How She Scaled Howdy From $400 Left to $50M in Recurring Revenue | Entrepreneurship | How We Profit | E11

22:28We'll do it after the birthday. I called one of my friends and I called my mom and I was like, I really hate to be this person. And I'm so embarrassed, but I like really need those baby shower gifts. Like I don't have anything for the baby and I don't have any money to buy anything for the baby. Like, can you please just like tell everybody that was going to come if they could still send the gifts? I would be super grateful for that. And so it was like a very like embarrassing like ask. But like, of course, my friends showed up and like everything was happened. And then I had my son and and then fast forward to June.

23:04Then it was like it was like the lowest low. And then going into June, everything I think people realize like we're not going back to the office. Yeah, we're locked down. We've been doing this remote work for three months. It hasn't hurt us. Our business hasn't imploded. Maybe remote's where it's at. And then it was almost as if like everybody that paused their business, everybody that paused their orders came back with like a vengeance. And we like it was crazy. June, we started to like just take off.

23:32Hala Taha:I'm so proud of you and that you were able to stick it through through that really hard moment. People don't realize like when you're an entrepreneur, a lot of people work for entrepreneurs, right? And they don't realize like how much risk the owner took to create that business. Like you put all your money in the company. I did the same thing with Yap Media. I paid myself$60 ,000 for many years. I actually am buying an office and I had to look at my like, I had to send tax returns for 2023, 2024. And you can even forget as an entrepreneur how little you made, right? In 2023, I reported like$100 ,000 personally.

24:12Hala Taha:And then the next year was like 900 ,000. It got so much. It's like if you just wait a little longer, you know, just skyrockets. So it's it's just so like it probably feels so good to just look back and be like, man, I'm so glad that even when it was so hard, I did not throw in the towel. Oh, my gosh. It was, yes, 100%. I think being pregnant, being nine months pregnant helped me not throw in the towel because I'm like, who's going to hire me? I'm about to go on maternity leave. Like quitting wasn't an option because I didn't even know where I would go at that point. And so I was like, well, I didn't even consider the option of throwing in the towel until like maybe it would have been like three months postpartum.

24:57Hala Taha:Well, thank God you didn't throw in the towel. And look at you now. Now, how much is your company valued at? A hundred and how much million? Yeah, I don't even know. Like a hundred and something million? I don't even know. I mean, does anyone want to pay for that? No, I'm teasing. I think I would say like 150 easily. That's 3x revenue, which is a very, very modest valuation. That's absolutely incredible. So you ended up raising VC money. Yeah. But that was after you were already like$3 million ARR. So why did you decide to raise that VC capital? Was it so you could have money to pay the employees?

25:32Yeah, it was the, we were, so we were at a place in our business where the working capital swings were starting to get scary. And so we thought, we're like, do we take a little bit of money? Do we take venture? What do we do? And so my co-founder and I were like, you know, I feel like there's a really big play here that we could just go big with this company. And, but we kind of let fate decide for us. So we applied to Y Combinator. We had applied to Y Combinator the year before. We didn't get an interview. And we're like, you know what? Let's just do one last application and see how it goes. And if we get in, then we'll go down the venture route.

26:11And if not, we'll continue to make it a lifestyle business. And we'll just try and save up more and more money as much as possible or intentionally not grow as fast. And so we applied to YC. We got an interview. We got in. And so that decision chose that life for us, I guess. Yeah.

26:28Hala Taha:It's so funny. I don't really know much about YC. So it's like, what does it stand for? Y Combinator? Y Combinator. Y Combinator. Okay. What is the benefit of being in that? Oh, man. Mostly fundraising. Okay. Mostly fundraising. So they have created such a beast, a machine. So they're a venture firm. They kind of rewrote the rules for tech companies way back when Paul Graham and Jessica, his wife, started it. But I'll try and give like the simplest way to describe it. They make such good bets on companies that they are the best performing venture capital firm. Because people think of them as an accelerator.

27:09They're a venture capital firm.

27:11Hala Taha:Oh, okay. They are 5x better than the next best one you can think of. And Paul Graham calls it black swan farming, where he'll bet on 10 companies or 100 companies, assuming one of them are going to be the anthropic of that batch and just be worth like billions and billions of dollars. And they've gotten so good at identifying the companies that so many businesses, so many investors just invest in every single YC company. So just by going through the program, going through the accelerator, being accepted. And then, of course, they teach you. They teach you how to market. They teach you how to go to market.

