If You Tweet It, They Will Come
Mayor Francis Suarez's Twitter-fueled approach to building Miami and what it could mean for real estate operators
Hello, fellow people who have heard more about Miami in the past month than they have in their whole lives…
Recently, I’ve been eager to share my thoughts on technology disrupting real estate and cities. My vantage point comes from my prior experience at WeWork and my current work at VTS— two companies on the cutting edge of this change (despite what the average person’s perspective is about WeWork).
Inspired by the brilliant Dror Poleg’s equally brilliant book, Rethinking Real Estate, I decided to flesh out my thoughts on the future of an industry on the verge of tectonic change.
To start, let’s talk about Miami and Mayor Suarez’s strategy to grow his city.
If You Tweet it, They Will Come
Over the past month, my Twitter feed morphed from a few stray tweets discussing moving to Miami into a feed seemingly geolocated within the confines of Hard Rock Stadium or Art Basel. CEO’s, VC’s, and investors (mostly located in San Francisco) declared Miami on the verge of a renaissance.
At some point, Mayor Francis Suarez joined the fray and the dialogue shifted from Miami hype-beast tweets to a genuine discussion about the future of the city.
Naturally, the tactic of publicly recruiting residents sparked opinionated reactions from the Twitterati. I’m less interested in the back and forth about the hardly novel movement of wealthy people to south Florida and more intrigued by the power of Mayor Suarez’s guerilla approach.
In the same way that a company equals the sum of its people and hiring capabilities, a city equals the sum of its citizens and ability to attract more of them. A key question for a mayor to answer is “How can I attract great people to move to my city?” What’s interesting about Mayor Suarez’s approach, is that he’s capitalizing on a key component of Twitter—the tendency of its users to form enduring echo chambers. Often, this feature of Twitter produces negative outcomes (especially in politics). However, Twitter’s ability to create groups of like-minded thinkers can lead to incredibly powerful positive outcomes. The free exchange of ideas empowers people to deepen their knowledge a topic and to observe others debate the merits of an idea, company, person, or even a city. Mayor Suarez’s wooing of VC’s, CEO’s, and tech leaders created a public-facing dialogue around the future of tech in Miami, and the value of moving there. The discussion itself acts as a recruiting tool for other leaders, making the move to Miami seem comfortable and logical.
Detractors point to the makeup of the group having this discussion, wondering “Why do I care where Keith Rabois decides to live?” While that’s certainly a valid question, there’s value to start by selling the benefits of Miami at the top of the food chain. The approach taken by Mayor Suarez mirrors an enterprise sales concept popularized in the novel, “Selling Above and Below the Line” , by William “Skip” Miller:
“Above the line executive buyers focus on past problems (rectifying challenges) & future business outcomes (investing in opportunities). They should be engaged as early as possible in the sale, and are often members of the C Suite (leaders).”
Their goals center on:
Advancing their “trains” through leverage— building value across multiple projects
Saving time
Lowering risk
Generating Robust ROI
Building competitive advantage incl. brand/image
In enterprise sales, the product’s features and value need to resonate with the majority of its day-to-day users. Such users are typically “below the line” employees, comprised of entry level employees up through mid-senior management. However, the “economic buyer”, aka the purchasers of the product, are typically C Suite executives. These execs hold the power to not only make the purchasing decision, but to implement the process and incentives needed to ensure successful adoption. The earlier management buy-in is secured, the higher the likelihood of a successful sale. Mayor Suarez’s approach mirrors this enterprise sales approach. He’s aligning the incentives of Miami as a city to these “above the line” folks, who have their own incentives for becoming the Uncle Lou of tech. They view Miami as a solution to rectify past problems (San Francisco government) and conjure future business outcomes/ROI (building a tech ecosystem from scratch). Their brand/image already constitutes a competitive advantage, but the allure of being seen as an originator/accelerator within the Miami tech scene has valuable advantages down the line.
So what do the everyday “below the line” people of Miami get out of this? They receive something similar to what “below the line” employees get from products—better features that improve their day-to-day lives. In the case of Miami, the obvious benefit to “below the line” residents will be jobs. The more investors and companies flock to Miami, the better chance a 25-year- old Miami resident has to get a high paying job. Better paying jobs attract more young ambitious people, and the city offering those jobs begins to grow as the network effect takes hold. Some younger folks already made that bet:
Now, most of the cities in the above chart have two things in common: relatively low taxes (0% inc tax in Miami’s case) and warm weather. I’m not suggesting that your average person scours Twitter to discover which city may be on the cusp and moves there, but cities featuring the convergence of warm weather, low taxes, and a growing tech ecosystem will be growth centers over the next decade. The other benefit for current residents—staving off tax increases due to budget shortfalls from Covid.
