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cover of episode Michele Hansen update: Section 174 and bootstrapping with kids

Michele Hansen update: Section 174 and bootstrapping with kids

2023/5/16
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Michele Hansen: Section 174 改变了小型软件公司处理研发费用的方式,导致税负增加,影响企业运营。国会最初无意让此生效,但未能及时废除。现在,企业需要积极联系国会,提高对此问题的认识,并推动立法修正。作为小型企业主,我亲身经历了 Section 174 带来的挑战,税收增加了400%,这迫使我不得不重新评估公司的财务策略。我深知这不仅影响我的企业,还关系到整个小型软件行业的生存和发展。因此,我积极组织小型软件企业联盟,共同致信国会,强调 Section 174 对我们造成的实际困难,并呼吁立法者采取行动。我们希望通过集体的力量,让国会认识到问题的严重性,并尽快找到解决方案,以减轻小型企业的负担,促进创新和经济增长。 Michele Hansen: 我认为,企业主应该积极参与到 Section 174 的倡议活动中,即使没有签署最初的信件,也可以通过联系国会议员,分享企业的经历和担忧,来表达支持。每个企业的声音都很重要,通过集体的努力,我们可以影响立法进程,促使国会采取行动。此外,企业主还应该密切关注税务指导的变化,并与会计师合作,制定合理的财务规划,以应对 Section 174 带来的挑战。虽然 Section 174 带来了不确定性,但我相信,通过积极的行动和合理的规划,我们可以克服困难,实现企业的可持续发展。

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This podcast is distributed by Transistor.fm. Hello and welcome to Build Your SaaS. This is the behind the scenes story of building web apps in 2023. I'm Justin and I've got Michelle Hansen, co-founder of Geocodeo, back on the show today. Michelle's been fighting the good fight

With this rotten Section 174 tax legislation in the USA. How's it going, Michelle? It's going. It's going. What time is... Right now, it's noon Pacific time for me, because I'm in North America. You are originally from the States, but where are you right now? So I live in the Danish countryside now. The Danish countryside. It is 9.06 p.m. 9.06? That's about the time...

When I'm thinking, how old are your kids, by the way? We have one daughter and she is nine. Nine years old. Okay. See, I always thought that once they got a little bit older, I would be, you know, around like eight, nine o'clock used to be just, I was dead tired. And that's like, you know, when they're younger, story time, bedtime, all that stuff. And I was just so exhausted. And

I still get exhausted at 9 p.m. Nothing's changed. So you're making it happen here with the time zones.

And, yeah, you've got an update for us, I think, on Section 174. We've done an episode on this already. Folks can go back. Do you want to maybe briefly, again, describe what Section 174 is? And then, yeah, just give us an update on what's happened since the last time you were on the show. Yeah. So the TLDR is in 2017, Congress passed a bunch of tax cuts.

And one of the ways they sort of, quote unquote, paid for these tax cuts, according to the Congressional Budget Office, which sort of does an estimate of how much any bill might cost, was that they said starting five years after the bill was was passed, you know,

Companies would no longer be able to expense what is called research and experimental activities and instead would have to amortize them. And so I'm going to unpack that jargon for a second. Basically, research and experimental is actually a huge category of things that businesses do. And for us, it specifically calls out software development activities.

as a research and experimental activity. This is different than research and development because they couldn't make it easy for us. And, you know, and there's some R&D tax credits and people can get that. But unfortunately, that's a much, much, much smaller group of things that qualify for that. So research and experimental is everything from software development to

to market research. It's basically anything that goes into building a new product or making improvements to an existing one, which is...

I think one of the biggest surprises about this, and then normally we used to be able to expense all of that. Okay, so your staging server, that's just an expense. The developer who spends, let's say, 100% of their time building new products or improving existing ones, that used to be an expense. Now that has to be spread out over at a minimum of five years if that's happening in the U.S. Or for people who are...

working abroad, that's 15 years. So this has created a huge problem for a lot of companies, but really most acutely small software companies like ours, who normally just, you know, a huge percentage of our expenses were things we could just

And now instead you can only take a small percentage of them every year as an expense. And then the rest of that is added to your profits and then you get taxed on it. And so you end up getting taxed on this profit that doesn't actually exist because you already spent that to run the business. So it's a huge problem.

Congress never actually intended for this to take effect. I mentioned it was kind of a sleight of hand to pay for the tax cuts. Yeah. The plan all along was for them to repeal this before it took effect because they knew it wasn't good tax policy.

And so despite the fact that they know it isn't good tax policy and they tended to repeal it before it took effect, they didn't repeal it before it took effect because Congress. And so now we're all in this situation where we're in this sort of –

difficult situation because of this unintentional tax policy. And so, I mean, people have seen their taxes go up like 400%. Like it's, it's, people are talking about shutting down their businesses, freezing, hiring, laying people off. It's, it's serious out there. It's a real thing. And so you put together the S S B Alliance, small software business alliance.org and,

And you've been doing some work behind the scenes. Can you give us an update on what's happened since we... The last time we talked, it was like April 14th was your date. Because that was...

what was happening around that time and what's happened since then? Tax day. What was happening around that time? Of course. So yes. And so the reason why you heard from me last time was because, um, we were sending a letter to Congress from small software businesses, um, about the section 174 changes and describing the impact they have had on businesses like ours. Um, and so we sent that letter on tax day, which was April 18th this year. Um,

to the leadership of both the House and Senate, the Senate Finance Committee, the Ways and Means Committee, and also the leaders of the small business committees. Yep. And so we had 597 small software businesses from all 50 states plus DC sign this letter, which I am...

