Featured on this episode: Maureen Waters, President – Ten-X Commercial
Earlier this month, we had the pleasure of attending the CREtech conference 2019 in New York as an official media partner, and interviewing some of the leading voices, innovators and disruptors in the Real Estate Industry.
Maureen leads the transformation of Ten-X Commeri business as we expand beyond the traditional ways of transacting real estate, creating a force multiplier in CRE tech. With 25 years of commercial real estate experience, Maureen has developed a unique skill set spanning marketing, sales, strategy, operations, finance and data, with extensive experience transforming service businesses. She previously served as Ten-X Commercial’s Chief Marketing Officer.
Prior to joining Ten-X, Maureen was head of real estate and asset management at Bill Gates Investments. She also spent 15 years at Cushman & Wakefield, where she most recently served as Chief Strategy Officer, and six years at CBRE.
Maureen holds an MBA in Finance from Fordham University and BA in Economics from University of St. Thomas, and has a RE license in New York. Maureen is also a National Board member of Girls, Inc. Maureen resides in San Francisco with her son Ben.
Also featured on this episode:
Piers MacNaughton, Director of Health Strategy – View
View manufactures View Dynamic Glass, a new generation of smart windows that let in natural light and views, and enhance mental and physical wellbeing by significantly reducing headaches, eyestrain and drowsiness. In addition, View’s windows reduce glare and heat, improving the energy efficiency of buildings by 20 percent. View’s windows are digital, connected, and can be controlled from anywhere, including your phone – no blinds or shades required.
Clinton Robinson, Co-Founder and CEO – Lane
For Clint, Lane is the culmination of more than a decade of creating tangible technology products for complex ideas. He created his first successful company at 15, and since then has continued to use technology as a way to create solutions to the most complicated problems in the media, retail, and healthcare industries.
Ben Wright, Founder and CEO – Upsuite
Fascinated by people, how they work and collaborate, and which ingredients make for highly successful teams, Ben has been drawn to coworking spaces and their role in the future of work. Upsuite was founded to help teams find coworking spaces and create the environments in which they do their best craft.
Ben is a three-time founder of companies in digital marketing and commercial real estate SaaS. His teams have scaled those companies across 48 US States and six countries. He holds a graduate degree from Stanford University in Quantitative Economics.
David Wong, Co-Founder and CEO – BOOQED
Business developer, entrepreneur and start-up veteran with substantial international experience in blue-chip companies and new ventures in mobile entertainment, digital media and tech. I particularly enjoy translating strategy into action — taking a “Big Idea” and building it into a profitable and sustainable business. Currently co-founder / CEO of Booqed, a digital marketplace helping connect companies needing short-term space to work, meet or have an event with landlords that have unused space — and build a global brand, business model and network.
RealCrowd – All opinions expressed by Adam, Tyler, and podcast guests are solely their own opinions and do not reflect the opinion of RealCrowd. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. To gain a better understanding of the risks associated with commercial real estate investing, please consult your advisors.
Adam Hooper – If you don’t have buy in from the top, it’s kind of hard to drive that culture change, right?
Maureen Waters – That’s correct.
Adam Hooper – So how can some of the maybe smaller midsize organizations start to think about those four different aspects and start making that change towards a more technology focused company?
Maureen Waters – I think it’s easier when you’re smaller. I did a transformation also when I was at Cushman & Wakefield. So the smaller you are, although the issues are the same, it’s easier because you can get, the alignment is a little bit easier. So you can imagine with 250 people versus 6,000, I can get 40% of the folks aligned and that will impact the entire organization.
Adam Hooper – Welcome back again, listeners, for yet another episode of our 2019 CREtech coverage. Today, we talk to Piers MacNaughton, Director of Health and Strategy at View. Super interesting conversation about smart windows and connected technology. Then we went to a panel about accelerating the adoption of tech. Super interesting conversation. And we round out the episode with Maureen Waters, President of Ten-X. We talk about what they’ve been up to lately, how they’re staying innovative in the space, and also a few nuggets about leadership. So with that, let’s get to it. Piers, thank you for joining us this morning here at CREtech 2019. How’s the show been so far?
Piers MacNaughton – It’s been amazing. It’s been a busy two days.
