“Don’t be ashamed of working in real estate.” Blink and you would have missed it, but this was the most arresting thing I heard anyone say at this year’s Mipim Proptech Europe conference in Paris.
Diluted by all the chat, deliberation and discussion around scale-ups, fundraises and global expansion plans, this piece of advice from a seasoned property professional might not have sounded significant to anyone else.
But it certainly struck a chord with me. These words, courtesy of JLL France’s managing director, Charles Boudet, highlighted an issue that I suspect is not given the attention or coverage it deserves. Namely, that as a result of a huge effort across the sector to drag real estate into the digital age, a light has been shone on the industry and is showing it in such a harsh light that some people have to be reminded not to feel ashamed of the work they do.
Slow-moving
But why? Yes, real estate has been traditionally slow-moving and wary of disruption and a new order. And yes, there was a lot of work to be done to get the sector to where it is now – and there is much more that needs to be done. I can’t see where the shame is in that – in trying, striving and struggling to implement change.
After all, change isn’t easy. The European Commission’s Rudy Aernoudt summed this up perfectly as he closed his Mipim Proptech keynote speech using the words of Machiavelli: “It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.”
Quite. And yet, Boudet’s comment highlighted that, despite all the work being done to ensure real estate evolves, the very fact that an evolution was, is and will continue to be so desperately required is too often a source of embarrassment within the industry. Surely it should rather be a catalyst for excitement and opportunity?
And this is another key point. If real estate is considered such a disappointing industry to be part of when it comes to digital transformation, why are so many people moving into it from the tech sector? From former eBay CPO RJ Pittman joining Matterport to Silicon Valley investors Mihir Shah and Yishai Lerner heading up JLL Spark, property is proving, arguably beyond doubt, that it is a good place to be and, if anything, the fact it has so far to go in terms of growth equates to a huge amount of opportunity.
It is dangerous to make broad-brush statements on matters such as cultural approaches to failure. But speaking at the conference to the president of US-based investment firm Jamestown, Michael Phillips, did make me wonder whether the concerns Boudet highlighted are more likely to be an issue in Europe.
“I think as Americans we do tend to be a lot more positive about things than some other countries – particularly around change and the unknown,” said Phillips. “We seem to have more confidence that everything will work out and I do think that’s part of our culture.”
Innovation
Maybe it’s a US thing, maybe it’s a Michael Phillips thing. This is a man who took the reins of a traditional, 37-year-old company based in Atlanta, Georgia, and forced a pivot to focus investments on buying areas to develop into innovation hubs. The result? An increase in AUM from $2.8bn to $11.8bn.
The point is that many of the success stories born out of embracing change in real estate are likely to be fuelled, in part, by the fact that the industry is ripe for disruption. And this is entirely reliant on there being a low base to start from. But this does not mean real estate will always be slow-moving, traditional and archaic.
In fact, this sector arguably has the power to harness more change, more transformation and more innovation across the world than any other.
The hope is that through communication, collaboration and events such as Mipim Proptech Europe (where visitors were reportedly 45% real estate, 45% tech and 10% VCs/investors) we will reach a point where no one feels ashamed of working in real estate – not from a digital transformation point of view, at least.
Change is tough. Failure is uncomfortable and uncertainty is scary.
And there is no shame in any of that.
