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Reuben Saltzman

Spectora, Software, and Company Culture (with Kevin Wagstaff)

Kevin Wagstaff, the co-CEO of Spectora, joins the show to talk about home inspection software, the home inspection industry, and company culture. The show starts off with Kevin introducing himself and how he decided to get into the home inspection industry from a technology perspective. He then answers the following questions:

  • How much competition is there in the home inspection software field? When you’re building this technology, how much did that affect the touch and the feel, and what your technology looked like once you delivered it to the home inspection industry?

  • When did you have your first customer?

  • How many customers do you have now?

  • When you were looking at February of 2021, how many people as clients did you set a goal at?

  • What’s next? How much could you envision getting out of this market?

Reuben then brings up how intrigued he was with the tech support at Spectora. He shares how responsive, quick, motivated, and fantastic the entire team at Spectora is, and Kevin shares what has driven his company to deliver in this manner.

TRANSCRIPTION

The following is a transcription from an audio recording. Although the transcription is largely accurate, in some cases it may be slightly incomplete or contain minor inaccuracies due to inaudible passages or transcription errors.

Kevin Wagstaff: We had a friend that worked in tech, his dad was a home inspector, and still is, in Colorado Springs, and he said, “Guys, my dad’s software is so old, and it’s one of the best in the space, 25% of the inspectors use, and it just hasn’t updated in 20 years.”

Bill Oelrich: Welcome, everybody. You’re listening to Structure Talk a Structure Tech presentation. My name is Bill Oelrich alongside Tessa Murry and Reuben Saltzman, as always the three-legged tool up in the Northland, and today we’re balancing some really cold temperatures on top of this thing, but happy to be here and on today’s episode, we are gonna have a conversation with Kevin Wagstaff, the CoCEO of Spectora. Everybody clap because Kevin’s awesome. Can’t wait to have this conversation. Usually at Structure Talk, we like to talk about and teach about all things crazy that we see in houses, but today we get to pick the brain of one of the technology leaders in the industry. And I’m super excited to get into this conversation. So without me dragging along a bunch of words that nobody wants to hear, Kevin, why don’t you introduce yourself and kinda give us a little bit of history about who you are and where you came from, and please tell me why you decided to get into the home inspection industry from a technology perspective.

KW: Oh boy, what a start. First of all, thanks for having me. It feels great to be on the other side of this dynamic, typically I ask the questions and then I just get to listen and it’s wonderful ’cause I love listening, so I’m gonna have a hard time talking about myself here, but anyway, my background, I guess will go as far back to say, finance major thought I was gonna be a financial advisor, a CFA or CFP of some sort, worked at Charles Schwab for a number of years, and then got a job at HomeAdvisor, which everyone in our industry really loves, I know, right? I think everyone just is in love with HomeAdvisor in our industry. I was there on their SEO team, so that’s where I kind of learned the world of digital marketing, how big companies actually get traffic to their websites, I learned about paid advertising, great experience all around, can’t talk about the quality of the leads for any industry, I can’t comment on that. But a great time doing that.

KW: And then I did not wake up one day and just say, “Man, I really wanna work with home inspectors. I really want them to tell us how bad our software is.” We had a friend’s dad, actually, believe it or not, Mike and I, brother co-CEO, we had a friend that worked in tech, his dad was a home inspector, and still is, in Colorado Springs. And he said, “Guys, my dad’s software is so old and it’s one of the best in the space,” he goes, “It’s what like half or not half, maybe 25% of the inspectors use, and it just hasn’t updated in 20 years, and I think there’s opportunity here.” And Mike and I knew we always wanted to start a company together. We did start female empowerment t-shirt company years ago inspired by my daughter, but it turns out selling t-shirts at scale is really hard and inventory is not fun to carry. So we did that for a couple of years and it was fun and put some good messages out there, but then we realized, “Okay, we belong in tech, ’cause we’re tech guys by trade.”

KW: So we started doing some research and thought, “Hey, a smaller industry that’s relationship-based feels more appealing than trying to create the next Instagram or try to create the next subscription cat food service, any of the ridiculous stuff that Silicon Valley is doing and raising money for,” we said, “That doesn’t really interest us.” I don’t have any interest in competing with Harvard or MIT grads [chuckle], so we said, “Let’s go small.” And when we heeded some advice from like Paul Graham and some other tech people that said, “Hey, solve a small problem and then go from there, and I think you’ll have a higher degree of success just in business in general,” which I think home inspectors to a degree, we all solve small problems and then we branch out from there. So that’s how we got into it, found us, as odd as that sounds, and as cliche as that sounds. And then the other two co-founders dropped out, they weren’t at the point in their life where they could do 60-70-hour work weeks that Mike and I were doing for free, which every entrepreneur… Everyone listening probably knows that that first year is brutal, in any new venture.

Reuben Saltzman: You had somebody approach you and just say, “Hey, my dad’s a home inspector, his inspection software is ancient and antiquated, and I think you should write him software. And then you could sell it to other people, and there’s a real need in the space for a new software,” and you guys got together, you discussed it and you said, “Let’s do it.” Is that… Am I missing a step here?

