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[00:00:00.240 --> 00:00:03.360] This podcast is hosted by Transistor.fm.
[00:00:17.920 --> 00:00:19.680] Hello, welcome to Build Your Sass.
[00:00:19.680 --> 00:00:24.320] This is the behind the scenes story of building a web app in 2023.
[00:00:24.320 --> 00:00:27.600] I'm Justin Jackson, the co-founder of Transistor.fm.
[00:00:27.600 --> 00:00:33.680] And today on the call, I have Michelle Hansen, co-founder of Geocodio.
[00:00:34.640 --> 00:00:40.480] And we're going to be talking about something very exciting, which is Section 174.
[00:00:40.800 --> 00:00:41.440] Hi, Michelle.
[00:00:41.440 --> 00:00:42.480] How are you doing?
[00:00:42.480 --> 00:00:43.440] Hi.
[00:00:43.440 --> 00:00:44.160] How are you?
[00:00:44.160 --> 00:00:51.280] First of all, Michelle, last I heard from you, you were going into hibernate mode.
[00:00:51.280 --> 00:00:59.440] And the way I understood hibernate mode was you were going to offload some of your side projects, you know, stop recording the podcast for a while.
[00:00:59.440 --> 00:01:05.040] No writing of new books, nothing extra, not doing any public speaking.
[00:01:05.040 --> 00:01:06.080] I'm just going to relax.
[00:01:06.080 --> 00:01:07.120] I'm going to focus on me.
[00:01:07.120 --> 00:01:08.320] I'm going to focus on my family.
[00:01:08.320 --> 00:01:10.800] I'm going to focus on Geocode.
[00:01:11.120 --> 00:01:12.560] What happened?
[00:01:13.760 --> 00:01:14.400] Yeah.
[00:01:16.800 --> 00:01:19.120] Oh, I want to go back in my cave, man.
[00:01:19.760 --> 00:01:20.400] Yeah.
[00:01:20.400 --> 00:01:22.800] Section 174 is what happened.
[00:01:22.800 --> 00:01:26.320] And I can't wait to go back into hibernate mode.
[00:01:26.320 --> 00:01:26.800] Okay.
[00:01:27.120 --> 00:01:36.880] Yes, this was kind of, I mean, it's not out of left field because it's this legislation's been proposed for a while.
[00:01:36.880 --> 00:01:50.160] Maybe for folks who don't understand what section 174 is, could you give a brief description and maybe then we'll talk about why it matters for small software companies.
[00:01:50.160 --> 00:01:53.200] So what is section 174?
[00:01:53.200 --> 00:02:04.120] The very high level is that section 174, and specifically what we're talking about is reverting section 174, is a part of the U.S.
[00:01:59.840 --> 00:02:04.680] tax code.
[00:02:04.920 --> 00:02:09.560] So we are talking about anyone who has a U.S.
[00:02:09.560 --> 00:02:14.200] business that builds or sells software.
[00:02:15.480 --> 00:02:24.520] And this is the part of the tax code that deals with what is called research and experimental, which is different than RD.
[00:02:24.520 --> 00:02:25.160] Okay.
[00:02:26.120 --> 00:02:42.600] And basically for, I want to say about 70 years since this section came into being, software development was considered among this research and experimental or RE spending.
[00:02:43.960 --> 00:03:06.040] And then what happened was, and under this section, you had the choice to either take all of those expenses immediately, which is to say, let's say you spent $10,000 last year building a new product, you had server costs, you had icon libraries, you had a UI library, you had all this stuff that you used to build it, right?
[00:03:06.040 --> 00:03:10.440] That $10,000, you could choose either to take that as an expense right away.
[00:03:10.440 --> 00:03:25.000] So that's negative $10,000 from your taxes, or you could choose to amortize it, which is basically have it spread out over many years, which is something you hear very commonly about computers, right?
[00:03:25.000 --> 00:03:31.960] Like all of us kind of know, like if you buy a new laptop, you don't get to take off 100% of that in the year that you bought it.
[00:03:31.960 --> 00:03:39.480] That has to be spread out over many years because you get, you know, five years of life out of that, right?
[00:03:39.800 --> 00:03:54.640] And so for basically forever, companies could choose to either expense these expenses, software among software development among them, or spread them out over many years.
[00:03:55.200 --> 00:04:04.400] Now, in 2017, there was a big piece of tax law in the U.S.
[00:04:05.040 --> 00:04:07.280] Mostly it was tax cuts.
[00:04:08.080 --> 00:04:25.040] And part of the sort of maneuvering to pay for those tax cuts was to say that, and this is also a benefit of it, that said for five years, companies can expense all of this RE spending.
[00:04:25.040 --> 00:04:25.680] Yeah.
[00:04:26.000 --> 00:04:35.440] But then as of January 1st, 2022, which is 14 months ago, it must be amortized.
[00:04:35.440 --> 00:04:43.120] So companies no longer had the option or have the option to take it as an expense.
[00:04:43.120 --> 00:04:46.560] Like, what's the proposed benefit to the government for doing it this way?
[00:04:46.880 --> 00:05:07.680] The thing about this is that when Congress passed this law in 2017, it was known that it was basically part of the package that was paying for these tax cuts and sort of just kind of in the same way that many governments push the problem of paying for retirement off to the next generation.
[00:05:07.920 --> 00:05:13.200] This was kind of doing that to companies, except only five years down the line and not, you know, 30, 40 years down the line.
[00:05:13.200 --> 00:05:13.680] Got it.
[00:05:13.680 --> 00:05:21.680] And so they knew when they were passing this bill that the intent was that they would revert this change before it took effect.
[00:05:21.680 --> 00:05:28.080] So it was basically kind of some accounting sleight of hand as they were passing this bill.
[00:05:28.080 --> 00:05:30.920] At this point, we can get upset about that.
[00:05:31.240 --> 00:05:45.560] Or I think where I'm choosing to spend my attention is on the likely catastrophic impact it will have on companies that build software and then doing something about it.
[00:05:45.880 --> 00:05:46.520] Yeah, yeah.
[00:05:46.520 --> 00:05:52.600] So this was this, from my perspective, it looks like this was political maneuvering.
[00:05:52.600 --> 00:05:58.360] Nobody expected this to go through, really, but now it looks like it has gone through.
[00:05:58.360 --> 00:06:14.440] And now I'm seeing tweets from founder friends who are like, we're doing our taxes and instead of paying $75,000 in taxes this year, we're paying $225,000 in taxes this year.
[00:06:14.440 --> 00:06:20.360] Or instead of my taxes being 30%, they've gone up 350%.
[00:06:20.360 --> 00:06:25.240] So it's having a meaningful impact on people right now.
[00:06:25.560 --> 00:06:27.000] Are you seeing that too?
[00:06:27.000 --> 00:06:27.480] Yeah.
[00:06:27.480 --> 00:06:31.480] And this is also something that companies have been predicting for a long time.
[00:06:31.480 --> 00:06:48.200] And so bigger companies think Netflix and Zoom and Microsoft, Intel, like since 2019, they have been talking to Congress about this, saying, Hey, remember that tax provision that you didn't intend to take effect?
[00:06:48.200 --> 00:06:49.800] We haven't forgotten about it.
[00:06:49.800 --> 00:06:55.160] Let's just make sure that we fix this before 2022 when it takes effect.
[00:06:55.160 --> 00:07:00.520] And they've been sending letters and talking to Congress about this for four years now.
[00:07:00.520 --> 00:07:06.920] And everybody thought in 2022 that it was going to be reverted before it took effect in December.
[00:07:06.920 --> 00:07:12.200] And then it kind of fell apart at the last moment with some negotiations.
[00:07:12.200 --> 00:07:15.840] And then so we get into this year.
[00:07:16.720 --> 00:07:32.160] And I think we small business owners hadn't really been clued in on it because, I mean, like, I don't track like policy legislation as part of my, like, I'm too busy responding to customers and like building software, right?
[00:07:32.480 --> 00:07:34.960] So, and dealing with sales taxes.
[00:07:34.960 --> 00:07:51.920] So, um, so now we get into this year, and uh, our accountants are starting to say, so there's this change that Congress didn't intend for to take effect, uh, but it did take effect.
[00:07:51.920 --> 00:08:11.200] And now, all of your software development and new features you're adding, new products you're building, stuff you probably don't think of as RD, salaries, servers, icon libraries, whatever it is, all of that is now has to be amortized.
[00:08:11.200 --> 00:08:13.360] That's no longer an expense.
[00:08:13.360 --> 00:08:18.800] You can only take 10% of it for 2022.
[00:08:18.800 --> 00:08:27.120] I did not realize that it's not just salaries, it's also any other expense related to software development.
[00:08:27.120 --> 00:08:27.360] Right.
[00:08:27.360 --> 00:08:53.360] So, this means, for example, that if you are, and so the crazy thing about this is also that Congress didn't intend for it to take effect, but since they were widely expected to fix this before it took effect, because nobody in Washington thinks it's good tax policy, the IRS did not write and release the full guidance on how tax preparers implement this.
[00:08:53.360 --> 00:09:03.080] They issued sort of something that's being taken basically as a warning in January that was like, hey, remember, this happened, but it doesn't actually define software development.
[00:08:59.840 --> 00:09:03.400] Yeah.
[00:09:03.640 --> 00:09:08.040] But I have been talking to a lot of experts about this in the past couple of weeks.
[00:09:08.040 --> 00:09:24.200] And it is increasingly clear to me that Section 174 is bad news for every company that builds software, not just ones that have employees, not just ones that are C Corps.
[00:09:24.520 --> 00:09:34.520] Like, if you have an LLC and you're only building a product right now and you're not even making any money, you're going to owe taxes because of this.
[00:09:34.520 --> 00:09:38.200] Like, it's very, you're likely to owe taxes, rather.
[00:09:38.200 --> 00:09:38.920] Wow.
[00:09:39.240 --> 00:09:40.520] It's everything.
[00:09:40.520 --> 00:09:41.800] I mean, I was thinking about this the other day.
[00:09:41.800 --> 00:09:49.640] I was like, if we, so, so, if, so, again, the IRS has never had to define software development, so we're going to have to, we're waiting for that from them.
[00:09:49.640 --> 00:10:11.800] But if they take the definition of it that most of the major accounting firms expect them to take and what, you know, big companies have been warning about in their public filings, like you can find VMware like warning about the tens of millions of dollars in additional taxes they're going to have to pay in their filings last year.
[00:10:11.800 --> 00:10:12.360] Yeah.
[00:10:12.360 --> 00:10:17.560] Like, developers are, is, are all developers going to have to be time tracking?
[00:10:17.560 --> 00:10:23.640] Like, I mean, everybody's, I mean, people are usually so relieved to stop doing client work and stop time tracking.
[00:10:23.640 --> 00:10:29.560] And now it's like, wait a minute, well, was that new feature development, which is now this RE expense that has to be amortized?
[00:10:29.720 --> 00:10:42.040] So not only you're, if you get a salary, right, that has to be part of that, but also, okay, I guess the staging server that you were using, that part of that expense is now under this different category.
[00:10:42.000 --> 00:10:50.400] Uh, you know, like, okay, you bought, you know, Tailwind UI for that, okay, that's now has to be capitalized, right?
[00:10:44.920 --> 00:10:58.720] Like, versus, well, you were fixing a bug later, and so that is actually just a regular business expense, so we get to write that one off.
[00:10:58.720 --> 00:11:01.680] But then, what if we're doing a UI improvement?
[00:11:01.680 --> 00:11:03.440] That is that a bug?
[00:11:03.440 --> 00:11:11.440] Is that like is that a new feature if it's making it easier to use because people were not realizing there was this functionality?
[00:11:11.440 --> 00:11:15.920] Like, it's a nightmare, it's an absolute nightmare.
[00:11:15.920 --> 00:11:28.480] And I think the fact that big companies have been writing to Congress about this for four years now it shows how much of a problem this is.
[00:11:28.480 --> 00:11:34.960] Before we get into this conversation, Justin, it's very important that I note that I am not a tax accountant.
[00:11:34.960 --> 00:11:41.600] And for advice about your specific situation, people should consult an accountant.
[00:11:41.600 --> 00:11:43.840] Yes, the same applies for me.
[00:11:43.840 --> 00:11:48.720] We are not accountants, we are not lawyers, we are not giving investment advice.
[00:11:48.880 --> 00:11:50.240] Just play one on TV.
[00:11:50.240 --> 00:11:54.800] This is just for informational and entertainment purposes only.
[00:11:54.800 --> 00:11:56.880] And call to action purposes, really.
[00:11:56.880 --> 00:12:05.040] I mean, that's why that's why I'm here is not to be the rain on everybody's parade, right?
[00:12:05.040 --> 00:12:08.720] It's to say, yes, this is a big problem.
[00:12:09.040 --> 00:12:14.160] Congress kind of made it, you know, five, six years ago.
[00:12:15.760 --> 00:12:18.400] Big companies have been trying to do something about it.
[00:12:18.480 --> 00:12:20.000] Didn't work.
[00:12:20.320 --> 00:12:22.080] And that's where we come in.
[00:12:22.080 --> 00:12:22.720] Yes.
