Continuing the series of #lastmeter science - studies of the spatial and business logics of last meter optimization and service integration - here's a review of one of the contemporary complements or purported alternatives to Last Meter®.
1 RUNAWAY FUNCTIONS
Mobile phone and tablet apps to help real estate users (and managers) manage their everyday experiences are proliferating - even tipped by real estate investors as one of the trendy things to invest in in proptech. Apps are the icons of the digital age - and so surely, their time is now, in the real estate environment.
The problem maybe that apps have had their day - and we are now onto a new era of digital interfaces and enablement, even if its contours are not yet complete.
FEATURE AGGREGATION The main offering of real estate apps is feature aggregation, with a focus on - obviously - features that support quality life in a real estate context. This means that, rather than multiple tools and interfaces for running your life, real estate apps offer you a single app with multiple functions.
The problem with this is that the digital age is beginning, not ending, and the function set of these apps is accelerating away from users, real estate owners - and app developers - far faster than the apps can be developed and optimized.
GOING DEEP Firstly, each feature, once offered, becomes a runaway train of deeper potential and requested use cases. Information tools become digital signature tools become payment tools - and then require accounting and a whole other world of sub-features. Chat tools become user forums become group management tools - and then require curation and live support and a whole world of sub-features. It's very difficult to stabilize the status of features offered when in each individual case, users have access to alternatives (albeit usually single-function) with far more depth.
GOING BROAD At the same time as runaway users expectations of feature quality, real estate apps are subject to runaway expectations of feature quantity. If my smart watch can remind me of when I should go to the gym, why can't my real estate app remind me of when I should replace the lightbulbs or take out the recycling? If my gym app has a social media feed, why doesn't my real estate app?
WHAT'S MINE IS NOT YOURS Finally, real estate apps, as their feature sets get deeper and wider, run into the reality that more and more of the features they seek to add overlap with technical and business objectives of third parties. So, the app developers need to decide whether to partner or integrate with additional suppliers, license them - or compete with them.
This is not at all easy, despite years of claims that it will work just dandy. App developers have been offering feature integration across smart devices (now called IoT), including automated booking and controls, not just for years - but for decades. The Push-Button Manor (google it) is SEVENTY years old as a concept, and was offering: automated lights, doorbells, windows, curtains and more.
At the present time, the problem with this is not just that the integrating these features into one app is technically hard, it's that it relies on collaboration with companies that increasingly just do not want help to do it well. Device manufacturers that couldenable booking or control systems via third party apps, are very cautious to prevent third parties, even when they allow feature aggregation, from taking key customer functions, experiences, controls and value-added away. What they do allow are the deployment of commodity features by many actors, but nothing definitive or distinctive by any one.
More than that, device makers and platform companies - which are increasingly the same actors - are offering the best feature aggregation themselves: partly because they control the devices, interfaces, platforms on which these features work, partly because they can force smaller even large actors to play along with their tools - and above all because they fully intend to out-compete any actors in this space.
In short, feature aggregation is hard: it gets hard, complex, and competitive very fast. In fact, the largest and most powerful companies in history are competing for it. What are real estate app companies planning to offer, as a stable value proposition, in this context? Is the permanently changing feature set something to do with these difficulties?
2 DISAPPEARING INTERFACES
The feature aggregation problem described above is the obvious problem with real estate apps. The hidden problem is one of disappearing relevance of apps all together. We can call this interface aggregation.
INTERFACE AGGREGATION At first sight, it may seem that feature aggregation - lots of similar features in one place - is the same as or a related phenomenon to interface aggregation - lots of user interfaces being merged into interface. But they are not the same, and interface aggregation is happening at a larger scale, with bigger implications.
ALL-IN-ONE At the present time, individual apps are dying through explicit interface integration, in which one super-app just absorbs more and more functions of other apps. In the European and American case, the most obvious examples of this are digital tools such as Facebook and Gmail gradually offering chat, phone calls, video calls, event and calendar management, file management, blogging and publishing and advertising and photo sharing and video sharing and on and on.
In Asia, with Facebook quietly experimenting on the side with such features, interface aggregation has gone much farther. WeChat is offering banking, shopping, food ordering, ride-hailing, and much more: it is explicitly offering itself as the single interface you need to run your life.
PART OF THE FURNITURE This is not the only interface aggregation force, and probably not the most powerful one either. Contextual interface aggregation is the quiet absorption of feature after feature into the general functioning of smartphones and tablets - features that are not even really called features. It started as innocently as smart phones offering alarm clocks - but not, basically, any digital feature than can be offered is going to be offered, as a basic tool of the smartphone, cutting out of the value loop countless apps. The separate interfaces that would have been offered for these features gradually dissolves into the interface model of the whole device.
For example, smart lock functions are more and more integrated into phones; health management and fitness tools; communication functions; and ever more features - have no separate interface, at least not separate app, to manage them and are increasingly baked into the device itself.
Given the aggregation of interfaces into super-interfaces like WeChat, and the aggregation of interfaces into the general operation of smartphones, where is the opportunity for simple, practical apps like real estate apps to stabilize a meaningful and lasting value proposition?