KW: [chuckle] No, he… ’cause our friend was a developer, so he said, “Let’s all do this together,” and his other co-worker was a designer, so we are like, “We have a dream team here,” ’cause Mike’s a great developer, great marketer designer. I feel like I’m decent on marketing, sales, customer support, that type stuff, and so the four of us started kind of doing research and kinda doing our due diligence and saying, “Wow, there’s opportunity here,” like software as a service isn’t really a big thing in this industry, it was all downloadable software, which when you look out at the rest of the world, you’re like, “Oh, there’s Pandora, there’s Spotify, there’s Netflix,” all these kind of software-on-demand services, and we thought, “Why hasn’t it hit home inspection yet?” And it made sense when you think of the broader real estate ecosystem, and you say… You look at the tools that realtors had even five years ago, a lot of legacy, a lot of old school stuff where you’re like, “Oh, how come there’s not a better solution for saying booking these showings?”

RS: Kevin, just for anybody listening, who doesn’t understand the term concept, the term software as a service, can you just define that real quickly?

KW: Yeah, basically, when you go to a website, structuretech.com, spectora.com, you’re accessing something in the cloud, the nebulous Cloud, right? We all… It’s a weird term, I get it, but basically, you’re accessing something on the internet versus let me download this whole package on to my computer, and then it just lives on my computer, I can use it anywhere I go, but if I don’t have my computer, can’t use this program, that’s the opposite of web-based, that’s just like local or downloadable software, which primarily existed when we got in the industry and would like to you to own Home Gauge so we were all like, “Hey, buy it once, download it, you own it forever.”

That’s what we did for ever. That’s… [chuckle]

KW: And it makes sense, and that’s why I always tell people, people expect me to like bash on it or inspectors will ask me, and I say, “There’s a reason why that has been the model, is because the rate of change in technology wasn’t even close, it’s grown exponentially over the last 20 years.” If it took a couple of years for any major technology to change, yeah, you should just build it once, sell it to people and then let it run for years, that’s just tough to do nowadays, right?

RS: I don’t know the answer to this. Does the accessibility of internet services affect Software as a Service too or does that not have anything to do with the viability of Software as a Service?

KW: No, absolutely. That’s absolutely a trend. If you look at the last 10 years, the accessibility to not only internet, but high speeds just gets normalized more and more to where, okay, you can access it just as quick, go into a web browser or load it up in your mobile app than if it was a packaged like Microsoft Word, the Microsoft suites, like the most famous downloadable softwares ever, but now Google, Google Drive, Google Docs, all these things that just seem to work well.

RS: Mm-hmm. Exactly.

KW: But there’s a time and a place for both. I think there’s still certain things we download, but it’s starting to feel a little more antiquated because you know what, all of our computers and phones get outdated in like 10 days, basically, which is kind of annoying for all of us where it’s like, “Alright, cool, I guess I need another phone.”

Tessa Murry: I just have a, kind of a, I guess, a general question for you Kevin. I hope you can answer this, but I’m just curious if you can kind of paint the picture of like how many home inspection softwares were out there when you got into this, and how many of them are cloud-based like Spectora?

KW: So when we got into it, we only thought there was like three or four, because I spent time on interactive forums, doing my research, I saw a couple of them everywhere, right? And I was like, “Okay, there’s only a couple of big competitors. This feels good, we can just take some share and we can all thrive.” And then upon doing research, I’m like, “Oh my God, there’s like 20, what I now call like zombie software companies,” and no offense to anyone that uses them, but I feel like ones that… Their last update was probably eight years ago, and their site just keep sinking lower and lower when you search home inspection software, there’s a reason for that, it’s probably someone that’s moved on to something else, you can just generate a PDF and it’s simple, and that works for some people, but the more I found out, I was like, “Wow, there’s a lot of software that was kind of created once and hasn’t innovated.” Because it is a fairly… I guess on the tech side, easy thing to do to say, “Hey, we’re gonna make a basic mobile app that spits out a PDF with text on it,” but I think we all know it gets way more complex than that.

BO: So Kevin, when you sat down with your three partners, your brother, two other people, and you all get into this, how far into the future did you try to look in terms of technology thinking, “We’re going to a mobile platform and we’re gonna leave the desktop behind” or did you decide you were gonna blend them, what was your framework to move into the future, especially with the change as rapid as it is now?

KW: That’s such a great question. So having worked at HomeAdvisor and my brother being deep into tech, we… I guess in our heads at the time, I’m trying to go back here and recall when I would say thinking five, 10 years ahead of saying, “Okay, we can’t just do what’s happening now, like… ” But then also looking at through the lens of, “Okay, we know real estate and home inspection can be a few years behind maybe current trends,” so it was almost like we almost had to think five years ahead to say, “Okay, mobile first should be a thing everywhere, and we think it could be a thing.” We kinda took a leap of faith by saying, “We didn’t know how much resistance there would be to home inspectors saying, ‘I can’t do all that on my phone, are you kidding me, this tiny screen, like there’s no way I’m publishing on site.'” So we made some assumptions there that we tried to constantly check, so each inspector, I took to coffee and interviewed, I would definitely probe and talk about, “Let’s talk about what you do on mobile on-site.”