Awesome. Hugely proud. Like, I just like beam with pride thinking about how we came together to do this. And, you know, like coalition letters like this, they're not the kind of thing that really makes the news. But they're an important step in the legislative process for companies who normally, like us, don't have...

Yeah.

Then to have the people who signed the letter and even people who didn't sign the letter to send it to their congresspeople saying this is happening. We're in your district. We're in your state. We're impacted by this. Please see below for the letter. But also legislators who, you know, who support this, who are already co-sponsors of the bills, they can go to their colleagues and say, OK.

hey, this is an issue. Like, here's an example. Here's a letter from small software businesses. Here's a letter from small manufacturers. Here's a letter from small biotech companies, right? And so this is sort of part of that docket that they can use in their negotiations to encourage other legislators to support this and understand that

that this is an urgent issue. Yeah. And kudos for you for galvanizing all of the support because the story that I saw play out was somebody in Twitter, sorry, somebody on Twitter or in a Slack group or something would wake up to this. They would learn about it somehow and they go, oh my gosh, how come nobody's talking about this?

And I could say, oh, people are talking about this. There's already a movement underway. Don't start another change.org thing. Just go to SSBalliance.org and sign up there. And then we can galvanize all the support in one place. So well done. I think for you to get ahead of this and then to create the...

the container for people to like, when they did wake up and realize it was a big deal for the, it gave us a place to go and then put our efforts all kind of in one spot. And I'm guessing that there's going to be more and more people kind of waking up to this still, uh,

And they're going to be looking for, where do I go? Well, you can still go to SSBAlliance.org, put your name and email in, and then get updates on what's happening. Yes. And sorry, even people who didn't sign the letter, it's still incredibly impactful if you contact your Congress people, so your representative and your senators, about this. You know, if you run a small business, you're

Include a couple of lines about how it's impacting you and include a letter of the copy because we want to make sure that a copy of this letter gets to every single legislator because it is having an impact. I heard from contacts in D.C. this week that emphasizing the impact of this on small businesses is a salient message both for Republicans and Democrats and for independents today.

And offices are hearing from small business owners in their states and districts who are caught off guard by this and that is making an impact. People are having really good productive meetings with their legislators on this. I've heard from people who've

They used the contact form. They ended up having a phone call or even a meeting with their senators. The guys from Demergent Labs, they met with their representative and said that they were very receptive to it and that going with the letter in hand really gave them a chance.

a level of sort of legitimacy that they might not have otherwise had going in just as, or felt like they had going in as small business owners themselves. So even if you didn't get a chance to sign the letter before tax day, you can still get involved. You know, we actively need more people reaching out as well because just as of today, there are now 30 co-sponsors on the Senate bill to fix this.

And last Congress, when there was also a bill, there was 36. So there's still another six we need to get to at a minimum. 30 is not 100. So we need to make sure this is getting in front of every senator and every representative and that they understand that small businesses are impacted by this. And so on the SSB Alliance website, I actually have templates and links for contacting Congress. So there's a tool you can go to it.

You know, you put in your zip code, it gives you a link to their contact form. And then there's a template for, you know, describing the impact and including the letter. Like, and all of that honestly should take you less than 10 minutes to do. And it really is impactful because their staff is,

have to keep tallies on every single contact about specific bills. And so, and the key thing there is that you have to customize it a little bit. So if you simply just send them a copy of the letter, everybody who just sends, say, a copy of the same letter, that gets counted as one. But if they're unique, they get counted as separate contacts about this. And that is something that offices really pay attention to. Yeah, this is great. I'm just looking at your...

You've got a letter to Congress as a PDF and then contact Congress. And then you can go to congress.gov and search for your Congress members if you're in the U.S. If folks follow those instructions and then customize the letter a little bit, that creates more mobility.

momentum that has a bigger impact than them just copying the same thing over and over again. Yes, exactly. And unfortunately, this is something that only U.S. citizens and permanent residents can do. I recognize that there are a ton of people who have U.S. LLCs, USC corps,

who are impacted by this, but don't live in the U.S., aren't U.S. citizens. Unfortunately, there isn't a whole lot that folks in your position, quite frankly, can do. But raising awareness about this and encouraging all of the U.S. founders you do know, regardless of whether they're in the country or not, because U.S. citizens have the right to vote regardless of where we live in the world, which not all countries have.

using whatever platform and network and connections you have to encourage the U.S. citizen or resident founders you know to contact Congress. That is hugely impactful. Yeah, yeah. And then talk about it on Twitter. I was just looking at this one from Demergent Labs and them talking about it on Twitter creates more momentum. So if you share your experience there,

And, yeah, they felt empowered bringing that printed letter that you had and all the people who signed it when they went and met with their house representatives. Do something about it, then talk about it.

And we got to keep this thing going. Create social proof. Yeah. And so what's happening next? What are the next steps in this? Is there other dates we need to be thinking about? Are we just waiting for it to hit a critical mass? What are the other things to be considering? So...

Right now, you know, as far as my read on the political situation, which is to say, you know, what I'm reading and reading between the lines in, you know, Politico and whatnot is D.C. is focused on the debt limit right now, like the U.S. federal government's spending level.

