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

People were just like leapfrogging from like job to job to job to job. And I was like, this is so insane. Like this is such like a dumb problem for startups to have. I mean, imagine you raise $2 million and you can't hire people. How is that possible? So I was like, this is a dumb problem to have. There's smart people all over the world. Why isn't there a solution? And there was, there was tons of solutions, but it was overseas.

Jacqueline Samira is the founder of Howdy, a company helping US businesses build teams across Latin America. Today we're breaking down how Howdy actually makes money, what global talent really costs.

We have a 15% margin on everything we do.

How much money did you end up raising in total?

We raised $21 million.

Looking back, do you feel like you raised too much money?

I would say if you have the ability to not fundraise, it's always better because—

One of the things that I see you do is billboards, which is really unique.

The billboards are like $10,000 a month.

Oh wow.

For one. Like—

Really? That expensive? Yes.

We were thinking if we could create this like unique algorithm, this company is gonna have this type of like grading based on the type of employees that they want. And then people are gonna have this grading based on like the type of employee they are. 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. Because especially 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 Jacqueline, welcome to How We Profit. Hi, thank you so much for having me. I'm excited to be here.

Me too. I was seriously looking forward to this conversation. So we're actually friends. We're in an entrepreneurship peer group. You're somebody who I really look up to. You're one of the smartest women that I know. And when I started this series, I told you about it right away cuz I was like, you need to be on How We Profit because YAP fam, she is such a badass. She has grown a company. to $30 million in annual revenue, probably more now.

$50.

$50 million in ARR. Like, I— oh my God. Like, that is absolutely incredible. And so the company's called Howdy. You're like kind of famous in Austin. Everybody knows you in Austin. But for those of us, uh, all around the world tuning in, what is Howdy exactly?

So we are a company that builds software development teams in Latin America. So we have 11 offices throughout Latin America. from Mexico all the way down to Argentina. And, uh, we like to think of them as coworking spaces where we build teams for US tech companies.

Really cool. So, an enterprise company, uh, contacts you because they want, like, more IT folks on their team. You stand up, like, a literal team for them in Latin America.

Yes. So, we stand up, it, it can be as small as a small startup saying, I need one person to a big enterprise company that's like, I need a team of 50, or I need a team of 100, and we can service them in any of the locations that we're at, or we can even open up a new location depending on the size and volume that they need. Very cool.

So, would you consider your company like a recruitment company or a workforce management company?

I don't know.

Like, what do you, what do you consider it?

I, I consider us full stack. We do everything. So, to some people, we are recruiting, we're office space, we're logistics, We're HR, we do it all end to end. A lot of times though, when people come to us, they have a problem with one of the things. So they have a problem, they, maybe they set up an office in Colombia, but they can't find the talent that they thought that they could get, or maybe they just don't even know where to start. So we are a one-stop shop for everyone and how we help people, it just depends on usually what their pain point is.

Okay. So I know you're so smart, so you're probably like, You've got different product offerings in your business. So like, walk us through that in the ease, in the simplest way that you can. Like, what are the different offers that you have?

Actually, funny enough, we don't have different offerings. We have one main offering.

Okay.

And we designed it so people can hire one person all the way up to thousands of people. And so the way that we have built it is we make it so that every one person has like a built-in cost. So, think about it like you come to me and you say, I wanna build a social media team, or I wanna build a software development team 'cause I've got this idea for this great app. And so, we would sit and work with you and we'd say, okay, so probably need this type of person, this type of person, this type of person. And then when we present you a person, we'll show you their all-in cost.

Okay.

So, I'm just gonna do round numbers here for it. Let's just say it's $100,000. Now, the amount of money that that person gets is usually roughly around 60%.

Yeah.

And then about 25% of the $100,000, so let's just say $25,000 goes to supporting the individual.

Mm-hmm.

And then $15,000 goes to Howdy, like specifically.

Got it.

And then that scales up and it scales down. So if you only need one person, we'll put them in a coworking space. And part of that coworking space is they get a desk, they get equipment. If you want a big office build out, well, it's like, okay, we'll, we'll front load the costs ourselves, but we are anticipating making a certain amount of money over a certain period of time.

Got it.

So that, that's it. And that's like the all in, everybody gets the same type of thing. Rather than—

so whether it's one employee or like a full-scale team.

Yeah.

