IB: Thanks again for having me. So it all started in the Netherlands. So I’m born and raised in Amsterdam. So my name and my accent, I guess, are not from the US. So that’s where it all started. Studied there, lived there most of my life and then moved to Asia, lived a number of years in Vietnam and Singapore and after which I moved to South America. I was fortunate to live a few years in Buenos Aires, Argentina and also traveled extensively across Latin America and then moved to the US here in Chicago. So calling in here today from a beautiful summer day in the Chicagoland area eight years ago, give or take. I’ve done a number of things in the real estate space, but currently I’m the managing partner here at Proptech Connection.

DA: Great. So specifically now you’re in that cross-section of commercial real estate and technology. What did you do previous that led you to this particular position or provided that expertise to be able to be part of this new organization?

IB: Yeah, super. So we saw a number of challenges in market and together with my colleagues, business partners, we saw a huge opportunity in this Proptech space and commercial is one of the largest parts of that. But as a firm, we operate across every asset class and across the full asset lifecycle. But a lot of our work concentrates around the commercial space. But what we saw in market is a lot of noise and lots of companies doing similar things, very hard for what we call technology buyers. So breeds, asset owners, managers, operators, construction companies, et cetera, to actually understand what is happening in market in the tech space. Who is active? What companies are out there? What are the different models? Who is winning? Where, et cetera, et cetera. And while we are quite unique is a few things. One, our team comes from the industry. So colleagues that worked in the VC space, ex-private equity, clean tech fund. We have a chart of the account, an ex-investment banker, head of data analytics of one of the largest REITs. And then collectively as a firm, we have now interviewed three and a half thousand Proptechs. We’re tracking 19,000 of them in different capacities. So we sat in every seat on the table. And myself, I’ve sold into real estate businesses. I have an extensive network in that space. And what we do now is we also present a lot of our insights to some of events, for example. We’ve done some gas lectures here at MIT and Harvard. And we’re now speaking to Columbia University to do one there as well. I was actually speaking with one of the professors last week. But we’re really that independent vehicle that sits in that ecosystem that gives global market intelligence and insights what’s happening in the space. So we’re very uniquely positioned. And we have a very data-led infrastructure, how we map this and where we see the opportunity. So everything we do is very much data-led. And we leverage some of the platforms to deliver those insights to our clients. How many years into this process are you now? In the Proptech connection, we’re now six years in the business. And the challenges initially, it’s like, okay, who are these guys? We’re not a McKinsey, we’re not a BCG. And so that’s one of the first hurdles you get. But what we’re seeing now is we work with a lot of VC funds, obviously Proptech funds. We have visibility over 2,800 funds that have deployed in the Proptech space, at least what we define Proptech. And that’s a lot of strategics, family offices, and big Fortune 1000s, for example. And there is a big opportunity in this particular space. And it’s rapidly moving as well.

DA: Right. So Ivo, a two-part question. One, I would love to know why you think you were so uniquely suited to this opportunity. What has helped to make you successful? But I can’t ignore the timing. You indicated you had launched about six years ago. So myself included, having launched just before the pandemic, without a line of sight to the pandemic. I’m just curious, how has that affected your business and sort of the timing of how the business has grown?

IB: Thank you for the questions. Maybe to answer question number one, why me? I don’t think it’s necessarily only me. It’s a team effort. But what really started to appear is that a lot of folks in the network, technology buyers, these adopters that I was referring to, were looking into technology, and many didn’t know where to start. So there wasn’t a good market intelligence network kind of vehicle that was facilitating data-led insights into this ecosystem. That was the opportunity. And then where I and our team really differentiates is that we have sat in every seat on that table. So we worked for funds. We sat in the private equity VC site. We worked for REITs construction companies on the adopter site. And then we collected the interview 3,500 prop tech. So we’ve seen the good, the bad, and the ugly. And then it was also timing, right? And you have to overlay its data, its network, and its knowledge, right? So all these things need to come together, because it’s hard, right? Building an advisory business generally is hard, building a name, reputation, and obviously translating that into business. So yeah, that has worked out really well and then secondly, I think to what you said about the real estate market post-COVID, materially, this ecosystem has obviously changed, right? The way we consume real estate post-COVID is completely different, especially in commercial. If you look in terms of occupancy, depending on which market or where you are, there’s a lot of nuance, right but generally speaking in the US, obviously there is stress in market, right? You see duration of lease terms is falling as well. And then one of our observations is also that this model of the regular B2B model is shifting into a more B2C kind of model where the tech and the data needs for these technology buyers are shifting, right? So previously, we’re selling into KPMG at Hudson Yard or whatever asset it may be, right? But nowadays, you actually need to understand these employees, right? What education do they have and where they come from, backgrounds, right? The more granular, the better you know that, the better insight you have about and predict when they come, how long they will stay, how long they stay with the job, et cetera, right? So the techniques are really shifting and we see that. And we believe also as a firm that, really say as it used to be, right? The traditional business is going to change, right? And you cannot stay behind from a tech perspective. So you need to be ahead of the game. If not, you’re going to get out of business, right? So we think this tech involvement is going to be more and more material. And that’s also based on some of the conversations, David, that we’re having with folks in market. Tech innovation is being more discussed in board meetings, right? So you really see that shift, I would say, over the last years.