KW: But I have the agent experience so I remember following along a home inspector that used one of our competitors, so I kind of understood that like, “Okay, some of this is happening on mobile.” But at least on that front, we knew more could be done on mobile, ’cause everything told us, “Hey, a large part of inspectors are doing zero to 20-30% on mobile, and that’s it.” ‘Cause the constant feedback was, “Hey, I spend two to three hours at home every night, my family doesn’t like it,” and we’re like, “Okay, if that’s a problem and that’s an emotional problem,” because I think people wanna spend more time doing things they enjoy being with their family. So we had to look ahead on that front, but then we also tried to look ahead in terms of like cost structure and how like ancillary services and upsells, ’cause we… I think it’s a trend that hasn’t quite played out yet, but we also thought, “Man, how come home inspectors aren’t offering X, Y, Z?” Because I remember my home buyers always asking the inspector, “Hey, who do I call, you know, I’m gonna need a plumber when I move in, and you’re telling me this? Who do I call?”

KW: Some of them as going as far as, “Hey, what do I… Do you have any insurance providers, like who do I go to for home insurance,” and that’s an interesting one. A lot of things inspectors traditionally were like, “I’m not touching that.” And we were always like, “What’s the deal there? Like is there… ” Yes, liability, we get it. The typical answer, right? But liability gets disclaimed every day by everybody. We were thinking ahead of like, “How come home inspectors don’t have a network of quality trusted contractors that they’re sending leads to?” And you cut out a Home Advisor. You cut out a middle man. That was always interesting to me.

BO: I think I have the answer to that question. They don’t have enough time to track down and monitor those networks of people, and contractors are notoriously, they step up when there’s a job to be bid, and sometimes they slide a little bit once they have a commitment. And I’m not making a broad statement about the industry, I’m just seeing there’s a lot of really, really busy people, you try to get your talons as deep as you can into that prey so you don’t lose it, and then figure out how can I balance everything else that’s going on in my life.

RS: The value proposition in recommending somebody kind of sucks because you recommend this contractor and they do a good job and people are satisfied and they’re like, “Okay, you gave me a good recommendation, they did a good job, that’s what I expected, wonderful.” But you give out 10 recommendations, and one of those is crappy, it’s like, “They totally screwed me over and you gave me their name and what is wrong with you? How could you… ” And it’s like, “I can’t control any of that!” And it would look really bad on you. And so often I think it’s easier to just say, “Yeah, I don’t know.”

KW: That’s a great point. Attribution and minimal upside that I’ve never, I guess, thought about it in that way, but you’re right, if like if there’s very little to gain and a lot to lose, credibility-wise, it doesn’t set up well, which makes total sense.

RS: I understand it now, having said all that, at our company, we do have an internal list of service providers that I spend a fair amount of time maintaining, when I get complaints, people come off of it, I just removed one today, I won’t even say what field it was. No, I will ’cause nobody knows who’s on there, it’s private and so an insulation contractor who I’ve been calling and emailing for a month straight, and I can’t get them to return a single call or email from me after giving their name out for eight years.

TM: Did you say insulation contractor?

RS: I sure did so you know who it is.

TM: Well, I just forwarded that list to our real estate agent who asked about it last night, so maybe I should send them an updated email.

[chuckle]

RS: Yeah. Tell them not to contact one of those companies, but… Yeah, so Kevin, I totally get why people might be hesitant, but on the other hand, it’s like, “Why wouldn’t you wanna try to control that, help your clients out and give them good people?”

KW: Yeah, ’cause there’s a couple of big themes at play here, one obviously the lack of people in the trades like that’s been whittling away for so many years, and so they don’t have to compete, so there’s almost no incentive to be great at customer service because they’re all backed up like months, right? I know in so many hot markets, they’re just like Denver, you try to find a good plumber electrician, you’re waiting for two months, a bathroom remodel, might be six months. It’s crazy.

BO: I blame that on the trades, this lack of people coming into the trades because I think they haven’t cast the vision that shows a young person how the hell they can come into these trades and grow life and grow a career inside of it. They’re just looking for somebody to do that job right now. And what they need to do is cast vision and show somebody a pathway to a bigger life, and they’ll have people breaking down their door to come and work for them.

TM: It sounds like they need a bill.

KW: They need a bill.

[laughter]

TM: So alright.

BO: Doesn’t everybody?

KW: But no, I agree with you, like what InterNACHI in a way has done for the home inspection industry or any association that kind of showed you the vision and that like, “Hey, you can make a great living doing this, you can make six figures, you can make a solid living.” There’s nothing for that, I bet, for these other trades.

BO: No. But again, they’re busy. I mean, you gotta prioritize and getting that job done is more important than vision casting for the future. You probably have to do it at the same time. The demographic of the home inspection industry, it’s an older demographic. So when you’re building technology, how much did that affect the touch and the feel, and what your technology looked like once you delivered it to this group?