Adam Hooper – It’s busy. There’s a ton of people here too.
Piers MacNaughton – It’s packed.
Adam Hooper – Yeah, it’s definitely grown. So why don’t you tell us a little bit about your background, how you got into what you’re doing today with View, and maybe just how you got into that space.
Piers MacNaughton – So actually View, I’ve been at View for three months now so it’s still relatively new.
Adam Hooper – Pretty new, okay.
Piers MacNaughton – And I came from the Harvard School of Public Health. I’d been there actually in academia in my entire life up to that point. I was a research associate there, Associate Director of the Healthy Buildings program.
Adam Hooper – Yup.
Piers MacNaughton – So I got my start kind of doing a PhD in healthy building science, researching how buildings impact people’s health, looking at things like air quality, lighting, noise, acoustics, thermal comfort, kind of the full suite of things that impact our health and wellness in spaces. And that’s obviously of huge interest to View because they’re a company that has a huge impact on people’s health and well being as well.
Adam Hooper – Yeah, and I think that that awareness of how people use a space and how space affects its users, it’s certainly coming much more to the forefront than it ever has been, right?
Piers MacNaughton – Yeah. I mean, we often said in our program at Harvard that why isn’t the public health school there? That we’re the field of common sense. That everyone knows intuitively that your environment impacts your health. This is not rocket science. But a lot of times, people don’t act until they have the concrete data, especially in commercial real estate. So that’s been the big challenge is bridging that gap, creating the data, and then being able to present it in a way that can be consumed to speak the language of real estate and translate that over. So that’s been the big mission of what I was doing at Harvard and also what I’ve been bringing to View.
Adam Hooper – And so do you think that’s what’s precipitated this change is an awareness or the data to actually measure it and see what that impact is? Is that’s what’s driving this change, awareness?
Piers MacNaughton – Absolutely, yeah. And I know that there has been 30 years and more of health research on buildings, but it hasn’t really been translated yet. And I think in the last five years, it’s been starting to connect. And we’ve seen now this kind of explosion of prop tech that’s related to health, but also just everyone in the industry being aware that this is an important thing for consumers whether it’s certifications or developers really taking us seriously and changing the operations. Kind of across the whole ecosystem, we’ve seen a big movement there.
Adam Hooper – Perfect. And so now View specifically, why don’t you tell us a little bit about what View does?
Piers MacNaughton – So View, we’re a smart window company. So at our core, our technology is adapting to sun in the space. And it’s essentially a solution that brings in the optimal amount of sunlight at all times. So if it’s really bright out, it’ll tint down in a way that blocks glare, but you still get the view. And if it’s cloudy or the sun’s not directly on the facade, it’ll open up so you get those views. So really, it’s a solution that replaces the need for blinds. You don’t have to choose to have a view or not a view. You get to always have a view and the right amount of daylight in the space.
Adam Hooper – And so how’s the nature of the workforce changing how building owners or users think about things like this, this quality of health? And are you seeing any either demographic changes or some of these more WeWork flexible office spaces? Is that driving any of this change and innovation?
Piers MacNaughton – Yeah, I mean there’s two things. One is that people just have more access to data, so people are more aware than they used to be. So now we see that there’s a really smart consumer base. Our tenants kind of know what’s going on and they really are trying to demand these access to daylight and having these things. They know it impacts their employees and they know it impacts their bottom line even in terms of how their employees perform. So that’s one side of it. The second side, we see the workplace is changing. We’re now knocking down walls which means that even in these dense buildings, you can have a view of the window from the center of the building.
Adam Hooper – More light coming in, yeah.
Piers MacNaughton – You can have more light coming in and penetrating in so that again, it’s no longer necessary to just rely on electric lighting. We now have solutions where you can bring daylight through the whole space in line with changes in how the space is being set up.
Adam Hooper – And so I’m assuming in part of this, if landlords are trying to solve for basically happy tenants, right?
Piers MacNaughton – Mm-hmm.
Adam Hooper – Do you guys go through an assessment of what the current situation is and propose a solution? Or how do you actually measure some of these impacts?
