Dave Marcinkowski is a Founder/Partner in Madera Residential and Quext, focused on creating smarter, healthier apartment communities. 

There’s a problem inside the multifamily industry. I’m not the first person to point it out, but I will join the chorus of people speaking out about it. That problem is cliquish behavior.

If this was about everyone joining together to push the industry forward, that would be one thing. But that’s not what it’s about. Instead, it focuses on companies, either by choice or by default, tying their organization to a specific third-party vendor and only using that specific vendor or those vendors associated with them. This leaves the industry stagnant, without any push for innovation. That’s a problem. Once any organization joins a clique, that group essentially dictates how that organization is run.

While staying with one clique may seem like the best — or, in many cases, the only — decision, it can adversely affect your company and your ability to effectively run your properties and, ultimately, your ability to innovate. Here’s why.

The Data Problem

The issue has several causes, but it’s rooted in data and access to it. One problem is most of the data in the multifamily industry are siloed with a handful of prominent vendors, and those vendors control the data’s distribution.

First, those vendors make it prohibitively expensive to access that data. For example, if an innovative startup has an idea that requires integration, it must pay a hefty annual sum — $25,000 or more in some instances — to each vendor annually to be able to integrate with their database. For smaller companies, which are often where some of the most industry-advancing innovation comes from, these figures often mean the organizations can’t integrate with more than one of the major vendors. That’s joining a clique by default.

Additionally, even with the high cost, vendors are only offering limited access to their datasets. For example, they may share basic data like the resident’s name or address but not provide that resident’s more meaningful data, like their lease term, rental rate and other charges, credit score or payment history. This is information that could help improve a new offering’s products, but by withholding this information, the large vendors are stifling innovation.

Innovation Or Extinction?

So how do we lessen the impact of these cliques? By changing a few mindsets. First, we need to focus on creating true integrations between our management technologies. And that may mean forming an open collective that will not only revolutionize the space but encourage integration.

More prominent companies must acknowledge that they have to work inexpensively and collaborate with everybody else in the space, or it’s the customer who ultimately suffers. And if the customer is suffering then all these existing cliques run the risk of becoming extinct. Eventually, someone will come along who does not fear innovation but, instead, embraces it. This group will collaborate with other companies to create products that provide customers with the solutions they want. These synergies will provide the technology — and data — needed to make better management decisions to optimize our property performance.

That’s where the danger lies for the large fraternities or cliques of today. They must accept this new mindset and completely reinvent themselves, or, I would argue, risk being a dinosaur.

Can You Trust Your Group To Innovate?

Moore’s law essentially states that technology is doubling every two years. I would argue that in the multifamily industry it is more like once every decade. And I would also argue this is due to the few massive platforms dominating our industry. Let me ask you a question: Do you trust your vendor to tackle VR/AR, IoT, blockchain, cryptocurrency, remote work and the list of new technologies that goes on and on? All other industries are seemingly at the forefront of these new, developing technologies, while we just wish our residents could apply for, lease and completely onboard an apartment from their computer.

The Resident Is Always Right

Another crucial mindset change we need to embrace is making resident satisfaction the No. 1 priority. Residents are demanding that interactions be easy and convenient. Properties often put surveys in the field to find out what their residents and potential residents want. One thing we hear repeatedly is the request for an all-in-one leasing solution. Residents want the ability to view their future apartment, complete the application process and gain access to their unit from one online location.

So, if that’s what we keep hearing, why is nobody offering it?

Some companies claim to have a solution that meets this need, but what they really have is a minimum viable product that isn’t actually viable. And the reason it’s not viable is that cliques don’t play well with all the different vendors and products that go into the leasing process. Operators know leasing an apartment goes way beyond data collection, approval processes and e-signatures. Wouldn’t it be nice if a resident could completely onboard and get access to their apartment through a smart lock without ever coming into the office? Why don’t we have a marketplace for residents to select their utility provider, moving company, banking and financial service solution, furniture, etc.? This marketplace would give the resident what they want and need while also creating a revenue stream for the property owner.

Breaking Free

The multifamily industry cannot move forward unless we change our mindsets and rid ourselves of cliques. We can’t continue down a path of restrictive access to data and ignoring basic resident needs. Everyone is in a position to become a dinosaur, but we can foster an environment of true innovation with just a few simple changes. Suppose we focus on collaboration, low-cost integration and creating products that keep pace with new technology and are based on what our residents desire. If we did that, we would create a stable industry that allows every company, big or small, to thrive.


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