The wheel was invented around 5,000 years ago, but it was another 4,900 or so years before the first mass-produced automobile rolled off the line. Humans flew to the moon 66 years after that. Twenty-two years later the World Wide Web came online and just six years after that, the first social network was born. One of the key features of the Digital Age – the technological revolution we’re currently in – is the speed at which disruption occurs. More disruption is happening more quickly.
In addition to the speed at which technological progress occurs, another defining feature of this technological revolution is disruption – the kind I wrote about in A Blockbuster Moment Has Arrived. Digital platforms like Amazon, Uber, Netflix, Airbnb, and Priceline have upended the retail, transportation, entertainment, and hospitality industries.
But at the heart of the technology revolution – driving the speed and the disruption – is the user. Jeff Bezos, the founder and CEO of the trillion-dollar company Amazon, has said that of the 14 principles guiding Amazon, just one is its secret sauce: “The number one thing that has made us successful by far is obsessive compulsive focus on the customer.”
The secret sauce of the world’s biggest, and arguably most disruptive, technology company is a focus on the customer.
Indeed, technology platforms like Amazon, Priceline, Netflix, and the many others, succeed because they empower their users. With Amazon, we can shop from the comfort of our homes, get a better selection and a better price, delivered to the porch the next day. With Priceline, we likewise get access to a better selection and better prices – and the sort of self-determination that comes from being able to make our own travel arrangements. With Netflix, we can finally watch anything we want, anytime we want.
Newly empowered, customers then drive further advancements – think Amazon Prime, Booking.com, Netflix original content. It’s the Age of the Customer. Across industries, the companies that survive and thrive are those that leverage technology to provide a superior user experience. They’re the ones with an “obsessive compulsive” focus on providing value to the customer, ensuring that they have more choice and more efficient service.
This hasn’t played out in the commercial real estate industry. Yet.
An industry ripe for disruption
Like retail and hospitality and entertainment before it, the commercial real estate industry is ripe for disruption. For one, the commercial lending landscape is very fragmented. There are so many different types of lenders – from life insurance companies to CMBS players to national federally chartered banks, state chartered banks, credit unions, Fannie Mae and Freddie Mac for multifamily to private label players, and the list goes on.
Further complicating the landscape is the myriad of property types. Office, industrial, multi-family, mixed-use, retail, healthcare, special use, hospitality, single-purpose, portfolios – this list goes on as well. And then there’s a huge range of loan types, from monthly adjustable loans all the way through to 30-year fully amortized loans and pretty much everything in between. Needless to say, neither borrowers nor loan originators nor even the lenders themselves are well served in this current environment that is very fragmented and very complicated.
But disruption is coming.
Delivering a better experience for borrowers
With our own “obsessive compulsive” focus on the customer, we’ve combined state-of-the-art technology with high-touch service to deliver a better borrower experience.
On the technology side, CUPID™ (Commercial Underwriting Pricing Index Data) is our transformative web-based platform. It leverages a proprietary search engine driven by algorithms to sort through hundreds of lenders and thousands of loan programs to find the right loan that fits the borrower’s specific needs – at the touch of a button.
In addition to the search engine, a key aspect of our technology platform is the online portal, where borrowers can communicate with their concierge, download, sign, and upload required documents. As an entirely self-contained platform, the system is very secure – much more so than the hodgepodge of email, fax, and mail that is the status quo.
Yet we recognize that technology alone is not the whole answer. So we pair the technology with a concierge service. At the beginning of the loan process, the borrower is matched with a seasoned loan originator who guides them through the process. After a conversation about the borrower’s goals, we issue a pre-qualification with the six top lenders that best fit the borrower’s needs.
This combination of technology and service together enable us to provide borrowers access to all the choices, but simplify the process, cut through the complexity of lenders and products, so borrowers get the right lender and the right product to meet their needs – quickly and efficiently.
Delivering a better experience for lenders
Borrowers are not our only customers. As an essential part of the commercial real estate ecosystem, lenders are an important user group for our platform as well. And the status quo for them is about as abysmal as it is for borrowers. The quality and consistency of the loans they’re getting often leaves a lot to be desired and they end up investing a lot of effort working leads that don’t end up fitting, in order to catch the one that will.
So the other side of the CommLoan platform is a database of loan products and lending guidelines. We’re beta testing in Arizona and California and have about 350 lenders on the platform representing about 25,000 loan products. Through a secure portal, lenders can update their loan product offerings and lending guidelines. Rates are automatically kept up-to-date in real time with algorithms that ping the various indices. Because our system matches the borrower’s criteria with the lender’s guidelines and products – considering 30 key underwriting variables – when we make a match, we know it’s a fit.
As is the case for borrowers, lenders don’t have to worry about using email or fax or third-party services to send documents. We fully process the loan within our platform, with access to the portal for borrowers and lenders, so the process is efficient and secure. At the end of the day, lenders get the best possible borrowers with the least amount of effort.
Delivering a better experience for originators
The third key user group that we’ve built the platform to serve is loan originators, who deliver the concierge service to our borrowers.
Facing a Blockbuster moment, it will be the originators who ride the wave of disruption (rather than try to block it) who end up on top. Already, the most successful originators are those who deliver the best experience to their borrowers. That will continue to be true but it will only get harder to do without a technology platform that enables originators to provide borrowers more options, and better options, more quickly.
That’s one of the reasons our growth strategy includes hiring loan originators around the country.
In addition to enabling a better borrower experience, a technology platform makes the entire loan process more efficient, so loan originators can invest less time processing loans and more time developing relationships. As just one example, leveraging our powerful search engine to draw from the database of lenders and loan programs enables originators to provide quick and accurate loan quotes to real estate agents and potential borrowers.
With our platform, loan originators can do what they do best – provide high-touch customer service – and let the technology do the rest. They win more business, borrowers get better loans, and lenders avoid wading through applications that don’t fit.
When the focus is on delivering a better user experience – leveraging technology to do so – that’s when everyone wins.
Mitch Ginsberg is co-founder and CEO of CommLoan, the first true commercial real estate lending marketplace, which combines state-of-the-art technology with a concierge service to give borrowers unprecedented access to the capital markets.