The Pareto principle is an observation that about 80% of outcomes are due to 20% of actors, whether people, processes, events, or other causes. And it's likely that 80% of the benefit from a piece of software comes from 20% of its capabilities. Why care about advanced Microsoft Word formatting choices when all most people need is the remarkable ability of an electronic typewriter that can erase mistakes without the application of correction fluid to a page?
Oversimplified to a degree, yes, but the basic idea is correct. Software becomes overbuilt and over-featured over time for business reasons. The history of the industry is wrapped up with the need for ongoing revenue. Users indefinitely could continue with the license they purchased. Vendors then sold upgrades with new features and eventually stopping support for the earlier versions. Then the industry turned to cloud-hosted systems and an older model of software rental from mainframe days. Want to use the application next year? You paid the annual fee. But to avoid resentment and try to push competition away, the vendors kept adding features.
But the real innovation that people tend to want are new ways to solve problems companies haven't gotten around to. This seems particularly true in commercial real estate, an industry with a reputation of being indifferent if not hostile to technology.
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Maybe the real problem is that they don't see enough 20% applications that can solve 80% headaches. How many more times does someone need to hear about yet a new package to manage communications with tenants or to apply vast amounts of data to the investment decision process? Layering more on the base applications often becomes effectively irrelevant and an excuse to raise prices. GlobeSt.com has heard recently from operators who won't invest in more tech without a tangible pay off.
The future of innovation might be the polar opposite direction of smaller applications that address time-sucking annoyances that may not be so glamorous but are far more practical.
What brought this up was a couple of companies in the construction permitting space that have popped up: Pulley, started in 2021, and PermitFlow, started in 2022.
Pulley wrote GlobeSt.com, "obtaining approval to break ground takes months – often longer than the construction itself – and the process is different across every city in the country. On ground-up commercial projects, every extra month in permitting costs developers half a million dollars. For retailers, permitting issues are the number one cause of missed openings. In aggregate, slow permitting costs owners and developers $50 billion every year and is the leading source of pre-construction delays."
They claim a "database of thousands of local permitting requirements, integrations to monitor permit status in real-time across jurisdictions, and city-specific historical datasets to forecast approval timelines." Currently they operate only in Austin, San Antonio, Dallas-Fort Worth, and Houston in Texas, and then Denver and Boulder in Colorado.
PermitFlow says it supports "multiple municipalities nationwide."
Limitations at this point wouldn't be surprising. These are types of business that would need extensive work in the beginning because — by the nature of localized conditions, services, and information — they aren't easily scaled. However, it's an interesting concept that conceptually could save time and solve smaller but thornier problems.
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