Opportunities for Real Estate Innovation in Canada
R-LABS’ Managing Director, James Innis, comes to the Lab with a decade of experience in investment banking, venture capital and company building. Over his career, he has leveraged his knowledge of operational and financial strategy to build companies in the global market including Canada, Germany, and the UK. In the article below, James shares insights on problem-focused solutions and how to enter the real estate technology sector as a Canadian innovator.
Canada’s long track record in technology innovation gives us a competitive advantage when it comes to problem-solving. On the global stage, Canadian companies are changing our everyday experiences across a wide range of industries: Ritual improved how we order lunch. Pivot Furniture lets you subscribe to furniture and home decor. Ecobee puts your thermostat in the palm of your hand. That’s on top of the leading technologies coming out of the Canadian market, including Slack, Sonder, Element, Clio, Wave, TouchBistro, and Shopify – just to name a few.
It’s clear that we have the capability and support to play an exceptional role in innovation, but how does real estate fit into the mix? Our industry has created significant opportunities in Canada for innovative new companies, so we’re breaking down how innovators can marry technologies to solutions and bring ideas to market.
Solving Global Problems
One platform we can leverage is bringing our background in technology to large Canadian players who already have a global presence in the real estate sector, such as Oxford Properties. Through its international platform, Oxford has created a strong brand presence in markets like New York, London, Berlin, and Singapore. Another example is Brookfield who has a diverse global portfolio spanning multiple cities and multiple asset classes within real estate. Dream Office REIT has also seen success across Canada and in Europe. So, there is a solid base of Canadian real estate players who can take home-grown innovation and roll it out on a global scale.
And when we think about the problems these large global players are trying to solve, we realize that the issues are not unique to Canada. We’re not the only country in the world struggling with housing affordability. Climate change affects everyone, and many countries are looking for ways to become more environmentally friendly. As the digital era progresses, companies around the world are retrofitting buildings for smart technologies. While the impacts may differ across regions, these are problems that are being faced in every market.
The opportunity for Canadian innovators is to address global problems from a strong base here in Canada. We have outstanding technical talent coming out of the higher education system who are looking for new use cases for their innovations. We also have an active group of experts in the real estate industry who are looking for technology-based solutions. By bringing these two cohorts together, we have a tremendous opportunity to solve global problems from within Canada.
Applying Technology to Real Estate
So, which technologies are showing the most promise in Canada? Our technology sector has been very successful in artificial intelligence, Internet of Things (IoT), enterprise software, and blockchain. We’re well-positioned to take advantage of our technical prowess and apply it to major problems affecting real estate – such as leveraging artificial intelligence for retail environments or retrofitting existing spaces for smart buildings. We have the technology, we have the know-how, and we have the talent. What we don’t have yet, for example, is the unicorn company that is doing blockchain for commercial real estate, leveraging artificial intelligence.
Rather than building a solution and then finding a customer, start with the customer and the problem that they’re having. Once you know the problem, decide which technology is the best fit and figure out how you can scale that through a viable business. Our thesis at R-LABS is that we can build those first-of-its-kind companies by solving the problem directly with the innovator. And with a wealth of technological options, we’re able to pick the solutions that best address the issue at hand. Machine learning, big data and virtual reality are all fantastic technologies, but the challenge is how we apply them to problems.
The technology components are out there; we need to apply them to real estate. We work very closely with our partners like Empire Communities, Dorsay, and Oxford Properties to uncover the core problems in the real estate sector. What are the challenges that they’re facing? And how do we lever technology to create elegant solutions? Start from the problem instead of being enamoured with the technology itself. The technologies will change so if you are completely wedded to a specific solution or technology, it could be a difficult road ahead.
Advice for Early-Stage Investment
Once you’ve gone through the hard part of identifying the problem, recognizing a need, and creating a business case around that problem, then you get into the fun stuff. Here is some of the advice I give to innovators who are looking for early-stage investment:
Look to your network. Your success will be determined, in part, by who you surround yourself with. One of the reasons we think R-LABS is such a powerful proposition is that we’re surrounded by a fantastic network of innovators, real estate partners, and capital partners. These are the people that can help to leverage your business and scale it both within Canada and globally.
Know your market. You’ll need a very robust understanding of not just the market that you’re going into, but the addressable market. Who are you actually selling this to? How big is that market? How are you going to engage that market? At R-LABS, our research team does an in-depth analysis of the market and the customer segments using our solutions to ensure we always put the problem first.
Build a great team. We’d be remiss not to mention the importance of a strong team. You need to think about everyone in the organization – from your founders to your new hires to your advisors. When early-stage investors are making decisions, a large part of it based on the team. So put a lot of thought into who you’re bringing on board and how they will support your vision.
Connect with the industry. There are a lot of great organizations out there with the mandate to help early-stage companies, as well as networking groups. Mentors and organizations like MaRS, Women in Proptech, Toronto Crew, OneEleven, and R-LABS provide friendly-environments where innovators can explore ideas. Reach out to these organizations and build bridges. It will go a long way in terms of opening doors and accelerating the business.
The opportunities in the market today are endless, and that’s something we’re really excited about going forward. At R-LABS, we’re always looking for people who share our love for problem-solving. And based on what we’ve seen in the Lab, the future is bright.