27:49They teach you. They know what is like. They have their finger on the pulse of how consumers and how investors and how everybody's thinking that even going through the process, you learn so much. But at the end of it, they have this pressure cooker where they have this thing called demo day. And you're basically put in front of 4 ,000 plus investors. And then those investors get to have the opportunity to invest in you. So at the end of YC, at the end of our three months, I had 93 investor meetings. Wow. Which is crazy. Yeah. I never would have had anything like that if I didn't go through. I mean, I was trying to get investor meetings prior to getting into YC.

28:23No one wanted to talk to me. The moment people even heard I got in, then all of a sudden, like, my email was blowing up.

28:29Hala Taha:So you just, so like, there was some sort of application and interview process to get into YC? Yeah. So they have an application form. It actually hasn't changed, I don't think. I don't think it's changed. and you go through and ask you a bunch of different questions. It's actually a really great exercise. Like if you want to get very clear on your business, do the YC application. You don't have to submit it, but it like really gives you clarity on your message, your market, what you're trying to do. And then there's a video, a demo video that you have to do. Very cool. Very cool. So how much equity did you give up?

29:01Hala Taha:It's the same deal for everyone. So it's 7%. Oh, that's not bad at all. That's the only amount of money that, and you, how many you got? Oh, I have no for YC. Just from YC. Just for. So you give up 7 % for YC. They give you, I think our deal was$125 ,000 or maybe it's$150 ,000. But how much money did you end up raising in total? We raised$21 million. Okay. So we did$2.9 million out of YC. And then a year later, we did another$18 million. And so how much equity do you own now? So I have roughly 35 % of the company. And my co-founder has like 23%. Okay. So we started 60-40 before we did anything.

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32:49Hala Taha:Give your business the rock-solid foundation it needs with AT &T Business so you can step into your CEO energy. Powered by AT &T Business. built to work. Get AT &T business at business.att.com. Looking back, do you feel like you raised too much money? Are you happy with the money that you raised? Do you have advice to people tuning in in terms of when they should raise money and when they shouldn't? I'm happy. Like, I don't regret anything that we did. And we still have$9 million in the bank, which is what helps us as we grow, if we want to make big bets or big investments. we are now cash flow positive.

33:26We were cash flow positive before YC. And then we took all this money and we invested it a lot. And then now we're just back on the other side of being cash flow positive. Now, do I regret doing it? The thing is when you raise money, easy in, easy go, like easy out. You make bets, you make investments, you do things, you hire people. And I think you make decisions that a non-venture-backed business would make that sometimes work, but most of the time they don't work. So I would say if you have the ability to not fundraise, it's always better because you just make better business decisions. And especially in this day and age, people are raising a bunch of money so they could do a thing and so they can sell.

34:12We were never of this mindset of like, let's raise a bunch of money, do a thing, and then sell. We were like, we're in this for the long run. Like these are people we're talking about. These are families we're talking about. And, but we wanted to make a really big business. We want our business to be like a, a Tata or like an Accenture. Like that's what we see. And so I think there, we, we were lucky that we got venture capitalists that are very, um, they're in it for the long run. Most VCs have this like seven year, five year time clock. And they're like money in, money out. And so we were very fortunate that we got the right kind of investors for us.

34:52And that's a big, I would say that that's more important than whether you should raise or not raise. It's like who you have on your cap table makes all the difference.

34:59Hala Taha:Yeah, because they also give you good guidance. Do you feel like you get good guidance from your board? I feel like it's such a treat. Everyone I hear that talk about board meetings, they're like, oh, I've got to go to a board meeting or oh, I've got to like do this thing for the board meeting. I'm like, yes, I get to go to a board meeting because I'm going to go and talk to these like really smart people that have so much access, understanding, knowledge, and I'm going to present them all of our wins, but all of our problems. And then they're going to help us think through it. Yeah. And they have incentive.

35:24And they have incentive. And we're all aligned on that incentive.

35:26Hala Taha:Yeah. So, yeah. I feel like one of the reasons why I may want to raise money, I've never raised money, and I've even talked to you about it. And I feel like you're like, you don't need to raise money. Don't raise any money. But the board, to me, sounds so great. Like having experienced people who I think the people that would invest in my company would likely be people who are from the industry. Yeah. Helping me. So one thing that's great about a board is that it does exactly that. Now, where it is bad is like the board is now all of a sudden your boss. Yeah. I don't really want a boss. I know.

