According to literary theorist Christopher Booker, there are only seven master plots that define all novels: rags to riches, the quest, rebirth, overcoming the monster, comedy, tragedy, and voyage and return. It is an interesting contention with a clear cognate in the world of startups.
Startups too have just a few narratives. In my estimation, ninety percent of startup narratives are one or more of these five:
- Discovering and capitalizing on an omission (opportunity)
- Improving the mouse-trap
- Realizing the wheel is not turning well-enough
- Changing the world by action at scale
- Creating an upstream pivot point
Though not as pithy as the descriptions of Novels, these categories appear to stand the test of time.
In PropTech, 2, 3, and 5 reign supreme. In this piece, we’ll focus on 5: creating an upstream pivot point.
In simpler language: PropTech companies often focus on one aspect of the real estate process and elevate it as THE pivot point in the entire ecosystem. It is an understandable position to take, because it allows them to craft expertise in one area and allows an entire downstream industry to benefit from improvements and flows from that one area of focus.
Four examples to introduce here:
For AI leader Quantarium, valuations are the pivot point. Quantarium’s Automated Valuation Model (QVM) is the leading AVM with regard to breadth and accuracy and uses genetic modeling to manage anomalies. For Quantarium, most housing factors are “downstream” from the basic question- “What is this house worth?”
For Rook Capital, housing affordability is key. In the absence of people being able to buy houses, the entire ecosystem (including community) collapses. Finding new and innovative methods for putting families in houses is the pivot point for this Colorado-based startup.
For PunchListUSA, the fulcrum point is the Inspection Report. The Inspection Report serves as a sort of “23 and me” for the house, indicating what changes will have to be made, and when, so that families can budget for them. Using the Inspection Report as a diagnostic tool that allows the homeowner to determine the lifecycle need of the house- that’s their pivot.
For Flueid, the Transaction Process is the key. Smarter, faster transactions usher in the real digital transformation for Real Estate. This company pivots on process efficiency using data and actionable insights to compress timelines, streamline workflows and improve the overall transaction experience for everyone.
These pivot points are important and have spawned innovative companies forging ahead in the world of PropTech. For the entire industry, however, the question remains: How do we stitch together these “points” into one holistic platform that just might disrupt but will do so with purpose. Until then, availing of these theses is a good bet.