DISCOVER THE SECRET BEHIND WHY 20% OF HOME INSPECTORS DOMINATE THE MARKET – TUNE IN TO OUR LATEST EPISODE AS WE EXPLORE THE PARETO DISTRIBUTION.
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CHAPTER MARKERS
0:00
Inspectors Discuss Pareto Distribution and Whiskey
5:27
Competition and Success in Home Inspections
15:45
Marketing and Passion Essential for Success
26:18
Adaptability and Success in Home Inspections
35:30
Advancing in Home Inspections Through Fear
PODCAST TRANSCRIPT:
Ian Robertson
Welcome back to Inspector Toolbelt Talk with one of my favorite segments, Drinking With Jay. How are you, Jay?
Jay Wynn
I’m doing good. Ian, how are you tonight?
Ian Robertson
Good, thank you. So I can’t imagine that any of you listening in tonight, this is your first time listening in, because obviously you’re all avid listeners. But this is one of my favorite segments, and based on me and Jay, have talked about some great things in the inspection industry, usually our best conversations come out over a glass of whiskey. So that’s what we’re doing tonight. So Jay, what are you drinking tonight?
Jay Wynn
So I went back to an Irish whiskey called The Quiet Man.
Ian Robertson
Nice.
Jay Wynn
Yes, there’s a little bit of a backstory to it, I guess. The guy who distills it, his father was a career barkeeper, and he had the reputation of never talking about what happened or what was told to him, so he became known as the quiet man. So he brewed it, named it after his father, supposedly, at least that’s the story on the bottle. I’ll go with it.
Ian Robertson
Yeah, and it’s delightful? You like it?
Jay Wynn
I do, actually, I really like Irish whiskeys. So not as heavy and thick in some of the flavors of some of the peats, just nice, clean. If you get a real good one, it’s real easy to sip. And that’s what this one is.
Ian Robertson
Cool. Well, speaking of peat, I’m going back to my, I don’t know, what do you call it? My favorite one, but it’s the Lagavulin 16, you know, I found part of a bottle down in my basement bar, and I’m like, how, how is this still here? And I popped it open, and here it is. So I’m feeling good, and tonight, this is going to be good stuff for us to drink while we’re talking about Pareto distribution. So you had brought this up, and this is very applicable to home inspections, home inspection businesses, and a lot of different things. But Jay tell us what the Pareto distribution is.
Jay Wynn
So it’s basically a mathematical equation of explaining why so few people seem to have so much of any given thing, and that can be of an object like we talked about the wealth distribution and economics a little bit. Seems like very few people have a tremendous amount of wealth. But it can also relate to things like in the inspection industry, who is getting the inspections in a given time, who’s getting the work, who’s doing really, really well and being really, really successful, and who’s not. The reason I got thinking about this is I obviously pay close attention to Inspector Toolbelt. I watch the website a lot. I watch the comments, and it seemed to me that there was a lot of comments from guys coming in and going, yo, I’m doing all your suggestions, but boy, I just don’t seem to be making my numbers, getting the inspections. I don’t seem to be getting there and almost a sense of frustration. But I don’t think guys understand how hard it really is to be in that top percentage. I mean, we, you’re, you have some great guests on I mean, just about every time I listen to a podcast, I’ll change what I’m doing somehow, a little, a little bit, almost always, oh, I’m serious. You got some really solid input. You’ve got some, some, I would say, industry leaders, but you also got people that are really willing to share everything they’ve learned, and they condense it down real quick. And when we get talking about it, I think sometimes it’s real easy to forget that there’s been a lot of work and a lot of effort that’s gone into this, and a lot of mistakes have been made. So these guys didn’t just step into it and, you know, unicorns and rainbows, and it opens right up. It’s been a lot of work to get to where they are, but the Pareto distribution is a way of describing why so many feel they have so little, and it kind of plays out in some other fields. And I just when I was watching the comments, it just struck me as that this really seems to be, not unknown but overlooked, I think, is a good way of saying it.
Ian Robertson
Yeah, and just a shout out to all our guests. Man, we do have some amazing guests. It makes the show. We’ve had everybody from guys starting out all the way up to Nick Gromicko and multi-inspector firms like crazy and just everything in between. So it’s great stuff, but it’s interesting when you brought up Pareto distribution. So it was made by, I think he was Italian.
Ian Robertson
And he wanted to, basically, from what I understand, explain why 20% of the population controlled 80% of the money. And it was also the birth of what we call the 80/20 rule. Like we talk about 20% of our effort represents 80% of the results. And look it up. It’s an actual mathematical equation that you can apply to many different parts of business, and we’ll talk about a couple ways that it applies. But one of the things that you brought up about Pareto distribution is that 20% of the inspectors approximately appeared to do about 80% of the business.
Jay Wynn
I think so.
Jay Wynn
Yeah.
Ian Robertson
You know, I was thinking about this when we did a podcast a couple weeks ago about, it was based on a book, but talking about changing consumers perspective of value, and how, basically, raising prices can raise the perception of value. And actually increase work.