35:58So there's also that. And then there's, you know, depending on how you set it up, obviously, like you have a lot of smart people in your life that would make it so that it would be very hard for the board to fire you. but you know, a board does fire the CEO.

36:11Hala Taha:And there's other ways to get capital. Like you can just get a line of credit. Yes, exactly. You don't have to get an investor. Yeah. Okay. So you raised money. Let's talk about your customer. Who's like your ideal customer? I hate customer. I love them so much. They tend to be growth stage or bigger tech companies with a senior technical leader who has been around the block. Okay. So they've been a leader for 10, 20 years. They know how they're, it's just, they have this like knowledge and confidence of what they're looking for and what they know. So they really see the value that we provide.

36:48And then when they are interviewing the teammates and when they're interviewing the people, it's just, there's so much clarity. And so we love them. And they usually come with more of a team-based approach. they'll say we want to we need to build like this team of three or this or that now of course they can always come and say like we just want one person to see how you do there yeah but they they just have a lot of experience and with that comes wisdom and that really works well for us

37:14Hala Taha:and how are you typically finding that client like what are the ways uh one of the things that i see you do is billboards which is really unique what the billboards have done for us is they have elevated our brand in a way that like we were huge. We have 11 offices. We have, you know, over 600 people, but people don't know we exist. And when we started doing the billboards, they started to realize like, oh, wait, you guys are big. You guys are capable because what would kill me is I would go on a sales call and it would be a company that would be a perfect customer. And they're like, yeah, but we need to go with someone with a little bit more like experience or we need to go with someone with a little bit bigger.

37:59And they would name a company and I'm just like, gosh, I know their talent is not there. And so that would kill me. And so one of the things that me and my head of marketing were talking was like, how do we build up our brand so that people don't question our size and our capabilities? And one of them was billboards. And then the other thing is like, you see billboards all the time. And it just is noise. It's just noise that you bypass. And so we just thought, well, we don't need to sell our message. We've got a great domain, howdy.com. We just need people to go to the domain and see what we do.

38:31Hala Taha:And so we're like, how do we get people to go to the domain by looking at our billboard? Well, let's have fun with the billboards. Let's like put jokes or like do something that's a little bit shocking so that people would be like, what does this company even do? It's so smart. And I'm guessing you do it in cities that are like tech hubs. Yes. So right now, our main focus is Austin because we're in Austin. We are going to do a big billboard play in San Francisco. But I mean, holla, the billboards are like$90 ,000 a month. Oh, wow. For one. Really? That expensive? Think about it. So every single tech company is kind of hyper-focused in the Bay Area.

39:10Hala Taha:Yeah. And then all the people that... So if you're servicing a tech company, you want to advertise to tech companies. So they're all right there. And then 200, so YC, just to go back to the YC example, they accept 250 companies roughly. They don't have like a number that they do, but it's roughly 200 to 300 companies every batch. They do a batch every quarter. So every quarter, there's 200 to 300 companies that are getting$500 ,000. So it's like, and then they're getting all the other investor money, right? Yeah. So there's just so much capital flowing. And then they're all competing for these like billboards or trying to like, you know, hey, we exist and we do this thing.

39:47Yeah. So it is a hard market to market in.

39:51Hala Taha:It's a hard market to market in. But the billboards, in my opinion, is like genius, especially if you can put the billboards exactly where your target audience is, because then you just seem bigger than you are. I have a great example of kind of marketing to like a very niche audience as well. So for me with my podcast network, I'm looking for like the biggest podcasters in the world. So what I did is I created a, I think I told you about this in our peer group, but I basically created this like newsletter that would only go out to the top 1000 podcasters in the world. And I scraped their emails and I sent them an opt-in and I was like, hey, like, do you want to get like industry knowledge from me?

40:29Hala Taha:Like I want a podcast network. People kind of know who I am in this industry too. And it's like, I'm not going to publish it publicly. You'll only get it if you opt in. And then people would opt into like my pod flash newsletter and I would just like tell them how to monetize like all those secrets that I had. And then I'd have people like Alex Tramosi and Ed Milet opening up my email 10 times. I feel like any way that you can make yourself just seem bigger by directly getting in people's email, like being on the billboard is just so powerful. Totally. How else are you marketing and getting clients?

