“The opportunities for people who embrace where we’re going are like nothing that has been around in decades and our capabilities and ability to build a better built environment are in a place now that hasn’t existed. So, yes, there’s lots of scary stuff but my word, it’s still the biggest opportunity the industry has had in decades.”
Susan Freeman
Hi, I’m Susan Freeman. Welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum, where I get to interview some of the key influencers in the world of real estate and the built environment. Today, I am delighted to welcome Antony Slumbers. Antony is a globally recognised speaker, advisor and writer on the future of real estate. A serial entrepreneur, he has founded and exited several PropTech software companies and now consults for real estate boards on futureproofing real estate. His work centres on how advances in technology changed the nature of demand across all asset classes. He writes a blog at antonyslumbers.com and teaches the online Generative AI for Real Estate course. So now we have the opportunity to hear from Antony Slumbers on what’s going on in the incredibly fastmoving world of AI and how it’s likely to affect the real estate sector. Antony, welcome and thank you for joining me today.
Antony Slumbers
Oh, it’s an absolute pleasure. I’ve been waiting for this!
Susan Freeman
So, I was thinking, it has been a long time coming and I was thinking about the fact that it was you on the first day of lockdown at the beginning of 2020, who actually told me how to use Zoom and we had a whistlestop tour, you told me everything I needed to know and I think days later we were doing a transatlantic panel on the future of the office with Dror Poleg and Ronen Journo.
Antony Slumbers
That’s right and you haven’t stopped since.
Susan Freeman
Well, it was a steep learning curve, I just can’t believe that it’s actually five years ago.
Antony Slumbers
Oh it’s insane isn’t it, it’s absolutely insane.
Susan Freeman
So, you are best known as being a real estate futurist and looking at your CV, starting in the art world as a dealer in 19th century art, moving into real estate development and then being a very early adopter of PropTech, I mean what drew you to real estate technology?
Antony Slumbers
It is a very, very strange story and somewhat unique. You’re quite right, I am actually old enough that I did a History and History of Art degree before there was any mention of anything like the internet and then worked for a 19th century art dealer for, for many years. So, my daily habit was swanning around Christie’s and Sotheby’s and having a jolly good time. But in, in those days, a lot of art dealers got involved with residential development and we got involved with a residential development actually funded by one of our art dealing clients and then cut a long story short, that all went on and then on my birthday, January 7th 1995, I went into the first internet café in the centre of London and thought “ooh, this is perfect for real estate isn’t it” because it’s lot of images, lots of paper and people all over the place, so I thought well that’s, that’s what happens in real estate. So, I actually ended up launching Estates Today which I think was the first commercial real estate website in 1995 and then for many years actually acted as a web agent as it were, we used to design various companies’ websites and the like and we did all the 3.58 work for more than ten years until they were taken over by JLL. And then that sort of morphed into property management because I started thinking oh well this stuff’s going to be incredibly useful for running buildings and it actually started down in MIPIM in one of the, the late night parties in MIPIM and I was talking to someone from Broadgate Estates and they said, “you know this stuff’s going to be absolutely marvellous for you.” Three days later I went to see them, four days later we’d agreed to enter, do a joint venture together and two months later we launched Vicinitee, which was at that time, it was a combination of property management software and what’s now known as tenant engagement and we launched I think in May 2…, March 2001, it was either March or May and we launched with a fashion show on the arena at Broadgate with massive, massive Vicinitee banners all around the arena and we had 10,000 register on day one. And I’ve never, ever got anywhere close to having 10,000 people register onto something, something I’d done in day one, and of course this was pre-mobile times.
Susan Freeman
So, you really were ahead of your time and did people take it seriously? I mean, obviously you were an enthusiast and an evangelist for this but did people realise that the way we do things in real estate was going to change?
Antony Slumbers
I think a lot, a lot of people didn’t and it’s, it’s actually much the same now except we’re much better now, there’s a much larger percentage of the industry that’s fully bought in now. But there was still a segment to the industry in those days that was bought in and I was very lucky to have the CEO and the CFO of Broadgate Estates who I worked with were both completely sold on it and could immediately see how it would help their day to day work. And they, they were just the, the best clients, I mean I worked very closely with some of their people, so we had a great domain knowledge and then the technology knowledge, which is always the best way of working these things, you have to have both sides of the equations and of course we had immediate distribution so we’d finish a piece of software on a Friday and it would be in one of London’s best buildings on a Monday being tested so it was a wonderful client to have at that stage for pushing things out.
Susan Freeman
So Broadgate Estates were part of British Land, is that right?
Antony Slumbers
They were part of British Land, yeah.