That's really cool. And so you were just kind of talking about the way that you make money on the deal. Go deep on that. Like how do you actually make money at Howdy?

So my background, taking it a couple steps back, yeah, has always been in sales.

Mm-hmm.

And for me, one thing that I always felt I didn't align with companies on was if they did these like long-term contracts.

Yeah.

With companies. And so, the sale would be very aggressive and it would basically to get them to the point where you're handcuffed into an agreement. There's big enterprise companies that people sign up with all the time. I'm thinking of Salesforce, like off the top of my head. And it's like you're locked into a 2-year agreement or a 3-year agreement. And it's like you get 6 months into it or 12 months into it, if it's not working for you, you're stuck. Yeah.

And that sucks.

And like there's no onus on the company to make sure that they're still delivering exceptionally well. So, what I wanted to do was make it so it was easy in, easy out. If they wanted, there was no front load, like there was no cost to start recruiting, there was no cost to sourcing, there was no cost to— for you if you were hiring with me. Um, but my goal was whoever you hire, Yeah. you're gonna love them, and then we are gonna support you in the background so much so that you never say, you know what, Jacqueline, uh, we love this person that you found for me, but we no longer wanna work with you anymore. Like, we need to be able to provide so much value to you that you think of us—

Don't cut you out.

Yeah, they don't wanna cut us out. And so I designed it like that. And we started very small with the idea that like we had to earn your business every single day.

Yes.

And continue to earn your money every single day. So, uh, how we actually make money is, yes, like if you look at the, if you look at the scale of things, we always tell people upfront it's 15% to us.

Yeah.

Like we have a 15% margin on everything we do. And if you are not happy with the value we provide and everything else, then like you don't have to work with us.

Mm-hmm.

Now, of course, there's other things we do in the background. So 25% goes towards the individual. And of course, there's economy of scales. If we build out a big office, maybe there's health insurance discounts we can get once we hit 100 people, or there's equipment perks or laptop perks, like Buying brand new MacBook Pros in South America is 50% more expensive than in the United States because of all the import taxes. But there are some vendors that will cut us a deal and they'll help pay us for some of those import taxes. Like they'll, they'll carry the burden if we have a certain volume with them.

Nice.

And so our business ends up making, if we do it right and if we scale at an appropriate size, but that's, you know, some of the levers we're looking on in the background too.

Oh my gosh, there's so much to dig into.

There's so much.

Okay, so let's talk about, how much money you're making, break down how much money you're making a month and how much revenue is actually going to pay all the workers that you source for companies and like what that means logistically. Yeah. Like, do you pay them first? Do you get paid first? Like, how does that all work cash flow-wise?

So cash flow-wise, we, we charge people, we charge our customers every Friday. for the work done in arrears for that week.

Okay.

So it's a weekly payment that they pay us, and we did that in the beginning to help with cash flow. So the idea is like, if we get paid on Friday, hopefully it enters our bank account Tuesday. And depending on the country, uh, most people in Latin America get paid on the first of the month, Hmm. of every month. So it's just once a month payment. Uh, it's cultural down there. I, we explored in the early days, Do you want to do bimonthly? Do you want to do weekly? Do you even want to do daily? Because there were some payroll providers here in the United States that had this concept of, hey, earn your paycheck every day.

Yeah.

And so I thought that might be a unique differentiator for us down there in the market is to do some sort of different things with payroll. But it turns out in a lot of places we operate, people like to get all of their money on the 1st, pay their rent, pay their bills, and then everything left is what they would consider their spending money.

Okay.

And so that's, That's how it works for them. As far as like the money that we get from customers, usually we, we're in a place where our working capital swing is, is something where we raised a lot of venture capital.

Yeah.

So we have enough in the bank to always pay people.

Mm-hmm.

And we're just constantly making sure that our accounts receivables is paid on time. Luckily, we have a payment by credit card option.

Yeah.

And even though we take a 3% hit by doing that, It, it's okay. Like we would rather take the 3% hit, but make sure we get guaranteed payment.

Yep.

Than, um, doing any kind of net terms. The only time we agree to net terms is if it is a publicly traded company and it is just one of their like, hey, if you're working with us, you have to agree to this.

Yeah.

And in those scenarios, they'll be more flexible by putting down a deposit. So if they ever miss it, then we can pull from the deposit.

Got it. And net terms for those who don't know is basically saying like they have 30 days to pay you once you send an invoice or something like that.