And that is proving to be just a tad contentious. There's different ways that could shake out. It could be that they just try to just do the debt limit alone and just only pass a bill that does that and then leave everything else to the side. Or there could be some sort of compromise package in there as part of the debt limit. But that is sort of the story.

soonest opportunity for anything to happen because not every piece of legislation has a tax section in it. That is possible, but not likely. And I believe that has to be sorted out before they go on recess in August. Now, it's also possible that we go into recession and this sort of

you know, bubbling, you know, mini bank crisis turns into a bigger bank crisis and there needs to be some sort of economic recovery bill. It could go in there, but, you know, I mean, predicting recessions, I mean, that's not my department. So the...

House Republicans are also expected to release a budget or, sorry, an economic package bill that will include this. But from what I have been reading, that's not really considered a sort of a serious proposal. That's the, yeah, they're going to, that's sort of their wishlist of everything, but not really something that's going to happen.

There's been a lot of talk basically about the negotiating side of this. So because this was part of paying for those tax cuts, which were Republican led effort, there is a sense among Democrats that Republicans need to give them something in order to for them to give them this thing. Our role in this is to be like, hey, guys, that's that's great. You've got these like feuds you want to settle. This is an urgent problem for businesses that are going to go out of business because this. So, like, can we try to put that aside? Yeah. Now.

But I actually was reading something earlier this week saying, you know, that, you know, there's talk about child tax credit or low-income housing and, you know, actually, or whether that trade is expensive enough. I mean, it's a whole kind of thing. As it looks like right now, basically, the soonest opportunity for this to get fixed is at the end of September. There's a continuing resolution at the end of September where tax historically has been part of it, from my understanding. And so that,

from what I'm reading, that looks like the soonest opportunity. What that means is if you, like us, extended your filing to September 15th, this is highly unlikely to be solved before September 15th.

Yeah.

no idea when that's coming out. If it doesn't happen in September, unfortunately, it would be at the end of the year. I'm assuming if the IRS hasn't released guidance yet, it would be hard to know for your accountant to know what guidance to follow, right? Like how this will actually be taxed or amortized. And so is that kind of for small businesses that are doing the advocacy work, they're

their congressperson, all that stuff. On the accounting side, until there's guidance, I'm guessing that, like, is it just a waiting game? Well,

From my understanding and what, you know, if you look at like the filings of public companies, they are proceeding under the assumption that the definition will be that it is new feature development and new improvements on existing products, but not sort of straight maintenance. Yeah. VMware, for example, they talk about in their filings going back over a year, a lot of companies talk about on their earnings calls that

And so most of us don't have the expensive accountants that they have. Most of us, you know, also use accountants who are also small businesses themselves. But that is the guidance that they are proceeding under. And so there was partial guidance issued at the beginning of this year, basically warning accountants

not to wait it out and just file as if nothing had changed. So accountants have already been put on, literally on notice about this, but we will have to see how it shakes out. I mean, I do know some people who said, well, maybe we're just going to pay it as if it was the same as last year because our accountant told us that DC is going to figure this out and we're just going to trust that it's going to happen. And then what their gamble is basically that is if it isn't fixed, then...

then they're going to end up paying, they're still going to owe 400% more in taxes. And then they're going to go owe penalties and interest on top of that. And so for some people that is,

you know, noncompliance is ostensibly always an option, right? Yeah. That's, you know, that's up to them and their accountant. But I think it's also important, I think, as you've mentioned when you did your first mention of this on the podcast, to not fall into magical thinking that our community loves to fall into that, oh, you know, sales tax, that doesn't apply to us. GDPR, that doesn't apply to us. Like, it does. Yeah.

It does. That's part of building ASAS is complying with government regulations, even when they are unclear. Yeah, this is wild. Yeah, it's just every time we talk about it, it just feels like this is just so unnecessary, but really here. Is there anything else that you want folks to know about right now at this stage, other than that reminder to go to SSBAlliance.org, contact Congress,

Get the letter, customize it, send it. Anything else folks should be knowing about? Send the letter if you haven't done so already.

That is the most important thing to do right now. Okay. It doesn't matter if you didn't sign the letter originally. That's fine. You can simply say, I'm a small business and, you know, like, I support this letter that was sent, right? I'll give you a link to include in the show notes. But that is the most impactful thing that you can do. And everything I have just talked about, if you were not aware of this, probably sounds...

an awful combination of scary and confusing. There is an effort going on to try to fix this. What is in your control is to send the letter to Congress, to tell the other founders you know to send the letter to Congress.

Just send them the link. Use the templates. You don't have to think about it too much. But it really does make an impact. Like the letter was mentioned in a House Small Business Committee hearing. It was officially entered into the congressional record. It's getting mentioned in other hearings and whatnot. It's these sort of small...

procedural things that don't make the news, but they actually really make a difference. And so the more legislators are receiving this letter, the more who are receiving it continually, that

has an impact in the sort of, you know, how the sausage gets made kind of a way that usually isn't quite so public. All right, folks. So yeah, make sure you do that. The link will be in the show notes, but it's also at ssballiance.org. And then you click the contact Congress link at the top and it'll take you. Michelle's got it really nicely laid out here.

