For a time, Klaus von Rottkay was a CMO at Microsoft in Germany. He spent four years in the position, working at one of the biggest tech companies in the world. But in 2017, he left the well-known giant to join a comparatively small real estate company called PlanetHome as the new CEO. So why did Klaus leave a position at such a big international company? The answer is simple – he saw the potential for innovation in real estate, and he wanted to drive it.
“I’m convinced PropTech is going to be big,” says Klaus. “Real estate is going to be transformed. At the same time, I think it is lagging in Germany where I would say the real estate sector is slow in transforming compared with other industries.”
PropTech is a catch-all term for technological innovations in the real estate market, just as fintech is for finance. Some developments have already seen the use of AI, blockchain, VR/AR and data visualisation. However, Klaus says it’s not evolving as quickly as it could, and he wants to be a proactive driver of change. “I wanted to take responsibility for the digital transformation myself,” he says, “rather than just trying to convince customers to transform digitally and more rapidly.”
“What we have done so far is to get a lot more talent from other industries with a lot more digital experience than the real estate industry in Germany – starting with myself. From IT, for example. I’ve also imported some talent from industries adjacent to the real estate business. I think getting top-notch digital talent into our company is something no-one else on the market has done, and I am convinced that this is not only a differentiating factor now, but also something that will have a much larger pay-off in the future.”
“Getting top-notch digital talent into our company is something no-one else on the market has done.”
Overcoming challenges and struggles
Integration of technology into the real estate industry is not without its challenges. Use of data comes with the necessary safeguards and restrictions to protect customers and partners. Digitisation of processes will enable more flexibility, which in turn may lead to tenants demanding more short-term, mutable arrangements. And of course, any kind of digital advancement leaves an industry subject to a rapidly evolving regulatory environment. Before a company gets to that point, however, progress may be slowed by what Klaus sees as a disconnect between a company’s leadership and its tech staff.
“I used to be a CMO,” he says. “The struggle between the CMO and the IT department is a perennial challenge, and from an executive’s perspective it’s often easy to ignore it, to say ‘you guys figure it out’. As a result, there’s a lot of friction and inefficiencies in the system, because one department says, ‘Go do it’ and the other says ‘It’s going to take two years, and it’ll be super expensive.’ But if you combine responsibilities at a lower level, we’d have the right amount of speed and momentum to make sure we transform our digital processes in
a timely way.”
Though it’s not typically considered a problem as such, PlanetHome is also being forced to adjust to its rapid expansion. “It sounds a bit trivial, a nice problem to have, but we are growing very fast and we’re a company of more than 700 people,” says Klaus. “Growth is taking a toll on the existing organisation because new employees have to be skilled up and learn how the system works. We have to scale all our back-office operations at the same time, so we’re basically modernising and innovating every step of the way.”
Revolution of necessity
But Klaus is certain that the revolution is necessary; he’s not content to simply bring PlanetHome up to a baseline level of functionality. His plans for the company involve it being a vanguard of PropTech. “We’re not planning to maintain the processes as they are now, but to consistently bring new innovations into the market because there’s so much opportunity out there,” he says. “Our purpose as a company is to help our customers find the best solutions when acquiring, owning or selling real estate properties, and digital transformation helps us deliver better service at the right points in time.”
“Our purpose as a company is to help our customers find the best solutions when acquiring, owning or selling real estate properties.”
PlanetHome’s business partnerships also help it better serve the market, essentially by putting businesses in touch with customers (for example, a bank may refer a customer interested in buying or selling to PlanetHome). Two and a half years ago, PlanetHome came out from under the ownership of UniCredit Bank AG, and therefore has relatively few partners. Nevertheless, it maintains strong business relationships with those partners.
“The conversion rate from these partnerships is extremely high, best in the business,” says Klaus. “And you can’t forge them overnight. These partnerships have grown over many years, and you become better year on year when you work alongside your partners. It’s kind of unique to PlanetHome, and it’s a very close-knit, symbiotic relationship.”
On the road to PropTech and the future, Klaus hasn’t lost sight of PlanetHome’s number one priority – customers. “Trust is so incredibly important when you’re dealing not just with a commodity but with a customer’s life savings and a family’s future, which has been poured into a single purchase or sale. That is going to be one of the main challenges of the business – to combine that trust with technology.
“This is going to be our sweet spot in the market: to deliver digital convenience and insight while at the same time acting with a trusted hand, as a confident partner to take our customers along the way.”
“This is going to be our sweet spot in the market: to deliver digital convenience and insight while at the same time acting with a trusted hand.”