First up, WTF are Reverse Salients?
Nicholas G Carr’s 2006 Strategy & Business piece notes that “Reverse Salients” comes from military terminology, referring to a section of an advancing military force that has fallen behind the rest of the front.
This section is typically the point of weakness in an attack, the lagging element that prevents the rest of the force from accomplishing its mission.
Until the reverse salient is corrected, progress comes to a halt.
Way back in 1983, Thomas P. Hughes applied the term in the realm of tech innovation, in his book “Networks of Power: Electrification in Western Society, 1880-1930”.
Hughes noted that a ‘reverse salient’ forms when a complex technological system advances towards a goal, where some components fall behind or out of line, resulting in the growth of the whole ecosystem being “hampered, or thwarted”.
Carr summarises it to state that “in technological advance as in warfare, the reverse salient is the weak link that impedes progress.“
So now that we know what reverse salients are, where can we find them in the innovation and adoption of property technology (aka proptech)?
Are there Reverse Salients in PropTech?
Across the globe, PropTech adoption, funding and innovation are growing rapidly.
The industry is made up of thousands of companies, building towards their (often shared) vision or goal of what the future of places looks and feels like.
I’ve spent the last decade building technology for flexible workspaces. During that time I’ve noticed a persistent reverse salient knock back, or even completely stop, great proptech innovation and adoption.
I note this down in the hopes that it helps some of the awe-inspiring proptech teams enjoy even more success by quickly remediating or planning-around how they’d address certain elements causing the drag on progress.
Of course, there’s another whole debate around why some firms will not, or even cannot, adapt due to the innovators dilemma, but that’s another story for another post or presentation.
Before we dive in, it’s probably best to first look at what is going well for proptech innovation and adoption within a traditionally slow-moving industry.
The strong advance of PropTech.
In a non-exhaustive list:
Funding is pouring in.
Over $52B were invested into proptech companies in 2021 and 2022.
(Source: Center for Real Estate Technology & Innovation )
More, better interfaces.
Increasingly, interacting with physical space is getting better and easier via tech-enabled interfaces.
Adoption is growing.
“By 2025, 78% of companies plan to incorporate over 10 of 15 technologies identified as anchors for hybrid work transformation”
Growing market size.
The PropTech market is estimated to be advancing at a compound annual growth rate (CAGR) of 16.8% during the period 2022-2032.
(Source: Future Market Insights)
Just one directory of proptech solutions lists over 9,000+ vendors.
5 signals that even within this ultra-conservative market (when it comes to tech implementation), proptech is advancing into every aspect of the spaces in which we live, work, play, stay and store.
The reverse salient is in the glue.
If you know me or what we’ve been working on since 2019, you won’t be surprised with where I believe the reverse salient in innovation and adoption lies.
I believe the reverse salient holding back the proptech industry is within the digital fabric, the glue if you will, that connects different proptech solutions together. Commonly referred to as ‘integrations’, these cover how different systems (hardware and software) from different vendors can be interconnected, but includes a lot of deeper and geekier technology and processes that I won’t get into today.
ICYMI: It’s this integration challenge that frustrated me enough to write a post asking for help in November 2019, which then drove me to prove the scale of this issue by mapping out over 354 integrations between just 86 platforms in April 2020, and is a key-driver of what we’re building for operators, end-users and proptech companies day-in and day-out at Syncaroo.
But today, I wanted to dig deeper into why exactly integrations are not just a short-term issue, but are indeed a reverse salient for proptech as an ecosystem, especially as the weak link may be getting even weaker due to worsening external market conditions.
So, why are integrations the weak link?
Other than most integrations being either costly or a bundle of pipes being held together with chewing-gum, sellotape and tears, we can actually dig in a little deeper by looking at the objectives and their challenges for each group affected by proptech implementations.
They need updated systems that can easily and securely be connected to their existing setup or be pluggable into their now constantly-changing tech stack.
They need to offer an ever-growing number of integrations which means constantly diverting dev & other resources to scope, build, test, implement, support and maintain each one.
They want a seamless experience however they interact with a physical space, but importantly could not care less about the actual tech stack a building uses.
2023 is amplifying this reverse salient.
Both local and global economies are heading towards choppy waters over the next few months (at least).
We’re seeing layoffs at Proptech Platforms, leaving less allocatable resources for splitting between core competencies and integration development/maintenance.
Building users, who are engaging with physical spaces in whole new ways, have growing expectations (and even demands) about how interacting with buildings should feel.
And so, building operators have to adapt and evolve product offerings, and their stack, rapidly to stay flexible and reactive to changing market conditions and consumer demands.
As markets tighten, the drag on progress caused by this reverse salient could slow or even stop the immense progress seen in the proptech ecosystem over the last 2 years.
Remedies and workarounds.
Reverse Salients can be remedied, restoring growth momentum.
Of course, I believe that Syncaroo will continue to play a huge part in streamlining integrations and data syncing for proptech companies and building operators so that experiences are easier to plan, build and maintain for building users.
Through a unified integration layer, proptech platforms can build a single one-to-many integration, operators can enjoy more control over how systems connect and what they sync, and end-users can use more and more interfaces to seamlessly interact with their favorite spaces.
Given the worsening of this reverse salient, we’re actively exploring a new funding round. The idea is to further scale up the integration layer that’s already synced over 7 million data events between management systems, inventory databases, pricing data, booking interfaces, mailroom management, and more in buildings around the world.
But if what we’re building isn’t your cup of tea, then here’s what we’re seeing from each group to help you plan your own approach/remedies.
As proptech is adopted, the question of integration options is coming up earlier and earlier in their research. A poll of coworking space operators noted that for 100% of respondents, the availability of integrations directly affects buying decisions. By picking more integrable systems, the reverse salient can be remedied before it slows or breaks implementation.
Platforms are shifting away from building a whole bunch of ‘OK’ integrations. They’re instead focussing on making their own API and Webhook infrastructures are secure, supportable internally, and scalable. Making it easier to build and manage integrations allows for more reactivity when slack starts forming in the advance of adoption.
Now very very few end-users will ask “what tech stack do you use?”, but we’re seeing more and more questions about whether they can use tools/interfaces they’re used to using (like their phones or calendars or team messaging system) to leverage the space or amenities. Listening out for these will help guide you towards speeding up any components left behind in your infrastructure.