DevHeads Revenue & Valuation (2023)

guys there you have it Dev heads they're quitting their full-time jobs they're making 30 grand 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 districts are already going to be about equal to our first our salaries make it our jobs uh they make occurring revenue on hosting and other items looking to build from here hey folks my guests today are Fortuna and Kobe they are building Dev heads which is a young software and Hardware development company targeted local businesses their goal is to provide a personal experience at larger scale companies can't deliver they target local companies because they're often forgotten about are unable to afford the development fee of large-scale businesses for Tunica you ready to take us to the top yeah all right so first off just to be clear you guys are you're a consulting firm that code software for local businesses yeah yeah are these websites what are what are local businesses asking you to code usually well right now we're going on updating a lot of websites and we have a one business that's like just providing a personalized app that keeps track of all their appointments coming up and then um 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 current students can reach out for advice whenever they need it I see and what's your guys's background are you Engineers we're both um computer science who codes what who's front end who's back end who's full stack I'm the back end guys all right well Kobe what's your go-to front-end tool right now uh I use vs code to code most of my applications okay and for tuna on your side what's your what's your back end favorite right now right now it's PHP we haven't got like super defensive backhand but php's just it's carrying us right now yeah all right great when did you guys land your guys's first customer paying customer um 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 you know 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 those contracts are about 41 contracts right now but when what month this year did you get your first dollars of Revenue the first um July was our first month yeah that's great okay okay so this month we're recording July 12th so you got your first customer this month yeah yeah what are they paying um the school district um what we're still in negotiations with people we're trying to get in that 10 grand range for to provide that for a school district the websites were pumping out it's 240 um 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 and whenever you need more from your website like let's say you need a new software that you can't find online or we go find it for you we'll be whoever's offered go out there to switch again at 40 a month and why do they need you for that why can't they use GoDaddy or Bluehost or somebody's providers well because when you're launching your own business you you where our goal is like we're your I.T 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 going to 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 that's stuff GoDaddy and Bluehost they've gone too big to like personally check that for every single website most folks listening right now they're are 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 dev heads oh we're about to be all in on dev head starting August oh come on about the B isn't all in when are you guys quitting your jobs within the next weeks it looks like we'll Quinn just like go all in deaf has because right now it's like it's 12 hours a day mostly on dev heads it's like it's here we do our full-time jobs our full-time jobs are pretty laid back we're sitting around most times so we can beat her and still work on deaf heads but like in the next week we'll quit our full-time job and just like strictly Dev hits Kobe does that make you nervous nah I'm all for it oh what's going on there YouTube good to see you guys now imagine this you love watching these interviews with SAS Founders but imagine if we took all of the valuation data out from over 2807 interviews I've done manually saves you a lot of time well we've done this we've built the into the beautiful interface inside of founder path check this out I'll show you how you can access this in a second but you log in you connect your stripe account you see your valuation real time you can see what it changed over the past 88 days and even set goals for evaluation this year now the secret valuation is there's many different ways to value a SAS business so the reason you're going to see three or four different evaluations inside of your founder path dashboard this is all free by the way is because depending on who's doing the buying of your SAS company you're going to get a different valuation a VC is going to pay a different valuation private Equity Firm is different if you're going to 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 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 built off random data again you guys hear these interviews on YouTube all these datas are built from real-time valuation data points Founders share with us on the show so traction 1.2 million seed round 3.7 raise they sold 22 percent of their business go in here and filter by the event maybe you only want to 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 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 data set of SAS valuation than what you can get now inside of founder path and we're thrilled to bring it to you all right we're gonna go back to the YouTube video here in a second but if you want to check this tool out if you want to jump in and sign up you can check it out for free to get your valuation at this link this link founderpath.com forward slash products forward slash evaluations or if you go to founderpath.com and hover over products click on get your evaluation 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 all right let's jump back into the interview 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 our current salaries are not too high it's like 30k a year so it's like we just want to 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 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 de-risk the starting process you know they have savings they've worked hard to save up things like that how are you guys de-risking sort of buying yourself sometimes get Deb head off the ground even when you're not making a full-time income from your full-time job um right now we have we have between us we have savings we're about 15 000 saved up to go towards that as that's fine and then we have we're building connections from another startup in St Louis um what is it um Balto 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 