41:03Hala Taha:So traditional outbound, that's another way. I would say our biggest growth hack in the beginning was word of mouth. Yeah. It's not anything that we did that we could do. It was just if we did a good job, our customers liked us, they told other people. So like one tech founder was like, oh, I've built this great team with this company. Howdy told another, told another, told another. And that's how we grew so quickly was inbound. Once we started to want to invest more on top of it, we did do meta. We tried to do meta. It was horrible. Yeah. Like, I make this joke that I would have done a better job if I would have just taken$80 ,000 because that's how much we were paying on these like digital platforms.

41:40Put it in a warehouse, light it on fire, film it, put it on YouTube, and then market that. Like that I think would have done better than our stupid...

41:48Hala Taha:Yeah, ads are really tough. They're so... Especially for our business. Like we... Yeah. So that was not good. So we started doing like hyper-targeted campaigns. So the first thing we started to do was events. We got a suite at the Moody Center in Austin, and we started targeting our ideal buyers and offering them tickets to our suite. And then some people would take us up on it. And when they would come, we purposely and intentionally did not do business. We would just say, hey, we're just here to host you. We want to just like make sure you guys have a good time. And then of course, psychology, like people are like, wait, but like, I should probably at least hear you guys out.

42:24And so a lot of people would then give us the opportunity. Our whole thing is we just want people to hear what we have to do. If you can just hear, give us two minutes for us to explain what we do. If you're interested, great. If not, it's not, we don't need to sell you on anything. Either you want to work with us or you don't.

42:40Hala Taha:Yeah, and the Moody Center, if you guys don't know, like it's a place where in Austin there's like concerts and things like that. So you've got a private suite. Yes. That's like kind of like everybody wants to be in one of those suites in Austin and you host them and wine and dine them. It's so hard. I mean, it's so hard to turn down. Like imagine Timmergaz coming up, right? yeah big time guy and it's like hey do you and you know plus one or you and plus three want to join me to go see Tim McGraw yeah it's if yeah so so that was big and that ended up working out well so then we got a suite of uh Oracle Stadium for the Giants uh San Francisco Giants and that's like our big sweet play in San Francisco we were trying to do the Chase Center we were trying to do a couple other things.

43:20But I mean, it's very, very, very pricey. So those are our two kind of business development plays that we're doing right now. And then traditional outbound. So LinkedIn outbound email, outbound cold calling. We also would host like what we would call like bespoke micro events where, for example, our next one, I'm only thinking of the future, we're bringing in this like big ahi tuna. And then we're having a chef from, I think, Uchi come and do this like special like cutting of sushi.

43:54Hala Taha:Oh, very cool. And so there's 10 seats. And we'll - It's like very like high touch, fancy events, basically, that you're doing for your clients. So interesting. We did. We also did hog hunting out of a helicopter. Oh, yeah. You told me about this. That's so crazy. So we do like these crazy, unique, high-end, expensive events to really bring in the folks that we want to talk to. Again, no pressure, like just so that they can give us an opportunity to hear what we have to do. And then also we're doing, we just launched what we're calling a CTO studio and a CEO studio where it's like an in-studio, not a podcast, it's more of an interview for how they're building in the age of AI.

44:32And that's been lovely because we're getting just insight, market intel that's been great and helps us move with the industry. But then also it builds relationships with the people that we're talking to as well.

44:42Hala Taha:And you're filming them like super high quality film that then they can use in their own marketing and things like that. And we give them all the raw footage. We cut it and clip it and do it. And we show it to them, too, because we don't want them to like be like, actually, I don't want them. I don't want you guys to publish anything about this. And so but it's it starts from like a journalistic standpoint. Like we want to know what you're doing, how you're doing it. This industry is moving so fast. Things are happening so fast. How are you doing it? Okay. So we talked about your kind of high touch marketing play.

45:18Hala Taha:Retention is really important to you and referrals and expansion. This is like your framework for product market fit, basically. So help us understand how are you ensuring that you're expanding with customers, that they stay with you a long time, that they're telling their peers about you? So we have on the back end of our business. So once you hire someone and they start working with you, we have two people that support every single account. One of them is called an engineering, well, we call it technically an engineering manager. Internally, we call it an engineering mentor. These guys were former technical leaders at U.S.