Thanks for doing all this work. That's me and Tailwind. Yeah, you and Tailwind. That's perfect. Buddies and GitHub desktop. Yeah, that's good. It's awesome. I think it's also Laravel Vapor too. Yeah, we got the whole gang. You got the whole stack behind you. That's great. If you have time, I'd love to get your thoughts on, I just had Aaron Francis on and we were talking about

and starting a family or bootstrapping while you have young kids and life balance and everything. And we had done an interview about the story of you and Matias building Geocodeo, which is your company. You don't do tax policy for a living. That's just a hobby. God, no. No. After between this and having gone, just gone through sales tax compliance, I,

I don't ever want to talk about taxes again in my life. I will have to, but I am extremely done with the topic. Hey, how come your team doesn't have their own podcast? Head over to Transistor and use my coupon, transistor.fm slash Justin. You'll get 15% off your first year of podcast hosting.

I'd be curious because I know one of my memories of speaking to you was you had this line of when you'd started Geocodeo, you were like, if this could pay for diapers, I think it was, or childcare, or like each win you had, there was like this related milestone that related to family life.

And I'm wondering what your perspective is on some of that. So, yeah, what do you think when you advise people, friends who are thinking about starting SAS and they also have young kids, what kinds of things are you saying to them? I mean, you know, it's tough. I should say that I have not listened to the episode with Aaron yet, but it is queued up.

Because I think it sparked a good conversation about this. I've noticed a conversation you and Aaron and Matt Wensing has been jumping in on that. And I think it's a good one to have, right? Because, yeah, when we started Geocodeo, the original idea was...

The thing that sort of, you know, got us off the couch because we would just, yeah, we spent our weekends catching up on Game of Thrones or whatever. Right. And then, you know, no kids like the world, you know, the weekends were our oyster. Right. Yeah. And then, you know, kind of things got real when we truly understood, you know, how much the cost of daycare would be, which for context in the U.S.,

in a majority of states is more expensive than state college tuition. And so where we lived in a major city, it was $25,000 a year for infant daycare. Wow. And at the time, you know, we both had, you know, good professional jobs, you know, working in web development, but

But that was a lot of money. And we're like, okay, so we can either kill it at work and try to get raises of $25,000 this year, or we can start something on our own. And so we can just keep the same level of living.

And so that was sort of the initial goal was to try to pay for that. I didn't even think about going full time on it for a long time because it was like, okay, well now we're at least making the same amount of money if you're taking, you know,

uh, daycare into account. And it was like, oh, well, okay, maybe, you know, we got to, uh, fix our broken air conditioner, you know, that was $8,000 without having to take out a loan. That is amazing. Or I got to pay off my student loans. Like it wasn't, yeah, it was, it was very focused on things that kind of made our family budget better. Initially. So you, you were working as a product manager, I believe, or something like that. Yeah. Yeah. So I started out as, as like

I actually transitioned from being a technical project manager, like at an agency managing web development builds, to then being a product manager. Okay. And Matthias, was he working as a developer as well? Yeah. Yes, we were both W2. So you're both W2. You have a baby in that time. And then you folks made the decision, you're both going to continue working full time, but...

That means daycare and daycare is $25,000 a year. And then you were like, okay, how we got to figure out how we can do this. One option is we could try to get raises. Another option is we could try to build something on the side. Did you try a few things to build on the side? Like how long did it take? Yeah, we did try a few things. You know, most of them didn't, didn't work. Yeah. I remember, I remember going to a hackathon like, um,

I don't know, six or seven months pregnant. Okay. Trying to wear baggy clothing so I didn't look pregnant, which makes me incredibly sad to think that was only 10 years ago. And that was just, like, it was... Sorry, you were trying to not look pregnant just because you didn't want the...

What? Sorry, explain that part. Yeah, to lose legitimacy to the judges and investors present. Got it. Because it was also like it was, you know, it was a 24 hour all night, like pizza and beer at 2 a.m. Kind of. It was a I mean, yes, this this sounds like very 2012 when I say it. Yeah. I don't even know if these kinds of things still happen anymore, because it seems like as a community, we've kind of.

beyond that and now recognize it's like really terrible for work-life balance. But, you know, like that was like, that was what we did back then, I guess. Yeah. And no one told me that it would be bad to be pitching pregnant, but that was just something I had internalized. Yeah. I mean, and if you think about the, everything else kind of associated with that event, like pizza and beer and stay up all night is not exactly welcoming to

to, you know, to, well, to an expectant parent

a new parent or, you know, you can keep going down the list. People who need sleep, right? Yeah. I mean, it's, I think there's a lot of downsides of that, but yeah, we, we built an app for that thing that didn't go anywhere. Built, I don't know, a couple of other things that maybe one other thing before that, then we built this mobile app and that actually ended up getting somewhere in the range of like three, $400 a month in ad revenue, which was amazing. And then we launched something else after that. And that one, like

totally failed. And so, but then by that point, we kind of had that one going, but then we actually needed geocoding for it. And I've told the story a million times, but anyway, so Geocodeo comes sort of out of that app actually in order to keep that running. Cause then it was like, oh, okay, this is making like three or $400 a month. Like this is amazing.

Let's just keep this going. Like, let's just ride this gravy train as long as we can. Yes. And intentionally actually not spending too much time on Geocodeo at the beginning. And then it completely blew away our expectations. I remember I had this spreadsheet that I can't find, but I remember making it of what our definitions of success were. And a wild success was...

