1. First, identify key pain points
It is tempting to sign up for dozens of cool software demos, especially if you have an in-house innovation team dedicated to adopting new technologies, and most definitely if you have an internal venture arm that wants to take part in the financial upside. However, there are dozens of startups popping up in nearly every product category, and your operating teams will soon find themselves overwhelmed. In fact, if you’re a property manager reading this, you might just feel that technology solutions sound great, but their applicability to your day-to-day seems too theoretical.
Consider cutting through all the noise and opt for a more capital efficient path: do the up front work of asking the tough questions about your business needs, get to know your team’s pain points on the ground floor, and identify key themes that could create value for your company. Finally, map those themes to Proptech startups in the market and focus on the opportunities that will truly create value for your company. It will save you a tremendous amount of time and get you on the quickest path to a positive outcome.
2. Define the implementation plan and expectations
Of the pilots we’ve ran, the most successful are those where each side (the technology provider and the customer) create a methodical and clear plan for what is being delivered, when it will be deployed, how the product will work and how success will be measured. This sounds rather rudimentary, and it is, but it’s surprising how easily we forget to cover the basics. I suppose it’s the excitement to start working for a new customer or the customer’s excitement to see new tech adopted quickly. Take a step back and make sure you address the nitty gritty technical questions up front. Your technology provider will thank you for the clarity and you will be happy when the pilot is delivered without any surprises. Here are practical themes to consider:
- Define the Scope (i.e. which assets and users will be part of the pilot)
- Outline what use cases or features within the solution you will be focused on for the pilot (typically you are highly focused on a smaller set of key use cases)
- Identify the key workflows (i.e. how will users interact with the solution across the above scenarios).
- Define timeline and outcomes – How long will it take to evaluate? What happens if we succeed? What happens if we fall below expectations?
3. Calibrate your adoption speed
The time to adopt technology can vary, and it can be critical. Energy efficiency hardware will return a sizeable ROI but requires longer adoption cycles than property management software that shows incremental operational gains rather quickly. Similar in concept to identifying key pain points, your understanding of the time-to-value in adopting technology is crucial because, depending on your time horizon, showing the value of the tech investment has a high opportunity cost. If the technology is slated to drive strategic value for your business, be prepared to be extra diligent in evaluating the time to complete adoption and begin seeing ROI. You may be seeking the promises of a slick tenant experience mobile app but the process of implementing the service components and launch the platform will take 8-12 months. Make sure stakeholders are aligned on the timeline to achieve a return-on-investment from the get-go.
4. Get the most out of your partner
In the Proptech world, perfect is the enemy of the good. New technologies have the promise of a great new world, but the reality is that unlocking the value of Proptech means a process of trial and error. The good news is that fledgling startups are prepared to invest their venture dollars in providing free (or nearly free) pilots in exchange for your usage, engagement and feedback. To be clear, we’re not saying you should adopt Proptech if the baseline product demo does not appear to solve a real need. If you have conviction during the diligence cycle that the provider’s service will create value, you should feel even better knowing that given that pace of startup innovation the service will improve dramatically over a relatively short period of time. Therefore, getting the most out of your provider’s research & development means carving out frequent meetings to communicate your pain points, clearly define measures of success and contribute your staff time to provide feedback on the technology. Taking the leap with a startup can be scary, but if you make the most of it you are going to get a lot more value dollar-for-dollar compared to an incumbent
5. Test drive before you integrate
It can be tempting to ask your technology provider to integrate with your core operating systems from the get-go. You’re probably running on some combination of Yardi, MRI, Building Engines, ViewPoint, Angus, VTS, Procore (Honest Buildings), the list goes on. To boot, there are so many Proptech solutions that it is quickly becoming impossible to implement multiple solutions in parallel. Integration is an important factor but don’t put the cart before the horse. The reality is that most early-stage Proptech startups are focused on building and optimizing their core product to validate that it meets the needs in the market. This is the holy grail in the startup land, and that means that if the core product is not solving at least a majority of your pain points then integration is probably a secondary subject. This gives all the more reason to trial the product in your environment before carving out expensive integration resources.
Finally, once the diligence is done, take the leap or move on.
If you have followed the above steps, you have probably completed a handful of others to get yourself comfortable with the technology. While this is not an exhaustive list, you have taken steps to de-risk the outcome of adopting technology. Last but not least, trust your process. There is no silver bullet to adopting Proptech. The best you can do is set a thorough and efficient process, and trust that once it is completed it is time to make a decision – go or no-go. Time is your most valuable resource in a rapidly changing world of information technology.