My definition of PropTech

I don't understand homebuyers

It’s a fair question.

What is PropTech?

People seem to have several different definitions.

Here’s mine:

“If it affects commercial property owners, it’s PropTech.”

or

“If commercial property owners have to approve it, it’s PropTech.”

That means, anything in a retail, office, apartment, or industrial lease that is technology related is PropTech. If it goes into the operations, marketing, leasing, or sale of a commercial building, it’s PropTech.

Doesn’t matter who pays for it. (More on that later.)

You’ll notice that homebuyers and residential real estate agents are not in here.

Commercial real estate agents (both sales and leasing) very much ARE in here.

The reason I break it out this way is twofold:

First, it’s my direct experience. I’ve always been in commercial real estate and understand it better than residential (as mentioned above, I consider apartments to be commercial).

Second, CRE tech all follows the same trajectory - B2B. Residential real estate tech follows a B2C trajectory.

Your average homebuyer is just a consumer. She has consumer preferences and (more importantly) a consumer budget. If you try to sell her technology, she has serious budget constraints, tastes, and timing.

Now, compare that to the COO of a REIT or brokerage shop. She has millions to spend on technology even though it will probably take you much longer to close that sale.

Residential real estate tech acts like B2C. Commercial real estate tech acts like B2B.

I understand B2B.

I get the sales cycle.

I get the buying decisions.

I get the P&L.

So, in my mind, PropTech is B2B technology that affects or needs approval from the owner of a commercial property.

This will be important down the road because as of right now I can’t really help startups who are selling to realtors or homebuyers. That’s just not my market.

So as you follow this newsletter, know that almost all of my coverage of the market will be on commercial property and the innovations around it. I won’t have many comments or feeds on residential realtors