The Connected Home — Opportunities And Disruption

By John Bodrozic, Co-Founder, HomeZada

The consumer journey through homeownership spans countless different interactions and transactions with different companies both large and small. Let’s take a summary look at this from a timeline perspective

• Real Estate: Hire a real estate agent and broker to help find a house, and use real estate portals to start your initial search. Lots of data and documents going back and forth to negotiate a deal.
• Mortgage: Use various online sources to shop for rates, and possibly work with a broker. Lots of data and documents to get a mortgage.
• Insurance: In order to close on your home, you need an insurance policy thus using online sources or agents and brokers to get the right coverage.
• Home Warranty: Perhaps part of the deal, you may also buy a home warranty for the first year.
• Title and Escrow: Finally, everything comes together to buy that home with reams of information.
• Moving Company: Time to pack up your belongings and move to the new home.
• Utility Companies: Time to sign up and start paying your energy, water, phone, TV, and Internet service bills and understand your usage patterns.
• Maintenance: Either you need to perform these tasks, or you need to find via various online sites, referrals, etc. specific trades like plumbing, HVAC, electrical, handyman, and landscaping services to help you.
• Home Improvement: Finding products and contractors either online or via referrals to help you through your remodel and renovation projects that improve the value of your home and require updating your insurance policy and your maintenance plan.
• Smart Devices: From security, to temperature controls, to lighting controls, and others, choosing multiple vendors to help you control various aspects of your home.
• Real Estate: You have been in your home for five to 10 years, and now you decide to sell it and have to market your home and compete with similar homes in your neighborhood with either the same agent or a different one.

We are living in a world where consumers are adopting mobile, cloud, Internet of Things (IoT), connectivity, and multiple user interfaces faster than many industries. This “consumerization” of technology is forcing change on many traditional industries such as real estate, insurance, mortgage, and home improvements as consumers expect a more seamless digital interface and relationship for their core products.

According to Goldman Sachs research, millennials as a cohort are between 35 and 15 years old and have a population of 92 million, which is the largest generation ever, even bigger than the baby boomers which have 77 million. They are “Digital Natives” which means they grew up with all these technologies and are social and connected. As a result, “Millennials are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come.”

There are two distinct opportunities here. One is to help individual companies reinvent their consumer facing processes to be more digital and connected for their core product, such as a real estate deal, a mortgage, an insurance policy, or a kitchen remodel. The other is to think beyond their individual silo and look at the entire homeowner journey, and help connect their core product to other products and services that the homeowner needs for a more seamless experience.

The connected home has multiple facets to it. One is the proliferation of smart devices that help the user control the security, temperature, energy management and other aspects of the home. Another facet is combining the multitude of business transactions the consumers engaged with in managing, maintaining and improving the home. Another is the combination of the real estate process with home management in both the upfront buying of a home, as well as, the downstream selling of the home.

The macro trends are clear with widespread adoption of important foundational technologies such as mobile, cloud, IoT and others along with the demographic trend of digital natives hitting their prime spending years. The home has many large industries serving individual aspects of the entire journey, thus there are many opportunities for ISVs and VARs to engage on either the business or consumers side of the rapidly evolving connected home in the years to come.