Kylie Davis: (00:02)

Welcome to the Proptech Podcast. It's Kylie Davis here, and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. I passionately believe we need to create and grow a sense of community between the innovators and real estate agents, and sharing our stories is a great way to do that. Now, the aim of each episode is to introduce listeners to a PropTech innovator who is pushing the boundaries of what's possible, and explore the issues and challenges raised by the tech and how they can create amazing property experiences.

Kylie Davis: (00:35)

Now, my guest in this episode is Dave Garland, Managing Partner of Second Century Ventures and the REACH global programme, the number one PropTech accelerator in the world. And from its start as an accelerator of US based PropTechs through the National Association of Realtors, REACH has expanded over the past two years to create programmes in Australia, Canada, and soon in the UK. And given the success of Aussie PropTechs, such as ActivePipe, BoxBrownie, and RateMyAgent in the US programmes, we like to think that it was the Aussies who showed REACH that innovation was not just the purview of the US industry, and that we played a role in their expansion. Now, Dave has met literally hundreds of PropTech entrepreneurs across his career, and he has a highly honed instinct for what makes a technology successful in real estate, property management, and construction, and where the tech is going.

Kylie Davis: (01:33)

I wanted to get him on the show for two reasons. If you're a PropTech listener, you'll get some great insights into how to be successful, and the work you'll need to do to make it. And if you're a real estate agent, or property industry listener, this is also for you. Dave has his finger on the pulse of new technology coming through the pipe. And it's interesting to know all of this is being funded by the National Association of Realtors, the world's largest industry organisation, which is effectively residential real estate. So, Dave Garland, welcome to the Proptech Podcast.

Dave Garland: (02:08)

Thanks, Kylie. It's a pleasure to be here.

Kylie Davis: (02:10)

Yeah. Now, Dave, normally, we on the Proptech Podcast, get everyone to start with their elevator pitch. But I'm assuming you have heard an awful lot of elevator pitches in your day. And I want to pick your brain about how we can build better PropTech. So, how many elevator pitches do you actually think you've probably heard?

Dave Garland: (02:29)

That's a great question. I think it's... Gosh, I guess the bigger question is what constitutes an elevator pitch? I mean, if we're just looking at the general idea of, hey, here's my idea, what do you think? Then quite a few. On a weekly basis for the last 10 years I'd say at least five per week for the last 10 years. That's just me, and not really counting the rest of my team. That it's truly a global team. And so, there's been a lot of elevator pitches.

Kylie Davis: (03:02)

That would be hundreds of thousands.

Dave Garland: (03:04)

Yeah. It's quite a number of them. And whether or not you hear them on the elevator, as it were face-to-face, or increasingly just more pitching sent to us via email, or via social media, etc. So they come from all over. But yeah, there's a lot of ideas out there, and I love hearing the ideas, too. These ideas are super important, especially when it comes to the problems that we're trying to solve in the real estate ecosystem.

Kylie Davis: (03:36)

So, what are some of the best ones that you've heard? So in the last couple of months, what are some of the best ones that you've heard?

Dave Garland: (03:46)

There's quite a few good ones. I would say this that the best ones are the elevator pitches that leave me wanting more. They're the ones that entice me to lean forward in the conversation and essentially say, "Oh, that's interesting. I haven't really thought of it that way." They're simple. They're oftentimes narrative, meaning that they'll tell a story. And what I mean by that is the best ones set up a framework of here's not only a problem but here's emotionally the impact of that particular problem because these elevator pitches are not just about the content of the pitch. It's also about the individual who's giving that pitch because at the end of the day, when you walk away from somebody that supposedly just met in an elevator just randomly and they pitched you on an idea. You're only going to remember a couple things about that. And oftentimes, you'll remember the emotion that they left you with.