Jay Wynn
Yeah, for people that use price as the marker for selecting quality.
Ian Robertson
Yeah, interestingly, that uses a form of Pareto distribution. So if you look at the spectrum, the middle is where you don’t want to be, and the bottom is where you don’t want to be. Interestingly, the top 20% of people that were charging money were doing the most work. So it’s not exactly Pareto distribution, but it uses the same basic principles, and it applies really well.
Jay Wynn
So yeah, and here’s how it breaks down, right. So I’m in the 518 area code. Let’s just say, hypothetically, in my area code, there are 1000 inspections going on every year, and let’s say there’s 25 inspectors. There’s a lot more, but let’s just say, for the sake of round even numbers, there’s 25 inspectors. How it breaks down is the square root of 25, so five guys are going to handle 50% of the work. So that means five guys are going to handle 500 inspections out of that group. So then that means there’ll be 16 guys left to handle 500 inspections.
Ian Robertson
20 guys.
Jay Wynn
Oh, I’m sorry, 20 guys, I’m getting ahead of myself, but the next square round number of that is four. So four times four is 16, that means the next four guys are going to handle 250 inspections. So the number of inspections gets halved every time you go down, which means that for the the 16 guys that are left, there’s only, like, 250 inspections left for all of them. So you start seeing this, this bell curve to the bottom, if you will. And what people don’t realize is that a lot of guys, it keeps getting lower and lower too. So if you’re just starting off, or you’re at the low end of this, you’re competing for a lot of work, and you’re, there’s just not a lot coming your way, largely because of this distribution. It’s not an exact presentation, but it helps explain it. And then when you scale this up to 1000 guys in an area, you find that it does work out just to be that 20% of the number are handling 75 to 80% of the work. So the more you have in the area, the more people you have competing for it, the more lopsided this proportion becomes.
Ian Robertson
You know, it’s funny too, because a lot of times we’re thinking, I just want to make a living. A lot of us are just out there, like, I just need enough to make a living. According to Pareto distribution, that kind of, technically doesn’t happen. You either, you either make it or you don’t. You can, you can, you either need to make a fantastic living or, you know, struggle, and there’s very little in between, according to Pareto distribution. And it’s not exact, like people listening to this, and we’re going to get comments in the, in the forums and stuff, say, well, I make a good living. And, okay, that’s cool. That’s actually the exception, because if 80% of the work is being done by 20% of the inspectors, and that’s almost invariably across every industry. Pareto used that to explain basically economies all across the world, and it was so relatively accurate across a broad spectrum that people started applying it to just about everything. It’s a very accurate mathematical equation. So we can talk about it all day long, but in reality, we want to be part of that top 20% and that’s really our goal. Our goal should be, I want to be in the top 20% of inspectors in my area. Or otherwise, we’re going to be struggling and fighting for what’s left over, which is really hard to do.
Jay Wynn
Yeah, and then you get the people that are competing on price point, and they typically tend to go that way, thinking that somehow they’re going to capture more of that market. And it just, it really doesn’t happen. I mean, here’s the thing, when I try to get this into guys heads, because I still, I’ll take guys on, I’ll apprentice them, I’ll do the ride arounds, they’re still welcome with me. Obviously, in the last two years, fewer and fewer people are looking at getting into the industry. And I think that’s, I’d almost say that’s a mistake. I think right now would be a good time to get to do it and to start build. But that’s another topic. But one of the things I try to tell them is that our industry has a ridiculously high fail rating, like when I went to the class, I think there was 22 other students in the class that I went through, as far as I know, only two of us ever actually went and started doing inspections. And then five years later, I was the only one that was doing it full time, you know, the other guy, he decided he went to commercial for a while, then he decided it just wasn’t for him. So out of 22 that started, I was the only one that stayed with it. And this is 10 years later. And then you have to understand that, you know, 10 years later, most of the guys that make it through that initial couple of years, most of them drop out within five and this last downturn that we’ve had has taken a lot more guys out. So we really have fewer and fewer inspectors out there.
Ian Robertson
It is, and it’s going to turn around. Like you said, I always use the analogy of people with a pond. So everybody was casting their lines in a pond and catching fish like crazy just four or five years ago, and it’s just like, yay, all these fish. All of a sudden, the fish disappear, and there’s less fish in the pond. So what happens is, everybody grabs their poles and they leave. The fish are going to come back. So while everybody else is gone, stick more of your poles in the pond, so when fish come back, we have the majority of the poles out there. We’re going to catch all the fish when they come back big. That’s how the market is right now. Problem is the Pareto distribution basically shows that there is going to be a high fail rate in most industries, especially when you work with larger numbers. So like you go back to the 90s, there’s a lot less home inspectors. It really wasn’t a known industry. Now we’re up to, like 33,000, 34,000 in US and Canada. So now we’re dealing with a larger number set. So now we have to deal with competition, and we’re, if we’re competing, I guess my takeaway from it was, if we’re competing to be in the middle, we’re just going to lose. So if we’re looking and saying, well, my wife’s website’s as good as everybody else’s website, or I do just as good of a home inspection as them, or I offer just the same services as all the other guys, if we’re saying that, we’re doing it wrong, because 80% of people that we look at, 80% of the home inspectors in our market, are struggling, we want to find the 20% that aren’t and say, what are they doing, and then do it better, and add more value even on top of that, to bust into that top 20%.