[00:12:22.720 --> 00:12:30.000] So let's talk about what you've been organizing during your hibernate mode.
[00:12:31.880 --> 00:12:35.800] So you have this amazing website, SSB.
[00:12:35.960 --> 00:12:40.520] So S as in Sam, S as in Sam twice, right?
[00:12:40.520 --> 00:12:43.160] SSB Alliance.org.
[00:12:43.160 --> 00:12:48.040] So tell us what you've done so far and what's kind of in motion right now.
[00:12:48.040 --> 00:13:04.840] So what's in motion right now is to get small software businesses into this conversation and hopefully get the message through to Congress that this is an urgent problem that needs an urgent solution.
[00:13:04.840 --> 00:13:10.520] So Congress in December, they tried to repeal this.
[00:13:10.520 --> 00:13:12.360] I mean, there was broad bipartisan support.
[00:13:12.360 --> 00:13:15.320] Like there isn't anyone who thinks this is a good idea.
[00:13:16.200 --> 00:13:25.880] But it was seen as kind of a big business issue, which meant that it got parlayed off of a whole bunch of other different issues and it all got very complicated and fell through.
[00:13:26.920 --> 00:13:31.800] And this year, there is still a chance this is going to get reverted.
[00:13:31.800 --> 00:13:34.280] There is, again, broad bipartisan support for this.
[00:13:34.280 --> 00:13:35.960] Nobody thinks it's a good idea.
[00:13:35.960 --> 00:13:40.440] Nobody thinks it's good tax policy, but it's still seen as a big business issue.
[00:13:40.440 --> 00:14:01.800] And the problem is, is like you, I'm either opening emails from my accountant about this, or I'm opening Twitter and seeing all of my friends freaking out, saying that they might have to do layoffs, that they're taking out loans, that they're using their personal credit cards, or that they have no idea and their accountant hasn't told them and they are getting really worried.
[00:14:02.920 --> 00:14:10.200] The thing about this is that small businesses, like everybody loves small businesses, right?
[00:14:10.200 --> 00:14:12.200] Especially policymakers.
[00:14:12.200 --> 00:14:16.560] I like to say, you know, we are the cute puppies of the policy world.
[00:14:16.560 --> 00:14:19.280] Just basically everybody loves small businesses.
[00:14:14.920 --> 00:14:19.600] That's right.
[00:14:19.840 --> 00:14:27.120] But right now, because of section 174, we are getting run over by a truck and Congress has no idea.
[00:14:27.120 --> 00:14:27.680] Yeah.
[00:14:27.680 --> 00:14:30.800] Because they are thinking, okay, you know what?
[00:14:31.200 --> 00:14:32.960] We should fix this.
[00:14:32.960 --> 00:14:34.800] We can do that later in the year.
[00:14:34.800 --> 00:14:40.000] We can push this again to December, push it to the last minute, get something through.
[00:14:40.320 --> 00:14:44.080] And, you know, big companies, they have access to credit markets.
[00:14:45.360 --> 00:14:53.280] They can shoulder an extra $10, $20 million in a tax bill in a year and knowing that they're going to get it back later, right?
[00:14:53.280 --> 00:14:59.360] Because this would not only fix it, but also revert it so that it basically didn't take effect.
[00:14:59.360 --> 00:15:02.160] And then you would get a refund for 2022.
[00:15:02.480 --> 00:15:16.720] But if you're a small business and your tax bill has just gone from $75,000 to $225,000 and you're making a million or two a year, that's huge.
[00:15:16.720 --> 00:15:19.360] Like you may not have that money.
[00:15:20.080 --> 00:15:23.120] You can't just go sell stock in order to get that money back.
[00:15:23.120 --> 00:15:32.240] You can't just go to the bank and get a loan because, I mean, the only bank that was friendly to software companies, like literally just one put.
[00:15:32.960 --> 00:15:34.640] And most of us didn't even use them.
[00:15:34.640 --> 00:15:38.480] We use normal banks that barely know what software is in the first place.
[00:15:39.280 --> 00:15:43.840] So this is a huge problem for small businesses.
[00:15:43.840 --> 00:15:48.880] We can't wait a year to get a refund check for this.
[00:15:48.840 --> 00:15:49.320] Yeah.
[00:15:49.320 --> 00:15:50.960] Like, we can't wait.
[00:15:50.960 --> 00:15:56.320] And so, what you probably know about me is that I am an indie founder.
[00:15:56.320 --> 00:15:56.880] I wrote a book.
[00:15:56.880 --> 00:15:59.320] I have a podcast, all that fun stuff.
[00:15:59.640 --> 00:16:03.800] Way back when I used to live and work in DC.
[00:15:58.880 --> 00:16:04.040] Okay.
[00:16:04.840 --> 00:16:17.720] And so when I heard about this, and I have some friends who work in the policy world, and I remember them like kind of saying at the end of last year, like, oh, this big thing I've been working on, like, you know, it didn't go through, and I'm like super bummed about it.
[00:16:17.720 --> 00:16:20.200] And like, I mean, I'm like super checked out on politics.
[00:16:20.200 --> 00:16:26.120] Like, I'm just kind of like working and like, you know, I have a general idea of what's going on, but like, definitely not following policy.
[00:16:26.120 --> 00:16:27.800] And I'm like, oh, that sounds like really rough.
[00:16:27.800 --> 00:16:29.720] I'm sorry, you've worked hard on this.
[00:16:29.720 --> 00:16:30.840] Like, it didn't work.
[00:16:30.840 --> 00:16:32.520] Like, go have a glass of wine.
[00:16:32.520 --> 00:16:33.320] Like, right.
[00:16:33.320 --> 00:16:35.240] And then, and then, so everybody started talking about this.
[00:16:35.240 --> 00:16:36.600] And I started hearing about it.
[00:16:36.600 --> 00:16:42.760] And I was like, so is this this thing that you were all upset about in December?
[00:16:42.760 --> 00:16:44.440] And they were like, yes.
[00:16:44.440 --> 00:16:44.920] Wow.
[00:16:44.920 --> 00:16:50.120] And I was like, oh, because all of my friends are upset about it now.
[00:16:50.440 --> 00:16:58.520] And so I have basically been pulling out all the connections I've got to get us into the conversation in DC.
[00:16:58.520 --> 00:16:59.080] Amazing.
[00:16:59.400 --> 00:17:12.520] And to get us, the cute puppy small businesses in front of Congress so that they understand that this is an issue, right?
[00:17:12.520 --> 00:17:14.920] And let me do an analogy here.
[00:17:15.240 --> 00:17:21.800] This issue is kind of like, you know, this for anybody who has teenagers, who's ever been a teenager, which I know is you.
[00:17:21.800 --> 00:17:22.360] Yeah.
[00:17:22.920 --> 00:17:27.160] It's like a pile of sports equipment sitting in the hallway, right?
[00:17:27.160 --> 00:17:28.760] That might be hockey equipment.
[00:17:28.760 --> 00:17:31.160] It could be soccer cleats, whatever.
[00:17:31.160 --> 00:17:36.360] It's sitting in the hallway and it sits there for a couple of days.
[00:17:36.360 --> 00:17:38.600] Everybody knows it's a problem.
[00:17:38.600 --> 00:17:43.880] Everybody knows it shouldn't be there, but everybody just keeps walking by.
[00:17:43.880 --> 00:17:44.360] Yeah.
[00:17:44.600 --> 00:17:55.760] And then one day turns into another and this pile of sports equipment starts smelling really, really terribly.
[00:17:55.760 --> 00:17:56.560] Yeah.
[00:17:56.560 --> 00:17:58.080] It's a good analogy.
[00:17:58.080 --> 00:18:07.120] And the person who should be cleaning it up is playing Mario Kart and there's guests coming in 10 minutes, right?
[00:18:07.440 --> 00:18:15.280] And so we need to be, you know, the person who kind of runs in there with a wooden spoon and says, hey, this is a problem.
[00:18:15.280 --> 00:18:16.960] Guests are coming in 10 minutes.
[00:18:16.960 --> 00:18:20.800] There's a pile of, you know, dirty equipment in the hallway.
[00:18:20.800 --> 00:18:23.600] Like we need to get this done now.
[00:18:23.600 --> 00:18:24.880] We cannot wait.
[00:18:24.880 --> 00:18:31.760] And so what I'm doing is, you know, first sort of getting us together, right?
[00:18:31.760 --> 00:18:33.760] We are not the most organized bunch.
[00:18:34.560 --> 00:18:39.760] Just trying to organize people and then getting people in front of policymakers.
[00:18:39.760 --> 00:18:48.000] So like members of our community, because of this effort, have already talked to Hill staff, already told them about how they're taking out loans and how this is affecting them.
[00:18:48.000 --> 00:18:48.640] Yeah.
[00:18:48.640 --> 00:18:59.680] But the big thing we're doing now is we're going to have a coalition letter to Congress, which is basically this is a formal letter to Congress that will go directly to their offices.
[00:18:59.680 --> 00:19:02.880] This is not something that we just put in a contact form and pray.
[00:19:02.880 --> 00:19:07.840] This is going directly to their offices because of these friends that I have.
[00:19:07.840 --> 00:19:08.400] Amazing.
[00:19:08.720 --> 00:19:13.440] And describes the impact that this is having on small software businesses.
[00:19:13.440 --> 00:19:18.400] Now, I know that many of us, we don't even know what the impact of it is yet.
[00:19:18.400 --> 00:19:18.960] Yeah.
[00:19:18.960 --> 00:19:20.160] That's okay.
[00:19:20.160 --> 00:19:32.280] Like, if your accountant hasn't found out about this yet or hasn't told you about it yet, and you're worried about it, you can still sign this because you are almost certainly going to be impacted by this.
[00:19:32.600 --> 00:19:41.960] And, but there are people who are like laying people off, or I mean, we were talking about hiring another developer this year, and that conversation has just gone out the window.
[00:19:42.200 --> 00:19:46.840] Um, and so did you, yeah, congratulations.
[00:19:47.160 --> 00:20:01.720] I mean, there are companies facing bankruptcy already because of this, like, this is very, very like, and I have this form of just kind of collecting everybody's emails and their addresses so we know which congressional districts they're in and kind of how it's impacting them so far.
[00:20:01.720 --> 00:20:05.320] And like, it is just breaking my heart.
[00:20:05.320 --> 00:20:15.560] Every single one of these emails that I get in there, that's like, you know, we got through COVID, we thought things were going to be good, like, we finally felt like we were back on our feet again, and then this happened, right?
[00:20:15.560 --> 00:20:22.920] And we don't have the money for it, banks won't work with us, like personal credit cards, I guess, right?
[00:20:22.920 --> 00:20:29.000] And so, we need to get this letter in front of Congress, and these things are very, very effective.
[00:20:29.000 --> 00:20:35.000] So, there was a group of small biotech companies that sent one a few weeks ago.
[00:20:35.000 --> 00:20:40.280] There were 500 small biotechs that signed this letter, which I think that means we can do a thousand, right?
[00:20:40.280 --> 00:20:46.200] Yeah, a senator like mentioned this letter in a hearing a couple weeks ago.
[00:20:46.200 --> 00:20:53.960] Like, these things really make a difference because when that, like, there are policymakers who are they're already co-sponsors of the bill to fix this, right?
[00:20:53.960 --> 00:21:13.400] Yeah, when they're going to their colleagues, when their staff is going to their colleagues, this is a letter they can bring with them and say, Here is very tangible impact of very small businesses seeing tax bills that are 400% higher than previously for a policy that we never intended to implement.
[00:21:13.400 --> 00:21:17.200] Yeah, um, and so, as many people who are U.S.
[00:21:17.280 --> 00:21:20.720] citizens, sorry, can sign this, right?
[00:21:21.200 --> 00:21:27.920] Like all 50 states plus territories, we have to do this, right?
[00:21:27.920 --> 00:21:31.280] Because this is up to us at this point.
[00:21:31.680 --> 00:21:36.880] The big companies have tried, it's stuck as a big business issue.
[00:21:36.880 --> 00:21:38.480] It's not a big business issue.
[00:21:38.480 --> 00:21:41.280] This is also a small business issue.
[00:21:41.280 --> 00:21:49.360] And so we have the opportunity to get in there, shake things up a bit, and say, this is not a hypothetical issue.
[00:21:49.680 --> 00:21:54.400] This is not something that's only going to affect the Facebooks of the world, right?
[00:21:54.400 --> 00:22:06.720] Like this is going to impact small businesses in Kansas and Missouri and Pennsylvania and Arizona as much as it is the companies in California who are already hurting.
[00:22:06.720 --> 00:22:19.200] Yeah, and just to, again, to give a practical example of this, like at Transistor, I think like a lot of Bootstrap software companies, we spend most of the money in a year.
[00:22:19.200 --> 00:22:23.600] We take it out as owner with owner distributions.
[00:22:23.600 --> 00:22:27.600] We take it out as pay our staff really well.
[00:22:27.600 --> 00:22:30.720] So we don't have a lot of cash in the bank.
[00:22:30.960 --> 00:22:38.080] We run just a nice lean operation and we know that every month we're going to have more cash coming in from recurring revenue.
[00:22:38.080 --> 00:22:49.520] But if you've been running your business like that, that means that, and you just have this expectation that any expense you have is an expense for that year.
[00:22:49.520 --> 00:22:52.640] And so you can take most of the money out of the company.
[00:22:53.120 --> 00:22:58.440] So if you run lean, like a lot of us do, that's where it's going to get you.