Dave Garland: (04:54)

So I guess what I'm referring to are those circumstances is where they're able to create this narration of what's going on in the world and this problem, and how they've created and crafted a solution that's able to address this particular problem. And then they kind of stop. And they also understand that, all right, I'm going to wait for that dramatic pause [crosstalk 00:05:16] so that they can ask me for more. Right. I think some of the best start are like picture a movie trailer where you have that sort of voice of God that comes over, it's like, in a world where you have real estate is experiencing phenomenal issues in the transaction. And real estate practitioners can't close fast enough on certain deals, and imagine the impact and the humanity. And yeah, oh, by the way, we've got a solution for that.

Dave Garland: (05:45)

So that type of narration where there's some emotion behind it, you can tell the passion behind the entrepreneur, and they've done their homework, and they've crafted the message in such a way that entices me to want to learn more in a very simple manner. Those the best of the best. And I think that those the ones that stand out. And remember, it's just a first step because after they get you in the door, then the real information comes out and the devil is in the details, and that's obviously when you take that next step and decide whether or not you want to work on an investment strategy with them, or bring them into the programme or invite them into various parts of the ecosystem.

Kylie Davis: (06:27)

So, that ecosystem has been around now for how long, the NAR REACH platform, 10 years?

Dave Garland: (06:35)

NAR REACH, the first class started in 2013. And so, it's been a while. And so, there's been a phenomenal amount of change within the ecosystem since then. And the companies that were invited into that programme were a little bit earlier to the game. It was more of an incubator/accelerator versus where we are today, which is much more of a scale up type programme. And in 2013, the companies that came in, I would say were really the trailblazers in the space. They focused on removing certain amounts of friction within the transaction itself.

Dave Garland: (07:20)

And at that time in 2013, there weren't a huge number of companies, but they were attacking very big challenges for realtors and for practitioners. And some of the items that they were focused on were things like enhancing communication between real estate practitioners and the consumer or streamlining moving operations for consumers, and just in general, connecting the practitioner better with other individuals within the ecosystem itself. And then, literally, go on top of that you had some predictive analytics, machine learning type systems that were more in their infancy. That's I think largely the types of companies that came to bear on that first 2013 class in the United States.

Kylie Davis: (08:13)

So, in the seven years since that first class started, has occurred, how has the PropTech environment changed over that time? What are we seeing now? How has it grown?

Dave Garland: (08:28)

Yeah, that's a great question. I think that if we were to look at the comparison between the companies that let's say we're bringing into our programmes now and investing in now versus back then there's some similarities and some differences. I think that the similarities are that at the heart of it, entrepreneurs are still passionate about removing friction in the transaction, as well as other friction points within the general real estate ecosystem. So that that tends to be a mainstay.

Dave Garland: (09:00)

But now, I think more than ever, it's also about improving the customer experience and part and parcel... So you could still be a B2B type strategy, but the net return is to enhance the experience for that end consumer, whether they be a property owner, a buyer or seller of residential real estates, a property manager, etc. How do you really enhance that experience? And then also, I'd say that today, it's more about interoperability between markets and between segments. And what I mean by that is it's a closer tie between settlement service aspects of the transaction. So you have things such as mortgage, title, escrow, property management, contractor networks, search, marketing, advertising, are much more intertwined now. And that's oftentimes due to technologies and businesses that are laser focused on shrinking the time and the data management challenges that help to connect those disparate parts of the transaction.

Dave Garland: (10:07)

So, we see some really interesting changes and some ironies in the space as well. I think that on one hand, you have what I call the great decoupling of the real estate transaction versus the aggregation of systems and processes in the space. And it's what I mean by that is, on the decoupling side, every aspect of the transaction journey is being picked apart. And entrepreneurs are finding ways to improve the micro parts of that particular process. And they're getting really good at it. And whatever it may be, whether it be at the top of the funnel in locating customers down to the actual specific parts of a disclosure form, and they're building businesses around that. And the best of the best in terms of those organisations are leveraging the success of their businesses as a wedge in the market to build what I would refer to as micro marketplaces, and then expand further into the transaction. So, on one hand, you have that decoupling of the process.