KW: You’re so good at this Bill, that’s such a great question. It informed so much because I was constantly the advocate for the average home inspector, because my brother and early on the other guys, and then even our recent hires in the last couple of years, they’re technologists, they interact with cutting edge technology all day, every day. And I have to keep reminding them, “You’re not… That’s not typical. That’s not the average person. That’s not the average 50-year-old guy in the Midwest,” I said… And that goes down to button placement, to the words you use to describe something on a certain page, and I always try to put on my five-year-old glasses and say like, “Okay, if I’m a five-year-old trying to figure out what to do next, what do I do?” Or someone, I can’t remember who said it, but they said, “Explain it to me like I’m a five-year-old,” and I’ve stolen that with our team internally, like, “Break it down to me to the simplest level.” And we all have to get good at that because there’s nothing more frustrating or knowing when like a person or a software assumes you know something.

KW: Lots of beta testing early on, lots of doing screen shares with inspectors, of saying like, “Okay, what are you thinking when you’re on this page, walk me through what makes sense, what doesn’t? All I know is you click there, why did you click there?” And then you start to hear like, “Oh, I was just trying to get to the template, or I didn’t know how to turn this template into a report.” I’m like, “Oh, okay, cool. Make note of that.” And trying to get that feedback early on is easy because you have really engaged people that are invested in you building a better mousetrap, a little harder nowadays, because now you have lots of voices, lots of preferences, and I get how software can get bloated and become Frankenstein software, as we call it, where it’s like you just bolt on stuff and it gets harder to navigate.

KW: But I will say back to the core of always trying to think about, I wanna say the lowest common denominator, but the least tech-savvy inspector, is he gonna get lost and flounder in here? Can we account for that? Because the tech-savvy ones, they’ll whip through everything and be looking for the next feature, that’s fine, but… And then education resources. So I think there’s a… I started YouTube channel like I think the first couple of weeks in and said, “Alright, as awkward as this feels, I gotta get my face on there, clicking through things with people talking through it and hand-holding.” I just think there’s no other way to do it with a service business or software than holding people’s hands and just making sure.

RS: Well, you guys have done a really good job of that. I mean, that’s why you’re on this podcast, if it’s not obvious, if we haven’t stated it made it clear to any listeners we use Spectora here at Structure Tech, we’ve talked about it several times over the past year, switching our software over to Spectora, you and I met the first time when I came on your podcast, that was probably about a year and a half ago, you’ve been doing a podcast for a long time now. How long has it been?

KW: Maybe two years.

RS: Not that much longer than us.

KW: No.

RS: It just feels like you’ve been doing it for a while before I even started. You’re the old school podcaster in my eyes.

KW: Maybe I’m not doing them often enough, maybe that’s the problem as I do, I see, I’ll go weeks sometimes where I’m like, “Oh, the other things come up and then you gotta find a guest,” but I’m having the team help with that now, but… Yeah, no, we’re about the same.

RS: What prompted us to have you on here because I mean like Bill kinda teed this up saying, normally, we have people on here talking about houses, but what really intrigued us was just the other day, we were talking on our team about the tech support at Spectora and Eric our lead inspector was talking about every time there’s any question that needs to be answered, how do you do this, whatever it is, he said he has never dealt with a company in his life who is as responsive, as quick and motivated, and has the same level of energy and passion and drive as the entire team at Spectora. It’s not like he’s got one person he gets in contact with their like “Talk to Joe. Joe is really good.” It’s like, “No, talk to anybody at Spectora, and they’re all just fantastic.”

RS: And as he’s going through this, I started thinking, “Man, we gotta get Kevin on our podcast just to talk about company culture, I wanna hear what it is that you did to get your company to this level.” I segued into a totally different conversation right now, really… What I meant to ask you, hold up, we gotta talk about your culture in a second, but first you’re talking about home inspectors being slow to learn, let’s not mince words, I know what you’re saying. I gotta ask you: Have there ever been any home inspectors where you’ve just had to tell them, “You know, I bet you’d be happier using a different piece of software”? [laughter] Has that ever happened?

KW: Yes, and you will probably relate to this very deeply because whether it’s they’re slow to learn or they’re just really, really struggling, we rarely give up on anyone, first of all. A lot of times, it’s like we’re gonna… We see it as a challenge. Those are the most valid. Those feel the best when something clicks and you heard from someone every day for a month, two months, and then they just go away. And sometimes, you check back, you’re like, “Are they still with us?” Like, “Okay. No, they’re doing inspections, and they’re not reaching out to us,” and that feels great. So learning curve, we’ve worked with, trust me, pen and paper, to us. So you’re talking going from zero to 100 in terms of like software can deal with that.

