March 28, 2023 • 33 mins
Michele Hansen (co-founder of Geocodio) is raising the alarm about Section 174. This legislation could dramatically increase your tax bill this year if you're a small software company in the USA. Michele is organizing a response through the Small Software Business Alliance.
👉 ACT NOW:
- Sign up for Michele's list
- US citizens: tweet and call your Senators today. They need to know that this is a small business issue and that small businesses in their state are hurt by Section 174.
- Share the ssballiance.org URL with your founder friends.
In this episode:
- (01:37) - What is section 174?
- (04:37) - What's the benefit to the government for this change?
- (08:58) - Section 174 is bad for every company that builds software
- (11:23) - Disclaimer: We're not tax accountants
- (12:16) - What is the SSB Alliance?
- (14:00) - Small businesses are the cute puppies of the policy world
- (22:00) - A practical example
- (25:25) - This is going to impact small software businesses
- (28:31) - What can we do?
- Pascal from sharpen.page
- Rewardful.com
- Greg Park
- Mitchell Davis from RecruitKit.com.au
- Marcel Fahle, wearebold.af
- Bill Condo (@mavrck)
- Ward from MemberSpace.com
- Evandro Sasse
- Austin Loveless
- Michael Sitver
- Colin Gray
- Dave Giunta
🎙️ Podcast hosting is provided by Transistor.fm.
📺 Learn how to start your own podcast!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Justin (00:12):
Hello. Welcome to Build Your SaaS. This is the behind
the scenes story of building aweb app in 2023. I'm Justin
Jackson, the cofounder ofTransistor dot f m. And today,
on the call, I have MichelleHanson, co founder of Geocodio,
and we're gonna be talking aboutsomething very exciting, which
is section 174.
(00:35):
Hi, Michelle. How are you doing?
Michelle (00:37):
Hi. How are you?
Justin (00:38):
1st of all, Michelle, last I heard from you, You were
going into hibernate mode. Andthe way I understood hibernate
mode was you were going tooffload some of your side Jax.
You know, stop recording thepodcast for a while. No writing
of new books. Nothing extra.
Not Doing any public speaking,I'm just gonna relax. I'm gonna
(01:01):
focus on me. I'm gonna focus onmy family. I'm gonna focus on
Geocodio. What happened?
Michelle (01:08):
Yeah. Oh, I wanna go back in my cave, man. Yeah.
Section 174 is what happened,and I can't wait to go back into
hibernate mode.
Justin (01:20):
Okay. Yes. Where It this was kind of I mean, it's not out
of left field because it's thislegislation's been proposed for
a while. Maybe for folks whodon't understand what section
174 is, could you give a briefdescription? And maybe then
(01:41):
we'll talk about why it mattersfor small software companies.
So what is section 174?
Michelle (01:47):
The very high level is that section 174, and
specifically what we're talkingabout is reverting section 174,
is a part of the US tax code. Sowe are talking about, anyone who
has a US business, that buildsor sells software. And this is
(02:11):
the part of the tax code thatdeals with what is called
research and experimental, whichis different than r and d.
Justin (02:19):
Okay.
Michelle (02:20):
And, Basically, for for, I wanna say, about 70
years, since this section cameinto being, software development
was considered among this,research and experimental or R
and E spending.
Justin (02:37):
Okay.
Michelle (02:38):
And then what happened was And and under this section,
you had the choice to either,take all of those expenses
immediately, which is to saylet's say you spent $10,000 last
year, building a new product.You had server costs. You had
icon libraries. You had a UIlibrary. You had all this stuff
(02:59):
that you use to build it.
Right? That $10,000, you couldchoose either to take that as an
expense right away, so that'snegative $10,000 from your
taxes, Or you could choose toamortize it, which is basically
have it spread out over manyyears, Which is something you
hear very commonly aboutcomputers. Right? Like Mhmm.
Justin (03:20):
All of
Michelle (03:20):
us kind of know, like, if you buy a new laptop, you
don't get to take off a 100% ofthat In the year that you bought
it, that has to be spread outover many years because you get,
you know, 5 years, of life outof that. Right?
Justin (03:33):
Mhmm.
Michelle (03:34):
And so For, basically, forever, companies could choose
to either expense theseexpenses, software software
development among them, or,spread them out over many years.
Yeah. Now in 2017, there was a,Big piece of tax law, in US.
(03:59):
Mostly, it was tax cuts. And Apart of the sort of maneuvering
to pay for those tax cuts was tosay that and this is also a
benefit of it.
They said for 5 years, companiescan expense all of this r and e
spending.
Justin (04:19):
Yeah.
Michelle (04:20):
But then as of January 1, 2022, which is 14 months ago
Justin (04:27):
Yeah.
Michelle (04:28):
It must be amortized. So companies no longer had the
option or have the option totake it as an expense.
Justin (04:37):
Like, what what's the proposed benefit to the
government for doing it thisway?
Michelle (04:41):
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 that waspaying for these tax cuts and
sort of just kind of In the sameway that many governments push
the problem of paying for,retirement off to the next
generation Yeah. This was kindof doing that to companies
(05:04):
except only 5 years down theline and not, you know, 30, 40
years down the line.
Justin (05:07):
Got it.
Michelle (05:08):
And so they knew when they were passing this bill that
the intent was that they wouldrevert this change before it
took effect. So it was basicallykind of some accounting sleight
of hand, as they were passingthis bill. At this point, we can
get upset about that, or I thinkwhere I'm choosing to spend my
attention is on The likelycatastrophic impact it will have
(05:35):
on companies that build softwareand then doing something about
it.
Justin (05:40):
Yeah. Yeah. So this was this from my perspective, it
looks like this was politicalmaneuvering. Nobody expected
this to go through, really, butnow it looks like it it has gone
through. And now I'm seeingtweets from founder friends who
are like, we're doing our taxes,and instead of paying $75,000 in
(06:03):
taxes this year, we're paying$225,000 in taxes this year.
Or instead of my taxes being,30%, they've gone up 350%. So
it's having a meaningful, impacton people right now. Are you
seeing that too?
Michelle (06:21):
Yeah. And and this is also something that companies
have been predicting for a longtime. And so, bigger companies
think, you know, Netflix andZoom and, Microsoft, Intel,
like, since 2019, they have beentalking to congress about this
saying, hey. Remember that taxprovision that you didn't intend
(06:42):
to take effect? We haven'tforgotten about it.
Let's just make sure that we Fixthis before 2022 when it takes
effect. And they've been sendingletters and and and talking to
congress about this for 4 yearsnow, and everybody thought in
2022 that it was going to bereverted before it took effect
in December, and then it kind offell apart at the last moment
(07:04):
with some negotiations. And andthen so we get into this year,
and I think we, small businessowners, like, hadn't really been
included on it because I mean,like, I don't Track, like,
policy legislation is part of mylike, I'm too busy, like,
responding to customers and,like like, building software.
(07:26):
Right? So and dealing with salestaxes.