Jay Wynn
Yeah, and that’s, that’s, I think that’s the unstated goal of everybody that comes on this podcast is it’s to share knowledge and it’s to share experience, but ultimately, to give the right people the tools that will help them break into that top 20%. But if you think it’s going to be easy, or you think it’s going to be a walk in the park, you’re not going to make it. It is a lot of work. And I think inspections, in particular, the inspection industry is a very front end loaded business. You got to put a lot of time into getting it up and getting it running once you’re established and once you, you are out there, once you break into that top 20%, it’s a lot easier to keep it running, not effortless, but easier. But getting there is a real front, you got to put a ton of work into building it. That’s your your driveway speeches, you’re improving your reports, investing in yourself to become a better inspector so that you can charge more. I think that’s a point that a lot of guys miss. You can’t just jack your prices up if you don’t up your skill set, up your presentation, up your ability to control a crowd, up your personal resistance to some of the emotions that we have to deal with.
Ian Robertson
Up your personal resistance, Jay. Sorry, the Lagavulin’s gotten to me.
Jay Wynn
You know what I’m saying. You got to get a thicker hide too. You got to get used to people calling you an idiot and a fool and telling you you don’t know what you’re doing, although you’ve been on 300 roofs in the last year, you know. And they’ll have one guy come in a pickup truck who works for a case of Budweiser, tell you something’s just what the seller wants to hear, and everyone wants to believe them. You got to get used to it. So you got to get a thicker hide, and you have to be ready to put a lot of effort into it. And I think some guys don’t realize just how much work it takes to get it up and going.
Ian Robertson
Yeah, so I think there’s the key of why we’re talking about this. It takes more than just the basics to get things done. And, you know, listen, if you’re, if you’re a doctor, and you’re an average doctor, you’re still going to have a good job, you’re still going to have an office and patients and things like that. Because, you know what, there’s, there’s a need for doctors out there.
Jay Wynn
Well, there’s also a very high bar of entry.
Ian Robertson
Yeah, exactly.
Jay Wynn
So that’s another point too.
Ian Robertson
With home inspections, though, if you are a good home inspector, that’s not going to guarantee you any work, because there’s not, there’s a glut of home inspectors in the industry, to a certain extent, and there is not a high bar to reach to enter the industry. So where there’s always a constant flood of new guys, and then it kind of creates this weird quagmire of failure. So our Pareto distribution numbers, if you go by, so I used to teach home inspectors. I don’t know anymore as of recently, but I remember the fail rate was very high. And you just mentioned it, 22 guys. You said, was it?
Jay Wynn
Yeah, 22 but again, it was 10 years ago.
Ian Robertson
Yup, so two guys made it out of 22.
Jay Wynn
Yeah.
Ian Robertson
That’s less than Pareto distribution. That’s, that’s about 9%
Jay Wynn
Yeah.
Ian Robertson
And then you were the only one left after a certain period of time. So that was about four and a half percent. So we’re working against some hard numbers here. So if we aren’t adding, not just stuff, but value. And I say just not adding stuff, because I see some home inspectors that just throw the kitchen sink at people, like I’ll give you these three warranties, and I’ll do backflips, and I’ll do this, and I’ll do that on anything that you want. That’s not what we’re talking about. We’re talking about adding actual value like you and your area, in our area. Yeah, you’re the go to guy. You’re the guy that they call when other home inspectors, to be frank, don’t, kind of mess up. And they’re like, okay, well, let’s get Jay in here. And then nobody argues, because Jay said it. I’m gonna say you’re, you’re known for that, so don’t let that go to your head, Jay, come on.
Jay Wynn
I promise.
Ian Robertson
All right.
Jay Wynn
There’s guys out there that can take me down in a heartbeat. So I, no, I beg to differ. But anyway.
Ian Robertson
There’s always somebody smarter and, you know, Dunning and Kruger. You think you’re not smart because you are smart. But anyways, I say that only because you add value. You don’t just add a service on, like, oh yeah, I got this little piece of equipment, and I’m going to look down your sewer drain. You became an expert at it. You add services on, you add value by upping the level of your service and different services. So adding value is different than just throwing stuff at people. Like, remember those old infomercials in the 90s? I was watching one of those. I think it was ShamWoW, or one of the other ones. And the guy’s like, and that’s not all! You get this, this, this and this, and that’s not all! Order in the next 20 minutes, and get this, this, and this! And I didn’t buy anything because I’m just like, if I wanted a towel, you just gave me 15 other things. I’m like, I just wanted a towel. We don’t want to be like that salesman. We want to be adding value and saying, what makes me worthy of being in the top 20%.