Dave Garland: (11:19)

Whereas on the other side of the coin, you also have organisations that are largely focused on solving the entire journey of the transaction, and bringing it all under one roof. And these tend to be the larger organisations with the big brands that want to essentially say, "Hey, this is our process, soup to nuts. And if you come with us, then presumably you'll receive some economies of scale and some efficiencies because we do everything under one roof from a technology standpoint." So, I think that that's an interesting dichotomy I've been seeing as of late, and certainly something that you didn't really see eight, nine years ago.

Kylie Davis: (12:05)

Do you think real estate agents have kept up with it? How do you think the way that we've embraced change as a real estate industry has that changed over those sort of seven to nine years?

Dave Garland: (12:19)

Somehow. [inaudible 00:12:21]. It sort of depends on what type of real estate agent or practitioner you're talking about. I mean, if you're talking about a property manager, you can focus on certain areas where some property managers are substantially more open to leveraging technology to solve some of the problems that they've had for their tenants or for their owners, etc. And this is one of the areas where I would argue that Australia tends to shine is in property management technology. When you contrast that with let's say property management technology, specifically in the US. US is really earlier in terms of timing for rolling out those types of technologies. Australia has been on the forefront of that for a while. And that's by nature of the way the cities, and the people live and work and play in Australia versus a majority of the US market. So, it really depends.

Kylie Davis: (13:12)

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Kylie Davis: (14:24)

Did you guys see in the US like we saw here in Australia though that during the COVID period there was an increased adoption of tech?

Dave Garland: (14:33)

Certain types of technology, absolutely. I mean, it's just by demand. I mean, when you have a massive demand to let's say close transactions in a time period where social distancing is required, or where you can't do things traditionally face-to-face, it really accelerates the use of certain technologies over others. And we certainly saw that in terms of the document management, online document management, remote online notarization, different forms of communicating with clients. It really fast tracked some of those technologies at a speed that I don't think many people had anticipated. And I think that that was actually a net benefit for the industry as a whole.

Kylie Davis: (15:21)

So, you talked before about how the problems that are now being solved are becoming more niche or micro. We're unpacking more and more of the whole transaction process. But what are the common mistakes that you see startups are making around the problems that need to be solved?

Dave Garland: (15:43)

I'd say if I was to put some of the biggest mistakes that I see consistently across whether it be, applications or just general pitches is when entrepreneurs that tend to be new to this space or may not understand the difference between, let's say, a TAM and a SAM. And what I mean by that is a TAM would be a Total Addressable Market, and a SAM is a Serviceable Available Market, and the two are vastly different. So a Total Addressable Market is really a total market demand for a product or service, which is oftentimes calculated in annual revenue of a service or sales of that available market. So, you can say, "What's the total addressable market or the total available addressable market of the US home sales?" For instance. And in any given year, you'll have about five and a half million transactions that take place, and you multiply those transactions times the average dollar volume of those transactions, and you'll get the theoretical total addressable market of US housing stock, for instance, that's just one example.

Dave Garland: (16:59)

Now contrast that with a serviceable available market, and it's really sort of the portion of the total addressable market that can be serviced by a company's products or services. So I think oftentimes entrepreneurs conflate that dollar value of the bigger addressable market. And they say, "Okay, well, this is how big that-"

Kylie Davis: (17:20)

We went 100%.

Dave Garland: (17:22)

And all we need is 1%. And if we get 1% of that market, then we'll all be insanely rich. But the reality is that, the serviceable market tends to be substantially smaller. And so getting that right is really important, especially as you break down or decouple the process and focus on niche areas within the industry. Really understanding that difference between TAM and SAM I think is really important. And that's something that we really encourage entrepreneurs to look at when we're discussing their objectives with them. And it's something that we oftentimes really challenge entrepreneurs on is really how did you get that particular information? And why do you think the market is that big? And then why do you think the market that you'll be able to achieve is so big within a given point in time? And that becomes a catalyst to all sorts of fun conversations.

