Bespoke Proptech – When Is It The Right Choice To Go Bespoke?

As Proptech matures, established solutions in the market increasingly accommodate broader markets / use cases. Consolidation in the market, through acquisitions geographically or into different verticals, creates market leaders - the industry standard choice.

‍

With many large players accommodating multiple regions, sectors, and use cases, a question on some minds is "Does this one-size-all approach fit our needs?"

‍

While many Proptechs do offer bespoke services and different levels of customization or adjustment, solutions are rarely built from the ground up on a per client basis. This makes sense, given R&D can take years of testing and development to optimize a solution for a use case.

‍

However, is there a scenario where it makes sense to build from the ground up specifically for a client’s needs?

‍

The short answer is yes, as probably expected, though not completely from the ground up.

‍

Existing research and development can be re-used or augmented, where the designed outcome benefits from the foundational work and testing already done.

‍

The most obvious circumstance in which this scenario makes sense is with a long-term client or partner relationship, in which the partner has significant scale and resources to fund and deploy the solution. These sorts of scenarios generally involve the large partner exploring opportunistic innovations or solving for a shared problem among their assets, unsolved or solved inadequately by existing market solutions.

‍

Sometimes, these cases are not so much about solving an unsolved hurdle but attaching their own brand identity and capabilities to the solution.

‍

To some degree, this need can be solved through “white labeling” or branding solutions, as well as solutions that offer customizable functionalities, so it is important to consider the depth of need in this area.

‍

The other scenario where bespoke makes sense is where there is a strong technical need for an unmet use case. In this circumstance it doesn’t matter the scale of the client, they are forced to consider bespoke solutions in order to meet a use case.

‍

An example of this is some of the industrial Proptech like cooling systems for data centers or automated trolley warehouses where the facility layout may act as a blocker for existing solutions.

‍

Impact on the Proptech Business Model

The standard approach to this need is offering highly adaptable and configurable solutions, which suffices 95% of the time in most use cases.

‍

But does this mean there is a gap?

‍

Is there a play where some Proptechs could cater to this need and act as almost specialized R&D houses for bespoke Proptech needs?

‍

The answer is yes, and they do exist, though they generally have to be of a considerable size to be able to cater to the needs and requirements of large clients.  

‍

This can be challenging as a business model as companies have to essentially market their capabilities and expertise rather than a product, which as an intangible, is harder to illustrate.

‍