Jay Wynn
Exactly. Yeah, personally, that’s our skill level. I’ll just give you for instance, we do a lot of sewer scopes, okay, but our area is in the Hudson Valley, the Mohawk Valley. It’s an incredibly old area. I’ve actually taken some time to do some research into how they used to move the sewers around, because you’re talking anything you could literally, like some areas in Troy, you can come across stuff that’s been in the ground for 150, 200 years in some places, it’s not unknown. So what did they do back then? What did they use? How did they, what was the philosophy? What was the idea? What were they trying to achieve? Where were they so, I mean, it sounds stupid, but maybe even doing some history into your area and what did guys do? That way when you run across something really, really strange, I’ll just give you for instance, we had a situation where we were in a mold class. Some guy was talking about on how he was doing an assessment on a building, and he kept finding dirt poured down walls, and he couldn’t figure out why. But I actually found an old article many, many, many years ago that was talking about one of the ways they tried to fireproof the buildings was by adding soil in the walls to try to stop flame from moving through. So it’s just stuff like that. It was a situation where he had no clue what it was, and yet, I remembered that article that I read, so I was able to bring that to the conversation. Did you, did it look like this? Yes, well, this is, this is a technique they used to use. I’m not saying 100% that it was, but it adds depth to what you’re doing. And I’m not saying that I know everything. I certainly don’t. I love learning from guys. That’s part of why I listen. Your guys come on here, and they’ll say stuff and they’ll do things a certain way, and I can’t, there’s times when I’ll go right that day and change something into my report, or change something the way I’m doing when I hear it.
Ian Robertson
Nice.
Jay Wynn
But it can’t just be ourselves personally, too. We’ve got to invest in our networking. We have to invest in our marketing. You know, you understand the value of marketing. A lot of guys in the home inspection industry, I don’t think really do. You can be the best guy out there using the greatest equipment with the best knowledge base, but if nobody can find you, they don’t know who you are, or the ways that you have been making yourself known are becoming obsolete, you’re not going to work, period.
Ian Robertson
You know, that is a two sided coin there. I see guys go one side or the other. I see some guys that do nothing but market, and they market hard, and then they struggle with the inspection side of their business. They’re like, Ian, I’m having legal troubles, you know, this or that, and this agent won’t use me, and then I see some guys that are just, oh my goodness. They could recite a code book from 1963 at the drop of a hat, and just can’t get an inspection job to save their life. We have to be a little bit of both. And there’s a lot to be said about the purity of what we do, the purity of our profession. I’ve not met, let me say, not any, but the vast majority of the multi-inspector firms that have big companies and everything, they rely very heavily on the purity of the inspection. I was talking to a home inspector who has couple dozen inspectors the other day, and man, you get him talking about it, he goes, no, you have to check the underside of that stucco with your bare hand. My guys are not allowed to leave that site until they check it, and then they check this and I’m like, and he feels it. It’s like Stevie Ray Vaughan said, if you don’t feel it, nobody else will. Like him and his guys, they just, they just feel it. So when you’re working with the client on site. So I cyber stalk you, and I looked at some of your reviews recently. That’s what people say. They’re like, oh man, you can tell he’s passionate about his work. I have a doctor that, I keep talking about my doctor because it’s such a good illustration, but he’s passionate about it. I was like, oh, cool. I’m feeling it because he’s feeling it, like I want to, I want to be healthy because he wants me to be healthy. But now, if you get some doctor who just doesn’t care, we’re not going to feel really well. So on the first side of that coin, yeah, I agree. We really need to work on the purity of our profession. We need to be amazing. We need to feel it. We need to be passionate, not just about home inspections and running our business, but be passionate about the house itself. Like, oh man, look at this woodworking or, oh, do you know how they used to build these fieldstone foundations? And just, it has to just ooze out of us. If it’s not oozing out of us, people are going to notice that.
Jay Wynn
Yeah. So I think I’ve seen this a lot with guys that market really, really hard. They’re like, flashing the pan inspectors. They come on the scene, and everybody’s talking about them, they’re just the most amazing thing, because look at what they’ve done in Facebook and how, oh, they became office President, and then six months later, they’re not working because no agents are referring them anymore, or because they missed this. And now their clients moved into the house after the agent referred this, this wonderful new inspector that was all over the social media platforms, and they found major problems that he didn’t catch, overlooked, or didn’t even know about. So those guys tend to come on the scene real strong and glow real bright for a real short period of time, and then they’re gone, yeah, and then you got guys that are just awesome. They’re great with buildings, but you can’t find them, or they don’t know how to talk to people, or they can’t walk into a room full of agents and intelligently verbalize why they’re there, why we do what we do, and why we’re the guy they want to have on site. So, I mean, there’s a lot to that. You have to know your own value, but it does have to be both. And if you don’t have one, you will not work, period. And it’s, it’s more multi dimensional than that, but those are two big ones. You have to have the personal skill set, but you have to be able to be found, and you have to know how to handle people, too.
