Kylie Davis is from RealContent.guru and she'll be one of our expert commentators as we stream back some content live from the Inman Conference in New York late in January. It's going to be an exciting time. We're going to be talking about the top five PropTech developments or innovations, not necessarily concentrating on products, but areas of innovation in general during 2018.
What is happening with artificial intelligence?
Kylie said: “I think when we think of AI, we tend to think of C-3PO or robots that follow us around and do everything from making coffee but what we're seeing and some of the Australian companies are actually leading this way, is technology that is algorithms that are sitting in the background that are doing a lot of the repetitive tasks that agents do that they don't necessarily think about.
“So let me give you an example. RiTA, which is the bot that is run by Aire, with Ian Campbell and Sarah Bell. RiTA basically has lots of different applications but some of the best ones I've seen are, she can act like a 24/7 assistant on the front desk. If you think about what the girl or boy on the front desk does for real estate agents, when inquiries come in, they read those inquiries, they work out about a property, they'll respond to them if they can, if there's something they can answer or they'll forward it on to the agent to make sure that the agent calls the person back.
“But the trouble with that is that's really a lumpy workflow. So those inquiries will come in huge amounts over the weekend when people are in property searching mode, they often come in silly hours of the morning when people are looking for property drinking wine and then of course, the poor old assistant comes in first thing on Monday morning and they've got to get through all the work that got to be done Monday morning and deal with all the weekend's backlog.
“Whereas what RiTA can do is simply respond immediately to people based on if they've asked a question on something that RiTA already knows because it's the opening for inspection time or she can send messages or text messages to the agents to tell them that they need to call somebody urgently. But she'll also take in new data and then add it to the CRM and do that in a really consistent way. So that when you come in on Monday morning, everything's done and in fact, it's being done constantly in the background to a much higher standard.”
How does this help you to concentrate on other tasks?
The thing about this is that you know it's going to be done. It's going to be done proficiently because you've set all the parameters for it but it also allows you to focus very much on the tasks that need you, that you can't automate. And that is, talking to buyers and sellers and actually doing the negotiation. This really helps you stay focused on those dollar productive activities.
Kylie said: “Absolutely. And the thing is, too, that these quite boring tasks. The thing about big data is that human beings are terrible at big data, our brains can only process and deal with so much at a time and a lot of data work is actually really dreary. You've got to enter names and addresses or contact details into databases. That's really boring work to make a person do but the bots are able to do that, they have no opinions about the boringness of it. They just process the work through and if it comes in at two in the morning, they'll do it, they'll flick it through really quickly, so we're seeing some really great developments in that space. Some other things like, we're seeing platform automations as well. Things like ActivePipe have got more intelligence in them to start to recognise people's behaviour, which means that you can start to automate your marketing to people.
“We're seeing increasingly, even today, someone sent me an email, a company called Cribs. It was just a piece of tech that they were using which is called x.ai, which lets you schedule meetings really quickly with people. And I thought they had an assistant who was trying to set a time for us but in fact it was just a little piece of AI that was saying, ‘Look, I can see in the calendar that John's got these three spots available, which one would work for you?’ I downloaded it straight away.”
How is outsourcing becoming massive in the industry?
Kylie said: “I think that's because as an industry, more technology makes life a lot easier, and the more it expects us to get done in a day. And so outsourcing is a great way for us to affordably scale our businesses, and get more work done at a higher standard. The ones that are the really good ones, are those that have the structures in place, that make explaining what you want and the level of delivery that you require, really easy and make that something that can be explained quite quickly. And they've got the tools in place to help you monitor and measure it.
“Slack, there's that one that's good, that's useful as well. Look, I think 99% of the mistakes, especially that Australians make, when they're outsourcing, is they forget how colloquial we are in our language. And how often unclear we can be when we're asking for something to be done. I know that I'm completely terrible at it.
“Nathan and I have a Beepo employee who does a lot of animation and design. He's super-duper clever, but most of the time it's because I've asked for something in a very strange way. So I suppose what we're seeing though is, in the real estate industry in particular, these developments, of these systems that sit over the top of the outsourcers, that make sure that that communication is really clear. And that the delivery, you know, frameworks around it are really well understood. And that job descriptions are very structured and that it really minimises that error. And gets people working and productive as quickly as possible for your business.”
What difficulties are there with outsourcing?
Kylie said: “It is really hard to simplify your language, or to structure it in a way. So I think that's why those companies that have got those platforms in place, that take into account the way that you have to brief, and the way that you need to ask the work. I think the companies that don't have those structures in place, are ones that you want to be careful with as well, because it means that there's staff in the other country are maybe not being looked after the way that they need to be. So there's a level of comfort in knowing that everything's above board and being done well, when you're using some of the bigger outsourcers.