Yeah, exactly.

Okay.

And so in those scenarios too, we might even pre-bill them for the, like, on the first of the month so that we get paid by the 30th.

Yes, that makes a lot of sense. Okay, very interesting stuff. Um, let's go back to actually how this all started. So you started the company in 2018. You had a really great sales background. Did you have IT experience? Like, why did you start with ITT?

That's a great question. Uh, so no, I wouldn't say I have direct tech experience whatsoever. My mom's a computer engineer though.

Mm-hmm.

And my uncle owned a computer store. So I would say that I had a strong affinity for technology and I knew a lot about it. And I was raised with it. I was very comfortable with computers, but I just didn't ever have the passion. I was going to go into investment banking. I graduated university in 2008, and so that all imploded. And I decided to just get a job in sales while the markets were recovering, and then I was gonna go back into banking. And I ended up really liking sales because I realized, especially enterprise-level sales, they have these complex problems and selling was really just providing a solution for them based on what you had.

Yep.

And so, it felt like it was a puzzle that I had to put together. It felt like fun game theory. If I do this and they do this and they do this.

Mm-hmm.

And so, I ended up staying in that and, uh, I ended up in Austin, Texas. And in Austin, this was 2011, there was this emerging tech scene happening. And I thought, I was like, you know what, that's cool. I can like marry my experience with sales with my affinity and relationship with technology and start leading sales at tech companies in Austin. So, uh, a couple years later I, uh, joined a midsize tech company and I was leading their sales team. And when I was in it, I went from that company to another smaller startup. I started to notice a trend, and that trend was that the teams were really bifurcated in this, like, people that were super grateful for the job, super grateful for the perks, and then people that, like, they could just leapfrog to new opportunities because so much capital was coming to the city, so much money was coming to the city, and there was just, like, infinite demand for senior software developers.

Hmm.

And especially like the dedicated senior software developers on the team, like you would have some that all of the work would fall on their plate because other people were like, oh, I'm gonna leave at 3, or I'm gonna go and find another job. Or you know what, like I didn't get a big enough raise this year, so I'm just gonna go take this other opportunity.

Mm-hmm.

And so, it's like, it was, it was hard for startups to keep long-term technical talent because of how much money was coming in and how many opportunities were coming in. People were just like leapfrogging from like job to job to job to job.

Yeah.

And I was like, this is so insane. Like, this is such like a dumb problem for startups to have. I mean, imagine you raise $2 million and you can't hire people. Like—

So ridiculous.

How is that possible?

Yeah.

So I was like, this is a dumb problem to have. There's smart people all over the world. Like, why isn't there a solution? And there was, there was tons of solutions, but it was overseas.

Mm-hmm.

It was in India, it was in Asia, it was in the Middle East, it was in Eastern Europe. It, I mean, every, it was literally everywhere but in our time zone at the time. This was 2017, 2018.

So Latin America international hires, although it's like pretty popular now, back then it wasn't very popular.

No. Back then it was not very popular. And if it was popular, it was more on like the freelancer marketplace.

Mm-hmm.

It was like, oh, I've got a guy that I found on Upwork. Yeah. Or I got a guy that I found on Toptal. But tech companies needed teams and they needed dedicated members of their product team that wanted to not be like a mercenary. Freelancers had this more like mercenary, like, I'll come in, I'll do this thing and I'll leave, or I'll keep doing it for you, but like, I'm my own person. And so I was like, surely there's gotta be like a whole— there, this is like a missed opportunity that we're not, we're not looking into. So that's when I, uh, jumped into it.

Yeah.

And, uh, and just started.

It's amazing because that sales background gave you the ability to like understand how to create offers, I'm sure, because you saw how other tech companies were kind of packaging their offers and presenting their offers to potential clients. Um, and you were able to kind of see the problem. So you co-founded Howdy with somebody in 2018.

Actually, so I technically, I, uh, started it myself.

Okay.

I have a co-founder.

Okay.

Who I was trying to bring on board with me in 2018. And we did ideate it together and we innovated the idea together, but he didn't join me for a year because he was actually, the company he was working at was getting ready to go public. And so he wanted to kind of follow that journey.

Got it. So you need, you need, you got your co-founder a little later once you were a little less risky.

Yeah.

Now you did have a little bit of a rock bottom moment. You were 9 months pregnant, you had $400 left.