This is not to say that real estate owners won't find them valuable. And not to say that investors won't assume their valuable growth. But it is to question whether real estate, particularly larger owners, should support such tools at scale if they understand quite how much change is underway in the app and interface context.
Before suggesting alternatives, let's explore the bigger picture of user interfaces, by which real estate apps are framed.
3 INTERFACE LIFT
We are still, particularly in the context of apps and mobile interfaces, in the magical period where we confuse interfaces with features. Meaning, if there is a button, we think it 'does something' just because it exists, and in theory can do something. And we ascribe to app developers the power of magicians: the guide and control the magic of interfaces with buttons.
INTERFACE AS MAGIC This was the case - the magic of interfaces, and the magician-quality of those who controlled them - in the early days of the web. Web developers and IT architects were immensely powerful, and very well paid. But now, the magic of the web interface has significantly declined - to the extent that anyone can create a fantastic web interface, for free, or very low costs, equivalent to the most powerful and expensive corporate web presences only a few years back. The same is rapidly becoming true for apps and mobile interfaces. You might say: anyone who thinks apps are magical, and app developers are magicians, is not yet very experienced in technology.
We could explore how these interfaces become cheaper and simpler - through increasing use of standards and libraries and more powerful devices. But the force truly driving change in this context is not the technology of interfaces, it's the business of interfaces. There is simply no sustainable business in functional interface development - because the interface is simply the interchangeable and commodified surface of a digital experience (feature) that has its own, more powerful and realistic value proposition. Essentially, all app developers and web developers are either revealing this and helping users evolve more sophisticated features and experiences beyond simple interface functions - or they are hiding it, attempting to retain value in the 'magic' of the interface offering itself.
INTERFACE AS SURFACE Modern websites are basically collections of features and functions, each of which has technology and value that go far far beyond anything the interface itself is responsible for. This, remember, is part of the phenomenon of feature aggregation: that features consolidate away from the interface, in the hands of suppliers that often control and are always expert in features they themselves offer. No-one creating a website would these days attempt to create a payment solution, video solution, account management solution, or similar: you just aggregate the features supplied by more powerful modular feature providers, and present them in an attractive format. The skill of the web developer is now in the design of the interface layout and experience, not in the mastery of its technical content.
So it is for apps. Chat functions, booking tools, IoT management features, information services, and more - these are all commodity features that more or less any developer can frame, without significant technical resources deployed. What this implies is that modular app development - where users are invited to invent the feature set of their own apps, should be rising in potential just as it has already risen to prominence in web development.
MIX AND MATCH And so it is: AppGyver, AppSpotr and more are extremely powerful tools for generating finished apps, with a customized, modular feature set, far more cheaply and far more flexibly than simply buying a fixed app solution.
Even more powerfully, the leader in the real estate app space, All Things, is offering a specialized modular app for real estate owners, with a pre-existing set of partners to help run and develop each of the embedded features. The future of apps is here, even if it is unevenly distributed.
VANISHING INTO THIN AIR But apps are not the only interfaces that are merging into commodity 'surfaces' for the ecosystem of services and features that users want - just as has happened in the web development context. The technical future of interfaces is now massively influenced by ambient and contextual interfaces: two kinds of interfaces that, sort of, don't exist at all!
Ambient interfaces include such things as voice interfaces, and gestural interfaces (pointing, waving, body posture). Given that we have always been talking and point, it's not really clear these are 'interfaces' at all. Contextual interfaces are even less 'real' - in that they are instructions that are packaged with other instructions, and contextual facts, rather than explicit trigger instructions. Closing the curtains when it's dark, opening the garage door the the car is near, adapting temperature when the weather changes: previously, these are actions that would require an explicit interface, and action at the interface from the user, to be be triggered. Now, increasingly, these actions can be triggered by instruction sets, or just rules, that the user sets once for many contexts - or even, doesn't explicitly set at all.
What all of these trends in interface development have led to is a world where it is increasingly hard to charge premium prices for apps when all they really are is interfaces on top of features other people supply.
The interface provider can charge for the interface, and the quality and and quantity of features provided, and effectiveness of the interface design. But increasingly they cannot and should not charge for the features themselves, which involve, often, separate financial relationships and opportunities.
4 THE VENDING MACHINE PROBLEM
As with the package box analysis, in the first #lastmeter science review, we can reinforce some of the challenge to the relevance of real estate apps, by taking the counterfactual as given, and exploring the reality then. So: what would happen if real estate apps are hugely successful, and the feature creep, interface aggregation, and interface commodification issues described don't prove to be definitively problematic.
VENDING MACHINE PROBLEM Just as with package boxes, if apps become hugely successful, supporting monetization of all sorts of features, real estate owners will naturally find themselves asking the simple question: why are we paying for a digital 'vending machine' to have exclusive access to our residents and their purchasing power, without participating in this business opportunity?
This is the vending machine problem: real estate, in seeking a way to supply convenient opportunities to its residents is not just giving away, but is paying for, an opportunity for a third party to have unique access to its residents. This is entirely unsustainable, and exactly with real-world vending machines, rapidly leads to a reversal of the entire business logic of apps.
