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Our objective will be to convert existing financial modelling software into
the premier real estate development software in America. We will do this
first in the way that products are offered today (installed) but very little
will be done that is not relevant to the Microsoft .net strategy whereby
in 5 years nearly all important software will be used via the internet and
not installed on local computers. In 8 years most of our revenue will come
from use fees paid for the use of our software available in real time on the
internet. We already have substantial proprietary software for managing
large websites that is our basis for confidence in this objective, and
that proprietary software may become an additional product.
Management ownership rests primarily with two principals who share similar
software development, management and marketing skills. For convenience,
one devotes himself primarily to marketing and finance while the other
is primarily concerned with product development, but to some extent
their skills are interchangeable.
Several strategies are core ideas in our thinking.
What makes the company different from others
Our basic products were developed over several decades in consultancy
with some of American's most respected developers. The features
of the products cover a very wide range of types of real estate development
projects and they have become very solid through years of use.
We also have an important advantage in that our software development
platform allows us to respond to the special needs of customers very rapidly.
We have two products which depend on our special knowledge of an industry
and which are more powerful than any of our competition in their features.
for development of property where takeout is realized through sales and
for development of income properties.
We also have highly developed capacity for management of websites and this capacity will be central to the marketing and support of our software products. This proprietary software for managing websites is called QuikSite and it may become a third important marketable product.
Future products (product evolution)
at present are standalone products
(though they can be used together for the same complex project).
In their evolution, it is expected that they will grow together
and eventually become one product that has most of the features
of a spreadsheet. At this point they will be fully integrated
with financial management systems, with construction management,
and with a lease by lease operating management system. This
evolution will be a staged process and may take several years.
Market summary and industry overview
|Social & recreational||9.3|
Of these, residential and commercial are the best indication of our market. These total $236.9 billion of annual funds flowing into real estate development not including land & soft costs (development expenses & fees).
In determining our market, we might like to pull out of that number total expenditures for development services for which we can help. That will include some of the financing and syndication fees, feasibility study expense, and developer overhead.
If we look at total construction in 1998 and put it into equivalent terms by adding an estimate of land and development fees, we get to $300 billion per year. Taking 1% of that, then cutting it in half to be cautious, we get to a market wherein we can directly help of $3 billion per year. That's a rough estimate of the annual cost of MBA type persons sitting at desks and doing analysis to justify and plan real estate development. Of course, we know our industry is generally not so sophisticated as to hire lots of MBA's, but the market will get more sophisticated. That means rapid growth, and we can segment the market lots of ways and still have a very big pie.
$3 billion a year for MBA persons doing our stuff in the nationwide real estate development market. These numbers will change when I spend more time on this, but good enough for now.
Our biggest competition really is spreadsheets. But spreadsheets are prone to errors and everybody working with spreadsheets wishes his macros included things he doesn't know how to or doesn't have time to develop. Also, spreadsheets are wretched in that they sometimes grow so complicated they become musclebound (hard to modify). They also become bound to the creator; it's hard to transfer responsbility for a complicated spreadsheet to a new person. Often the new person would rather start over and create his own. People using our software would have the advantage that at crunch times or when they needed something new we could do it for them or teach them how.
Many organizations in the real estate industry are primarily interested in software products that we don't have and won't seek to develop. To better understand our products, it seems useful to identify these. The following are examples of software that we don't expect to offer.