Digitalisation is transforming everything, and with real estate being the largest asset class in the world, it is inevitably at the heart of the revolution. In this piece we describe a variety of elements that a successful coliving business must take into account when selecting and implementing a truly experience-changing technology for all stakeholders involved.
The following article has been included in the fifth edition of Coliving Insights - Co-Tech: Innovating Coliving with Technology. Download your full copy of the publication by clicking this link.
While several established industries have been implementing digital transformation processes for more than a decade, real estate has been lagging behind in the adoption of technology and just recently started to explore what these innovative digital solutions can offer.
As technology is rapidly changing how companies reach, communicate with and market to end-customers, the implementation of digital tools has become a necessity for any real estate business. Understanding this requirement, multiple companies dove into complex solutions before ever conducting a thorough identification of their actual pains and needs. This has led many brands in real estate, including within the coliving sector, to challenge themselves with complex integrations (often involving several third parties), ultimately getting stuck with over-comprehensive systems, deemed inefficient in the long-run.
To speed up and scale, real estate companies should first prioritise what is truly important and achievable within a given timeframe - low hanging fruits. A well-defined research phase can serve as a trampoline to enhance further processes, providing a company with valuable data. A comprehensive understanding of pains, gains and roles of all the stakeholders involved (i.e. developers, operators, community managers, tenants, partners, investors and more) can pave the way to successful digital transformation by creating alignment in the early stages of the process.
Setting and monitoring reachable, short-term goals enables companies to get closer to achieving overall long-term business goals over a specific timeframe. This step-by-step approach to business transformation has proven to be successful in the past. With a rise of modern lean methodologies (i.e. Design Thinking and Growth Driven Design), companies are understanding the value in optimising their processes, operational flows, teams and technology.
A classic example of effectiveness of this type of approach is the application of the Kaizen mindset to process improvement. Popularised by Toyota, this methodology focuses on a process of continuous improvement through the implementation of small, incremental changes. When considered all together, these constant changes can result in significant growth.
Coliving, as a new segment, is still characterised by a strongly fragmented market. Nevertheless, small and medium businesses play a huge role in its development. With a number of unwritten rules, it can be a challenging environment for starters. However, the appropriate technology can deliver experiences that make coliving attractive to potential and current residents, as well as helping developers and operators manage their projects and communities efficiently at scale.
One of the bigger barriers to innovation in real estate is the clash of interest of various stakeholders involved in the decision-making process. The solution? Start small. The future of real estate will no longer predominantly be determined by executives in black suits dictating the rules of the world. With the rise of alternative real estate sectors (such as coliving, PBSA / student housing, senior housing, etc.), very often the need for innovation comes from the bottom - the employees on the front line, who are in contact with the tenants and truly understand their pain points and business bottlenecks. Leveraging that knowledge, developers and operators could spend more time on the strategic decisions that allow the employees at the first touchpoints to implement small ‘adjustments’ into their marketing, operating and management systems, in order to respond much faster to a constantly evolving real estate landscape.
At the same time, in a market flooded by proptech products, it may be difficult to choose one that will match the exact needs of a particular company. Proptech became one of the most used terms in the industry - according to Google Trends the usage of the keyword ‘proptech’ skyrocketed by 400% in just four years - attracting new enthusiasts with the promise to disrupt the market with newer, better, more innovative products. Meanwhile, the market reality shows that new solutions are all revolving around similar topics and trying to solve the same problems, but in different ways. This fact should not come as a surprise considering that real estate, being the biggest asset class in the world, brings many opportunities for new entries. When starting or growing a coliving brand, there is no need to engage in a high-risk investment such as a complex PMS or CRM system that may not be fully utilised in the long run, which also requires many hours of restructuring processes and onboarding. Instead, you could reap the best of what technology has to offer, building up on tools that are within your reach. There is no need to reinvent the wheel. Start from what is easy, and upgrade later. This would definitely be our most recommended process for emerging coliving players.
