2367 - Revolutionizing Inspection Processes in Regulated Industries with VirtuSpect's Tim Harris

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0:46Visit podverify.com if you'd like to be featured as a future guest. I'm Josh Elledge. Let's get into it. With us right now, it is Tim Harris. Tim, you are the CEO and co-founder of VirtuSpec. You're found on the web at VirtuSpec.com. Really excited to talk about your technology. Tim, it's great to have you. Great to be here, Josh. Thanks for inviting me. Before we start talking about the impact that you have in the market and, you know, kind of your superpowers and the work that you do, I understand that you're an avid swimmer. And, you know, by avid, I am astonished at your early morning gumption.

1:28You want to maybe share your morning routine? Yeah, well, I've started about 10 years ago swimming every day and now I'm a regular swimmer with a other group of swimmers at 4 a.m. in the morning. So I go to bed quite early, but I get up early and I find that the routine of doing a long swim early in the morning before most people wake up helps relieve stress and gets me focused for the day. So that's my passion outside of work. Yeah. You know, I live here in Orlando, so I have a pretty decent outdoor swimming calendar that I can do that. Obviously not now, not in January, but, but it's actually not too many months away that I can get back in the pool.

2:12Can I just ask you a personal question? You know, so I, I tend to get a lot of shoulder pain from swimming and maybe it's my stroke. And I can tell you this, I'm absolutely not doing maybe the stretching that I should, that could be part of my problem. Do you make, do you make something like that a part of your routine so you can keep swimming at that pace? Actually, I don't do a lot of stretching, but I did join a master's program, which is a national swimming group that has coached workouts early in the morning. And they helped me with my technique to be more using core to throw the arms instead of using the shoulders to throw the arms, which really kind of alleviates a lot of the shoulder pain.

2:59Wow. Thank you for that little tip. That's where I'm going to start digging. I have some things to learn before I get back in the pool in a few months. So, well, Tim, share with us a little bit about what VirtuSpect is, what you do. Sure. So VirtuSpect is a software as a service company. So subscription based software company. And we provide a platform that that automates the inspection process for regulated industries like banking, which is our first market that we entered. So, for example, for SBA loans, which is one of our use cases, SBA loans require, there's an inspection required for a restaurant, say, applying for a loan.

3:43And typically that inspection was done by third parties, you know, would drive to a location, a restaurant, for example, and take pictures and answer questions and then attach the photos to emails and so forth. So that is historically how it's worked with our system. We have both a, we've combined a centralized management software platform to manage all the workflows associated with the inspection, as well as a highly secure mobile app that allows, in the case I just mentioned, the restaurant owner to capture their own inspection, which is a lot more convenient than sending a third party to do it.

4:24It's a lot less intrusive and it is a lot faster and it's able, it allows us to do high numbers of inspections for regulated industries where inspections are generally required at scale, thousands of inspections per day, per day if needed. Wow. Okay. So these would be, and so who typically is doing this? Obviously, these are inspectors that are using your platform then. And, you know, I mean, it might be kind of interesting, you know, to kind of someone want to be able to do their own inspections with this technology just to make sure they're ship shape. But it sounds like the majority of the work are going to be done by current inspectors.

5:03Well, actually, it can be done by inspectors, but typically it's done by people who are either working remotely or have a business that's applying for a loan. And we guide them through the process to do the inspection themselves. So they don't need to be an expert at capturing the inspection. The questions are all customizable and tailored by the organization seeking the inspection. And they're typically done by people in the field. So a restaurant owner who's applying for a loan would do their own inspection. And, you know, for someone working from home, which is another regulated use case that works for a bank, for example, needs to have their home office inspected.

5:44you know, inspected, they would do that inspection themselves. And then our platform orders, it handles the provision, the ordering of the inspection, the provisioning of the mobile app for the person in the field to do the inspection, the producing of the reports, the remediation, escalation, notification, approval process, and all that stuff. Well, this has to be improving a lot of old systems that maybe just delayed a lot of things. And so obviously, there's some cost savings, I think, that can be realized here. But I think that this just makes things so much more efficient. I'm sure you've got some great stories of particular use cases where like, yeah, let me tell you the before and after.

6:28Tim, anything come to mind? Well, I can give you a good example, which is banking, which, as I mentioned, is our first vertical market that we've penetrated for our first customer, Celtic Bank, which does about a thousand inspections a year with us. They're able to cut the loan close time by four days per loan. It's normally the ordering of an inspection from a third party, getting them to go out to travel to go do the inspection, making the appointment with the business that needs the inspection would typically take about five days. And the fastest we've turned around an inspection for them is 28 minutes.