45:56tech companies that are based in our offices throughout South America. And then we, of course, have an account manager. The technical mentor is really there working one-on-one with the engineer to support them Because what we've realized is it's not a technical gap that they have, but it might be a cultural gap or a communication gap or the way that certain companies work in the U.S. is just so foreign to other places. And so it's there to help them bridge the gap. But then also turning around on the customer side of things, they have almost like an extension of their team, like an extended leader that they can kind of debrief with.

46:33So, for example, say like I'm the engineering manager at Howdy and you're the technical leader at your company and you're frustrated with your team. Rather than just being frustrated with your team, you could come to me and say like, hey, I'm frustrated with my team. I feel like they're not delivering fast enough. I feel like I gave them these expectations three different times and blah, blah, blah, blah, blah. Right. I have the direct relationship with it. You also have the direct relationship with the engineers, but I'll go in the background and see what's going on. And it turns out, oh, there's this third party product manager that's injecting all of these like tasks that you weren't even aware about.

47:08And so it's like it's this like helpful added element that allows you to share like your thoughts and your concerns while also like having someone on the ground to support both sides. So that works really, really well. And I will say that people will tell me like these engineering mentors are your secret sauce. What you should tell people about it. and we try to, but the problem is when we introduce it early in the conversation, people are like, no, no, but I don't want manager. We don't need that.

47:36Hala Taha:We don't need that. Like I'm the manager. I'm going to manage the team. I'm like, yes, you're, you are. But like, think of us as like your technical therapist. I don't know. Trust me, we, we, it's not an added cost. There's a benefit. People really value that. And then on the account manager side, of course, then it's just like your go-to contact for anything as it relates to your account. And then any other support that you want. So yes, with that, they share with their friends. And also too with like the developers themselves. Like if they're feeling that they weren't, I don't know, like received well or taken care of or they feel like they're getting taken advantage of from the customer.

48:13Those are things that we can help navigate so people aren't living in this like isolation, which it can feel like that when you have distributed teams.

48:21Hala Taha:Yeah. Well, that's really awesome. It sounds like you really care about the experience and making sure that the teams perform and that your clients are happy so they tell their friends and so they keep hiring more with you. That's ultimately the goal. That's ultimately, yeah. So part of it is hiring, on your side, good people. Yes. And you guys are really picky about who you hire. You have a really extensive process. From my understanding, your recruiters have like a psychology degree or something. Talk to us about the recruitment process and why you have recruiters that are also psychologists.

48:52Hala Taha:Yeah. So it's a people business, right? And when we were first starting out the business, my co-founder Frank and I were thinking, we're like, you know, we should create this algorithm. And this algorithm will be like, okay, this company is going to have this type of like grading based on the type of employees that they want. And then people are going to have this grading based on like the type of employee there. Because there's some people that like, I just want to go to a job and I just want to get all my tasks and I want to do my job and I want to leave and other people want to be. So there's just like, there's so much nuance, right?

49:20And so we were thinking if we could create this like unique algorithm that we could do it and match it. And we both realized we're like, well, you're not an ML expert and I'm not like a psychologist. So our very first recruiter we hired was actually a psychologist. And we were like, hey, her name's Millie. We're like, Millie, help us with this.

49:35Hala Taha:Was she also a recruiter or she was literally a psychologist? She was a psychologist. She had just gotten her degree in psychology. And we're like, hey, instead of going into that, she was a friend of one of our first engineers. And so we got, we had an opportunity to talk to her. We're like, can you help us with this? Can you help us? We'll teach you how to recruit, but can you use your expertise to really understand and identify and build out a profile of the person so that we can match them correctly to opportunities that we're getting on our side? And so it started with one and it worked so well that everybody since then has been psychologists that we trained to be recruiters.

50:12Hala Taha:That's absolutely incredible. And so what is the benefit of that? I know you're getting like, why is personality, I guess, so important to you when you're hiring? Because, you know, especially when you go through the process, when you go through the vetting process, you are clearly smart. You clearly know what you're talking about. So failure only happens when there's a personality mismatch. and there are some people that want to feel like they're in a pressure cooker when they're working. There are some people that absolutely don't. And so knowing that and knowing people's motivations and knowing how people work well together, it helps for the longevity of their relationship at a partner.