[00:22:58.440 --> 00:23:12.440] Because now you're going to need, instead of needing to have whatever you normally have in your bank account, $100,000, $200,000, $500,000, whatever, you're going to need to have way more just to cover the tax bill, especially year one.
[00:23:13.080 --> 00:23:18.440] And there's this great Wall Street Journal piece that you link to on your site.
[00:23:18.440 --> 00:23:19.480] I'll quote from that.
[00:23:19.480 --> 00:23:28.520] Laura Lynn Gonzalez expected a tax refund this year after her two employee data visualization company experienced a $30,000 loss.
[00:23:28.520 --> 00:23:36.680] Instead, she said she's facing a $100,000 federal tax bill that is about as large as her 2022 salary.
[00:23:36.680 --> 00:23:38.360] That's what this looks like.
[00:23:38.360 --> 00:23:46.280] It looks like if you don't have the cash to pay the tax bill, that's where you're going to get in trouble.
[00:23:46.280 --> 00:23:55.800] And it works great when you can expense, you know, when you can expense developer salaries and developer costs as a full expense in that year.
[00:23:55.800 --> 00:23:57.880] Running lean works that way.
[00:23:57.880 --> 00:24:09.160] But if that's the way you've been running it, and if LLCs, you're probably taking nice distributions, you know, all of that's the way you've been working won't work under this legislation.
[00:24:09.160 --> 00:24:18.600] That's why it's so important because you're going to need to come up with maybe hundreds of thousands of dollars in cash to pay a tax bill.
[00:24:20.200 --> 00:24:24.040] Nobody really expected this to happen.
[00:24:24.040 --> 00:24:30.440] And then now that it is, and we are all getting these tax bills or sort of very slowly, right?
[00:24:30.440 --> 00:24:35.080] Because there's people I've talked to who didn't, their accountant didn't realize that this was happening.
[00:24:35.800 --> 00:24:39.400] So now they're not only facing the huge tax bill, but also penalties.
[00:24:41.560 --> 00:24:46.560] And that five-year depreciation we talked about for spreading it out.
[00:24:46.560 --> 00:24:52.720] If you are running a remote company, which a lot of people are, you've got, maybe you've got contractors all over the world.
[00:24:52.720 --> 00:24:56.880] Foreign RE expenses are 15 years.
[00:24:57.200 --> 00:24:58.400] Oh my gosh.
[00:24:58.720 --> 00:24:59.440] Yeah.
[00:24:59.760 --> 00:25:07.840] Like, so if you've got, you know, a lot of people have a team in, you know, in Southeast Asia or in Eastern Europe or just, I mean, spread out all over the world, right?
[00:25:07.840 --> 00:25:08.160] Yeah.
[00:25:08.160 --> 00:25:10.800] That's 15 years.
[00:25:10.800 --> 00:25:11.600] Wow.
[00:25:11.600 --> 00:25:13.360] For that development expense.
[00:25:13.360 --> 00:25:27.840] And so this is, I mean, it, I hesitate to say it because it feels dramatic, but Section 174 is an existential threat to anyone who builds software.
[00:25:27.840 --> 00:25:28.240] Yeah.
[00:25:28.480 --> 00:25:31.440] Even if you're only making $10,000 a year.
[00:25:32.400 --> 00:25:32.880] Yeah.
[00:25:32.880 --> 00:25:35.200] Even if you don't have any employees.
[00:25:35.200 --> 00:25:35.760] Yeah.
[00:25:36.400 --> 00:25:37.840] This is a problem.
[00:25:37.840 --> 00:25:48.480] And in a, I mean, this is, I don't know, it feels a little bit like putting the rookie in at the end of the game to throw the Hail Mary, you know, to win the game, right?
[00:25:48.480 --> 00:25:54.160] But it's like up to us, the little guys, to do this.
[00:25:54.480 --> 00:25:58.320] But folks, like folks in DC, they are very receptive.
[00:25:58.320 --> 00:26:00.080] Like I've had some great calls with people.
[00:26:00.080 --> 00:26:02.720] They are happy to have us on board.
[00:26:02.720 --> 00:26:03.840] We're getting help.
[00:26:03.840 --> 00:26:08.400] Like we're like this letter is going to go straight to Congress.
[00:26:08.400 --> 00:26:16.800] Like people you probably know on Twitter have already talked to Hill staff about this because of this effort.
[00:26:16.800 --> 00:26:17.280] Yeah.
[00:26:18.080 --> 00:26:21.600] It's, I didn't come out of my hibernation for nothing.
[00:26:21.600 --> 00:26:26.560] Like, this is a really, really serious problem.
[00:26:26.560 --> 00:26:32.920] And we cannot rely on the bigger companies to sort this out.
[00:26:33.160 --> 00:26:41.080] Or, as you said a couple weeks ago, we can't have magical thinking and just pray that it doesn't impact us.
[00:26:41.080 --> 00:26:43.880] Yeah, this is going to impact us.
[00:26:43.880 --> 00:26:44.360] Yeah.
[00:26:44.360 --> 00:26:50.200] And we have a responsibility to do something about it and can do something about it.
[00:26:50.200 --> 00:26:50.600] Yeah.
[00:26:50.600 --> 00:26:51.240] Yeah.
[00:26:51.560 --> 00:26:55.240] So, we, folks, if you're listening right now and you are a U.S.
[00:26:55.240 --> 00:27:09.720] citizen and you have, you're doing anything on the side, you have your own software company, go to ssballiance.org right now while you're listening, sign it, and then send it to your friends.
[00:27:09.720 --> 00:27:12.040] Explain to them what's going on.
[00:27:12.040 --> 00:27:15.480] And you're right, we need to have a thousand people sign this.
[00:27:17.160 --> 00:27:22.600] There are many, many small software businesses in the United States.
[00:27:22.600 --> 00:27:30.600] And the more people that sign this right away, the bigger, the louder we can make our voices.
[00:27:30.600 --> 00:27:36.200] And we can actually have a chance here, especially with Michelle's work, to make a difference.
[00:27:36.200 --> 00:27:38.920] We can actually get this into the hands of the right people.
[00:27:39.240 --> 00:27:44.840] And again, like she said, small business is such a strong political motivator.
[00:27:44.840 --> 00:27:55.320] Like this, we actually do have some power here, and we need to use it, especially because the culture has become kind of antagonistic towards big tech.
[00:27:55.320 --> 00:28:06.200] Well, small business, like mom and pop shops, we have a good reputation in the culture, and we can use that to say, hey, you gotta help us out here.
[00:28:06.200 --> 00:28:10.360] Or like, honestly, I don't know what we would do, even.
[00:28:11.480 --> 00:28:13.640] So, that's this is your call to action.
[00:28:13.640 --> 00:28:16.640] Go to ssballiance.org.
[00:28:16.800 --> 00:28:23.040] Michelle's been really good at communicating with everybody, sending updates, telling folks exactly what they need to do.
[00:28:23.040 --> 00:28:32.720] It'll take you 10 seconds to sign up, and then another 30 seconds to a couple minutes to do what Michelle's asked folks to do.
[00:28:32.720 --> 00:28:38.400] Do you want to just quickly run through what people can do besides sign up for ssballiance.org?
[00:28:38.720 --> 00:28:46.720] So, if you go to ssballiance.org now, you will be directed to sign the coalition letter.
[00:28:46.720 --> 00:28:56.880] And then there is also the option to stay updated, which is basically mandatory because if it turns out that you're in a really pivotal congressional district, we want you to talk to your representative.
[00:28:56.880 --> 00:29:01.120] And so, it's really important to have your whole address in there.
[00:29:01.120 --> 00:29:02.960] I'm not sharing that with anybody.
[00:29:02.960 --> 00:29:05.520] Your email isn't getting shared with anybody.
[00:29:05.520 --> 00:29:07.920] Like I said, I used to work in DC.
[00:29:07.920 --> 00:29:14.640] I know what the tricks are when you fill out forms about politics where I'm still getting added to stuff because of the Obama 2008 list.
[00:29:14.640 --> 00:29:16.560] I am not doing that to your email.
[00:29:16.960 --> 00:29:18.800] I'm the only person who's going to have this data.
[00:29:18.800 --> 00:29:25.440] It'll get shared, you know, anonymously, like in terms of this business in Michigan is saying that they're going to have to lay people off, right?
[00:29:25.440 --> 00:29:26.880] Like, things like that.
[00:29:26.880 --> 00:29:33.760] Or I might reach out to you and say, Hey, would you be up for talking to a Hill staffer and sharing more about what's going on in your business?
[00:29:33.760 --> 00:29:35.760] But nobody else is going to see your information.
[00:29:35.760 --> 00:29:44.640] The letter will have your name, your company name, and your location again, because we need to show that these businesses are all over the country.
[00:29:44.640 --> 00:29:48.960] I mean, it's kind of a funny thing where, like, Congress basically doesn't know we exist, right?
[00:29:48.960 --> 00:29:50.160] Like, small software companies.
[00:29:50.160 --> 00:29:50.720] I mean, right?
[00:29:50.720 --> 00:29:53.040] Like, we're kind of looked down upon in some corners, right?
[00:29:53.040 --> 00:29:56.800] Like, we're oh, you know, lifestyle businesses, right?
[00:29:57.360 --> 00:30:01.160] This is our moment to have an impact.
[00:30:01.160 --> 00:30:03.480] And so, that is the information that's gathered.
[00:29:59.840 --> 00:30:05.080] I'm the only one who's seeing that.
[00:30:05.400 --> 00:30:11.560] Sign the coalition letter and do it on or before April 10th.
[00:30:11.560 --> 00:30:15.080] We need to deliver this to Congress before tax day.
[00:30:15.080 --> 00:30:17.720] So, April 10th is the deadline.
[00:30:17.720 --> 00:30:20.200] ssballiance.org to sign the letter.
[00:30:20.200 --> 00:30:27.560] If you're listening to this after that, you can still go there and just sign up for the regular mailing list.
[00:30:27.560 --> 00:30:31.160] And so, I'll keep you in the loop on how you can help.
[00:30:33.000 --> 00:30:34.200] Sign the letter.
[00:30:34.520 --> 00:30:35.080] Yeah.
[00:30:35.400 --> 00:30:45.720] And thanks again, Michelle, for like for deciding to put yourself out there to use your connections and to organize this.
[00:30:45.720 --> 00:30:52.200] I was really heartened because I feel like often small business founders just don't want to think about this stuff.
[00:30:52.200 --> 00:30:54.920] And I get it, but this is real life.
[00:30:54.920 --> 00:30:56.760] Like, this is actually happening.
[00:30:57.240 --> 00:31:00.120] We don't have a reality distortion field we can use here.
[00:31:00.120 --> 00:31:04.040] This is actually just real, really what's happening.
[00:31:04.040 --> 00:31:05.480] So, thank you so much.
[00:31:05.480 --> 00:31:07.960] I think everybody, Michelle didn't ask me to say this.
[00:31:07.960 --> 00:31:09.560] Everyone go buy her buck.
[00:31:09.880 --> 00:31:11.720] Thank her on Twitter.
[00:31:11.720 --> 00:31:13.400] Sign up for Geocodeo.
[00:31:13.720 --> 00:31:15.880] But most of all, just thanks so much.
[00:31:15.880 --> 00:31:19.800] And let's help her do, let's help her get this in motion.
[00:31:19.800 --> 00:31:25.000] So send this to your friends, sign it right now, spread the word.
[00:31:25.000 --> 00:31:29.240] And yeah, let's try to get this, let's try to get this reversed.
[00:31:29.240 --> 00:31:30.440] Thank you, Justin.
[00:31:30.440 --> 00:31:45.440] And I mean, if anybody else, if you've got a podcast, if you've got any kind of presence anywhere, LinkedIn, Twitter, wherever that is, if you have a presence among software founders, you need to use that now.
[00:31:45.920 --> 00:31:54.640] If you want to continue being a software founder and you want those people to continue being software founders as well, we have to do something about this.
[00:31:54.640 --> 00:31:56.800] And so just reach out to me.
[00:31:56.800 --> 00:32:00.800] I did a scary thing, which is open my DMs.
[00:32:01.520 --> 00:32:03.600] So, yeah.
[00:32:03.600 --> 00:32:06.560] And I'm already getting so many Bitcoin raffle offers.
[00:32:08.400 --> 00:32:09.680] Make it worth it, people.
[00:32:09.680 --> 00:32:10.160] Okay.
[00:32:10.160 --> 00:32:11.120] Reach out to me.
[00:32:11.120 --> 00:32:11.520] Yeah.
[00:32:11.520 --> 00:32:12.800] I'm out of my hibernation.
[00:32:12.800 --> 00:32:14.400] We're going to make this happen.
[00:32:14.400 --> 00:32:17.200] What we all need to be on board to make it happen.
[00:32:17.200 --> 00:32:17.520] Yeah.
[00:32:17.520 --> 00:32:18.800] Thanks so much, Michelle.
[00:32:18.800 --> 00:32:22.960] You can get Michelle on Twitter, MJW Hansen.
[00:32:22.960 --> 00:32:26.320] That's H-A-N-S-E-N.
[00:32:26.880 --> 00:32:39.120] She's got a lot of other links on her Twitter page, but then ssballiance.org will also give you her email address, which is then you can be in contact with her directly.
[00:32:39.120 --> 00:32:41.600] And yeah, let's make this happen.
[00:32:41.600 --> 00:32:48.160] And let's do a follow-up episode after that deadline, which was April 10th.
[00:32:48.160 --> 00:32:48.720] Yeah.
[00:32:48.720 --> 00:32:54.080] After April 10th, let's do another episode just to update folks on this and we'll go from there.
[00:32:54.080 --> 00:32:54.720] Sounds great.
[00:32:54.720 --> 00:32:55.200] Thank you.
[00:32:55.200 --> 00:32:56.560] Thanks again.
[00:33:14.640 --> 00:33:18.560] Podcast hosting is provided by transistor.fm.
[00:33:18.560 --> 00:33:29.760] They host our mp3 files, generate our RSS feed, provide us with analytics, and help us distribute the show to Spotify, Apple Podcasts, and more.
[00:33:29.800 --> 00:33:41.000] If you want to start your own podcast or you want to switch to Transistor, go to transistor.fm/slash Justin and get 15% off your first year.