Susan Freeman
So, did the other big property companies sort of sit up and take notice and say right, we’re going to do this as well?
Antony Slumbers
Well, I won’t name them but there was, a few years later there was a certain other very large company that used all our tools, so we, we made visitor management systems, permits to work, help desk systems and they thought oh well we can do this so we’ll go and do our own and they spent about a year developing their own, put it into one of their buildings and then the property management team absolutely loathed it so it immediately got binned and they started using our system again. But you know it’s very strange, I, I can’t quite understand certain things that go on, for instance I went into a building just near Bloomberg’s building in the City of London a few months ago and funnily enough I was going to see an event, an AI company in the building, walked into the building and was confronted with a paper visitor management system and I almost fainted, the first thing I did is took out my camera because I thought oh I’m going to get so much mileage out of this so, 23 years after we had digital visitor management systems running in Broadgate, there are people still thinking it’s acceptable to put a paper visitor management system in a modern, prime building in the centre of London so, still takes a time.
Susan Freeman
And it’s quite unusual actually because most modern buildings you go into now, you know it’s all touchscreen check-in and everything, isn’t it.
Antony Slumbers
Yeah. It is becoming an outlier now but, but we’re repeating it with Ais.
Susan Freeman
Well yes and actually since you’ve mentioned AI, I think this conversation is very timely. DeepSeek has just launched and seems to be a real gamechanger and OpenAI have announced a couple of new tools, I think, Operator and, and Deep Research, I mean change seems to be coming at us so quickly and it might be a good idea, you know good time now for you to you know maybe comment on basically what these tools are and how they’re going to effect the way we do business in real estate.
Antony Slumbers
Okay, so, the important thing to understand and it is quite hard to get a grasp of this is the speed of change that is happening at the moment. We’ve talked about the speed of change for a long, long time. It’s always the fastest time ever, isn’t it. It’s always the fastest time ever but we’re, we’re now getting to a stage where things are developing at a truly extraordinary rate so, let’s say ChatGPT launched in November 30th, 2022 and reached 100 million users in two months, I think it was. So, very, very quick mainly because the ease of use was, it was so easy to use, it was a text box, you just wrote something in and it would give you an answer and it would seemingly give you rather, rather a clever answer and you’d have a lot of fun with it. Since then things have been getting faster and faster and faster but there’s a new thing that has happened over the last few months that they’ve started a different way of scaling the capabilities of these systems. For the last few years everything has been involved with scaling the size of the training of these models, so it’s the amount of data that goes in, the amount of compute you apply to it and the size of the algorithms and that meant things scaled very, very quickly but it was getting towards an end, an end point that there’s a limit to how fast you, basically you run out of data or at least you run out of data that you can get your hands on. All the public data in the world has been consumed by, by these models but the last few months they’ve started working on another way round where the processing actually happens after you answer the question, so it’s called inference compute so, previously you would ask a question of these models and it would immediately spit out an answer because it would work from its training data which has created a statistical model of everything it knew and using that statistical model, it would just spit something out. There was no thinking involved, no rumination in any way. They’ve now started doing it that when you ask a question, that’s when compute comes in again and they start and the system then starts thinking and analysing and working step by step through your question and this has enabled another lockstep up in, in capabilities but it’s also meaning we’ve got to the stage where things are improving themselves, it’s called recursive self-improvement, when a system teaches itself and this first happened with DeepMind in AlphaGo when it played Go against Lee Sedol, I think it was back in 2017 and that model was trained against humans, literally it played lots of games against humans and then eventually by the time you got to the next model, it actually played against itself and once you get a machine playing against itself, it obviously can be massively faster and that’s sort of what is happening now, not completely but sort of what is happening and it’s one of the big things that’s involved in DeepSeek. One of the things that DeepSeek, which is this small Chinese model, model out of China, one of the innovations was that they, they got it to do what’s called reinforcement learning on its own, where the model teaches the model. So you now have a situation where OpenAI launched the o1 model which is their reasoning model. Ignore the words, it’s not really reasoning in the, you will get people who quibble and say that it’s not reasoning but to the man on the Clapham omnibus, it looks like reasoning. That came out in December and then we’ve, we’ve just having now the launch of o3, so it hasn’t skipped a generation, they didn’t do o2 because they would have gotten trademark problems with O2, so they went from o1 to o3. So instead of the jump from like GPT-3 to GPT-4 which took two years, the jump from o1 to the next version of o1 has literally taken a couple of months. So, you have things moving much, much faster and for instance, there was a new evaluation started by someone because we’ve started running out of the ways of testing how good these models were, so someone built, built a new model which was called Humanity’s Last Exam and they got 3000 questions and they paid up to $5000 per question to a specialist to ask a question which was inordinately difficult, so the whole idea is the machines wouldn’t be able to do this. O1, OpenAI’s o1 in December, scored about 3%, so even though it was then the best model there was, it scored 3% on the human valuation. The new o3 deep research scored 26%, which is somewhat terrifying so, yes, the speed of change is, is extraordinary.