Ian Robertson
Man, you said that beautifully. They have all the right stuff to be a home inspector, but they can’t intelligently verbalize why we’re here and what we’re doing. I think that, I think that’s key. I think the vast majority of us as home inspectors are really good inspectors, but terrible marketers. You have no idea how many times we build a website for an inspector, and we’ll ask them two, three times for just a short bio, just a couple sentences, and then eventually we’ll get the email that says, I’m not really good at selling myself or talking about myself. And I’m like, get good at that. Not, we’re not talking about bragging. We’re talking about saying, you know, listen, I’ve read an article about why dirt is in the walls, and here’s the reference for it. And you’re still talking about yourself, but you’re talking about the condition at the same time. We’re not talking about bragging. We’re talking about, like you said, intelligently vocalizing why we’re here and why they should have chosen us. That’s beautiful.
Jay Wynn
I’m here to protect your interests in one of the biggest investments you are going to make, and I take my job in that and that trust you’ve given me incredibly seriously.
Ian Robertson
Yeah.
Jay Wynn
There’s guys that can’t even say that, though, there’s guys that, the two sentences, it’s very hard for them to say, and there’s no ego in that. There’s no vanity. It’s not about me, it’s, this is why I’m here, and this is what I do.
Ian Robertson
Yeah. And that goes back to Pareto distribution, that top 20% is going to be a crossover of those two skill sets, and they’re very different skill sets.
Jay Wynn
Oh yeah, very different.
Ian Robertson
Let’s be honest with it. Most of us sitting here, I had, I had to learn skill sets that weren’t my skill set to become a good inspector and a good businessman, because they are very, very different skill sets.
Jay Wynn
So I had to learn a lot of skill sets to become a good businessman and a good inspector. See, the business side of things is where I was very weak at, and I had to learn a whole different language, a way of accounting, a way of marketing, a way of presenting that, why I do what I do, and a whole business model. So I was the other side of it too, you know, I knew buildings, but I didn’t know how to run a business. I didn’t know how to, where my pricing should be. I didn’t know how to market or advertise. But here’s the thing, I found people that did, and when they talked, I shut up and listened, you know, and that was the big thing, is I found people that were already established. They were smarter than I was. They’d figured things out, and I didn’t try to reinvent the wheel. I just did what they told me to do. And then after a while, I got comfortable doing it, and I started doing it in my style. And I think that’s key. You do that. You go through the motions. You build it up, you get all the parts in place, and then you put you into it, and you’re going to have your own way of dealing with things come out. You’re gonna have your own style and the only way that you like to handle things, and that’s perfectly fine. That’s your personal stamp on things, and that’s your mark of success. But none of us, I don’t think any of us, have all the skills together. We got to learn from somebody.
Ian Robertson
And that’s the key, what you just said right there. So both you and I had skill sets, but we didn’t have all the skill sets, and we’ll never perfectly have each skill set. People still have strengths and weaknesses, but where I see people lack and fall into the 80% of the Pareto distribution is an, not an unwillingness to learn, but an aversion to learning. There willing to learn, but they want to learn in their own way, in their own time, and they want it to fit into what they already know. So there’s a cognitive dissonance to it, like it’s like, as long as it fits into what I already think it should be, then I’ll listen. But instead, emptying ourselves and saying, okay, what does this guy know that I don’t. So everybody that’s been on the show, these are guys that are on the, are on the 20% of Pareto distribution. They’re doing 80% of the work. You know guys like, you step back and say, what do they know? And empty ourselves of it. So I was talking to a guy recently, and he’s like, I’ve listened to all your podcasts. It’s not working for me. I’m like, really, like, because this was like, I don’t know, maybe two weeks ago, but just a month ago, I had another guy saying, I went multi-inspector. I have five inspectors after year two, and I just followed your podcast. I’m like, you can’t have two different results like that. So I asked him, I’m like, are you doing this? He goes, no, that didn’t work for me. Like, how about this? No, that didn’t work for me. How about this? That’s not my style. By the third thing I’m like, listening and doing are two different things. Do it, hate it, learn to love it, and then watch how it works out. We can’t force the solution to be what we want it to be, and I think that’s human nature. We want it to be like, I had one guy. He’s like, I want my website, but I want it to rank really high. I looked at his website. He’s like, three sentences and a weird picture of a house in the 90s. I’m like, I can’t do anything with it. He’s like, then I’m not working with you. I’m like, okay, do we want our 90s website, you know, using this as an illustration, do we want our way of doing things to be successful? Or do we want to find the actual ways to be successful and to be in that top 20%? That takes some real, real metacognition. Man, you really we need to step back and evaluate how we actually think about things.
