PropTech
Adversarial Interoperability: A Game Changer in Multifamily Property Management
Revolutionizing the Multifamily Property Industry through Disruptive Technology Integration
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Summary
The multifamily property management industry is facing a transformative era with the advent of adversarial interoperability. This disruptive technology is essentially the ability to plug into and use data or services from existing systems without the system owner’s permission. Traditionally marked by complex systems, lack of connectivity, and inefficient operations, multifamily property management is witnessing an innovative shift. Adversarial interoperability will empower organizations to seamlessly integrate systems, streamline operations, and deliver unprecedented levels of service and efficiency.
Problem
Siloed information, disparate systems, and a lack of cohesive data-driven strategies have long burdened multifamily property management. This fragmentation leads to inefficient operations, subpar resident experience, and increased management costs. Additionally, traditional models often resist innovation, creating barriers for new entrants, stifling competition, and impeding the industry’s overall progress. The legacy players have every interest in keeping the status quo.
Solutions
- The advent of adversarial interoperability offers a solution to these deep-rooted issues, allowing new entrants to connect with existing systems, thereby driving competition, innovation, and efficiency.
- With adversarial interoperability, property management companies can break down information silos, improve data flow, and streamline operations, enhancing resident services and increasing profitability.
- By leveraging data from existing systems, companies can derive actionable insights, implement data-driven strategies, and make informed business decisions.
- Adversarial interoperability promotes industry transparency, ensuring residents receive high-quality services while encouraging business partners to improve their offerings consistently.
- Lastly, this technology promotes a culture of continuous innovation, pushing the multifamily property management industry toward a more progressive future.
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Multifamily Idea Composting
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“The concept of composting is not new, but applying it to personal and professional development is an innovative approach. At Google X, we have introduced the idea of ‘idea composting‘ to turn discarded ideas into valuable ones.
As with any compost pile, idea composting requires several key elements: reflection, diverse inspiration, and action.
First, one must reflect on past failures and record them in a “failure journal.” This is not to dwell on the negative aspects of the failure but rather to understand the valuable lessons that can be learned from the experience. And to keep a record of the idea as some innovation presents well before its time. As technology and innovation advance, you might return to the journal to resurrect parts and pieces of old ideas to marry new ones.
Secondly, actively seek out new ideas and perspectives. This can be achieved through reading, networking, and engaging with individuals who have different backgrounds and experiences. The more diverse the sources of inspiration, the more likely one is to find new and valuable ideas. Always be learning and recording.
Thirdly, actively look for connections between seemingly unrelated ideas. This is where true innovation lies – in the ability to combine different perspectives and approaches to arrive at new solutions to problems or new ways of tackling a project.
Finally, take action on your ideas. Even if an idea seems unlikely to succeed, it is worth testing and experimenting with. If they don’t work out, be patient and put them in the composter.
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Zillow Super App
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Photo by Rami Al-zayat on Unsplash
Zillow has long been known as a popular real estate platform, but recent developments suggest that it may be on its way to becoming the first super app for all things housing. This is exciting news for anyone interested in renting, buying, or selling a home and those simply interested in following the latest trends in the real estate market.
One of the key reasons it is well-positioned to become a super app for housing is its breadth of services. In addition to its core real estate search function, Zillow also provides a range of related services, such as mortgage and rental search, property management tools, and even home renovation and design resources. Users can turn to Zillow for all their housing needs rather than relying on multiple apps or services.
Another advantage is the sheer scale of its user base. With more than 200 million monthly visitors, Zillow has a huge audience of renters, buyers, and sellers and those simply interested in browsing listings or learning more about the housing market. This provides unparalleled access to data and insights about the real estate market, which could be used to create even more robust and useful tools for users.
Perhaps the super app’s most exciting aspect is how it could leverage new technologies to create even more innovative and personalized services. For example, they have already begun experimenting with virtual reality and augmented reality features that allow users to view homes in 3D or even “walk” through a home before visiting it in person. As these technologies evolve, it’s easy to imagine Zillow becoming an even more powerful and engaging tool for users including owners and operators.
Imagine if Zillow created a full-stack property management platform and gave it away for free to property owners and operators.
Of course, there are also potential drawbacks to the rise of a super app like Zillow. Some critics have raised concerns about the company’s increasing dominance over the real estate market and the potential for bias or inaccuracies in its automated valuation models. Others worry that it’s sheer volume of data could be used in ways that compromise user privacy or security.
Despite these concerns, it’s clear that Zillow is well on its way to becoming a super app for all things housing. With its comprehensive suite of services, massive user base, and willingness to embrace new technologies, Zillow is poised to transform how we think about buying, selling, and managing our homes. Zillow’s ongoing evolution is worth watching whether you’re a first-time homebuyer, a seasoned real estate investor, or a large owner or operator. It’s also worth keeping an eye on the idea of a Super Property Management System fueled by Zillow.
If this happens, sign me up.
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Why More Multifamily Technology Means More Decision-Makers
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Multifamily companies are using more and more technology, and it’s touching more and more areas of property operations. Most of the time it improves experiences and makes things more efficient. We tend to think about its impact on operations, costs, performance and customer experience. But as with most things, there can be unintended consequences.
