Smartphone ubiquity and the Internet have allowed humans to interact with content in more dynamic ways than traditional books and videos. Those trends, among others, have dramatically impacted the way people learn today and led to an explosion of education technology (“edtech”) startups benefitting from the meaningful increase in digital usage and engagement. Startups that have penetrated traditional K-12 education in the classroom (e.g. Mystery Science, Khan Academy, etc) and other areas of the economy, such as IT (e.g. BetterUp, Torch, WorkRamp etc) enhance how students and employees are taught, trained, and coached.
EdTech may not seem related to PropTech but it is because it addresses the root cause of systemic labor and productivity problems within the built world. It’s well documented that over the last half century the real estate industry has suffered and continues to suffer from a major labor shortage and lack of productivity across the trades. It isn’t the fault of the trades’ work ethic (far from it!), it’s a function of fewer people being exposed to the trades and not having access to the same technology tools that other parts of the economy benefit from. This is a big problem because it spans the entire built world, including everything from institutional-grade construction to single family home services. I’ve written about the multitude of reasons why in the past, so I will discuss a potential solution to solving job growth and productivity improvement: education technology!
Although it’s still early days, the rapid adoption of education technology within the IT enterprise has proven that employee training needs can be met digitally. IT enterprises share many of the same needs and characteristics of real estate enterprises, so it seems plausible to draw parallels between the two and extrapolate the possibility of a green field opportunity for PropTech startups to build learning management systems to meet the unique needs of construction workers and specialty technicians (electricians, roofers, plumbers, etc.).
Traditionally, trades have trained new workers at offsite training centers and through onsite apprenticeships. While those offline models have proven to be effective in the past and will continue to be in the future, they naturally aren’t as scalable as technology alternatives and are potentially contributing to the slow job growth and lack of productivity improvement. As a result, two tailwinds position education technology for potential near term adoption across built world verticals:
- The COVID-19 environment is making it difficult to complete in-person training with large groups of workers in the close confines of offsite training centers
- Millennials, who are more comfortable interacting with online interfaces, are replacing Baby Boomers as they retire and are starting to make up a larger percentage of the workforce.
However, analogous to the enterprise IT market, and maybe even more pronounced in the construction industry, is the skepticism around training. Although many trainings are required by law, particularly around jobsite safety, often times its seen as a means to an end and not taken seriously. Unfortunately, training and compliance frequently take a back seat when an important job needs to get done and a lot of money is on the line. Sure, OSHA compliance training can only be so engaging, but when it comes new skill development, education technology might be able to move the needle through shorter form, video-first digital content that’s more engaging and that can be completed on a smartphone and on a more flexible schedule. This can perhaps help solve the labor shortage by improving the productivity of existing workers by upskilling them and bringing new people, who otherwise might not have entered the trades, to the trades through digitally curated courses. Online courses can potentially help prepare them for the basic skills required prior to an interview too.
Taking it a step further, an integrated, interconnected software platform that links training to performance and subsequent compensation and development could be the missing link. If outcomes can be directly tied back to training, result in expedited career progression for employees, and increased margins for employers, it could provide an incentive needed to change the industry’s perception of training from an “afterthought” to a critical component of workflow process. If education technology helps switch the current perception of training, then I think it unlocks a lot of potential for startups to crack the code.
Although the evolution of Edtech in PropTech is still in its infancy, entrepreneurs are starting to take notice. Greenwork, Interplay Learning, Nana Home, Skillcat, Skillit and Strivr among others, are all exciting startups in the early stages of solving labor productivity and job growth. It will be fun to see how this space continues to evolve in 2021 and beyond. If you have any questions, think I missed anything or are building in this space, please reach out. DMs are open!