Jay Wynn
Yeah. I see guys fall into the same trap. Because I think what people forget too is we are an evolving industry. We are a technically involving industry. We are moving forward all the time. Markets change, like you and Beon talk about the markets, your updates. I love listening to that, too, by the way. It’s just interesting to hear two unpolished opinions bouncing stuff off each other. But one of the things, like the NAR settlement, that’s going to affect our industry, how, we don’t quite know. But are you willing to adapt? Are you willing to reinvent yourself, if need be, if you were relying completely on agent referrals and you’ve got nothing else, if that starts to dry up, are you willing to venture into other avenues of marketing and advertising? Are you going to improve your website? Are you going to do more direct to consumer marketing? What are you ready to do to be adaptable? Because nothing stays the same. Everything is always changing. And I mean, that’s another dimension to it is you may have run a successful business for years, but if everything changes around you and you refuse to adapt, you’ll become a dinosaur. So another part, you’ve got to be able to be willing to reinvent yourselves, and sometimes drastically reinvent yourselves, and that can be a painful and scary situation, too, if you’re moving to the unknown, even if you’re established.
Ian Robertson
I’m just going to say it, change stinks. I don’t like to change. I like to figure out a system, and I’d like it to run like that forever. But the reality of it is, what you just said, the world that we live in changes very rapidly, and our industry is changing rapidly. Think back. You’ve been in business, what, a little under a decade now.
Jay Wynn
10 years, just over.
Ian Robertson
Oh, wow, over 10 years. Okay, so let’s just go back 10 years, 10 years ago, most home inspectors didn’t use infrared on inspections. Thermal imaging was not a thing. In fact, even in our area, some agents were like, whoa, we don’t need any of that. Are you gonna look for ghosts? It’s like, haha. Like, this is real technology, we’ve been using a long time. Sewer scopes, not a thing.
Jay Wynn
Nope.
Ian Robertson
I barely knew of just a handful of inspectors 10, 15 years ago that would do sewer scopes. Septic inspections, I mean, that’s a big thing in our area now.
Jay Wynn
Yep.
Ian Robertson
Eight years ago, didn’t happen.
Jay Wynn
Nope.
Ian Robertson
Nope. I think you were the first one eight years ago, maybe seven years ago, to start doing full septic inspections in our area. There was a lot of pushback.
Jay Wynn
A lot of pushback I got. I had a lot of uphill battles for that, and now I got inspectors that are not only doing them, they’re copying our style.
Ian Robertson
Yep.
Jay Wynn
I mean, that’s, and I’m good with that. And I say, as long as they’re doing a legitimate job, and they’re taking care of their people, and they’re really, you know, like just trying to be a great inspector and and, well, to the purity of inspection, um, by all means, I’ve helped a number of guys set, set up the septic portion of their business and talk how, how do you do it? What are you looking for? What tools to use, techniques. In fact, I’ll have guys sometimes call me up say, I can’t find a tank. What do we, you know, it’s, by all means, wasn’t a thing a decade ago, but we put it, we got it going in this area, but I learned that from other parts of the country where it was standard. So I looked at what they were doing, and then adapted it to what our market would support, and then adapted it to what people expected and then started changing and elevating expectations, now to the point where a lot of septic companies won’t do inspections, and people want independent inspectors doing them too. So we’ve managed to shift the market in our area.
Ian Robertson
But think about that. You were willing to change your whole perception of things, because it’s not, it’s not easy going from, I’m a home inspector to I’m gonna go dig a hole in your backyard, look at a big tank, and run some cameras up and down it. I’ll be frank, I pushed against it. I wasn’t really thrilled about the thought of it. But now, if we’re gonna push against the thought of that because we’re nervous about it or we don’t understand it, we can’t do something just because it’s not our our thing.
Jay Wynn
So, I think the other thing too is, and I’ve heard this some other podcasts, is that none of us want to admit when we’re afraid of doing something, and yet fear restricts a lot of what we, we do as individuals and as building our business. We’re afraid. And if we try something once and it doesn’t work instantly, well, that’s it. It doesn’t work. And I didn’t like it. I knew it wouldn’t work anyway, and I think that’s part of being realistic about things too. Fear can limit us. I mean, one of the things that I hate to say it, that’s actually been a blessing in disguise, is that through my life, I’ve had to reinvent myself a number of times. So I’ve had to change careers, I’ve had to change jobs, we’ve had to change living circumstances. We’ve had to just start from the bottom and build right back up. But what that does is it makes you a little more insulated from that fear, because we’ve done it before, we can do it again. It’s, it’s actually, it’s a skill that you can learn like anything else, but you got to be willing to to adapt, to be adjustable, and sometimes that means tearing it down and looking at the blocks and building it right back up again, maybe a little better, a little stronger, a little smarter. But it’s, it’s one of those elements that puts you in that top 20%. The guys that are willing to adjust and adapt, shift things around, even, even sometimes the entire business model, breaking it down and around, those are the guys that, in connection with the other stuff we’re talking about, will rise, and other guys that don’t do those things are going to fail. I know nobody wants to say that. Nobody wants to say, well, if you come in here, you’re going to fail. We want to we want to think that everybody’s going to be equally successful, and there’s going to be plenty to go around. But the fact is, a lot of people in an industry are going to fail. What we’re trying to do is give the guys that really want to succeed, that really want to push into that top 20%, give them the tools and the advice and the help they can to get there. And there’s another, I have this very selfish reason why I like guys to succeed, because my hope is, is that collectively, we can continue to improve the industry we’re in. We can continue to make it a more honorable, a more recognized business, a more valued business, and we can raise the expectation every inspection we do so that people won’t even think about going with that bottom 80% and I’m hopeful that a lot of those guys are just going to start going away. I’m hoping that collectively, we can keep pushing the standards so high that, and I don’t want to say this in a bad way, well I’m going to say it. I don’t know a nice way to say it, but the bottom feeders, I’d like to see a lot of them leave our industry. I’d like to see those guys just go find something else to do.