Piers MacNaughton – Yeah, I’d say when we approach our customers, a lot of times, it’s new construction or it might be renovation. We actually do a full 3D model of the space. We model out the entire thing about how the daylight’s going to interact with the space with and without blinds. Do that for free honestly, so people, they get that assessment and they know what the difference will be ahead of time.
Adam Hooper – And just the ability to do that is a pretty big achievement, right?
Piers MacNaughton – Yeah, that’s a pretty big achievement and that’s something that used to be reserved for the academics over at Harvard, but now it’s something that we bring in house and we do for all of our customers up front.
Adam Hooper – So you said mostly new construction. Is this a solution where, I guess, what’s the right scale for engaging on a product like this? Is it a smaller office building in a suburban area? Is this mostly kind of class A new construction office or what are the typical applications for this?
Piers MacNaughton – Really, it’s anything large and commercial. So we do mostly office, but we also do tons of airports, tons of healthcare, lots of multifamily, higher education. Daylight isn’t something that’s just a niche thing that only certain people need. Really, everyone needs it in every building, so.
Adam Hooper – And anything that you can do to make people happier in airports is probably helpful.
Piers MacNaughton – Yeah, we’ve done a lot of research in airports and we’ve seen that it increased well time, it can increase their expenditures on retail. It just makes them generally happier to be at the airport and traveling often is not a fun thing to do.
Adam Hooper – Not the best.
Piers MacNaughton – So if we can make it better, that’s a plus for the airport.
Adam Hooper – Yeah. Energy savings too, right?
Piers MacNaughton – Right, yeah. So we save between 8 to 20% energy savings. That’s by reducing the solar heat gains so we don’t let all that sunlight come in and heat up the space. The most important part is it takes down the peak demand so you can downsize your hvac, you can open up your space back to the floor plan, not have all these huge ducts in the building. So yeah, it has a huge energy benefit as well.
Adam Hooper – And how does that math work out? Is this an investment driven decision that building owners are making, or is it more of the wellness that’s driving that primary decision?
Piers MacNaughton – Yeah, I’d say the operational side is less interesting. Mostly I think the value that makes people jump for View is the twofold, and I think they kind of are tied together. We have the health and wellness benefit which they know that they can pass on. And we’ve shown time and time again that buildings that go with View are able to upcharge their space to account for that benefit. So they’re demanding 5% higher rents by having View in their space.
Adam Hooper – So smart windows. I mean, not many people have heard of a smart window. And we’ve heard about smart watches, smart everything else, but smart windows, what does that mean?
Piers MacNaughton – Yeah. Awareness has been a hard thing for us. Also, because we don’t necessarily want our product to be so. If it stands out, it’s probably not working right. So a lot of times, people, even in airports where we have millions and millions of people passing through, they might not even know that they’re behind View glass. They just know they’re comfortable. They know that they’re not having glare. They know they have the view and they might not even appreciate it because it’s really only changing kind of slowly in response to movements of the sun and things like that. So awareness has been hard, but ultimately with our customers, when they do use it, they see the value immediately and a huge proportion of our business are returning customers coming back is saying we’ll pay whatever your price is to have this again, so.
Adam Hooper – And are you seeing any of those decisions being, I think you mentioned the tenants and users of the space are becoming more aware of options like this. Are you seeing users or tenants push for these installations, or is it still primarily driven by building owners and landlords in that construction renovation cycle?
Piers MacNaughton – Yeah. I mean, there is a huge split incentive system which is making it. The benefit goes to the tenant and a lot of times the developer is paying the price tag. So bridging that gap can be hard sometimes. The developers have found that they can pass on the price through increases in rent, so that case has already been made. But we also have a lot of corporate partners, owner occupiers that will say yeah, this is a no brainer. We’re paying the bill and we’re also going to see the benefits. We’re definitely going to do this.
Adam Hooper – Yeah. So I did see an article that you guys put out about again kind of the whole integrative things and smart windows. How far can that technology go in terms of windows with sensors, and alarms, and other sensing technology? What do you see for the future of a smart window?
Piers MacNaughton – I’d say that we are just scratching the surface. Facades are huge on the building. Like this is a huge physical infrastructure. We are now adding network and power to the windows. So with that, it opens up a whole Pandora’s box of opportunities. We have many different products that are now being layered on top of that network. Everything from detecting that a window’s broken, detecting that there’s been a broken window, we can add in sensing technology, environmental sensing technology, for example. We can support 5G and other network solutions that are now just coming out to the market.
