Proda on eradicating ‘garbage’ data
Originating from Stockport, David Oates has travelled his way through the software industry, holding senior positions at companies including US-based AI-driven contract management Exari, and gaining understanding of portfolio management as senior vice president at global Argus Software.
Oates is now helping the growth of impressive startup Proda, which was founded in 2017 and focuses on the standardisation and extraction of good data for commercial real estate. PlaceTech spoke to Oates about the biggest challenges facing commercial real estate and the need for regulation and standardisation of data.
The data challenge
“Our two founders, Peter Bredthauer and Charles Williams, came from a commercial real estate fund, where they were trying to figure out a specific problem, which is, everything is underpinned by data,” said Oates.
And poor data at that, according to Oates, who said when he started in the software industry 20 years ago, “we all talked about garbage in, garbage out, which is still true today, sadly.”
“Unfortunately, the biggest problem in the commercial real estate space is data is not standardised at all. At Proda we’re addressing the most important data out there which is the rent roll, pretty much every investment, asset management decision is based on that rent roll data. ”
According to Oates, rent roll data currently comes in a variety of formats, sometimes Excel or PDFs, found in a variety of places from emails to dropboxes, making it difficult to pull together. Proda is seeking to standardise and validate it, to effectively become a universal API, which can be plugged straight into other technology tools and reduce the job of manually finding and importing data from hours to seconds.
“We haven’t met anybody yet that has said we don’t have that problem. But I don’t think everybody believes there is a way to solve that problem easily, when we show them what we do there’s this lightbulb moment,” said Oates.
“The biggest problem in any software-as-a-service business, and we’re all SAS businesses now, isn’t necessarily selling product, it’s getting adoption. I ran Argus for a long time, and every customer we had would always say it’s too hard to get data in, it’s too time consuming.”
The biggest themes of 2019
The growth rate of proptech is unsustainable, according to Oates.
He said: “With my knowledge of the software industry, you’re going to see a period of consolidation. If you don’t have a real problem to solve right now, you’re going to struggle. There are certain areas of tech that are swamped already with potential suppliers, look at tenancy management for example in the residential space.”
“VTS is going to start seeing more competition, large companies such as Argus Enterprise are already seeing people nibbling away at their dominance. I’ve seen it before in e-signature, DocuSign dominated the market but there’s now hundreds of players in that space.”
He added: “People that don’t adopt technology solutions to automate their processes will get left behind in the next two or three years. A lot of people are saying that, not just the CEOs of technology.”
“When I was running Argus, it was harder to meet people because there was this reluctance to do anything with technology. We were trying to get customers to replace an Argus solution that was 15 years old and they were reluctant to do it.”
“The industry is becoming more technically aware. There is an acceptance, you have to do something now.”
Pushing the agenda in 2020
Oates would like to see the digital agenda being pushed up within the real estate businesses.
“People coming into the industry over the last five years are more technology savvy than ever before. The new breed coming in will inevitably drive it, because they’re used to working with technology.”
“I’d like to see the introduction of some standardisation into the industry because there isn’t any. If you ask somebody in the UK to define commercial real estate and you asked someone in Germany, they’ll give you a different definition.”
“I’d also like to see a decision made about Brexit. Whether it’s what people want or not, it will at least get rid of the uncertainty and I think the industry will benefit from being able to move forward.”
“Regulation is also inevitable, real estate is an asset class, the more regulation comes, the more it drives technology.”
Standardisation + regulation
Oates referred to the Dodd-Frank act which made an impact when introduced in the US securities business in July 2010. Financial regulation was overhauled, and many firms received large fines for non-compliance over tracking the life of a trade, including international bank BNP Paribas.
“It’s amazing how fast that drives things. It was the US that introduced the fine system that was 1% of total revenue. It’s not quite the same with real estate because it’s a long-term asset, but even so it’s still an asset class and is now the world’s largest asset class, so that regulation will happen at some point.”
For standardisation, Oates believes companies like Proda will drive it: “Our mission is to become the standard for rent roll data management. If we achieve that, standardisation will naturally get driven through the industry.”
“If we do our job properly, then people will be asking for files to be run through Proda, to know it’s clean and valid. That’ll be real success on our part.”