Kylie Davis: (18:14)

So really being able to explain how you got to that number, and why you think you can do it, as opposed to, "Oh, that's for my accountant said to put in the spreadsheet."

Dave Garland: (18:24)

Yeah, I mean, look, I think it's a really good point. Because when you look at any average investor deck that an investor will put together to ask for capital. There's always a slide in that deck that discusses that market size. And entrepreneurs will leverage that information to justify the build of their particular technology. And they'll engineer something absolutely brilliant and beautiful and sexy. And oftentimes, what tends to happen is that they'll engineer and they'll get so far ahead of their skis that they don't take the time to really understand the market. And so by the time they're all done building this... This MVP, this minimal viable product, they go to the market only to be told, "Sorry, that's not what I want." From the demand standpoint. And I think that it begs the question, really, how do you know what the consumers want? Or how do you know what the demand is for your given product or services.

Dave Garland: (19:38)

So, ideally, the best of the best out there from an entrepreneurial standpoint really understand intimately the problems and the challenges that their customers face. And that's really the genesis of product market fit. And one of the reasons, actually the number one reason why startup companies fail, it's not because they run out of money. It's because they lack the product market fit, meaning that there's a demand. And if they don't truly understand the demand, and they build to something else, then there's no product market fit. If there's no product market fit, then there's really no business. So, when you look at survey after survey of entrepreneurs, this went out of business. And you really suss out why that organisation failed. It's for the most part there was a lack of product market fit versus, oh, I ran out of [inaudible 00:20:38].

Kylie Davis: (20:39)

What do you think are the biggest problems we should be solving for now in real estate? Given all the tech that's already gone on over the last seven years? Where do you think we should... Where do you still see the pain?

Dave Garland: (20:53)

Look, there's pain everywhere.

Kylie Davis: (20:56)

It's so painful.

Dave Garland: (20:58)

There's pain everywhere. But then there's also the other side of that coin, which is, how do you move towards the pleasure part, right? I mean, all human behaviour is really governed by the idea of moving away from pain or moving towards pleasure. So either removing some friction, or we're making things better, quicker, faster, because it brings us to a higher degree of solvency quicker. And so I think that in general, removing barriers, making things a little bit more efficient, those are the sort of broad themes. And then real estate has gotten so big in terms of the interoperability that I was speaking to that there's all sorts of new challenges that come about when you start bringing ancillary segments together better, quicker, faster. I think that those will be some of the big things to solve for, particularly around data, data sharing, interoperability, consumer information. And look, there's a whole host of new issues that have just been brought to light by COVID as well that are really, really unique.

Dave Garland: (22:11)

Actually, I truly believe Kylie that 2021 will really mark the beginning of a renaissance period for real estate technology. And the reason being is because COVID has really allowed us to streamline and forced us to move certain processes quicker, and often times has also had a dramatic impact on the market. There's this intersection of industries. And there's now this incredible amount of capital flow into the space more so than ever before that's bringing better smarter entrepreneurs that are taking bigger risks to help a traditionally underserved industry that, by the way, happens to be the biggest industry in the world. So I think with all that being said, there's some really, really neat things that will be built in the next couple of years. But those businesses will be built on the idea of solving some common familiar problems that aren't just common among practitioners in one geographic location, but practitioners in all geographic locations.

Kylie Davis: (23:27)

Fantastic. I can't wait for that. I love the idea of a renaissance. After 2020 I think we could all look forward to something. And we do feel like we've kind of been through the Black Death, don't we? So, you guys are also expanding. I mean, in the last seven years, you've gone from almost a startup at NAR REACH, and now you're scaling up a lot too. Tell us a little bit about, and we've just had the second intake in Australia of the REACH programme. So, if you haven't got your applications in everybody out there, hurry up. Shelli Trung and the team at REACH are currently going through new assessments. But tell us about where you are now. How many countries?

