Proptech must keep real estate in focus
There are a number of challenges that proptech companies need to tackle to succeed. Mentors and advisors often notice these issues in large enterprises and SMEs, with the greater impact felt by startups. These challenges often cause a snowball effect, especially if it starts at the ‘Minimum Viable Product’ level and continues through market penetration.
Talent sourcing
Most proptech startups tend to source talent from a purely tech background without real estate experience. While a tech background is important, the lack of real estate experience can hinder their ability to perform and may have a negative impact on the entire business.
Although skills are largely transferable across sectors, there is a fine line between technology knowhow, and market knowhow. Ideally brands must strike a balance between the two in their new hires.
The importance of talent cannot be overstated. We’re witnessing an influx of talent from Russia and the rest of East Europe into Dubai. These resources are tech-savvy and well experienced in proptech and everything tech. With Dubai offering the right platforms for investors, great initiatives and innovations, we are likely to witness an unprecedented surge in virtual real estate.
With Dubai offering the right platforms for investors, great initiatives and innovations, we are likely to witness an unprecedented surge in virtual real estate.
Working in silos
Most real estate companies in the region still segregate conventional, digital and product efforts. They hire and treat employees as independent departments, with separate KPIs and performance metrics. In many of the well-known real estate companies, the lack of collaboration between digital, conventional and product marketing and planning, results in weakly integrated customer-facing communication.
Broker-developer disconnect
The moment of truth in real estate is owning a physical property, unless we’re talking about fractional ownership, tokenization or virtual assets. More importantly, over 80 per cent of the revenue of major developers in the UAE are driven by real estate brokers, and only 10-15 per cent come from digital channels.
Therefore, the thinking should be how to integrate the broker into an omnichannel journey, and how to facilitate their customer funnel and collateral through digitalization, and not to decide on offline or online without the other.
Roping new investors
Many startups, especially in the pre-seed stage, try to save on product development. But while doing so, they bring on board supportive talent to help them kickstart their journey, and they give them a stake in the startup in return and include them in the board. After a year or two, if the startup turns out to be successful, and new shareholders request to join the board, it will be difficult to make room for the newcomers and allocate shares for them.
I always give two pieces of advice for startups; choose your board carefully, and be wise about your overall company valuation when you grant shares. Always go for a partner who sees the overall picture and appreciates the vision of your startup. A partner who is aware of the exit strategy and can participate in making it happen. Partners should also be well-connected within the industry and have an influential opinion. And needless to say, they should believe in the idea and have what it takes to succeed.