So, so Yep. Now we get into thisyear, And, our accountants are
starting to say, so there's thischange that congress didn't
intend for it to take effect,but it did take effect. And now
(07:49):
all of your software developmentand new features you're adding,
new products you're building,stuff you probably don't think
of as r and d, salaries,servers, Icon libraries,
whatever it is, all of that isnow has to be amortized. That's
no longer an expense. You canonly take 10% of it for 2022.
Justin (08:13):
I did not realize that, that it's not just Salaries.
It's also any other expenserelated to software development.
Michelle (08:21):
Right. So this means, for example, that if you are and
and and so the the crazy thingabout this is also that a
congress didn't intend for it totake effect. But since they were
widely, like, expected to fixthis before it took effect
because Nobody in Washingtonthinks it's good tax policy.
Justin (08:39):
Yeah.
Michelle (08:39):
The IRS did not write release the full guidance on how
tax preparers implement this.Mhmm. They issued sort of
something that's being takenbasically as a warning in
January that was like, hey.Remember, This happened, but it
doesn't actually define softwaredevelopment.
Justin (08:57):
Yeah.
Michelle (08:58):
But I have been talking to a lot of experts
about this in the past couple ofweeks, And it is increasingly
clear to me that section 174 isbad news For every company that
builds software, not just onesthat have employees, not just
ones that are c corps. Like, Ifyou have an LLC and you're only
(09:22):
building a product right now andyou're not even making any
money, you're gonna owe taxesbecause of this. Like, it's very
you're likely to owe taxesrather. Wow. It's everything.
I mean, I was thinking aboutthis the other day. It's like,
if we So so so so, again, theIRS has never had to define
software development, so we'regonna have to we're waiting for
(09:43):
that from them. But Yeah. Ifthey take the definition of it
that most of the majoraccounting firms Expect them to
take and what, you know, bigcompanies have been warning
about in their public filings.Like, you can find VMware, like,
warning about the tens of1,000,000 of dollars in
additional taxes they're gonnahave to pay in their filings
(10:05):
last year.
Yeah. Like like, are aredevelopers are is are all
developers gonna have to be timetracking? Like
Justin (10:12):
Yeah.
Michelle (10:13):
I mean, everybody's mean, people are usually so
relieved to stop doing clientwork and stop time tracking. And
now it's like, wait a minute.Well, was that new feature
development, which is now this rand e expense that has to be
amortized? So not only your ifyou get a salary, right, that
has to be part of that. Butalso, Kaye, I guess, the staging
server that you were using, thatPart of that expense is now
(10:34):
under this different category.
For that. Okay. That's now, hasto be capitalized. Right? Like,
versus, well, you were fixing abug later, And so that is
actually just a regular businessexpense, so we get to write that
one off.
But then what if we're doing aUI improvement that is that a
(10:57):
bug? Is that, like, is that anew feature if it's making it
easier to use because peoplewere not realizing there was
this functionality. Like, it's anightmare. It's an absolute
nightmare, and I think the factthat big companies have been
writing to congress about thisfor 4 years now. I mean, it it
(11:18):
it shows how much of a problemthis is.
Before we get into thisconversation, Justin, it's very
important that I note that I amnot a tax accountant. And for
advice about your specificsituation, people should consult
an accountant.
Justin (11:36):
Yes. The same applies for me. We are not accountants.
We are not lawyers. We are notgiving investment advice.
Michelle (11:43):
Just play 1 on TV.
Justin (11:44):
This is just for informational and entertainment
purposes only.
Michelle (11:49):
And call to action purposes, really. I mean, that's
why that's why I'm here is notto, You know, be the the rain on
everybody's parade, right, is tosay, yes. This is a big problem.
Congress kinda made it Mhmm. Youknow, 5, 6 years ago.
(12:10):
Big companies have been tryingto do something about it. Didn't
work, and that's where we comein.
Justin (12:16):
Yes. So, let's talk about what you've been
organizing During your hibernatemode. So you have this amazing
website, s s b. So s as in as inSam, s as in Sam twice. Right?
SSB Alliance .org. So tell uswhat you've done so far and
(12:40):
what's kind of in motion rightnow.
Michelle (12:42):
So what's in motion right now is to get small
software businesses into thisconversation and hopefully get
the message through to congressthat this is an urgent problem
that needs an urgent solution.Mhmm. So, you know, congress, in
December, they tried to repealthis. I mean, there was broad
(13:05):
bipartisan support. Like, thereisn't anyone who thinks this is
a good idea, but it was seen askind of a big business issue,
Which meant that it got parlayedoff of a whole bunch of other
different issues, and it all gotvery complicated and fell
through.
Justin (13:20):
Mhmm.
Michelle (13:21):
And this year, There is still a chance this is going
to, get reverted. There is,again, broad bipartisan support
for this. Nobody thinks it's agood idea. Nobody thinks it's
good tax tax policy, But it'sstill seen as a big business
issue. And the problem is is,like you, I'm either opening
emails from my accountant aboutthis, or I'm opening Twitter and
(13:41):
seeing All of my friendsfreaking out see saying that
they might have to do layoffs,that they're taking out loans,
that they're using theirpersonal credit cards, or that
they have no idea and theiraccountant hasn't told them, and
they are getting really worried.
Mhmm. The thing the thing aboutthis is that small businesses,
like, everybody loves smallbusinesses.
Justin (14:04):
Mhmm.
Michelle (14:04):
Right? Especially policymakers. I like to say, you
know, We are the cute puppies ofthe policy world. Just basically
everybody loves smallbusinesses.
Justin (14:13):
That's right.
Michelle (14:14):
But right now, because of section 174, We are getting
run over by a truck, andcongress has no idea.
Justin (14:21):
Yeah.
Michelle (14:22):
Because they are thinking, okay. You know what?
We should we should fix this. Wecan do that later in the year.
We can push this again toDecember, push it to the last
minute, get something through.
And, you know, big companies,they have access to credit
markets. They can they can, youknow, shoulder an extra 10,
(14:43):
$20,000,000 in a tax bill in ayear Mhmm. And knowing that
they're gonna get it back later.Right? Because this the this
would not only fix it, but alsorevert it so that it basically
didn't take effect.
Yeah.
Justin (14:54):
And then
Michelle (14:54):
you would get a refund for 2022. But if you're a small
business and your tax bill hasjust gone from, You know,
$75,000 to $225,000 Mhmm. Andyou're making, you know,
1,000,000 or 2 a year. That'sHuge. Like, you may not have
that money.
You don't you can't just go sellstock in order to get that money
(15:17):
back. You can't just go to thebank and get a loan because, I
mean, The only bank that wasfriendly to to to to software
companies, like, literally justwent kaput. Like Yeah. Like and
most of us didn't even use them.We use normal banks that, like,
Barely know what software is inthe 1st place.
Like Yeah. So this is a hugeproblem for small businesses. We
(15:38):
can't wait a year to get arefund check for this.
Justin (15:43):
Yeah. Like,
Michelle (15:44):
we can't wait. And so what you probably know about me
is that I am an indie founder. Iwrote a book. I have a podcast,
all that fun stuff. Way backwhen, I used to live and work in
DC.
