“The real estate industry needs an absolute transformation. The old solutions are no longer fit for our new situation, we need new tools. I think the real estate world is going to undergo enormous changes soon. And there is a major opportunity for technology companies today.”
Collaboration is vital in this new digital era. David Hueso Gutiérrez, Founder of TheFringe/LABS, shares his views on how proptech partnerships can be the key to improve the real estate industry and solve most of its current challenges.
What are the biggest challenges the real estate industry is facing?
The answer is very clear: everyone in the market has a lot of old money. There is very little new money, which is basically the money that is being invested in it, in start-ups, etc. We have a lot of old money that hasn’t been able to turn the market around. I have never believed that innovation comes from within —I have always believed that innovation comes from outside. First, we need to create things outside and then introduce these innovations into large corporations.
“I have always believed that innovation comes from outside”
How does digital transformation enhance this new era of Real Estate?
From the digital world, which is where I come from, we are trying to start a revolution in the Real Estate market. Mostly, operational solutions are the most necessary tools for this industry. Digital transformation works from the core of these corporations to change the processes, to optimise them.
As entrepreneurs, we always aim at revolutions, but sometimes you only need optimization. We have to think about these short-term needs and not only in the long term. In this industry, it is very difficult to plan ten years ahead. Investors can think about it, but this is not the case of the corporation that wants to evolve.
What do large companies expect from startups?
Just as we were discussing before, they expect solutions that will make them improve their deal, become more efficient in their current operations and open up new lines of business. Let’s make that what you do. All three things optimise and improve profitability and open up new lines of business.
“Large companies expect three things: optimise operations, improve profitability and start new lines of business”
Which real estate assets will remain the strongest?
The most solid aspect is the brick itself, the real estate itself. Then, it is a very heterogeneous answer. Everything related to intermediation has to be digitised and this is the process where the largest transformation is taking place. Last year, investment was mostly driven towards asset management, basically real estate management, and technical costs. This second aspect is more complicated, it is going to be a rather long-term process.
How important is data today?
Well, I have been working with data for many years and my company is actually based on data. Data is fundamental. I have never believed that the real estate world is a big data world —this industry needs smart data. There is a lot of data out there, but there are few people who know how to focus it in the right direction. The amount of data is not as important as having a partner that leads you toward the right decisions.
“In the end, a manager just wants to optimise and maximise the company’s performance. Without data, this is impossible.”
At a technology event, the start-ups are usually made up of specialists from the fintech industry, but there is not a lot of contribution from within the real estate industry itself. Why do you think this happens?
We should take several factors into account. First, proptech is a small part of fintech because we are talking about investment. There is a lot of interest from the industry, but it is an older market, it is more difficult to change. The financial market has already undergone several digital transformations. This has not happened in the real estate market, where we are still working with Excel, and most people don’t know what an API is. Therefore, people investing in proptech companies generally come from the financial or digital world, who really understand how this works.
The market is extremely appealing, but we should consider that the processes that started changing 15 years ago in other industries have just started changing a couple years ago here. It is a much more cautious market. Yet, the winners will be those who think seven, ten years ahead.If you would like to watch the complete interview and learn which are the European markets that spark most interest in real estate investment. Visit: https://www.thefringelabs.com/es/