Susan Freeman
So, I mean it’s all you know pretty scary so I suppose the first question is, what does that mean for the real estate sector, which famously is not at the cutting edge of innovation and change and this just seems, you know it’s happening so, so quickly so, how is it going to effect the way we do deals?
Antony Slumbers
I think we have to think about putting it into two buckets. How is this going to impact our customers and how is it going to impact us? This is going to impact the real estate industry far, far more than the previous version of AI which was predictive and analytical and you needed a great amount of data in order to make it work and there were things you could do years and years ago that have never been done in real estate, largely because we do not… we either don’t have the data or we don’t have the data in a good enough form etc, etc. So there was a limited amount that the industry could really use AI for but with this new type of AI, which is generative AI, which is fundamentally a creative tool and it’s a large language model. Now, the thing about the real estate industry is yes, it’s built on finance but second only to finance, it’s built on paper, it’s built on documents, it’s built on language so there are huge areas of the real estate industry that are bullseyes for applying this technology to. So anything to do with text or images or code or voice is perfect for AI so, everything to do with leases, investment memorandums, research documentation, all of the things in real estate that involve paper, which is a very, very large percentage of what everyone does, these tools can either automate things or they can enable you to do what you were doing better, faster, cheaper or they’re going to enable you to do things that you simply weren’t capable of doing before and that’s the interesting thing. So internally, the forward leaning section of the industry will be adopting all of this stuff relatively fast. Now I sit here and think oh well everyone’s so slow but compared with other technologies, this is still incredibly fast so, as of middle of last year in America, something like 40% of people had used generative AI in one way or another, just used it, doesn’t mean they use it all the time but had used it. It took ten years before 40% of the population had used a mobile phone so, it’s very, very fast adoption at a macro level so there’s going to be a lot of change within real estate very quickly because we’re going to sort of out documents.
Susan Freeman
So, I heard you having a bit of a discussion yesterday about whether people needed to be trained to use these systems because it strikes me that if you’ve got something that’s so sophisticated and capable of you know really thinking, building on arguments, you have to be quite sophisticated in terms of instructions that you give it to get the best out of it.
Antony Slumbers
You absolutely do and I’m, you know obviously I’m, I sell a training course so I’m biased in that way, but I really do believe everyone actually does need to be taught a level of AI literacy. There’s a phrase that people say that “AI is the revenge of the humanities graduate” because it’s language, so you have to ask these machines using language so the better your facility is with language, the more you can express yourself, what’s your wants etc through language so the better you’re going to be. But there’s also this fundamental point which is it is genuinely hard to grasp but “this is software but not as we know it, Jim”. This is not deterministic software. Every bit of software you’ve used to date is deterministic. 2+2=4. Push this button, that will happen. Generative AI is a creative tool so, push that button twice and you’re going to get a different answer. Push that button on one model, you’ll get a different answer to another model. Frankly, this is more like dealing with a human than a piece of software and if you think about it, you’re suddenly introduced to a team of, you’ve got five new interns, each are very competent, on paper they all look the same but they’re all going to be different, they’re all going to have a slightly different character and they’re going to be different at different things, they’re going to respond to different ways of being spoken to and they’re going to answer it in different ways and this technology is much more, much more like that so you actually do need to develop your human skills in order to understand paradoxically these machine skills.
Susan Freeman
And how are people going to differentiate, if everybody’s got access to these incredibly effective AI models, how are you going to differentiate because it used to be on the basis of you know you were the best, brightest, knew the most. If everybody’s going to have access to that, then what happens?