Okay. And so when I heard aboutthis and I I have some friends
who work in the policy world, Iremember them, like, kinda
(16:06):
saying at the end of last year,like, this big thing I've been
working on, like, you know, itdidn't go through, and I'm,
like, super bummed about it.And, like, I mean, I'm, like,
super checked out on politics.Like, I'm just kinda, like,
working and, like, you know, Igot a general idea of what's
going on, but, like Yeah.Definitely not following policy.
And I'm like, oh, That sounds,like, really rough. I'm sorry
you've worked hard on this.Like, it didn't work. Like, go
(16:29):
started talking about this, andI started hearing about it. And
I was like, so is this thisthing that you were all upset
about in December?
And they were like, yes.
Justin (16:39):
Wow. I was
Michelle (16:39):
like, oh, because all of my friends are upset about it
now. Mhmm. And so I havebasically been pulling out all
the connections I've got to getus into the conversation in DC
Justin (16:53):
Amazing.
Michelle (16:53):
And to Get us, the cute puppy small businesses
Mhmm. In front of Congress sothat they understand, this is an
issue. Right? And and and let medo an analogy here. This issue
is kind of like you know, forthis is for anybody who has
teenagers, who's ever been ateenager, which I know it's you.
(17:16):
Yeah. It's like a pile of sportsequipment sitting in the
hallway. Right? That might behockey equipment. It could be
soccer cleats.
Whatever. It's sitting in thehallway, and it sits there for a
couple of days. Everybody knowsit's a problem. Everybody knows
it shouldn't be there, buteverybody just keeps walking by.
(17:38):
Yeah.
And then One day turns intoanother, and this pile of sports
equipment starts smellingreally, really Terribly.
Justin (17:50):
Yep. It's a good analogy.
Michelle (17:52):
And the person who should be cleaning it up is
playing Mario Kart, and there'sguests coming in 10 minutes.
Right? And so we need to be, Youknow, the person who kinda runs
in there with a wooden spoon andsays, hey. This is a problem.
Guests are coming in 10 minutes.
There's a pile of, You know,dirty equipment in the hallway.
(18:15):
Like, we need to get this donenow. We cannot wait. And so What
I'm doing, is, you know, first,sort of getting us together.
Right?
We are not the most organizedbunch.
Justin (18:28):
Mm-mm.
Michelle (18:29):
Just trying to organize people and then getting
people in front of policymakers.So, like, members of our
community, because of thiseffort, have already talked to
Hill staff, already told themabout how they're taking out
loans and how this is affectingthem. Yeah. But the big thing
we're doing now is we're gonnahave a coalition letter to
Congress, which is basicallythis is a formal letter to
(18:51):
Congress that will go directlyto their offices. This is not
something that we just put in acontact form and pray.
This is going directly to theiroffices because of these friends
that I have
Justin (19:02):
Amazing.
Michelle (19:03):
And describes the impact that this is having on
small software businesses. Now Iknow that many of us, we don't
even know what the impact of itis yet.
Justin (19:13):
Yeah.
Michelle (19:13):
That's okay. Like, if your accountant hasn't found out
about this yet or hasn't toldyou about it yet and you're
worried about it, you can stillsign this because you are almost
certainly going to be impactedby this. And but there are
people who are who are, like,laying people off. Or, I mean,
we were talking about hiring yetanother developer this year, and
(19:33):
that conversation has just goneout the window. Mhmm.
Justin (19:37):
We just hired somebody else.
Michelle (19:39):
Oh, did you? Yeah. Congratulations. I mean, there
are companies facing bankruptcyalready because of this. Like,
this is Very, very like and andI have this form up just kind of
collecting everybody's emailsand their addresses so we know
which congressional districtsthey're in and kind of how it's
impacting them so far.
And, like, it is it is justbreaking my heart every single
(20:00):
one of these emails that I get.That that's like, You know, we
got through COVID. We thoughtthings were gonna be good. Mhmm.
Like, we finally felt like we'reback on our feet again, and then
this happened.
Right? And we don't have Themoney for it, banks won't work
with us, like personal creditcards, I guess. Right? And so we
need to get this letter in frontof Congress. And these things
(20:21):
are very, very effective.
So there was a group of smallBiotech companies that sent 1 a
few weeks ago, there were 500small biotechs that signed this
letter, which Awesome.
Justin (20:33):
I think
Michelle (20:33):
that means we can do a1000. Right?
Justin (20:34):
Yeah.
Michelle (20:35):
A senator, Like, mentioned this letter in a
hearing a couple weeks ago.Like, these things really make a
difference because when That,like, there are policymakers who
are they're already cosponsorsof the bill to fix this. Right?
Justin (20:48):
Yeah.
Michelle (20:48):
When they're going to their colleagues, when their
staff is going to theircolleagues, This is a letter
they can bring with them andsay, here is very tangible
impact of very small businessesseeing tax bills that are 400%
higher, than previously for apolicy that we never intended to
implement. Yeah. And so As manypeople who are US citizens,
(21:12):
sorry, can sign this. Right?Yep.
Like, all 50 states Plusterritories, we we have to do
this. Right? Because this is upto us at this point. Yeah. The
big companies have tried.
It's stuck as a big businessissue. It's not a big business
issue. This is also a smallbusiness issue. And so we have
(21:36):
the opportunity to get in there,shake things up a bit, and say
this is this is not ahypothetical issue. This is this
is not Something that's onlygonna affect, you know, the
Facebooks of the world.
Right? Like, this is a this isgonna impact small businesses in
Kansas and Missouri andPennsylvania and Arizona as much
(21:57):
as it is the companies inCalifornia who are, you know,
already hurting.
Justin (22:01):
Yeah. And and just to, Again, to give an a practical
example of this, like, atransistor, I think, like a lot
of bootstrapped softwarecompanies, we we spend most of
the money in a year. We take itout as owner with owner,
distributions. We Take it outas, pay our staff really well.
(22:22):
So we don't have a lot of cashin the bank.
We run it just a nicely inoperation, and we know that
Every month, we're gonna havemore cash coming in from
recurring revenue. But if you'vebeen running your business like
that, That means that and andand you just have this
expectation that any expense youhave is an expense for that
(22:43):
year. And so you can take mostof the money out of the company.
So if you run lean, like a lotof us do, That's where it's
gonna get you because now you'regonna need instead of needing to
have whatever you normally havein your bank account, a 100,000,
200,000, 500,000, whatever,You're gonna need to have way
more just to cover the tax bill,especially year 1. And, There's
(23:09):
this great Wall Street Journalpiece that you link to on your
site.
I'll quote from that. Laura LynnGonzalez expected a tax refund
this year after her two Employeedata visualization company
experienced a $30,000 loss.Instead, she said she's facing a
$100,000 federal tax bill thatis about as large as her 2 2022
(23:30):
salary. That's what this lookslike. It looks like if you don't
have the cash To pay the taxbill, that's where you're gonna
get in trouble.
And, it works great when you canexpense, You know, when you can
expense developer salaries anddeveloper costs as a full
expense in that year, runninglean works that way. But if you
(23:53):
If if that's the way you've beenrunning it and if, you know,
LLCs, you're probably takingnice distributions. You know,
all of that's the way you'vebeen working won't work under
this legislation. That's whyit's so important, because
you're you're gonna need to comeup with maybe 100 of 1,000 of
dollars in cash to pay a taxbill.