DA: Yeah. I started this podcast just in the early days of the pandemic and it was a way to reach out and connect with people. And I was super interested in this whole conversation around what would eventually be the future of work and how and where people work. So today I’m just really excited to be engaging in conversation around the future of commercial real estate and how it’s continuing to evolve to meet the needs of people. And then obviously to your point about the impact of technology and how that is not only enhancing how buildings are operated, but also the experience that is now offered as a result of that. So I’m super excited to be having this conversation with you and to be able to learn from that network and that exposure that you bring to the table. So just curious if you could share with our listeners, as your business is continuing to evolve, we’re now through the worst of COVID, we are in a new world. Doesn’t look at all like the one pre-pandemic. What kinds of things are you thinking about as you continue to innovate to meet the needs of, I guess, your stakeholders, which are building operators, prop tech companies, venture capital partners. What kinds of things are influencing the way your business is evolving? Yeah, I think it’s a few things.

IB: There’s a lot of new ones on market. So when we look, for example, we’re a global business, we have five offices, three of which are in Asia, Europe and here in the US. So we really have a global footprint and the needs of these three different buckets of clients are very different. So I think it’s important. Maybe we can double down more here in the North American market but what I think is really prevalent is a few things. I would say one, you start to see that a lot of REITs here in the US or technology buyers, again, it’s different pockets of companies, have a lot of capital deployment. And they’re looking into how to stay ahead of the game. So tech budgets are increasing. There’s a lot of options out in market. And we think that it’s very hard for folks to find qualified staff to make those decisions. So having some kind of intelligence platform that can facilitate that, we think is really prevalent. Secondly, we started to see that a lot of the REITs are setting up direct investment arms, so corporate VCs. And they’re looking for strategic opportunities and we think this is incredibly relevant for a lot of the prop techs, because if a major REIT has a specific issue, it’s very compelling, right? Because they don’t only invest, but they also can become one of your largest clients, right? So having that and we see that actually accelerating because it’s very hard. If you’re a prop tech VC, it’s very hard to service 50, 60, 100 different LPs, all with different businesses, construction companies, commercial, engineering groups, whatever it may be. But they have all different use cases, different problems, right? So what may work for them might not work for the guy next door, right? So there’s a lot of curation. So we see that as well. And then, what we also see is that, let’s say, grade A office space is very hot, right? So obviously, also, the space where you guys play, there’s an increasing need for tech, even though we need to zoom out and understanding, obviously, the inflationary environment and pressure on budgets, et cetera. But I think if you look on a log chart, if you zoom out and you see the trend, there is a very strong desire from players in market to come in. And then the final piece, I would say, is there is a lot of Fortune 1000s looking into this prop tech domain as well. So one of the things, what we’re thinking about is a lot of these becoming more and more prevalent or likely that tech companies will become real estate businesses. So this is also something that we’re thinking through and the impact that will have on the sector.

DA: Just curious from the perspective of strategic investment, just a sidebar question. What do you think the implications are for an early stage startup when they do receive strategic investment? Does that positively, negatively influence their trajectory? Does it limit them? Does it open up doors for them? Is there any bias if and when that happens? I think it’s very interesting proposition for the industry to actually make that actual investment. But for the prop tech company, good, bad or indifferent?

