Our team at the PTC is sharing weekly "fun facts" about the Real Estate + Investment industry. Our team at The Proptech Connection is constantly in the #Proptech market, with all sides in solving their problems. Here's a few summarized...
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The US state of Virginia, accounted for 70% of all email traffic via its data center alley. Not sure this is what John Denver meant by "Almost heaven".
Electricity accounts for 40% of data center op costs + the image from Greenpeace shows how large cloud companies are tackling this. Massachusetts Institute of Technology also did an interesting study, finding:
Cloud computing has a greater carbon footprint than the airline industry. The building of data centers in the desert has had water shortage impacts on states like Utah.
In some instances only 6-12% of energy is used for computational work, the remainder being used for back-ups or cooling
The real estate industry is rightfully targeted as a high waste industry with many citing WFH as a solution to rectifying some of its wastage. However, what these stats highlight is that these "new ways of working" come with their own issues.
We see dozens of solutions each month from across the globe tackling many of these types of issues + what is clear is that every company needs bespoke solutions.
Some interesting insights from McKinsey & Company on the growing impact of AI. Some key take aways:
- 27% of their survey respondents noted a 5% improvement to EBIT due to AI
-The function which had the biggest improvement was in services + operations
-Sub-functions of risk was the lowest ranking out of 10 key areas
The recent data issues in #Australia highlight, there is now a greater need for data security, and we have noted this is often seeking to leverage AI.
We have also noted a number of excellent new technologies coming to the fore to meet this demand.
As we move into a more defensive economic environment, we expect this trend to continue (i.e focusing on using tech to augment current flows, especially around risk prioritization, rather than generate revenue) to meet the growing concerns from occupiers/buyers/residents/asset users.
Prior to Instagram, its’ founders set up Burbn. Burbn was a quasi-social media site + photo sharing was one of many things you could do on the platform. Yet despite $500k funding + ex-Ivy league founders, it didn’t grow. Was more a moonshine than a Jack Daniels.
The feedback from users was they only used the platform for the photo application. The rest of it wasn’t relevant/or there was better in market. Hence the birth of “Insta”. From a Proptech perspective, gives some great insights:
- Building out broad functionality when operating in a disparate customer market like real estate isn’t always needed. Being a single point solution is often more valuable.
- A number of investor pitches are ruined by over extending ambition - this often muddles what the current state’s value prop is + the opportunity is lost.
- The logic of vertical/horizontal integration sounds solid but doesn’t always work (see Katerra)
- The need to constantly evaluate users + product fit is crucial. The guys at CNN, I am sure can attest to this after burning $320m in 30 days on CNN+ before it close
Digital Transformation is challenging but many in CRE are seeing the current environment as the perfect time to design + deliver something completely different-not just repackage or have lite versions of prior projects.
One recent example is an occupier who has committed to spend >$20m per year on digital transformation, driven in part by their decision to materially reduce their global office footprint. These material shifts are something we are seeing globally. This is also one of the reasons that we are seeing valuations in the CRE vertical of Proptech staying strong- these will be the tools of the change.
As markets worsen, we believe it will be the digital pioneers who will "excel" as we come through the cycle.
For more insights or to partner with us to get market access to the largest Proptech network globally contact us!