and last year dated about five million in Revenue so having him as a resource helps a lot too 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 going to be shocked by it so personal expenses to avoid copyright I just try to go on like eye stock 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 possible because Kobe talked about your personal expense like for example if you guys are both 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 head to like live basically so tell me a personal story 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 is probably going to 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 that's awesome and then what about what about on your end for tuna oh for me I'm kind of on the foods to eat side too but then for me I my phone bill used to be incredibly High I've downgrades like a a local carrier not really low carrier but like one of the lower end carriers just for time being my phone bill went from like 80 dollars a month and I was like 20 so I'm like okay yeah I'm saving 60 internet that can go back to where stuff heads in the long run and I'm just like I've limited we've both eliminated eating out it's like I've done it to about like one day a week and it's like I'm eating almost same thing every day but it's like it'll be worth it no longer yeah I love that I love it all right who owns more equity right now it's about a 50 50 share what if you disagree uh we have one more person I've had uh we have one more team member Brandon uh he wasn't able to make this mean but like he's right there like he's the one who will like see through both sides like he's the advertisement like he'll get our names out and he's like I I believe this was a better run for companies that like we can both respect Brandon's opinion but Brandon doesn't own any Equity no Brennan doesn't currently doesn't own any Equity I see I see all right so what's the long-term goal you're doing the school district 10K you're doing a website for 250 bucks a pop four years from now what do you guys think Dev heads looks like our goal is to see like with the school district stuff see how first year let's have like our school district our social School District let's get all the results in and let's be able to bring that some more like more school districts and misery our goals eventually you've reached out to every school district in every High School in Missouri at least we have 960 high schools that for April we're going to increase the price it's way more than second hip hop it's like let's use ours our our school superintendent to reach out to those other ones and like every single high school wouldn't be like 40 50 Grand per high school that we incorporate that into said the high schools can later on go connect to our alumni system and eventually we want to get updates where it's like it's almost mandatory in every High School to have this connection 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 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 um our hosting business recurring revenue and usually with our hosting usually once a month we can get a new contract from one of our current people or hosts 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 going to build out this month that's going to give us the recurring Revenue we'll need for now it's just yeah but how do you I mean 40 bucks a month to hosting is fine but you're also then paying 10 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 um a connection software is kind of like we want to get into 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 um the connection program we're working on right now the scooters 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 of Missouri already requires them to do that so that's our long-term goal just seeing how far we can take that 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 all right give me a CEO you're following or studying [Music] all right fair enough Fortuna this one's for you uh what's your favorite book my favorite book um the one that started off Rich that poor data is the one that got us into that mindset number uh three Kobe your favorite online tool 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 love that our opportunities last couple will throw at you how many hours of sleep do you get every night I'm at three right now all right three and what's your situation married single kids oh I'm single right now all right how old are you I'm 19. 19 and Kobe how old are you I'm 18. 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 some of you guys wish you knew when you were 15. uh um I wish I knew more about like just how I could get after like a lot of the stuff itself time I was always in mind so like I can't do it unless a teacher teaches me or like at least I unless I've learned it from school there's you can just get out there and go do it with like YouTube that's my favorite online so because it's like everything's online and it's like you're never more in a quick Google search away from learning something really important guys there you have it Dev heads they're quitting their full-time jobs they're making 30 grand 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 districts are already going to be about equal to our first our salaries make it our jobs uh they make occurring revenue on hosting and other items looking to build from here for tuna Kobe thanks for taking us to the top all right thank you no problem one more thing before you go we have a brand new show every Thursday at 1 pm Central it's called Shark Tank for SAS 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 our poo CAC LTV you name it they share it and the buyers try and make a deal live it is fun to watch every Thursday 1 p.m Central additionally remember these recorded founder interviews go live we release them here on YouTube every day at 2PM Central to make sure you don't miss any of that make sure you click the Subscribe button below here on YouTube their 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 SAS World whether it's 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 want to take this conversation deeper and further we have by far the largest private slack Community for B2B SAS Founders you want to 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 saying sign up for that at nathanlacka.com forward slash slack in the meantime I'm hanging out with you here on YouTube I'll be in the comments for the next 30 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 those people we got to push them away click the thumbs up below to counter them and know that I appreciate your guys's support all right I'll be in the comments see ya