IB: It depends. Maybe not the answer you want to hear, but I would say it depends on the entity, both on the startup, the prop tech side, as well as the investor side. Sometimes it’s very smart money. Sometimes it’s not smart money. So it really depends because there’s a few challenges. One is oftentimes, sometimes taking strategic capital closes doors from competitors that will not engage because Mr. A has an upside and is invested in the space. So you need to be very wary of that. On the other side, one of our clients is a major corporate VC out of Japan. For example, they write very small checks up until it can buy for whatever price effectively and for them, they’re active in real estate energy across a lot of different industries. And they can plug that in. And because of the scale, they’re actually not competing because anything is irrelevant. Those are very interesting. We’re working now with a major investor in Saudi that has very strategic needs, what they’re looking for. This is extremely compelling for any prop tech that you would approach because one, they have no access to Saudi. They’re not there. If they come instantly, you become the largest player in market. So that’s very compelling but there is sometimes competition. Another thing I think what we see with corporate VCs is decision making processes are slower. There’s a lot of different stakeholders that need to get involved, more due diligence, depending on who they are, not necessarily the domain experts in the prop tech space and that’s why we sometimes work with those folks because they say, hey, listen, we don’t know this space entirely. We need some support here. But that obviously means that they need to get more comfort to make some of those decisions. Whereas a traditional VC can move faster. And oftentimes, when folks are looking for funding, speed is a very important consideration.

DA: So Ivo, I’ve got to tap into your broad exposure to a global industry and just ask you about the office category, the office space, because that’s obviously where we’re clearly focused. What are you seeing? What are you hearing? What are your clients telling you about how space is being utilized and more importantly, how maybe the purpose of space is changing or evolving and how they’re responding?

IB: Yeah, very, very good question, David. And obviously you can share a lot of knowledge in this particular domain, but I’ll try my best to answer it. I think if you look here in the North American market, this provision of space and how to use it is obviously something that a lot of folks are trying to figure out. From our perspectives, there is 13 different strategies that you can implement as a commercial owner in terms of how you want to position that asset and put yourself in market. And one of the key things where we see a lot of demand and where there’s still a lot of demand from the tenant side is high quality, amenity-driven assets. And that’s also what you see now, the Black Rocks and the Blackstones and some of the largest institutional owners are coming in. So this also means that likely the bottom is in. These guys, the smartest folks in market are very active. But it’s something, we have a lot of conversations behind doors and people and trying to map this out and really trying to understand how to do it but it’s really from an ownership perspective, what are your KPIs? What are your objectives? What are you trying to achieve and then back solving that to the techniques. How can you facilitate that? Very different kind of conversations I would say that we have in mostly the US and Asia. Europe is a whole other beast, but that’s where we see most of those discussions being held.

DA: Right. A bit of a forward-thinking question. You’re a Managing Director of the Proptech Connection, global footprint. You’re still building your business. You’re six years in, but still lots of runway ahead of you. If budget were not an issue, if I was able to give you a blank check and you’re thinking about how to build this business for the next three to five years, I’m just curious, what new initiatives would you love to undertake to position your business for success, to be able to continue to respond to this evolving industry?

IB: Ooh, that’s a hypothetical question, but I think what we would do, we would probably hire a hundred or 200 data scientists. Right. And I think the real opportunity here is what we’ve done as a business, we’re tracking 19,000 prop types. We have a 200 data point analysis, how we look at each tech company. So we mapped 10 million data points in this space. So we think we have the most robust market intelligence platform on that and you can start building algorithms on top of that. And then you can start automating certain things. And we think then you have a very powerful engine where you can look at, let’s say, use case stack offering and build another 70, 80 different filters behind it and then with a very high degree of confidence, can start automated matchmaking. And we think that’s very powerful because a lot of people waste a lot of time in this space. Right. One of the challenges we see when we speak with tech buyers is, you know, say, hey, listen, everybody’s coming to me. Everybody wants to sell a product. I don’t know who’s selling the truth. I don’t know what’s out in the market. So there’s a lot of wasted time. Right and then good companies sometimes don’t get the credibility because somebody is really good at doing marketing and PR. Right. But then oversells and then, you know, it becomes a bad reputation that then goes back to the entire industry. So if we got a blank check, that’s where we would spend a lot of time and effort. And quite frankly, what I think is also interesting, if you look at almost every industry in the world, there’s a market leader, right? Somebody, there’s a leading brand. In real estate, you don’t really have it. There is no go to platform for real estate. Yes, you have CBRE. Yes, you have JLL. But I think there is an opportunity for somebody to become that go to brand. And that could actually come from the tech side. Right. So there is also an opportunity we see there. 

