Open Letter To Duke Long. “Are You Adapting to Commercial Real Estate Technology Quickly Enough?” Bradford Harries.

Duke- In response to your article Are You Adapting to Commercial Real Estate Technology Quickly Enough?

I always enjoy your perspective on the CRE Tech world. Your piece on “Are You Adapting to Commercial Real Estate Technology Quickly Enough?” brings me back to a historical perspective that I have frequently told over my almost four decades as a technology investment banker.

In 1982, the world was abuzz with the arrival of the IBM PC the year before. What I remember hearing was how “astonished” the world was at how quickly these new machines were appearing on the previously expansive and uncluttered desk space of corporate executives. Some tech watchers proclaimed the impending widespread adoption by corporate chieftains of this new and powerful tool. The reality was that these PCs were largely ornamental boat anchors on their desks. Secretaries printed emails for executives’ to read and then took dictation for the responses. These executives had no use for the tool and lacked basic typing skills. PCs ran afoul of the time-honored way in which they conducted their business.

Fast forward ten years and tech writers would proclaim the remarkable transition that had taken place in corporate America. PCs on desktops were the norm. Executives were typing some of their own emails. There were even some who started using electronic calendars. The executives who had shunned the PC as a toy had adopted this new technology.

Well, not really. The up and coming executives who had been in their 40s in 1982 were the ones who had started seeing the usefulness of the PC. Now that they were in their 50s in elevated positions of authority, they were demanding the use of the technology. They expected communication by email. They were scheduling meetings electronically and some were even becoming rudimentary users of spreadsheets (not just reading the output).

The point is over a ten-year span, a portion of the old guard retires or dies. A new younger generation of managers rises upbringing with them the technologies that they were using even if their bosses were not. The younger generation then imposes the adoption of technologies, processes, and procedures on the whole team, which those below them support because they have come to expect it.

I believe some part of the answer to your question about how quickly technology is adopted is based on the views of the leadership in the real estate industry. They continue to see threats in the sharing of information that they grew up believing was their competitive advantage. There have also been any number of technologies with promises of great cost savings or increases in revenues that have not worked out, making everyone wary of the next shiny object.

All that said, the Millennials are coming of age and stepping into positions of influence and authority. They have expectations regarding the availability and use of technologies. This is a generation who largely believe information should be widely shared and (frequently) free. It’s not the information itself that is valuable, but the analytics applied to it that result in business actions that create competitive advantage. I believe we are at an inflection point driven by a change of management in the industry.

Bradford Harries is a partner at Chessiecap Securities.

 

+1 Bradford has his point of view. I happen to agree. Hard to argue against for me. What’s your take?

  • Steve Kapp

    I think that Bradford Harries makes some good points in his response to Duke Long’s article “Are you adapting to Commercial Real Estate Technology Fast Enough?”. What is missing though, is the acceleration of the rate of change. Comparing how gradual PC adoption took from 1982 to 1992 is a poor guideline to look at in today’s world. That is because technology is increasingly being adopted at a faster and faster pace. You have to do so, or get left in the dust. Managers don’t have time to wait out a generation to die or retire. If you were to list the top 10 CRE Tech companies, my bet is that more than 90% of them weren’t even around 5 years ago. Now some are worth billions of dollars. Beware of looking backward in time for analogies to today. It ignores the convergence of many different technologies happening today, and the accelerating pace of adoption and change.

  • I agree that the acceleration of technology is quickening. The mass adoption of brand new technology i.e. augmented reality (via Pokemon) was an industry record of 1 year. But are there really many more brand new technologies to adopt? Or are we just building better versions of existing technology? Virtual reality or block chain technology will be the next new disruptors. But, that will be slowed down due to cost (VR), cybersecurity fears and the existing infrastructure in developed countries (i.e. financial institutions). The tech train has left the station, it’s just a matter of who is riding the commuter rail and who wants a ticket on the hyperloop.

  • Michael Stephens

    The ‘shiny object’ point resonated with me……pioneers have not helped our(them)selves when suggesting that the industry needs to adopt this and then that. I wrote this 18 months ago on this subject:

    https://www.linkedin.com/pulse/your-4k-quintuple-blade-virtual-reality-voice-ghia-gls-mike-stephens

    The acceleration of change (per below) and now the supply side massively dwarfing demand will add more confusion to our client decision making. Trick is to prove the value so that the client decides fast and does not regret his/her haste.

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