Dave Garland: (24:18)

So right now we have programmes that are domiciled in Australia. As you know, as you just mentioned, Shelli and her team are doing a phenomenal job getting ready for the 2021 programme that we'll be launching early part of next year. We have a programme that just launched in Canada in October and we'll be hopefully opening up our programme or announcing our programme first part of December in the United Kingdom. So those are where those programmes are domiciled. In addition to the US, we have two flagship programmes. One REACH, the original REACH programme, and one that segment is specifically for commercial. That's our REACH commercial programme.

Dave Garland: (25:01)

And really all those programmes are very similar to one another in that they're intensive multi month sales and marketing programmes really aimed at maintaining and helping organisations grow at a substantial pace by leveraging networks of mentors, partners, practitioners, and strategic opportunities with folks both in the industry as well as outside and surrounding the industry. So, it's been a wonderful voyage thus far. And we're really trying to help out the industry as best we possibly can with the idea that if we can take the best of the best, find the best of the best, and provide them with the right tools, education, talents, and assistance, then really we're doing good for the industry.

Dave Garland: (25:56)

And that's really what our sole reason to be is. I mean, we're not like a typical venture capital organisation. We're not a typical accelerator. We're really a scaler programme that is backed by a trade association, the largest trade association in the world. And so we have a responsibility to ensure this, the practitioners around the world are provided with the best technologies to remove friction in their day to day tasks.

Kylie Davis: (26:25)

Okay. So, if I'm an Australian PropTech, though, it's not necessarily the case that I should just apply for REACH Australia, though, is it? How do I decide which REACH programme I want to go into?

Dave Garland: (26:39)

Yeah. So, the way that we've structured is this. We have these REACH programmes that are specific to the region that you're building your business in now. So, for instance, if you are a organisation in Singapore, and you're looking to really grow your operations in Australia, well, REACH Australia would be highly applicable for you to apply to. If you wanted to build your operations in Canada, then obviously, REACH Canada would be the place to apply. But the idea is that once you're within the family, so to speak, we find that the best ideas out in the ether are not really confined to one market. And that's really one of the veils in which we evaluate each one of the potential companies that come into the programme is that if a challenge is specific and unique to one particular geographic location, well, that's nice, but we're looking for organisations whose technologies can not only scale beyond that particular market geographically, but also potentially impact other segments. And those are the types of companies that tend to grow at warp speed and tend to serve a very large segment of the real estate population.

Kylie Davis: (27:59)

Okay. So what kind of PropTechs are really exciting you right now? What companies have you seen out there that you think, "Wow, if I had a lazy million, I'd back that horse."

Dave Garland: (28:11)

Yeah, we're backing quite a few incredible companies right now. I mean, we've really expanded our operations, and we've worked hard to be the most active investor in the real estate technology space. And the investments that we're making right now, we're hoping are not just solving problems today. But the problems that will be impacting practitioners five, 10 years from now as well. But me personally, look, I'm a deal junkie, and I'm a student of what's going on in the macroeconomic sense, on a global level.

Dave Garland: (28:46)

I really like the ecosystem that we're in right now. And I really believe that there's a gold rush coming into the space, and you're starting to see it just in terms of the amount of capital that's being invested in property technology over the last couple of years. I think you have roughly 30 plus billion in 2019 when you remove some of the investments [inaudible 00:29:07] the world. This year to date, you've got about 10 billion that's been invested in property technology in spite of COVID. So you have this increasing amount of capital that's also going to be met with a substantial demand for your general large scale institutional investors to play in the real estate ecosystem, both in markets like the US and Australia, as well as in other global markets throughout Europe and China.