“And also, I think that there's a group of them now that are starting to really specialise in the kind of services that real estate agents want. And there's something I'll throw out, to be a little bit controversial, is that those businesses that struggle, those real estate businesses that struggle with outsourcing are often the same businesses that struggle with their own staff. And so, some of the issues around that are usually tied back to leadership and clarity around leadership and how you treat your team more than issues with outsourcing.”
What place does social media and marketing have in the industry?
Kylie said: “This is a really vibrant part of the prop tech startup community, marketing and automation. There's a whole lot of innovation going on in this space and a lot of it's coming out of Australia. What we're seeing is there are some great companies that are helping real estate agents automate their content and how they send emails out. And as part of that, like so Active Pipe, able to both help you schedule your emails that are going out, but then also gain more intelligence from what's coming back from those emails or the responses that you're getting, and then using that information to target more and more deeply.
“We've got other businesses like at Phoenix and Tiger Pistol who are doing work in that social media space. So helping agents automate and get insights and target their social media advertising much more effectively so that it's kind of point and click rather than having to go through all the drama of trying to learn Facebook ads, which is the bane of every normal person's existence. And we're also seeing the content itself and how you create it and how you do that really quickly to create great quality content, or have it available as quickly as possible. We're seeing some great work in that space too. Companies like Home Preso that are able to help automate and make that happen a lot faster so that you don't have to be a content expert to create a content calendar and have things new and interesting to post on a regular basis.”
What needs to change?
The whole scene is changing, and as Kylie mentioned, that a lot of it's driven out of Australia. One of the reasons for that is that Australia is still the most expensive country in the world to advertise a property online and that has to change and it is changing.
Kylie said: “Well, we have this legacy which is good and bad. So while our commissions are a lot smaller than the US. So in the US, property commissions are six percent, which is three percent to the selling agent, usually and three percent to the buying agent. In Australia, we've had much lower commission levels, but we've always charged for vendor paid advertising and we've had some very motivated companies in Fairfax and News Corp who have been very keen to help real estate agents spend that money. And they're my old cohorts, so I take some of the blame.
“So because of that, because we have this heritage of vendor paid advertising and understanding the power of marketing and being able to talk to our vendors about how important that is, that's one of the reasons why I think advertising's so expensive. But it's also one of the reasons that is encouraging all of this innovation to help make it more affordable for agents to do things differently and hopefully better.”
Has this forced us to innovate?
Kylie said: “Yeah, I think some of the legacy ways of advertising have a place, but what we're seeing now is you need to, if you're serious about doing marketing, you need to be fishing where the fish are and making sure that you're targeting and that targeting is a lot more affordable. But the downside to it is that you then also have to create content that you can target off, that is actually genuinely interesting. So it's not just about property listings, it's actually about thinking who your audience is and what we're seeing is some really exciting stuff coming out that's helping agents not just think, oh, house for sale, house for sale, house for sale, but actually thinking of ways they can be useful.”
What is big data and the internet of things?
Kylie said: “Well, the Internet of Things is one of my favourite things. It's basically any device that you've got around the house, or even as part of the construction of your property, or anything really, but let's keep it to a real estate example. It's any device that at the moment is probably a bit dumb but can have some smarts put into it and connect it to the internet, to start to give you information about itself. So things like hot water services, elevators, dishwashers, any electronic device that we use at the moment. The next world that we're entering with them is things where, at the moment if they break, you sort of go, ‘Oh, it doesn't look like it's working,’ and then you sort of do things to test it and it's like, ‘Oh’, and so you lose time doing that, and then you have to ring someone.
“Whereas what we're heading very rapidly towards is those devices having the chips inside them to say, "Oh, hang on. I'm either overdue for routine maintenance," and booking their appointments, or booking their own maintenance, running their own scans and tests to make sure that they work all the time. Or when they don't work, reporting their errors back to base.”
Is this like the ultimate connectivity?
Kylie said: “Yeah, and it's not so prevalent here in Australia, but in the US, Google have a product called Nest, which is, basically it runs your home for you. So it manages your thermostat, and it manages ... it can turn your lights on and off, and then that's also connected to Google Home, which is starting to pick up here in Australia. And so you can start to tell the ... you know, the Internet of Things is capturing data, recognising how many times it's turned on and off all of these things. How often it's failing or where parts are breaking, all that sort of stuff, but then you've got that voice activation over the top of it, that lets you tell it what to do or interact with these devices.
