It was my pleasure to present at the invite-only Proptech CEO Summit in San Francisco, hosted by former Trulia execs and current venture capitalists, Paul Levine and Pete Flint. There were over 100 proptech CEOs present, including Glenn from Redfin, Eric from Opendoor, and many others.
I want to share my entire presentation from the event, in addition to highlighting a few key points.
PropTech and PropPsych
The first point deals with the critical role of human psychology in real estate transactions, and the concept of loss aversion (for more, check out How Psychology is Holding Back Real Estate Tech).
Human psychology is the single biggest obstacle to mainstream adoption of new technologies in real estate. The point I made in my presentation is this: every venture capitalist should be asking proptech start-ups how they are going to address loss aversion.
And the inverse is true: each startup should clearly explain how its product or service is designed to minimize loss aversion in consumers.
Building the technology alone is not enough. Real estate tech companies need to assure consumers their product is just as "safe" as the status quo. PropPsych is just as important as PropTech.
Solving problems with money
The second point relates to the massive amounts of money flowing into the ecosystem. To quote Glenn Kelman, "If we can afford to lose money for five years, how can we ever make money?"
The biggest players in the space -- Opendoor, Purplebricks, and Compass -- have raised hundreds of millions to over a billion dollars each. The next tier of start-ups have raised tens of millions of dollars each.
But none of these companies are actually doing something new; they're doing what's possible with massive amounts of capital.
Yes, there are novel aspects of the business models that allow these business to realize gains in efficiency, or provide a superior customer experience. But all are underpinned by massive amounts of capital.
The reason that Compass can buy market share, Purplebricks can generate tons of leads through advertising, and Opendoor can buy thousands of homes is access to vast amounts of capital.
Attached below is a link to my presentation on Slideshare (you can also download the PDF). Unlike my numerous industry reports, this is designed to be delivered in person. But hopefully it helps you and your business.