Growing your city creates jobs, which then lowers the need to increase taxes on current citizens. Taking advantage of 365 days of warm weather and relatively lower taxes helps recruit additional workers, increasing the pie for everyone in the city.
So what does this mean for the real estate industry? Well before we dig into the positives, it’s important we address the elephant in the room. Miami finds themselves in a precarious position due to climate change as a city. Scientific American declared Miami the “Most Vulnerable Coastal City Worldwide”, and anyone weighing investing in real estate should gauge the risk that it ends up floating away. Still, investors should pay attention to this Miami momentum. Some clearly have:
Extrapolating investment ideas from Twitter sentiment may seem crazy to some, but Keith and Sheel likely will get ahead of data pointing to Miami’s growth that investors will see in later in 2021. In general, real estate operates on lagging indicators, especially when it comes to demand data (Shameless plug: VTS solves for part of this, check out VODI). Information channels in real estate often involve anecdotes from brokers and quarterly reports that become immediately outdated upon receipt. Relevant data flows slowly and if you wait until the data points in a conclusive direction, you’re going to miss out on the best deals. Now, I’m not suggesting real estate operators should camp out on Twitter all day looking for ideas, I’m just pointing out that user-driven tools can be leveraged to understand a rapidly changing world before the change even crests. Real estate leaders simply need to get creative.
An even bigger shift is occurring when it comes to tech’s effect on real estate. Technology breaks down barriers and allows for a mayor to communicate directly with the world about the value of his or her city. The communication feels authentic and gives an organizational leader the ability to converse 1 on 1 with the people they serve. While most companies obsess over methods of communicating with their end users, real estate firms often lag behind in understanding and conversing with the occupiers of their buildings.
While most real estate companies are still adjusting to this new world, is there an example of a firm getting ahead of the curve? Maybe one that’s building in Miami? Yes: Common- who is set to open a 271 unit ground up development in Coconut Grove, Miami in 2021. In the announcement for their recent $50M funding round, CEO Brad Hargreaves outlined a couple key decisions Common made:
“In the early days of Common, we made an important choice to build a full-stack residential management platform that encompassed operating, leasing, design, and capital markets, rather than just an app. Building a full-stack management platform wasn’t an easy choice, but we saw that the entire residential operating system of property management and leasing was fundamentally broken, and fixing it would require replacing the entire system rather than putting a software patch on top.”
By building a full stack residential management platform, Common deeply understands each persona in their ecosystem and how to better serve them. Brad explains that point further below:
“Using data to build better homes. Common is unique in that we are an integrated residential designer and manager — two functions that are typically segregated with minimal overlap or feedback. By integrating design and management into one company, we are able to seamlessly incorporate learnings and data from our existing portfolio into future homes. While some insights are exciting (“What amenity spaces get the most use, and when?”) the mundane ones (“How many gallons of hot water does a coliving tenant use?”) are just as impactful.”
That granular detail about users represents an enduring competitive advantage for Common, as each project they complete provides them with more data to leverage. Part of understanding your customers revolves around the data you collect from engagements with them. Another key component is how you then communicate and empathize with their needs. Common built a data flywheel to constantly improve the experience for their users. Mayor Suarez built his communication approach on earnestness, authenticity, and a public forum that provides awareness to those he can’t speak with 1-on-1. Both of these methods work and represent the power that technology has as a medium to communicate with customers. In essence, Common and Mayor Suarez both use technology to show they care about improving the lives of their customers. The lesson for real estate operators should be: use tech as a tool to improve the lives of the people inside your buildings.
Covid spurred disruption in our way of life while making room for creative approaches to build a better way forward. Real estate leaders have focused on what this means for office space at a macro level, but that’s only part of the story here. Technology allows for change to occur quickly, and those that harness its power will succeed more quickly too. Whether you use technology to understand your customers (Common) or communicate with them (Mayor Suarez), real estate operators and city leaders should continue to push boundaries.
I just hope the next mayor of NYC pays attention to how to speak to New Yorkers on Twitter:
Cheers,
Evan