DA: I love it. Very aspirational. I’m just finishing an amazing book called Unreasonable Hospitality, written by an entrepreneur in the restaurant business, where obviously hospitality is key. But I just think there’s so much to be learned for any business. And so for me, it just highlighted what I’ve been thinking about for quite some time, this whole notion of how we create destinations of choice, how we up the experience to instill a desire to be back in the physical workplace. We don’t believe in mandates. We really believe that people need to come back because they want to be there. They choose to be there. So I’m just curious, as you’re talking with the real estate industry and prop tech companies, obviously we are specific to the tenant experience conversation. But how else is that playing out from your observation? What other requests are coming either from the industry or what other prop tech companies are emerging, not just only in tenant experience, but in other spaces that are trying to address this whole issue of experience?

IB: I think what we generally see in market, there is a lot of important solutions. What you’re starting to see is that a lot of folks, middleware aggregators, platforms that bring that together are building a lot of momentum. Clients are looking for a one-stop shop. So that’s one thing where we see a lot of interest. I think we need to also zoom out. There’s different things that we see in the US here. It’s very much transactional driven. A lot of tech coming into that domain, lots of transactions. How can we make that more efficient, lower the cost in Europe? It’s very much that ESG sustainability agenda where regulatory, like New York is leading in the US, but that conversation is a bit more progress also from a regulatory standpoint. And APEC is a whole other beast where you have emerging markets, developed markets, and the techniques are very, very different. So I think that’s what we see in macro, but it’s really, who is bringing that together? Those middleware platforms we think is a really big opportunity. 

DA: Great. Let’s take a short commercial break and we’ll be right back to continue the conversation.

COMMERCIAL BREAK

DA: And now I’d like to welcome back to the show, Ivo van Breukelen, managing partner at the Proptech Connection. Again, thank you so much for joining me today. Thank you for having me. Yes. Listen, you are at the forefront of this disruption of the largest asset class in the world, commercial real estate being impacted by just so many new technology solutions. When I first envisioned what has now become Hilo back in 2017, I went to my first tech conference and I think there were about 100 people in the audience and probably just a few more hundred Proptech companies across the spectrum of geographies. And now you said you’re tracking some 19,000. So that’s a huge number and a lot of growth over a short period of time. So with the introduction of all this new technology and the role that it’s playing in terms of operations and efficiency and experience, just curious about any thoughts you have on that whole tech stack. What are you hearing most from your real estate partners as to what they’re looking for?

IB: It always trickles down to a few questions. How can I make more money? At the end of the day, it’s all about ROI. So what we see in market is there’s a lot of questions and discussions about, hey, why is X not using tech? And at the end of the day, it’s like, how can you increase asset value? How can you reduce costs or save me time? At the bottom line, that’s where it gets through. That’s also how we look at it. So folks tend to come to us with use cases or specific commercial problems that they’re trying to solve and then we have a very methodical approach in terms of how we look at that. But the reality is that’s where it comes down to. And what you see then also from obviously relationships and conversations that we have is there’s also large real estate organizations that, for example, have tried to build a tenant engagement app themselves. We know of one in Asia that spent $10 million building out themselves. And I think six people have used it. And there was one of the folks that was very much involved in this that was very excited to build this initiative, whereas it would have made much more sense to actually go to a vendor that already built it and you can plug in tomorrow and now just a lot of money is effectively drained away. Those are some of the things that we’re seeing, David.