KW: There are people, though, that there’s just certain quirks with the software or it’s a little different than their mental models used to, and they just can’t get over it. And they just say, “I absolutely need this pixel to be five inches over or else, I can’t use you.” And they really start beating us up over it. Those are the ones where it’s like, “You know, maybe we’re not the best fit, and that’s okay.” I’ve trained those lines into our whole team because early on, I really had to say that a lot, and it hurt because as a… It’s like as a home inspection come, you want everyone to be your customer. Anyone that talks to you, you’re like, “Okay, you should be a customer.” But then, there’s ones where you drop that line and the irony is they end up wanting you more because like, “Oh, wait, you don’t want me? Well, I want you now.” Just like what you said, “How we might be a little… ” We know we’re not the cheapest home inspection company, you guys are famous for this, it’s like, “But here’s what you get for all of this, and here’s why we’re quality. But if we’re not a great fit, that’s okay.” Then they’re like, “Alright, well, where do I book the inspection?” [laughter] I probably heard… I guarantee you all, I’ve heard that dozens and hundreds of times.

RS: It’s true, I think there’s psychology behind that. Once something becomes scarce, it’s…

KW: Wanted more.

RS: It’s wanted, yeah, definitely.

KW: Yeah.

RS: Let me just back up and stuff. When did you have your first customer? How long ago was it?

KW: Great question. So that was, I still remember it like it was yesterday, it was February 2017. When do the InterNACHI forums, January 17, when we launched, took some punches, body blows, got body slammed, and then February, I think someone was like, “Alright, I’ll give you a trial sign-up.”

TM: So how many customers do you have now, Kevin?

KW: We just crossed, I believe, the 4000 mark the other day.

RS: No!

TM: Wow!

KW: Yes.

TM: In four years, that’s amazing.

KW: Our industry obviously is notorious for poor reporting, poor statistics, because like the Bureau of Labor Statistics can’t even get it right with whether home inspectors versus like a building and code inspector, [chuckle] which is I think it’s the most ridiculous thing I’ve ever received. But InterNACHI has 26,000 members, but we know that all includes a lot of hobbyists and, yeah, a lot of guys that just do their neighbor’s house every now and then. So your guess is as good as mine.

RS: Okay.

TM: Yeah. Reuben, how many members are part of ASHI then?

RS: I think it’s around 8000 maybe.

TM: And there’s a lot of people that are members of both, right?

KW: Yeah.

RS: Yeah, both. And with the InterNACHI number, I could be wrong about this, but what I’ve heard, the way they describe it is that once you’re a member, once you’ve been a member once, you are added to that number and the number never goes down.

[laughter]

RS: But I, I don’t know, if those are true or not. I could be wrong. I mean I might get myself in trouble.

KW: Oh, well, we probably have 15,000 users if we’re going by that number. Yeah.

[laughter]

KW: Yeah, yeah, who knows. All the people have gone out of business.

RS: So I don’t know, but the number I’ve heard thrown around there most often in the US is somewhere in the neighborhood of 20,000, but who knows? Let’s just say it’s 30,000, you have a ridiculously large slice of the market, Kevin. After four years, I mean, that just talks about how good of a job you guys are doing.

KW: You see this hairline, it’s a little further back in exchange for all that. A lot of long days and nights. But yeah, no, it’s been great. And I think consistency, you guys, so many parallels, I think with high-quality operators, just like you all where you show up every day, you do the right things, and then you kinda just look up at the scoreboard after a year or two and you’re just like, “Oh, wow, like… You know, this is paying off.” And it’s no magic bullet, we have competitors coming up nipping at our heels now, and it’s just like, “Okay, great. Keep doing your thing and we’ll keep focusing on where we’re going.”

RS: So in 2017, it was just you and your brother, or did you have anybody else on board at that time?

KW: Just me and Mike for the whole year. So we wore all hats. I think we had 200 customers by the end of that first year.

RS: And how many people you have on your team now?

KW: So now, we have a team of 20.

[chuckle]

RS: Wow.

KW: Yeah, 2 to 20, and so… Man, that first year though, it was demos at 6 AM, answering emails at midnight, doing demos whenever anyone would talk to me, driving all over Denver to just meet with people, and Mike would build features overnight. So someone would say, “Hey, I really need the template editor to have a copy feature to do this.” I send it to Mike through… We had Slack for two of us, which is hilarious, and it’s just like… We have different chan…

BO: True checking.

TM: Yeah. Yeah.

[laughter]

KW: We had like five different channels, but it was just me and him on all of them, so it was just kind of funny, we’re like, “Okay, we’re talking about business in this chat,” but I would send it to Mike and he would literally write back a week or two later, and he’d say, “Hey, okay, tell Jim to refresh his browser now,” and I would get back to him and he would still be at his computer and that would make him be like, “This is amazing, guys.” And that was kind of how we had to make our name was like, “We’re gonna react so fast ’cause we really wanna make something great,” and we still try to do it to this day. Obviously, it’s a little different, can’t be overnight or can’t be within 10 minutes, but that agility, I think matters to people a lot.

BO: You mentioned your scoreboard when you sat down in 2017 and you rolled out a product, when you were looking at February of 2021, how many people as clients did you set a goal at?

KW: I didn’t think about 2021 at that time, I gotta be honest with you. I was like, year by year, it was like… I mean the longest-term vision we had was like, “It’d be kind of cool if we could make a living with a nice little software product, a couple employees, and we could do that forever. That’d be great, you know.” And then each year is like we started to kind of set more ambitious goals and inspectors kept coming and we’re like, “Okay.”