Adam Hooper – That’s amazing.
Piers MacNaughton – There’s tons in the IoT space. One of our interesting ones is around displays. The window itself can be a display. Instead of having monitors and TVs thrown up everywhere, you can have a window that serves as a window when you want it or as a display when you want it. These are all things that are either in our pipeline or are already out.
Adam Hooper – Yeah, and is that, a lot of the technology that we talk about and the question I’ve been asking is what’s the timeline for implementation, right? Are we there now, or are we 18, 24 months out, or are we five years out, right? It sounds like this is a more now than not.
Piers MacNaughton – Yeah. I’d say it that way that it’s more now than not. Of the things I listed, some are more now and some are more later, but yeah, these are all things that are being actively developed and we already have relatively good prototypes for.
Adam Hooper – Perfect. Well, that’s super exciting. Thank you for coming to tell us about what View’s up to and we’ll definitely keep our eyes out for what you guys come up with next.
Piers MacNaughton – Yeah, thanks for having me.
Adam Hooper – Thanks, Piers. Next up, fresh off the panel about accelerating adoption of technology in the real estate space. We have Clinton Robinson, Co-founder and CEO of Lane; Ben Wright, Founder and CEO of Upsuite; David Wong, Co-founder and CEO of Booqed. Fascinating conversation. Hope you enjoy it. Well, thank you guys for joining us fresh off the panel about technology adoption. Obviously, a big topic here today, so why don’t we kind of run down the line, kind of name, background, how you got into the space, what you do now, and we’ll talk about adoption.
Panel – Yeah, thanks for having us here. I’m Clinton Robinson, CEO and Co-founder of Lane. I’m actually a computer scientist. I have a degree in artificial intelligence, been building tech products my whole life. Kind of got into CRE somehow, but now I’m here.
Adam Hooper – It happens to the best of us.
Panel – Classic story. Yeah, and happy to be here on this podcast. I’m Ben Wright, CEO and Founder of Upsuite. I’m a three time founder. The last company was a commercial real estate SaaS company as well. Upsuite operates in 25 North American markets. We’re a flex office marketplace. It really removes friction in these types of transactions for brokers, operators, and most importantly the member or tenant.
Adam Hooper – Perfect.
Panel – And I’m David. I’m Co-founder and CEO of a company called Booqed. We’re based out in Hong Kong. We are a digital marketplace for tenants and landlords to find or monetize any sort of short term, unused business spaces. How I got into this, I actually fell into it by accident. In Asia, you travel two hours and you’re in a different country, different culture, different everything, and doing that for business, it’s just one of the major frustrations was trying to find places to meet, find places to work. We decided that we needed to do something about it. That’s how I kind of got into this by accident.
Adam Hooper – And now the nature of usage of space is changing dramatically, right? So what are you guys seeing and how is that kind of enabling all three of your companies really to take advantage of how what we think of traditional office space usage or communal space usage? That landscape is completely changing.
Panel – I’ll take the first swipe, but I think all three of us will have something to say on this. Business is chasing talent and we operate in North America and nowhere is that more true here. Business has to provide the experiences and environments that their talent wants. And for us, that means being able to open a satellite office, being able to expand as a start up very quickly or contract very quickly. And so as the office products to serve those needs really become as much as 30% of the office market by 2030, new solutions like ours are really needed. But it all comes down to businesses chasing talent all over the world really.
Panel – Yeah, I can second that. So Lane’s a workplace experience platform and we connect everything in the built environment to make it easy to use and frictionless for the occupants, the people who go there every day. And absolutely, this new workforce expects everything to be enabled by technology.
Adam Hooper – Right.
Panel – They expect everything to work like Airbnb or Uber and that is not the modern office environment.
Adam Hooper – No, it’s not.
Panel – At least one that doesn’t have Lane. They expect everything to be seamless throughout their day and frictionless. And absolutely, if you want to attract these people to come work for you, you need to offer these solutions which means commercial real estate needs to start offering these solutions to their clients.
