Regular readers of this blog are probably familiar with my views on what motivates people to buy software. Sellers tend to characterize value propositions in terms of numbers ("Roll out this software and increase your x by y%!"). Buyers of technology, on the other hand, are seldom impressed with these projections, at least during the phase of a sales cycle when they are most persuadable.
If ROI comes into play, it is downstream of the decision to do a project, e.g., when a diligent company analyzes the results of a pilot before proceeding with further rollout. Operators tend to have an idea of how they want their businesses to work and seek technologies that are consistent with that vision.
Establishing that fit is what sales conversations are mostly about, and it largely explains which projects operators decide to do. But it doesn't entirely explain which technology company they choose to do the project with.
The Under-Rated Art of Vendor Selection
A few months ago, I was a guest on the Digible Dudes podcast. It was a great conversation, and one of the areas that we discussed was the adoption of AI in multifamily. One of the hosts asked me what advice I would give to a vendor who is trying to build a market for their AI solution. My instant reaction was, "Be first."
First-mover advantage is a thing. We know, for example, that a high proportion of competitive bids go to whichever company responded first. But there are good reasons to think that it's increasingly important in a multifamily tech environment that keeps growing.
On the pod, I explained my advice on AI by citing the 20 executive executives for the most recent edition of 20for20. Through those conversations, I noticed that while AI adoption is now widespread, there was little evidence that operators were aware of functional differentiation that separated the applications they had chosen from the others. With most technologies, leaders can readily say what it was about the company or the functionality that made them opt for one product versus another. The same does not seem to be true of AI.
AI is more of a black box than most technologies, so it's hard even to be curious about what's going on under the hood compared to more traditional technologies. That is, of course, a risk, but it's a risk that the industry appears to be comfortable with. When functional differentiators are not obvious to buyers, there is a big advantage to being the first vendor to bring a solution to a possible buyer.
Why This Is a Great Demand Gen Opportunity
Readers of a tech marketing persuasion should by now have noticed that this is a huge opportunity. If the market does not yet understand the technology, and if the technology itself is still evolving (think generative AI), then really good educational content has unusually high leverage. If the first sales rep to show up has a higher-than-average chance of winning, then so does the source of the first enlightening article or paper that a buyer reads on the topic.
In the spirit of educating the market on technology, I have been working with a group of vendors of another fast-changing, increasingly AI-enabled technology: fraud prevention. It's a fascinating area that was one of the surprises in this year's 20for20 research. Fraud has emerged as a much higher management priority than it has been for the last several years for a variety of reasons, including the growth in online leasing and the lingering effects of the pandemic.
It is unsurprising, then, that fraud prevention is currently the most evaluated technology in multifamily, with many highly innovative companies working on the problem. I interviewed leaders of 11 companies in a brand-new podcast series.
Back to Being First
The 11 interviews highlighted the differences between these companies' technologies and guiding philosophies. At the same time there is evidence that the companies that were first to market wield an advantage over the companies that have emerged more recently. In an industry like multifamily, peer influence is a big part of the vendor selection calculus. It can even supersede some significant product capabilities in some buyers' decisions.
In the case of fraud prevention technology, there are genuine and important sources of advantage that are not obvious, and given the stakes (this is now a problem that affects more than 93% of companies), they are well worth understanding. The 11 interviews are intended to tease out the differences between solutions and the perspectives of the companies' leaders.
To prevent fraud, property managers have to do several things well. This interview series, and a new white paper that will follow in July, attempt to highlight what those things are, and what part of the problem each vendor helps to solve. I'm hugely excited about this new format and to further a conversation that I think is currently one of the most important in our industry.
Season One of Tech Talk with 20for20 drops the week of June 17th. The podcast is now live on all major podcast platforms. Subscribe now on Apple Podcasts, Spotify, Amazon/Audible or iHeartRadio.
Photo by Rob Wingate on Unsplash