Yeah.

You had invested everything into Howdy. And you were basically running on your last dollar. Tell us about that time and, and how you got there.

Oh my gosh, that was so hard. Uh, so, okay, uh, this was 2020. We were, we were doing pretty good. We had not raised any money. We were bootstrapped. I, uh, I had saved $150,000 from my sales, my previous sales career. I was, uh, 32 at the time, and 100% of that money went into the business. And we were growing steadily, but it was February of 2020, and we had just gotten a couple, like, really big, let's just call them orders, right? It was like to build a team.

Yeah.

And my co-founder and I, we were so excited. We weren't paying ourselves really anything yet. I was living off of that $150,000. It was also my savings account, so I was living off of it a little bit too. And so we got these couple orders in. I was like, yes, this is going to be awesome. Like, I'll finally be able to start, like, maybe taking a little bit of a paycheck.

Mm-hmm.

And then COVID happened in March, and everything went— like, everything was put on pause. And so, all of those, like, orders for the teams basically just disappeared. And then the few people we did have at the time, the companies that were employing them basically told us, like, hey, we might need to pause. operations.

Oh man.

We don't know what's going to happen. And so not only did we not get the orders, we also had like existing— and so that was like, it all went away. Like all the money went away. Everything went to like keeping this business afloat. And it was May 3rd when I had my son. But I remember, oh God, I'm going to like cry thinking about this.

Oh no.

So I had a baby shower planned for the end of March that got canceled.

Oh no.

And And I was like, they were like, oh, you know, 'cause they, we were thinking things were gonna reopen back up.

Mm-hmm.

And, and it didn't. And they're like, oh, maybe we'll do it later. We'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 gonna 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.

Yeah.

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, then it was like, it was like the lowest low. And then going into June, everything, I think people realized like, we're not going back to the office.

Yeah.

We're locked down. We've been doing this remote work for 3 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, it was crazy. June, we started to like just take off.

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.

Yep.

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, 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.

Yeah.

How little you made, right? In 2023, I reported like $100,000 personally. And then the next year was like $900,000. It got, it got so much. It's like, it's like if you just, if you just like wait a little longer. You know, it 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, it, yes, 100%. And, and I think being pregnant, being 9 months pregnant helped me not throw in the towel because I'm like, who's gonna hire me? I'm about to go on maternity leave.

Yeah.

Like, like quitting wasn't an option. Because I didn't even know where I would go at that point.

Mm-hmm.

And so I was like, well, I, I didn't even consider the option of throwing in the towel until like maybe it would've been like 3 months post—

Yeah.

Postpartum.

Well, thank God you didn't throw in the towel.

Yeah.

And look at you now. How much is your company valued at? $100 and how much million?

Yeah, I don't even know. We—

Like $100 and something million.

I don't even know. I mean, does, uh, anyone wanna pay for that? No, I'm teasing. Um, I think, I, I would say like $150 easily. That's 3x revenue. Yeah. Which is a very, very modest valuation.

That's absolutely incredible. So you ended up raising VC money.

Yeah.

Uh, 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?

Yeah, it was the, we were, so we were at a place in our business where the working capital swings were starting to get scary.

Mm-hmm.

And, uh, 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, we were like, you know, I feel like there's a really big play here that we could just go big with this company. And, um, 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, like, one last application and see how it goes. And if we get in, then we'll, we'll go down the venture route. And if not, we'll continue to make it a lifestyle business and we'll just be, we'll just try and save up more and more money as po— as much as possible or not, or intentionally not grow as fast.

Mm-hmm.

And, um, so we applied to YC, we got an interview, we got in. And so that, that, that decision chose that life for us, I guess.

Yeah. 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, of being in that?

Oh man, mostly fundraising.

Okay.

Mostly fundraising. So they have created such a beast, a machine. They're, 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. I'll try and give like the simplest way to describe it. They make such good bets on companies that they're the best performing venture capital firm because people think of 'em as an accelerator. They're a venture capital firm.

Oh, okay.

They're 5x better than the next best one you can think of. And, and Paul Graham calls it black swan, black swan farming, where he'll put— 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 their 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, they teach you, they know what is like, they have their finger on the pulse of, 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+ 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 3 months, I had 93 investor meetings.

Wow.

Which is crazy.

Yeah.