Antony Slumbers
This ultimately will be the big conundrum. At the moment, I don’t think it’s that difficult. I think for most people you have 18 to 24 months to gain enormous competitive advantage simply because we’re still in early adopter stage. So, it’s going to take quite a long time before everyone gets to the stage where everyone is capable of doing, doing x. Thereafter, this is where it starts getting interesting and this is where I start feeling happier in a way because it’s then going to be the human input and the human creativity and the human different way of looking at things to a machine that’s going to make a difference. Now one good example of this, there’s been lots of really solid peer review studies on this. In one of the studies they found that for creative tasks, the tools would make everybody considerably more creative. They actually, they said about 40% or so and you know they did it in an academic way so, everyone was creatively more creative, but everybody was more creative in the same way so, using the tools actually homogenised, it raised the bar of creativity but it homogenised the creativity so, the real skill is going to come when we can use the creativity of the machines, which is different to the creativity of humans and the skill is then going to be what is it about our human skills that’s going to enable us to create something that we’ve never created before. So yes, it raises the bar but in a different way and there’s no getting away from the fact that if you listen to what OpenAI say how they describe AGI and they describe AGI as machines that are capable of doing all the economic, all the economic activities of humans and actually, Sam Altman this week reckoned that this new deep research model could actually do low digits of all the tasks that people needed to do, but ultimately we’ll be able to do all the economically valuable, if you get to AGR, which you really don’t need to stress about too much, but inevitably we will get there, we’ve then got to work out new measures of economic value so, it’s a very much a renaissance world we’re in, we’re moving into, where we’ve got to create new sources of value and it’s not dissimilar and actually, real estate people are actually quite well positioned for this because you know if you just take the office sector, which I know more about than other sectors, we’re continually reinventing what an office is, you know an office in the ‘80s was different to the ‘90s, different to the noughties and different to now. Doesn’t mean, the office still exists but its purpose and point and justification is different and therefore we need to think of different uses for everything. So, it’s this paradoxical thing where I like to say, “human is the new luxury.” We’re going to get to a point in time where everything that can be done technologically will just be done and for the first x number of months that happens, we’ll think wow this is magic, but we get very bored with technology very quickly. I remember laughing a number of years ago when my son used to moan about the video would cut out when he’s on his phone as we were in the car and just thinking it’s absolute magic compared to when I was your age that that even exists, but we get bored of it quite quickly, it’s a novelty so we get bored of that so, what is it that’s going to have value long term and actually it’s going to revert back to humanity and human connections, connectivity, what’s the pleasure of being with other people when we don’t need to do x? Work that out.
Susan Freeman
Also, one of, I mean one of the concerns must be if so many tasks that we’re used to doing are done by the machine that you lose the ability to do it and in a strange way, it might you know reduce creativity because we’re relying on something else to do it. And also what happens when you’ve got a power cut? Nobody can do anything.
Antony Slumbers
Well, yes, that’s true. I think when you’ve got a power cut, we’re done for already aren’t we, we sit there and think oh my god, what is there to do, you know, I’m completely stuck, can’t do anything. It is absolutely true, in fact there have already been some studies done where it has been shown that using these tools can reduce the cognitive function of people because it’s very easy to get lazy because you don’t have, you don’t have to think. Now admittedly there was a time when we used to need to do maths in our head and then we got our calculators and we didn’t, but we started to understand that that’s fine because we can use a calculator. What we’re going to have to do with these tools is, we’re going to have to very consciously change our own views of our own intelligence and educations so, I think there’s, there’s four super skills that we’ll need to get really good at. The first is critical thinking, so every time we look at something, it’s a bit like the old Jeremy Paxman thing, “Why is this lying liar lying to me?”. We don’t know if it’s true, we literally do not know if it’s true or accurate so our ability to, as a muscle memory thing, approach everything with much stronger critical thinking from now. Then we’re going to have to get very good at problem solving, human skills and data skills, but most importantly, exactly the point you say, we are going to have to be very conscious that we must not submit to laziness and reduce our own capabilities. We have got to try, to try harder and we’ve got to be forced to try harder to push these tools, but it is a big worry because a lot of people frankly are lazy and then we’ll be in trouble.
Susan Freeman
So, in terms of the new roles we’re going to be seeing, are we already seeing different roles emerging, roles disappearing? You sort of imagine that sort of something that really involves inputting information for instance will no longer be a role but are we seeing new things coming down the line?
Antony Slumbers
Well, certainly anything structure repeatable, predictable will go, anything that’s just rote will go. Again, if you think of the office market over the last few years and the move to flexible offices and the move towards much more humancentric offices, you look at a great office or you go into a great office now, it’s a completely different entity than it was 20-30 years ago so the skills that were needed to go into create a space that could catalyse human skills and enable someone to be happy, healthy and productive, is a completely different skillset to the one we have now and that’s sort of across the board so, the primary skill in the future is going to be how to understand what we can get out of these machines, how we can create and curate new things and most importantly, how we can ask better questions. So, there’s a lot of new skills that we are going to need. Also, I would say, particularly in something like real estate where there’s lot of, same as the law where there’s a professional side to it, none of this negates the need to have your professional skills. You would be a better surveyor if you’re a really good surveyor working with these tools than if you were an average surveyor working with these tools. It’s really, really important to be able to understand what to ask these things and to evaluate what they are telling you so, in some ways, very domain specific skills actually will become more valuable. I listened to a very good podcast a while ago talking about the professional services companies and Rita McGrath was one of the people on it and I think she was saying, in professional services, there’s a lot of commodity professional services go on, that is likely to be commoditised even more if not done away with, but this panel of people reckoned that the top end of consultancy is actually going to be busier than ever because their capabilities of asking harder questions and the thought processes that need to go into answering those questions actually are becoming more important. So you definitely, you definitely as a, as a twenty year old mustn’t think oh well in that case I don’t need to know anything, I’ll just ask the machines all the time. The more you know, the more you’re going to be able to get out of these tools longer term.