Adam Hooper – Yeah, and that’s something we’ve again we’ve talked about a fair bit here at the show is the user expectation of what that experience is. We’re spoiled, right, with all these apps. Netflix, Amazon, Uber like you said. It’s just so easy and so intuitive which is like the antithesis of how to use real estate, right? So I’m kind of curious how that trend towards really exceptional user experience which again is a theme that we’ve seen on some of the keynotes. How does that permeate through your guys’ business from that kind of product forward focus and that user experience side?
Panel – I’ll talk about a couple of these. One of the experiences is how long does it take to buy it. If you talk to a traditional commercial broker today, they’d say it’s seven to nine months to build it out and secure it. We’ve had multiple members sign year long contracts seeing three spaces in one day and signing that same day. The average transaction and flex is 23 days from start to finish. And that could even be for multi year. So I think that’s important. I also think from the experience of being educated, the internet has really helped people be educated and expect to be educated about the market. Oftentimes information in commercial real estate is not transparent at all.
Adam Hooper – Right.
Panel – And so I think all three of our solutions, particularly Booqed and Upsuite, help educate the buyer I think of what they’re buying and how to compare it against something else and I think that’s really important as well. I’m going to take this maybe from a slightly different aspect and that’s more starting from the meeting spaces, and that’s actually where the core of our business starts is meetings that drives trust which drives then transactions to office space or other sorts of spaces. And at least in Hong Kong and I’m sure it’s pretty similar here in New York, people, they hang in the office a long time. And to have their meetings, they may not actually stay in the office or go down to that Starbucks or whatever that coffee shop on the corner. And it’s candidly, it can be an awful experience, right? You’re not guaranteed a seat. It’s noisy. Everybody’s listening. I’ve sat in coffee shops where somebody was doing a performance review next door and I’m going that’s crazy. Why would you do that? 30 yards away, there’s a restaurant which is open and there’s nobody in it because it’s off peak. They have people there and why not create a better user experience for somebody wanting to have a meeting than to go to the traditional coffee shop which is really busy
Panel – and you’re fighting with everybody? So for us, that’s one manifestation of the way the user experience or how we’re hoping to improve the user experience.
Adam Hooper – And so how have you guys seen, again, kind of curious across your three platforms, is demand seems to be mostly driven by the user. A user’s needs aren’t necessarily aligned with a landlord’s desires, right? So how do you guys balance that friction? Is that a nuance in and of itself, right, or how does that play out on these different platforms?
Panel – For Lane, that’s a great question. So we’re a workplace experience platform which means we incorporate the whole workplace ecosystem. So landlords, property managers, security teams, maintenance teams, those are also our users. And I think that’s actually what sets us aside from our competition. It’s a huge differentiator. We’re working on building a great experience for those people as well. So not only are we focusing on the occupant, we’re working with all these other stakeholders in this ecosystem to give them the best possible experience. And I think that’s why we’re getting such great adoption and we’re getting such great buy in, why we’re landing some of the best clients in the world is ’cause we’re providing so much value to them at the same time as providing so much value to their occupants that they’re trying to reach out to.
Panel – For every new advancement, there’s got to be demand and supply and I think this question is about supply.
Adam Hooper – Mm-hmm.
Panel – In some markets, even if it’s 90% leased, 50 to 60% of the office space is not used. And so that’s the same trend that drove Airbnb. It’s the same trend that drove Uber is unused assets that can be used better. And so what I think flex office and all the permutations of it have done is give landlords new solutions to fill that unused space. And I think that’s exciting. It creates a challenge for them which is how do I find people for it, but that’s why our platforms exist. So I think that’s a great question about supply. Without the underutilized assets, there’d be nothing for us to really improve. And luckily for us, there’s plenty.
Adam Hooper – Yeah, and it reminds me of the conversation we had with Steve Weikal, MIT, a couple years back on the podcast. He introduced this concept of real estate fracking, of basically taking this kind of what used to be entire bundle of real estate, one entity uses it. That’s their lease, that’s their space, and that’s it, right? However they utilize it, that’s up to them. But this again kind of fracking of being able to portion off these little different use cases and to be able to better utilize that space whether that’s from the landlord’s side or from the user’s side, I mean, it seems like that’s kind of this environment that’s emerged where all three of you are now active in and being able to better utilize those spaces. I mean, is that really what this is about at the end of the day? Better user experience, better utilization, better experience for everybody.