I never would've had anything like that if I didn't go through. I mean, I was trying to get investor meetings prior to getting into YC. No 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.

So you just said 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 it asks you a bunch of different questions. It's actually a really great exercise. Like if you wanna 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. And then—

Very cool. Very cool. So how much equity did you give up?

It's the same deal for everyone. Okay. So it's 7%.

Oh, that's not bad at all.

It's not bad.

That's the only amount of money that, and you, how many you got?

Oh, I had, 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, uh, $2.9 million out of YC, and then a year later we did another, uh, $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.

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, like, as we grow, if we wanna make, like, big bets or big investments. We are now cash flow positive. We were cash flow positive before YC, and then we took all this money and we invested it a lot. And then, and then now we're just back on the other side of being cash flow positive. Now, uh, do I regret doing it? The thing is, when you raise money, easy in, easy go, like easy out. You, you make bets, you make investments, you do things, you hire people, uh, and I think you, you make decisions that a non-venture-backed business would make.

Yeah. Mm-hmm.

That sometimes work, but most of the time they don't work.

Mm-hmm.

So I would say if you have the ability to not fundraise, it's always better because you just make better business decisions.

Yeah.

Like, and especially in this day and age, like, people are raising a bunch of money so they could do a thing and so they can sell. We 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.

Mm-hmm.

Most VCs have this like 7-year, 5-year time clock.

Mm-hmm.

And they're like money in, money out.

Yeah.

And so, we, we were very fortunate that we got the right kind of investors for us. And 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 Yeah, because at the, at, at, 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 gotta go to a board meeting, or, oh, I've gotta like do this thing for the board meeting. I'm like, yes, I get to go to a board meeting. Mm-hmm. Because I'm gonna go and talk to these like really smart people that have so much access, understanding, knowledge, and I'm gonna present them all of our wins, but all of our problems, and then they're gonna help us think through it.

Yeah. And they have incentive.

And they have incentive, and we're all aligned on that incentive.

Mm-hmm. Yeah. So yeah, I feel like one of the reasons why I may wanna raise money, and I've never raised money, and I've even talked to you about it. Yeah. And I feel like you're like, you don't need to raise money. Don't raise any money. Um, but the board, I, 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. So you will— so 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.

Mm-hmm. 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?

Oh, my ideal 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. And 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 3 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.

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.

Yes.

Which is really unique.

What the billboards have done for us is they have elevated our brand in a way that, like, we, we're huge. We have 11 offices, we have, you know, over 600 people.

Mm-hmm.

But people don't know we exist.

Mm-hmm.

And, uh, 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.

Yeah.

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. And 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, it was like, how do we build up our brand?

Yep.

So that people don't question our size and our capabilities. And, uh, one of 'em 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.

Yeah.

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. Mm-hmm. Let's like, put jokes or like do something that's a little bit shocking so that people would be like, what, 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.

Like, really? That expensive?

Think about it. So Every single tech company is kind of hyper-focused in the Bay Area.

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, yeah, they, uh, 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.

Yeah.

So it is a hard market to market in.

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 of marketing to like a very niche, um, audience as well. So for me, with my podcast network, I'm looking for like the biggest podcasters in the world.

Yeah.

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 1,000 podcasters in the world. And I scraped their emails and I sent them an opt-in and I was like, hey, like, do you wanna get like industry knowledge from me? Like I own a podcast network. People kind of know who I am in this industry too. And it's like, I'm not gonna publish it publicly. You'll only get it if you opt in.

Yeah.

And then people would opt into like my Podflash newsletter and I would just like tell them how to monetize, like all those gross secrets that I had.

Oh my gosh.

And then I'd have people like Alex Hormozi and Ed Mylett opening up my email 10 times, you know?

That's awesome.

So 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. It's just so powerful.

It's totally.

How else are you marketing and, and getting clients?

So traditional outbound.

Yep.

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.

Mm-hmm.

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, I would have done a better job if I would have just taken $80,000, because that's how much we were paying on, on these like digital platforms, put 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—

Yeah, ads are really tough.

They're so— especially for our business. Like, we, we, we Yeah. So that was not good. So we started doing like hyper-targeted, uh, campaigns. So the first thing we started to do was events. We, um, we got a suite at the Moody Center in Austin.

Mm-hmm.

