The Power of Data, the Beauty of Things
Dhiraj Malkani Explores the Intersection of the Physical and the Digital
Trained as a mechanical engineer, it makes sense that Dhiraj Malkani emphasizes the importance of things—the real, the physical. But after interacting with tangibles for seven years in product development, the realm of the digital beckoned. “I got the startup bug,” he says, explaining why he joined Boston University’s Photonics Incubator, where he helped faculty members build startups. But he still felt the pull of things—call it gravity.
At Rockport Capital, Dhiraj has found the perfect balance, helping companies bring the physical into the digital domain. Six years ago, he and his colleagues at Rockport put together a thesis predicting that the low cost of mobile technology and hardware would soon bring physical assets into the digital world. So when he discovered Honest Buildings in 2012, it seemed like a natural fit.
“Big data is great, but you need to do something with it,” Dhiraj says. “Platforms that contextualize data are in great demand.”
Meeting Riggs and seeing his ambitions for disrupting the real estate industry sealed the deal and made Honest Buildings one of the only companies Rockport has invested in after one meeting. “You invest in people more often than not,” Dhiraj says, emphasizing that a clearly articulated vision and bold ideas are essential to entrepreneurs. “Are they really going to transform an industry, or make an incremental change?…We were excited about his vision to change a large industry that hasn’t adopted technology as much as it should.”
As Dhiraj sees it, the real estate industry has been slow to jump on the digital bandwagon because, frankly, they haven’t had to. “Why fix what isn’t broken? It’s the number one rule of business,” he explains. Add to that the enormous amount of capital at stake, and you get a highly risk-averse industry. But there’s change afoot, change that mean enormous possibilities for companies like Honest Buildings.
In addition to the injection of younger people, the real estate industry is feeling the shifting sentiments of a market seeking sustainable technologies, convenience, and transparency, all of which intensify the need to move online. Still, Dhiraj says changing the industry “is like turning a battleship around—it’s not going to happen overnight.”
But fierce competition makes the eventual change inevitable. Every piecemeal component of the real estate market is going to have to come online, he says, “or HB will eat their lunch.”
Honest Buildings was Dhiraj’s first investment in the real estate sector, and he got on board early. When he invested in June of 2012, HB had only four employees, and worked out of a tech incubator. “When I came to do due diligence back then, the four of them were in a little corner,” he laughs. “We had to take more chairs than they’d reserved.”
Seeing how HB has grown in the 18 months since has reinforced his belief in the company. HB’s most valuable asset, in his eyes, is the robust network it’s created, the first step in making the (literally) concrete digital.
But the next step is clear and looming: HB’s challenge, Dhiraj says, will be to get people to start transacting on the site. This requires understanding people’s motivations for joining the network, and providing the services and experience that lead to action. “’Build it and they’ll come’ does not apply here,” he says. HB is the first real network in the real estate space, the first to try to break the code on transactions at a high volume, transactions that are still largely offline. “It’s a daunting task,” he laughs, “but an exciting task.”
And a task Dhiraj believes HB is up to. He sees the non-startup backgrounds of many HB team members as a tremendous asset, emphasizing that it’s the passion that matters, that will find a way to climb over the walls that pop up: “More experienced startup people will see the walls up ahead and say ‘No, we can’t do that.’”
Not that Honest Buildings will be alone in scaling those walls. Dhiraj envisions 2014 as the year when the Internet of Things really takes off, when everything moves online. “Everything we touch will be able to communicate with us. Everything will be digitized and connected,” he says. “The interaction of all those things can improve our quality of life.”
The trouble with this connectedness is the glut of data it creates. “Big data is great, but you need to do something with it. Platforms that contextualize data are in great demand,” Dhiraj says. HB is one of these platforms. With an abundance of information within its pages, the data is there, and the tools to contextualize that data are good and getting better. The physical is becoming digital, and now it’s a matter of bringing the people to this virtual trove of useful information.
“If we can penetrate the market,” he says, “We can really change people’s behavior.”
Dhiraj’s favorite books are the Harry Potter series, and his favorite building the Twin Towers. Those might seem like random facts, but a closer look suggests a more interesting meaning, a through-line in his world outlook. With the Potter series, he says, he’s attracted to “the world of enchantment. The ability to change and never give up.” And with the Twin Towers, his explanation is similarly aspirational: “Those of us who got to be in that building and climb to the top and look out on the world will never forget that incredible feeling of what can be accomplished in a country of meritocracy, what can happen when you put your heart and mind behind something.”
It’s transformation that draws him in, whether in the form of a horcrux or the American dream or the possibilities for reinvention after destruction.
Today, a transformation is happening across the world and across industries—including commercial real estate—as the physical begins to reap the benefits the digital world.
And with support and insight from people like Dhiraj, Honest Buildings is poised to capitalize on this change, to create something powerful, revolutionary, and inspiring—and, of course, transformable.