We earn more than our server costs, which were $20 a month. So, yeah. And all of that is happening. Meanwhile, you know, I think when Geocodeo launched, our daughter was, yeah, she would have just turned four months old. Like we incorporated a week after she was born. Wow. So you got some of that started before she was born, right?

You were like ramping up and you were like, okay, we're going to build some of this. And then she was born. And then the, what was, was the app launch after she was born or before she was born? So the app that had the ad revenue that was launched, I think October of 2013. So she was about two months old at that point. And then at that point we, so we,

You know, our evening hours, you know, at least, you know, thankfully babies kind of go to bed to sleep early. So like, you know, come 7, 730, we could actually work on it for a couple of hours a day. And we probably should have been sleeping because she would, you know, wake up at 1 or 2 a.m. But so it is. And started working on geocodeo more.

There's a great picture of Matias actually going down to this, like, incubator co-working space while he was on paternity leave, I think, with her in the, like, you know, in the car seat, carrying her in, like, like, geocodeo, like, very preliminary version of geocodeo. He was running on a laptop. He's testing it with his friends. And she's just, like, sitting there hanging out, you know, in the car seat. That is an interesting perspective, is that talking about balance, right?

I mean, this really depends on a lot of factors like post-COVID.

maternal care, how well you're sleeping, if there's any health complications for mom and baby. There's all these other factors. But if baby is healthy and sleeping, those first... And if you're on parental leave, that could actually give some space to work on things because newborns often do sleep and you can put them in a seat and they just kind of hang out. Was that your experience? How hard was...

managing all of that? And would you recommend it to others? Yeah, I think this is one of those times where it's like, this is what I did. And if I was doing it again, I don't know if I would do it the same way. And I don't know if I would recommend someone else do it either. As you said, it's very contingent upon...

personal factors. Like my own recovery was actually quite rocky. So, but like, you know, Matias was able to, you know, put her in the Moby wrap, which is like a wrap that you sort of, yeah, you wrap around you and it holds the baby to your chest very tightly. And like, they love it and will sleep. She would sleep for hours in that. And so he would just have the wrap on and be coding like with his arms kind of outside and, you know, it worked. And,

I think it was highly dependent on situation. But I knew, actually, I do know other people who launched something on maternity leave. Do you know Anna Mast? Yeah. She, yeah. So she, I believe, launched her business that she then ended up, she sold that, I think, last year or the year before. She launched that while she was on maternity leave. Yeah. And so I think, you know, for me, it's not just about the parental leave aspect. It's that

I found the early stages of parenting to be just really exhausting and depleting and the lack of sleep and the kind of, you know, you're just on call 24-7 and...

have no social life. And, you know, if you are going to work, that's your only adult interaction of the day. There's not really a whole lot of sources of dopamine unless you're someone who just absolutely like loves child rearing, which I mean on it, like I have a lot of other interests in life. And so like for me, it was actually quite motivating to be like, okay, I only have one hour a day to work on whatever I want to work on. And so like,

I would think about that all day. And then when I actually got time to do it, I would sit down and I was very motivated. And maybe this is because I have ADHD and like I need a deadline and I like things have to be a crisis. Right. Yeah. And so but Matias doesn't have ADHD. And he also kind of felt the same way that it was actually really good because otherwise it was like, we don't have to work on the app now. Like what, you know, time just kind of without kids, like I feel like time just kind of

kind of stretched in front of me forever. And it was so, procrastinating was so much easier for me versus when kind of, you know, family life comes into play. You don't have control or influence even over your own schedule in many cases. And so those rare times you do have,

For me, I got a lot of dopamine out of working on our projects. For other people, they, you know, they might use that time differently. And I think that's equally valuable. I probably shouldn't have been working all the time. I was probably a workaholic for many years there. It's not really healthy to have like work, I think, be such a core source of dopamine.

But that's only something I have, you know, learned in the past four or five years. Yeah. The struggle I have is, and now I'm hearing it in your story as well, even hearing you tell that story, I'm like, it's bringing up old feelings for me. Like, yeah, I remember how motivating that was to feel like I have this baby. Now we have this child. Yeah.

And it's us, like we're responsible for this child and how are we going to do this? And such a big portion of that ends up being money. Like we're going to need money for all these things. And it was motivating to feel like, okay, well, what can we do? You know, what can I start on the side? What can I do on the side? And I feel that. I feel like, okay, and it does feel like

you know, there, there's probably, um, uh, a relatively healthy way to do that. And, but there's also this part of me now that I can see it can go both ways. Like it happens to have played out for you and I, meaning, uh, we're the survivors in the survivorship bias. Right. But I have also talked to lots of people who really kind of destroyed themselves, um,

pushing themselves to be like, I'm going to start a bit. I'm a new parent and now I'm going to start a business. And, uh, for them, it ended up being the wrong decision because,

Which leaves me in this awkward place of, in retrospect, just the same way you were saying, I don't know if I would necessarily advise people to do that. It's difficult to know what advice to give to folks because on one hand, it worked out for us. It seems like it would be terrible to rob somebody of that opportunity. But on the other hand, I just feel like business is a real challenge.