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 wanna just like make sure you guys have a good time. And then of course, so smart psychology, like people are like, wait, but like I should probably at least hear you guys out. Yeah. And so a lot of people would then give us the opportunity. Our, our whole thing is we just want people to hear what we have to do. If you can just hear, give us 2 minutes to, 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 wanna work with us or you don't.

Yeah. And the Moody Center for you, 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 that wine and dine.

It's like, it's so hard. I mean, it's so hard to turn down. Like imagine Tim McGraw's coming up, right?

Yeah.

Big time guy. And it's like, hey, Hala, do you and, you know, plus one or you and, and plus 3 wanna 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 at Oracle Stadium for the Giants. Nice. 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, but, um, I mean, it's very, very, very pricey. Uh, so those are our 2 kind of business development plays that we're doing right now. And then, um, traditional outbound, so LinkedIn outbound, email outbound, outbound cold calling. We also would host like what we would call like the bespoke micro events where, for example, our next one, I'm, 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.

Oh, very cool.

And so there's 10 seats and we'll—

So 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 that was another one.

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.

Mm-hmm.

And 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.

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'll give them, we give them all the raw footage. We cut it and clip it and do it and, and we show it to them too because we don't want them to like be like, ah, actually I don't want them, I don't want you guys to publish anything about this.

Yeah.

And so, um, but it's, it, it, it, it starts from like a journalistic standpoint. Like we wanna 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, um, we talked about your kind of high-touch marketing play. Uh, retention is really important to you and referrals and expansion.

Mm-hmm.

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, uh, on the backend of our business, so once you hire someone and they start working with you, we have 2 people that support every single account. Uh, 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 US tech companies that are based in our offices throughout South America.

Mm-hmm.

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 US is just so foreign to other places.

Mm-hmm.

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. So, for example, say like I'm the engineering manager at Howdy and you are the technical leader at your company and you're frustrated with your team.

Okay.

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 3 different times and blah, blah, blah, blah, blah, right? I have the direct relationship with the— you also have the direct relationship with the engineers, But I'll go in the, in the background and see what's going on.

Mm-hmm.

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.

Mm-hmm.

And 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.

Mm-hmm.

So that works really, really well. And I'll say that people will tell me like, They'll be 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, no, but I don't want manager.

Or we don't need that.

We don't need that. Like, we, I'm the manager, I'm gonna 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. Like, you know, trust me, we, we, it's not an added cost. It's, 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, 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, those 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.

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, is hiring on your side good people.

Yes.

And you guys are really picky.

Yes.

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.

Yeah. So it's a people business.

Mm-hmm.

Right. And, um, when we were first starting out the business, uh, 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 gonna have this type of like grading based on the type of employees that they want. And then people are gonna have this grading based on like the type of employee they are. Because there's some people that like, I just wanna go to a job and I just wanna get on my task and I wanna do my job and I wanna leave. And other people wanna be, so there's just like, there's so much nuance, right?

Yes.

And so, we were thinking if we could create this, like, unique algorithm that we could do it and match it. And, and we both realized, we were 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 were like, Millie, help us with this.

Was she also a recruiter or she was literally a psychologist?

No, 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, 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.

Mm-hmm.

But can you use your expertise to really understand and identify and build out a profile of the person so that we can match 'em correctly to opportunities that we're getting on our side? And so, it started with one, and it worked so well that ever— everybody since then has been psychologists that we trained to be recruiters.

That's absolutely incredible. And so, what is the benefit of that? I know, I know you're getting like, um, like, why is personality, I guess, so important to you when you're hiring?

Because, you know, there we, especially when you go through the process, when you go through the vetting process, you are clearly smart. You are, 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, it helps for the longevity of their relationship at a partner.

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 So, we're hiring them. Okay.

So, we have physical, 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, uh, so, but then when COVID happened, everybody got out of their leases and we had actually signed to start like 2 more offices, but we put them on pause as well. And because with everything else that was going on, pause. But then when things turned back around, I, 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.

Mm-hmm.

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.

Mm-hmm.

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.

Yeah.

So they wanna go out, they wanna leave, they wanna go and have like an office space they can go to. Um, 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 gonna do and we're gonna 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 gonna have great coffee, we'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, or you can go into like a phone booth. But at the end of the day, if you wanna just be around people, because we're also like cooped up, you can be around people.

Hmm. 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, and we don't ever pool them. So, our agreement with a US tech company is once we find a resource for you, that's your resource. Now, if that resource doesn't wanna work for you anymore, they have free will. They 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, it's the employee's decision or the professional's decision whether or not they stay or leave.

