My High-Level Predictions for the Next 5–10 Years
One of the innate abilities that I was fortunate enough to be endowed with was the ability to process a ton of information and see the connective tissue among disparate data points. This has served me well in two facets of my life: playing trivia and developing investment theses.
As I mentioned in Part 1, my previous theses coalesced around the “lifecycle” of the home, from its birth (homebuilding) through it’s changes of ownership (transactions) to its care (maintenance and improvement) and its use (consumption). The framework was developed to easily convey the learnings into a format that was digestible by a corporate strategy team and made for clustering of strategic options simpler. However, it’s simplicity was also a limitation and made communicating other trends or vantage points harder.
For the development of newest theses, I freed myself from a framework for communicating them because in the end they were developed more for internal discussion and for alignment on where to deploy capital. The theses were allowed to be free form in nature and no control would be put over them to ensure maximum mutual exclusivity. Instead of creating a singular means of collecting, synthesizing and communicating the findings I focused more on developing a multitude of frameworks for the collecting and synthesis and allowed for full creative license on the output. It was messier than the first time but hopefully more precise.
My Framework for Collection and Analysis
For the development of my next set of future states of homes and housing, I expanded the number of lenses from which to contextualize a home. Those vantage points were:
Vantage Point of the Structure
- The Lifecycle: This is a hold-over from my previous framework and a useful tool. This puts the home at the center of the universe and the people, materials and services as time-bound participants in the life of the home.
- The Location: The features and uses of a home often vary greatly based on where it is located. An urban multi-family home has a very different set of uses and service providers than a rural farmhouse.
Vantage Point of the People
- Inhabitants: This vantage point explores the variety of interactions and expectations between owner-occupants and renters and within the sub-group of renters the difference between long-term and short-term and multi-family versus SFR.
- Service Providers: This looks at the relationships between a home and those who make a living through adjacencies.
After collecting data on each vantage point, I began to look for large scale trends (think affordability, labor shortage, and sustainability) that span across all points of view as well as interconnected challenges and opportunities. From this process, my theses began to sprout.
My Predictions (aka Where I am Investing for Next Fund Cycle)
For future posts, I will expand upon these concepts but for now I will provide a very brief overview of the predictions and themes I will be seeking to invest in for IFP IV.
Prediction 1: Productivity in Construction Will Finally Rise
- Drivers: Massive housing shortage + homebuilders increasing investment in innovation
- Main Themes: Land Use Optimization Tools, Digital Sales and Permitting, Automated Construction Sites, Faster and More Transparent Payment Flows
Prediction 2: The Concept of Owning a Home is Gonna Get Blurry
- Drivers: Housing Affordability + Pushback Against SFRs
- Main Themes: Shared Equity Models, Housing Derivatives Market (Risk Sharing), “Active” Home Insurance Companies
Prediction 3: More Owner-Occupants Will Use a “Property Manager”
- Drivers: Declining DIY Skills + Better Service Aggregation
- Main Themes: Home Concierge, Total Cost of Ownership Models, Maintenance Subscriptions
Prediction 4: Real Estate Agents Will Change from Transactional to Advisory
- Drivers: Declining Transaction Costs + Influx of New Products + Inexperienced Homeowners
- Main Themes: Real Estate Managers, Integrated “Home Finance” Platforms
Prediction 5: Residential Data Collection Will Accelerate
- Drivers: Increased Focus on Data Value + Higher Institutional Ownership
- Main Themes: Home Valuation Platforms, Project ROI Platforms, Intelligent Homes, Digital Home Management, Home Inspection Extensions, Personalized Data Pipes and Controls
Prediction 6: The Trades Professions Shed Their Stigma
- Drivers: Skilled Trade Shortages + Desire for Higher Paid Jobs + Digitization
- Main Themes: New Age Trade Schools, Job Boards and Marketplaces for Workers, Financial Products for Tradespeople, Knowledge Aggregation and Remote Workforce Engagement Tools, Data Driven Triage
Prediction 7: Serving the Gen Z Home Journey
- Drivers: Maturation of Gen Z into Ownership Age + Pandemic Hangover + Digital Native Expectations
- Main Themes: Affordability Solutions, On Demand Everything, ESG-Centric Home Brands, Fully Digital Transactions, Nomadic Lifestyle Enablement
That is a lot to digest, but I think that is because I fully believe the 2020s will be a decade of massive change in the concept of homes and housing. I’m excited to raise our new fund, put it to work in the most exceptional founders working to bring this future to life and roll up my sleeves to help in anyway I can. Stay tuned for future posts where each of these predictions is expanded on. Until then, have a safe and happy holiday season and if you’re vision of the future looks like this please contact me so we can build that future together!