In the end, what makes the solution ‘stick’ depends on three factors: 1) clear added value (i.e. improved operative performance), 2) high ROI and 3) ease of implementation. The current landscape of digital tools includes many possible choices that fulfil those the criteria for any type of challenge. Implementing simple, no-code / SaaS solutions through existing integrations will often outweigh comprehensive systems thanks to flexibility, agility, speed of implementation and ease of use.
For example, building an online community that is able to engage in a platform can be entirely performed using existing no-code tools, and customised at any time to only include features that will actually be utilised by all website visitors, instead of buying an all-in-one community app or software. Therefore, instead of being stuck with a complex system that does not really meet your business and user needs, it is important to create a digital ecosystem in which the elements can be put together and re-shuffled at any given moment, while defining the most appropriate processes at a business level. The importance here is starting with tools that the team already uses (Website CMS, project management and communication apps, etc.) and adding other crucial solutions to fulfill the current and most pressing demands for operations performance and automating repetitive tasks in an effective manner.
Setting up automations through no-code solutions can bring various benefits. Firstly, the full control of the tools is in the hands of internal teams who are able to adjust settings and functionalities over time without involving any external coders or developers. Secondly, current trends require businesses to set up agile and flexible frameworks to face uncertainties in regards to their digital presence. It is always possible to exchange no-code tools for a different solution that better fits business goals without incurring high costs. Most importantly, automation enables teams to save time, improve operations and internal processes as well as gather different kinds of data from the very first touchpoints with the end-customers, even before the start of building operations.
No-code solutions make it easier to gather enormous amounts of data generated by tenants and employees at different touchpoints. While comprehensive systems also allow data collection, it is often hard to interpret this data and get lost tracking aspects that are not delivering useful information. Through no-code solutions it is possible to automatically track only the data points that are deemed truly relevant, and merge them in one place. Well-designed integrations have a potential to create more accurate forecasts. Based on that, executives and decision makers can come to conclusions more easily and effectively target the needs revealed by the data. Eventually, the better the understanding of the market by gathering data and qualitative information, the higher the probability of consolidation of the coliving sector.
What helps companies to uncover their potential is mapping the entire customer journey and defining all internal processes before even starting to research the best digital solutions. Listing all the possibilities at every digital touchpoint, understanding which operations and marketing efforts can be automatised and subsequently setting reachable goals will help narrow down the most suitable solutions. This step of defining what should be firstly automated and choosing the right digital tools can be facilitated by trusted third-parties through digital consulting and auditing sessions.
Digital Estate was born with the mission to empower specialist real estate businesses and players through a deep understanding of the market and all the development phases. Backed by almost a decade of expertise of its Venture Developer (Spatial Experience), Digital Estate ideates, designs, develops, integrates and automates a large variety of solutions, elevating the digital experience for internal teams and end-users. Through consulting, Digital Estate is able to find the best-in-class tools or reliable proptech providers that truly match case-specific needs of specialist real estate businesses. If it is not possible to find a good fit for a certain digital challenge, Digital Estate is also able to solve complex issues through custom development and coded solutions.
In the beginning of the real estate journey, especially in shared living sectors characterised by an interconnection of various market players, it is crucial to set up collaborations and knowledge exchange frameworks. In the end, coliving as an industry can progress faster when different players join forces to achieve goals together. Sharing knowledge is not limited to an operational or development level, but can also be done to identify - and educate about - the best digital practices within real estate. This will help accelerate an overall digital transformation process of the whole industry, increasing trust of institutional investors and consolidating coliving as a core residential asset class.
We live in an era of advanced technology. If real estate players will not be able to adapt to the changing landscape and embrace digitalisation, they risk losing their place in the market. Digitalisation itself is not a one-time change nor is it a purpose in itself. It represents a tool, process and methodology to drive impact; a process that requires a holistic approach, which means not only using the latest tools, but also aligning on internal processes and educating teams to embrace smart tools in the modern workspace. Digital transformation is the new norm in real estate, reflecting one of the main growth drivers for both the present and future, especially for a disruptive industry like coliving.
Sign up to the waitlist to keep updated about Digital Estate and receive exclusive access to our upcoming newsletter. Get in touch for more information!