Founder of Estates Today and all-round tech guru Antony Slumbers gets philosophical in his quest to turn data into gold
Isaac Newton, the creator of calculus, the three laws of motion and the universal law of gravitation, is perhaps the smartest man ever to have walked the planet. What is less well known about him is that he was a keen student of alchemy, the practice of transforming base metal into gold. Or rather attempting to, as, of course, it cannot be done.
However, that inconvenient truth was not taken as proof that it was not possible. Instead a rather clever justification for failure was developed – that alchemy was possible, but only by someone who did not want to do it. If your interests were as base as greed and lust for gold, then you did not deserve to learn the secret.
Much the same applies to people looking to monetise data from smart buildings, a subject I keep coming across in the world of proptech. They say that data about your building will be worth more than the building itself. Buy our software and you can perform alchemy.
Sorry to disappoint you, but if it foiled Newton, then it will definitely foil you.
The rise of ad blocking shows us why.
More than 400m people have so far installed ad blockers, mostly on mobile devices. Why? Because people hate being harassed online, virtually stalked by re-targeting from advertisers that have been slow to grasp just how much their would-be customers have come to dislike them.
If all you want to do is monetise data about your customers (people who work in or visit your buildings), or sell ads based on data about them, you will not get very far. In fact, you will damage your brand.
So what is the answer? How do we monetise data from smart buildings?
The answer lies in the twin trends of the move from products to services and ownership to access.
Increasingly we are living in an almost post-consumer world where we are less bothered about acquiring more stuff and more interested in being provided with services, experiences and ephemeral pleasures. So Uber instead of cars, Spotify instead of CDs, Netflix instead of DVDs. On-demand this, on-demand that. Why bother to own something you seldom use, that becomes out-of-date rapidly, or that you really cannot afford? Rent what you want, when you want it.
Real estate is not immune to this trend. In fact, the real estate business is no longer about real estate, or soon won’t be. Just as it is now easy to buy almost any software as a service, so it will become with real estate.
Space as a service is the future of real estate. And when you become a service provider rather than a rent collector, what will be your differentiator? It will be your brand, and your brand will grow out of the user experience you can offer your customers. And that user experience will be dependent on data, which is where we start to find the way to perform real estate alchemy.
Data is the fuel you need for the two things that will underpin a great user experience: the ability to remove friction and the ability to enable discovery.
Friction is anything that makes it harder than it need be to do anything. Friction is what makes life a pain. Often these are small things, but we all know that it is often the small things that are the most annoying. They are the things you have to do when you have other things to do. So one would use data to remove this wherever possible.
Armed with real-time data about temperature, humidity, air quality, light levels, motion, presence, location etc, there are myriad frictions you could make disappear. Every year new sensors arrive on the scene, and in each one is a new business model. You just need to connect the dots.
Whereas removing friction principally deals with everyday pains, enabling discovery is all about gains, the enjoyable things you can offer your customers. If we knew who was visiting us and when and we knew all about the space around us, then how could we make visiting us a more exciting, pleasurable, or just more convenient experience?
This is all a mindset. One where building value depends on building a brand, and that in turn involves thinking about all the ways you can enliven or animate your physical spaces.
So, back to Newton and alchemy. There was a magical ingredient alchemists believed existed that would make turning base metal into gold possible – the Philosopher’s Stone. That would be the ultimate monetisation machine for real estate. Our Philosopher’s Stone is data, but data used in the correct way.
Interact with Slumbers on Twitter @antonyslumbers