Dave Garland: (29:43)

And the reason being is because with this flush of capital that has been created for the most part due to COVID. You're going to have a lot of folks chasing for yield, and trying to avoid the inflationary pressure that comes with printing a lot of money. So there's only so many places that you can put your capital in, in order to help ward off against inflation. And real estate tends to be one of the most popular instruments. So I think that with that amount of capital that's coming into the space from investors in conjunction with the amount of capital that's being pushed toward technology that's now impacting the space, you have a perfect storm for a lot of new innovation. And that innovation or the gold rush, as I put it, will really be powered by companies that leverage things such as artificial intelligence or that are focused on enhancing.

Kylie Davis: (30:46)

Sorry, it's 2020. It's 2020. There's always a dog in the office, right? And someone's just delivered something to our front door. So, they've just gone to let everybody know.

Dave Garland: (30:58)

That's one of the beauties of COVID is that it's changed the way that we live and work and to get to that point, the office has changed. The retail environment has changed. All this has changed, and this change doesn't mean those aspects of real estate go away, it means that now there's going to be new questions of where to invest your money, and that's going to drive more and more people to the real estate technology space. So, to answer your big question of, hey, if I had a million dollars just myself just lying around, and there's a gold rush. Well, like in any gold rush, you don't want to be the miner, you want to be somebody who's providing the picks and shovels to the miners.

Dave Garland: (31:38)

So if this gold rush is really going to be powered by companies that are leveraging artificial intelligence, and machine learning, and computer visioning, and consumer concierges, modelling and sensors, the picks and the shovels of that rush will largely be dependent on data and the availability of data that can be consumed and adjusted quickly. So, my easy million, as you put it, would be investing in companies that have not only access to this data and access beyond just the transactional property data, but the deep behavioural data that's going to be captured and traded in the future, the sensor data, the IoT data. So, really, what I'm looking for is really the Palantirs of the real estate vertical, those massive shops that will host all the data.

Kylie Davis: (32:34)

Yeah. I thought you were going to tell me you were going to give it to Amazon Web Services or something hosting everything in the cloud.

Kylie Davis: (32:44)

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Kylie Davis: (33:52)

So have you got any specific names for us that you like? You were one of the first investors in DocuSign, which is one of your flagship investments. What specific companies at the moment that are in the programme that you think are doing a great job?

Dave Garland: (34:08)

Well, I mean, I think you look at the Australian programme this past year there's been some phenomenal success stories just out of that inaugural programme. You have organisations like UbiPark with some of their marquee partnerships with companies such as Porsche are doing incredibly well. They've also secured some pretty amazing pilots with capital organisations. You have organisations that have really set up themselves for scaling with some nice capital raises. Those are organisations like Sorted, and igloohome. So there's been some pretty big wins out there just in this first year in the Australian ecosystem.

Dave Garland: (34:49)

I'd say broadly speaking, there's a lot of financial wins for us that we have within our Second Century Venture portfolio both in our REACH classes in the US, as well as in Canada that we're all excited about. But I'd say, stepping back and broadly looking at our biggest strategic investment success has really been us doubling down within the REACH programme. And I think that, that largely has been our best strategic investment today over the last 10 years, by far. Just because of the number of practitioners in the space that we've been able to impact. So we're investing in dramatic fashion, in building out this infrastructure to help support these businesses. And the more that we do that, the more that we're able to provide education, sponsorships, mentorships, etc, for the benefit of these companies, allows us to get to know the entrepreneurs better, so we can make even better strategic investments for them through our Second Century Ventures vehicle. But also just in general.

Dave Garland: (35:55)

When you look at what's happened in other industries when you've gone through this renaissance period, and I think that FinTech went through this a couple of years ago. They're a little bit ahead of the real estate ecosystem. And healthcare and bio sciences have gone through their renaissance in terms of the amount of capital that have been pushing towards innovative ideas and startups and technologies to support the ecosystem. What tends to happen with that capital infusion is that it also pushes up the availability of educational opportunities. And we're not really seeing that in the real estate space. Now, what I mean by that is that take FinTech for instance. When you look at what happened in the FinTech environment, in terms of let's say, the number of incubators, or accelerators per 1,000 new startups that were created, you had 15 times the amount of incubators and accelerators and scale of programmes in FinTech than you do in real estate today per 1,000 companies. That's a drastic differential.