“So what we're seeing in the US is sort of the Google Home or Amazon Alexa being at the centre of everything that's going on in your home. And in the rental and in the property management space, things like a company called Zenplace are working on ways so that when a tenant has an issue with something in the property, they can either log it, they can say, "Hey, Google, the dishwasher's not working, can you log it?" And then that would report it through to the property management.
“Or, say, hot water service is a good example. Google can say back to you, ‘Well, have you checked the pilot light?’ ‘I don't know how to do that. How do I do that, Google?’ ‘Okay, this is where you'll find the pilot light. This is what you should look for,’ and to start to give you instructions. If you think about how powerful that is, is that you're no longer having to wait till the morning when the property manager's in the office. Ring them, wait for ... do the seven phone calls backwards and forwards while you miss each other to tell them what's going on. Wait for them to send someone round, in which case you could be out of hot water for a couple of days. It can solve all those problem really quickly.”
Will these devices be able to do this kind of stuff instantly?
Kylie said: “Yeah, absolutely. Where this gets really exciting, too, is because these devices will be capturing data both on themselves and a little bit about what's happening around them so much, it starts to really impact on how we innovate further. So that example of the thermostat, for example, in your house, in Australia it's more probably going to be managing air conditioning, or heating if you live in Melbourne or Tassie.
“But if you have a device that you can walk out of the house and realise, actually, I have forgotten to turn it off, and turn it off on your phone. Or it knows that you come from work at 6:00 every night, and so it turns itself on in readiment for you. Then the amount of energy that gets saved is phenomenal when you times that over every single house across the country. Which means that greenhouse gas is improved, and so it then starts to really have an exciting impact around how we're living in the planet.”
What customer pain points is technology helping to solve?
Kylie said: “Well, I think it depends whether you're a buyer or a seller or a renter or an investor or a property owner what those pain points are. But I think really generally, they are that buying and selling property is a really, well, it's really slow and it's really stressful. And it involves handing information over from filling in lots of forms and handing information over from one person to the next person so that they can make mistakes filling in those forms and then give them back to you and after many days delay.
“So there's lots of inefficiency in that process once you've decided to buy and sell and there's also a lot of inefficiency in finding properties that are suitable and matching people that are suitable to properties and then even financing those decisions whether that's renting or buying.
“Yeah, and I think, look, there's lots of different kinds of customers in this space as well. So we've got our end user customers, so buyers, sellers, renters and landlords. And then we've also got our internal customers. So our employees and what is the experience that they're having on a day to day basis in the work that they're doing and how can we make, how can we solve some of the pain points that they're experiencing?”
What examples of problem solving are there?
Kylie said: “Well, I think look the one that's been around for a while but is only just starting to get adopted really a lot is DocuSign. So being able to sign a document from anywhere in the world, and have as many people sign or witness it, makes life a lot easier without you having to print it out, scan it, have it witnessed. You can do it simultaneously, which is really powerful. And in New South Wales even the Government's finally changed the Rental Tenancies Act to allow that to be a way of signing a tenancy agreement. So that's improved it a lot.
“We're seeing a lot of innovation happening around trust accounting. So, how do you account for funds in real time, make sure that they're always available without having to do the old fashioned quite laborious accounting methods for that and having money sitting in separate accounts. How do you just sort of know where the money is at any particular time and have it allocated.
“We're also seeing some really innovative thinking around changes in the bond market. So as a tenant you need to put a bond down. If you then decide to move properties, you have to put another bond down and that's likely to be required before you get your old bond back. So that's a lot of money to have out, especially for a lot of tenants who might not be in the best financial circumstances. And so we're seeing really innovative thinking happening around there to work on how to change that process and have it as an insurance policy, rather than having to put money in with the Government.”
What is research showing?
Kylie said: “Rockend have done some great research recently into the property management sector, and we can see from that research that most property management businesses are small little agencies, with probably less than three property managers. They're dealing with about 150 properties and they are busy. And they're busy doing really quite dreary work of making sure maintenance and all of, maintenance is done, inspections are done. And it's lots of ticking and flicking and admin sort of stuff that are pain points when they just come in that kind of volume.
“So we're seeing solutions on how you kind of batch them, manage them more efficiently, get them done to a much higher standard. Turn it around more quickly so that you've got happier tenants and happier landlords, so that you're not dealing then constantly with complaints from them. And sort of recording and registering all of that so that you're building up sort of information on when things will need to be replaced. Getting an understanding of when things can be replaced or serviced so that you then don't have to deal with something broken down the track.”
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