BO: Was 4000 a number that you meant to reach and go beyond, or is it just mushroomed?

KW: I do think after a year or two, we started to look at the whole market and say, “Okay, InterNACHI has got this many, okay, what if we could get to five or 10, what would that look like?” And it just felt kind of like something in the distant horizon. So yeah, it was… There’s fantasy numbers we all throw out there as goals, but then there was like… It’s funny, in our annual goal setting every year, Mike’s always like pretty ambitious up here, and then I’m always kind of like the conservative one, I was like, “Oh, let’s set it down here,” and then we always end up some in the middle, so it’s, we kind of complement each other in that way.

BO: Gotcha. So you have 20 people on the staff now and you’re cranking out about 4000. If you to 8000, does that team have to go to 40, or are you gonna be able to do 8000 inspectors? Or companies with say, 30 people, are you able to scale up?

KW: That’s a good question. I think we could do it with 30, ’cause I think we really spend a lot of time on thoughtful like systems and processes, and that’s not… ‘Cause we’re wisdomatic, it’s ’cause we’ve had to, ’cause we’ve had really inefficient parts of our business. Just like everybody, we were like, “Oh my God, I can’t have everyone asking me this question every day, I’m gonna go nuts, we gotta create a Wiki and we have to have Slack, and we have to have Zapier, and kind of automate certain things within our business.” So, yeah, I think we can do that. I think development power, firepower is always at a premium, something we’ll have to definitely add. And then support, support is something that’s harder to scale because I think we have such a high human touch, I want someone taking 30 minutes on a chat with a guy that’s just learning the software, and that’s the first touchpoint with us, and that’s…

KW: Most businesses would be like, “No, that’s terrible. You’re never gonna scale.” I’m not too worried about that because we’re not trying to be Facebook, we’re trying to provide high-quality service, so it’s totally quantity over quality, so I’m okay with that.

RS: Well, and there’s only so far you can scale or getting in to something other than home inspections, that makes me think, what’s next? How much could you envision getting out of this market?

KW: 10,000.

RS: Okay, alright, so you get to 10,000, what comes next?

KW: You know, that’s a great question. I think there’s… I’m… I just fantasized about ways to… ‘Cause I think of it this way, every new home buyer, they have these needs, whether they go to the agent for it, the home inspector for it, or they Google it on their own, I don’t know yet if there’s some of those things that we can help home inspectors facilitate to just put it in front of them, not push it, not have liability, anything like that, of like, “Hey, I’ve got a partner’s page here, check out anything you want here,” whether it’s a ring or a nest or I don’t know, a local handyman, like things that are very low, not to put inspectors in any hot water, but it’s like creating that network to say, “You know what, now it’s free to use Spectora because of you connecting the homeowner to this or even making money using Spectora.”

KW: That’d be ridiculous to me. It’s like if inspectors could make money by using us, we still get paid, but the homeowners are getting something they were gonna go and find on Yelp or HomeAdvisor anyway, that could be kind of fun to do in terms of like it’s just not been, I don’t know, it’s probably been done before, but basically creating that defendable ecosystem. Because that’s a business that can last a really long time, and Mike and I always try and take like a 10-20 year view on everything we do, and that’s just kind of how we run the business ’cause it just helps us make more sound decisions.

KW: And people ask us every day like, “Hey, can you just tweak a few words so I could use this for my power washing business? Or can you tweak a few words in the online scheduler so I could use it for my property management business?” So that could be interesting. But at this point, it just distracts us, we have so much more we can improve with the software and the experience and features to add for all different personas. And the more we start thinking about that, the more we’re like, “God, the stakes are half the ball.” But we still wanna be dominant, we still wanna just wow people every day and earn our money day-to-day, and then the stuff will maybe present itself if the software is just chugging along nice and smooth, and we’re twiddling our thumbs, which will probably never happen, but…

TM: Listening to you, Kevin, it’s very inspirational, because hearing your thought process when you came into this industry of quick response and adapting and building the software that was needed on-demand and something that I feel like this industry probably didn’t really have before you entered into this market. And I think it’s great that you’re embracing that and you’re kind of cornering the market on that, and we really, we need that. And same thing with home inspectors, like this whole industry, it’s slow to change as well. And so one thing that I think we’ve even learned at Structure Tech in the last years, we were doing things a certain way for a really long time, and then when the pandemic hit, it gave us a chance to kinda take a step back and re-evaluate and switch some things up and change, and we found that there are better ways of doing things and sometimes it’s scary to try something new. Your software program, I personally, since I am not inspecting anymore, I’m out of the field that I’m doing the training and teaching and hiring staff now, but I’ve seen it just completely, I think really change the way that we do inspections, and it’s given inspectors their lives back.

TM: It’s allowed them to be able to report on the information on site and finish the majority of the report there, go home, do some tweaks and send it out and then have their evenings with their families, like you said, that’s just invaluable having that time. So thank you, Kevin, for doing what you guys do and creating a great software and adapting and changing and being quick to respond.