Panel – I love that real estate fracking. That sounds like something…
Adam Hooper – You can use it.
Panel – Steve Weikal would say.
Adam Hooper – I’ll take credit for it here. I’ll give the credit to Steve. I think he took it from somebody.
Panel – That’s great, I love it. No, that’s really awesome. At the end of the day, I think that that pretty much nails it at least from our perspective. And I’ll toss in the perspective from Hong Kong where you have some of the most expensive real estate on earth. Ben was talking about the fact that a lot of this is actually underutilized and that just doesn’t make any sense in this current economic environment and what people are actually looking for. So yeah, absolutely, any way you can cut, and slice, and dice that space, as a user, finding ways to actually use that in a way that makes sense for your business. As a landlord, finding ways that you can make some money off of an existing asset. Yeah, absolutely, that’s definitely where we see this.
Panel – I think the overly simplistic view of this is that this is just a millennial, let’s do everything for millennials. What I really like about what we’ve said is there’s benefit to the landlord. There’s benefit to the tenant. There’s benefit to really the entire ecosystem to better utilize space and make it more attractive, have workforce recruitment benefits. And I think that’s why this whole flex sector is set to grow to as much as 30% of the office market.
Adam Hooper – Yeah, that’s the follow up question. I’m sure you guys all have some interesting takes on WeWork which we’ll leave for another conversation, but you can’t argue the fact that they have fundamentally changed the nature of how we use space, right?
Panel – Absolutely.
Adam Hooper – So you said maybe 30% is in this kind of flex arrangement?
Panel – Yeah, so the low estimate from CBRE by 2030, their low estimate is 13. The high estimate by JLL is 30% by 2030.
Adam Hooper – And where are we now?
Panel – So right now, we’re at 3 in North America.
Adam Hooper – Okay, so a lot of room for growth with this change.
Panel – In any scenario.
Adam Hooper – Okay, so we’re going to get a hot take on WeWork here.
Panel – All right. Hot tick on WeWork. I think a lot of people are assuming that WeWork are the ones who disrupted the space. I think WeWork was just responding to a market that was changing and they just happened to do it the loudest. So as Ben’s saying, it’s not just a millennial fad. Making things easier to use is out of the bag now for commercial real estate. We’re not going back. We’re not all jumping off Uber ’cause we don’t like ordering a cab easier.
Adam Hooper – Right, yup.
Panel – And I’ll throw a couple more in. I think WeWork’s done a tremendous amount right. They’ve set a new standard for space design. They have made it attractive to enterprise which they do really, really, really well. So we wrote a piece called “What WeWork Is Doing Right” that you can find. Where they really struggled is it’s hard to attract members cost effectively to a short term space. So that’s the problem that our companies are really working on and we think they’ve set the bar really high for the rest of us to come and help. Yeah, I guess for me, sort of parting shot is look, I think WeWork is, they started something which even without them, you talk about sort of that whole idea of an inevitable truth. Work shifts, culture shifts. This is happening with or without companies like us. So whether we’re part of the equation, we see these changes happening either way. So that’s kind of just we need to be on top of that.
Adam Hooper – Perfect. Well David, why don’t you tell us a little bit more about where listeners can learn about Booqed?
Panel – Yeah, sure, absolutely. So Booqed, come visit us, www.booqed.com, Booqed with a q, B-O-O-Q-E-D dot com.
Adam Hooper – Perfect. Clinton, how about Lane?
Panel – Yeah, joinlane.com.
Adam Hooper – And Ben, Upsuite?
Panel – Yeah, we’re at upsuite.com.
Adam Hooper – Perfect. Gentlemen, thank you so much for joining us today.
Panel – Thanks very much. Thank you very much. Yeah, thanks for having us.
Adam Hooper – Hope you have a great conference. Final guest of today, Maureen Waters, President of Ten-X commercial talked about how they’re innovating in the space. Ten-X just released an iOS mobile app so we talk about their mobile versus desktop usage, talk about what’s next for Ten-X, a survey they just completed about the current state of commercial real estate technology, and round it out with a little talk about leadership. Maureen, thank you for joining us. First time on the podcast here at CREtech 2019.