Prompt 2: Key Takeaways

Now please extract the key takeaways from the transcript content I provided.

Extract the most important key takeaways from this part of the conversation. Use a single sentence statement (the key takeaway) rather than milquetoast descriptions like "the hosts discuss...". 

Limit the key takeaways to a maximum of 3. The key takeaways should be insightful and knowledge-additive. 

IMPORTANT: Return ONLY valid JSON, no explanations or markdown. Ensure:
- All strings are properly quoted and escaped
- No trailing commas
- All braces and brackets are balanced
Format: {"key_takeaways": ["takeaway 1", "takeaway 2"]}

Prompt 3: Segments

Now identify 2-4 distinct topical segments from this part of the conversation.

For each segment, identify:
- Descriptive title (3-6 words)  
- START timestamp when this topic begins (HH:MM:SS format)
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Most important Key takeaway from that segment. Key takeaway must be specific and knowledge-additive.
- Brief summary of the discussion

IMPORTANT: The timestamp should mark when the topic/segment STARTS, not a range. Look for topic transitions and conversation shifts.

Return ONLY valid JSON. Ensure all strings are properly quoted, no trailing commas:
{
  "segments": [
    {
      "segment_title": "Topic Discussion", 
      "timestamp": "01:15:30",
      "key_takeaway": "main point from this segment",
      "segment_summary": "brief description of what was discussed"
    }
  ]
}

Timestamp format: HH:MM:SS (e.g., 00:05:30, 01:22:45) marking the START of each segment.

