Matt Kuperholz is no stranger to all types of data. As PwC’s Chief Data Scientist, he was recently honoured by Malcolm Turnbull and the Australian Chief Scientist as one of 100 knowledge workers shaping the new economy. Matt was formally trained in actuarial science and computer science, and has since honed and expanded his technical skills in these fields with over 20 years of consulting to top-tier companies, making him an expert in planning, executing and communicating results of advanced data analytics. As part of this project, Samantha McLean spoke to Kuperholz to get his thoughts on how he sees the real estate industry shaping up to take insights from data created in and outside the industry.
First up, it’s probably not a good idea to say ‘big data’ too often with someone like Matt Kuperholz, who believes the term doesn’t demonstrate the true value that data can bring. “I think data has always been increasing in its volume and variety and velocity, [parts of] the traditional definition [of big data]. I think we’ve been on that curve for some time. However, we are in a remarkably different place today, with almost all industries realising that data can help them do better business. With data and analytics we get that mythical win-win, where you’ve got happier customers and more efficient and profitable companies. Or you’ve got safer and more content employees at the same time as running a business more efficiently.”
The ‘knowledge economy’ is one where Kuperholz says there is a win-win through analysis of data. “I see data as an asset. [And] it’s an interesting asset class
because, unlike traditional asset classes where you can say, ‘this is the value of my work in progress,’ or, ‘this is the value of my stock on hand, or cash at bank,’ what is the value of your data?
“As a currency and an asset – an absolutely fascinating topic – what happens when you bring data together and suddenly the whole is greater than the sum of the parts, the insights that data can release? Every [other asset] we’re mining, we’re running out of. Data we’re making more of all the time.”
CREATING VALUE IN THE KNOWLEDGE ECONOMY INCREASING VALUE AND TRUST
I ask Kuperholz about his role at PwC, and how this fits into the concept of Australia’s knowledge economy. “We think we can help build trust [through data] because we are creating additional value that wasn’t there before. For example, enormous amounts of data are now recorded on social media which expose people’s emotional states, what they like, what they are into, what life stage they are at, and that is incredibly valuable.” This data is combined with other client data plus other data to solve important problems, and to distribute additional value that wasn’t there before.”
For the real estate industry, Kuperholz uses Facebook as an example. “If I’m going to get a targeted advertisement in my Facebook feed, how good is that advertisement about the fact that I am looking for a house [if I am]? [And then even better if] it alerts me to a property that I hadn’t come across which is totally in line with what I’m looking for. Now that’s a great advertising spend of the vendor’s advertising budget.”
How does this increase value and trust when some users would consider it kind of creepy? “It’s a fantastic experience for me,” answers Kuperholz, “because if I want to use a free service like Facebook I’ve got to look at ads. So if those ads are targeted based on information you know about me, it does, I suppose raise interesting questions around privacy and general ‘creepiness’. However, I know from personal experience when [I’d been] looking for the perfect house for a long time recently, when the perfect one fell into my lap it was an incredibly exciting moment. So technology and data could have helped that happen sooner; everybody benefits.”
And mostly data is de-identified through aggregation so we are talking about data that is alike, not exact. “If I can aggregate the data to a point where
I’m not talking about Matt Kuperholz, I’m talking about people like Matt Kuperholz, I’m not using personally identifiable information.”
And then there are convenience aspects which might actually work for the consumer. “[In the future] some people may want to opt into a robo-advisor that will clear up their Saturdays or get them to the right houses at the right time or give them a much fairer estimate of what the deposit cheque they need to write.
“All of these things are useful services that people might actually say, ‘Well, I’d like that.’ In fact, [in] some industries you might even be saying, ‘Do you want to pay for this? Your time is worth money to you.’ It’s almost like paying for a human advocate at an auction.”
And then there are the (possibly) more left-field uses of data outside the real estate that create solutions for the industry. “I worked with a startup in the States that’s combining the real estate marketing and aligning it with Airbnb – because there is actually a new investment class in America where you’re investing in properties specifically to ‘Airbnb them’. You’re happy with a lot more vacancies because you’re getting a higher rate when you have people for a very short term. Their data-mining solution is combining these sources of micro-economic data with Airbnb, specifically to advise investors of where to buy property.”
THE QUESTION OF OWNERSHIP
As it’s always a hot topic, I mention some of the takeaways from the round table, mainly to do with concerns about who owns the data that a real estate agent creates. Kuperholz believes this is a bigger question than just for real estate or marketing. “What right do you have to the economic value in the data that you create and the economic value that other people derive from it? I think people, when presented with something that they value, are quicker to disregard intrusions into perceived privacy than when you don’t offer them something of value. Does that make sense?”
Kuperholz gives a bigger-picture view, citing the example of how Government might be able to use data. “What if we were able to solve a big problem by government and build a better, safer Australia for all of us to live in, with less family violence and more personal freedom and liberties? Philosophically,
if people got over the barriers of sharing data, we would have more value for everyone to share.”
Again, as it may apply to the real estate industry Kuperholz brings it back to derived value. “What’s the incentive structure? If I rent a system from a franchise owner that’s going to make it easier to share data, and go through cleaning data and getting better data, what’s in it for me? Or what’s in it for me to enter the data correctly in the first place as a user of the system? They have got to look at incentive structures that encourage certain types of behaviour, ultimately for the survival of the franchise or group.”
DATA THAT CREATES EFFECTIVE MARKETPLACES
What happens next in the industry, says Kuperholz, is really about effective marketplaces. This is where other industries are headed – where buyers and sellers are brought together using the least amount of resources for a deal that feels right for everyone. “Yesterday, I met with Alibaba who run a $3 trillion marketplace. They’re all about making it easier for people to buy and sell. They do that through technology. Netflix – selling rental videos – [are] one of the early, case studies of targeted marketing. ‘If you like this movie you might also like this one.’”
But if data is to create a more efficient marketplace it may mean that technology will replace jobs. Kuperholz says that the answer is that the industry needs to innovate to survive, but it’s not all bad news. “If you look back to the industrial revolution, or the original machine revolution, a lot of people lost their jobs. They were sewing stuff by hand, when it could now be done by machine. But all these new jobs were created. People had to design, build and maintain the machines. So the industry is going to change shape, but someone who understands the dynamics of the industry is going to be able, if they’re agile, to create a whole new set of jobs.”