How Hounder CEO Joshua Northcott grew Hounder to $3.1M revenue with a 12 person team in 2024.

guys he left enterprise software in 2015 to launch hounder.co which is an agency that broke a million in Revenue in 2021 2 million Revenue last year hoping to break 2.5 this year but they're secretly building an internal SAS tool they plan to release to the market later this year which you want to check out hey folks my guest today today is Josh North northcott he is named the top 10 most exciting Founders in 2023 from La weekly currently the CTO and co-founder of hounder an award-winning design and development company that specializes in large web system implementation web design and the development of product applications he's using this discovery to build his own SAS tool which is coming out later this year we're going to learn about it all today Josh are you ready to take us to the top hey that sounds good Nathan all right so when did you launch the company and this just to be clear this is an agency today right it's an agency today yeah we've been always so it's been about seven years now that we started uh since we kicked it off uh basically it really kind of started off with you know me being a uh a web director for a for a large software company an Enterprise company and we ended up doing a lot of work with uh you know some of the the biggest uh you know agencies and service providers in the in the nation and it ended up becoming a thing where uh I always wondered why stuff didn't get done on time on budget and all those things like why is it always a mess like why does it suck so we ended up uh said hey I think we could do this better and uh uh me and uh my co-founder Justin we we stepped out of uh you know you know kind of corporate jobs and uh yeah started hounder seven years later or you know seven years later here we are so well what is that 20 20. it was late 2016 actually it's late 26th or yeah yeah it was 2016. so I guess it's just like going up on seven years twenty okay and then fast forward today how many folks are full-time at the agency see uh full-time full-time employees 10 now and then uh and then we have uh 12 as a whole team but 10 full-time employees yeah 10 full-time okay great and when you're doing these big projects like are we talking like five grand a month retaining I'm a minimum six months or like how do you generally price yeah so these are we we basically Focus primarily on Enterprise so that's where we come from and uh so we're talking about like big system kind of Marketing System implementation CMS custom designs that type of stuff so uh generally like in terms of costs go go wise like generally we don't do anything under 100K yeah okay so 100K minimum project value and then what you'll do like four or five ten projects a year that's it yeah that's about right and we um and then we do have ongoing Services as you kind of mentioned but that is uh yeah the big thing is uh yeah just we kind of hand choose and hand-picked those uh five or six products we do it every year with with our clients have you guys had your first million dollar a year yet oh gosh yeah yeah we actually so last year we had our first and then oh I'm sorry two years ago we had our first million dollar year and then we did I saw 100 growth even in 2022 and uh we reached our our two million year so uh last year so yeah we're we're hoping to keep the 100 growth train going here in the end of this year so that's impressive I I don't know I always calculate revenue for employee agencies two million dollars with 10 people would put you like 200 Grand of Revenue per employee which is pretty impressive I imagine you might have an army of contractors you turn off and on as you need them no actually no no um I know a lot of people do it that way but no we uh we we kind of only we're only growing as the demand Forest grows basically so that's kind of been our our sweet spot but no we haven't been able haven't had to really do that at this point um maybe in the future but right now we just have a real tight-knit team that we've uh worked with and I've worked with personally like years before in other companies things like that so it's just uh works well how do you manage the planning from that perspective when you sell a hundred thousand dollar contract then you complete it in four months you then have to go start all over for it and sign a new hundred thousand dollar deal to replace that Revenue that's Now sort of completed or delivered I mean how do you manage that yeah so so it's a it's it's not perfect but one of the things that we do is uh I mean basically like we started at 100 100K at least and then but some some are you know close to like we've seen um some projects that were 850k and things like that that run through a course of a year almost through the million dollar Mark over a course of several years uh so it's uh so basically what we do to manage it is like you know that with ongoing Services we just keep we really keep a real close look at how much we are bringing in every single month and then how that actually what that looks like from our cost so that way month over month we see ourselves not losing anything and then we have our projected you know goals for the year um every year we're trying to do 20 increases uh you know 20 increase in just revenue and growth but you know over the last several years you know we talk about we've seen 100 growth and uh about 80 growth the year before so it's something that we're uh I'm trying to keep uh keep that going while still being mindful of how quick we grow as a team you know I think that's really it is trying to just find that that right balance of the target this year is 2.5 million in Revenue that's correct 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 valuations 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 around 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 interesting okay tell me more about the SAS Ida some of the most successful SAS companies they start off as agencies so I'm going to get in your head now because you're at that stage yeah that's it and that was always the goal too was to you know to productize over time while we're at a service company and kind of weigh products and services and so that was the thought I I think I I epically failed by taking us almost seven years to get there you know to really start to be like okay let's do it um but basically one of the things that came out of it is you know getting a chance to work with some of the largest organizations in the world like the adobe's and like your clients and partners of ours Shopify who are clients and partners of ours NHL uh UL city of Los Angeles Etc like it really became a thing where you started to come across a lot of the similar types of problems and issues that uh a...