Now, if they get fired, do then they go on another, to another company or do they get some sort of evaluation with you guys first before you bring them onto a different company?

So, uh, We, when they get fired, they stay, they move over to what we call our roster.

Mm-hmm.

But in that period is when we evaluate. Most of the people that we hire, we deem, hey, this is, these are Howdy engineers. Now, if there's anything that happened throughout the relationship with the customer that makes us question, then of course, like, 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.

Got it. And then when you get a new client, um, 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.

Okay.

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.

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.

Mm-hmm.

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, uh, capitally backed. And so, unfortunately, we kind of like saved them a little bit. And, um—

So, you got a good deal?

So, we got a great deal, and they got a great deal too, because, uh, it, it was a mutually great exchange, I would say. And, uh, so now we have this platform. It's not in the US yet. We're hoping to bring it to market soon. Um, but we, it, it's still primarily a Brazilian-focused market, but we do use it to source in Brazil.

Nice. Okay, so let's talk about expansion for Howdy. Do you think about other markets? Like, are, 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?

Yes. 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, 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.

And are you renting the offices there or are you buying these properties?

I wish we owned them. No, we're renting.

I was gonna say you could be like in the McDonald's real estate business.

I know. Could you imagine? I wanted to be. I was wondering.

Damn, if she owns all those properties.

I could imagine.

Yeah.

I know I would. I, I think if we were, uh, still bootstrapped, that would've been a path we would've gone down.

Mm-hmm.

Uh, we did end up buying the office space we're in in Austin.

Got it.

So beautiful, beautiful place. And we presented it to the board. The board agreed with it. They, they feel like owning outside of the US is a little risky.

Mm. That makes sense.

Yeah.

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. We, we—

Oh, you do that?

Yeah. So we staff any role that can be behind a computer, we can staff. Uh, I, but we, what we, so a couple 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.

Yeah.

And so what we realized is I would say about 12% of our staff is non-technical and 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.

Yeah, that upsell it like that's, 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, 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, and I loved it. It was nail it before you scale it. Tell us about that.

So when I started the business, I, 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.

Mm-hmm.

And what ends up happening is implosions. And whole, 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. We 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. So—

I love that. 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. Yes. 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 wanna talk about AI.

Yeah.

Do you feel like AI is disrupting your model in any way? Like, do you feel like people are hiring more slowly or they're hiring differently? Um, and I, 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. Oh, really?

'Cause I was like, is my, is my business— Yeah, everything's going away.

Gonna implode because like coding is obsolete. And, uh, fast forward 6 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. We 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.

Yep.

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 it is— 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, and they are a lot picky, a lot pickier with who they hire because it's one person doing the job of 10 now.

Yep.

And so, like, that one person has to, like, really know. Uh, 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 'em 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. Uh, he has his PhD in machine learning and quantum computing, and he was teaching at a university. And what we have, 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 it's just constant.

Now, uh, one of my last questions to you, if, if somebody's 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. Uh, one thing, so, God, thank goodness there are things like Claude and ChatGPT 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. Like, when you're meeting people in person, the, the scariest thing about doing something like this is the unknown unknowns. It's, it's— you have all these preconceived notions of what you need in, in the United States, but every country operates differently.

Yeah.

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. It, it, it— there, there, there's just more exchange that happens. I think people are a lot more guarded when they're over, um, 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, uh, it's, it's fun too. You 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.

So really, I love this business because I feel like it's actually something that you can start quite small. Yeah, like you can, you could start it virtually. Yeah, you don't have, like, I, I agree with you, like eventually if you're gonna scale it, go there, figure out where you're gonna open up your office and, 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 really cool stuff.

Especially too, if like you are an expert of something, you're gonna recognize who else knows that skillset. And so, mm-hmm.

And what the gaps are in terms of hiring in the US.

Yep.

Oh my gosh, there's so many more questions that I wanna ask you, uh, but we don't have a lot of time, so I'm gonna end this with, uh, 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.

Mm-hmm.

Because if you don't, it's not gonna 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 @HowdyJacqueline.

Amazing. Thank you so much for joining us on How We Profit.

Thank you.

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's 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, upskilling 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. 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, Hala Taha, AKA the Podcast Princess, and I'll see you in the next one.