DevHeads Revenue (2023)

[00:00] Guys, there you have it. Devheads, they're quitting their full time jobs. They're making $30 a pop right now. They're saying, screw it. We're going in. We're gonna help build software for these school districts in Missouri. Our first school district's already gonna be about equal to our first our salaries make it our jobs. They make recurring revenue on hosting and other items looking to build from here. Hey, folks. My guests today are Fortuna and Kobe. They are [00:21] building devheads, which is a young software and hardware development company targeted at local businesses. Their goal is to provide a personal experience that larger scale companies can't deliver. They target local companies because they're often forgotten about or unable to afford the development fee of large scale businesses. Fortuna, Kobe, you ready to take us to the top? [00:37] >> Yeah. We're ready. [00:39] Alright. So first off, just to be clear, you guys are you're a consulting firm that codes software for local businesses? [00:46] >> Yep. Yeah. [00:47] Are these websites what are what are local businesses asking you to code usually? [00:50] >> Right now, we're going on updating a lot of websites, and we have one business that's like just providing a personalized app that keeps track of all their appointments coming up. And then a local, it's not really a business, but with our school district, we're partnering with them to connect the alumni system to the current students so that current students can reach out for advice whenever they need it. [01:09] I see. And what's your greatest background? Are you engineers? [01:11] >> Yep. We're both engineer we're both computer science. [01:14] Who codes what? Who's front end? Who's back end? Who's full stack? [01:18] >> I'm the back end guy. I'm front end. [01:20] Alright. Well, Kobe, what's your go to front end tool right now? [01:24] I use VS Code to code most of my applications. [01:27] Okay. And Fortuna, on your side, what's your what's your back end favorite right now? [01:30] >> Right now, it's PHP. We haven't got it, like, super deep into back end, but PHP just it's carrying us right now. Yeah. [01:37] Alright. Great. When did you guys land your guys'first customer, paying customer? What year? [01:42] >> We landed this year. We have multiple paying customers. Currently, we're lined up to do 40 websites this month. We have a big contract with our school district to make provide them that connection between the alumni system and what's it called, the current students. So we have that big contract, and then we're working on getting more contracts. So right about now we have, like if we count the websites as contracts, we're about 41 contracts right now. [02:05] But when what month this year did you get your first dollars of revenue? [02:08] >> The first July was our first month. Yeah. [02:11] That's great. Okay. Okay. So this month, we're recording July 12. So you got your first customer this month? [02:16] >> Yeah. Yeah. [02:17] What are they paying? [02:19] >> The school district, what we're still in negotiations with it, but we're trying to get in that $10k range for to provide that for school district. The websites we're pumping out, it's $240 per, $250 per website. And then we have a hosting fee of $40 per month to where we provide the virus protection. We'll update your domain whenever you need more from your website. Like, let's say you need a new software that you can't find online or [02:41] >> we go find it for you, we'll be whoever's offer Goat out there, which again, that $40 a month. [02:47] And why do they need you for that? Why can't they use GoDaddy or Bluehost or or some of these providers? [02:51] >> Well, because when you're launching your own business, you you where our goal is, like, we're your IT team. Like, we want you to not worry. Just worry about your business. And we provide, like, that personal experience like GoDaddy or Bluehost. They're not gonna go do daily runs on your websites. Make sure, like, okay, that your website's optimized for today. It's still running fast. Like, we do daily speed checks, daily virus checks. That's the that's the stuff [03:12] >> GoDaddy and Bluehost, they've gotten too big to, like, personally check that for every single website. [03:17] Most folks listening right now, they're, you know, they're working a full time gig thinking about launching their own company. You guys, it sounds like, have you quit for your full time jobs? Are you all in on devheads? [03:25] >> Oh, we're about to be all in on devheads starting August. [03:28] Oh, come on. About to be is an all in. When are you guys quitting your jobs? [03:31] >> Like, within the next weeks, it looks like we'll quit and just, like, go all in devheads. Because