Since so many of us are struggling right now to find direction given the epic uncertainty Covid-19 is creating, I thought it would be useful for me to share with our team, customers and the broader community what LeasePilot is working to build and why I believe it’s important.
What’s the Big Idea?
Our big idea at LeasePilot is to eliminate unstructured documents as the principal technology that underlies virtually all commercial transactions and replace it with a structured database. That may sound pretty dry, but the ultimate impact is huge: radically more efficient markets that will free up a massive amount of wasted human potential. Let me explain…
From Paper & Ink to Bits & Bytes
In an economic context, the term “technology” can be applied to any tool that converts inputs of labor, capital, and energy into something more valuable than they were previously. For commercial transactions, a document does just that: two parties write down their expectations and goals and trade that paper back and forth a few times until they come to an agreement. Once signed, both parties place the document in a file cabinet for future reference. When other people need to understand those expectations and goals, the document can be sent to them via courier.
Documents as a technology have served businesses of all kinds very well for centuries. In modern times, email may have largely replaced the need for a courier and documents may be stored electronically, but the underlying technology itself hasn’t changed. That’s a problem since documents are fundamentally an analog technology and today’s commercial world is digital.
The Problem with Language
Documents are written in natural language. When it comes to creative and intellectual pursuits, the malleability of natural language is a great strength: a single idea can be expressed in a near-infinite number of ways. But commercial transactions don’t have an infinite number of outcomes. Our markets rely on patterns. Sure, those patterns may be complex and varied, but the parts that matter are finite and can be cataloged and inventoried in a database. This means I can prepare a lease or a loan by pulling the appropriate information from a database, and then I can manipulate that information, reorganize it, and store it in that same database.
Computers aren’t very good at manipulating natural language (which is analog), but they are great at manipulating information in a database (which is digital). So taking a data-first approach to constructing commercial agreements opens the door to hyper-efficient transactions facilitated by computers.
And that’s precisely what we’re doing at LeasePilot. In converting leases and other agreements into structured digital information, LeasePilot’s software can assemble, manipulate, store, share, and understand these commercial agreements in ways that were previously impossible.
Reconciling an Ideal with a Messy, Imperfect Reality
All of this sounds great in theory, but in our actually-existing reality things are not so simple. Most complex transactions contain elements that are unique and defy the kind of binary categorization that a database requires. We also have to be honest about the fact that computers aren’t enforcing these agreements. The courts are. And in courts, it’s the words that matter, not the data. Natural language serves us well here since it is both nuanced and flexible. Nuance allows parties to express intentions that courts can interpret, and flexibility offers those same parties the ability to customize their agreement to meet specific and unique requirements.
And now we’re back to square one…
Back to square one? Not so fast…
Even though lawyers need the nuance and flexibility that comes with manipulating specific combinations of words, that doesn’t change the basic truth that a lease, for example, has a logical structure and is made of interrelated business concepts. These concepts have consistent, universally-understood meanings throughout the real estate industry. To reconcile these competing realities, LeasePilot has created what we call an “illusion of a document” to act as a familiar user interface.
In this “illusion,” the end-user sees a document written in natural language on their screen. The user is able to edit the text of the lease in much the same way that they would in a traditional word processor. But behind the scenes, the lease is still a collection of database values which are updated to reflect the user’s interactions with that “illusion”. This gives users the freedom to change specific words while (1) retaining the ability to manipulate the lease using automation and (2) maintaining the underlying structure of the agreement.
Where the Roadmap Leads
If you think that sounds like a lot of work, it is. But it’s worth the effort.
Just imagine: Getting a deal done in 10 days that used to take 90. Printing automated abstracts rather than spending countless hours summarizing deal terms. Never re-keying the same information into multiple systems. Generating transactional reports for lenders, investors, and buyers rather than have lawyers read and re-read the underlying leases ad nauseum.
Ultimately, the impact is radically more efficient markets that free up a massive amount of wasted human potential so it can be re-directed toward pursuing more meaningful objectives.
This is what we are in it for.