How Hounder Reached $2M Revenue in 2022 with 100% Growth and 10 Full-Time Employees (Interview with CEO Joshua Northcott)

Intro and Company Overview

Nathan Latka

00:00Guys, left enterprise software in 2015 to launch hounder.co, which is an agency that broke 1,000,000 in revenue in 2021, 2,000,000 revenue last year, hoping to break 2.5 this year, but they're secretly building an internal SaaS tool. They plan to release to the market later this year, which you wanna 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

00:25and cofounder 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 SaaS tool, which is coming out later this year. We're gonna learn about it all today. Josh, are you ready to take us to the top?

Joshua Northcott

00:40>> Hey. That sounds good, Nathan.

Agency Origins and Founding Story

Nathan Latka

00:42Alright. So when did you launch the company? And this just to be clear, this is an agency today. Right?

Joshua Northcott

00:47>> It's an agency today. Yeah. We've been always so it's been about seven years now that we started we kicked it off. Basically, it really kinda started off with, you know, me being a a a web director for a for a large software company, an enterprise company, and we ended up doing a lot of work with, you know, some of the the biggest, you know, agencies and service providers in the in the nation. And it it ended

01:10>> up becoming a thing where 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, said, hey. I think we can do this better. And, me and, my cofounder Justin, we we stepped out of, you know you know, kinda corporate jobs and, yeah, started hounder seven years later or, you know, seven years later, here we are.

01:33>> So That's kinda how it initially started.

Nathan Latka

01:35What is that? Twenty twenty twenty

Joshua Northcott

01:37>> It was late twenty sixteen, actually. It's late twenty six or yeah. Yeah. It was 2016. So I guess it's just going up on seven years.

Team Size and Structure

Nathan Latka

01:44'20 okay. And then fast forward today, how many folks are full time at the agency?

Joshua Northcott

01:48>> Full time full time employees, 10 now. And then, and then we have, 12 as a whole team, but 10 full time employees.

Pricing and Project Model

Nathan Latka

01:55Yep. 10 full time. Okay. Great. And when you're doing these big projects, like, we talking, like, $5 a month retainer or minimum six months? Or, like, how do you generally price?

Joshua Northcott

02:04>> Yeah so these are we basically focus primarily on enterprise so that's where we come from and- so we're talking about like big system kind of marketing system implementation CMS custom designs. That type of stuff. So, generally, like, in terms of cost go go wise, like, generally, we don't do anything under a 100 k.

Nathan Latka

02:23Mhmm. Yeah. Okay. So a 100 k minimum project value. And then what you'll do, like, four, five, 10 projects a year?

Revenue Milestones and Growth

Joshua Northcott

02:29>> That's it. Yeah. That's about right. And we and then we do have ongoing services as you kinda mentioned, but that is yeah. The big thing is, yeah, just we kinda hand choose and handpick those five or six projects we do every year with with our clients. Great. Have you

Nathan Latka

02:43guys had your first million dollar a year yet?

Joshua Northcott

02:46>> 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 a year, and then we did a saw a 100% growth even in 2022, and, we reached our our 2,000,000 year. So Last last year. So, yeah, we're we're hoping to keep the 100% growth train going here in the into this year. So

Managing Pipeline and Revenue Continuity

Nathan Latka

03:07That's impressive. I've I don't know. I always calculate revenue per employee at agencies. 2,000,000 with 10 people would put you at, like, $200 of revenue per employee, which is pretty impressive. I imagine you might may have an army of contractors you turn off and on as you need them. No?

Joshua Northcott

03:20>> Actually, no. No. I know a lot of people do it that way, but no. We we we kind of only we're only growing as the demand for us 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. Maybe in the future, but right now, we we just have a real tight knit team that we've worked with and I've worked with personally,

03:39>> like, years before in other companies, things like that. So it's just works well.

Nathan Latka

03:44How do you manage the planning from that perspective? When you sell a $100,000 contract and you complete it in four months, you then have to go start all over for it and sign a new $100,000 deal to replace that revenue that's now sort of completed or delivered. I mean, how do you manage that?

