The wave of tech disruption has been picking off industries one after the other since the early 70’s. Until today when it’s hard to think of any remaining sector of the economy that hasn’t gone through, or is in the process of being converted into a software driven market.
The current biggest industry that is seeing major disruption is automotive and energy with Tesla taking the lead on a major shakeup to how cars work, and eventually with how the energy grid functions. This sector was a long time hold out due to the cost and dedication required to create a successful new car company. Should Tesla’s strategy play out they could find themselves with a global automotive monopoly on an $8T market.
There is, however, an even bigger market that has not really been touched by technology discruption yet. It is long overdue for modernization and a shift towards software driven margins. Productivity in this sector has been essentially unchanged since the 50’s.
Construction, and Housing is the biggest untapped market yet to be infiltrated by a technology company.
Amazon is a technology company that sells books, Tesla is a technology company that makes cars and somewhere out there is an entrepreneur who will start a technology company that happens to build houses.
What does a technology housing company look like?
It will re-evaluate housing from first-principals – what is the ideal wall assembly? could you build a house with vacuum double-walled insulated panels? Would people buy a ‘branded’ home with a badge on the front? Could you provide home insurance as a service, have fully integrated smart electrical panel? an integrated thermal management system of heat pumps that moves heat from the freezer/fridge to the hot water tank? Could you change the perception of a home to be a computer you live in? Would it be possible to work with every jurisdiction to have these homes pre-approved for building inspections? biohazard protection level air quality filters, integrated security systems, off-grid by default?
The ultimate house would be built to a tolerance of micrometers, and be produced at a rate of 100’s per day. It would be termite proof and impregnable to insects or rodents, the exterior would be zero maintenance.
It would also be a general housing platform that, like Tesla, uses software to unlock the features you pay for so that manufacturing can be streamlined to fewer SKUs.
Many of the existing problems with houses can be delt with – house insurance is expensive because a flood or fire can result in massive remediation costs. To counteract this, the builder should provide the insurance policy to the home owner – all claims are dealt with by the builder which provides the feedback loop to inform design decisions that improve future houses.
The real differentiating factor though is going to be having a house that is software upgradeable and gets better every month with upgrades. If you could re-imagine a house as a software platform what kind of things would it do (that you don’t get with smart but dumb “smart home” systems)? perhaps a home that can play hide and seek with you, maybe it can find your lost stuff, talk to you in the room you’re in, lock all doors in the house, identify and trap intruders. maybe it would not require manual light switches, and it would auto-open doors for you. video and audio calls could follow you room to room. A smart home that makes being at home fun and social, or relaxing and serene with a single command. A house with a fart app.
There is the need out there for order of magnitude better homes than what is currently constructed. Nobody has invented it yet. And to the company that creates the first computer you live in, they will have the chance at dominating a $13T market.