Maureen Waters – Thank you, Adam. It’s nice to be here.
Adam Hooper – Yeah, so just got done with your panel about bridging the gap. I think very topical obviously in our industry. How do you go from the real estate company to the tech company? Your four points: culture, customers, product, and data. I’m curious, did you guys approach those in that order? Was it a kind of all at once? What was the most challenging of those four maybe?
Maureen Waters – Interesting question. I did place it in the order of priority although we did have, the first piece was definitely culture. No doubt about it. The organization and how we thought about it and how we integrated and broke down silos had to happen before we could really address our customers and start the integration of the other areas. So definitely…
Adam Hooper – It starts with culture.
Maureen Waters – The culture was the priority.
Adam Hooper – I think that’s something too, I mean, on your slides, just the words that we use between real estate and technology. I mean, completely different universes, right? I think it’s been interesting to see our space evolve where earlier on, we were at this about seven years now. That gap between technologists that saw real estate as an opportunity market was still pretty big. I’m curious has that gap between the practical application of the technology and the real estate world, has that started to narrow or is that still a pretty disparate gap between those?
Maureen Waters – I think it has narrowed. I’m pretty optimistic that it’s continuing to narrow. I tend to be on that side of the ledger when it comes to the gap. I just think there are a whole host of folks that are in this industry today that were not even here a year ago. And while their focusing tends to be on the entire CRE ecosystem, I do believe that what we’re starting to see more really hone in on very specific areas around property, tech, or specific to data and how we all utilize the data to influence our decision making.
Adam Hooper – Yeah. And so now for smaller managers, operators, maybe midsize companies that are trying to make that leap from traditional real estate owners to more of a tech centered, what are some things that they can maybe look at implementing across those four? Again, if it’s a small shop culture. If you don’t have buy in from the top, it’s kind of hard to drive that culture change, right?
Maureen Waters – That’s correct.
Adam Hooper – So how can some of the maybe smaller, midsize organizations start to think about those four different aspects and start making that change towards a more technology focused company?
Maureen Waters – I think it’s easier when you’re smaller. I did a transformation also when I was at Cushman & Wakefield. So the smaller you are, although the issues are the same, it’s easier because you can get, the alignment is a little bit easier. So you can imagine with 250 people versus 6,000, I can get 40% of the folks aligned and that will impact the entire organization. And so I would say they can absolutely make it happen. It’s just really staying the course. It’s really hard in this business to get distracted. It moves so quickly and there are so many bright people with great ideas that you want to influence your business or you want to bring in as part of your ecosystem that you can get distracted very easily.
Adam Hooper – So on the product side, you guys recently released your iOS app.
Maureen Waters – We did.
Adam Hooper – How has that gone?
Maureen Waters – It’s gone great. We’ve had more traction in the last I would say since we launched it than we had all of last year.
Adam Hooper – Wow. That’s really good. That’s meaningful.
Maureen Waters – On the old app, so.
Adam Hooper – Do you know what percentage of user base was mobile, I’m sure you guys track that, mobile versus kind of desktop traditional?
Maureen Waters – We do, we do. Our mobile has increased year over year by 25%.
Adam Hooper – Wow.
Maureen Waters – And so it is a large percentage. We track it transactionally, so it’s overall, I won’t get the stat right on, but it’s in the 40%. We’d like to see it upwards of 60, but because we’re transacting online, it’s a little bit harder to use the mobile app, but we’re seeing more and more…
Adam Hooper – To run it all the way through on the mobile, yeah.
Maureen Waters – We have a dashboard that’s been probably one of our most successful products and the brokers and sellers just love it. They can track from onboarding, once we go live on asset all the way through closing.
Adam Hooper – I think that’s what’s also interesting is that we talked before a couple interviews back. User experience in this kind of app environment is so easy in so many different platforms right now that that’s becoming the expectation which is difficult to make a commercial real estate transaction as effortless as checking a movie on Netflix, right?
Maureen Waters – That’s right.
Adam Hooper – But I think that’s the expectation is that Amazon and kind of appification of everything. So it’s good to see some innovation in trying to put that app first environment out there.