Joshua Northcott

03:57>> Yeah. So so it's a it's it's not perfect, but one of the things that we do is I mean, basically, like, we started at a $100,100 k at least and then but some some are, you know, close to like, we've seen some projects that were 850 and things like that that run through a course of a year, almost through the million dollar mark over the course of several years. So it's, so basically what we do to

04:22>> manage it is, like, you know, that with ongoing services, we just keep a we really keep a 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 projected you know goals for the year- Every year, we're trying to do 20% increases, you know, 20% increase in

04:45>> just revenue and growth. But, you know, over the last several years, you know, we've we talked about we've seen a 100% growth and about 80% growth the year before. So it's something that we're trying to keep keep that going while still being mindful of how quickly grow as a team. You know? I I think that's really it. It's trying to just find that that right balance of

Nathan Latka

05:07So the target this year is 2,500,000 in revenue?

Joshua Northcott

05:09>> That's correct.

Nathan Latka

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The SaaS Idea and AI Opportunity

Nathan Latka

07:33there. Alright. Let's jump back into the interview. Interesting. Okay. Tell me more about the SaaS idea. Some of the most successful SaaS companies, they start off as agencies. So I wanna get in your head now because you're at that stage.

Joshua Northcott

07:44>> 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 kinda weigh products and services. And so that was the thought. I I think I I epically failed by it taking us almost seven years to get there, you know, to really start to be like, okay. Let's do it. But, basically, one of the things that came out of it is, you know, getting

08:05>> a chance to work with some of the largest organizations in the world, like the Adobe's and, like, your your clients and partners of ours, Shopify, your clients and partners of ours, NHL, UOL, City of Los Angeles, etcetera. Like, it really became a thing where we started to come across a lot of the similar types of problems and issues that, a lot of, you know, organizations are having, whether the mid midsize to to large. So one of

08:30>> the things that ended up coming up is, the need for especially now, it can't be 2023 without talking AI. Right? So it ended up becoming a thing where with AI and where that's been going with ChatGPT and other tools in Bard and things like that, that, you know, we could actually utilize a number of different use cases and things like that in terms of a product to make life so much more ease more easier that's actually

08:56>> installed and set up in their CMSs and in their marketing systems and tools that they have. So that's been one of the big keys where we've been starting to utilize our own for

Nathan Latka

09:07all What will you replace? Like, once the SaaS tool you've built internally, once you launch it five years from like, name a tool that's live today that if you have your way, you'll replace it.

Joshua Northcott

09:18>> It it's not so much that it'll replace, but actually, well, it would replace like a Yoast or something like that that's in your like an SEO tool that's in your WordPress, things like that where I mean, imagine a world where you don't have you no longer see red dots that say, hey, you should do this or you should do that or think about changing this or or something like that. But instead, it just does it all

09:39>> for you and optimizes it for you. Mhmm. So that's that's like the type of technology that will just be instilled into these CMSs. Like the Drupals of the world, the WordPresss, the AEM, Adobe Experience Manager, Sitecores, etcetera. So all these major, large, enterprise tools that people are using. How are you in

Nathan Latka

09:59better position though to to go win that war? I mean, why doesn't Yoast just launch plug in for those things? Why don't they like, how do you beat them? What's your mousetrap?

Joshua Northcott

10:08>> Yeah. So, basically, the big thing for that one is that, like, the big mousetrap here is that, one is it's really speed to market, but two, I mean, it's it's it's very true. They have, like, a big part of their market today. They can they can go ahead and build. But the big thing is is it's it doesn't start it doesn't stop there. It doesn't stop with just introducing AI. It also it starts with introducing machine

Competitive Positioning Against Yoast and Others

Joshua Northcott

10:32>> learning and things like that that actually create, like, an autopilot mode for an SEO person. So you don't have to so it's no longer just maybe clicking a button and getting some AI content that's optimized for your page, but instead, it's sitting there and it's learning and it's doing things differently. Like, so for example, imagine so one of the things, like, an SEO professional does today is, like, especially if they're, you know, they're good at what

10:57>> they do, it's it's not they don't stop at just your ranking. Like, say you you now rank, you know, and you got nathanlatka.com now ranks number one. But now because of the actual, like, there's those click through rates that people are actually clicking on and seeing and and depending on what your title and descriptions are, people are gonna, you know, may or may not click on it even though you're ranking up towards the top. So, like,

11:22>> what really good SEO people do is you actually kind of measure that and you start finding new things. You start saying, okay. Well well, our click through rate go up if I start to change this title, change this pet, those types of things. Well, imagine machine learning kinda going on in the background And just do

Nathan Latka

11:38mean I get that. I just don't understand why you're uniquely positioned to win that battle. I mean, if Ahrefs launches a plug in to do this, if SEMrush launches a plug in to do this, if Yoast get like, I guess I just don't understand how how your plan what your plan is to, like, beat them and get to market faster than they are for this exact tool.

