Year-End Review 2019

We have spent some time reflecting on our journey and want to share our exciting plans for 2020.

2019 is almost over, and we are only a couple of weeks away from turning 1-year old (Woohoo!). We want to thank everyone who has encouraged and supported us along this journey. We have spent some time reflecting on our journey and want to share our exciting plans for 2020.

At first, we set out to build a comprehensive real estate fractional ownership database worldwide. By aggregating hundreds of real estate fractional ownership platforms scattered worldwide, our portal was designed for you to find everything in one place and in an organized manner to streamline your research and due diligence process before investing in real estate fractional ownership. You can get a better grasp of the industry landscape and spot opportunities easier and faster. We were confident that our platform would become a key enabler in this sector. 

However, after launching our beta and getting feedback, we realized that our platform has yet to establish an essential element: forming a close-knit community of real estate enthusiasts and real estate experts by encouraging contribution and transparency. Community engagement enables deep, meaningful relationships to build trust and confidence.  Having a pool of excellent, reliable insights directly from experts (real estate agents/brokers, institutional firms, and transactional advisors) helps address your uncertainties and frustrations with market research, sourcing experts & projects, and conducting due diligence in real estate investing. This access can speed up your learning and provide you better clarity for your real estate exploration.

This “Aha” moment led us to launch the Denzity Forum last month with a handful of users and experts. Not only that, users found the answers useful, the experts found the information exchange meaningful! So, we have decided to expand our scope from real estate fractional ownership to include more segments of the real estate sector. Our top priority in 2020 is to broaden this community by empowering a cosmopolitan environment that gives you access to a growing range of insights and projects directly from experts worldwide. We believe this direction will significantly benefit you and the real estate sector worldwide in the long run. 

We are excited about next year! If you want to find real estate insights, find potential real estate projects, or connect with link-minded real estate enthusiasts and real estate experts, then our platform can help you to achieve your goal. 

Find more about the forum here: https://forum.denzity.io/topic/130/year-end-review-2019

Wish you a Happy Holidays and talk to you again in 2020,

Darren

Co-founder, Denzity

WeWork – A Cautionary Tale For All PropTech Players

As the year of 2019 draws to a close, it’s hard to forget one of the biggest lessons learned in the business world: WeWork’s failed IPO at USD 47 billion leaving SoftBanks to intervene with a ‘stimulus package’, which leaves WeWork at a valuation today of USD 10-12 billion.

For those interested in reading more into WeWork’s story, here are some informative pieces: Feedough’s “WeWork Business Model, an in-depth analysis of WeWork’s business model; Harvard Business Review’s “No, WeWork Isn’t A Tech Company. Here’s Why That Matters, which breaks down WeWork’s ‘taboo’; and Bloomberg’s video “The Spectacular Rise and Fall of WeWork to get a better grasp of the situation.

From this saga, we hope PropTech players take a step back and re-evaluate three important lessons:

1. Are you In the tech business or real estate business
Many start-ups often frame themselves as tech companies in hopes to obtain a higher valuation from a larger pool of potential investors. A business should only be classified as tech-driven only if the core business is selling tech as a product or service, as the high valuations associated with technology companies are their ability to generate enormous profits and scale at a fast speed with relatively low investment. In our view, WeWork is not a tech company and they should be frank with their investors to manage expectations.

2. The potential impact of the proprietary technology
It is hard to understand how much tech has played a part in WeWork’s business. WeWork claimed that they employed data analytics and another smart tech to improve the efficiency of their spaces, how people use their spaces, and where to build next. Yet, isn’t this the knowledge and insights provided by real estate experts (such as brokers)? While we associate the utilization of technology as helping businesses make better decisions, there is a vast array of tech companies that don’t necessarily deliver on this promise – WeWork included.

3. The recession threat
Some people argue that the sole reason WeWork failed was because of bad timing – this is partly true as WeWork is a subleasing business – while others argue WeWork failed to build proprietary technologies to protect itself during a recession – partly true assuming you agree WeWork utilizes technology in its core business.

In our view, WeWork’s expansion into other types of real estate improves diversification depending on its mix. For example, expanding the number of gyms increases risk during a recessionary period, as their occupancy suffers on account of fewer active memberships. However, owning hospitals and public-funded schools would be ‘defensive’ and improve WeWork’s resilience during a recession as these segments would ‘operate as normal’. If WeWork were developed as a technology company, they should have allocated more attention and effort on developing tech to lower their cash burn to ensure their clients stick around during bad times.