Michelle (24:13):
It's nobody really expected this to happen. And
then now that it is and we areall getting these tax bills or
sort of very slowly. Right?Because there's people I've
talked to who didn't theiraccountant didn't realize that
this was happening. Mhmm.
So now they're not only facingthe huge tax bill, but also
Penalties Mhmm. And that 5 yeardepreciation we talked about for
(24:39):
for spreading it out. If you arerunning a remote company, which
a lot of people are, you've gotmaybe you've got contractors all
over the world. Foreign R and Eexpenses are 15 years.
Justin (24:51):
Oh my gosh.
Michelle (24:53):
Yeah. Like, so if you've got, You know, a lot of
people have a team in in, youknow, in in Southeast Asia or in
Eastern Europe or just, I mean,spread out all over the world.
Right?
Justin (25:02):
Yeah.
Michelle (25:02):
That's 15 years Wow. For that development expense.
And so this is I mean, it Ihesitate to say it because it
feels dramatic, but section 174is an existential threat to
anyone who builds software.
Justin (25:22):
Yep.
Michelle (25:23):
Even if you're only making $10,000 a year.
Justin (25:26):
Mhmm.
Michelle (25:27):
Yep. Even if you don't have any employees. Yeah. This
is a problem. And in, I mean,this is I don't know.
It it feels a little bit likeputting the rookie in at the end
of the game to throw the HailMary, you know, to to to win the
game. Right? But it's, like, upto us, the little guys, to do
(25:48):
this. But folks like, folks inDC, they are very receptive.
Like, I've had some great callswith people.
They are Happy to have us onboard. We're getting help. Like,
we're like, this letter is gonnago straight to Congress. Like,
People you probably know onTwitter have already talked to
Hill Staff about this because ofthis effort. Yeah.
(26:12):
It's I I I didn't come out of myhibernation for nothing. Like,
this is a really, really seriousproblem. And we cannot rely on
the bigger companies to sortthis out. Or as you said a
couple weeks ago, We can't havemagical thinking and just pray
(26:33):
that it doesn't impact us. Yeah.
This is going to impact us.Yeah. And we have a
responsibility to do somethingabout it and Yeah. Can do
something about it.
Justin (26:44):
Yep. Yep. So we folks, if you're listening right now
and you are a US citizen and youhave you're doing anything on
the side, you have your ownsoftware company, Go to SSB
Alliance .org right now whileyou're listening. Sign it, And
then send it to your friends.Explain to them what's going on.
(27:06):
And you're right. We need tohave a 1000 people sign this.
There's There are many, manysmall software businesses in,
the United States. And, the morePeople that sign this right
away, the bigger, the louder wecan make our voices. And we can
We can actually have a chancehere, especially with Michelle's
(27:28):
work, to make a difference.
We can actually get this intothe hands of the right people.
And, again, like she said, smallbusiness is such a strong
political motivator. Like this,we actually do have some power
here, And we need to use it,especially because the culture
has become kind of antagonistictowards big tech, while Small
(27:50):
business, like mom and popshops, we have, a good
reputation in the culture, andwe can use that to say, hey. You
gotta help us out here. Or,like, honestly, I don't know
what we would do even.
So that's this is your call toaction. Go to SSB Alliance .org.
(28:11):
Michelle's been really good atcommunicating with everybody,
Sending updates, telling folksexactly what they need to do.
It'll take you 10 seconds tosign up and then another 30
seconds to a couple minutes todo, what Michelle's asked folks
to do. Do you wanna just quicklyrun through what people can do
besides sign up for SSB Alliance.org?
Michelle (28:33):
So if you go to SSB alliance.org now, you will be
directed to sign the coalitionletter. And then there was also
the option to stay updated,which is basically mandatory
because if it turns out thatyou're in a really pivotal
Congressional district, we wantyou to talk to your
representative. And so it'sreally important to have your
(28:53):
whole address in there. I'm notsharing that with anybody. Your
email isn't getting shared withanybody.
Like I said, I used to work inDC. I know what the tricks are
when you fill out forums aboutpolitics where like, I'm still
getting added to stuff becauseof the Obama 2008 list. I am not
doing that to your email.
Justin (29:11):
Yeah.
Michelle (29:11):
The only person who's gonna have this data. It'll get
shared, you know, anonymously,like, in terms of this business
in Michigan is saying thatthey're gonna have to lay people
off. Right? Like, things likethat, or I might reach out to
you and say, hey. Would you beup for talking to a Hill staffer
and sharing more about what'sgoing on in your business?
But nobody else is gonna seeyour information. The letter
will have your name, yourcompany name, and your location
(29:34):
again because we need to showthat these businesses are all
over the country. I mean, it'skind of a funny thing where,
like, Congress basically doesn'tknow we exist. Right? Like,
small software com I mean,right.
Like, we're kinda looked downupon in some corners. Right?
Like, we're, oh, you know,lifestyle businesses. Right?
Mhmm.
This is our moment to have animpact. And so that is the
(29:57):
information gathered. I'm theonly one who's seeing that. Sign
the coalition letter and do iton or before April 10th. We need
to deliver this to congressbefore tax day.
So April 10th is the deadline. Ss b alliance.org to sign the
letter. If you're listening tothis after that, You can still
(30:17):
go there and, just sign up forthe regular mailing list, and so
I'll keep you in the loop, onhow you can help. Fine line.
Justin (30:29):
Yeah. And thanks again, Michelle, for, like, for for
deciding to Put yourself outthere to use your connections
and to organize this. I wasreally heartened because I feel
like often Small businessbanners just don't wanna think
about this stuff, and I get it,but this is real life. Like,
(30:49):
this is actually happening. Wewe don't have a reality
distortion field we can usehere.
This is actually just realreally what's happening. So
thank you so much. I thinkeverybody Michelle didn't ask me
to say this. Everyone go buy herbook. Thank her on Twitter.
Sign up for Geocodio. But mostof all, just thanks so much, and
(31:10):
let's help her do let's help herget this in motion. So Send this
to your friends. Sign it rightnow. Spread the word, and, yeah,
let's try to get this, Let's tryto get this reversed.
Michelle (31:23):
Thank you, Justin. And, I mean, if anybody else if
you've got a podcast, if you'vegot any kind of present presence
anywhere, LinkedIn, Twitter,wherever that is, if you have a
presence among softwarefounders, you need to use that
Now Mhmm. If you wanna continuebeing a software founder and you
(31:43):
want those people to continuebeing software founders, as
well, We have to do somethingabout this. And so just reach
out to me. I did a a scarything, which is open my DMs.
So, Yeah. And I'm alreadygetting so many Bitcoin raffle
offers. Oh, no. Make it worthit, people. Okay?
(32:04):
Reach out to me.
Justin (32:05):
Yeah.
Michelle (32:06):
I'm out of my hibernation. We're gonna make
this happen. What we all need tobe onboard to make it happen.
Justin (32:11):
Yeah. Thanks so much, Michelle. You can get Michelle
on Twitter, mjw Hansen. That's ha n s e n. She's got a lot of
other links on her Twitter page,but then SSB Alliance .org will
also, give you her emailaddress, which is then you can
be in contact with her directly.