RS: Yeah.

KW: Thanks for saying that. It says so much about you all, first of all, ’cause when I think it was Reuben or George, they were just like, “Hey, we’re gonna do this, and here’s our dates.” I was like, “Wow.” And they felt so calm about it, there was just this like calm decision, and I was like, “Wow, I guarantee they’ve done some behind-the-scenes planning and work and they have a leadership team that can roll this out.” It felt so buttoned-up where I’m like, “Wow, that’s amazing.” First of all, so I was just like, I have so much respect for companies in the middle of the pandemic, maybe even during busy season, things were ramping up again, I think, and you guys just did it, so that’s really cool to hear.

TM: Glad it sounded calm on the surface ’cause it didn’t feel that way. That’d be like under the water.

[chuckle]

RS: You know, we didn’t have a plan. I will say that. It was very intentional, it was a lot of meetings, a lot of thinking about this, but Kevin, I started down a path that I never really got to my question of essence, which is what really brought you on the show here is why is it… Everybody we talk to at your company is awesome. What got it to that point?

KW: I have a feeling you all are gonna nod your heads ’cause it seems like you all have a similar culture, and I think especially at the highest levels of IEB, I think there’s so many similarities, and so that’s why like I’m always… I’ve drunk the IEB Kool-Aid and I learned as a vendor being at that conference, which is insane to think like that I got so much from it, I felt like I should have paid an entry fee or whatever for it. Like we did pay, didn’t we? [chuckle] To be honest, I always try to think about that first week, that first month, when it was me putting everything into every single person I interacted with, and like the hunger and the quality, and just like that my competitive attitude have a background and just athletics and so I’m just a competitive person in general.

KW: So I translate a lot of my kind of athletic life to business now, ’cause I’m a big Mark Cuban fan, and I think he always inspired me in terms of, he played basketball till he wasn’t good enough anymore, and then he just channeled all of that into whatever the thing was, and it happened to be business. And so that always stuck with me from day one, so that was kind of how I operated. But then I’m a people pleaser by nature and that doesn’t serve me well in certain parts of our business. Anyone that’s ever gotten like a refund or credit knows that it’s like, I’m not the best person to make those decisions as I feel like I empathize too much, but then that is exactly what helped in the early days, and so Mike and I very much have this people-pleaser nature to us, and I think that makes us not wanna disappoint anybody, and that included every single one of our first couple hundred customers, and then that motor just kept going.

KW: And so I think people saw that. I think it took… When we hired our first employee, I remember we were in that little shoebox of an office with her that we rented for a couple hundred bucks a month at a co-working space, we were there 10 to 12 hours a day, and she saw that and she felt it, and I think lots of business owners can say, “Okay, once I hired someone, let me back off.” I’ve rived her I’ve… “You can handle this.” It just took so much intentional kind of like, “No, you need to feel this, we can’t just tell you what to do. Like we’re gonna shadow on support for months, and I want you to read the words I use, I wanna talk through why I’m saying this, like I get a lot of intentionality behind, ‘oh, there’s a reason why I’m such a height man for our customers.'” And it feels good for me to just encourage people and make them feel good.

KW: So there’s a lot of that talk of like kind of this fluffy nebulous stuff instead of just like, “No, just you robotically say this, and then you ask them if there’s anything else you can help with,” like you can have a checklist, you get that in a call center anywhere, right? But it’s a lot harder to be a human and every individual interaction in every moment and saying like, “Wait, how are things going, Reuben? Like what is it like running a company this size? Like what are your challenges right now?” And that boy, that’s hard to teach, that curiosity in each interaction in moment ’cause it’s exhausting. Like I remember is like I would bang out 100 conversations in a day and I’m like, “The end… ” I’m just like, “Dude, the buttons right there, just click it.” [laughter] It says, click me.

KW: But I think that endurance, I think you all can attest this in anything in life, whether it’s relationship or business, that entrepreneurial endurance is something that you kinda have to show people and entrench in them, so that’s a long way of rambling and saying we talk about these values and things that are underneath the actual thing you’re doing to talk about purpose, and without getting too fluffy, ’cause you also hire someone, and it’s like, “Okay, dude, like I haven’t drunk the Kool-Aid yet. Like what’s my job? Just tell me what to do.”

KW: That’s my ramble on that, but also hiring, I think hiring we also don’t just look for experience either. Early on, we kind of hired people purposely from different backgrounds, maybe they didn’t have support or sales experience, and then we nurtured and learned it together, as opposed to someone coming and say, “No, this is how I did sales at this financial software company.” I’m like, very different home inspectors, it’s a very different way to communicate, very casual industry. So I don’t know if that answered your question at all, Reuben. You can try and ask it again and I can try again.

RS: It’s not as magical of an answer as I was hoping for.

[laughter]

RS: I was thinking of some magic bullet like, yeah, we do this, or I read this book and I followed all the information to a T.

KW: Well, I do have a book.

RS: Oh, okay. What book?

