Terms like “AI”, “big data”, “machine learning” and “predictive analytics” are popping out more and more in today’s commercial real estate landscape. But what impact does the emerging tech have on the industry? We recently had the chance to have a chat with Zac Ruiz, CEO & Founder of Salt IO – a big data firm that specializes in commercial real estate. They are focused on driving creative outcomes and using data to grow business and customer values, finding win-win situations for all parties involved. Without further ado, here’s what he had to say.
Q: Tell us a little bit about your background and what lead you to creating Salt IO.
I graduated from University of Delaware in 1999 with a passion for software development. I worked in a number of industries but my favorite job was collaborating with people who built financial models. I would be their “data person” and help source\wrangle data and deliver it to the Modelers so they could work their magic. I would also help them make their models run faster and at scale. Eventually I was promoted to my own level of incompetence, overseeing a team of more than 20 people. I learned that being a talented programmer doesn’t prepare you for leading others. I quit my job and founded Salt IO as an opportunity to take a step back and round out my game. We are back on track now bringing a mix of leadership and technology to bear on pain points in commmercial real estate and across capital markets.
Q: How has big data impacted the commercial real estate industry so far?
It hasn’t. Commercial Real Estate doesn’t have “big data”. The most popular data providers report on five million properties which isn’t particularly big. The Big Four (Google, Facebook, Apple, Amazon) have big data and have made it a thing but the truth is most firms don’t have access to data at anywhere near that scale. In CRE you can get away with Excel just fine. I suspect CRE firms that attempt true “big data” initiatives using all the fancy technologies have probably ended up somewhat frustrated with the outcome. I encourage folks to stop thinking about Big Data and laser focus on what data they have and what small initiatives can unlock real value in that data. Experience some ROI and then quadruple down on data initiatives from there.
Q: How do you see AI and machine learning transform the industry further in the future?
We have a long way to go. Artificial Intelligence algorithms are powered by data and in CRE the data just isn’t good enough. If AI algorithms are going to make decisions for us we better be sure they are doing that with near perfect input data that we trust. We don’t have that data. Transparency\quality\governance\lineage\security, no matter what facet of data you think of we just aren’t anywhere close in CRE. So I believe working on AI algorithms is putting the cart before the horse a bit. We have to go back around and solve some foundational data issues to truly leverage AI.
Q: What would be main benefits for estate companies?
That said, there are a number of applications for AI/ML technologies to be put to work improving the data story. Natural language processing, document classification, entity recognition, field extraction; I think we are starting to see firms start to leverage Machine Learning to create better datasets, which is fantastic.
We tend to think of datasets as having to be Big (back to question two above) and so we always want more rows and more columns; often valuing size over quality. But a high quality dataset with just two columns can be extremely valuable. Imagine if you built a dataset of every Self Storage facility in the U.S. with it’s clean, correct address. If you knew your dataset was perfect (100% coverage, 100% valid addresses) you have unlocked value. Sales and Marketing want that list. Modeler’s want that list. Analysts want that list. Researchers want that list. Your competitors want that list.
Q: Are there any other tech trends that people should keep an eye on?
I believe we are on the cusp of a technology revolution in CRE. Analysts and brokers and agents and bankers are becoming entrepreneurs and starting technology driven companies. Engineers and software developers are learning the business and bringing their talents to the mix. The major trend I see is that CEOs are asking for data and technology to become a core part of the business and are willing to spend the money to start solving the problems. As that becomes the case we will continue to see more and more interesting developments in data and technology across the industry.
Q: Any other insights you’d like to share?
The robots aren’t coming. Blockchain\crypto isn’t going to obsolete you. The game really is about analyst\broker\agent empowerment. How can we get better data in front of a human’s eyes so they have a chance to have a valuable thought\idea or make a more informed decision. This problem seems so simple but the solution is so complex and will define the next generation of CRE technologies.