(32:33):
And, yeah, let's get let's makethis happen. And we'll let's do
a follow-up episode after thatdeadline, which was April 10th.
Yeah. After April 10th. Let's doanother episode just update
folks on this, and, we'll gofrom there.
Michelle (32:48):
Sounds great. Thank you.
Justin (32:49):
Thanks again.
Hello. Welcome to Build Your SaaS. This is the behind
the scenes story of building aweb app in 2023. I'm Justin
Jackson, the cofounder ofTransistor dot f m. And today,
on the call, I have MichelleHanson, co founder of Geocodio,
and we're gonna be talking aboutsomething very exciting, which
is section 174.
(00:35):
Hi, Michelle. How are you doing?
Michelle (00:37):
Hi. How are you?
Justin (00:38):
1st of all, Michelle, last I heard from you, You were
going into hibernate mode. Andthe way I understood hibernate
mode was you were going tooffload some of your side Jax.
You know, stop recording thepodcast for a while. No writing
of new books. Nothing extra.
Not Doing any public speaking,I'm just gonna relax. I'm gonna
(01:01):
focus on me. I'm gonna focus onmy family. I'm gonna focus on
Geocodio. What happened?
Michelle (01:08):
Yeah. Oh, I wanna go back in my cave, man. Yeah.
Section 174 is what happened,and I can't wait to go back into
hibernate mode.
Justin (01:20):
Okay. Yes. Where It this was kind of I mean, it's not out
of left field because it's thislegislation's been proposed for
a while. Maybe for folks whodon't understand what section
174 is, could you give a briefdescription? And maybe then
(01:41):
we'll talk about why it mattersfor small software companies.
So what is section 174?
Michelle (01:47):
The very high level is that section 174, and
specifically what we're talkingabout is reverting section 174,
is a part of the US tax code. Sowe are talking about, anyone who
has a US business, that buildsor sells software. And this is
(02:11):
the part of the tax code thatdeals with what is called
research and experimental, whichis different than r and d.
Justin (02:19):
Okay.
Michelle (02:20):
And, Basically, for for, I wanna say, about 70
years, since this section cameinto being, software development
was considered among this,research and experimental or R
and E spending.
Justin (02:37):
Okay.
Michelle (02:38):
And then what happened was And and under this section,
you had the choice to either,take all of those expenses
immediately, which is to saylet's say you spent $10,000 last
year, building a new product.You had server costs. You had
icon libraries. You had a UIlibrary. You had all this stuff
(02:59):
that you use to build it.
Right? That $10,000, you couldchoose either to take that as an
expense right away, so that'snegative $10,000 from your
taxes, Or you could choose toamortize it, which is basically
have it spread out over manyyears, Which is something you
hear very commonly aboutcomputers. Right? Like Mhmm.
Justin (03:20):
All of
Michelle (03:20):
us kind of know, like, if you buy a new laptop, you
don't get to take off a 100% ofthat In the year that you bought
it, that has to be spread outover many years because you get,
you know, 5 years, of life outof that. Right?
Justin (03:33):
Mhmm.
Michelle (03:34):
And so For, basically, forever, companies could choose
to either expense theseexpenses, software software
development among them, or,spread them out over many years.
Yeah. Now in 2017, there was a,Big piece of tax law, in US.
(03:59):
Mostly, it was tax cuts. And Apart of the sort of maneuvering
to pay for those tax cuts was tosay that and this is also a
benefit of it.
They said for 5 years, companiescan expense all of this r and e
spending.
Justin (04:19):
Yeah.
Michelle (04:20):
But then as of January 1, 2022, which is 14 months ago
Justin (04:27):
Yeah.
Michelle (04:28):
It must be amortized. So companies no longer had the
option or have the option totake it as an expense.
Justin (04:37):
Like, what what's the proposed benefit to the
government for doing it thisway?
Michelle (04:41):
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 that waspaying for these tax cuts and
sort of just kind of In the sameway that many governments push
the problem of paying for,retirement off to the next
generation Yeah. This was kindof doing that to companies
(05:04):
except only 5 years down theline and not, you know, 30, 40
years down the line.
Justin (05:07):
Got it.
Michelle (05:08):
And so they knew when they were passing this bill that
the intent was that they wouldrevert this change before it
took effect. So it was basicallykind of some accounting sleight
of hand, as they were passingthis bill. At this point, we can
get upset about that, or I thinkwhere I'm choosing to spend my
attention is on The likelycatastrophic impact it will have
(05:35):
on companies that build softwareand then doing something about
it.
Justin (05:40):
Yeah. Yeah. So this was this from my perspective, it
looks like this was politicalmaneuvering. Nobody expected
this to go through, really, butnow it looks like it it has gone
through. And now I'm seeingtweets from founder friends who
are like, we're doing our taxes,and instead of paying $75,000 in
(06:03):
taxes this year, we're paying$225,000 in taxes this year.
Or instead of my taxes being,30%, they've gone up 350%. So
it's having a meaningful, impacton people right now. Are you
seeing that too?
Michelle (06:21):
Yeah. And and this is also something that companies
have been predicting for a longtime. And so, bigger companies
think, you know, Netflix andZoom and, Microsoft, Intel,
like, since 2019, they have beentalking to congress about this
saying, hey. Remember that taxprovision that you didn't intend
(06:42):
to take effect? We haven'tforgotten about it.
Let's just make sure that we Fixthis before 2022 when it takes
effect. And they've been sendingletters and and and talking to
congress about this for 4 yearsnow, and everybody thought in
2022 that it was going to bereverted before it took effect
in December, and then it kind offell apart at the last moment
(07:04):
with some negotiations. And andthen so we get into this year,
and I think we, small businessowners, like, hadn't really been
included on it because I mean,like, I don't Track, like,
policy legislation is part of mylike, I'm too busy, like,
responding to customers and,like like, building software.
(07:26):
Right? So and dealing with salestaxes.
So, so Yep. Now we get into thisyear, And, our accountants are
starting to say, so there's thischange that congress didn't
intend for it to take effect,but it did take effect. And now
(07:49):
all of your software developmentand new features you're adding,
new products you're building,stuff you probably don't think
of as r and d, salaries,servers, Icon libraries,
whatever it is, all of that isnow has to be amortized. That's
no longer an expense. You canonly take 10% of it for 2022.
Justin (08:13):
I did not realize that, that it's not just Salaries.
It's also any other expenserelated to software development.
Michelle (08:21):
Right. So this means, for example, that if you are and
and and so the the crazy thingabout this is also that a
congress didn't intend for it totake effect. But since they were
widely, like, expected to fixthis before it took effect
because Nobody in Washingtonthinks it's good tax policy.
Justin (08:39):
Yeah.
Michelle (08:39):
The IRS did not write release the full guidance on how
tax preparers implement this.Mhmm. They issued sort of
something that's being takenbasically as a warning in
January that was like, hey.Remember, This happened, but it
doesn't actually define softwaredevelopment.
Justin (08:57):
Yeah.
