On today’s show we’re talking about the link between online and offline and the world of real estate in particular. When I look to see where real estate is going, I look to online innovators. That seems counter-intuitive. After all, we live in an offline world.
When we think of the online world, your first thoughts might go to Facebook, or Instagram, or TikTok or ClubHouse. How could those technologies possibly disrupt the world of real estate? It makes no sense.
In my view, the disruption to the physical world is going to come from the online world. The catalyst for disruption in real estate won’t come from a new building technology per se. Although there are a number of innovations in technology that are changing the way buildings are designed and constructed.
I look to those companies that are upending business using technology. We’re talking about how Travis Kalanick, the founder of Uber, and most recently of Ghost Kitchen startup called Cloud Kitchens.
This was merely an idea a year ago. Today, some top chefs in NYC have abandoned their expensive real estate and are serving the take-out market out of commercial kitchens located in less expensive industrial space, rather than the prime location kitchen with the fancy ground floor restaurant dining room attached.
I attend a daily meeting with Glenn Sanford, CEO of EXP Realty. You might be wondering what I’m doing hanging out with the CEO of a real estate brokerage. I’m not a real estate agent and don’t want to be. Apart from the word of real estate, there’s no real connection.
What sets Glenn apart from others in the space is that he speaks like a software designer. He uses language, terms and metaphors that came out of the world of software development. It’s not an act. He simply exudes it. As we’ve talked about recently, When I look at the systems he has used to build his business, there’s no doubt in my mind that he is thinking scalability, the kind of scalability that can only be matched in an online world. His company has experienced the kind of growth that only a software company can achieve. It would have been near impossible in a bricks and mortar business.
It used to be the case that an impressive office with a sprawling lobby and layers of assistants made an impressive first impression for a prospective client, or an aspiring employment candidate. Today, that’s a distant memory.
I’ve been using zoom for meetings for several years now. But my use of zoom has expanded dramatically. Even in the past week, I have spent no less than 6 hours a day in zoom meetings on some days.
In December of 2019, zoom had about 10 million daily active participants. By March this had grown to 200 million and by April, over 300 million. How did zoom scale their enterprise by a factor of 30 in the span of months? The ease of use of zoom and the excellent performance made this possible. It turns out that Zoom uses Amazon’s web services data center. They’re one of the largest suppliers of third party data services. Amazon’s server farm was easily able to scale the service offering to meet the needs of zoom’s growth.
None of these shifts individually represent a major change. But cumulatively, the compound effect of all these changes on the design of real estate is significant. I don’t need to dedicate as much wall space for book cases anymore.
How many people used to have a video studio in their homes 20 years ago? Hardly any. Today, I know of dozens. If I was designing a home for this coming decade, I would be designing it differently compared with only a few years ago. Back in the day, homes and apartments used to have a built -in cabinet for the delivery of fresh milk. Today, nobody would even think of that. But a secure e-commerce locker makes a lot of sense.
We know that technology is changing rapidly. We have no idea what building technologies will look like in 30 years from now.