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Brent Williams' Apartment Blog

Thoughts, comments, and ideas about the overall multifamily industry, as well as a property-specific focus on resident retention and apartment marketing.

Who Will Lead the Platform Revolution In Multifamily?

NMHC OpTech ConferenceDuring the NMHC OpTech conference this past week, Phil Simon spoke about the “Age of the Platform”, which essentially means businesses building applications on top of other businesses.  The most well-known examples of this platform concept are creating apps on Facebook or the iPhone.  In these cases, Facebook and Apple become the “platform” by which other companies develop add-on services to offer to their customers.

From a multifamily perspective, there are two ways to participate in a platform concept:  Either create services on another platform, such as develop your own Facebook app, or become a platform yourself, where businesses create services on your own architecture.  Today, I want to cover the latter, as I really think that is the more interesting of the two right now.  I think the most logical, and potentially evolutionary-inducing option is for property management software to be that option.  In this way, other companies should easily be able to integrate their service with the base property management software without duplicate entry, exporting/importing issues, and other walls between the data.  So for example, a company could develop a package-tracking “app” that works seamlessly within the property management software environment and leverages standardized data, such as resident lists, rather than having it be a separate entity entirely which has to recreate these standard elements.

In 2005, my former company was attempting to implement a social media based resident portal, and we got the painful feedback that our service would simply not be useful unless we were integrated with the major property management software providers.  Nobody wanted to deal with multiple user lists and manually importing and deleting residents in the system.  But the process of integration was expensive, difficult, and sometimes impossible, so our innovative solution sailed off into the sunset never to get off the ground.  Since then, I have talked to countless entrepreneurs with similarly innovative technology solutions, and my first question is always, “are you integrated with the property management software providers?”

Fast forward seven years, and you would have thought that would have changed, right?  But during the last session of the conference, where startup companies were able to showcase their service to industry leaders, that question became the defining factor for half of the entrants:  “Are you integrated?”  And right there it was apparent how much this giant barrier had stunted innovation for our industry.  It didn’t matter how great the service was; if the company wasn’t integrated, it was too much of a hassle/headache for a property management company to implement.

This is not just a question of whether a property management software will integrate, but also whether a property management software will integrate in a way that allows cash-strapped start-ups to thrive.  Of course, large technology companies with loads of resources will find a way, even if it means piggybacking on other integrations, but if our industry wants to evolve at a more rapid pace, this process needs to be much more economical and simple to do, and just as with Facebook, Apple, and others, the building of add-on services will make the fundamental property management software more valuable, rather than simply be added competition within its own environment.

All that said, I don’t think that existing property management software providers are the only option to be the defining platform option.  For example, another compelling option would be an open-source content management solution to be a primary platform for the industry.  This site is developed on an open source CMS, which does not charge for the base architecture.  On top of this base framework, developers are free to create components that integrate with the system, as well as with each other.  Therefore, we are able to provide a blogging platform, forum, social functionality, job listings, file sharing, and other features, all of which work together seamlessly, rather than 10 different websites.  So in this way, if several industry tech leaders joined together to develop a multifamily open-source "backbone", that could be a compelling platform, as well.

Either way, whether it is an open-source platform, a for-profit company creating their own platform, or some third option, it will be interesting to see what options lead the pack in this defining moment in the history of the multifamily industry.

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This comment was minimized by the moderator on the site

I think the platform revolution will need to be led by one of the providers who already has decent presence and currency with the multifamily marketplace. First mover advantage won't necessarily be important because the biggest players will be able to match and leapfrog each other fairly quickly. Where the difference will happen is in that form or those firms who can deliver the message to those who need to hear it. We have talked about this concept in some of the Friday Twitter chats--great product + lousy marketing = no sales. Great product + well-oiled marketing and communications machine = Market Leadership !!!

One thing against which vendors will have to guard is the 'build it and they will come' mentality. Yes, that can work, but I speak from experience--I worked briefly for a electronic rent payment software company which thought they had it all figured out. The owners thought we could trot out the product to every property manager and they would immediately adopt our platform just because. The business the company did for the time I was there though came from timing, i.e. reaching a prospect either just before or just after they began considering whether or not to adopt an rent payment (and tenant communications) solution. Part of that was because we did not have the heft to put out a comprehensive marketing message.

Most importantly, my friends, listen to your customers, whoever they are. (They could be residents, property management companies, the industry/local Apartment Associations, etc.) What do they want? What is important to them? Put a roadmap together from that input and do it well and efficiently, and your path towards success in the 'platform revolution' will be assured.

  Comment was last edited about 9 years ago by Brent Williams Charles H. Fiori
This comment was minimized by the moderator on the site

Great points, Charles. I think, however, that a solution that was primarily free will get a lot of traction with small operators simply because of the cost benefit of it. If the system can have some basic components up and running, it can begin buildout using those small operators, and then evolve to handle more advanced systems.

  Brent Williams
This comment was minimized by the moderator on the site

Brent, I think you hit it on the head when you suggested an open-platform approach. The big management software companies in our industry have been charging top dollar for mediocre operating systems for way too long. Unless you're Apple and have a robust ecosystem partnered with topnotch hardware/software, the closed platform business model will eventually crumble without the support from our open-source tech community. The Multifamily software industry is ripe for disruption and proprietary technology will take the biggest hit. I look forward to the day that our management companies aren't paying huge fees for plug-ins or "advanced features" that should have been available straight out of BETA.

  Jason Velazquez
This comment was minimized by the moderator on the site

Thanks for the comment, Jason. I don't want to say one company or another has not done well, but rather take a positive approach that this is a giant opportunity for every one of them. Just the idea of this gets my competitive juices flowing, and I don't even have a stake in the game.

  Brent Williams
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Brent, you are a true diplomat! I come from a student housing background so, I guess I'm a little more sensitive on the topic of operating systems in our industry. Nothing would make me happier than one of the big guys opening their API to let us build upon it. I fear, however, that if/when that happens it will be too little too late. Think about Blockbuster. They knew about streaming technology well before Netflix came along but were too busy getting fat off late fees and over-priced candy. I hope I'm wrong; competition pushes innovation. If the big guys survive the open-source revolution, we'll all be better off for it.

  Jason Velazquez
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<p>Brent, <br />
Very well written! So true is the common question, "will it integrate?". Unfortunately it seems that many pmc's can't choose their "best in breed" solution package because they fear doing so will cost them heavy integration fees and headaches. However I do think change is in the air. There are so many great offerings out there, and we have very knowledgeable customers. Hopefully their voices will be heard and all management software providers will realize that having some of their customer's business and relationship is better than none.</p>

  leslie
This comment was minimized by the moderator on the site

I agree with you, Leslie, that change is definitely in the air. When I was starting my company in 2005, it was a lost cause because I, as the start-up supplier, had absolutely no chance of pushing the envelope. But now, the property management companies themselves are forcing the issue, which will drive some very interesting changes.

  Brent Williams
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Great point, Leslie. Integration is paramount in every industry. It requires a different mind-set for many old-school vendors intent on protecting their offerings.

  Phil Simon
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<p>Thanks for the writeup. If anyone wants to see the video, it's here:<br />
http://wp.me/p1LWlM-u0<;/p>

  Comment was last edited about 9 years ago by Brent Williams Guest (Phil Simon)
This comment was minimized by the moderator on the site

Thanks for inspiring the blog, Phil.

  Brent Williams
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Sorry...wrong link. I should have it up soon. My bad.

  Phil Simon

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