Susan Freeman
And the sort of human skills and people skills are going to be more important, I’m not quite sure how people are going to learn those because it’s not the sort of thing that you’re necessarily taught at school and going through university.
Antony Slumbers
I think people can, I don’t know, send everyone to hospitality school, you know, I think in many ways these things can be taught. There are so many things we’ve never really had to bother with and that’s the thing and that’s one of the big things in real estate, you know the whole, all the hospitality and the user experience and the customer experience stuff, you know twenty years ago no one gave a hoot about any of that, not because they didn’t care, it just had no economic value to them, it didn’t matter to them at all whether their customer was happy with their office, if they signed the lease that was that. And now you’re having to learn all those other skills, but it’s funny how, a couple of years ago my wife bought me one of those “For Dummies” books which are quite funny and it was “Critical Thinking for Dummies” and, and they’re actually, they are so much better than they sound and it was only then that I realised actually there was so much more I could learn about critical thinking that I just hadn’t thought about and so there are all these skills you can ask, I mean one of the funny things that I’ve got, I’ve got a GPT which is a custom version of ChatGPT, which you can create and I call it ‘The Socratic Questioner’ so it’s been preloaded with how to be a really good Socratic questioner and there’s, you know there’s a formula to it isn’t there. So I built that into the thing and now I have conversations with it and it goes, “Ooh, why do you think that?” or “What might happen if…?”, “What might be true that would make that untrue?” and it takes you through and it becomes quite, quite addictive so, yes, we’re going to have to spend a lot of time teaching ourselves all these human skills. But I think, I have this funny concept of, which I wrote about a few weeks ago, called’ Real Estate as Maven’ and I have this idea that there are going to be buildings which are designed in such a way. They’re going to be sort of multi, sort of mixed use muti-usage type, types of spaces but they’re going to be designed in a way partly to enable us to have really good connectivity and collaborative ability and places to learn but they’re also going to be geared up to making connections between people. So, in some way the building will know that Susan really should meet Anthony and Anthony really should meet Susan and the building becomes part of how, how you network and how you create new value and how you pull everything together.
Susan Freeman
Is that beginning to happen, do you think? Are people moving in that direction?
Antony Slumbers
I think so, I mean it’s quite interesting, you know if you go into somewhere like the Innovation XCHG on 22 Bishopsgate, which has got a lot of people from the PropTech industry come and go. If you just hung around there for a while, you would bump into lots of people and they do lots of events there, a lot of teaching events. I think a lot of offices are actually going to be like schools, they’re going to be the places where we go to learn things and understand about new things so I think there are certainly, there are certainly people developing the types of spaces with very particular markets in mind and trying to become an agglomeration of all the people who are all an interesting in that sector.
Susan Freeman
And if the building does become part of your working and learning experience, how does that square with the concept of working remotely and not being necessarily in the office? Do you see it as something that you might just dip into like a couple of times a week, three times a week?
Antony Slumbers
I thought for a long time that we’ll be a lot more deliberate about why we are in x place. I mean, it’s very funny, years and years ago when we were running Vicinitee, I live down in Guildford, the team was obviously at Broadgate, my designer was somewhere else, but we would meet every Wednesday religiously, you had to be there, you weren’t allowed to meet, have any other meetings and we would get together and spend a very strong time together as a group, we’d go through everything and then we’d all go out at night, so we did the sort of social bonding if you like, but also the time was just there to you know just chill, sit back and what’s going on Susan, what’s interesting, what’s not interesting and that worked incredibly well and then the rest of the week people went off and did what they want and I think that’s more and more likely what’s going to happen. You stay in one place to do x and then you come together to do y and I know that, I know the argument of well some people, well there’s certainly lots of people who haven’t got somewhere nice at home where they can do individual work so they, offices still need spaces to do individual work but primarily, we will use spaces together when we really need to bash these cognitive minds together. We won’t just be there because it’s Tuesday afternoon, we’ll be there because on Tuesday afternoon, this is what you’re going to do.
Susan Freeman
You I think coined the expression “space as a service” back in 2014, so again a little bit ahead of your time. So, ten years on, has anything surprised you about the way that concept has been accepted, you know how it’s evolved or how it hasn’t evolved?
