Playing on the other side of the table, Harris Sun, CEO and founder of RaSpect, calls for a change in mindset among corporate partners, urging them to not only treat start-ups as vendors but also to invest in and grow with them. “How about considering ventures with promising solutions as early-stage investment opportunities so that they can obtain a significant equity stake at a low valuation?” he suggests.
Different from venture capital firms, corporates can feed and nurture their start-up partners by bringing them businesses and customers from their established network. As the start-up’s business then grows and prospers, the firm’s valuation will grow by leaps and bounds — the return on investment could be significant. “That’s what is called ‘win-win’,” says Sun.
Some firms may consider disruptive start-ups as a threat, but he says start-ups should be seen as an opportunity for them to offload laborious manual workflow to start-ups who have the tools to digitalise and automate the process, so that they can cut costs, reduce manpower and most importantly, focus on what they are good at.
Echoed by Great Eagle’s Ho, one of the advantages promised by proptech solutions is manual process automation, so that real estate companies can free up employees from manual (and at times dangerous) tasks and reduce costs.
For example, inspecting the façade of high-rise buildings is one the most dangerous and costly maintenance tasks which if left unchecked can lead to costly failures.
With RaSpect’s drone-assisted building surveying solution, not only can more accurate inspection and analysis be provided compared with traditional practices, but clients also benefit from substantial cost savings versus manual inspections that require scaffolding or suspending working platforms, according to Sun.
Ho adds that IoT sensors automate the collection of big data whilst powerful cloud computing and faster, more stable wireless connectivity allow AI to perform real-time analysis and provide actionable intelligence.
A lot of building systems which used to work in silos are now able to communicate with one another over an API (Application Programming Interface). This interoperability allows for the integration of different solutions and customisation for different use cases, she says.
“Office buildings and shopping centres are increasingly deployed with a central platform connected to different building systems utilising IoT sensors to enhance resource management and decision-making.”
More and more corporates are leveraging machine learning and AI to automate demanding processes and analyse data with algorithms that convert information into useful insights. “One of the trends is the use of robotic process automation, or RPA, to automate rules-based and repetitive tasks performed by people, ranging from answering customer emails to ensuring legal compliance,” she says.
In a more distant future, blockchain will eliminate the risks of fraudulent ownership as every transaction is recorded and validated by the system. Blockchain also facilitates fractional ownership, allowing the tokenisation of assets that has not previously been securitised.
This means that average citizens can afford to own shares of urban infrastructure or buildings and exchange their shares transparently and securely via blockchain-based smart contracts and token systems.
“As we advance towards smart cities, the government plays a vital role as a facilitator, but policymakers should ensure the right balance of incentives and legislation to motivate individuals and businesses. People are more likely to move where there are carrots as well as sticks.”
Finally, for a corporate-start-up collaboration to succeed, corporates must understand why they are engaging with start-ups, what pain points they want to solve, be clear on the process and timings, and if possible, implement a fast-track procurement programme for start-ups, says Ho, speaking in the role of HKPTA board member.
“Treat start-ups as partners, rather than nice-to-haves, nor a CSR campaign.”
What corporates look for in a start-up?
Akina Ho, Head of Digital Transformation and Innovation at Great Eagle, as well as a board member of the Hong Kong PropTech Association (HKPTA), says collaborations with start-ups are growing in importance as laggards risk being disrupted by rivals or new incumbents who embrace an open innovation strategy...