WHO PAYS WHODon't forget: we have seen this movie before. Before the arrival of the App Store, phone manufacturers paid software developers for the privilege of having their apps on their devices as amenities for their users. After the arrival of the App Store, and increasing maturity of the digital economy led to the magic of digital things wearing off a bit - app developers payApple for the privilege of having access to their users in the App Store.
Real estate apps are not just in a similar situation: they are in exactlythe same situation. Leveraging the physical 'device' and claiming close, even exclusive, access to users: these facts lead to app developers payingfor such a privilege, rather than being paid to occupy a role.
EVERYONE LOSES It's not just real estate owners that are being ripped off in this scenario. It's the suppliers of services and features that the apps themselves leverage. If the monetary relationships, monetization models, data flows and models, interface concepts that users start to use to access functions and features of their lives are increasingly controlled by third-party app developers, it's a huge disadvantage for those service providers - who now are supplying the main functions of the app in the first place.
And so is not surprise that - in fact - the suppliers of devices, services, features that leverage app interfaces, including but not limited to real estate apps, are simply not accepting a monetization layer and data-capture layer from app partners.
To give an example of how the feature depth problem, and vending machine/monetization problems are found in practice, consider a real estate app provider claiming to offer a hot food ordering service.
Is it really credible that a company offering hot food delivery - an individual restaurant let alone a restaurant delivery platform - will allow an app partner to reinvent their entire menu in their own interface, create a booking/ordering sytem, and monetization/payment channel in that interface - and take money for the privilege of, in practice, taking over their business? Is it credible that a single app company will do this for lotsof complex services?
BUYER BEWAREIn fact, it's not only not credible, it's a risky proposition to get involved with: real estate needs to be aware of this because a lot of real estate apps, as their core features disappear, are offering more and more elaborate service features that seem increasingly hardly to stabilize. Buyer beware. It is possible that the very largest and most powerful interface aggregators might be able to force an aggregated sales channel situation into existence. But even then, when it happens, the apps will be entirely free to the user, and revenue sharing with real estate owners.
5 WHAT THE HELL?
As with the analysis of the package box solutions, it's important to end on a positive note. The digital revolution is filled with opportunity, not just risk and complexity.
While there are challenges to real estate app developers- through feature creep and exhaustion, interface evolution, and problematic monetization and client-capture models - real estate owners can make smart, cost-effective and risk-managed decisions regarding apps. Here are some guidelines:
1 Build or Buy: What might seem a complex decision in any other case - buy a solution or build your own - is becoming much simpler in the case of real estate apps, in particular for large real estate owners. Whether literally building an app from scratch (google:"app developer"), or using a modular app framework (e.g. AppGyver), or ready-to-go modular app system (AllThings.me) - the options for real estate owners are wide, cost-effective and extremely powerful. And so, there is no good reason for a large real estate developer to pay for a private app to be deployed to their users. For the time being, however, smaller real estate owners may be advised to look for a simple, complete solution they can just pay for off the shelf, but they will want to be aware of the extent to which the app is represents a vending machine - i.e. is taking advantage of access to their building users.
2 Modularity and Extension: A key decision that will drive real estate owners towards long-term app solutions is the desire to enable a modular and extensible feature set. There are so many features that users might choose - or get bored of - and so many features that are likely or certain to arise, that apps which can natively add and remove functionality are likely to be very attractive. Real estate owners, and in particular real estate developers who cannot be certain what is about to happen in technology - or user preferences - should take this seriously, and be slightly wary of developers lying about 'modular features'. Modularity means features that exist and can be added today, and function right now; not features that can be maybe added in the next development and release cycle, depending on user requests.
3 Monetization and Partnership: A strategic decision for real estate owners is who benefits from app deployment in their properties. Ultimately, the more powerful an app is - or, the more features that it enables - the more that the feature set should be generating value that can and should be shared with the real estate owners. Thus the suppliers of the service partnerships are likely not only to be willing to share revenue with real estate owners - but to guide, and pay for, the development of apps, or at least app features that support the deployment of and revenue generation from services and features. This is the vending machine 'solution': when those that sell to users end up paying the real estate owners for the privilege, rather than expecting to be rewarded. This puts the development and deployment of apps into a partnership and ecosystem mode - not only more valuable, but less risky.
4 Surfaces and Simplicity: Finally, real estate owners can determine for themselves what future they believe in or want to support for interfaces in general. What is certain is that user expectations with regard to interfaces will not with apps - rather they are beginning with apps, and moving on from there. Voice, ambient, contextual interfaces, and in general just radical simplification of the digital lifestyles we are living is the future of apps, and interfaces. These are just the surfaces of increasingly complex experiences, and best practice has shown, the simpler these become, the more valuable the experiences are. The paradigm of the Push-Button Manor, which is behind most of the real estate apps, is 70 years old. So, even as it arrives, it's time to move beyond it.
Welcome to Last Meter®. This is not a rehearsal. The future is here. And is not just a smartphone app.
