AMA - How Much Innovation Is Too Much?

The Real Estate Espresso Podcast

AMA – How Much Innovation Is Too Much?

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AMA – How Much Innovation Is Too Much?

Welcome to the Real Estate Espresso podcast, your morning shot of what’s new in the world of real estate investing. I’m your host, Victor Menasce. Today is another AMA episode, which stands for ‘Ask Me Anything’. I appreciate your questions and, if you have a question you think will be of broad interest, send it in and I’ll answer it live on air. Send your questions to victor at victorjm.com.

Today’s question comes from Robert, who asks, “How do you know when you’re pushing innovation too far and you’re outrunning the marketplace demand?” Well, Robert, this is a terrific question.

To develop a product, one can go below or beyond the average, often referred to as the bleeding edge, especially in the technology industry. New startups are famed for inventing new products, sometimes without considering whether there is a demand for said product. This, and several other reasons, can cause them to fail. Hence, the high failure rate isn’t merely due to lack of innovation, but rather because they fail to consider the marketplace for their product.

Unlike technology startups, innovations in real estate investment shouldn’t necessarily be about testing unknown territories, but about offering practical value. Indeed, we can create new amenities and products, but it’s best to restrict the unknown variables to avoid high risk.

If you, for example, were to innovate by adding an electric vehicle charger as an amenity, you’d have to consider the uncertainty in the business model. One considerable element you have to think about is the future of EV battery technology, as it could be a major game-changer for real estate.

When considering new designs, be cautious not to jeopardize the entire project due to a new and untested design. It’s possible to innovate without unnecessarily gambling too much. To verify how well your innovation is received, conduct market tests by asking local residents for their opinion.

Thanks to Robert for the great question, and for the listeners at home, let’s make some incredible things happen. We’ll talk again tomorrow.

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