Ian Robertson
Or at least let those guys who are at the bottom part of the 80% raise and elevate their business to kind of meet the standards. But in reality, according to Pareto distribution mathematically, it unfortunately doesn’t happen.
Jay Wynn
Well, but here’s the thing, the square root of 10 is, the closest square root is three, right? Three and three is nine. So if there’s 10 inspectors in the area, three of them are going to have 50%, that means another 50% is left for the last six so you start looking when there’s fewer and fewer people you’re competing against, the distribution gets much more even that’s the thing, and that’s the thing that I think people miss, is that when you don’t have the number of people just in the field, just warm bodies in place, the numbers start to shift, and things start getting a lot more even. It’s fascinating, but sit down with a piece of paper sometime, and just do the numbers. Take it from 1000 down to 50, down to 25 down to 10, and you’ll just see how it all plays out.
Ian Robertson
You know, it’s interesting when you look at the actual mathematical equation, like you can see it on Wikipedia, I can’t even name some of the symbols that are in the full mathematical equation. Your explanation is very simple. It actually makes it make sense. But going back to that point about fear, I do think that that is the one characteristic factor of the 80% in Pareto distribution, fear of change, fear of failure, fear of a lot of things. So for instance, we talk about pricing, we’ve had Preston Kincaid on, and he talks about fear stops us. And I think basically what he’s trying to say is whether we admit that it’s fear or not, that’s exactly what it is. So, raising our prices and adding a new service, oh my agents are going to like that. Really? Did you ask each one of your agents, would you like this? You know, I don’t remember the last time my favorite restaurants came and asked me if I like something. They put it out there. They let me try it, and then they move on. Like, cool. We made money. He liked the burger. Let’s go on. We’re making these things up in our head to try to make ourselves feel better about our fear, to validate our fear. My agents aren’t going to like that. People aren’t going to pay this. No one’s going to hire me for that. If we live that way or do business that way, like you said, we’re going to go the way of the dinosaurs. Because some young upstart, you know, some of these young inspectors, they’re, they’re impressive. You got like, a 25 year old guy who’s got a, who’s got a robust list of services that he’s well qualified for, markets hard, and does his thing and communicates well with people. You don’t think he’s afraid too? He’s walking into that room, I was a 25 year old inspector once, scared the tar out of me. Man, I almost messed my pants every inspection, the first, the first 100 of them. It’s scary. But listen, as we get older, I find it in my 40s, as we get older, it’s like harder to make those changes. So yeah, I think you’re exactly right. I think fear, whether we admit it or not, keeps us from advancing, and also we try to validate our fear and call it something else besides fear.
Jay Wynn
Yeah, I actually see a lot of the negative comments, they’ll post something like, well, I tried this and it didn’t work, but it doesn’t matter, because I’m still offering exceptional services at my price point. And so it’s like, really, did you try it? And really, how good are your services? You know, you’re going to tell me that you’re a great inspector if you blow through a house in an hour, and then you got to run to the next one, so you can do three or four of these a day, as opposed to some guy that’s got his pricing right, and he can spend the time and communicate with his clients and spend whatever the house needs, an hour, two, three, whatever they need to be comfortable. Are you seriously going to tell me that you stack up against that guy? You know, when you stop and you look at some of the stuff, you realize that, I think the term is self-soothing. There’s a lot of that that goes, especially on the online stuff. I’ve gotten so I’m very leery of a lot of the online commenters. You wonder how much they’re actually doing and how much success they’re actually really having.
Ian Robertson
Yeah, well, that’s, I mean, I remember when first, when I was first starting out, about almost 20 years ago, was the guys that I thought were doing amazing, I’d really drill down and be like, you’re not really doing amazing. And then I kind of, like, start backing away, like, okay, maybe your opinion isn’t really what I need to listen…I remember, man, this is dating me, making me feel old. I was the first person in our area to do electronic reports. I’m not talking about, you know, sitting on a computer and writing something up in Word. I had a PalmPilot. I did my report on a PalmPilot and delivered it with a PDF. And I remember people saying, that’s crazy. You’re not even writing it down with a pen. And I remember all the other home inspectors were so livid, you can’t do that, and you’re right. It was self-soothing. They were soothing themselves. Because, you know what? It’s a new skill to learn. It’s a new way of doing things. It’s a new expectation. And the older we get, sometimes it’s the harder, it’s harder to do that.
