Product First

FIRST, THE OLD NEWS.

Real estate sector is reeling under recessionary trends. If that news fails to excite anyone, I don’t blame them – its hard to find a corner of media today which fails to remind us of this. One of the segments bled from the mislaid assumption that India is teeming with millionaires who can purchase as many one-crore apartment as they can sneeze during hay fever. This has led to an oversupply of premium real estate, of which there are few takers now. There was always an underlying middle class, middle quality market were transactions were happening and continues to happen even now. Only that the big players who were snooty all these days catering to a fictitious market size of premium consumers are back in the middle segment. “Affordable Housing” has suddenly come in vogue and everyone is busy figuring out how much can how many consumers really afford.

BACK TO THE FUNDAMENTALS

I have tried in the past to dissociate myself from the real estate industry and establish architecture as a design profession merely related to it. I strongly believe that architects have a responsibility towards the citizens and users of the product that they design. A home, a office, a school, a hospital, a sidewalk, a park, an entrance gate, every bit of the built environment a person comes in contact with during his life has a role to play to make living a richer experience. Though that is an elaborate issue of another article, the point I am trying to make here is I had a huge problem in the last few good years.

The past few years have been good to us. We build many large corporate beehives, elaborate housing colonies, whatever, and all made fairly good money in process. The problem is when whatever you build gets sold at obscene markups, no one really cares about what was being build. Gimmicks and speed of delivery took precedence over fundamentals of product quality.

This is the second major recession I am experiencing, the last being around the year 2000. I still consider that the buildings we designed and built during that period were one of the best we ever did. We thought through the design decisions, we innovated, we specified appropriate materials and in general we stretched every buck to deliver it maximum value. In the end, the products were functional, logical and inherently aesthetic, not just gift wrapped. Because there were many products and few buyers, we were trying to differentiate our buildings through deeply researched innovations rather than a quickly-finish-and-move-on-to-the-next-project approach. The time now is no different. We are barely into this recession and I predict a return of the “Fundamentally Correct” product.

BIGGER BANG FOR THE BUCK

The residential sector and its reaction to the recession is indicative of the changing mindset. Now that all developers of all size and reputation is crowding the mid-segment of the residential market, there is an enormous effort to differentiate a product by design and specification. A segment which had earlier accepted mediocrity as its standard (“Oh, you can only get this much for this price!”) is suddenly trying to stretch the buck and push in a lot within the same price. The specifications and workmanship is improving; newer ideas and features are being thrown in and all these are necessarily not costlier or frilly, but plain sensible. The difference now is to fix the price bracket first and then to see how much that can be stretched in terms of product quality instead of building the product first and then determining its selling price, knowing well that anything has a buyer (or another investor to dump it to) 

THE IDEA FACTOR

Its obvious that the moment buyers determine what they will pay for a given product, the product itself will start catering to the need of the consumer rather than the producer. Too bad it took a recession and many livelihoods to bring about this attitude change to what it should have been in the first place.

The good thing in all this, as I see it, is the veritable goldmine of ideas that is being generated during these lean times. We atleast have the time now to sit, think, rethink, run trials and not everyone cribs that the designers are delaying the delivery! The value of an idea is in the differential cost of implementing it as against the benefits it yields to the user. The cost can be measured but benefit, very often, is an intangible, but it has to make sense. You can price out a kitchen chimney, but hardly the comfort that it brings to your mother cooking in there. These are fundamentally good ideas, which add value, which makes sense and all that collectively offsets what it costs. 

WHEN THE TIDE RETURNS

The opportunity this recession offered us, the designers of the real estate industry, is time to think. Outside the pressures of delivery schedules, build-as-you-plan and sell-before-you-build complexes, designers found an opportunity to generate fundamentally strong product ideas. These are not cost-guided ideas (as you would expect during a recession) but value-guided ideas which will stay relevant when the tide returns. We all know that recession is a temporary phenomena – a building is for a 50 years. The shift of focus from the producer to the consumer will not go away any soon and therefore products pricing will be value driven rather than market driven. Tom may be able to sell his house in Timbuktoo when the times become good again, but that wont guarantee that Dick and Harry will be able to sell theres for the same price if the houses aren’t that good. 

If it does take another world war to come out of this recession, like it did the last time when things were this bad 80 years back, I hope to be busy rebuilding than to rewrite the theories I am propounding here. However, if we survive this one in a more civilised way, we should expect a flurry of innovative and ingenious application of design, material and technology, all leading to a better built environment at a macro level and value for money for the consumer at a micro level. The idea bank is waiting to be opened!