PropTech Talent and the Future of Real Estate with Antony Slumbers

Louisa

Hi everyone, and welcome to The Propcast. My name is Louisa Dickins, co-founder of LMRE, and board director for the UKPA, and I shall be your weekly host. Each week for 30 minutes, we’ll be connecting VCs, PropTech start-ups and real estate professionals globally and assist in bridging that famous communication gap we all love talking about. So, sit back, relax and enjoy the show.

Hi, everyone, and welcome back to the Propcast. Today we are joined by PropTech influencer Antony Slumbers, as we chat through talent and the changing workplace. So welcome, Antony. Pleasure to have you on the podcast.

Antony

It’s a pleasure to be here

Louisa

For those who haven’t heard of Antony, which I’d be very surprised if you have not and you are in PropTech, Antony is a globally recognised speaker, advisor and writer on PropTech and Space as a Service. A serial entrepreneur, he has founded and exited several PropTech software companies, and now consults real estate boards on their transformation, technology and innovation strategies. He writes an influential blog which we’ll go into a little bit more later on at antonyslumbers.com, and his prolific tweeter. He’s a member of the ULI Europe Technology and Real Estate Council, on the leadership Board of CREtech, is a member of the Advisory Board of tenant engagement leader Equiem, and on tech working group of the British Property Federation. His clients include various big names like CBRE Global Investors, EPRA, INREV, the Crown Estate and I could go on and on to likes of MRI, RICS and Fifth Wall Ventures and you can find all of this out later on in the show. In May this year, Antony co-founded the Real Innovation Academy, which runs a five week online course on the future proof office, which he’ll chat to me later about, what it’s about, why he started and a bit of what that course includes. Without further ado, welcome to the show Antony, shall we kick start the questions?

Antony

Fire away.

Louisa

Awesome. Okay, so in your recent blog, you mentioned the pandemic as another T model moment, which caused every industry specifically we’re looking at real estate to be impacted – commercial real estate closed down, shops shut, you no longer have restaurants and hotels and bars, offices emptied and we’re seeing the future is looking fairly uncertain, well, it’s just looking different actually. Can you explain to our listeners what do you mean by the T model moment and how has technology impacted this, and specifically for real estate, what it meant for it?

Antony

What we need to look at is if you think of when the Model T came off the first production line in 1908, the standard way of travel at that time as a horse, there was a huge horse population. Model T comes off the line and then within a number of years, suddenly there are no more jobs for horses, and there’s lots of jobs for cars, and you get these sorts of punctuated equilibrium moments when big things change, and then the change very rapidly. And I think what’s happening now, and what is being unearthed by the pandemic, is that fundamentally technology has changed the demand for real estate. It’s just in many ways we didn’t particularly notice until very recently. And so you’ve got this situation now, where the type of work we do is changing but also where we can do it. Clearly there’s been a global mass experiment in remote working, and it turns out that actually people can work remotely. And then you start take one in that case, what do I need my office for? And you have this “aha” moment I’m being very surprised over the last few months, how many CEOs have come out rather amazed that their companies have carried on working as if they didn’t realize that a lot of this technology existed. And people can do things pretty well wherever they wanted. So you get these as I say, these Model T moments when all of a sudden things change very, very dramatically. And that’s really what’s happening. What’s happening now is we’re realising we’re moving into a different world very, very quickly.

Louisa

And this different world impacts everyone. And you mentioned your blog a quote stat from McKinsey and in 2017, 47% of the tasks people are paid to do globally, could be automated by using currently demonstrated technology. There’s a big debate going on, and the UKPA are about to do this debate,  it’s about the knock-on effects of technology and real estate, and what does it mean for jobs?