Antony Slumbers
I would certainly say we completely won that battle eventually. And just to explain, I never thought about space as a service so much as being about the procurement of services, you know you’re not buying space as a service a day or week or month or whatever. The idea was to have spaces that provided the services that that individual person needed whenever they needed it in order to do whatever it was they’re doing to their optimum. So it’s all about personalising and customising space for particular usages and particular people and I’d certainly say we’ve, we’ve won the battel completely on that, that Rob Harris – you might well know the excellent researcher – had this line of, “spaces and service will grow and grow and then it will disappear” and it will disappear because it just becomes the norm and that’s how I, how I see things now. I see the major multinational companies are going to have the very best buildings in town and they’re going to have internal teams that will run their spaces as spaces and services spaces, very focussed on the user experience and the ability of the space to provide what their people need. And then I think pretty well everyone else is either going to outsource their space to an operator of some description or will have their own building or their own floors and their own lease but will then have that run as a space as a service they get. And it’s interesting, if you look at CBRE just buying Industrious, just makes me think this is CBRE can now go to x, y, z corporate and say well, we, i.e., our new Industrious unit, we can run all your space for you and we’ll provide you with spillover space as well, but we’ll do the whole thing for you, because this, the thing is these types of spaces, you’re going to need less of them but they’re going to need to be a lot better so per square foot, I think things are going to get more expensive but they’re not simple, they’re really hard, you know it’s like running, you know what it’s like if you go into a great hotel, it looks absolutely effortless, well this can’t be that hard, well that’s the trick, that’s the trick and this is going to be the case with great offices, the way they are operated is going to give me and everyone else exactly what I need to maximise my capabilities.
Susan Freeman
It really is a move towards hotellification isn’t it.
Antony Slumbers
Absolutely. Or hotels the other way round, you know, you go into central London hotels or I’m sure it’s the same in Paris or New York and they’re full of people working on the ground floor, aren’t they. And then also hotels will develop new models to enable someone to block book two days a week, six months at a go, and something cheap, you know, we’ll redo it, someone needs to come into the town two days a week, they’re going to need this sort of space and somewhere cheap to sleep at night, so there’s going to be all these new, this is the exciting thing about all this I think that all of this plays to the really entrepreneurial side of, of real estate people which you know in some ways the real estate industry, as with other industries, just became so financialised that it was really nothing to do with real estate, it was just, you know, it’s just a money game. But this feels more like it’s going to be back to, I mean you know a lot of the people that were involved with this a long time ago who were real entrepreneurial creators coming up with things that look really old-fashioned now but at the time were really, and you can see there’s a number of them out there at the moment doing things and you think ooh, wow, that’s different.
Susan Freeman
Is there any, anybody in particular, any particular sort of start-ups or trends that you see at the moment which you know you think are particularly exciting?
Antony Slumbers
I love the stuff that General Projects do, that Jacob does there. Takes these funny spaces, well he takes some conventional spaces and just makes them really nice, but also takes some really funny spaces, you know like a bunker underground and thinks well what can we do with that that’s interesting and then has that sort of artistic flair on top of that you know, is deeply practical but it’s still, it has a je ne sais quoi and I think, I think there’s a number of, there’s a number of those all around that I really ought to do a better study of these types of places but I think there’s a lot, there’s a lot out there.
Susan Freeman
Yeah, there are some exciting things and Jacob of course has been a guest on the podcast so, thank you for mentioning him. So, Antony, if you were launching a new tech start-up today, and maybe you are, what problem would you be trying to solve?