DA: I think there’s been this tension and certainly in the early days and still in some companies, even from what we hear, this notion of building within or partnering with a solution or a company like ours. And I think what we have to appreciate is that maybe it’s not as easy as it looks. And I think if we want best in class, I think it’s fair to assume that a best in class real estate operator is not necessarily going to be a best in class technology provider. So I think what’s best for all of us is for us to play in our own arena, play in the areas where we can truly excel, and then come together in a meaningful way that’s going to help grow all of our respective businesses. I love how you zeroed in on ROI, that ultimately there’s got to be a business case. And I think that’s something that we think a lot about and we’re always striving to be able to better articulate and better demonstrate. So I think that’s a great insight and a great observation for other players in the market. Our closing speed round is an opportunity to get to know you a little bit better on a personal level. So I’m just curious, looking back, if there was one piece of advice that you wish someone had given you when you were first starting in your career, what might that be?

IB: Oh, that’s one that I really need to think about. I think ambition and relentless pursuit of success is really important, right? So the space where you guys work, it’s really hard, right? Building a tech business. It’s really hard. It takes a lot of effort and I think a lot of people don’t necessarily see it, right? The amount of thinking that goes into building that, I think is really, really important. And then I think, secondly, everybody should always start earlier and I think that’s two and three. One should really think about investment partners, what the right time is. We always say, try to delay it as much as you can and only do it when you need it.

DA: That’s great advice. Certainly on the investment side, some people, the press release goes out when they raise a round and they think that’s a win. And personally, I align with those that will tell you that the win is when you grow your business. The win is not just taking on more investment. That’s a means to an end. And it’s the end that you should be celebrating. So I agree in terms of delaying. And I also think in terms of how much and when ultimately. Tell me, share with me one way in which technology has impacted or improved the way you live or work.

IB: Well, for me, I always like to mention this. I’ve worked from home the last 10 years, give or take 10, 15 years. So when this entire thing of COVID happened, everybody was like, oh, what’s happening? I was like, for me, nothing, nothing materially changed in terms of I was already doing it, right? Obviously, I couldn’t go out of the house, et cetera. So I think that’s really exciting but what I think a lot of people underestimate is that this concept of all these different technologies that are now coming together, start colliding. If you look in terms of blockchain and you look at AI, you start how that is all going to grow. I think a lot of people underestimate, we’re used to exponential growth, sorry, to linear growth, not to exponential growth and I think what’s going to happen the upcoming four, five, six years is something we’re not ready for. We cannot mentally, it’s really hard to see that. And also for me, it’s really hard, but the pace at which things change is just incredibly fast.

DA: Right. And I think it’s going to increase. I think that’s a great observation. As commercial real estate continues to evolve, I think a lot about the skills, the roles, the responsibilities of people at the operational level, people who are operating real estate. And I think the way that it was, and I think a lot about the way that it’s going to be. And I really feel that the needs and the skills are going to change, just as you said, tech is going to, the exponential growth. I think there’s going to be new kinds of people working in our industry, which I think is going to be very exciting. I’m just curious, have you thought about that at all? Have you heard that from other people in the industry and if so, what expertise or skills do you think are going to be required?

IB: We’ve done some thinking around it. I think it’s going to be data scientists. These are going to be the best paid people in the industry, right and two, it’s about obtaining data sets. I think those are the two things where, you know, where there’s going to be a lot of demand and where there is the biggest opportunity as well. It’s really trying to understand all the data, how to bring that together and then pull the extra insights from it to monetize on it.

DA: That’s right. You know, the data without the analysis is not going to be helpful long-term. 

IB: No.

DA: If you were not doing what you’re doing right now, what would you be doing instead?

IB: I hope I would be laying on a beach somewhere in the Caribbean. No, but I would always be, I have a lot of ideas and other things that I would like to do, right? So maybe there’s a lot of different things that cross my mind and things that I would do, but always entrepreneurial.

DA: Right. You’ve got that entrepreneurial. Always wanted to be an entrepreneur? Yes. Yeah. I get that. And it’s in our DNA. Ivo, thanks so much for joining me on the show today. I really enjoyed the conversation. I’m looking forward to continuing to engage with you and your team and continue to collaborate. And I hope this is just the first of that process, the first step in that process. So thanks again for joining me today. 

IB: Wonderful. Thank you so much for having me. I really enjoyed it. 

DA: All right, Ivo. Thank you.

IB: Thank you. 

DA: That’s a wrap on today’s episode of TEN. I want to thank Ivo for joining me on the program. If you enjoyed this episode, don’t forget to subscribe and leave a review. It helps others find the show. Thanks for listening and until next time, I wish you all continued success in building community where you work and live.