right now, it's, like, it's twelve hours a day mostly on devheads. It's like it's your we do our full time jobs. Our full time jobs are pretty laid back. We're sitting around most of time, so we can be there and still work on dev heads. But, like, in the next week, we'll quit our full time job and just, like, [03:50] >> strictly dev heads. [03:51] Kobe, did that make you nervous? [03:53] Nah. I'm all for it. [03:57] Oh, what's going on there, YouTube? Good to see you guys. Now imagine this. You love watching these interviews with SaaS founders. But imagine if we took all of the valuation data out from over 2,807 interviews I've done manually. Saves you a lot of time. Well, we've done this. We've built it into the beautiful interface inside of Founderpath. Check this out. I'll show you how you can access this in a second. But you log in, you connect [04:21] your Stripe account, you see your valuation real time, you can see what changed over the past eighty eight days and even set goals for valuation this year. Now the secret evaluation is there's many different ways to value a SaaS business. So the reason you're gonna see three or four different valuations inside of your Founderpath dashboard, this is all free by the way, is because depending on who's doing the buying of your SaaS company, you're gonna get [04:45] a different valuation. A VC is gonna pay a different valuation, private equity firm is different. If you're gonna do a minority sale, that's different. And if you sell the whole business, that's a different valuation. You can see all those when I hover over here. Right? So the teal is what a VC would pay. Yellow is what private equity and red is if you sold the whole thing outright. Now what's cool about this is this is not [05:07] built off random data. Again, you guys hear these interviews on YouTube. All these datas are built from real time valuation data points founder share with us on the show. So traction, 1,200,000 seed round, 3.7 raise. They sold 22% of their business. Go in here and filter by the event. Maybe you only wanna see companies that have sold the whole business. Well, here are a bunch that have been acquired the valuation and the multiple. Maybe you're going [05:33] out right now and you're raising your seed round. Well, go in here and look at all this recent seed deals that went down, what they raised, what valuation they raised at, and what percent that they sold. There's never been a larger dataset of SaaS valuations than what you can get now inside of Founderpath. And we're thrilled to bring it to you. Alright. We're gonna go back to the YouTube video here in a second, but if you [05:55] wanna check this tool out, if you wanna jump in and sign up, you can check it out for free to get your valuation at this link. This link, founderpath.com/products/valuations. Or if you go to founderpath.com and hover over products, click on get your valuation here, and go ahead and sign up to give it a whirl. Again, all that valuation data live right inside the platform. I hope to see you there. Alright. Let's jump back into the interview. [06:22] What what help me understand what you're giving up. Are you comfortable sharing what your salary is at your current job just so people can understand what you're giving up? [06:28] >> Our current salaries are not too high. It's, like, 30 k a year. So it's like Yeah. We we just wanna get after it because our the first contract we've signed with our school district, it's like that's almost our salary right there. So it's like yeah. Mhmm. [06:41] Have you guys how are you thinking about you know, people think when you launch a startup, it's very risky, but some of the best founders actually derisk the starting process. You know, they have savings. They've worked hard to save up things like that. How are you guys derisking sort of buying yourself some time to get dev head off the ground even when you're not making a full time income from your full time job? [06:58] >> Right now, we have sit we have between us, we have savings. We have about 15,000 saved up to go towards that. That's that's fine. And then we have we're building connections from another startup in St. Louis. What is it called? Bolto AI with Mark. He's been able to provide us with a lot of resources that he had when he was doing his startup just a few years ago. They launched in 2017, last year, he did about [07:20] >> 5,000,000 in revenue. So having him as a resource helps a lot too. [07:23] Mhmm. That's great. One of the things I always appreciate about, you know, founders starting out is how low they've kept their personal expenses. Kobe, tell me a story about some personal expense that you have just kept so low, people are gonna be shocked by it. [07:37] The personal expenses to avoid copyright, I just