Antony

Well, it’s actually absolutely huge. I mean, the McKinsey thing as you say was from 2017, 47%, of all of all the task people are paid to do around the world can be automated by currently demonstrated technology. So that’s essentially half the tasks that people are paid to do, can be done by machines, and the moment you’re paying humans to do it. And this is sneaking up on us. I mean, people don’t realise actually how fast technology has developed, and the progress within artificial learning and the speed of processes and the amount of data we have, and the scale of computational power that’s now at our disposal, is absolutely extraordinary, and has dramatically changed over the last five or six years. So when we’re now in a position that if you’re actually brutal about it, you should always think of these things as it’s not a case of jobs going, it’s the component parts of jobs. So all jobs are made up of individual tasks, people do 20 different things to make up their job. Well, if you take all the parts of your job that are in one way, or another structured, repeatable or predictable, those are going to be automated. And that’s the 47% that McKinsey talking about. Any task that is structured, repeatable or predictable will be automated, Elvis has left the building, that’s gone. So we’re actually moving to a situation where in a paradoxical way, as we get more technologically advanced, the role of the human at work is actually getting less technological. Because there’s no point us trying to find the machines or what the machines are good at, you don’t bring a knife to a gunfight. And if anything is structured, repeatable, predictable, the machines are going to do it better than you.

But fortunately, what machines are not so good at, are all the things that they humans are good at. So humans are good at imagination and empathy, design, abstract and critical thinking, judgment and all these sorts of things. The human skills are what people are going to be doing in an office. So we’re not going to be going into office to do an awful lot of tippy tappy on our keyboards on our own, the purpose of going into an office is actually going to be to work with other people to do human things, because our only value that is used is going to be using our human capabilities and our human skills, to create new products, to create new services, to refine products, and services. So you actually need a completely different form factor of an office in this in this world. If you look at the typical, traditional office where everyone’s lined up in rows, and it actually looks a bit like workplaces as spreadsheet, everyone sitting there as if they were selling a spreadsheet, doing something structured, repeatable, predictable, that’s what the old office was about. And that was a world where it was really easy. If you had 100 employees, if you wanted to kit out a workplace, you would get a hundred desks, a hundred chairs, a hundred computers, and hundred phones you line them all up, make sure they’re all great and away you go, you’ve got a workplace. But when the work we do is changing and becoming much more human, we actually need places that catalyse our human skills, we need to be in spaces that enable us to be as good at our human skills as possible. So the whole form factor of the office was changing anyway, I mean one of the reasons that the likes of Wework grew so much over the last 10 years wasn’t just the flexibility. It was because the whole vibe, the whole aesthetic was completely different. You walk into a building and you sit down on a comfy sofa, and lots of people are doing that and that’s work. Whereas that really didn’t exist in the old old way of thinking of offices. But going forwards, this is only going to get faster and faster and faster, and more striking. The work we do is going to be human work, and we need different of different types of spaces. So the actual purpose of an office is fundamentally changing.

And it’s also partly why the idea of people coming to the office for five days a week, it’s just not going to fly anymore, because you don’t need to be there five days a week. I you look at Gensler, the American architects do a workplace survey every year, and they do a breakdown of the type of work people do. And broadly speaking, it averages 50% of the time we’re doing collaborative work, or 50% of the time, we’re doing focus work. Now, as I say, there’s no point in going to an office to do focus work, there’s no point in going to office to have a meeting with yourself. And what’s happened during the pandemic is people realize more is certainly the thing they can easily do outside the office is all the focus work, what can’t they do? They can’t do the social work, they can’t do the mentoring, they can’t do the collaborative work. And that’s what they’re going to be going back into an office to do. No one is going to be going back into an office to do focus work broadly speaking, there will be bits of it, but as a rule of thumb, they’ll be going into the office to do collaborative work. And therefore we need a different form factor, we need different amounts of it. And we needed a very different product, and this is where the big bargain feature for the real estate industry is, is understanding the changing requirements of their customers, and to what extent they can fulfil them.

Louisa

Interesting what you say about Gensler getting involved in that, I think one of the heads of convene is from to the Gensler, and they’re looking at really what does their office space look like? What environment can they create to allow, like you said, these human skills to like flourish, whether its innovation and imagination, and this is all through the design of  the office and help their employees to really do a different job now. Surely it’s quite a good thing, the mundane jobs of analysis, going through data, that can all be done by to the machines now. So, I would have thought personally it’s quite good thing, and people can do what we’re good at, which is imagination, something slightly more creative as well.