Antony Slumbers
Yeah, funnily enough, we were thinking about something this morning exactly along those lines and what problem we were going to solve and we sort of came to the conclusion that we’d solve all of them. I think as in every industry, we’re going to see a huge process of unbundling and rebundling jobs so, the way we work is designed around certain technologies and then starts to take a life of its own and becomes sort of set in stone. And one of the problems a lot of people in real estate are having at the moment is they’re having this well, what do I buy attitude towards AI, or how can I save some money or how can I make some money, what should I go and buy? And they’re thinking of applying this AI to what they’ve already got. Marc Andreesen, the head of a16z came out with something good the other, the other day and he talked about AI as the sixth bullet point and he says this happening on people’s pitches now, that they’ve got their five bullet points and then think ooh Christ, better add another one, ooh when we do AI, and this idea of you just take what you’ve got and you throw AI on it and that’s going to solve the problem. That’s not going to work. This really is as fundamental as the well-known story of what happened to factories when they moved from being steam powered to electric motor powered and it actually took forty years before electricity made much difference to factories and it wasn’t until factories were completely redesigned that literally the workflows within a factory that redesigned that set off the crazy productivity growth of the 20s and early 30s but it had been around since 1880 but it wasn’t until it had been redesigned. One of the things I teach people on the course and evangelise for on the course is that everyone should look at their own particular job or if they’re at a higher level, their teams, their teams’ jobs and start breaking them down into these granular parts, literally the things we do to achieve that and for every one of them thinking that can be automated, this can be augmented by using technology, this should be kept for human, ooh and this is something that we can do that we could never have done before, and I think every single workflow across business is going to go through this process of being unbundled and rebundled for a new state. I was talking to somebody mid-forties, works for one of the bigger agencies last week and he’s very much a, an early adopter of all this stuff and he said “if I were young, I’d be looking not for one of the big companies, I’d be looking for a small company that could pull in a lot of domain knowledge and that designed their new company completely around all these new tools” so, started clean slate, let’s see how we can provide x, y, z much better, faster, cheaper and I’d think that’s the way to look at new products. Again on the course, I got sixteen fundamental areas within real estate that I think are going to be changed by AI and every one of the slides starts with “When productised”, someone needs to create a product for each of these things because mostly, you know, earlier adopters are happy to just to work with a text box but that’s no good for normal people, normal people want “I want to push a button on the slide I want to do this, want to do that” and then have all this stuff hidden behind, behind the scenes and that’s, that’s where I think it would get, get super interesting. Someone’s got to create how do we do leasing? How do we do operations? How do we do investment? How do we do valuations? How do we do underwriting, if you had a blank sheet of paper?
Susan Freeman
It sounds as if, if you had that blank sheet of paper, you would need fewer people to start your business?
Antony Slumbers
I am firmly in the camp that all of this stuff is a positive given enough time and given one big variable change. If we do not build a bigger pie, i.e. if the market does not expand then there are going to be a lot of people who will lose their jobs simply because, not that their jobs will disappear but the number of people required as an input to produce x output will drop considerably. So, we have to work on the basis of we need to build a bigger pie, and a bigger pie, this is my only real worry about this stuff is that it’s the gap between the new things appearing and then the new jobs appearing. We know they do but in the 19th century, it took forty years, it was called the Engels’ Pause and that’s what Dickens wrote about, all the misery of the forty years was people coming off the fields before there was really any work for them to do. By the end of the century, it was fine. So, it’s moving so fast now, how quickly can we adopt and generate new businesses?
Susan Freeman
One would hope with the speed at which things are happening and changing that that pause would be a lot shorter, but that’s really interesting. So, as we were saying at the beginning Antony, you are a futurist so, if you had to predict a major shift in real estate that people aren’t talking about yet, is there anything that you would mention?
Antony Slumbers
I’m not sure in the sense of no one is mentioning, you know, I’m certainly not arrogant enough to think well no one’s mentioned this. There’s a couple of things. I think we’re going to see a lot more mixed developments, mixed use developments and I think that’s going to be the way to go for people who can do things at scale. The days of splitting up a city that this is where you work, this is where you live, this is where you play, that was designed for a different era, we don’t need that era now, now we actually need paradoxically, we need to go back to 16th century Florence don’t we, where, you know, those city states or actually this is the idea with the 15-minute city, that everything you need is near you, because the fundamental point with most of, most of the issue around offices in major cities is it’s so damn expensive and takes so much time to get from A to B, that’s the problem, if everyone lived 10 minutes away, you know like Stuart Rose goes on about everyone should be in the office. I bet he either lives 10 minutes’ walk away from where he works or 20 minutes chauffeur driven car, so who cares, I’d go to the office every day if it was like but you know that’s not the reality for millions of people, it’s very expensive, takes a lot of time so, but we need people that we need people to get together. So, I think there’s huge opportunities in mixed use developments, mixed use neighbourhoods, I mean think of the great estates in London, those are the perfect exemplars from hundreds of years ago of mixed use neighbourhoods because they got complete control over it.
Susan Freeman
With social housing thrown in as well, yeah.
Antony Slumbers
With social housing thrown in as well, that’s actually what we want before split up so there’s that. The other thing is I think there’s great scope for secondary cities, particularly across Europe and hopefully within the UK for secondary cities to redesign themselves as magnets for talent. So particularly ones where there’s a university. You’ve got to go to places where there’s a density of intellectual talent, that’s sort of the starting point but Europe is full of some really attractive cities that have a university, that are just really nice places to live and live and work, you don’t all need to go to London and you don’t all need to go to Paris, there’s these secondary cities, they have a great chance of enabling, enabling people to have a better quality of life at a reasonable amount of money than is going to be possible in major cities, so if you think about it, there was an article, one of the John Burn-Murdoch articles in the FT who does the sort of data science journalism. He said that something like 70% of the “best” jobs in the UK are now in London so, where are you going to go? You have to have to go to London, which is great, gives you that sort of central, but then everything is, is too expensive. Why can’t we distribute talent more equitably round, around all our countries? Would enable people to spend a lot less on stuff and live better, higher quality of life. We’ve got to get there somehow.
