2022 Year in Review: Flying in Turbulence
As we wrap up 2022, I honestly have never been so bullish and excited about the vision of what we are building here at Inspectify. That being said, 2022 has been a trying year for all of us, something I relate to flying an airplane during turbulence. The year started like most flights, a smooth take-off with clear skies ahead. Then, what seems like out of nowhere, the year became turbulent. Small bumps and jostles started and then quickly escalated to severe drops and swerves. At times we thought we were through it, only to be thrown back into another series. As we ended the year still within turbulence, I take solace not in believing the turbulence is over (sorry, it's not), but rather in what flight attendants assure us on every flight...
Turbulence is normal, even expected. While uncomfortable and even painful, turbulence comes with flying and is something we should plan and prepare for but, more importantly, become more comfortable existing with.
Chapter 1: The Turbulence
For any company within the venture-backed proptech ecosystem, 2022 has been one of the most challenging but also defining years in the life of the companies. Our experience at Inspectify was no different. In a span of a short few months, we saw real estate activity take off in the first quarter of the year, only to dramatically crater over the pursuing quarters as rising interest rates pushed most buyers to the sidelines and constricted capital markets across industries. This created a perfect storm in proptech where revenues declined, company valuations compressed and raising capital came to a screeching halt. The end result were mass layoffs, predatory acquisitions and in some cases, companies closing up shop.
Now that I've covered the doom and gloom, let me state a possibly unpopular opinion... this needed to happen. In the years following the pandemic, real estate has gone through an unprecedented boom, which while great for growth of new companies, has further diminished paths to home ownership and helped mask unsustainable business models. The silver lining of this new reality we find ourselves in is it is forcing proptech companies and their founders / leaders to do something that simply wasn't necessary over the past few years; build a sustainable business model. There is a common view that the best companies are built during recessions because when resources are limited, it creates the focus necessary to truly listen to your customers, build products they need, and do so in a way that generates positive cash flow.
Chapter 2: The Flight
While 2022 has been a challenging year, we have covered a lot of ground as a company. We saw rapid growth during the first part of the year and, more impressive still, did not go backward in the later quarters of the year. Year over year, we grew inspections completed by 2.5X and revenue by over 3X. This alone is a testament to the resiliency of our business and an aspect that helps position us for continued growth.
Expanding the Vision
A large driver in our growth was a concept that has been in the works for years, a concept that inspections are not just limited to the purchase of a property but rather an activity that exists over the entire lifecycle of a property. At Inspectify, we summarize that properties are within one of three stages at any time of their lifecycle. It's either being Transacted (bought and sold), Improved (built and renovated), or Owned (owning and operating). Within each of these, there are existing and future opportunities to inspect properties, and the goal of Inspectify is to become the de-facto solution for all of those, as shown below.
Inspectify's Lifecycle of the Home
We have made significant progress on our product roadmap to help support this vision. In 2022 alone, we have released rehab / repair scoping within our reports, improved stability and performance of our inspection software, launched automated scheduling of inspection requests, and so much more.
While the turbulence of 2022 impacted our ability to grow quickly, it forced the opportunity to expand our vision. When we began 2022, inspections outside of the Transacted stage made up less than 10% of our revenue. As we end the year, that number is well over 60%. While uncomfortable, the turbulence has positioned us for rapid growth when home purchases eventually pick back up.
Growing the Network
The progress we made in 2022 would not be possible without the thousands of inspectors that partner with Inspectify every month. Our inspector partners not only provide a critical role in fulfilling our customer's needs but also challenge us to improve our platform for their own business and benefit the inspection community as a whole. Earlier this year, we hosted our annual Inspectify Summit in Seattle and had the opportunity to host six of our inspector partners, where we heard directly from the source on the good, the bad, and the ugly of our platform.
Rio Bravo Inspections, Ally Property Inspections, and 3 Labs Inspections with Inspectify team
Given the turbulence the year brought, it became more important than ever to ensure we are listening to the needs of our inspector partners. As a starting point, in Q4 of this year, we began systemically collecting Net Promotor Score (NPS) from our inspectors and were quite surprised to see it come in even higher than our customer NPS at over 75 NPS! While we still have much work to do to make our platform more efficient and effective for our inspector partners, I'm truly humbled by how much of an impact we have made on our inspector community.
Developing the Team
2022 was also a year of significant growth and development for our team here at Inspectify. Coming into the year, we looked and felt very much like a seed-stage start-up; very little role definition, no company-wide metrics or reporting, and a limited leadership team. As we looked to grow our team from under 20 to over 50 team members, we needed more organizational structure to ensure we could scale sustainably and support our team.
Early in the year, we rounded our management team by bringing in new talent, but more importantly, developing and elevating our existing employees to take on more responsibilities at the company. We also stood up a company reporting process leveraging the objective-key-result (OKR) framework, which helped provide direction for the company through four key company objectives: 1) Become the Verb of Inspections, 2) Delight and Empower with Customer Success, 3) Enable the API for the Home, and 4) Build a Workplace That Employees Love. While still an iterative process, these OKRs have been and will continue to be a consistent north star for our team to continue to build upon the vision and mission of Inspectify.
Unfortunately, the turbulence of 2022 also impacted our team adversely. While we were able to quickly adjust to changing markets and make up lost ground with new business, the unfortunate reality is that venture-backed companies need to focus more on profit than growth over the coming years if they hope to survive. This caused us to adjust our outlook and planning and "right-size" the business for the current environment. An unfortunate result was making the difficult decision to let go of 15 of our team members in November this year. It's a painful experience to go through, especially for those directly affected, and it's an unfortunate headline we've seen almost daily for the past two quarters. Our focus at Inspectify was to 1) ensure we were transparent as to why we had to make the decision, 2) support our impacted employees as best we could during the transition, and 3) provide clear direction for those that remain for what's next at Inspectify.
Chapter 3: The Destination
It may be hard for some to look towards 2023 with anything besides pessimism and regret, but as I mentioned at the beginning of this post, I've never been more bullish and excited about what we are building here at Inspectify. While 2022 can be summarized by its turbulence, I see 2023 as a year defined by stability. A year where the housing market will work towards coming into balance, a market where what buyers can afford to pay matches what sellers are willing to sell for. That being said, I do not expect that we hit that balance until late 2023. For Inspectify, that means 2023 will be defined by growing market share, launching new inspection verticals, and continuing to build upon our world-class product, inspector partners, and team. Cheers to an exciting 2023!