Antony

It’s a fantastic, fantastically good thing, if you are minded to realise it. And clearly it is not a good thing for some people. But then, if you look at the surveys of the amount of jobs that can actually be automated completely, it says that only about 5% of jobs can be completely automated, in the sense of all the component parts of that job are things that can be automated. The vast majority of jobs can be automated to a certain extent. So you can expect that most jobs, almost all jobs are going to be transformed in terms of what we do. But that doesn’t by any means mean that those jobs are necessarily going to go. And there is an awful lot more scope for making a difference, when you bring in the human skills back and back into it, a big differentiator are your human skills, and that’s actually going to benefit some people more than others.

Louisa

And if you’re looking at the difference in workspace, how much do you think brand effects where talents are drawn to? What percentage are we looking at?

Antony

I actually have a saying that I use, the user experience of your space is going to represent your brand, and the brand is going to represent your value. And this is the big challenge for real estate that’s going forward. People are not going to be leasing just space. Nobody needs an office, an office is just a dumb four walls for four walls and a ceiling. They need a user experience, they need to be in a space as I say catalyses their human skills, they need to be working with a company that understands what the wants, needs and desires are of individuals in that company. What are the tasks that individuals are doing in that company and then monitor and optimise the work the workplace, to enable people to operate as effectively and as productively as possible. Now to do that, you really need to understand your customer in a way that the real estate industry has never understood customers. And this is never a criticism, the real estate industry has never bothered with customers, because it hasn’t had to bother with customers. The customer has always been the person who signs the lease, and then whoever sends the rent cheque four times a year. Understanding the wants, needs and desires of individuals who use your space is irrelevant, it makes no difference to you and doesn’t it doesn’t involve any financial gain. But now it is going to make a big difference to you, because people are going to use your space if it enables them to be as productive as possible. And the only way you’re going to do that is by really understanding the jobs to be done with people, and as I say their wants, needs and desires and then providing them with space that offers them the services they need as and when they use them.

This is effectively what the Spaces as a Service, which I’ve been going on about since 2013 or something, has two meanings. One side of it, which is space that you procure on a short-term basis. But the more important meaning of Space as a Service is space that provides you with the services you need as and when you as and when you need them. So the point is, to create a great workplace you need to know a lot about your customer and you need to integrate the hardware, the software and the services that are involved in a building to create the best space. And that user experience that you create is going to actually become your brand, you’re going to be known for being able to produce a certain type of user experience, probably for a certain type of company, you may have multiple brands. And you might have different brands that suit different types of people, different industries or different price points, but you’re going to be creating brands in the same way as hotels create brands. And so the user experience that you’re able to create is going to represent your brand. And ultimately, your brand in real estate is going to be where your value is, just owning a dumb building used to be the smartest thing to – all the gains, king of the castle was the person who owned the building. It’s not anymore, the operator of the building is incredibly important now, which gets you on to the whole the whole talent side, what talents, what skills, you need to be able to operate in a great space as a service user experience building.

Louisa

And to summarise a lot of that, you’ve mentioned the six areas of the office industry that we really need to look into and connect to ensure we had this great user experience, and that’s real estate, networking, IoT, data capture and analytics, workplace HR and hospitality. So if we combine all the six areas, hopefully that will mean good things for the office industry, or the landlords and everything like that?