Michelle (08:58):
But I have been talking to a lot of experts
about this in the past couple ofweeks, And it is increasingly
clear to me that section 174 isbad news For every company that
builds software, not just onesthat have employees, not just
ones that are c corps. Like, Ifyou have an LLC and you're only
(09:22):
building a product right now andyou're not even making any
money, you're gonna owe taxesbecause of this. Like, it's very
you're likely to owe taxesrather. Wow. It's everything.
I mean, I was thinking aboutthis the other day. It's like,
if we So so so so, again, theIRS has never had to define
software development, so we'regonna have to we're waiting for
(09:43):
that from them. But Yeah. Ifthey take the definition of it
that most of the majoraccounting firms Expect them to
take and what, you know, bigcompanies have been warning
about in their public filings.Like, you can find VMware, like,
warning about the tens of1,000,000 of dollars in
additional taxes they're gonnahave to pay in their filings
(10:05):
last year.
Yeah. Like like, are aredevelopers are is are all
developers gonna have to be timetracking? Like
Justin (10:12):
Yeah.
Michelle (10:13):
I mean, everybody's mean, people are usually so
relieved to stop doing clientwork and stop time tracking. And
now it's like, wait a minute.Well, was that new feature
development, which is now this rand e expense that has to be
amortized? So not only your ifyou get a salary, right, that
has to be part of that. Butalso, Kaye, I guess, the staging
server that you were using, thatPart of that expense is now
(10:34):
under this different category.
For that. Okay. That's now, hasto be capitalized. Right? Like,
versus, well, you were fixing abug later, And so that is
actually just a regular businessexpense, so we get to write that
one off.
But then what if we're doing aUI improvement that is that a
(10:57):
bug? Is that, like, is that anew feature if it's making it
easier to use because peoplewere not realizing there was
this functionality. Like, it's anightmare. It's an absolute
nightmare, and I think the factthat big companies have been
writing to congress about thisfor 4 years now. I mean, it it
(11:18):
it shows how much of a problemthis is.
Before we get into thisconversation, Justin, it's very
important that I note that I amnot a tax accountant. And for
advice about your specificsituation, people should consult
an accountant.
Justin (11:36):
Yes. The same applies for me. We are not accountants.
We are not lawyers. We are notgiving investment advice.
Michelle (11:43):
Just play 1 on TV.
Justin (11:44):
This is just for informational and entertainment
purposes only.
Michelle (11:49):
And call to action purposes, really. I mean, that's
why that's why I'm here is notto, You know, be the the rain on
everybody's parade, right, is tosay, yes. This is a big problem.
Congress kinda made it Mhmm. Youknow, 5, 6 years ago.
(12:10):
Big companies have been tryingto do something about it. Didn't
work, and that's where we comein.
Justin (12:16):
Yes. So, let's talk about what you've been
organizing During your hibernatemode. So you have this amazing
website, s s b. So s as in as inSam, s as in Sam twice. Right?
SSB Alliance .org. So tell uswhat you've done so far and
(12:40):
what's kind of in motion rightnow.
Michelle (12:42):
So what's in motion right now is to get small
software businesses into thisconversation and hopefully get
the message through to congressthat this is an urgent problem
that needs an urgent solution.Mhmm. So, you know, congress, in
December, they tried to repealthis. I mean, there was broad
(13:05):
bipartisan support. Like, thereisn't anyone who thinks this is
a good idea, but it was seen askind of a big business issue,
Which meant that it got parlayedoff of a whole bunch of other
different issues, and it all gotvery complicated and fell
through.
Justin (13:20):
Mhmm.
Michelle (13:21):
And this year, There is still a chance this is going
to, get reverted. There is,again, broad bipartisan support
for this. Nobody thinks it's agood idea. Nobody thinks it's
good tax tax policy, But it'sstill seen as a big business
issue. And the problem is is,like you, I'm either opening
emails from my accountant aboutthis, or I'm opening Twitter and
(13:41):
seeing All of my friendsfreaking out see saying that
they might have to do layoffs,that they're taking out loans,
that they're using theirpersonal credit cards, or that
they have no idea and theiraccountant hasn't told them, and
they are getting really worried.
Mhmm. The thing the thing aboutthis is that small businesses,
like, everybody loves smallbusinesses.
Justin (14:04):
Mhmm.
Michelle (14:04):
Right? Especially policymakers. I like to say, you
know, We are the cute puppies ofthe policy world. Just basically
everybody loves smallbusinesses.
Justin (14:13):
That's right.
Michelle (14:14):
But right now, because of section 174, We are getting
run over by a truck, andcongress has no idea.
Justin (14:21):
Yeah.
Michelle (14:22):
Because they are thinking, okay. You know what?
We should we should fix this. Wecan do that later in the year.
We can push this again toDecember, push it to the last
minute, get something through.
And, you know, big companies,they have access to credit
markets. They can they can, youknow, shoulder an extra 10,
(14:43):
$20,000,000 in a tax bill in ayear Mhmm. And knowing that
they're gonna get it back later.Right? Because this the this
would not only fix it, but alsorevert it so that it basically
didn't take effect.
Yeah.
Justin (14:54):
And then
Michelle (14:54):
you would get a refund for 2022. But if you're a small
business and your tax bill hasjust gone from, You know,
$75,000 to $225,000 Mhmm. Andyou're making, you know,
1,000,000 or 2 a year. That'sHuge. Like, you may not have
that money.
You don't you can't just go sellstock in order to get that money
(15:17):
back. You can't just go to thebank and get a loan because, I
mean, The only bank that wasfriendly to to to to software
companies, like, literally justwent kaput. Like Yeah. Like and
most of us didn't even use them.We use normal banks that, like,
Barely know what software is inthe 1st place.
Like Yeah. So this is a hugeproblem for small businesses. We
(15:38):
can't wait a year to get arefund check for this.
Justin (15:43):
Yeah. Like,
Michelle (15:44):
we can't wait. And so what you probably know about me
is that I am an indie founder. Iwrote a book. I have a podcast,
all that fun stuff. Way backwhen, I used to live and work in
DC.
Okay. And so when I heard aboutthis and I I have some friends
who work in the policy world, Iremember them, like, kinda
(16:06):
saying at the end of last year,like, this big thing I've been
working on, like, you know, itdidn't go through, and I'm,
like, super bummed about it.And, like, I mean, I'm, like,
super checked out on politics.Like, I'm just kinda, like,
working and, like, you know, Igot a general idea of what's
going on, but, like Yeah.Definitely not following policy.
And I'm like, oh, That sounds,like, really rough. I'm sorry
you've worked hard on this.Like, it didn't work. Like, go
(16:29):
started talking about this, andI started hearing about it. And
I was like, so is this thisthing that you were all upset
about in December?
And they were like, yes.
Justin (16:39):
Wow. I was
Michelle (16:39):
like, oh, because all of my friends are upset about it
now. Mhmm. And so I havebasically been pulling out all
the connections I've got to getus into the conversation in DC
Justin (16:53):
Amazing.
