“The Innovator’s Dilemma” is a fantastic read for anyone in the business world (not just entrepreneurs). There are a number of takeaways from the book that apply to what has already occurred in the Real Estate industry, but for the purpose of this post, I will talk about the market that I know best – apartment rentals – and explain my understanding of where we are and why there has yet to be a truly disruptive technology to change the playing field for an old and tired business model.
The book makes multiple references to sustaining technology vs. disrupting technology. It is my belief that most of the focus, energy, and VC money that has been directed towards startups in the apartment rental space thus far, has been spent on sustaining technology. In Christensen’s example of the Disk Drive industry, most of the early innovators focused on capacity of the drives and each year they made incremental improvements on how many megabytes a drive could hold. In apartment rentals, startups have mostly focus on faster and more transparent access to apartment listings. In other words, sustaining technology. The process by which a renter transacts an apartment has hardly changed as a result of this innovation. Still, millions of dollars have been poured into companies that are racing to aggregate and plot listings on a more user friendly interface, so that end users (renters) can find the apartment of their choice faster and more accurately (inaccurate and duplicate listings are being curbed thanks to modern innovation).
None (to my knowledge) have rethought the process by which a renter goes about renting an apartment, which is where there lies a truly disruptive opportunity. I think we can all agree that there are lots of pain points that renters still have, no matter how beautiful a UI, or how accurate listings are on a site, there is a dire need for disruption in apartment rentals.
Have any ideas or hacks to share that might actually disrupt this industry?