Antony

But well, the interesting thing is that at the moment, to create a workplace involves six what could be almost distinct industries. So you need real estate knowledge, you need to understand networking and Internet of Things to put the networks in the building, you need to understand data capture and analytics, you need to understand workplace, you need to understand HR and you need to understand hospitality. Now as it is at the moment, those are pretty much six distinct industries. And largely they do not talk to each other. So you have this situation where to get to a desired output, you need six inputs, but at the moment, those inputs don’t talk to each other. What I’m arguing is that the real estate company the future, in one way or another, not necessarily that they do it all themselves, but more likely they create an ecosystem of partners that that they work with, provides all these skills. So we have real estate skills, networking skills, data skills, workplace skills, HR skills, hospitality skills and we combine them all and we get them all working together. And that’s the way we’re going to create great spaces. Because the way it is at the moment, if you’ve got six distinct industries, they’ve all got their own incentives, everyone is aiming for slightly different outputs. Whereas really the only output that should matter is how well does this space aid the customer, which is every person using it to be as happy, healthy and productive as possible? Because if we can make everyone as happy, healthy and productive as possible, that’s the way to get them to pay the most money, because they will be getting a much better service. So everything that goes into a workplace, that should be the singular aim, because if I’ve got a really happy customer, they’re going to pay me more money, which is going to enable me to spend more money and provide an even better service and so on and so forth.

So you’ve got a situation where the real estate industry is going to fundamentally change because it’s really no longer about real estate. It obviously is still about real estate, if you’re in the real estate industry, everything you know about real estate now you need to know in the future, but it’s necessary but not sufficient. You need all these, all these other skills as well. And as I say, you might be building them in house, or you might be setting up partners and ecosystems to do it. I mean, you mentioned kind of Convene earlier, the point about Convene is they started with meeting rooms, and then they went on to events, and then they added flex space, and then they can integrate into another building but they’re all about user experience. So their job is to unify all these six different things. So people will either be working with companies like them, or they will be doing it themselves, or they will be putting different companies together. But unless we can align the incentives between the owner, the operator and the occupier of space, you’re never going to create great space. And the big carrot for doing this is the is the fundamental fact now that the customer no longer needs our product.

We are now in the office industry going through what retail industry went through ten years ago. Ten years ago, I was saying to retail real estate people, “Watch out because people don’t need shops anymore”, and they go “Of course, they need shops no-one will buy clothes without feeling them”, and then I went on and on said no, they will. And the point is, we no longer need a shop to go shopping. So great retailers have to make us want to go there. And there are reasons to go to go shopping, great shopping is a wonderful thing, but I don’t need to do it. And the same thing is happening with offices and it’s been become abundantly clear during the pandemic, funnily enough knowledge businesses can operate without an office. That might not be the desired end point, but the but they can. So unless the industry can find a way of providing their customer with something they really want as opposed to need, then they have a problem. But I think this is again the bug in the feature, the ones who aren’t able to create a great user experience and make customers want their space are really in trouble. But those but those who can create great user experiences, and can create environments that the best companies really want to be in them are going to find that even in a market with massive oversupply, they’re going to find their section of the market is actually under supplied with high demand, because the best companies are going to gravitate to these type these types of spaces. And frankly, not that many real estate companies are going to be able to do it. So there’s going to be a low supply a really, really great space, which is why if you can do it I think you can probably generate more money out of real estate today and in the future than you’ve ever been able to do before, but you cannot do it just with a real estate mindset. You need to nail those six different industries together to really leverage this.

Louisa

So outside of workspace, I saw earlier on this year you’ve been a very busy man, and you have started an Innovation Academy. Our listeners would love to hear a little bit more one, why did you start it, who is this Innovation Academy for? And tell us a little bit about what does it compromise of?

Antony

Okay, it’s actually quite fortuitous, I’ve set this up with a colleague of mine, a chap called Dror Poleg, who a lot of your listeners probably have come across as well, who lives in New York. Dror and I are very similar in the sense that both of us have a real estate background and quite technical background as well, and we’ve been around the block quite a few times and are particularly interested in in the real estate side of the technology side and how these two interact. And we started thinking just before Christmas, well maybe we should do an on an online course because both of us have said and written about that one of the issues within the PropTech industry is that you have a real estate industry that doesn’t understand technology, and you have a technology industry or PropTech industry that doesn’t really understand anything about real estate. And that’s clearly a problem. So we had this initial idea of could we create a course which is educating real estate people about technology, and technology people about real estate? And what’s the crossovers? And how can how can each side work together, and how did the dynamics of the industry work? So we were actually working on this at the beginning of the year. And actually got it ready, just as I think it was literally the first week of lockdown was when we’d completed it. And so that was in in March. So we were ready to go in March, but you remember that time we were all running around like headless chickens.