Prompt 4: Media Mentions

Now scan the transcript content I provided for ACTUAL mentions of specific media titles:

Find explicit mentions of:
- Books (with specific titles)
- Movies (with specific titles)  
- TV Shows (with specific titles)
- Music/Songs (with specific titles)

DO NOT include:
- Websites, URLs, or web services
- Other podcasts or podcast names

IMPORTANT: 
- Only include items explicitly mentioned by name. Do not invent titles.
- Valid categories are: "Book", "Movie", "TV Show", "Music"
- Include the exact phrase where each item was mentioned
- Find the nearest proximate timestamp where it appears in the conversation
- THE TIMESTAMP OF THE MEDIA MENTION IS IMPORTANT - DO NOT INVENT TIMESTAMPS AND DO NOT MISATTRIBUTE TIMESTAMPS
- Double check that the timestamp is accurate - a timestamp will NEVER be greater than the total length of the audio
- Timestamps are given as ranges, e.g. 01:13:42.520 --> 01:13:46.720. Use the EARLIER of the 2 timestamps in the range.

Return ONLY valid JSON. Ensure all strings are properly quoted and escaped, no trailing commas:
{
  "media_mentions": [
    {
      "title": "Exact Title as Mentioned",
      "category": "Book",
      "author_artist": "N/A",
      "context": "Brief context of why it was mentioned",
      "context_phrase": "The exact sentence or phrase where it was mentioned",
      "timestamp": "estimated time like 01:15:30"
    }
  ]
}