7:04So that's a pretty radical improvement in that. And for a bank, that translates to extra interest income for the bank, because if they close faster, then they have four extra days of interest income. So for different industries, there are different benefits of automating the inspection process. No question. Now, are there regulated, and I'm just trying to understand the process here about, you know, these are, again, very highly, you know, regulated use cases. Is there like how do you ensure that you're meeting all of their requirements with this platform? And obviously, then I guess they kind of have to agree to it.

7:42But if there's kind of a known professional standard, how has that work happened in conforming to those regulations and also getting buy in from the banks or whoever else might be needing this very regulated review? Yeah. So the questions that are asked in the inspections and the photos and videos that are requested to prove compliance in our system are generally well known. There are regulations about what needs to be captured. And we encapsulate those in, I mean, there are experts who've helped us to, we don't develop the questions in the photo list ourselves. They come from either the customer or from a regulator.

8:30And we've also partnered with a leading compliance audit company, E-Delta Consulting, that helps us with a broad range of compliance audits that they know what the regulations are. They provide the frameworks to their customers and they help us to design the inspections that meet the needs of the regulators. And so as a company, then VirtuSpec, how has growth been and how are you kind of continuing that growth trajectory? Yeah, sure. Well, I mean, as a startup, we've stayed very focused on financial services. We have designs on other vertical markets and we're starting to penetrate those as well.

9:14but we have customers in the commercial lending space and the growth has been good. We launched the platform in August of 2024. So we've been at it a little over a year and we are self-funded and able to, you know, self-sustainable. So we haven't taken any external funding yet. So I guess that's a good indicator of how well we're doing. Obviously we'd like to raise money to grow, But we've done well in our beachhead market, and now we've divided where we want to go next, continuing in financial services with banking, but also expanding into bank branch inspections for banks and things like that within financial services, and home office inspections for securities companies that have people working from home.

10:06So there's a compliance market for us where we prove compliance. We're the last mile of compliance, essentially, where we prove through photographic and other types of evidence that someone is in compliance to policies and procedures for compliance purposes. The other part of our business that is emerging is using our platform to augment asset management systems that, for instance, if a large warehouse, an Amazon warehouse has a number of forklifts, those need to be inspected on a regular basis. and integrating with the inventory management system and with the ERP systems, for example, to know not only the location and the proof of existence of an asset, but also the quality of the asset and how often it needs to be inspected and so forth.

11:00That's a new market that we're just beginning to penetrate now. How does getting started, and I don't know if you ever get folks that are concerned about privacy. Obviously, I'm sure that's generally something that folks will ask about. But is the process, part of my question is, to our friend that's listening right now, obviously they can go to your website, virtuospect.com and it's getting very clear, but do you mind maybe kind of sharing their next steps? And then also usually what happens and how easy it could potentially be to get going with the platform? Sure. So we are really focused on companies that do inspections at scale.

11:47So at least, I would say, needing at least 100 inspections a year, because typically those are the ones that have operational issues with managing large numbers of inspections, and particularly the remediation. You know, if something needs to be fixed or something needs to be reinspected, doing that manually when you have large numbers of inspections is a problem. So if there are companies that are struggling with that and using third party inspectors, we're a really good fit. And in terms of privacy, everything is we're built on a really industrial strength enterprise software platform that everything is encrypted.

12:27and actually, I would argue, much more secure than a typical third-party inspector who's generally an unskilled person who's sending a car to go take photos inside someone's business. We have everything locked down, and typically we're using internal resources, which is more secure than using third-party resources. Well, your website is virtuospect.com. There's right, when you go to the website, you'll see a learn more box. You'll see a contact form. And then I would imagine they get to talk with somebody on your team. Absolutely. Yeah. Love to talk to anyone who's interested. And your pricing is actually fairly accessible.

13:07I mean, given your use case, it starts, you know, anyway, the pricing is productized. You have it right on the website. So, well, wonderful. Tim, thank you so much for the conversation. Again, Tim Harris, you're the co-founder and CEO of VirtuSpec, the website VirtuSpec.com. Tim, thank you for joining us. Thank you very much, Josh. Really appreciate it. All right. We'll see you in the pool. Thank you very much. Bye now. Thank you.

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