try to go on, like, iStock, and I'm trying to get, like, the low like, the cheapest, like, quality stock images. Right? Because I'm not trying to I'm not trying to go out and, like, spend a bunch of money just to have, like, like, images and stuff like that. And I'm trying to I'm trying to find, like, the cheapest solution to getting our website to have the best quality runtime [08:01] possible because you [08:02] No. But, Kobe, talk to about your personal expense. Like, for for example, if you guys are both to able, like, get food on your table and, like, your rents in in Missouri for really low, you don't have to make a bunch at the dev heads to, like, live, basically. So tell me a personal story. [08:16] Okay. So a personal story is I've limited my spending to, like, let's say, if I really, really, really need something to eat, it's probably gonna be, like, twice per week. Like, I'm just trying to save money, just cook food at home just so, like, I I know that my money is going towards this company. [08:34] That's awesome. And then what about what about on on your end, Fortuna? [08:37] >> For me, I'm kind of on the food to eat side too, but then for me, I my phone bill used to be incredibly high. I've downgraded to, like, a a local carrier. Not really local carrier, but, like, one of the lower end carriers just for a time being. My phone bill went from, like, $80 a month to now it's, like, 20. So I'm like, okay. Yeah. I'm saving $60 that that can go back towards dev heads [08:55] >> in the long run. And then I'm just like, I've limit we both limited eating outs. Like, I've done it to about, like, one day a week and it's, I'm eating almost the same thing every day, but it's, like, it'll be worth in the long run. Yeah. [09:04] I love that. I love that. Alright. Who owns more equity? [09:07] >> Right now, it's about a 50/50 share. [09:09] What if you disagree? [09:12] >> We have one more person in dev head. We have one more team member, Brandon. He wasn't able to make this meme, but, like, he's right there. Like, he's the one who will, like, see proof both sides. Like, he's the advertisement. Like, he'll get our names out. And he's like, I believe this was a better run for a company. Like, we can both respect Brandon's opinion. [09:29] But Brandon doesn't own any equity? [09:31] >> No. Brandon doesn't currently doesn't own any equity. [09:33] I see. I see. Alright. So what's the long term goal? You're you're doing the school district 10 k. You're doing a website for $250 a pop. Four years from now, what do you guys think devheads looks like? [09:43] >> Our goal is to see, like, with the school district stuff, see how first year, let's have, like, our school district, our solo school district, let's get all the results in, and let's be able to bring that to more, like, more school districts in Missouri. Our goal is to eventually reach out to every school district in every high school in Missouri, at least. We have 960 high schools. If we're able to We're gonna increase the price way [10:04] >> more than take care of pop. It's like, let's use ours our high our school superintendent to reach out to those other ones. And, like, every single high school wouldn't be at at, like, 40 to 50 grand per high school that we incorporate that into so that the high schools can later on go connect to our alumni system. And eventually, we wanna get up there to where it's like it's almost mandatory in every high school to have this connection [10:23] >> system. So we're looking at the long terms, like getting up to Missouri senators and seeing if that's possible to get this in every single high school. [10:30] It's a lot of hustle every month to go find a new high school to build a website for. How do you build recurring revenue so you don't have to think about new money coming in every month? [10:38] >> Our hosting builds us recurring revenue and then usually with our hosting usually once a month, we can get a new contract from one of our the current people we host like, hey. I need this to be done. And that's how we do a lot of recurring revenue and the hosting for $40 a month with our 40 websites that we're about to that we're gonna build out this month. That's gonna give us the recurring revenue we'll need [10:57] >> for now. So just [11:00] >> Yeah. [11:00] But how do you mean, $40 a [11:01] month to hosting is fine, but you're also then paying 10 to 20 bucks of that out to the actual host provider. The margin's not really a software margin. That's more like a cost of goods sold. Are you guys thinking about building any internal software tools that you will then sell to school districts over time? [11:15] >> That connection software is kind of like we wanna get in the door, build that reputation. So whenever school districts come for the