Susan Freeman
Well it looked, I mean during the height of lockdown, it looked as if that was happening, people said yeah we can work remotely, we can employ people you know wherever they are in the world, but I think there’s been a little bit of a sort of backlash against that because as you, you’ve said, fine to work remotely but you do need to get your team together at set intervals, don’t you.
Antony Slumbers
You absolutely do and I think, I think it’s a shame that there hasn’t been more managerial intensity of working out how to operate in this sort of way. You know, there’s some very market leading companies in this area who are doing really interesting things, so almost like the poster child is the Australian software company Atlassian. Very, very big company, multinational, fully distributed but they actually have some of the best office spaces in the world, but they have very, very strong systems to support all this. So, for instance, all this business about oh you have to be in the office to hear what’s going on, is a nonsense, everything that’s going on should be on a system somewhere up in the Cloud and you immediately do it and she was, the woman called Annie Dean, is their sort of head of remote, distributed working and she was writing about this the other day and she said “the great advantage of what we do is because we work like we do, everyone always knows everything” because part of the rules are, you have to document your work at all times. So this idea of oh well, I don’t know what Susan or Antony is doing if I can’t see them. It’s a nonsense, you should just be able to look it up and that’s what Susan is doing, that’s what Anthony… and we haven’t put enough attention into what would be possible if we do this and then like Atlassian have very concentrated times together and very deliberate times together and they have the supporting offices that there is offices to go to. They said people tend to gravitate to certain cities, it’s not like everyone’s everywhere, they’re just in eight different cities instead of one. So we’ll have eight outposts so, you can go, if you need to go and we haven’t, we haven’t invested the management in the management capabilities to make use of all these technologies and I think that will come back to bite us as companies because you definitely can be a lot more productive. If you look at 8 or the 10 world’s most valuable companies are hybrid to fully distributed. Facebook just said well they’re going to carry on being distributed because they’ve built the systems to run and then when they get people together, it’s very deliberate and it’s for a purpose and it’s more meaningful so, I’d certainly believe very few people want or will work 100% remote and just as few people would, will work 5 days a week in the office and most of us need to work out what’s best for us and our team and our company, but not just say oh well it’s two days across the board, well it might be two days for sales and it might be three days for marketing, you know we’ve just got to be much more sophisticated about how we operate.
Susan Freeman
And also, a lot of it is about what the customer wants because you know we are obviously focussing a lot of on what we want, how we wanted to run our organisations but at the end of the day, you have to keep the customer happy.
Antony Slumbers
Absolutely. So, if you had different, you know if you were in businesses where you regularly need to meet your customer, then sorry you’ve got to be there but a lot of businesses never, never have to meet their customer, in which case that’s not important so it’s very much, it’s very much a horses for courses but if we had moved, if we’d made more effort to develop our systems so we genuinely can work much more digitally, actually companies would be a lot better because we are building the building blocks of productivity there and then you have optionality, my biggest worry for a lot of companies is their, certainly some of the biggest ones are doing this get everyone back and we all know it’s a cover to get rid of lots of people, but the trouble if you do that carelessly, is your best talent always has options and your best talent is actually more valuable now than probably at any time and you don’t want them to leave. And then, and then there’s the more social aspect of this is, this is an absolute bugger for women, women and anyone with disabilities. All this oh well, you know, heave yourself back to the office is suddenly cutting huge numbers of people off from what they were able to do, particularly, particularly younger mothers or disabled could work perfectly well distributed, cannot work back in the office and if you look at the participation rates, they’re not great.
Susan Freeman
So we’ve got to get it right.
Antony Slumbers
I just, just want to end on the point that I view all of this in an enormously positive light. The opportunities for people who embrace where we’re going are like nothing that has been around in decades and our capabilities and our ability to build a better built environment are in a place now that hasn’t existed so, yes, there’s lots of scary stuff but my word, it’s still the biggest opportunity the industry has had in decades.
Susan Freeman
Fantastic. Antony, thank you very much for your time today.
Antony Slumbers
That’s a pleasure. Thank you very much.
Susan Freeman
Thank you, Antony, for some really thought provoking insights on how the exponential speed of change in technology is going to affect the real estate sector and what we should be doing right now to stay ahead of the game. So that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
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