51:00Hala Taha:And you also have physical locations. How important is that for all the employees that you hire? And are you actually hiring them or like what, how does that work? Like, are you hiring them or are the companies hiring? So we're hiring them. So we have physical locations. It surprised me. When I first started the company, we had physical locations because this was 2018, 2019, when everybody had an office. You know, just not having an office was not really a thing. And so, but then when COVID happened, everybody got out of their leases. And we had actually signed to start like two more offices, but we put them on pause as well.

51:37And because of everything else that was going on pause. But then when things turned back around, I asked all of our engineers at the time their thoughts on it. And so we had this like resounding response where they wanted to have an office. And the reason being is because especially in South America, the culture is they have smaller homes. Like they don't have these big mansions on these big lots like we do in America. They live in condominiums. They live in apartments. They live in like big city centers. And so like having just like 500 square feet extra to like put an office in is not like a luxury a lot of people have.

52:17So they want to go out. They want to leave. They want to go and have like an office space they can go to. And of course, some people do. Some people have their own office. But we wanted to basically give people the option to be able to leave their home so they weren't stuck and cooped up in their small, tiny apartment or small, tiny condo. So we ended up doubling down on office space in COVID as a benefit to say like, hey, especially in these places, we're COVID safe. Here's how we're doing it. But this is what we're going to do. And we're going to do these meetups. And we ended up changing the design of our office where we had more of like a communal meeting place where it's like we're going to have great coffee.

52:52We'll have great after hours. We'll have Xbox. We'll have all these things. So you can come and you can work on your laptop in a little corner. You can go into like a phone booth. But at the end of the day, if you want to just be around people because we're also like cooped up, you can be around people.

53:04Hala Taha:And so when you hire somebody, are they typically working for one company or are they like moving from company to company? And like how long do you typically want them to work with you or hope that they work for you? We, our mission is to make it be the last job that a person's ever had to get and so that they can work for the rest of their lives with us. We have them as dedicated resources to one company. Okay. And we don't ever pull them. So our agreement with a U.S. tech company is once we find a resource for you, that's your resource. Now, if that resource doesn't want to work for you anymore, they have free will.

53:38They can quit. You know, they don't have to work for you. And vice versa, you do too. Like, you don't have to keep them employed. So, but it's the employee's decision or the professional's decision whether or not they stay or leave.

53:50Hala Taha:Now, if they get fired, do then they go to another company or do they get some sort of evaluation with you guys first before you bring them on to a different company? So when they get fired, they move over to what we call our roster. But in that period is when we evaluate. Most of the people that we hire, we deem, hey, these are Howdy engineers. Now, if there's anything that happened throughout the relationship with the customer that makes us question, then, of course, we put them under more scrutiny. But for the most part, the goal is it doesn't work out to no fault of their own. And then we find them a new home.

54:32Got it.

54:32Hala Taha:And then when you get a new client, are you always proactively hiring in these areas to like have people ready to go? Or like, how does that work? How are you projecting how many hires you're going to need? These are like the tough levers that we're always looking at. But I would say that there are a few core competencies and job roles that everybody's always looking for. And so we always have open pipelines for those. And we're always running those. And then we basically have what we would call like Howdy approved developers. And at any given time, we have like a pool of people that are not hired with Howdy, but are ready to be placed with open opportunities that they match with.

55:14Hala Taha:Yeah. And you recently, maybe not recently, but you acquired like a Brazilian company, right? Tell us about that. Yeah, so we acquired in 2023 a Brazilian talent marketplace called Geek Hunter. Very impressive company. They have over 400 ,000 software developers on the platform, and they were servicing 13 ,000 Brazilian companies. Wow. They got hit really hard by COVID, and they were not that capitally backed. And so, unfortunately, we kind of like saved them a little bit. So you got a good deal. So we got a great deal. And they got a great deal, too, because it was a mutually great exchange, I would say.

55:50And so now we have this platform. It's not in the U.S. yet. We're hoping to bring it to market soon. But it's still primarily a Brazilian-focused market. But we do use it to source in Brazil.