Dave Garland: (37:03)

So the ecosystem is craving more education. The ecosystem is craving more connectivity, because frankly, one of the unique things about real estate is that it's built on this idea of the strength of relationships. I think it's sort of unique to the real estate space. I mean, it underpins everything that being a practitioner is all about is the relationship. And without the knowledge of how the industry works, it's tough to take that second step and deepen those relationships.

Kylie Davis: (37:37)

So, what are your predictions for where PropTech's going in the next five years? We've talked about AI and artificial intelligence and machine learning and a little bit already, but what do you think in five years time selling or buying a home will look like because of this technology?

Dave Garland: (37:57)

Well, I think, as I hinted to a little bit earlier this impact from COVID will have a profound long lasting impact on how we transact real estate, and you're just starting to see the impacts of that across retail, across the commercial segments. Folks that are still in leases and being impacted by this today. Retail market, for instance, has been completely decimated. And on a physical basis, and you have new organisations and new segments within that market sprouting up in order to take those incumbents places. It's too early to tell, but you have a massive opportunity for new business models.

Dave Garland: (38:41)

The commercial spaces has been radically impacted as well. And that has done a couple of things. It's forced the commercial segment to intersect with industries that we never thought it would intersect as quickly like healthcare, for instance. And you're going to have changes to your work environment, but also it's impacting the housing market, and in how people are choosing to live, to work, and to play, because if all of a sudden, I'm not expected to go into an office environment, and I just want to... I can work from home, and from the comfort of my laptop or computer with a nice screen behind me and nobody really cares where I am, then all of a sudden it's as if my shackles are off. I can go and live in a place I never thought possible.

Dave Garland: (39:30)

And we're at the very early, early stages of figuring out what that impact will be. But I think that you're going to see some demographic shifts, some migratory shifts in terms of where people can choose to live, work, and play. And I think that these particular trends will have far reaching downstream impacts in other industries, the industrial sector of the market, and also the retail and development and construction sectors of the market. So, the technology will tend to follow those particular trends. And the practitioners will still be there trying to make the most of it for the benefit of those consumers. And those practitioners who are leveraging education and getting super smart on, okay, what are these migration patterns? Where's the demand going? And then also, what technology can I use in order to facilitate long term relationships with consumers, that's what it's all about.

Dave Garland: (40:31)

So the baseline of the transaction, I don't think is changing other than it will become quicker. Now, what will change, I believe, will be the segments that start to intersect more with real estate much quicker. The insurance, the banking, and the mortgage segments, and your stronger intersections will allow for quicker transactions. And you're starting to see that more and some of those products in the financial services segment allow for equity release like we've never seen for the benefits of homeowners, for the benefit of investors, etc. So, you're going to see some pretty cool changes.

Dave Garland: (41:07)

And then, on the living side of things as we continue to hunker down in our homes or build out our home offices, well, we're going to be much more acceptable to some of the things that many offices have started to experience. And that's this influx of sensors in our day to day life. And I think that smart home technology will continue to get smarter. And that's where you'll see this interplay and this tension between the availability of consumer data, and your privacy of that information versus efficiency, safety, and security. And that'll be a really interesting tension point. But that'll also drive, I think, future innovations.

Dave Garland: (41:55)

And then underpinning all of that, especially with new development opportunities, I think that there's a greater need for sustainability within the ecosystem, environmental sensitivity, building things with a lower carbon footprint. I do believe that while that in the short term has more taken a backseat to the conversation around COVID, I do think that is a long term trend where people want to live in healthy environments. It's going to be something that's going to be an increasing necessity. And certainly Australia's been a leader in that particular market, and the US is, I think, now coming into its own, and into its initial phases of understanding that benefit of ESG investing. I think that will be a really good thing, the more the US considers ESG as a lens by which to invest in unique opportunities that surround the real estate ecosystem.