Michelle (16:53):
And to Get us, the cute puppy small businesses
Mhmm. In front of Congress sothat they understand, this is an
issue. Right? And and and let medo an analogy here. This issue
is kind of like you know, forthis is for anybody who has
teenagers, who's ever been ateenager, which I know it's you.
(17:16):
Yeah. It's like a pile of sportsequipment sitting in the
hallway. Right? That might behockey equipment. It could be
soccer cleats.
Whatever. It's sitting in thehallway, and it sits there for a
couple of days. Everybody knowsit's a problem. Everybody knows
it shouldn't be there, buteverybody just keeps walking by.
(17:38):
Yeah.
And then One day turns intoanother, and this pile of sports
equipment starts smellingreally, really Terribly.
Justin (17:50):
Yep. It's a good analogy.
Michelle (17:52):
And the person who should be cleaning it up is
playing Mario Kart, and there'sguests coming in 10 minutes.
Right? And so we need to be, Youknow, the person who kinda runs
in there with a wooden spoon andsays, hey. This is a problem.
Guests are coming in 10 minutes.
There's a pile of, You know,dirty equipment in the hallway.
(18:15):
Like, we need to get this donenow. We cannot wait. And so What
I'm doing, is, you know, first,sort of getting us together.
Right?
We are not the most organizedbunch.
Justin (18:28):
Mm-mm.
Michelle (18:29):
Just trying to organize people and then getting
people in front of policymakers.So, like, members of our
community, because of thiseffort, have already talked to
Hill staff, already told themabout how they're taking out
loans and how this is affectingthem. Yeah. But the big thing
we're doing now is we're gonnahave a coalition letter to
Congress, which is basicallythis is a formal letter to
(18:51):
Congress that will go directlyto their offices. This is not
something that we just put in acontact form and pray.
This is going directly to theiroffices because of these friends
that I have
Justin (19:02):
Amazing.
Michelle (19:03):
And describes the impact that this is having on
small software businesses. Now Iknow that many of us, we don't
even know what the impact of itis yet.
Justin (19:13):
Yeah.
Michelle (19:13):
That's okay. Like, if your accountant hasn't found out
about this yet or hasn't toldyou about it yet and you're
worried about it, you can stillsign this because you are almost
certainly going to be impactedby this. And but there are
people who are who are, like,laying people off. Or, I mean,
we were talking about hiring yetanother developer this year, and
(19:33):
that conversation has just goneout the window. Mhmm.
Justin (19:37):
We just hired somebody else.
Michelle (19:39):
Oh, did you? Yeah. Congratulations. I mean, there
are companies facing bankruptcyalready because of this. Like,
this is Very, very like and andI have this form up just kind of
collecting everybody's emailsand their addresses so we know
which congressional districtsthey're in and kind of how it's
impacting them so far.
And, like, it is it is justbreaking my heart every single
(20:00):
one of these emails that I get.That that's like, You know, we
got through COVID. We thoughtthings were gonna be good. Mhmm.
Like, we finally felt like we'reback on our feet again, and then
this happened.
Right? And we don't have Themoney for it, banks won't work
with us, like personal creditcards, I guess. Right? And so we
need to get this letter in frontof Congress. And these things
(20:21):
are very, very effective.
So there was a group of smallBiotech companies that sent 1 a
few weeks ago, there were 500small biotechs that signed this
letter, which Awesome.
Justin (20:33):
I think
Michelle (20:33):
that means we can do a1000. Right?
Justin (20:34):
Yeah.
Michelle (20:35):
A senator, Like, mentioned this letter in a
hearing a couple weeks ago.Like, these things really make a
difference because when That,like, there are policymakers who
are they're already cosponsorsof the bill to fix this. Right?
Justin (20:48):
Yeah.
Michelle (20:48):
When they're going to their colleagues, when their
staff is going to theircolleagues, This is a letter
they can bring with them andsay, here is very tangible
impact of very small businessesseeing tax bills that are 400%
higher, than previously for apolicy that we never intended to
implement. Yeah. And so As manypeople who are US citizens,
(21:12):
sorry, can sign this. Right?Yep.
Like, all 50 states Plusterritories, we we have to do
this. Right? Because this is upto us at this point. Yeah. The
big companies have tried.
It's stuck as a big businessissue. It's not a big business
issue. This is also a smallbusiness issue. And so we have
(21:36):
the opportunity to get in there,shake things up a bit, and say
this is this is not ahypothetical issue. This is this
is not Something that's onlygonna affect, you know, the
Facebooks of the world.
Right? Like, this is a this isgonna impact small businesses in
Kansas and Missouri andPennsylvania and Arizona as much
(21:57):
as it is the companies inCalifornia who are, you know,
already hurting.
Justin (22:01):
Yeah. And and just to, Again, to give an a practical
example of this, like, atransistor, I think, like a lot
of bootstrapped softwarecompanies, we we spend most of
the money in a year. We take itout as owner with owner,
distributions. We Take it outas, pay our staff really well.
(22:22):
So we don't have a lot of cashin the bank.
We run it just a nicely inoperation, and we know that
Every month, we're gonna havemore cash coming in from
recurring revenue. But if you'vebeen running your business like
that, That means that and andand you just have this
expectation that any expense youhave is an expense for that
(22:43):
year. And so you can take mostof the money out of the company.
So if you run lean, like a lotof us do, That's where it's
gonna get you because now you'regonna need instead of needing to
have whatever you normally havein your bank account, a 100,000,
200,000, 500,000, whatever,You're gonna need to have way
more just to cover the tax bill,especially year 1. And, There's
(23:09):
this great Wall Street Journalpiece that you link to on your
site.
I'll quote from that. Laura LynnGonzalez expected a tax refund
this year after her two Employeedata visualization company
experienced a $30,000 loss.Instead, she said she's facing a
$100,000 federal tax bill thatis about as large as her 2 2022
(23:30):
salary. That's what this lookslike. It looks like if you don't
have the cash To pay the taxbill, that's where you're gonna
get in trouble.
And, it works great when you canexpense, You know, when you can
expense developer salaries anddeveloper costs as a full
expense in that year, runninglean works that way. But if you
(23:53):
If if that's the way you've beenrunning it and if, you know,
LLCs, you're probably takingnice distributions. You know,
all of that's the way you'vebeen working won't work under
this legislation. That's whyit's so important, because
you're you're gonna need to comeup with maybe 100 of 1,000 of
dollars in cash to pay a taxbill.
Michelle (24:13):
It's nobody really expected this to happen. And
then now that it is and we areall getting these tax bills or
sort of very slowly. Right?Because there's people I've
talked to who didn't theiraccountant didn't realize that
this was happening. Mhmm.
So now they're not only facingthe huge tax bill, but also
Penalties Mhmm. And that 5 yeardepreciation we talked about for
(24:39):
for spreading it out. If you arerunning a remote company, which
a lot of people are, you've gotmaybe you've got contractors all
over the world. Foreign R and Eexpenses are 15 years.
Justin (24:51):
Oh my gosh.
Michelle (24:53):
Yeah. Like, so if you've got, You know, a lot of
people have a team in in, youknow, in in Southeast Asia or in
Eastern Europe or just, I mean,spread out all over the world.
Right?
Justin (25:02):
Yeah.