56:05Hala Taha:Nice. Okay, so let's talk about expansion for Howdy. Do you think about other markets? like are you like totally set on Latin America or is there more to go in Latin America in terms of like other pockets of Latin America where you can focus? All. I mean, there's other pockets in Latin America we can expand to. We can get bigger in our existing markets. And so right now we have one office in every city that we operate in. My dream is that we have multiple offices. And where are you operating in right now? So we are, oh my gosh, we're in so many places. So we're in Uruguay, we're in Argentina, we're in Brazil, we're in Chile, we're in Colombia, we're in Mexico, we're in Peru.

56:41Hala Taha:And are you renting the offices there or are you buying these properties? I wish we owned them. No, we're renting. I was going to say you could be like in the McDonald's real estate business. I know. Could you imagine? I wanted to be. I was wondering. I was like, damn, if she owns all those properties. Could you imagine? I know. I would. I think if we were still bootstrapped, that would have been a path we would have gone down. We did end up buying the office space we're in in Austin. Got it. Beautiful. Beautiful place. And we presented it to the board. The board agreed with it. They feel like owning outside of the U.S.

57:11is a little risky. That makes sense.

57:14Hala Taha:And then what about other product, like other niches in terms of like right now you do IT teams, but what about like marketing teams or finance teams or HR teams? Do you ever think about other business lines that you can support with? So we do all of it. Oh, you do that? Yeah. So we staff any role that can be behind a computer, we can staff. enough, but we, what we, so a couple of years ago in 24, we changed our marketing approach, we changed our website, and we made it look like we could do every single role. But then when you're all things to all people, like you become nothing to no one. And so what we realized is, I would say about 12 % of our staff is non-technical.

57:55And like our staffed employees are non-technical. And that is mostly through our existing partners that we inform them that we can do it. So it's kind of like that land and expand approach.

58:06Hala Taha:Yeah, that upsell, like that's what you upsell to, but your core thing is IT and that's how you get your foot in the door. Exactly. That makes a lot of sense. And then vice versa. Sometimes when we're doing outbound and they're like, oh, I don't need help on this. I mean, they show their jobs what they're looking for and we'll say, oh, well, you know, you're looking for EA or you're looking for this or you're looking for that. Like we can also help with that. And sometimes they let us work with them in that capacity too from that way. So. So I learned a bit about your philosophy in terms of scaling businesses.

58:35Hala Taha:And I loved it. It was nail it before you scale it. Tell us about that. So when I started the business, we started very, very small. And my philosophy has always been nail it before you scale it because I had been a part of big tech companies that they're like, oh, it's fine. Like, let's just build the plane while we're flying and let's just duct tape it. And what ends up happening is implosions and whole product lines can get turned off because someone just didn't consider these like small, tiny things. And so we very intentionally did that with Howdy. We only hired one person for one company, another person for another company.

59:09We didn't even tell people that we were doing this because I wanted to make sure that like all the payroll was going through, that there was just no unknown things. I love that.

59:19Hala Taha:And I do something similar with my company, but instead I'm the guinea pig. So we have like a marketing, basically company, a digital media agency. And so anything that we do, we first nail it with my account. It's like, can we make Hala go viral doing this? Does Hala's account grow doing this? And we don't offer it to our clients until we do it for me first. That's amazing. And then, of course, then you can just prove it. And you're like, look, look at how we did it. Yeah, here's the social proof. Yeah, amazing. I do want to talk about AI. Yeah. Do you feel like AI is disrupting your model in any way?

59:51Hala Taha:Like, do you feel like people are hiring more slowly or they're hiring differently. And I already know that you're, you know, doing things related to AI to kind of even expand your offers just because I know you personally, but talk to us about what you're doing because AI is here now. Man, so I went through like a stage of depression when it first came on because I was like, is my whole business going to implode because like coding is obsolete? And fast forward six months. I was like, no, like, yeah, maybe AI can do the code, but it's just like when Microsoft Excel was invented, right? Just because like it can automatically do mathematical equations, like doesn't mean we don't need accountants.

1:00:30We need more accountants now than ever before. Yeah. And so what I realized was, oh my gosh, we've just empowered so many, like we've unlocked the barrier to entry. More people can create, more people can build, more entrepreneurs can exist, more people can start businesses because they can ideate without having to get investment. And so it's like, wow, there's going to be so much, but there still needs to be people in the background that are more like the puppeteers or the architects or like security. There's so much with tech that there still needs to be management of it. So I feel like what has changed with our business is the type of person that they're looking for.

