Markets Not Ready for Smart Home; Ready for Smart Building

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BlackRock San Francisco Office

Most people even in developed countries don’t know what a smart home is or what it can do.  Those involved in this game, especially in Silicon Valley where Internet of Things hype abounds, don’t realize just how many millions of people have no idea about the smart gadgetry entering the market today, even if they have heard of Google’s Nest.  People outside the hype don’t know how to use it.  They don’t know how it will benefit their lives.

And more importantly, most of the millions of people who don’t know, don’t actually care!  They have lights, thermostats and locks that work just the way they’ve worked for their lifetime.  Compelling reasons do not exist for them to change to security violation prone and buggy hardware and software, software that is currently delivering a less-than-ideal user experience because the leaders in the field haven’t had enough time to discover what the true UX ought to be.

On the other hand, the smart building market has been primed for smart building technology even though the people involved wouldn’t necessarily say they want a smart building. Building owners, operators and facility managers are looking for solutions to their problems, solutions that the IoT can deliver. But why has the pump been primed so that they are looking for these solutions?

Green building initiatives and legislation are pushing building investors, owners and managers to look seriously at energy consumption.  Talk to a building owner, operator or facilities manager about ‘smart’ or ‘IoT’ and their eyes will glaze over. Talk to them about technology delivering 83% improved occupant satisfaction while decreasing energy consumption in buildings 15-47%, as Building Robotics’ solution Comfy does, and they’re all ears.

The real estate crisis also made owners, operators and facility managers acutely aware of every cent on a budget, engendering a focus on lowering expenses and increasing operational efficiencies.  Their eyes will get excited again when you mention technology enabling operational efficiencies, the likes of which they haven’t seen before.   Anyone who has worked on a building budget (and my eyes saw hundreds at BlackRock over nearly 6 years) knows a % decrease in operating expenses trumps the same % reduction in building energy consumption every time.  When you cut tenant hot/cold complaints by over 90% that is a huge operational savings and that is just one area smart buildings reduce operating expenses.

Building occupants are also demanding smarter environments, open plans, flexible working space and building wide cell phone and Wi-Fi coverage.  Those same eyes will light up when you talk about these things and how they improve tenant satisfaction and comfort.

Because of the costs of managing large corporate campuses, companies are looking for ways to improve space utilization.  Companies such as connected lighting provider Enlighted can not only provide energy efficient lighting but also shine the light on space planning challenges and through data quantitatively answer the question, “Is our new open floor plan working?”

Smart buildings will be the center of the discussion on the most interesting panel discussion on commercial real estate technology the world has seen, and it will be held in Silicon Valley at SRI a place known for producing innovation.  Building Robotics CEO Andrew Krioukov and Enlighted investor Q Motiwala from Draper Nexus will participate in the event alongside other leaders in the smart building space.  More on the event can be found here: https://www.vlab.org/events/smart-buildings/

 

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