crap shoot. Like it just, it can't happen for the majority of people who try it. It's going to be like, if you get a person who doesn't have kids and they have every, you know, they've got lots of financial margin and lots of time margin, lots of energy margin, even for them, the chances of success are low. And then you add in this idea of like, you're also going to be

you know, in the top, I don't know, top 1% of parents who can have the energy to do this and be a good parent. And you're going to be in the top 1% of couples who can manage the emotional stuff of being new parents and still have a relationship. And you're going to be in the, you know, there's all these other factors. Do you think there's any

or advice we could give to folks who are considering it? Like, what are the considerations if you have concerns

a new child and you're thinking, okay, well, I got to do something. When should you pursue that dream and when should you not? And is there any sort of wisdom that can come from the folks who have gone through it to say, well, here's the things to consider. Here's when, you know, maybe I would pull the plug or here's where the guardrails would be, I guess. Do you have any thoughts on that? It's a tough question, right? Because, you know, the both of us, we're only speaking from our personal experience and

you know, this isn't something that we have studied. This isn't something that we have, I don't know, applied right. And, and, you know, hundreds of companies and we can say, okay, here are the things that worked in here. Like, like we don't have any sort of like empirical evidence. We just have our own experiences. And that makes me not want to give any advice on the topic because, because I, I only have my personal experience. You know, I remember when

This will be so interesting to listen back to. I remember when we were talking a couple of years ago, and I don't even know when that was, but it was before COVID. So this was a while ago. I mean, that was like, what, like at least a decade ago. And I remember we were talking about this and you asked me, you know, about this like family balance and whatnot. And you said, well, so what about somebody who has a W-2 job? You know, they're a developer. They come home, they eat dinner with their family, and then they go into the basement to work on the side projects.

right after dinner. They're doing it for their family. They have a financial need for it, right? Necessity breeds invention. And I remember thinking very clearly, no, they shouldn't do that, right? Because their spouse, who I think in your scenario was a stay-at-home spouse, right? They are clearly putting work in all of its forms, whether it's sort of

self-directed or employer-directed, like above family and above their relationship with their spouse and sort of like social interaction and support like that, right? And so, and I think this is where I think like Matt Wensing, you know, tweeted this the other day of like, you know, you have four buckets, right? You have family, you have social, you have...

What were the other ones? Like health. Hobbies. Oh, yeah. Hobbies and business. Startup. Startup, right? And in order for the startup to be successful, you have to be putting nine, at least nine of your 20 tokens in that bucket. And Jason Cohen, he even separates out kids and spouse.

So he says you can do two things, two big things well. And then he lists everything. But he puts family into two buckets, spousal relationship and then just being a parent and child rearing. So yeah, there's all sorts of ways to separate it out. But yeah, and so there's kind of this conversation going on about it and

And I thought that was a really interesting way of looking at that, that like, I remember, you know, I had to do this, an activity like that at Founders Summit a couple of years ago from a burner's perspective, right? Is that you can't be running on full steam in every area of your life. Like something is going to suffer. And I guess I wish I had known about that concept and way of framing it beforehand because I

I think that would have given me some perspective earlier that it took me years to get and am still in the process of attempting to apply. And like you can't do everything 100% and it's worth it to kind of sit down and sort of audit where you're spending your time and whether those are the things that are

most valuable in the long term. Like I actually, I saw something on what was on Twitter, but it was from Reddit the other day about, you know, the only person who is going to remember in 20 years that you worked late as your kids. And I was like, Oh, Oh, that hurts. Especially like as somebody who has to do a lot of late night calls because of time zones and

you know, like did an evening MBA program, like as a parent and like, you know, was working at night, you know, like, like that really, that's like still, that's like still just hitting and sort of living, you know, rent free in my heart right now. But then it's a question of like, well, but if I'm working, what if I'm doing that work for my own business, for something that's building an asset,

you know, for our family, right? Like doing that, like, like I think I look back on those early years and like, you know, the times I regret working there, you know, when they're regretting doing W2 work on the weekend when it didn't really matter, right? Like, and I wasn't really getting all that much out of it, right? Versus like opening my laptop at 9 p.m. when she's already asleep and I'm building it with my spouse and we,

genuinely enjoy working together, I don't, I don't, I think that's very positive. Yeah. And so it really, really depends on the situation. But like, I think talking about being like, you know, somebody was saying, you know, they wish they had been more present. Right. And I'm like, yeah,

I look back and yeah, I wish I had been less distracted by nighttime and weekend slack drama from my W2s because that distracted me. Like, like just corporate drama, like was very, very distracting. Like, but there was never really a time when like, you know, for me, I guess that like, sure, there were times when we were talking about geocodeo, like at dinner time or whatnot, but like,

I don't know. I hope she absorbed something from that. Right. You know? So like, it wasn't like, yeah, those are the work related, but I didn't have very good boundaries at the time. And so I guess it kind of all, it kind of all blurred and it took me some years to really separate those things. Yeah. Yeah. And that's a journey that I can't, I don't, I don't know how to,

I don't know. I wouldn't wish it on anybody. And I also don't know how to give you advice on here's how you, you know, expedite your own journey through workaholism and recovering from it. Like, I don't know how to give advice on that. Yeah. And this is the thing, right? Is the in some ways I do have some empirical evidence because I have this inbox that I've had since 2012 when I started podcasting and blogging.

filled with people's journeys. Oh, you've got the mega maker people. And I've got the mega maker community and podcast listeners. And, and I have, you know, I started off with this kind of very, this, this, so, you know, maybe some bravado of like, this is what folks need to do. The best life you could ever attain is, you know, starting your own independent business. And, and

Now I've, I have these real life case studies of folks. And again, there's this realization that it just, the, there is a risk in all of this and the gauges are, you know, the gauges for your life are sometimes hard to self-assess. Nobody else, well, not nobody else, but often we don't get them assessed by some outside professional. And again,

The everybody's experience is different. The context is different, et cetera. And so I on one hand, I want to encourage folks and say, well, look like it really has starting this business has had a tremendous positive impact on my family. There's no doubt about it.