next big problem we need and that we didn't even think about. So when we first launched some the connection program we're working on right now, the school district's like, oh, we need this as well because we have to keep track of what our alumni is doing like a year out from now. Like the state [11:36] >> of Missouri already requires them to do that. So that's our long term goal, just seeing how far we can take that. Mhmm. [11:42] Mhmm. That makes a lot of sense. So this is very cool. Let's wrap up here, guys, with the famous five. Kobe, I'm gonna go to you first. Alright? Give me a CEO you're following or studying. [11:51] CEO I'm following or studying. Honestly, the man the man of myth and legend. You are my [11:57] Alright. Fair enough. Fortuna, this one's for you. What's your favorite book? [12:02] >> My favorite book, the one that started all Rich Dad Poor Dad is the one that got us into that mindset. [12:07] Number three, Kobe, your favorite online tool. [12:11] My favorite online tool. Well, online tool, I would just go go back to VS Code. It's like what started it. Or I'll say LinkedIn. LinkedIn also, I like that website because it actually helped. LinkedIn learning was what helped me, like, learn how to actually code in HTML and, like, CSS and websites. [12:29] Love that. Alright. Opportunities. Last couple we'll throw at you. How many hours of sleep do you get every night? [12:33] >> I'm at three right now. [12:35] Alright. Three. And what's your situation? Married, single, kids? [12:39] >> I'm single right now. [12:40] Alright. And how old are you? [12:42] >> 19. [12:43] 19. And, Kobe, how old are you? [12:45] I'm 18. [12:46] I love that. My last question is usually what's something you wish you knew when you were 20? So you guys are above the ball. I'll change it for you. What's something you guys wish you knew when you were 15? [12:58] >> I wish I knew more about, like, just how I could get after. Like, a lot of this stuff, it's self taught. I was always in the mindset, like, I can't do it unless a teacher teaches me or or, like, at least I unless I've learned it from school. There's you can just go get out there and go do it with, like, YouTube. That's my favorite online too because it's, like, everything's online, and it's, like, you're never [13:19] >> more in a quick Google search away from learning something really important. [13:23] Guys, there you have it. Devheads, they're quitting their full time jobs. They're making $30 a pop right now. They're saying, screw it. We're going in. We're gonna help build software for these school districts in Missouri. Our first school district's already gonna be about equal to our first our salaries make it our jobs. They make recurring revenue on hosting and other items looking to build from here. Fortuna, Kobe, thanks for taking us to the top. [13:42] >> Alright. Thanks. No problem. [13:45] One more thing before you go. We have a brand new show every Thursday at 1PM central. It's called Shark Tank for SaaS. We call it deal or bust. One founder comes on, three hungry buyers, they try and do a deal live and the founder shares back end dashboards, their expenses, their revenue, ARPU, CAC, LTV, you name it, they share it and the buyers try and make a deal live. It is fun to watch every Thursday one [14:09] p. M. Central. Additionally, remember these recorded founder interviews go live. We release them here on YouTube every day at two p. M. Central to make sure you don't miss any of that. Make sure you click the subscribe button below here on YouTube, the big red button, and then click the little bell notification to make sure you get notifications when we do go live. I wouldn't want you to miss breaking news in the SaaS world, whether it's [14:31] an acquisition, a big fundraise, a big sale, a big profitability statement or something else. I don't want you to miss it. Additionally, if you wanna take this conversation deeper and further, we have by far the largest private Slack community for B2B SaaS founders. You wanna get in there. We've probably talked about your tool if you're running a company or your firm if you're investing. You can go in there and quickly search and see what people are [14:53] saying. Sign up for that at nathanlatka.com/slack. In the meantime, I'm hanging out with you here on YouTube. I'll be in the comments for the next thirty minutes. Feel free to let me know what you thought about this episode. And if you enjoyed it, click the thumbs up. We get a lot of haters that are mad at how aggressive I am on these shows, but I do it so that we can all learn. We have to counter [15:13] those people. We got to push them away. Click the thumbs up below to counter them and know that I appreciate your guys'support. Alright, I'll be in the comments. See you. Hey.