Disruption at your doorstep beware of the coming hyperscale platform

Chris Mrakas CEO & Co-founder ALPPPS - property management leadership summit

2017 Gold Coast, Australia

It goes like this

•  Beware of the coming hyperscale platform in property management it will bring disruption to your doorstep.

•  The basic story plot goes something like this incumbents focused on perfecting what they do are stunned to find new entrants introducing a completely different way to make money

•  Trying to reinvent property management might sound crazy but it is a huge opportunity to build the next industry hyper scaling platform.

•  The prize is massive so no entrepreneur worth his or her salt will overlook this.

zRipe for Disruption Why property management?

High cost structures

landlords cross-subsidize others Charge for information that is free

buy a whole service package deal

landlord experience not the best

service delivery model is high touch

lots of redundant activities, many handovers and lots of repetitive manual mind-numbing work

Fees are are % on income

not because of ….

your margin

is my opportunity

zFee 7.6%, $160/month

zCost 4%, $70/month

zRevenue $210,000/FTE

because of ….

On a $420 per week rental property

through the use of technology the cost of property management services will eventually be reduced to near zero

radical hypothesis

00EVERYTHING

becomes FREE

SOFTWARE will eat the world

If the marginal cost of producing each additional item falls to almost zero

then eventually everything becomes free

Silicon Transistor

Circuit board

Mainframe

Workstation

PC

Internet

Mobile

Cloud

Messaging

Internet-of-Things

Robotics

Driverless

Things

AI

Chatbots

Machine Learning

software revolution means zero marginal cost

The Landlord

Minion

(aka Robotic Agent)

AI , Chat-bots with messaging can replace humans in doing most of what property managers do, including:- • General customer service response • Lease renewals and management • Maintenance procedures • Issue work-orders • Revenue protection • Collections and administration • Insurance claim preparation • Advertising

if all the above services are done by a Robotic Agent then with enough scale the cost of providing these services will be near zero marginal cost.

IoT will change the way things are done forever

New types of Revenue

Reduced cost

Enhanced Experience

IoT enables anything in a property to be monitored, controlled and monetised. It provides new ways to enhance revenue yield from an investment property. IoT will enhance the experience for landlords and tenants, reduce customer service requests, reduce capital expenditure and enhance revenue from investment properties and from the tenants perspective a better lifestyle unencumbered by issues of poor maintenance

z

IoT – react before the event

Reduce PM Fees to Landlord

More Landlords

Better Service

Experience

More “Better” Tenants More

doors

( growth )

Improved yields

Accelerated learning

More Instrumentation

More types of Property Revenue

IoT

Landlord Solar

AI Machine Learning

Deep Learning

Robot Agents Chat Bots Messaging

Matter Technology Ltd

The new Flywheel

z

what can happen in property

management ?

Fee 2.7%, $72/month Cost 1%, $18/month

Revenue $670,000/FTE

Everyone has a plan until they are punched in the mouth

Rent-Rolls worth 10% of todays market value

What is a hyperscaling

platform

Network effects – where the value of a product or service increases with the number of people using it.

The economics of zero marginal cost distribution increases the businesses monopoly power

The first revolution is when you change your mind

Its about a platform that monetizes jobs to vendors - $3b in Australia

Reduce PM Fees to Landlord

More Landlords

Better Service

Experience

More “Better” Tenants More

doors

( growth )

More Work Orders

More “Better” Suppliers

Better value for money

Improved yields

More Services

Accelerated learning

More Instrumentation

More types of Property Revenue

Finance Maintenance Improvements

Security Sales

IoT

Landlord Solar

AI Machine Learning

Deep Learning

Robot Agents Chat Bots Messaging

Matter Technology Ltd

The real Flywheel

Imagine a hyperscaling platform with 1,000,000

properties under management

where landlords don’t pay for

property management

Imagine issuing a job to be bid for on a platform where the job is …. •  paint 100,000 homes •  Replace windows on 20,000 homes

technology industry is usually

“winner-takes-all”

It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.

•  Free property management services to Landlords •  Rent-Rolls worth 10% of current market value •  Best vendor prices for services •  24x7x365 service •  Superior user experience •  Scale that makes the largest property manager look tiny

Landlord Solar

Turning sunbeams into revenue streams Chris Mrakas, CEO & Co-founder Matter www.matter.solar