If no media is mentioned, return: {"media_mentions": []}

Full Transcript

[00:00:00.240 --> 00:00:03.360] This podcast is hosted by Transistor.fm.
[00:00:17.920 --> 00:00:19.680] Hello, welcome to Build Your Sass.
[00:00:19.680 --> 00:00:24.320] This is the behind the scenes story of building a web app in 2023.
[00:00:24.320 --> 00:00:27.600] I'm Justin Jackson, the co-founder of Transistor.fm.
[00:00:27.600 --> 00:00:33.680] And today on the call, I have Michelle Hansen, co-founder of Geocodio.
[00:00:34.640 --> 00:00:40.480] And we're going to be talking about something very exciting, which is Section 174.
[00:00:40.800 --> 00:00:41.440] Hi, Michelle.
[00:00:41.440 --> 00:00:42.480] How are you doing?
[00:00:42.480 --> 00:00:43.440] Hi.
[00:00:43.440 --> 00:00:44.160] How are you?
[00:00:44.160 --> 00:00:51.280] First of all, Michelle, last I heard from you, you were going into hibernate mode.
[00:00:51.280 --> 00:00:59.440] And the way I understood hibernate mode was you were going to offload some of your side projects, you know, stop recording the podcast for a while.
[00:00:59.440 --> 00:01:05.040] No writing of new books, nothing extra, not doing any public speaking.
[00:01:05.040 --> 00:01:06.080] I'm just going to relax.
[00:01:06.080 --> 00:01:07.120] I'm going to focus on me.
[00:01:07.120 --> 00:01:08.320] I'm going to focus on my family.
[00:01:08.320 --> 00:01:10.800] I'm going to focus on Geocode.
[00:01:11.120 --> 00:01:12.560] What happened?
[00:01:13.760 --> 00:01:14.400] Yeah.
[00:01:16.800 --> 00:01:19.120] Oh, I want to go back in my cave, man.
[00:01:19.760 --> 00:01:20.400] Yeah.
[00:01:20.400 --> 00:01:22.800] Section 174 is what happened.
[00:01:22.800 --> 00:01:26.320] And I can't wait to go back into hibernate mode.
[00:01:26.320 --> 00:01:26.800] Okay.
[00:01:27.120 --> 00:01:36.880] Yes, this was kind of, I mean, it's not out of left field because it's this legislation's been proposed for a while.
[00:01:36.880 --> 00:01:50.160] Maybe for folks who don't understand what section 174 is, could you give a brief description and maybe then we'll talk about why it matters for small software companies.
[00:01:50.160 --> 00:01:53.200] So what is section 174?
[00:01:53.200 --> 00:02:04.120] The very high level is that section 174, and specifically what we're talking about is reverting section 174, is a part of the U.S.
[00:01:59.840 --> 00:02:04.680] tax code.
[00:02:04.920 --> 00:02:09.560] So we are talking about anyone who has a U.S.
[00:02:09.560 --> 00:02:14.200] business that builds or sells software.
[00:02:15.480 --> 00:02:24.520] And this is the part of the tax code that deals with what is called research and experimental, which is different than RD.
[00:02:24.520 --> 00:02:25.160] Okay.
[00:02:26.120 --> 00:02:42.600] And basically for, I want to say about 70 years since this section came into being, software development was considered among this research and experimental or RE spending.
[00:02:43.960 --> 00:03:06.040] And then what happened was, and under this section, you had the choice to either take all of those expenses immediately, which is to say, let's say you spent $10,000 last year building a new product, you had server costs, you had icon libraries, you had a UI library, you had all this stuff that you used to build it, right?
[00:03:06.040 --> 00:03:10.440] That $10,000, you could choose either to take that as an expense right away.
[00:03:10.440 --> 00:03:25.000] So that's negative $10,000 from your taxes, or you could choose to amortize it, which is basically have it spread out over many years, which is something you hear very commonly about computers, right?
[00:03:25.000 --> 00:03:31.960] Like all of us kind of know, like if you buy a new laptop, you don't get to take off 100% of that in the year that you bought it.
[00:03:31.960 --> 00:03:39.480] That has to be spread out over many years because you get, you know, five years of life out of that, right?
[00:03:39.800 --> 00:03:54.640] And so for basically forever, companies could choose to either expense these expenses, software among software development among them, or spread them out over many years.
[00:03:55.200 --> 00:04:04.400] Now, in 2017, there was a big piece of tax law in the U.S.
[00:04:05.040 --> 00:04:07.280] Mostly it was tax cuts.
[00:04:08.080 --> 00:04:25.040] And part of the sort of maneuvering to pay for those tax cuts was to say that, and this is also a benefit of it, that said for five years, companies can expense all of this RE spending.
[00:04:25.040 --> 00:04:25.680] Yeah.
[00:04:26.000 --> 00:04:35.440] But then as of January 1st, 2022, which is 14 months ago, it must be amortized.
[00:04:35.440 --> 00:04:43.120] So companies no longer had the option or have the option to take it as an expense.
[00:04:43.120 --> 00:04:46.560] Like, what's the proposed benefit to the government for doing it this way?
[00:04:46.880 --> 00:05:07.680] The thing about this is that when Congress passed this law in 2017, it was known that it was basically part of the package that was paying for these tax cuts and sort of just kind of in the same way that many governments push the problem of paying for retirement off to the next generation.
[00:05:07.920 --> 00:05:13.200] This was kind of doing that to companies, except only five years down the line and not, you know, 30, 40 years down the line.
[00:05:13.200 --> 00:05:13.680] Got it.
[00:05:13.680 --> 00:05:21.680] And so they knew when they were passing this bill that the intent was that they would revert this change before it took effect.
[00:05:21.680 --> 00:05:28.080] So it was basically kind of some accounting sleight of hand as they were passing this bill.
[00:05:28.080 --> 00:05:30.920] At this point, we can get upset about that.
[00:05:31.240 --> 00:05:45.560] Or I think where I'm choosing to spend my attention is on the likely catastrophic impact it will have on companies that build software and then doing something about it.
[00:05:45.880 --> 00:05:46.520] Yeah, yeah.
[00:05:46.520 --> 00:05:52.600] So this was this, from my perspective, it looks like this was political maneuvering.
[00:05:52.600 --> 00:05:58.360] Nobody expected this to go through, really, but now it looks like it has gone through.
[00:05:58.360 --> 00:06:14.440] And now I'm seeing tweets from founder friends who are like, we're doing our taxes and instead of paying $75,000 in taxes this year, we're paying $225,000 in taxes this year.
[00:06:14.440 --> 00:06:20.360] Or instead of my taxes being 30%, they've gone up 350%.
[00:06:20.360 --> 00:06:25.240] So it's having a meaningful impact on people right now.
[00:06:25.560 --> 00:06:27.000] Are you seeing that too?
[00:06:27.000 --> 00:06:27.480] Yeah.
[00:06:27.480 --> 00:06:31.480] And this is also something that companies have been predicting for a long time.
[00:06:31.480 --> 00:06:48.200] And so bigger companies think Netflix and Zoom and Microsoft, Intel, like since 2019, they have been talking to Congress about this, saying, Hey, remember that tax provision that you didn't intend to take effect?
[00:06:48.200 --> 00:06:49.800] We haven't forgotten about it.
[00:06:49.800 --> 00:06:55.160] Let's just make sure that we fix this before 2022 when it takes effect.
[00:06:55.160 --> 00:07:00.520] And they've been sending letters and talking to Congress about this for four years now.
[00:07:00.520 --> 00:07:06.920] And everybody thought in 2022 that it was going to be reverted before it took effect in December.
[00:07:06.920 --> 00:07:12.200] And then it kind of fell apart at the last moment with some negotiations.
[00:07:12.200 --> 00:07:15.840] And then so we get into this year.
[00:07:16.720 --> 00:07:32.160] And I think we small business owners hadn't really been clued in on it because, I mean, like, I don't track like policy legislation as part of my, like, I'm too busy responding to customers and like building software, right?
[00:07:32.480 --> 00:07:34.960] So, and dealing with sales taxes.
[00:07:34.960 --> 00:07:51.920] So, um, so now we get into this year, and uh, our accountants are starting to say, so there's this change that Congress didn't intend for to take effect, uh, but it did take effect.
[00:07:51.920 --> 00:08:11.200] And now, all of your software development and new features you're adding, new products you're building, stuff you probably don't think of as RD, salaries, servers, icon libraries, whatever it is, all of that is now has to be amortized.
[00:08:11.200 --> 00:08:13.360] That's no longer an expense.
[00:08:13.360 --> 00:08:18.800] You can only take 10% of it for 2022.
[00:08:18.800 --> 00:08:27.120] I did not realize that it's not just salaries, it's also any other expense related to software development.
[00:08:27.120 --> 00:08:27.360] Right.
[00:08:27.360 --> 00:08:53.360] So, this means, for example, that if you are, and so the crazy thing about this is also that Congress didn't intend for it to take effect, but since they were widely expected to fix this before it took effect, because nobody in Washington thinks it's good tax policy, the IRS did not write and release the full guidance on how tax preparers implement this.
[00:08:53.360 --> 00:09:03.080] They issued sort of something that's being taken basically as a warning in January that was like, hey, remember, this happened, but it doesn't actually define software development.
[00:08:59.840 --> 00:09:03.400] Yeah.
[00:09:03.640 --> 00:09:08.040] But I have been talking to a lot of experts about this in the past couple of weeks.
[00:09:08.040 --> 00:09:24.200] And it is increasingly clear to me that Section 174 is bad news for every company that builds software, not just ones that have employees, not just ones that are C Corps.
[00:09:24.520 --> 00:09:34.520] Like, if you have an LLC and you're only building a product right now and you're not even making any money, you're going to owe taxes because of this.
[00:09:34.520 --> 00:09:38.200] Like, it's very, you're likely to owe taxes, rather.
[00:09:38.200 --> 00:09:38.920] Wow.
[00:09:39.240 --> 00:09:40.520] It's everything.
[00:09:40.520 --> 00:09:41.800] I mean, I was thinking about this the other day.
[00:09:41.800 --> 00:09:49.640] I was like, if we, so, so, if, so, again, the IRS has never had to define software development, so we're going to have to, we're waiting for that from them.
[00:09:49.640 --> 00:10:11.800] But if they take the definition of it that most of the major accounting firms expect them to take and what, you know, big companies have been warning about in their public filings, like you can find VMware like warning about the tens of millions of dollars in additional taxes they're going to have to pay in their filings last year.
[00:10:11.800 --> 00:10:12.360] Yeah.
[00:10:12.360 --> 00:10:17.560] Like, developers are, is, are all developers going to have to be time tracking?
[00:10:17.560 --> 00:10:23.640] Like, I mean, everybody's, I mean, people are usually so relieved to stop doing client work and stop time tracking.
[00:10:23.640 --> 00:10:29.560] And now it's like, wait a minute, well, was that new feature development, which is now this RE expense that has to be amortized?
[00:10:29.720 --> 00:10:42.040] So not only you're, if you get a salary, right, that has to be part of that, but also, okay, I guess the staging server that you were using, that part of that expense is now under this different category.
[00:10:42.000 --> 00:10:50.400] Uh, you know, like, okay, you bought, you know, Tailwind UI for that, okay, that's now has to be capitalized, right?
[00:10:44.920 --> 00:10:58.720] Like, versus, well, you were fixing a bug later, and so that is actually just a regular business expense, so we get to write that one off.
[00:10:58.720 --> 00:11:01.680] But then, what if we're doing a UI improvement?
[00:11:01.680 --> 00:11:03.440] That is that a bug?
[00:11:03.440 --> 00:11:11.440] Is that like is that a new feature if it's making it easier to use because people were not realizing there was this functionality?
[00:11:11.440 --> 00:11:15.920] Like, it's a nightmare, it's an absolute nightmare.
[00:11:15.920 --> 00:11:28.480] And I think the fact that big companies have been writing to Congress about this for four years now it shows how much of a problem this is.
[00:11:28.480 --> 00:11:34.960] Before we get into this conversation, Justin, it's very important that I note that I am not a tax accountant.
[00:11:34.960 --> 00:11:41.600] And for advice about your specific situation, people should consult an accountant.
[00:11:41.600 --> 00:11:43.840] Yes, the same applies for me.
[00:11:43.840 --> 00:11:48.720] We are not accountants, we are not lawyers, we are not giving investment advice.
[00:11:48.880 --> 00:11:50.240] Just play one on TV.
[00:11:50.240 --> 00:11:54.800] This is just for informational and entertainment purposes only.
[00:11:54.800 --> 00:11:56.880] And call to action purposes, really.
[00:11:56.880 --> 00:12:05.040] I mean, that's why that's why I'm here is not to be the rain on everybody's parade, right?
[00:12:05.040 --> 00:12:08.720] It's to say, yes, this is a big problem.
[00:12:09.040 --> 00:12:14.160] Congress kind of made it, you know, five, six years ago.
[00:12:15.760 --> 00:12:18.400] Big companies have been trying to do something about it.
