The following is an excerpt from an article written by Alyssa Murrett. This article, in which she interviews Apto's very own Tanner McGraw and Ryan Masiello of View the Space, was originally posted on the Compstak blog.
To understand how CRE experience drives success, it is important to determine the challenges faced by CRE professionals.
First and foremost are tech challenges. Brokerages are notorious for having antiquated systems. McGraw describes how Apto was born out of this frustration: "I was a broker for 10 years on the investment sales side...the industry is slow to adopt technology and plagued with all these disparate systems." McGraw goes on to explain "many people are still using Outlook and Excel. It is an unsophisticated approach." McGraw states, "new brokers coming in (to the industry) did not have the advantage of less competition when they first started out. (They) needed to catch up and that's where tech comes in." McGraw describes how after many poor attempts by other software companies, he decided to create Apto as his "CRM, prospecting, deal management tool..."
Because McGraw and Masiello lived these challenges as brokers, they have been able to craft relevant solutions in Apto and VTS.
Buy why now? Why have we seen such an upswing in innovation within commercial real estate since 2008? We all know that commercial real estate took a turn for the worse in the recession, but what is interesting to think about is whether or not the technological advancement in the CRE industry would have occurred without the recession?
I was reading this article by Mark Suster, and this passage jumped out at me:
"Great companies are built in downturns. It's where the truly innovative separate themselves from the pack. It's when the game slows. It's when the noise stops and you can actually get customer attention, press articles and VC meetings."
Perhaps this might explain the lag in CRE innovation as my colleagues, Joe and Noah, describes last week?
For the sake of argument, what if the lag in investment and innovation was because of the following: Before the Great Recession, there where few CRE technology start-ups because there wasn't much of a need. The real estate market was booming, brokers were inundated with their day-to-day work-leasing space, tenant prospecting, or streamline a process, when everyone is making money? The Great Recession provided the catalyst for innovation. As the real estate market imploded, and brokers had to work harder for the next deal, they looked for ways to gain an edge over the competition. That is where technology enters. Brokers realized that there was an opportunity to change the industry through technology, which the CRE industry had yet to fully adopt.