Kylie Davis: (42:52)

It has been such an interesting year, hasn't it? Because here in Australia, it's been a year of bush fires, and then COVID. And both of those things impact on our homes in that you can't go home and necessarily be safe anymore. And so, that whole issue around environment and wellness and safety, and the need and the sense of coming home have all been challenged and are being rethought.

Dave Garland: (43:23)

Absolutely. I think it's good that we are rethinking that. It's true that we're thinking in an environment where there are incredibly smart entrepreneurs that are figuring out solutions to those nuanced issues that impact us on a daily basis.

Kylie Davis: (43:41)

Dave, it has been absolutely fantastic to talk to you today. Thank you so very much for your time. One quick last piece, what's your top piece of advice to the entrepreneurs that you work with?

Dave Garland: (43:52)

The top piece of advice for the entrepreneurs, I would argue is this industry is built on relationships. And the sooner that you understand that, the easier it makes for conversations. And when you get into the mindset of a conversation with a practitioner being the baseline of a future relationship, then you're building something that's lasting. If you treat individuals or consumers or practitioners just as part of a transaction in order to move from point A to point B, then that's not a long term strategy for victory.

Dave Garland: (44:34)

It's an old school industry in many ways, and for the good. And we like the idea that it's relationship driven. And that's what makes this industry really unique. And so if you trust in the relationship, if you learn to facilitate the relationship, and you bind to that philosophy, then you're really going to last in the industry because the practitioners you don't have a lot of churn with practitioners in the space that are jumping ship from the real estate industry to a different industry. Most of the time when people find that they enjoy the real estate space, they tend to stay there for their entire life. And it's a small industry in that frame of thinking, but it's also the largest industry in the world. It's built on relationships. So go out and build those relationships.

Kylie Davis: (45:20)

Fantastic. That's a great piece of advice. I can't wait till we can have a cocktail again together so we can-

Dave Garland: (45:27)

Absolutely. We can't wait-

Kylie Davis: (45:28)

... say hello again.

Dave Garland: (45:29)

REACH happy hours is coming to a venue near you when we can travel again.

Kylie Davis: (45:33)

Awesome. Okay. Look, Dave it's been great to have you on the show. So, thanks so much for your time.

Dave Garland: (45:39)

The pleasure is all mine. Thank you, Kylie.

Kylie Davis: (45:41)

So that was Dave Garland, head of the REACH programme globally, a man who has arguably done much to put PropTech literally on the map. The REACH programme offers amazing opportunities for PropTechs to scale and grow quickly. And to be accepted into their programmes is a huge feather in your cap if you can make it. The quality of the mentorships, and the introductions are literally second to none. And I love Dave's tips to PropTechs on understanding the difference between total addressable market and serviceable available market, your TAM and your SAM, and being able to see your technology story in those terms.

Kylie Davis: (46:19)

I think his comments too about how REACH and their investments focus on how PropTechs look at customers and market is also highly telling. This isn't just about how cool your tech is, but how you understand the market and how you're going to win customers. So effectively how you understand the humans and how they're going to buy your tech. And this is what makes someone invest in you if you're looking for funding. Now if you're in the real estate industry or an observer who's keen to know which PropTechs are likely to scale and thrive, following the REACH programme and their cohorts closely is a good investment tip.

Kylie Davis: (46:57)

Now, if you have enjoyed this episode of the Proptech Podcast, I'd love you to tell your friends or drop me a line either via email, LinkedIn, or on our Facebook page. You can follow this podcast on Spotify, Google Podcasts, Anchor, and Apple iTunes. I'd really like to thank my audio support Charlie Hollins, the fabulous Jill Escudero, and our sponsors Smidge Wines, proud to be the official wine of Australian PropTech and real estate. Direct Connect making moving connections easy and HomePrezzo now part of ActivePipe and making content marketing for real estate agents with a click. Thanks, everyone. Until next week, keep on PropTeching.