The Next Generation of Real Estate Leadership
We’re excited to share Mark Smukler will be joining the “New Age of Tech-Enabled Real Estate” panel at Shadow Summit 2019. Mark is CEO of Bixby, which he launched in 2016 alongside his friend and co-founder Alex Ohebshalom. Bixby provides a platform for building owners and managers to operate more efficiently and differentiate their resident experiences. Bixby is in use at over 3,000 properties, encompassing an array of multifamily, single family, commercial, coworking, and coliving spaces.
Mark’s background in finance, combined with several years’ experience as a software engineer for early-stage startups, informs his outlook on the emerging market opportunities across commercial real estate. We spoke with him about the challenges of selling technology in a laggard industry, and what most concerns and excites him about where commercial real estate is headed.
Bixby’s target user is “a new generation of tenants and residents.” What’s different about them?
For the first time, real estate has started to adopt more consumer side technologies. There are two trends driving that.
The first is a universal trend: people today have a completely different relationship to technology than previous generations. We use our phones for everything from ordering groceries to getting a taxi. That kind of relationship hasn’t been [widely] supported in the real estate industry.
The second trend is a shift in the gatekeepers in real estate and the successor event going on there. In NYC, for example, so many family offices and real estate groups got their start in the early eighties when asset prices were depressed. 40-50 years later, the next generation is taking over the business, and those new leaders are actively looking to modernize and digitize.
“I think about the transition from real estate as the four walls where you live and work, to a service industry.”
What barriers to adoption are you confronting as you sell to property managers?
Challenges are similar to general B2B sales — larger contract values create longer sales cycles. While real estate is adopting more technology than previously, it’s still a slow process. Getting out to market and signing new clients is still a challenge. Tied to that is finding sales talent. Very few people on the real estate side have software sales experience. They may know a lot of people in real estate, but can’t communicate the benefits a new technology platform can provide. Alternatively, SaaS sellers struggle to understand what’s important to the players in the real estate space. It’s hard to find the right people to drive new business.
On the other side, the biggest challenge is the breakage between the property managers and onsite personnel, or the purchasing decision makers and users. The challenge we have is the property owner and manager want to adopt the product. They go through training, and then that’s it. The staff continues to communicate building announcements by putting paper on a bulletin board. They don’t respond to maintenance requests through the app. They don’t add amenities so people can reserve them through the app. There’s a skill gap. Who’s supposed to run the product, who’s supposed to create events, who’s responsible for the resident experience? Without a dedicated resident experience professional, who does the responsibility fall to? That’s the challenge to accomplishing our mission.
How has commercial real estate technology evolved in the two years you’ve been part of Bixby?
It’s become one of the hottest sectors from an early stage VC perspective. Real estate is one of the oldest and largest asset classes in the world and has generally been a laggard in adopting technology. Naturally, there’s a huge opportunity to disrupt so many components of the industry, from leasing and brokerage to facilities management to investing and asset management. The funding environment is at an all-time high, and the trend of companies looking to adopt technology has accelerated.
There’s still a disconnect between executives and boots on the ground. In the C-suite, there’s excitement to implement technology but adopting new products can feel like a distraction for the rest of the organization. There’s still a long way to go, and part of it has to happen at the facilities management, operations, and HR level. Training individuals how to use new technologies and emphasize service over engineering.
What market shifts do you predict in the next 5 years? In the next 10?
There will continue to be a seismic shift. One area that will continue to proliferate is the home buying space. Removing friction the way companies like OpenDoor do in buying an asset. I’m really interested in fractional ownership, owning part of an asset more like a liquid asset; buying and selling parts of buildings like you would with day trading. Opening up the asset class to more participation will benefit all stakeholders.
There’ll be a big change in facilities management. A lot less people are entering the workforce. Less people are going to trade schools and entering the industry. To an extent, technology has the ability to disrupt that. Supers may not be replaced but they’ll become more efficient. Companies are going to come to market that allow an owner and operator to outsource what they previously did in-house. An ‘Uberification’ if you will of facilities management.
It never feels good to talk about a reduction in jobs. You want to enable people to do more. You don’t want to introduce a technology that’s going to kill jobs. To an extent, if you’ve got a part-time super who needs to take out the trash twice a week and do a general site visit once a week, you really don’t need that person on your payroll. Why wouldn’t you outsource it? I think that will create a beneficial work structure for facilities managers because they’ll be able to fill their day with more work and ultimately make more money.
Which real estate tech companies or trends excite you?
I’m most excited about the hotelification of residential real estate. People use “space as a service” to talk about what companies like Convene are doing. But when I think about it, I think about the transition from real estate as the four walls where you live and work, to a service industry. Taking the comfort and conveniences for residential real estate to engage in the community.
“The next generation of real estate leaders is actively looking to modernize and digitize.”
What concerns you about the future of commercial real estate tech?
The saturation of products in the space. When we came to market with Bixby, we weren’t the first. Some of those companies are still here; a lot aren’t.
The question I wish more people asked is, which companies have been creative enough to create sustainable businesses? There’s too much of a focus on companies that disrupt or solve problems, and not nearly enough on companies that create profit. I don’t believe in this, “we’re gonna lose money as we scale, then flip a switch and be profitable.” I think there’s a real problem with companies that hold onto the business for too long, even when the evidence shows the model they’re pursuing isn’t economically viable. People need to take a look in the mirror, be honest with themselves about the best path forward: pivot, sell, or find something else to do.
Hear more from Mark at Shadow Summit 2019. Request your invite.