One of the Best Signs that Commercial Real Estate is Really Gaining Momentum
Just look at the caliber of entrepreneurs entering the space!!!
Thanks to my friend and new event partner Steve Weikel of The MIT Center for Real Estate, I had the pleasure of meeting one of the most impressive young entrepreneurs I have met to date in the commercial real estate tech space. Wen Sang is exactly the type of visionary and innovator that will take this young sector to the next level.
MIT...Obsessed with solving big societal challenges...Y Combinator...I think you get the picture. What I love about Wen and his team, is that they are thinking big. Like really big. And when you talk to him you don't get any sense of fear or apprehension. They have big plans and big ambition.
Exactly the type of Founder we need in commercial real estate tech. Here are the excerpts from our conversation:
Michael Beckerman: What is your background?
WS: I’m an automotive engineer turned entrepreneur, a hustler, an analytical thinker, and an optimist. I was born and raised in China and came to the States in 2010. The enlightenment of Smarking came to me while I was working toward my PhD at MIT. I’m extremely passionate about hassle free parking and highly efficient urban mobility. I’m a lover of running, sailing, skiing, and golfing...
MB: What’s the history of Smarking? Who are your co founders and where have you gotten your funding from?
WS: When I got my first car, a little bumpy Saturn, in the summer of 2011, I was so excited and started driving around, feeling my American Dream was coming true. Not too long, I found myself struggling finding a parking space in Cambridge and Boston. I looked into the problem and found it both socially and economically significant - near 30% of the urban area traffic can be caused by parking searching! I also found that while building consumer mobile apps may be one part of the solution, solving the management problems for the people who own and manage parking assets is more fundamental.
Back of envelope estimation told me there's something big, and I started exploring the opportunity with a group of MIT friends in the summer of 2012. One of them, later on, became my co-founder, Maokai Lin, an MIT PhD in Applied Math / Operations Research, also the Champion of MIT Poker Bot Competition, a genius data scientist and full-stack software developer.
I committed to Smarking for full time in Feb 2014, and we built the 1st version product that summer at MIT. We then got funded by Y Combinator (the incubator nurtured both Airbnb and Dropbox), and moved from Boston to Silicon Valley in Jan 2015. We raised the first round of funding after YC from a group of top venture investors, including Khosla Ventures (investor to DoorDash, Instacart, Square, Stripe, Zocdoc... ), Slow Ventures (investor to AngelList, Postmates, Evernote, Nest, Slack ...), Greg Brockman (Co-founder of OpenAI, former CTO of Stripe), and many others. We continue to grow in San Francisco since then, and now we are working with clients all over the country and even in Canada.
MB: Who are your customers and what do you do for them?
WS: Entities who own / manage parking assets and want to enable the next level business results would hire Smarking, e.g. Boston Properties, Brookfield Properties, Unico Properties, City of Miami, Boston Logan International Airport, and many others. People use Smarking to increase revenue, reduce cost, elevate customer satisfaction, and differentiate competitive advantages for their parking assets, leveraging edge-leading data analytics, business intelligence, and yield management technologies. Here are some real stories: https://www.smarking.com/testimonials.
MB: What does the site/product do?
WS: Smarking extracts historical and real time transaction level data from any parking payment, access control, and sensor equipments and devices and crunches them into high level business insights that are crafted for the parking industry. It also provides them to real estate and parking professionals in a centralized and visually pleasant manner, to enable NOI improvement via inventory reallocation, pricing & staffing optimization, and proactive customer satisfaction activities. Here's a 2 min video.
MB: How do you see Driverless/autonomous cars impacting the future of the real estate industry?
- Development: the infrastructure will need to change, i.e. more design thinking on the connectivity between vehicle and infrastructures rather than only focus on human-infra interactions. For example, there will be increasing needs for electric car charging (most autonomous cars are built on EV platforms so far). When it comes to access control, payment and navigation/guidance, the interactions will be increasingly more for vehicles and less for human beings. Much less space may be needed for the car to park/store by itself without a human in it. Very likely the car could standby in a much further location than today when it's autonomous. There may be a fine line between land expense and cost of time/energy/traffic resources. Zoning regulations for how much space is for human and how much is for vehicles may change drastically, as in urban-core areas we may be able to shift more space for human and in outskirts we may need to build more vehicle spaces, or enable much efficient utilization of it…
- Management: there will be more needs from vehicles (comparing with human) than before in many aspects like security, communication, and hospitality due to new scenarios, e.g. unmanned logistics/delivery, autonomous parking guidance, pick up & drop off coordination
- Investment: the autonomous driving technologies could potentially further expand the radius of human activity circles in metropolitan areas and this may offer a lot more exciting investment opportunities in future. On the other hand, given that most of the time the urban parking land use is of low efficiency (in most of the cases oversupplied although we constantly circle around for parking - likely it's an information transparency problem, not a supply problem), there will be significant landscape changes to convert parking space (possibly mostly surface lots and also part of the overbuilt garage spaces) into commercial and residential space, as well as to convert curbside spaces into bike/bus/autonomous-driving lanes and all such changes bring both potential risks and exciting investment opportunities.
