Multifamily’s future may be all about walking the plank. At the National Multi Housing Council’s (NMHC’s) annual OpTech Conference & Exposition last fall, keynote speaker Phil Simon, author of The Age of the Platform, focused on the new rules that determine who will survive and thrive, and who will not.
The success of the “platforms” of Amazon, Apple, Facebook, and Google provides us with a road map to corporate success in this brave new world. They also provide a few lessons for the multifamily industry.
But first, to clarify a few terms, Simon defines a platform in this context as “an extremely valuable and powerful ecosystem that quickly and easily scales, morphs, and incorporates new features, users, customers, vendors, and partners.” “Planks” are the new features, products, and services that integrate with the platforms. So if Google is a platform, Gmail is a plank; if Amazon is a platform, Amazon Prime is a plank, and so on.
Simon argues that the success of the platform-and-plank business model is a sharp break from the old business model that created corporate success in the past. Rather than competing on a we’ll-buy-you-or-crush-you philosophy, the organic, inclusive, and collaborative nature of the modern platform changes the way companies innovate, allowing them to be more flexible and responsive to the marketplace.
Whereas innovation was slow, top down, and often executed through acquisition in the old business model, innovation in the modern platform era is external, partner-based, and, consequently, much faster.
Just think if Apple limited the application choices on your iPad exclusively to Apple-produced products and services. The company wouldn’t have achieved the same level of success with such a top-down, noncollaborative approach. Instead, it’s the market that quickly and easily determines the winners and losers, which is less important to Apple than volume. The explosive and organic growth of apps, or planks, adds ongoing value, literally and figuratively, to the platform.
So, what does all this talk of platforms and planks have to do with apartments? There clearly has been significant movement toward incorporating technology into core business functions and beyond, with multiple solutions for myriad systems and functions. New technologies promise more efficiencies; repeatable results; and opportunities to gain better business intelligence and make faster strategic decisions.
Our industry has its own existing platforms in property management software that are growing more robust and adding more sophisticated capabilities. And there is still room for providers to enhance their platforms and expand them with new planks.
The biggest challenge to date in unleashing innovation in the industry has been the integration of new multifamily planks with existing platforms. Currently, this integration can be difficult and costly. Industry executives often express frustration about the rigidity of many software products. Some point to rapid consolidation in the technology sector as another source of growing pains. Others say they often have to do one-off alterations to customize off-the-shelf products to meet their specific business needs.
These hurdles represent real opportunity for entrepreneurs who can figure out how to provide a stable platform with which planks can easily and affordably be integrated within the context of apartment operations.
The multifamily equivalent of Facebook’s Mark Zuckerberg or Amazon’s Jeff Bezos may already be among us, or waiting in the wings.