Poor Excel. When the history of twentieth and twenty-first-century technology is written, it will probably go down as the most maligned piece of software. The problem isn’t inherent to Excel itself though, quite the contrary. Its problem is that it does so many things so well that it gets used inappropriately, incorrectly and without enough training, planning or thinking about how it is used. And this is where the problem comes in.
A fascinating study of 15,000+ spreadsheets and related emails that were released into the public domain as part of the Enron scandal back in 2001 digs into some of the implications of this “flaw” with Excel. According to the research, 24% of spreadsheets with at least one formula contained an error; and 76% of the spreadsheets in the Enron Corpus database used the same 15 functions, showing how little of the capabilities were used. Furthermore, spreadsheets took up a lot of bandwidth with 10% of the emails studied referring to or including spreadsheets. And the final nail in the coffin: much of the discussion involved errors in or updates to the spreadsheets.
Hardly a glowing endorsement for increased productivity, efficiency and accuracy, right? But again, it doesn’t make sense to blame Excel, this is a common problem with how humans use one-size-fits-all software that sets out to do everything for everyone. This is because compromises are part of software development. Whether it’s for performance, simpler UI, or improved UX, there are always going to be tradeoffs. Additionally, if you have too many features, you get overwhelmed and don’t get to use the features that provide the most value to you.
So it’s hardly surprising that software developers are niching down and that software that does one thing very well and is easy to integrate with other software to create a best-of-breed system, is starting to challenge the dominance of Google Workspace and Microsoft Office 365.
The same is happening across various industries, where software and other technology is being developed to meet the needs of that specific industry: think of the financial services, healthcare or legal worlds. And also, the Commercial Real Estate industry.
CREtech’s time has come
“A lot of the current ‘enterprise’ solutions are patchworked together to meet the minimum needs of the CRE industry today. In other words, they are outdated and more than likely built to serve another industry more holistically. They somehow made their way into CRE as users were looking for solutions to help streamline their work.
“On the other hand, tools built by CRE professionals for the CRE industry are critical because of how unique real estate is compared to other industries of similar size; every asset, market, deal, and so on is different.”
Cicciarelli suggests that this will drive more automation, transparency and democratization of technology, which in turn will boost accountability, sustainability and the industry’s ability to make a positive impact in the world.
“The most obvious is the shift away from Excel spreadsheets to more process-specific solutions for leasing, accounting, insurance tracking, property management, space utilization, occupancy tracking and so on,” he says.
But will there be adoption?
I’ve written previously about cognitive entrenchment – the tendency for very experienced people to cling to familiar ways of doing things, even in the face of extreme flux. Why would people doing very well for themselves change how they do things?
Cicciarelli says that their early-adopting peers will encourage the rest of the industry to follow suit. “CRE is a relationship-oriented business and when the ‘trailblazers’ start to take chances and see success, others in their inner circle will follow. Other catalysts will be public pressure regarding ESG initiatives and legislation, along with the redevelopment and repurposing of outdated assets.”
CREtech companies to watch
Although it is still early days for the CREtech industry, there are a couple of standouts that are doing something different and solving real problems.
Buildout is building solutions to solve problems faced by a very specific and large market – brokerages. They are adding products to their platform that are in demand and are based on client requests.
StackSource is in a good spot as a lender marketplace, as there’s a lack of access to small and mid-market lenders for smaller investors. If they add the financial and loan underwriting backend to enable the movement of capital (perhaps using blockchain?) things would get very interesting.
Dealius has an interesting model if they can scale it, as they’re taking a similar approach to us and creating a user base with one platform to sell a service from another. They offer a SaaS-based brokerage management solution and provide commission financing via Dealius Capital.
Cicciarelli says, “It is still quite early for CREtech creation and adoption. I think across the board for all CRE-related activity, most of the solutions available are just now starting to meet the bare minimum requirements. With that said, most CRE professionals are still using all-purpose tech as they are resistant to change their ways until they can get fully comfortable with the newer, emerging tech coming to market. Areas that I believe are ripe for disruption are engineering & operations, accounting, financial analysis and structuring, and administrative tasks.”
You may or may not continue using your Excel spreadsheets for the moment, but do constantly question whether you are using the right tech, and whether you should be using more tech. Could you be more successful in the future if you were to use multiple technology solutions that integrate with each other? Keep an eye on what technology your colleagues and competitors are using too, to get a sense of what is working for your peers.