So we launched the first the first cohort in May, which went really well. It’s a five week course, and one of our students described it as “It’s partly a real estate course, it’s partly a technology course, and it’s partly a baby MBA course” So it’s a real crossover, it’s a real macro “Let’s look at what are the main drivers of supply and demand? How do you finance things? How do you operate things? How do you design things, what things are going to be in demand”, and all that stuff. So we did our first cohorts, we’ve finished our second cohort actually, this week. Next week, we’re going to launch a cohort specifically for APAC regions, based on them in Singapore time because it’s a completely online course but we have once a once a week we have an online get together. So we’ve been lucky enough to have quite a few APAC people on our course at the moment. But poor things have to be up at like midnight to join our live course, is going to be based on a Singapore time. And then we’re doing the last one of the year will be in October, which will be for US and Europe time.

And so far, what is really interesting about it is that it’s attracted roughly 50/50 male female, which is quite extraordinary for real estate course. It’s also attracted a really wide range of people. So we’ve had developers, we’ve had architects, we’ve had designers, we’ve had investors, we have flex operators, we’ve had a real range of people, and a wide range of types as well. So we’ve had quite a few young, entrepreneurial people starting their first businesses, all the way up to main board directors of one of the biggest real estate companies in the world. And the networking within the course has been absolutely fantastic. Because each week, we split the cohort up into groups. And we give them four questions and they had to present to the whole group the following week. So everybody gets to me every but everybody else. And what’s been so exciting about it is that we’ve asked, actually to be honest, really hard questions. We’ve asked questions, which are along the lines of what’s the meaning of life, the universe and everything? And you’ve got 10 minutes to answer. And it’s really hard questions, but the effort and brainpower that has gone into the presentations has been amazing. So in terms of in terms of an innovation love-in, it’s pretty, pretty much Heaven for Dror and I, it’s really worked out incredibly, incredibly well. And we have five weeks of fizzing with ideas.

Also what we’re going to do, the longer term aim is that we’re going to try and build an alumni network. So we have a separate Slack channel, which is only available to alumni, and all these presentations that we do, each cohort will get added into the into the main group. And we’re really encouraging people to work together because it’s very much self selecting, the type of people that are doing this course are the people who are interested in the future in change in real estate and technology. So over time, we’re hoping to build a really powerful, long, ongoing network of if you like, true believers of PropTech and real estate. So that’s it and all that is at www.realinnovationacademy.com, the full curriculum is on there and let me know what you think?

Louisa

Absolutely. And I’ll be sharing this information in the show notes as well. So if anyone wants to apply definitely reach out, sounds like a great academy, and from what I’ve seen in the market, the only one going on at the moment which is also specific to real estate, and who better to learn from than Antony as well, as somebody who is so passionate about the digitalisation in real estate. the Sally is bringing us to the end of the podcast. Antony is there any bit of parting information you’d like to share with our listeners and also how they can connect with you?

Antony

In terms of connecting with me and as you mentioned earlier, I am rather a prolific tweeter, so if you like Twitter @antonyslumbers, everything I do in my blog is on www.antonyslumbers.com, most of my stuff ends up on LinkedIn as well. So those are the best ways of contacting me. And the only thing I’d like to say because it’s particularly pertinent at the moment, is that clearly we are at a time of huge change, I’d just like to say it’s going to happen anyway. So really embrace it as an opportunity and think hard about how can you rework your value proposition, your business models, your offering to your customers, to take account of the change rather than try and protect what was what was happening before. So push on through, the only way the only way around is through, as Robert Frost said.