Maureen Waters – It’s true. And our algorithms are very close to Netflix actually. That’s how we think about the real estate. And it does help ’cause if you are looking at, there are some synergies between the types of real estate you’re looking at when you’re on our platform that bake into our algorithms. And then of course, you tell us your preferences, but you may tell us hey, my office, but when you’re on our platform, you’re actually looking at retail.
Adam Hooper – Right. What people say they like and what they actually do are often two different things, aren’t they?
Maureen Waters – Exactly. And so like Netflix, we will serve up the potential properties based on not only your preferences, but your behaviors.
Adam Hooper – Your actual behavior. Interesting. So a couple more things. You guys did a survey recently.
Maureen Waters – We did.
Adam Hooper – Some interesting parts in there. 73% of brokers rated technology investment as important to them, so I think that’s…
Maureen Waters – It’s huge, yes.
Adam Hooper – Perfectly evident. I mean, we all know it’s coming. 75% though said it’s complex and difficult to learn, right? So is that a reflection of the state of technology in your industry or is that a reflection of the users maybe not being as tech forward? Do you have any thoughts on that?
Maureen Waters – I think again, it goes back to partly what I said in my speech which is we haven’t partnered well enough. The tech and CRE haven’t partnered well enough to understand the exact pain points. Where we could go out and just build tech and if it’s not something I need as a broker, then I might be interested, but I’m not really going to follow it, right? But if you’re actually solving one of my pain points, it’s much easier for me to understand. And while the tech might be, I have to learn how to use it, I will because I have an inherent, I’ll leverage it in my day to day business. I think that’s something we’ve been missing. It’s the gap that we’ve seen over time and it’s starting to close and narrow.
Adam Hooper – More of that solution looking for a problem rather than actually solving a problem.
Maureen Waters – Exactly.
Adam Hooper – Yeah. Another interesting one. 39% said they were going to invest in VR in imaging. That’s pretty fascinating. I know it’s something we’ve talked about for a long time, kind of augmented reality and VR.
Maureen Waters – It is.
Adam Hooper – Are you guys looking at anything in that space or kind of what are you thoughts around that?
Maureen Waters – We are. We’re starting to look at it. We have in the past. I do think that there are some really strong firms out there in that space. I wouldn’t try to build it ourselves. I would rather partner with someone that really has the expertise. It’s a very narrow and unique expertise.
Adam Hooper – Yeah. So final question here. Kind of a little off topic from here. A recent interview, you were talking about leadership and about the importance of taking smart risks. How do you determine something is smart or not, right? Do you have a heuristic that you use or what’s your decision making process when you’re looking at some options to make a smart risk versus maybe a not so smart risk?
Maureen Waters – That’s interesting. Well, I would say that we work as a team. We have a partnership internally and so our executive team, when we’re taking on those types of risk, we work very closely, today more than ever with our customers. So if a customer comes to us and asks us build us a white label platform that we can use on our day to day. We will inherently go back and say, “What is the risk?” Can we build it? What is the cost associated with it? Is there an ROI? But at the end of the day, I think because we bridge that gap between the customer’s needs and what we can do on our platform and we don’t try to go off and build anything from scratch today unless it’s something very, very unique that has a very big payday.
Adam Hooper – Perfect. And finally, what’s next for Ten-X? What’s on the radar? What can be expecting to see?
Maureen Waters – Next for Ten-X is going to be more on the data side, very, very focused on data, but also more on the private label. We’re very close to announcing our first private label.
Adam Hooper – Oh, exciting. Perfect. Well, we’re keep our eyes open for that. Maureen, thank you for joining us today.
Maureen Waters – Thank you, Adam. Appreciate it.
Adam Hooper – That’s it for episode four of our 2019 CREtech coverage. Tomorrow, we talk with none other than Brendan Wallace of Fifth Wall, Vanessa Anderson at Truss, and also a panel about the hottest technology at the 2019 CREtech conference. Make sure you stay tuned for that episode and as always if you want to learn more about what we’re up to at RealCrowd, head to realcrowd.com or go to realcrowduniversity.com to get the best of our podcast episodes and content that we’ve created just for you. Thanks, and with that, we’ll catch you tomorrow.