Innovative Business Models Within the Swedish Proptech Sector
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Innovative Business Models within the Swedish Proptech Sector David Lazarevic and Seif Saleh Master of Science Thesis Title Innovative Business Models within the Swedish Proptech sector Authors David Lazarevic and Seif Saleh Department Real Estate and Construction Management Master Thesis numBer TRITA-ABE-MBT-19192 Supervisor Cecilia Hermansson Keywords Business Models, Business Model Innovation, Proptech, Disruptive Innovation Abstract The technological changes and digitalization are on the rise within the real estate market as new innovations are being developed and is within the real estate market known as proptech. However, the real estate sector is known to be slow in adapting to new innovative changes and therefore, been slow in developing the real estate market which has led to lagging behind in creating new solutions. The purpose of this research is to examine the current proptech sector in regards of existing business models and business model innovations. The proptech sector is in parts divided into real estate fintech and smart Buildings, where this study will explore how these innovative business models can be established within the Swedish property sector and what is needed in order for this to be achieved. The research is of the qualitative method and is conducted through semi-structured interviews with four participants in each of the proptech sectors. This research also evaluates the theory of disruptive innovation and how the business models relates to the theory. The findings of the research are the business models of the companies identified and interviewed. The concepts and the business models presented, are following structures from previous research on business model, where each defined aspect of their business model is presented. The findings represent the answer and a small portion of what business models that exist within the Swedish proptech-sector today. The findings are thematically analyzed, enabling answering and drawing conclusion on the research question. The conclusion is that the key factors of the establishment of a business model is based on having a product that provides a solution to an existing problem and creating a demand. There also has to be a receptive market for the possibility of establishment. Future research suggests that a research on the process of business model innovation within incumbents of the property sector is a highly relevant research field, lacking previous research. Acknowledgements This master thesis of 30 credits was conducted at the Royal Institute of Technology (KTH) at the department of Real Estate and Construction Management during the spring of 2019 as a part of the Master program in Real Estate and Construction Management. Firstly, we would like to thank our supervisor Cecilia Hermansson for helping, guiding and supporting us through this process, which has been of a great asset for our research. We would also like to thanK Kent Eriksson for his guidance and help throughout this process. We would like to thank all who participated in our interviews and provided invaluable data to our research and making this study possible. This study was made available because of you. Finally, we would like to thank all supporting us throughout this process with help, guidance and encouragement. A special thanks to both our families and friends, who have helped us through this education the last five years. You are the true stars of our lives. Thank you. - Stockholm, June 2019 David Lazarevic and Seif Saleh Examensarbete Masternivå Titel Innovativa Affärsmodeller inom den svenska Proptech-seKtorn Författare David Lazarevic och Seif Saleh Avdelning Fastigheter och byggande ExamensarBete Masternivå Nummer TRITA-ABE-MBT-19192 Handledare Cecilia Hermansson NycKelord Affärsmodeller, Affärsmodellsinnovation, Proptech, Disruptiv Innovation Sammanfattning En ständig utveckling i teknologin och en ökade möjligheter för digitalisering, har lett till en ökning av digitala verktyg och lösningar inom fastighetsbranschen, känt som proptech. Fastighetsbranschen däremot, är känd för att vara en traditionell bransch där en långsam anpassning till innovativa och digitala lösningar såsom proptech har gjort att fastighetsbranschen idag hamnat efter i digitaliseringsprocessen. Syftet med denna rapport är att undersöka nuvarande proptech-sektorn och deras affärsmodeller och affärsmodellsinnovation. Rapporten har utefter tidigare studier delat upp proptech i två segment; real estate fintech och smarta byggnader, där denna studie kommer att undersöka etableringsprocessen för innovativa affärsmodeller inom proptech, samt vad som krävs för att lyckas med att etablera sig. Undersökningen är en kvalitativ studie där semi-strukturerade intervjuer ligger till grund för resultaten. Undersökningen bygger även på teorin kring disruptive innovation och hur affärsmodellerna som undersöks förhåller sig till denna. Resultaten i rapporten består dels av de identifierade affärsmodellerna som representerar en del av den befintliga proptech-sektorn i Sverige idag. Företagens affärsmodeller är presenterade utefter tidigare forskning på affärsmodeller och affärsmodellsinnovation, där en klar fördelning av samtliga aspekter av en affärsmodell presenteras. För att möjliggöra ett svar på etableringsprocessen har en tematisk analys genomförts på resultaten. Detta har även möjliggjort en slutsats. Slutsatsen är att nyckelfaktorerna i en etableringsprocess består av en värdeskapande produkt, som skapar ett behov och tillfredsställer en lösning till nuvarande problem inom dess specifika marknad. Ytterligare en nyckelfaktor är en marknad som är mottaglig för att möjliggöra en etableringsprocess. Slutligen föreslås framtida studier inom affärsmodellsinnovations-processen hos etablerade företag inom fastighetsbranschen, det saknas studier inom detta område och det anses vara relevant. Table of content 1. Introduction .......................................................................................................................................... 9 1.1 Background .......................................................................................................................................... 9 1.2 Purpose ............................................................................................................................................... 10 1.3 Research question .............................................................................................................................. 10 1.4 Delimitations ...................................................................................................................................... 10 1.5 Outline ................................................................................................................................................ 11 2 Methodology ....................................................................................................................................... 12 2.1 Exploratory approach ......................................................................................................................... 12 2.2 Data collection ................................................................................................................................... 12 2.2.1 Interviews ...................................................................................................................................... 12 2.2.2 Systematic literature review .......................................................................................................... 13 2.3 Thematic analysis ............................................................................................................................... 14 2.4 Reliability ............................................................................................................................................ 15 2.5 Validity ............................................................................................................................................... 15 2.6 Ethics .................................................................................................................................................. 16 2.7 Uncertainty ......................................................................................................................................... 17 2.8 Contribution ....................................................................................................................................... 17 3 Literature review ................................................................................................................................. 18 3.1 Business models ................................................................................................................................. 18 3.1.1 What is a business model? Definition, history, development ....................................................... 18 3.1.2 The framework and components of BM’s ..................................................................................... 20 3.1.3 How is a business model defined within this study? ..................................................................... 21 3.2 Business Model Innovation ................................................................................................................. 22 3.2.1 What is business model innovation? Definition, history, development ........................................ 22 3.2.2 When and why is BMI important? ................................................................................................