Top-Down Go-to-Market Strategy

Joshua Northcott

11:53>> Yeah. Well, I mean, in terms of, like, beating them and what the mousetrap is, there's a there's a couple of different things, and it's really it's the size of clients that we work with that already trust us that use a lot of the stuff that we build. So it's really starting first with, you know, towards the top and having that partnership with a lot of those big companies that own these tools.

Nathan Latka

12:12So top down is I mean, so the answer there will be like be then like, Nathan, I feel like we've got an advantage. So we're gonna go top down instead of all of them, are PLG generally, and they all go bottoms up.

Joshua Northcott

12:21>> Correct. Yeah. Because it's really just it's really a matter right now where you're just on the store. Right? Like, you're just sitting there on the store, and, you're looking at five or six or seven other different plugins that I'll say they do the same thing.

Nathan Latka

12:33Alright. When do you launch? When does it go live?

Launch Timeline and Beta Signups

Joshua Northcott

12:36>> Gonna be at the end of this quarter, man. That's the that is the goal. So we're it's a we're looking at a soft launch of that and then and already you know, we already have about about a 100 people. We're gonna get the whole marketing thing going really soon as well. We already got a 100 different companies that have already signed up for the beta program and the early bird

Nathan Latka

12:55URL to sign up for beta.

Joshua Northcott

12:56>> Get it going. It's it is launching, but it's gonna be seocentral..co, and seocentral.ai goes all to the same spot.

Nathan Latka

13:05Interesting. And what's your initial price point gonna be? Think have you thought about that yet or no?

Joshua Northcott

13:09>> Yeah. We did. We're it's gonna be it's gonna be about only a $140 for the whole entire year. So annually annual cost of $1.40.

Nathan Latka

13:17Interesting. Seocentral.ai. We'll have to check it out, Josh. In the meantime, though, we're out of time. Let's wrap up here with the famous five. Number one, favorite business book.

Joshua Northcott

13:25>> Oh my gosh. Clone Yourself. Great book.

Nathan Latka

13:28Number two, is there a CEO you're following or studying?

Famous Five: Books, Tools, and Habits

Joshua Northcott

13:32>> You know what? Yeah. Actually, I'm following a couple different people, but what or number of different people. But one that I really like is a a guy named Brian Flynn who owns Super Seven, which is like a a toy and kind of pop culture company that's doing cool things on a yeah. Just bunch of different stuff, and he comes from, like, a punk rock background and, like, music and all that stuff and does just his whole

13:52>> the motto is no one did what we were wanting, and so we're just creating ourselves, which I love that kind of motto.

Nathan Latka

13:58Number three, what's your favorite online tool for building hounder?

Joshua Northcott

14:04>> Favorite online tool for building hounder? You know what? I I gotta say, probably, SEMRush has been huge huge in a lot of ways. A lot of content marketing there. And

Nathan Latka

14:14Number four, how many hours of sleep do get every night?

Joshua Northcott

14:18>> So it it's some days are better than others, but about I'm getting about I'd say on average about six hours.

Nathan Latka

14:25Okay. And situation, Josh? Married, single, kids?

Joshua Northcott

14:30>> Married with kids. Yeah. Two kids.

Nathan Latka

14:32That's awesome. How old are you?

Joshua Northcott

14:34>> I am turning 40 in just a couple weeks.

Nathan Latka

14:37That's excite happy early birthday. Last question. Something you wish you knew when you were 20.

Joshua Northcott

14:42>> Wish I knew when I was 20 to oh, you know what? To go ahead and take take the risk take the risk right right away. You know, go with what you wanna do right away. Don't, you know, don't wait. Don't try to just follow the norm, and then she just do what you want. Yep. Do the dream right out of the gate. Don't don't look back.

Closing Advice and Wrap-Up

Nathan Latka

15:03Guys, he left enterprise software in 2015 to launch hounder.co, which is an agency that broke 1,000,000 in revenue in 2021, 2,000,000 revenue last year, hoping to break 2.5 this year, but they're secretly building an internal SaaS tool. They plan to release to the market later this year, which you wanna check out. In the meantime, check out hounder.co. Josh, thanks for taking us to the top.

Joshua Northcott

15:24>> Thanks, Nathan.

Nathan Latka

15:25One 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 1PM

15:50Central. 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, 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 an acquisition, a big

16:13fundraise, 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 saying. Sign up for

16:35that 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. 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

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