As technology proliferates, the cost of technology increases too. In this article, I will focus on one cost in particular: the administrative overhead associated with decision-making. It appears to be growing in many multifamily companies, and it is becoming harder to control. As I will explain, there are important implications for both operators and vendors.
A Couple of Data Points
Over the last few years, the annual 20 for 20 survey has acted as a temperature check on the industry. Each year I interview 20 COOs and heads of IT to understand their priorities in operations and technology. It’s provided an opportunity to see what’s changing in the industry. And over the last few years, it has provided a couple of interesting data points about the cost of innovation.
Two years ago, almost all respondents had reported having formalized a corporate process for innovation. It seemed to be a consequence of the increase in VC dollars finding their way into multifamily technology. More investment meant more technology to understand and more evaluations to do. The industry’s traditional technology gatekeepers sounded overloaded with keeping track of the expanding technology stack.
This year’s report, which came out in February, found something much more specific. While the flow of capital, the pace of innovation, and the scope of technology continue to accelerate, the technology decision processes seem to be changing. In particular, the definition of “technology gatekeepers” appears to be expanding.
What Prioritization Tells Us
In this year’s research, we split the tech stack into four discrete segments: Leasing Tech, Data Analytics, IoT/Connectivity, and Resident FinTech. We asked each of the 20 respondents to rank the four segments in order of priority. The results, which we summarized in the chart, are instructive.
Leasing was unsurprisingly the top priority; after all, it is the area that has changed the most over the last couple of years. Data analytics was highly active as the pandemic forced management teams to virtualize and report on many new metrics. But it is the two lower-priority technology segments that are more surprising.
IoT should be a higher priority than it is, given the high costs and the risk inherent in installing physical equipment into properties. That it sits in third place probably has more to do with decision processes than its actual importance.
Consider the way that companies buy technologies like access control. It’s normal for the traditional technology buyer (the CIO or the CIO) to be heavily involved in deciding which technologies they will support in their companies. But the actual decision to purchase the technology is much more of a property-by-property decision.
So it may start as a decision that looks like a traditional technology selection process, overseen by the traditional technology gatekeepers. But then it changes into something far more like the decision to renovate a property or purchase appliances.
A similar thing is at play with Resident FinTech: a fast-growing segment of the tech stack, with numerous new companies and innovations taking hold in the industry. These tools are both popular and relatively easy to implement, so evaluation and decision-making are frequently delegated in the organization. Numerous CoOs, for example, described being aware of the fintech that tech companies were buying and implementing but had delegated decisions to buy it and implement it.
What This Means for Operators
More tech can simplify and remove friction from operations, which is a great thing, but it creates different types of complexity. The risk is that when firms delegate decisions below to traditional gatekeepers, they risk creating “shadow” IT departments, where decisions are made outside of the control of corporate IT.
Deposit Alternatives provide a good example: a quick look at the websites of competing suppliers shows that they include the same companies as clients. Vendors appear to be succeeding in selling directly into regionals, for example. And this has implications for vendor management and customer experience because having many different vendors across different regions makes it harder to offer consistency across a portfolio.
In the case of IoT, devolved decision-making can drive up IT costs. Non-IT actors (e.g., Asset Management) are making decisions to implement technology like access control in a particular asset. That makes sense, as the asset manager is responsible for allocating capital to the property, but their decisions can impact IT overhead, a pool of costs that it is not their job to manage.
That represents risk. Imagine choosing to roll out an access control solution means contracting with multiple vendors rather than a single provider. That creates a level of overhead, training, contract management, misaligned agreement dates, and general admin overhead that companies should want to avoid. As decisions like this become more devolved, the risk of higher overhead will increase.
What it Means for Technology Vendors
Vendors need to be aware that the bull’s eye is moving. It’s always been a winning strategy to focus on the traditional gatekeepers, the COOs and heads of technology. (That’s why 20 for 20 focuses on those specific roles!) But in my work, I’m increasingly seeing vendors lose business to competitors who did a better job of figuring out who is making the decisions.
The losing sales teams focus on selling into the conventional buyer persona, while the vendor that won the businesses figured out where the real influence was. It’s particularly true in companies whose sales teams do not yet have deep insight into the multifamily industry.
The mistargeting of effort filters through to marketing activities too. I work with many marketing departments across the tech sector, but I can think of very few who apply significant effort to persona-based marketing campaigns.
As technology and decision-making proliferate, this (already substantial) opportunity will continue to grow. More companies should grasp it! Companies need a wider variety of playbooks to integrate a more sophisticated concept of personas. It will confer an increasing advantage on the companies willing to invest in being good at it.
Unintended consequences aren’t always harmful. It is easy to think of ways that devolved decision-making improves multifamily operations as teams get smarter about how technology improves resident and associate experiences. But operators and vendors should be wise to this changing landscape. Administrative overhead is easy to ignore until it isn’t! And sales and marketing playbooks should always reflect the current state of our industry.