WeWork is a big lesson that should not be ignored. We hope PropTech players have not lured down a similar path in losing sight of their core focus: building technologies that impact and transforms the real estate industry.


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You can sign up to the forum here: https://forum.denzity.io/

The Forces That Will Shape The Future of Real Estate Investing

Global funding in PropTech reached more than USD 4 Billion in 2019, according to Pitchbook. It’s worth considering how technological advancements will shape the future of real estate investing. “The Inevitable: Understanding The 12 Technological Forces That Will Shape Our Future”, a book by Kevin Kelly, founding executive editor of Wired magazine and one of the leading technology thinkers of our generation, forecasted technological imperatives that will shape and transform our society over the next thirty years. More specifically, 3 out of the 12 forces, mentioned in the book, will inevitably transform real estate investing on a massive scale: the force of sharing, filtering, and questioning.

Sharing
We now live in a world of abundant information – with just a few clicks away, internet services (like Google or Wikipedia) demonstrate the power of networking effect. Technology can enhance collaboration within a community on a mass-scale. Experts, from different parts of the world with different expertise, share their knowledge freely to foster better collaboration.
 
Filtering
With the abundance of choices we are exposed to, it is impossible to assess everything ourselves. Filtering is needed to select the few but right things we should pay attention to. With the combination of crowdsourcing, expert curators, and technology advancement, real estate investors can harness strong personalization to obtain tailored suggestions and the best available projects that suit their appetite.
 
Questioning
“Every year we ask the Internet a trillion questions, and every year the search engines give back a trillion answers,” says Kevin Kelly. The future technologies will unleash enormous big questions that we could have never thought to ask before. Promoting the freedom to ask good quality questions are far more valuable than good answers. Real estate investors will constantly explore to ask unique personalized questions to find the best result.
 
We at Denzity believe those phenomena will fill the gap – providing better-informed decisions to real estate investors for their increasing appetite for cross-border diversification. As such, we constantly challenge ourselves during our product design on how we can deliver a better experience for your exploration in the world of real estate investing. 

If you enjoy this post, please share it with a friend! 

What do you want more or less of? Other suggestions? Let us know! Please give us feedback on our forum.

PropTech: Past, Present, and Future.

PropTech: Past, Present, & Future

It’s no secret that real estate is one of the largest industries in the world, yet it is one of the last to adopt the technology. It is no surprise that a large number of startups have spawned to tackle this industry. Beyond headline-grabbing companies like Compass, Opendoor, and Airbnb, critical problems remain in our industry that entrepreneurs are yet to solve.

Since the 1980s, there have been three major waves in PropTech (Property Tech).

Early PropTech from 1980 to 2000: With the introduction of basic solutions such as Excel, real estate companies began to implement enterprise software solutions in their workflow to drive more quantitative approaches to their investments and portfolio management (such as Yardi, CoStar, and Loopnet). These solutions tend to be closed-form while requiring heavy customization.

PropTech 1.0 from 2001 to 2007: With the increasing demand to seek information, real estate online aggregators emerge (such as Redfin, Zillow, and Trulia). Like other social media and e-commerce portals, these online aggregators allow users to find incumbent information by leveraging their cross-sided network effects.

PropTech 2.0 from 2008 to 2019: As consumer-preferred access over ownership (the shared economy movement), companies (such as Airbnb, Opendoor, and PurpleBricks) are focused on improving user experience and participation. 

PropTech 3.0 from present to beyond: According to CB Insights, venture funding in PropTech from 2008 to 2018 has increased from USD 20 Million to more than USD 4 Billion. The increasing interest in PropTech has grown considerably as many pain points still exist.

We at Denzity believe the fragmented and inefficient process in real estate transactions need to be addressed and solved. Firstly, as investors have access to limited information and data set, they still rely on their intuitions when making an investment. Secondly, there is a lack of investment options that investors can access. Therefore, we want to introduce solutions to digitize workflows and elevate the transparency so that better investment decisions can be made.

Denzity Forum is one of the solutions that seek to solve a real estate investor’s pain point on understanding how to carry out the due diligence process properly before investing in a real estate project. The forum is always improving, and we always challenge ourselves to make it as easy to use as possible.

You can sign up to the forum here: https://forum.denzity.io/

Thanks for staying tuned and speak to you soon.

Darren

Co-Founder, Denzity