Jay Wynn
It sure is, you know, and I agree with that, you know, the older I get, the less I want to change. And I’m also almost getting to the point where I’m looking at retiring, I’m setting that up. I’m looking at my exit strategy from things. So I’m in a different place than a lot of the young guys, but I was just, been watching things and been paying attention to things, and thought maybe this needed to be reiterated, especially a lot of the guys that are starting listening, that are starting into this, is that you’re going to have to put a whole lot of work in. You’re going to have to really front load this, and you’re going to have to be dedicated and push and push and push. And we’ve talked about this before. I was thinking Isaac Newton made a point. He said somebody commented to him on his genius and on his advanced theories, and his comment was something to the equivalent of, well, if I see farther, it’s because I’m standing on the shoulders of giants, you know, and it’s really a good way to think of it, as he wasn’t coming up with this stuff on his own. He wasn’t reinventing, he wasn’t, Genesis and all these new ideas. He was taking really intelligent people and what they were already doing, but he was he learned from it, copied it, and then thought about it and took it to the next level. And I think that’s kind of what the message is, at least on my perspective, to the guys breaking out, stand on the shoulders, by all means. Look at what the guys that, find who you like, who you want to be, mimic what they’re doing at first, and then after you get comfortable, after you start building it and getting good at it, then you make it your own. Put your own style, put your own brand on it, but don’t be afraid to stand on the shoulders of giants.
Ian Robertson
I think that’s a beautiful way to end our discussion of Pareto distribution. Fantastic discussion. I’m really glad you brought this up, Jay, and as always, thank you. Hopefully you enjoyed your Quiet Man drink. I enjoyed my Lagavulin, and we’ll talk soon.
Jay Wynn
Sounds good, Ian, take care.
Ian Robertson
Thanks.
Outro: On behalf of myself, Ian, and the entire ITB team, thank you for listening to this episode of Inspector Toolbelt Talk. We also love hearing your feedback, so please drop us a line at [email protected].
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*The views and opinions expressed in this podcast, and the guests on it, do not necessarily reflect the views and opinions of Inspector Toolbelt and its associates.

PODCAST SUMMARY/BLOG
In the latest episode of Inspector Toolbelt Talk, titled “Unveiling the Pareto Distribution: Strategies for Elite Success in Home Inspections,” we dive deep into the secrets behind why a small group of home inspectors dominate the market while others struggle. With Jay enjoying his favorite Irish whiskey, The Quiet Man, and myself relishing a peaty Scotch, we explore the concept of Pareto distribution and its impact on the home inspection industry.
The Pareto distribution, or the 80-20 rule, reveals that 20% of inspectors secure 80% of the business. This concept isn’t just theoretical; it’s a mathematical equation explaining why so few people seem to have so much of any given thing. Applying this to home inspections, we see how a small percentage of inspectors handle the majority of the work. This uneven distribution creates a competitive landscape where only the top 20% thrive, leaving the remaining 80% struggling for a share of the market.
Through hypothetical scenarios and real-world examples, we illustrate the challenges new inspectors face, from high failure rates to intense competition. It’s not uncommon for many to drop out within the first few years, unable to gain a foothold in the industry. This high failure rate underscores the importance of striving to be in that top 20%, where the bulk of opportunities and success lie.
But how do you reach this elite tier? It begins with understanding the relentless effort and strategic mindset required. Shifting consumer perceptions of value plays a crucial role. For instance, inspectors who charge higher prices often do more work, emphasizing that value perception can significantly impact business success. By enhancing service quality and maintaining a strong market presence, inspectors can stand out and avoid getting lost in the competitive middle.
Marketing and passion are essential drivers of success in the home inspection industry. Adding genuine value rather than overwhelming clients with unnecessary extras can make a lasting impression. Reflecting on the contrast between thoughtful service and aggressive sales tactics, we emphasize the need for in-depth knowledge and passion. Expertise, combined with effective marketing, helps inspectors not only be skilled but also be found by clients.
Adaptability and metacognition are also critical. The ability to step back, evaluate, and improve thinking processes is vital in an evolving industry. Embracing new technologies, like infrared technology and septic inspections, and overcoming the fear of change can propel an inspector’s career forward. Real-world examples highlight the necessity of constant innovation and the willingness to embrace new methods.
Moreover, the importance of learning from experienced professionals cannot be overstated. Building upon the knowledge of industry veterans, adapting their successful strategies, and putting a personal stamp on them can lead to significant advancements. This willingness to learn and evolve sets apart the top 20% from the rest.
In conclusion, the key takeaways from this episode revolve around understanding and applying the Pareto distribution, striving for excellence in service quality, leveraging effective marketing, and maintaining adaptability. By embracing these strategies, home inspectors can navigate the competitive landscape, overcome challenges, and aim for that coveted top tier of success.
Tune in to this insightful episode of Inspector Toolbelt Talk for a deep dive into these topics and more. Whether you’re a seasoned professional or a newcomer, the valuable lessons shared in this episode can inspire and guide you toward elite success in the home inspection industry.