This year there’s been some chatter about CREtech reaching market saturation and with that a lot of buyer confusion among decision...
CRETech – $15 Trillion Dollar Data QueriesAnthony
CRETech companies often boast they are disrupting a $15 Trillion market. Not only is that a lot of money but also a lot of data. The problem is that data is not shared.
An API or application programming interface is a way for programs to have a standard way of sharing data. API’s have become the new way for tech companies to achieve instant business development partnerships. When you log into a website with Facebook, that is an API.
No doubt data is of the utmost importance in CRE. That is why companies like CoStar Group closely guard their database with copyright infringement lawsuits like here and here. However, keeping a walled garden is not sustainable, just look at what happened to AOL after Netscape came along.
Some companies like Catylist and RealMassive, much to their credit have opened their data to the outside world with API’s. This is a big deal because innovation happens when you open yourself up to outsiders. That is why you hear of Hackathons sponsored by this and that company. They are looking for fresh ideas to innovate on top of their platform. Like real estate deals, it’s about creating win-win situations.
Open API’s are the first crucial step to machine learning and statistical analysis. Sadly, programmers cannot innovate if they are not powered by data. Data scientists and computer engineers stand to profit greatly by performing statistical analysis on valuations, default risk, leasing demand, site planning, construction risk and more. Or thinking smaller, incremental improvements could be as little as creating a mobile version for a service.
Information is a commodity. And like many commodities, the price over time trends to zero as more opportunists enter the market. It’s how you use that data that creates value. An Angel List search will show you there are currently 68 “commercial real estate marketplaces.” SpaceList and RealMassive are the only two that have an open API. Startups are not going to out Loopnet in building a walled garden.
There will be a changing of guard where the new companies on the scene will change the paradigm in which they are competing with Costar. It is not in the form of manual data entry or crowdsourcing, that’s so Web 2.0. It’s through automatic programming interfaces and machine learning.
Today, sharing your CRE data is a competitive advantage.