In case anyone needs more validation that the REtech space is in the midst of an exciting period of innovation, then check out who’s...
CREtech is NOT ScrewedAnthony
This year there’s been some chatter about CREtech reaching market saturation and with that a lot of buyer confusion among decision makers for a products fit into the overall strategy. This has brought some negative sentiment and it doesn’t help that private tech valuations are being called into question by investors.
I won’t pretend to be sitting here with a crystal ball and it might be observation bias but what I believe is actually happening is that people are confusing crossing the chasm from early adopters to early mainstream.
During this transition period there’s a lot of questions. As early adopters have tried every application with a value proposition, they now have an opportunity to step back and assess what they have in front of them. They are finding there are a lot of great apps out there, some of them have overlap, but generally speaking they provide a lot of value.
To the early mainstream, the value overlap is a source of contention because their job isn’t to gamble on software but to buy best in class, as the phrase goes, “Nobody ever got fired for buying IBM.” The problem is that the IBM of the latest commercial real estate tech hasn’t necessarily emerged, leaving those institutional real estate investors utterly confused.
I still think now is a great time to be a CREtech founder, with the only difference being that buyer personas are becoming increasingly sophisticated. Buyers are rightfully concerned about application connectivity, it’s great that apps provide specific data analysis but how does that fit into the larger picture. Hightower is doing integrations better than anyone, they even have a dedicated landing page, for their integrations with MRI, JD Edwards, and Yardi. I’ve always said the next generation CREtech business development deals were going to be done with API’s and it thrills me to see it happening.
Next, there’s still a lot of green pasture in CREtech. Here’s a freebie; building owners get it now that with building automation systems there are energy savings but the real gravy is in operational benefits from remotely diagnosing issues and avoiding unnecessary truck rolls, the ROI is clear. A building owner’s choices for BAS are basically Tridium or frankenstein together your own from multiple IoT providers. Guess what, Tridium costs a lot. So they’re putting together different systems throughout the building. What’s the big deal? Nobody and I mean nobody, is stopping and thinking about cybersecurity. Hackers can take down your HVAC, that might be annoying or critical if in a lab or data center, but no one is thinking about how their buildings automation system could be interconnected with other networks. If your tenant gets hacked due to your building automation system network, good luck filling those vacancies.
So yeah, there’s opportunities out there. Not all startups have reached product market fit and many never will. But if you’re a real estate guy or gal than you have grit so you won’t feel bad when the market tells you to suck it up and pivot. If you’re here for a bubble ride, then the door is getting narrower.