MB: When do you see Driverless/Autonomous cars becoming a reality? Where do you think it will happen first? What cities are really embracing this technology?
WS: I expect the change to happen rather gradually from different aspects than as an abrupt event overnight. Technology wise, different companies / manufacturers claimed to have level 4 autonomous cars on the road from 2018 to 2022. Business wise, even if we switch ALL the newly sold cars today to autonomous cars, it still takes ~ 15 years for half of the cars owned in the US become autonomous (assuming annual refresh rate stays at ~5-6%) - one of Goldman Saches' model estimated that by 2050 roughly more than 50% of cars may be autonomous - that probably makes sense. The legislation, regulation, insurance, and many other affiliated areas will most likely change overtime following such pace and most likely a little behind.
Regarding the application scenarios, it seems highway trucking, highway commuting and pre-routed rideshare in urban areas are most targeted.
The cities I hear the most are with on-going autonomous driving tests include San Francisco, Boston, and Pittsburgh and there may be many others out there already in the embracing mode.
MB: Do you think that for your generation, owning a car will become very rare?
WS: Majority of my friends and myself own a car today. Looking forward, it is actually possible that car ownership may boom again, imagining if owning an autonomous car could give you 10X better experience than a conventional car today (for both using and keeping it) at similar costs. There's no doubt that rideshare can be more and more popular, however, very likely people would choose customized autonomous ride experience with their own car over rideshare and then over public transit, if the cost (of money, time, and hassle) is on par. At the end of the day, we all just want better experience and cheaper options getting from point A to point B.
MB: If someone owns a parking facility now or has large parking assets as part of their development portfolio, what should they be thinking about now and how should they being preparing themselves for this coming car revolution?
WS: Parking asset owners should be proactive about staying ahead of the curve. Preparation wise, my two cents:
- Embrace, test, and adopt forward thinking technology solutions, but be very customer needs oriented. It is only possible to stay tuned with the newest by trying and it is extremely important to focus on the actual customer needs instead of spending time on flashy projects at the same time.
- To prepare for the autonomous future, you will need to get digital connectivity for your parking locations first: Can you optimize the parking revenue by pushing dynamic pricing to your locations? Can you get visibility on consumer platforms like navigation apps? Can you get real time insights in the business performance and demand pattern of your parking locations?
- The first step to get connectivity is to employ state-of-the-art technology solutions to start tracking the status of all the parking locations in real time at one place - you can only improve what you measure. Do not ignore the insights from parking data, when it comes to occupancy, turnover rate, monthly/drive up ratio, online transactions etc. all such data enables data-driven management and significantly better investment return potential. This applies to shopping centers, office buildings, hotels, campuses, and any properties with parking.
MB: What’s next for Smarking?
WS: Smarking is committed to be the defecto technology partner for parking assets owners and managers to help them stay ahead of the curve with all the drastic upcoming changes in the urban mobility and real estate market. Next for us, is to work with our clients & partners to show and share with everyone in the real estate and parking world.
About Wen Sang:
Wen Sang is the Founder and CEO of Smarking Inc.(http://www.smarking.net/), a fast growing MIT spin out technology company backed by top investors including Khosla Ventures, Y Combinator, Slow Ventures, and many others that solves the parking problem with data analytics. Wen is an MIT PhD 14' in Mechanical Engineering. His major curriculum concentrated on thermo-fluid sciences and energy conversion systems, and minor on economics and entrepreneurship. Wen Sang led and founded the MIT Asian Career Fair (http://asiancareerfair.mit.edu/) and co-founded the MIT Ventureships Club (http://ventureships.mit.edu) during his three years at MIT. Wen loves running, sailing (MIT Sailing Club), and rowing (MIT Rowing Club).