[00:12:18.480 --> 00:12:20.000] Didn't work.
[00:12:20.320 --> 00:12:22.080] And that's where we come in.
[00:12:22.080 --> 00:12:22.720] Yes.
[00:12:22.720 --> 00:12:30.000] So let's talk about what you've been organizing during your hibernate mode.
[00:12:31.880 --> 00:12:35.800] So you have this amazing website, SSB.
[00:12:35.960 --> 00:12:40.520] So S as in Sam, S as in Sam twice, right?
[00:12:40.520 --> 00:12:43.160] SSB Alliance.org.
[00:12:43.160 --> 00:12:48.040] So tell us what you've done so far and what's kind of in motion right now.
[00:12:48.040 --> 00:13:04.840] So what's in motion right now is to get small software businesses into this conversation and hopefully get the message through to Congress that this is an urgent problem that needs an urgent solution.
[00:13:04.840 --> 00:13:10.520] So Congress in December, they tried to repeal this.
[00:13:10.520 --> 00:13:12.360] I mean, there was broad bipartisan support.
[00:13:12.360 --> 00:13:15.320] Like there isn't anyone who thinks this is a good idea.
[00:13:16.200 --> 00:13:25.880] But it was seen as kind of a big business issue, which meant that it got parlayed off of a whole bunch of other different issues and it all got very complicated and fell through.
[00:13:26.920 --> 00:13:31.800] And this year, there is still a chance this is going to get reverted.
[00:13:31.800 --> 00:13:34.280] There is, again, broad bipartisan support for this.
[00:13:34.280 --> 00:13:35.960] Nobody thinks it's a good idea.
[00:13:35.960 --> 00:13:40.440] Nobody thinks it's good tax policy, but it's still seen as a big business issue.
[00:13:40.440 --> 00:14:01.800] And the problem is, is like you, I'm either opening emails from my accountant about this, or I'm opening Twitter and seeing all of my friends freaking out, saying that they might have to do layoffs, that they're taking out loans, that they're using their personal credit cards, or that they have no idea and their accountant hasn't told them and they are getting really worried.
[00:14:02.920 --> 00:14:10.200] The thing about this is that small businesses, like everybody loves small businesses, right?
[00:14:10.200 --> 00:14:12.200] Especially policymakers.
[00:14:12.200 --> 00:14:16.560] I like to say, you know, we are the cute puppies of the policy world.
[00:14:16.560 --> 00:14:19.280] Just basically everybody loves small businesses.
[00:14:14.920 --> 00:14:19.600] That's right.
[00:14:19.840 --> 00:14:27.120] But right now, because of section 174, we are getting run over by a truck and Congress has no idea.
[00:14:27.120 --> 00:14:27.680] Yeah.
[00:14:27.680 --> 00:14:30.800] Because they are thinking, okay, you know what?
[00:14:31.200 --> 00:14:32.960] We should fix this.
[00:14:32.960 --> 00:14:34.800] We can do that later in the year.
[00:14:34.800 --> 00:14:40.000] We can push this again to December, push it to the last minute, get something through.
[00:14:40.320 --> 00:14:44.080] And, you know, big companies, they have access to credit markets.
[00:14:45.360 --> 00:14:53.280] They can shoulder an extra $10, $20 million in a tax bill in a year and knowing that they're going to get it back later, right?
[00:14:53.280 --> 00:14:59.360] Because this would not only fix it, but also revert it so that it basically didn't take effect.
[00:14:59.360 --> 00:15:02.160] And then you would get a refund for 2022.
[00:15:02.480 --> 00:15:16.720] But if you're a small business and your tax bill has just gone from $75,000 to $225,000 and you're making a million or two a year, that's huge.
[00:15:16.720 --> 00:15:19.360] Like you may not have that money.
[00:15:20.080 --> 00:15:23.120] You can't just go sell stock in order to get that money back.
[00:15:23.120 --> 00:15:32.240] You can't just go to the bank and get a loan because, I mean, the only bank that was friendly to software companies, like literally just one put.
[00:15:32.960 --> 00:15:34.640] And most of us didn't even use them.
[00:15:34.640 --> 00:15:38.480] We use normal banks that barely know what software is in the first place.
[00:15:39.280 --> 00:15:43.840] So this is a huge problem for small businesses.
[00:15:43.840 --> 00:15:48.880] We can't wait a year to get a refund check for this.
[00:15:48.840 --> 00:15:49.320] Yeah.
[00:15:49.320 --> 00:15:50.960] Like, we can't wait.
[00:15:50.960 --> 00:15:56.320] And so, what you probably know about me is that I am an indie founder.
[00:15:56.320 --> 00:15:56.880] I wrote a book.
[00:15:56.880 --> 00:15:59.320] I have a podcast, all that fun stuff.
[00:15:59.640 --> 00:16:03.800] Way back when I used to live and work in DC.
[00:15:58.880 --> 00:16:04.040] Okay.
[00:16:04.840 --> 00:16:17.720] And so when I heard about this, and I have some friends who work in the policy world, and I remember them like kind of saying at the end of last year, like, oh, this big thing I've been working on, like, you know, it didn't go through, and I'm like super bummed about it.
[00:16:17.720 --> 00:16:20.200] And like, I mean, I'm like super checked out on politics.
[00:16:20.200 --> 00:16:26.120] Like, I'm just kind of like working and like, you know, I have a general idea of what's going on, but like, definitely not following policy.
[00:16:26.120 --> 00:16:27.800] And I'm like, oh, that sounds like really rough.
[00:16:27.800 --> 00:16:29.720] I'm sorry, you've worked hard on this.
[00:16:29.720 --> 00:16:30.840] Like, it didn't work.
[00:16:30.840 --> 00:16:32.520] Like, go have a glass of wine.
[00:16:32.520 --> 00:16:33.320] Like, right.
[00:16:33.320 --> 00:16:35.240] And then, and then, so everybody started talking about this.
[00:16:35.240 --> 00:16:36.600] And I started hearing about it.
[00:16:36.600 --> 00:16:42.760] And I was like, so is this this thing that you were all upset about in December?
[00:16:42.760 --> 00:16:44.440] And they were like, yes.
[00:16:44.440 --> 00:16:44.920] Wow.
[00:16:44.920 --> 00:16:50.120] And I was like, oh, because all of my friends are upset about it now.
[00:16:50.440 --> 00:16:58.520] And so I have basically been pulling out all the connections I've got to get us into the conversation in DC.
[00:16:58.520 --> 00:16:59.080] Amazing.
[00:16:59.400 --> 00:17:12.520] And to get us, the cute puppy small businesses in front of Congress so that they understand that this is an issue, right?
[00:17:12.520 --> 00:17:14.920] And let me do an analogy here.
[00:17:15.240 --> 00:17:21.800] This issue is kind of like, you know, this for anybody who has teenagers, who's ever been a teenager, which I know is you.
[00:17:21.800 --> 00:17:22.360] Yeah.
[00:17:22.920 --> 00:17:27.160] It's like a pile of sports equipment sitting in the hallway, right?
[00:17:27.160 --> 00:17:28.760] That might be hockey equipment.
[00:17:28.760 --> 00:17:31.160] It could be soccer cleats, whatever.
[00:17:31.160 --> 00:17:36.360] It's sitting in the hallway and it sits there for a couple of days.
[00:17:36.360 --> 00:17:38.600] Everybody knows it's a problem.
[00:17:38.600 --> 00:17:43.880] Everybody knows it shouldn't be there, but everybody just keeps walking by.
[00:17:43.880 --> 00:17:44.360] Yeah.
[00:17:44.600 --> 00:17:55.760] And then one day turns into another and this pile of sports equipment starts smelling really, really terribly.
[00:17:55.760 --> 00:17:56.560] Yeah.
[00:17:56.560 --> 00:17:58.080] It's a good analogy.
[00:17:58.080 --> 00:18:07.120] And the person who should be cleaning it up is playing Mario Kart and there's guests coming in 10 minutes, right?
[00:18:07.440 --> 00:18:15.280] And so we need to be, you know, the person who kind of runs in there with a wooden spoon and says, hey, this is a problem.
[00:18:15.280 --> 00:18:16.960] Guests are coming in 10 minutes.
[00:18:16.960 --> 00:18:20.800] There's a pile of, you know, dirty equipment in the hallway.
[00:18:20.800 --> 00:18:23.600] Like we need to get this done now.
[00:18:23.600 --> 00:18:24.880] We cannot wait.
[00:18:24.880 --> 00:18:31.760] And so what I'm doing is, you know, first sort of getting us together, right?
[00:18:31.760 --> 00:18:33.760] We are not the most organized bunch.
[00:18:34.560 --> 00:18:39.760] Just trying to organize people and then getting people in front of policymakers.
[00:18:39.760 --> 00:18:48.000] So like members of our community, because of this effort, have already talked to Hill staff, already told them about how they're taking out loans and how this is affecting them.
[00:18:48.000 --> 00:18:48.640] Yeah.
[00:18:48.640 --> 00:18:59.680] But the big thing we're doing now is we're going to have a coalition letter to Congress, which is basically this is a formal letter to Congress that will go directly to their offices.
[00:18:59.680 --> 00:19:02.880] This is not something that we just put in a contact form and pray.
[00:19:02.880 --> 00:19:07.840] This is going directly to their offices because of these friends that I have.
[00:19:07.840 --> 00:19:08.400] Amazing.
[00:19:08.720 --> 00:19:13.440] And describes the impact that this is having on small software businesses.
[00:19:13.440 --> 00:19:18.400] Now, I know that many of us, we don't even know what the impact of it is yet.
[00:19:18.400 --> 00:19:18.960] Yeah.
[00:19:18.960 --> 00:19:20.160] That's okay.
[00:19:20.160 --> 00:19:32.280] Like, if your accountant hasn't found out about this yet or hasn't told you about it yet, and you're worried about it, you can still sign this because you are almost certainly going to be impacted by this.
[00:19:32.600 --> 00:19:41.960] And, but there are people who are like laying people off, or I mean, we were talking about hiring another developer this year, and that conversation has just gone out the window.
[00:19:42.200 --> 00:19:46.840] Um, and so did you, yeah, congratulations.
[00:19:47.160 --> 00:20:01.720] I mean, there are companies facing bankruptcy already because of this, like, this is very, very like, and I have this form of just kind of collecting everybody's emails and their addresses so we know which congressional districts they're in and kind of how it's impacting them so far.
[00:20:01.720 --> 00:20:05.320] And like, it is just breaking my heart.
[00:20:05.320 --> 00:20:15.560] Every single one of these emails that I get in there, that's like, you know, we got through COVID, we thought things were going to be good, like, we finally felt like we were back on our feet again, and then this happened, right?
[00:20:15.560 --> 00:20:22.920] And we don't have the money for it, banks won't work with us, like personal credit cards, I guess, right?
[00:20:22.920 --> 00:20:29.000] And so, we need to get this letter in front of Congress, and these things are very, very effective.
[00:20:29.000 --> 00:20:35.000] So, there was a group of small biotech companies that sent one a few weeks ago.
[00:20:35.000 --> 00:20:40.280] There were 500 small biotechs that signed this letter, which I think that means we can do a thousand, right?
[00:20:40.280 --> 00:20:46.200] Yeah, a senator like mentioned this letter in a hearing a couple weeks ago.
[00:20:46.200 --> 00:20:53.960] Like, these things really make a difference because when that, like, there are policymakers who are they're already co-sponsors of the bill to fix this, right?
[00:20:53.960 --> 00:21:13.400] Yeah, when they're going to their colleagues, when their staff is going to their colleagues, this is a letter they can bring with them and say, Here is very tangible impact of very small businesses seeing tax bills that are 400% higher than previously for a policy that we never intended to implement.
[00:21:13.400 --> 00:21:17.200] Yeah, um, and so, as many people who are U.S.
[00:21:17.280 --> 00:21:20.720] citizens, sorry, can sign this, right?
[00:21:21.200 --> 00:21:27.920] Like all 50 states plus territories, we have to do this, right?
[00:21:27.920 --> 00:21:31.280] Because this is up to us at this point.
[00:21:31.680 --> 00:21:36.880] The big companies have tried, it's stuck as a big business issue.
[00:21:36.880 --> 00:21:38.480] It's not a big business issue.
[00:21:38.480 --> 00:21:41.280] This is also a small business issue.
[00:21:41.280 --> 00:21:49.360] And so we have the opportunity to get in there, shake things up a bit, and say, this is not a hypothetical issue.
[00:21:49.680 --> 00:21:54.400] This is not something that's only going to affect the Facebooks of the world, right?
[00:21:54.400 --> 00:22:06.720] Like this is going to impact small businesses in Kansas and Missouri and Pennsylvania and Arizona as much as it is the companies in California who are already hurting.
[00:22:06.720 --> 00:22:19.200] Yeah, and just to, again, to give a practical example of this, like at Transistor, I think like a lot of Bootstrap software companies, we spend most of the money in a year.
[00:22:19.200 --> 00:22:23.600] We take it out as owner with owner distributions.
[00:22:23.600 --> 00:22:27.600] We take it out as pay our staff really well.
[00:22:27.600 --> 00:22:30.720] So we don't have a lot of cash in the bank.
[00:22:30.960 --> 00:22:38.080] We run just a nice lean operation and we know that every month we're going to have more cash coming in from recurring revenue.
[00:22:38.080 --> 00:22:49.520] But if you've been running your business like that, that means that, and you just have this expectation that any expense you have is an expense for that year.