1:01:10And they are a lot picky, a lot pickier with who they hire because it's one person doing the job of 10 now.

1:01:17Hala Taha:Yep. And so like that one person has to like really know. But we've gotten a tailwind from it because people, even though they are hiring one for 10, they still have a budget for 10. So they just expect 10 people to do the work of 100 people. Yeah. So. That makes a lot of sense. And then you're also upskilling. Yes. Your high, your, what do you call them? We call them our howdy professionals. And then our shorthand for it is HPs. Okay, HPs. So how are you upskilling them with AI? So we hired a PhD. We hired a professor. He has his PhD in machine learning and quantum computing. And he was teaching at a university.

1:01:58And so he works for us full time. And he builds modules and courses. And he's just constantly running them. And he's constantly building new programming. And we are teaching people, one, how to like use AI agents to build, but then also like how do you even build small language models yourselves? And how do you do like proper harness engineering and eval engineering and all this like very like heavy technical stuff and just constant.

1:02:25Hala Taha:Now, one of my last questions to you, if somebody is tuning in and they want to copy your business, maybe not in IT, but standing up teams internationally. I have people in Nigeria and India and Algeria. We have, you know, and I found a lot of success with international hires. Now, if somebody wanted to start like a similar like agency, what advice would you have for them? I would say go to the country that you want to build in. One thing, so God, thank goodness there are things like Claude and Chachupiti now because it is just a wealth of information that we did not have back then. But we learned so much just being on the ground across the table from an accountant in Uruguay, from a lawyer in Colombia.

1:03:09Like when you're meeting people in person, the scariest thing about doing something like this is the unknown unknowns. You have all these preconceived notions of what you need in the United States, but every country operates differently. And so they will bring up things that you will never even think to consider or ask when you're in person rather than doing a call or a Zoom. there's just more exchange that happens. I think people are a lot more guarded when they're over a virtual. Yeah, totally. So go in person, talk to people. People are so friendly and they're so grateful. If you're willing to make the investment, if you're willing to go there, and it's fun too.

1:03:48You could experience a different culture. You have a deeper understanding too of the people that are there, what motivates them. Do they like this? Do they want an American company coming in? Most people, yes, but you'd be surprised. Some people are like, no, like, don't bring your money here.

1:04:00Hala Taha:So really, I love this business because I feel like it's actually something that you can start quite small. Yeah, you can. You could start it virtually. Yeah. You don't have like, I agree with you. Like eventually if you're going to scale it, go there, figure out where you're going to open up your office and all that. But like you could start this slowly and it's like such a great way to build like a really successful business. So totally cool stuff. Especially too, if like you are an expert of something, you're going to recognize who else knows that skill set. And so. And what the gaps are. terms of hiring in the U.S.

1:04:30Yep.

1:04:31Hala Taha:Oh my gosh, there's so many more questions that I want to ask you, but we don't have a lot of time. So I'm going to end this with one simple question. What is your secret to profiting in life? And that can be beyond just business. Mindset. Mindset. Mindset. You have to believe it to achieve it. Because if you don't, it's not going to happen. I totally agree. Jacqueline, where can everybody learn more about you and everything that you do? You can find me on LinkedIn, Jacqueline Samira, or on Instagram or X at Howdy Jacqueline. Amazing. Thank you so much for joining us on Howdy Profit. Thank you.

1:05:07Hala Taha:And that is how Jacqueline and Howdy Profit. Today's big lesson in a recurring revenue business, getting the customer is only the beginning. Howdy makes its model work by continuing to add value long after the hire is made. That focus in retention has helped turn a 15 % margin into a scalable business doing roughly$50 million in annual revenue. And as AI changes how companies hire, Jacqueline isn't betting against it. She's adapting, upscaling Howdy's talent, and preparing for a future where companies may hire fewer people, but expect each person to deliver far more. The real opportunity is not just finding global talent.

1:05:47Hala Taha:It's building enough value around that talent so customers want to stay and tell their friends. Thanks for listening to How We Profit, the young and profiting series where real entrepreneurs share real numbers, real margins, and the real stories of how their businesses actually work. And before you go, YouTube has one more conversation it thinks you're gonna love. Go give it a watch, then come back and tell me your biggest takeaway in the comments. This is your host, Halitaha, aka the Podcast Princess, and I'll see you in the next one. Thank you.