For many companies, beginning to innovate can be an overwhelming experience, full of risks and challenges. Specialist proptech fund Concrete VC decided to tackle this head on by hosting an event looking at what works and what fails in commercial real estate innovation.
The audience heard from Kathryn Malloch of Hammerson, Tanguy Quero of JLL Spark and John Abbott of HM Land Registry, who shared their tactics and strategies, and relayed experiences of good and bad practices within their own large companies. The event was chaired by Concrete VC partner, Taylor Wescoatt.
Barriers to internal innovation
- Quero said JLL has “leadership commitment” and “vision”. The trouble came when the firm started to implement its vision, to align all services and geographies to it. He added that JLL is the “perfect example of a company with silos. We’ve been good at doing incremental innovation, but when you talk about scaling products you need people in the team who have done that already and have the culture and collaboration. We didn’t have that and we’re currently in the process of solving this by hiring tech leaders”
- Malloch said the biggest challenge at Hammerson was around “building empowerment in the organisation” and not feeling like a “separate team driving innovation”. She added: “If we’re working in a silo from the rest of our business, it naturally creates a culture of people going ‘those guys are responsible for innovation’”
- Abbott said HM Land Registry has an electronic process “similar to what existed 150 years ago”. The Land Registry receives around 20,000 PDFs every day, and has 26 miles of boxes full of paper correspondence, which the Government department is “endeavouring to bring into the 21st century”. He added: “We’re a natural monopoly, but as part of the government we need to be an organisation that underpins innovation”
Models for internal innovation
- Hammerson has looked a lot at culture and structure within the business, according to Malloch, who added that the company has also done some simple things to make the process easier and more accessible such as capping the level of risk, looking at the minimum viable product required to test, and then building a business case in a low-cost way. Malloch said by approaching innovation this way it’s been “really successful, the risk feels manageable, and we’re validating things first in a light and agile way”
- Abbott highlighted the department’s open innovation project called Digital Street, which has over 250 different organisations taking part. “Our aim is to define how buying and selling property might work by 2030 and using that community to collectively learn and to build a land registry to enable that”. The project offers startups that have an idea £25,000, a desk and coaching, without taking equity
- Quero said setting up JLL Spark was a way of “solving and exploring disruptive options”, and added that the company wasn’t “connected to the outside world” with too much “focus on what’s happening inside the company” and it needed a “programme to connect with the proptech ecosystem”
- Malloch highlighted a programme Hammerson is working on through Innovate UK to do with Artificial Intelligence and CCTV, as an example of something that hasn’t worked as well as expected. She said: “It’s not been very successful as we were so green to it. It’s been an academic exercise, and because tech moves so rapidly, we’ve found the tech has moved on due to slow process.” Malloch added that the company “would’ve done it differently” and “not have gone through the Innovate UK process”, and instead figured out “how do we do more and test more in a smart way”
- Quero said JLL failed “by not saying no and ending up with a long list of products” with not enough finance, when some “should’ve been stopped to be able to focus on the more successful ones”
What’s been successful?
- Malloch said transparency and centralising are key, and added that the retail developer has “a tight talented team who work very closely together to share insights”, and there isn’t a “single person in the team that doesn’t know about other projects going on”
- Malloch recognised that the firm can’t plug the tech skill gap, and their approach is to develop partnerships
- She added that she appreciates when startups take the time to talk about that individual business rather than the industry as a whole. Malloch offered an example of a tech company that they have been talking to for two-and-a-half years and are finally doing something with. “It’s made us open to sharing our progress and something has finally clicked. See it as a relationship and not as a pitch”
- Wescoatt stressed that startups change, and whilst it might not be appropriate at the time, the companies might be worth revisiting
- Quero said JLL’s solution is to “define our strategy and explain it to people who know how to do it”. He added: “You just need to let them know what you want to achieve and how they can be a part of this change. If you articulate this, you’ll attract the right people”
- Quero offered some advice to startups, to “focus on the companies most ready for adoption, and find a way to nurture the rest”
- Abbott said as the department offers access to government, he’s always careful to explain to startups to “not expect government to move quickly” in order to try and offer clarity as early as possible. He added that it’s helpful just to give people the “chance to go deep on an emerging tech just because we want it to understand it” and then introduce a problem later