But I want to have some caveats to that to say. So on one hand, I want to encourage people that are doing it, go, yeah, go after it. But on the other hand, I want to say you do need something. You need some guardrails and tools.

Because, again, this is where magical thinking can get us in trouble. This thought of like, well, I could never get divorced or I could never alienate my children or I could never cause us financial ruin.

Well, you could. Those are all possibilities. Like those are all things that could happen that we need to take a responsibility for in the same way we take responsibility for GDPR and sales tax compliance and all these other things. So yeah, it's a tricky... I'm glad that the conversation is happening because I think a binary...

answer of just like rah rah go for it isn't enough it doesn't cover enough of the material and my hope i guess is that a deeper nuanced discussion um where we kind of consider some of these things and say well this is what it cost and these were the risks and and i'm speaking as someone who made it through but not everyone makes it through so i'm

those are things to consider. And ultimately what your kids really need are love and care and, uh, presence, you know, and, um, not presence. With a C, not with a T. Yeah. Yeah.

Not gifts. Though if you ask them, they would say they definitely need presents with a T. Did you see Venny's tweet? This is a side, but Venny, who runs Diversified Tech, she had this awesome tweet where her child goes to her and goes, Mom, I'm scared of dying. And her mom goes, oh. Venny goes, oh, dear, why are you scared of dying? Well, that means I won't have any more screen time. Yeah.

Oh, dear. Yeah. There's the priority right there. There's a real conflict here, right? Like a very, very strong two sides pulling with force at one another conflict. And I think also within us about this, right? Because on the one hand, it's like, wow, this has been...

Life-changing for my family, for me personally, for my professional satisfaction, like for the kinds of opportunities that my family can have, feeling enormously grateful and lucky to be in this position. Mm-hmm.

And feeling and going beyond that to feeling a responsibility to help others recognize that as an option they have available to them and to help them pursue that and achieve that if they want that. Right. Like there is just this kind of and I see this in you as well. That's like this sort of responsibility.

This compulsion that if one has been fortunate in their life, that they have an obligation to help other people recognize that, like in their own lives as well, right? Like there is a responsibility, a duty, right? It's not an option. But then at the same time,

Also realizing that it's not for everybody. And there are people who are very happy to even just having a stable nine to five job for 40 years is a dream come true for them. And they want that. And they genuinely, genuinely want that. Or that...

you know, their situation in life has not set them up in the way to be able to succeed on their own entrepreneurially. Or whatever their context is, right? That it's like people want different things in life and that's okay. And there might be somebody who, you know, in my situation says,

okay, well, daycare is going to be $25,000 a year. And I'm, you know, I'm going to try to kill it at work between the hours of nine and five. And if I make an extra $25,000 a year, that's great. And if I don't, you know what? We'll cut back and we'll do free activities and don't have to take plane trips, you know, right? Like we'll make it work because love is free and it doesn't matter. And like there's...

And that's true as well. Like everybody's experience is true. And their context matters. And no single human being, no single family has the same context as another family. And so I feel very, very like this very deep confliction about this between

wanting people to know that they can do this if they want to. But it's also completely fine if they don't. Yeah. And that that's valid too. And it's just, it's tough to balance that and not want to get, also, you know, for me, I mean, like, you know, I try to only give advice about the areas where I am sort of

genuinely have an expertise in like customer research stuff. Ask me about it. I will, I will claim to be an expert in that, but that's kind of the only area really. A lot of other stuff is just my own personal understanding and education and reading. And so, but there is another, where is that line? Yeah. It is really hard, but there is this other thing, which is

To bring awareness to something, the receiver still needs to do the work. They need to process it. They need to decide if it's right for them. They need to decide if the timing right, all those things. But sometimes people just don't know. They just haven't thought about it. So for example, one thing that came up in the Twitter threads quite a bit was,

Folks said, well, I don't see how you could do this. I don't see how you could have one spouse building something on the side on top of a W-2 unless their spouse was a superhero and doing 90 to 100 percent of the child care and the housework. And, you know, there are some old fables.

cultural ideas in there that might need to be challenged. And sometimes even just, you might have never even thought of it. Like you may have grown up a certain way where your mom or dad, one of them went to work and the other one stayed home. And it was like, that was just how life was. But there's this other consideration that some people just have never thought about, which is if you're thinking about doing this,

And I think it did come up in our first conversation because the title of the episode is, should you start a startup with your spouse? The other consideration is, okay, Frank, Eileen, whoever you are that wants to do this, the other party in this is your spouse. And you may be bringing some assumptions to the table.

that you haven't even actually thought of. Like you, you haven't explicitly said, well, my spouse is going to do 90% of the child care and the housework. Um, but that's actually something you need to explicitly bring up to your partner and say, Hey, this is what we're thinking about doing, or I'm thinking about doing, and it could have this benefit, but I guess we should think, you know, we have to think through what, what's this going to mean for you? And are you okay with that? And, um,

We have to be okay with the idea that your partner might say, actually, I'm not okay with that. I don't want that. I want you to be helping more with the kids. I want you to be helping more with the chores, et cetera. I mean, I think that's kind of setting it up for failure, right? To say, all right, I'm going to start a business and you're going to do 90% of the housework. That, you know, maybe that flew in like, you know, the 1930s, but, and not anymore. Yeah.