Michelle (25:02):
That's 15 years Wow. For that development expense.
And so this is I mean, it Ihesitate to say it because it
feels dramatic, but section 174is an existential threat to
anyone who builds software.
Justin (25:22):
Yep.
Michelle (25:23):
Even if you're only making $10,000 a year.
Justin (25:26):
Mhmm.
Michelle (25:27):
Yep. Even if you don't have any employees. Yeah. This
is a problem. And in, I mean,this is I don't know.
It it feels a little bit likeputting the rookie in at the end
of the game to throw the HailMary, you know, to to to win the
game. Right? But it's, like, upto us, the little guys, to do
(25:48):
this. But folks like, folks inDC, they are very receptive.
Like, I've had some great callswith people.
They are Happy to have us onboard. We're getting help. Like,
we're like, this letter is gonnago straight to Congress. Like,
People you probably know onTwitter have already talked to
Hill Staff about this because ofthis effort. Yeah.
(26:12):
It's I I I didn't come out of myhibernation for nothing. Like,
this is a really, really seriousproblem. And we cannot rely on
the bigger companies to sortthis out. Or as you said a
couple weeks ago, We can't havemagical thinking and just pray
(26:33):
that it doesn't impact us. Yeah.
This is going to impact us.Yeah. And we have a
responsibility to do somethingabout it and Yeah. Can do
something about it.
Justin (26:44):
Yep. Yep. So we folks, if you're listening right now
and you are a US citizen and youhave you're doing anything on
the side, you have your ownsoftware company, Go to SSB
Alliance .org right now whileyou're listening. Sign it, And
then send it to your friends.Explain to them what's going on.
(27:06):
And you're right. We need tohave a 1000 people sign this.
There's There are many, manysmall software businesses in,
the United States. And, the morePeople that sign this right
away, the bigger, the louder wecan make our voices. And we can
We can actually have a chancehere, especially with Michelle's
(27:28):
work, to make a difference.
We can actually get this intothe hands of the right people.
And, again, like she said, smallbusiness is such a strong
political motivator. Like this,we actually do have some power
here, And we need to use it,especially because the culture
has become kind of antagonistictowards big tech, while Small
(27:50):
business, like mom and popshops, we have, a good
reputation in the culture, andwe can use that to say, hey. You
gotta help us out here. Or,like, honestly, I don't know
what we would do even.
So that's this is your call toaction. Go to SSB Alliance .org.
(28:11):
Michelle's been really good atcommunicating with everybody,
Sending updates, telling folksexactly what they need to do.
It'll take you 10 seconds tosign up and then another 30
seconds to a couple minutes todo, what Michelle's asked folks
to do. Do you wanna just quicklyrun through what people can do
besides sign up for SSB Alliance.org?
Michelle (28:33):
So if you go to SSB alliance.org now, you will be
directed to sign the coalitionletter. And then there was also
the option to stay updated,which is basically mandatory
because if it turns out thatyou're in a really pivotal
Congressional district, we wantyou to talk to your
representative. And so it'sreally important to have your
(28:53):
whole address in there. I'm notsharing that with anybody. Your
email isn't getting shared withanybody.
Like I said, I used to work inDC. I know what the tricks are
when you fill out forums aboutpolitics where like, I'm still
getting added to stuff becauseof the Obama 2008 list. I am not
doing that to your email.
Justin (29:11):
Yeah.
Michelle (29:11):
The only person who's gonna have this data. It'll get
shared, you know, anonymously,like, in terms of this business
in Michigan is saying thatthey're gonna have to lay people
off. Right? Like, things likethat, or I might reach out to
you and say, hey. Would you beup for talking to a Hill staffer
and sharing more about what'sgoing on in your business?
But nobody else is gonna seeyour information. The letter
will have your name, yourcompany name, and your location
(29:34):
again because we need to showthat these businesses are all
over the country. I mean, it'skind of a funny thing where,
like, Congress basically doesn'tknow we exist. Right? Like,
small software com I mean,right.
Like, we're kinda looked downupon in some corners. Right?
Like, we're, oh, you know,lifestyle businesses. Right?
Mhmm.
This is our moment to have animpact. And so that is the
(29:57):
information gathered. I'm theonly one who's seeing that. Sign
the coalition letter and do iton or before April 10th. We need
to deliver this to congressbefore tax day.
So April 10th is the deadline. Ss b alliance.org to sign the
letter. If you're listening tothis after that, You can still
(30:17):
go there and, just sign up forthe regular mailing list, and so
I'll keep you in the loop, onhow you can help. Fine line.
Justin (30:29):
Yeah. And thanks again, Michelle, for, like, for for
deciding to Put yourself outthere to use your connections
and to organize this. I wasreally heartened because I feel
like often Small businessbanners just don't wanna think
about this stuff, and I get it,but this is real life. Like,
(30:49):
this is actually happening. Wewe don't have a reality
distortion field we can usehere.
This is actually just realreally what's happening. So
thank you so much. I thinkeverybody Michelle didn't ask me
to say this. Everyone go buy herbook. Thank her on Twitter.
Sign up for Geocodio. But mostof all, just thanks so much, and
(31:10):
let's help her do let's help herget this in motion. So Send this
to your friends. Sign it rightnow. Spread the word, and, yeah,
let's try to get this, Let's tryto get this reversed.
Michelle (31:23):
Thank you, Justin. And, I mean, if anybody else if
you've got a podcast, if you'vegot any kind of present presence
anywhere, LinkedIn, Twitter,wherever that is, if you have a
presence among softwarefounders, you need to use that
Now Mhmm. If you wanna continuebeing a software founder and you
(31:43):
want those people to continuebeing software founders, as
well, We have to do somethingabout this. And so just reach
out to me. I did a a scarything, which is open my DMs.
So, Yeah. And I'm alreadygetting so many Bitcoin raffle
offers. Oh, no. Make it worthit, people. Okay?
(32:04):
Reach out to me.
Justin (32:05):
Yeah.
Michelle (32:06):
I'm out of my hibernation. We're gonna make
this happen. What we all need tobe onboard to make it happen.
Justin (32:11):
Yeah. Thanks so much, Michelle. You can get Michelle
on Twitter, mjw Hansen. That's ha n s e n. She's got a lot of
other links on her Twitter page,but then SSB Alliance .org will
also, give you her emailaddress, which is then you can
be in contact with her directly.
(32:33):
And, yeah, let's get let's makethis happen. And we'll let's do
a follow-up episode after thatdeadline, which was April 10th.
Yeah. After April 10th. Let's doanother episode just update
folks on this, and, we'll gofrom there.
Michelle (32:48):
Sounds great. Thank you.
Justin (32:49):
Thanks again.
Popular Podcasts
Cold Case Files: Miami
Joyce Sapp, 76; Bryan Herrera, 16; and Laurance Webb, 32—three Miami residents whose lives were stolen in brutal, unsolved homicides. Cold Case Files: Miami follows award‑winning radio host and City of Miami Police reserve officer Enrique Santos as he partners with the department’s Cold Case Homicide Unit, determined family members, and the advocates who spend their lives fighting for justice for the victims who can no longer fight for themselves.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.