[00:22:49.520 --> 00:22:52.640] And so you can take most of the money out of the company.
[00:22:53.120 --> 00:22:58.440] So if you run lean, like a lot of us do, that's where it's going to get you.
[00:22:58.440 --> 00:23:12.440] Because now you're going to need, instead of needing to have whatever you normally have in your bank account, $100,000, $200,000, $500,000, whatever, you're going to need to have way more just to cover the tax bill, especially year one.
[00:23:13.080 --> 00:23:18.440] And there's this great Wall Street Journal piece that you link to on your site.
[00:23:18.440 --> 00:23:19.480] I'll quote from that.
[00:23:19.480 --> 00:23:28.520] Laura Lynn Gonzalez expected a tax refund this year after her two employee data visualization company experienced a $30,000 loss.
[00:23:28.520 --> 00:23:36.680] Instead, she said she's facing a $100,000 federal tax bill that is about as large as her 2022 salary.
[00:23:36.680 --> 00:23:38.360] That's what this looks like.
[00:23:38.360 --> 00:23:46.280] It looks like if you don't have the cash to pay the tax bill, that's where you're going to get in trouble.
[00:23:46.280 --> 00:23:55.800] And it works great when you can expense, you know, when you can expense developer salaries and developer costs as a full expense in that year.
[00:23:55.800 --> 00:23:57.880] Running lean works that way.
[00:23:57.880 --> 00:24:09.160] But if that's the way you've been running it, and if LLCs, you're probably taking nice distributions, you know, all of that's the way you've been working won't work under this legislation.
[00:24:09.160 --> 00:24:18.600] That's why it's so important because you're going to need to come up with maybe hundreds of thousands of dollars in cash to pay a tax bill.
[00:24:20.200 --> 00:24:24.040] Nobody really expected this to happen.
[00:24:24.040 --> 00:24:30.440] And then now that it is, and we are all getting these tax bills or sort of very slowly, right?
[00:24:30.440 --> 00:24:35.080] Because there's people I've talked to who didn't, their accountant didn't realize that this was happening.
[00:24:35.800 --> 00:24:39.400] So now they're not only facing the huge tax bill, but also penalties.
[00:24:41.560 --> 00:24:46.560] And that five-year depreciation we talked about for spreading it out.
[00:24:46.560 --> 00:24:52.720] If you are running a remote company, which a lot of people are, you've got, maybe you've got contractors all over the world.
[00:24:52.720 --> 00:24:56.880] Foreign RE expenses are 15 years.
[00:24:57.200 --> 00:24:58.400] Oh my gosh.
[00:24:58.720 --> 00:24:59.440] Yeah.
[00:24:59.760 --> 00:25:07.840] Like, so if you've got, you know, a lot of people have a team in, you know, in Southeast Asia or in Eastern Europe or just, I mean, spread out all over the world, right?
[00:25:07.840 --> 00:25:08.160] Yeah.
[00:25:08.160 --> 00:25:10.800] That's 15 years.
[00:25:10.800 --> 00:25:11.600] Wow.
[00:25:11.600 --> 00:25:13.360] For that development expense.
[00:25:13.360 --> 00:25:27.840] And so this is, I mean, it, I hesitate to say it because it feels dramatic, but Section 174 is an existential threat to anyone who builds software.
[00:25:27.840 --> 00:25:28.240] Yeah.
[00:25:28.480 --> 00:25:31.440] Even if you're only making $10,000 a year.
[00:25:32.400 --> 00:25:32.880] Yeah.
[00:25:32.880 --> 00:25:35.200] Even if you don't have any employees.
[00:25:35.200 --> 00:25:35.760] Yeah.
[00:25:36.400 --> 00:25:37.840] This is a problem.
[00:25:37.840 --> 00:25:48.480] And in a, I mean, this is, I don't know, it feels a little bit like putting the rookie in at the end of the game to throw the Hail Mary, you know, to win the game, right?
[00:25:48.480 --> 00:25:54.160] But it's like up to us, the little guys, to do this.
[00:25:54.480 --> 00:25:58.320] But folks, like folks in DC, they are very receptive.
[00:25:58.320 --> 00:26:00.080] Like I've had some great calls with people.
[00:26:00.080 --> 00:26:02.720] They are happy to have us on board.
[00:26:02.720 --> 00:26:03.840] We're getting help.
[00:26:03.840 --> 00:26:08.400] Like we're like this letter is going to go straight to Congress.
[00:26:08.400 --> 00:26:16.800] Like people you probably know on Twitter have already talked to Hill staff about this because of this effort.
[00:26:16.800 --> 00:26:17.280] Yeah.
[00:26:18.080 --> 00:26:21.600] It's, I didn't come out of my hibernation for nothing.
[00:26:21.600 --> 00:26:26.560] Like, this is a really, really serious problem.
[00:26:26.560 --> 00:26:32.920] And we cannot rely on the bigger companies to sort this out.
[00:26:33.160 --> 00:26:41.080] Or, as you said a couple weeks ago, we can't have magical thinking and just pray that it doesn't impact us.
[00:26:41.080 --> 00:26:43.880] Yeah, this is going to impact us.
[00:26:43.880 --> 00:26:44.360] Yeah.
[00:26:44.360 --> 00:26:50.200] And we have a responsibility to do something about it and can do something about it.
[00:26:50.200 --> 00:26:50.600] Yeah.
[00:26:50.600 --> 00:26:51.240] Yeah.
[00:26:51.560 --> 00:26:55.240] So, we, folks, if you're listening right now and you are a U.S.
[00:26:55.240 --> 00:27:09.720] citizen and you have, you're doing anything on the side, you have your own software company, go to ssballiance.org right now while you're listening, sign it, and then send it to your friends.
[00:27:09.720 --> 00:27:12.040] Explain to them what's going on.
[00:27:12.040 --> 00:27:15.480] And you're right, we need to have a thousand people sign this.
[00:27:17.160 --> 00:27:22.600] There are many, many small software businesses in the United States.
[00:27:22.600 --> 00:27:30.600] And the more people that sign this right away, the bigger, the louder we can make our voices.
[00:27:30.600 --> 00:27:36.200] And we can actually have a chance here, especially with Michelle's work, to make a difference.
[00:27:36.200 --> 00:27:38.920] We can actually get this into the hands of the right people.
[00:27:39.240 --> 00:27:44.840] And again, like she said, small business is such a strong political motivator.
[00:27:44.840 --> 00:27:55.320] Like this, we actually do have some power here, and we need to use it, especially because the culture has become kind of antagonistic towards big tech.
[00:27:55.320 --> 00:28:06.200] Well, small business, like mom and pop shops, we have a good reputation in the culture, and we can use that to say, hey, you gotta help us out here.
[00:28:06.200 --> 00:28:10.360] Or like, honestly, I don't know what we would do, even.
[00:28:11.480 --> 00:28:13.640] So, that's this is your call to action.
[00:28:13.640 --> 00:28:16.640] Go to ssballiance.org.
[00:28:16.800 --> 00:28:23.040] Michelle's been really good at communicating with everybody, sending updates, telling folks exactly what they need to do.
[00:28:23.040 --> 00:28:32.720] It'll take you 10 seconds to sign up, and then another 30 seconds to a couple minutes to do what Michelle's asked folks to do.
[00:28:32.720 --> 00:28:38.400] Do you want to just quickly run through what people can do besides sign up for ssballiance.org?
[00:28:38.720 --> 00:28:46.720] So, if you go to ssballiance.org now, you will be directed to sign the coalition letter.
[00:28:46.720 --> 00:28:56.880] And then there is also the option to stay updated, which is basically mandatory because if it turns out that you're in a really pivotal congressional district, we want you to talk to your representative.
[00:28:56.880 --> 00:29:01.120] And so, it's really important to have your whole address in there.
[00:29:01.120 --> 00:29:02.960] I'm not sharing that with anybody.
[00:29:02.960 --> 00:29:05.520] Your email isn't getting shared with anybody.
[00:29:05.520 --> 00:29:07.920] Like I said, I used to work in DC.
[00:29:07.920 --> 00:29:14.640] I know what the tricks are when you fill out forms about politics where I'm still getting added to stuff because of the Obama 2008 list.
[00:29:14.640 --> 00:29:16.560] I am not doing that to your email.
[00:29:16.960 --> 00:29:18.800] I'm the only person who's going to have this data.
[00:29:18.800 --> 00:29:25.440] It'll get shared, you know, anonymously, like in terms of this business in Michigan is saying that they're going to have to lay people off, right?
[00:29:25.440 --> 00:29:26.880] Like, things like that.
[00:29:26.880 --> 00:29:33.760] Or I might reach out to you and say, Hey, would you be up for talking to a Hill staffer and sharing more about what's going on in your business?
[00:29:33.760 --> 00:29:35.760] But nobody else is going to see your information.
[00:29:35.760 --> 00:29:44.640] The letter will have your name, your company name, and your location again, because we need to show that these businesses are all over the country.
[00:29:44.640 --> 00:29:48.960] I mean, it's kind of a funny thing where, like, Congress basically doesn't know we exist, right?
[00:29:48.960 --> 00:29:50.160] Like, small software companies.
[00:29:50.160 --> 00:29:50.720] I mean, right?
[00:29:50.720 --> 00:29:53.040] Like, we're kind of looked down upon in some corners, right?
[00:29:53.040 --> 00:29:56.800] Like, we're oh, you know, lifestyle businesses, right?
[00:29:57.360 --> 00:30:01.160] This is our moment to have an impact.
[00:30:01.160 --> 00:30:03.480] And so, that is the information that's gathered.
[00:29:59.840 --> 00:30:05.080] I'm the only one who's seeing that.
[00:30:05.400 --> 00:30:11.560] Sign the coalition letter and do it on or before April 10th.
[00:30:11.560 --> 00:30:15.080] We need to deliver this to Congress before tax day.
[00:30:15.080 --> 00:30:17.720] So, April 10th is the deadline.
[00:30:17.720 --> 00:30:20.200] ssballiance.org to sign the letter.
[00:30:20.200 --> 00:30:27.560] If you're listening to this after that, you can still go there and just sign up for the regular mailing list.
[00:30:27.560 --> 00:30:31.160] And so, I'll keep you in the loop on how you can help.
[00:30:33.000 --> 00:30:34.200] Sign the letter.
[00:30:34.520 --> 00:30:35.080] Yeah.
[00:30:35.400 --> 00:30:45.720] And thanks again, Michelle, for like for deciding to put yourself out there to use your connections and to organize this.
[00:30:45.720 --> 00:30:52.200] I was really heartened because I feel like often small business founders just don't want to think about this stuff.
[00:30:52.200 --> 00:30:54.920] And I get it, but this is real life.
[00:30:54.920 --> 00:30:56.760] Like, this is actually happening.
[00:30:57.240 --> 00:31:00.120] We don't have a reality distortion field we can use here.
[00:31:00.120 --> 00:31:04.040] This is actually just real, really what's happening.
[00:31:04.040 --> 00:31:05.480] So, thank you so much.
[00:31:05.480 --> 00:31:07.960] I think everybody, Michelle didn't ask me to say this.
[00:31:07.960 --> 00:31:09.560] Everyone go buy her buck.
[00:31:09.880 --> 00:31:11.720] Thank her on Twitter.
[00:31:11.720 --> 00:31:13.400] Sign up for Geocodeo.
[00:31:13.720 --> 00:31:15.880] But most of all, just thanks so much.
[00:31:15.880 --> 00:31:19.800] And let's help her do, let's help her get this in motion.
[00:31:19.800 --> 00:31:25.000] So send this to your friends, sign it right now, spread the word.
[00:31:25.000 --> 00:31:29.240] And yeah, let's try to get this, let's try to get this reversed.
[00:31:29.240 --> 00:31:30.440] Thank you, Justin.
[00:31:30.440 --> 00:31:45.440] And I mean, if anybody else, if you've got a podcast, if you've got any kind of presence anywhere, LinkedIn, Twitter, wherever that is, if you have a presence among software founders, you need to use that now.
[00:31:45.920 --> 00:31:54.640] If you want to continue being a software founder and you want those people to continue being software founders as well, we have to do something about this.
[00:31:54.640 --> 00:31:56.800] And so just reach out to me.
[00:31:56.800 --> 00:32:00.800] I did a scary thing, which is open my DMs.
[00:32:01.520 --> 00:32:03.600] So, yeah.
[00:32:03.600 --> 00:32:06.560] And I'm already getting so many Bitcoin raffle offers.
[00:32:08.400 --> 00:32:09.680] Make it worth it, people.
[00:32:09.680 --> 00:32:10.160] Okay.
[00:32:10.160 --> 00:32:11.120] Reach out to me.
[00:32:11.120 --> 00:32:11.520] Yeah.
[00:32:11.520 --> 00:32:12.800] I'm out of my hibernation.
[00:32:12.800 --> 00:32:14.400] We're going to make this happen.
[00:32:14.400 --> 00:32:17.200] What we all need to be on board to make it happen.
[00:32:17.200 --> 00:32:17.520] Yeah.
[00:32:17.520 --> 00:32:18.800] Thanks so much, Michelle.
[00:32:18.800 --> 00:32:22.960] You can get Michelle on Twitter, MJW Hansen.
[00:32:22.960 --> 00:32:26.320] That's H-A-N-S-E-N.
[00:32:26.880 --> 00:32:39.120] She's got a lot of other links on her Twitter page, but then ssballiance.org will also give you her email address, which is then you can be in contact with her directly.
[00:32:39.120 --> 00:32:41.600] And yeah, let's make this happen.
[00:32:41.600 --> 00:32:48.160] And let's do a follow-up episode after that deadline, which was April 10th.
[00:32:48.160 --> 00:32:48.720] Yeah.
[00:32:48.720 --> 00:32:54.080] After April 10th, let's do another episode just to update folks on this and we'll go from there.
[00:32:54.080 --> 00:32:54.720] Sounds great.
[00:32:54.720 --> 00:32:55.200] Thank you.
[00:32:55.200 --> 00:32:56.560] Thanks again.
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