And, you know, speaking to what I have seen and people I know, like I know someone who's getting a company going, has already had a side project for a long time, but is now going full time. Mm-hmm. Their spouse, I believe their spouse either...

works very part-time or stay at home. And they're like, oh yeah. And my wife is going to be doing like customer support on this too. Like, and so it's not just like, it's like, you know, doing it with your spouse, right? Like there's a long tradition of mom and pop businesses, right? Right. And I mean, you know, talking to Congress, like I think part of this has been, hey, so mom and pop software businesses, like they exist, like it's not just grocers and, you know, other things like that, right? Like,

There are mom and pop software companies where, you know, the wife is a developer and the husband's a business person or vice versa, or they're both, you know, doing things or like they've got, you know, like they're like, so they're, that are real collaborations. Yeah. That is definitely not for every couple. For some people, you know, could still be a family member they're, they're co-founding with for some people.

you know, what other I'd say, definitely not. Right. It really comes down to context and, and, but yeah, I mean, I mean, making things stated upfront, I think is important and making sure that your, your goals align and your expectations align. And then if they don't having the kind of relationship where you can continually renegotiate those kinds of things in a

in the same way that you would in the office and be just kind of sort of clear headed about it and be willing to say, hey, like this actually isn't working right now or like,

You know, okay, like option A, like you're doing all the housework. Option B, like, oh, you're actually using your accounting degree and then we hire a housekeeper. Like, you know, like, right? Like there's many different options, but if you're both aligned on it being something you want to do, then I think that's kind of...

you know, I mean, I mean, if you're not aligned with your spouse on anything, you know, going on in your household, whether that's work or parenting, right? Like that has to be talked about. And so the relationship has to be able to have those communication channels already open anyway, before you introduce a business, which in many ways is like another child into, into the picture. I like that. I mean, I think that's a, even what you just mentioned is

Again, people need tools. We don't come to anything really intuitively knowing any of these things and the idea of, okay, let's try this, but let's have a regular review meeting where we do sit down and say, okay, how is this working for you? Is this okay for you? I've had times where...

Where the people in my family have come to me and said, Dad, when you are on Twitter all the time, you are just more aggravated. So let's have a review meeting on that. Because maybe some of your Twitter usage is causing you some distress, which then in turn is affecting all of us. So let's just have a review on that, Dad. Maybe we can scale that down or whatever. And yeah, I think...

You're going to need stuff like that in your relationship and your family. And it's okay if people, you know, don't want to be co-founders with their spouse, right? There's, I know plenty of people who have great relations with their spouses who could not run a business together. That doesn't necessarily, like, right, like that, that is just a very particular type of

Um, of relationship. And, and I mean that point of, you know, spouse, children, startup, pick two, um, that that's, that's something I'm going to be thinking about too.

Um, because, you know, there were definitely a lot of times when my husband and I were talking about Geocodeo at the table and we thought it was a perfectly fun conversation. But our daughter, when she was three, like probably did not think it was so thrilling to talk about, um, the multitude of issues that come when you allow people to upload spreadsheets. Yeah. Um, you know, like, or, you know, like me, like, you know, I remember there was one day, like Sunday breakfast and I started like wireframing something on the, like, and like, I was literally like had printer paper and was like,

taping it to like the living room wall and we were like having so much fun like while eating bites of pancakes and it's like maybe like should we have been engaging and having a conversation with her about what was going on in her world right like that's also the kind of thing i look back on it's like i didn't really think about that much at the time but maybe i should have right um

And I guess and also in terms of life, it's like, you know, everyone is going to have regrets in life. Which regrets do you want? It's not a matter of not having regrets. It's a matter of which ones and how bad they are and whether you can live with them and whether they are also things you can recover from. Right. And I think that's the beautiful thing.

about a relationship that has a solid foundation is that the relationship can grow and it can evolve and it can be bended. And, and, and I like to believe that's, you know, with spouses or with children or anyone else. Right. Yeah. And so it's never like, you know, if you look back and say, oh, I really wasn't present, you know, during the first five years, you can be like, well, great. Like,

you can fix that. Yeah. What am I going to do now? Right. Exactly. Like, you know, you always have that opportunity to change. Um, and that's, that's, that's something I guess I, I, I find myself saying, even when I don't take my own, uh, course of action and I'm podcasting at 10 o'clock on a Thursday night. Um, well, thank you so much, Michelle, for your time. This was great. It's always great to talk to you. Uh, thanks for all you're doing for, with the SSB Alliance. Um,

And folks can check out Geocodeo online. Geocodeo.com, right? Geocode.io. I say geocode like the fish.io. Geocode.io. We don't have geocode.io. We didn't get that. And I'll also put links to Michelle's Twitter, to the links, to everything else going on. Check those out in the show notes. Thanks again, Michelle. Thank you.

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