KW: Delivering Happiness by the late great Tony Hsieh. But that book imprinted on me a couple of years ago, kind of what I already didn’t know I knew, but I was implementing of like, yeah, if they asked me to order a pizza, I probably would have done it ’cause I’m just like, “Yeah, whatever you need, dude. Yeah, I’ll do that.” So that culture of like, we’re a customer service company that happens to do home inspection software, just like you guys are a service company that happens to do the home inspections, that mindset matters. I think that mindset can imprint on people when you harp on it that much and you say, “You know what, our one-minute response time, I track that, I’m gonna look at it, I’m gonna judge you based on this, I give it… It matters that much to respond quick as a human.” So that was one big pillar was like responding under a minute, resolve the conversation on average under 15 or 20 minutes and then get a happy face emoji as their response when we close a conversation, it sends the inspector, how would you rate this conversation, and we look at those and we track them. I obsess over them. If someone gets a terrible or bad, I’m sending them an email, just like, you all probably do this, like you follow up with what could we have done better?

TM: That’s brilliant. That’s something even our older demographic will understand, the emoji.

KW: Right, just quick but yeah. Happy face, sad face. That’s it. Happy face, sad face.

TM: No explanation needed.

KW: Yeah.

RS: Yeah. No, that really was a great book. I remember after reading that, that’s what inspired me to add on our second client care coordinator back in the day. I just realized I don’t want people on hold this long. We need to fix this. And it was that book that inspired me to do that, a bunch of other stuff, such a good book.

KW: Yeah.

BO: If I can paraphrase for what I heard Kevin say, is you get what you give and give more than you take, and you’ll build a great team around you because people will be attracted to a culture that operates in that way. You didn’t put up too many strict parameters on who’s gonna sit in that chair, we’re gonna learn together, we’re gonna walk shoulder to shoulder, and that resonates with people at a very deep level. And I think that’s how you build a great company from the ground up is you just care a lot.

KW: I love that. Yeah, and we purposely always said, “Let’s do things that don’t scale,” ’cause everyone… Any company, everyone wants to talk about scale or what’s the next vision, or what’s the end goal? And we’re like, “Let’s just be here and now, and if someone needs an hour to figure something out, let’s give them that hour,” ’cause it’s not always gonna pan out. He may go out of business in a week, that’s fine, we’re gonna live with the results of seeing things through and spending the time with each inspector because it is a small industry, might be different if our total addressable market was 3 million, I don’t know if we can do that, but it kind of was a no-brainer to say, “Hey, we know it’s not scalable, we know certain people would scoff and say like, ‘Oh, you’re gonna do chat support and just talk to someone all day, like one guy that just hangs on there all day’ it’s like, ‘Okay, we’ll draw limits.'” But until the problem is solved, like we haven’t done our job and that’s what I try and tell them. It’s like this is not a volume game.

BO: So Kevin, I have one last question, and we’re gonna have to do a wrap, we could go on for four or five hours ’cause I have lots more questions, but what are you and Mike together, or you individually going to do, what’s your passion that isn’t working in this industry? Like if you had to not get up today and work at Spectora and you could go do whatever you wanted, what would you be doing?

KW: Wonderful question. Like I said, I have a background, played college basketball, played a part-season pro overseas afterwards, so I love the specifics of basketball and volleyball. So Mike and I play a pretty competitive sand beach volleyball, so we played doubles, beach volleyball. He got to just under kind of like a pro level, when he lived in San Diego. He showed me the game about seven, eight years ago, and I’ve fallen in love with it, and so we play pretty much have one of the higher levels you can locally around here, so I obsess over the details of a sport. And so I watch AVP volleyball now and I’m like pausing it and rewinding 10 seconds to kind of see their footwork and kind of where their shoulders are, every little detail, just like some people notice every little detail in the sport they watch.

KW: So I would coach beach volleyball because I feel like I dedicated probably way too much of my life to basketball and just being in the gym and studying and just paying attention to where the hips are turned when this happens and little details and just watch film over and over, almost up to an unhealthy obsessive level, so I feel like coaching, if I could harness that with my new wisdomatic approach of letting things play out, letting people make their mistakes, and then being there to kinda guide I would coach all day, every day. Just seeing growth in others, it’s just something, I don’t know, it’s just fun. And with our team here, and so I love talking through a problem for an hour with someone in telling them the why, as opposed to, “Can you just do this for me? That’s just fun.” And I don’t know what Mike would do. He’d probably just surf.

[laughter]

BO: That’s awesome. Well, one thing I can say is, I bet your kids are extremely lucky if you have that coaching spirit at home, so that’s a great story. Everybody, the voice you’ve been listening to is Kevin Wagstaff, he’s the CoCEO of Spectora, and we’ve had the pleasure of spending the last 45 to 50 minutes just picking his brain. Thank you very much, Kevin. And we’re gonna have to put a wrap on this episode, you’ve been listening to Structure Talk, a Structure Tech presentation. My name is Bill Oelrich, alongside Tessa Murry and Reuben Saltzman. As always, thank you for listening.

Spectora, Software, and Company Culture (with Kevin Wagstaff)

We’ll catch you next time.