Software Social

Numbers update on the letter to Congress + crossover with Made with Grit. 

Creators & Guests

Host
Michele Hansen
Co-Founder of Geocodio & Author of Deploy Empathy

What is Software Social?

Two indie SaaS founders—one just getting off the ground, and one with an established profitable business—invite you to join their weekly chats.

Unknown Speaker 0:00
Hello, Hello, it's me again. And I wanted to give you a little update on what's going on with

Unknown Speaker 0:09
the 174. Stuff.

Unknown Speaker 0:13
A numbers update, because this wouldn't be, you know, an indie project without doing numbers updates, right? Everybody loves numbers update. But before I do that

Unknown Speaker 0:27
I wanted to

Unknown Speaker 0:30
I, the there's some lack of clarity about what this all means. So I want to start with that. The first thing is, is that these changes have already taken effect. So the changes to Section 174, that force you to spread out

Unknown Speaker 0:53
costs related to building new products or adding new features to existing products.

Unknown Speaker 0:59
Those have already taken effect for 2022. So this is not a hypothetical problem. This is one that is already in effect.

Unknown Speaker 1:09
Related to that is that this is not just about what you might consider r&d spending. So some people

Unknown Speaker 1:18
there's some confusion that this only impacts people who take r&d tax credits or whatnot.

Unknown Speaker 1:24
That is actually a much narrower list of activities that fall under the r&d tax credit.

Unknown Speaker 1:30
Software development now falls under what is called research and experimental, which is a much much, much broader category. And there's actually a great pie chart floating around that shows all of this.

Unknown Speaker 1:41
But it is a it is the entire category of software development and other activities related to that to like market research is in that, for example. And so it's not just about r&d, or companies that think they do r&d.

Unknown Speaker 1:57
And the last one is, is that this applies to way more than just salaries to so

Unknown Speaker 2:04
you will be hit by very likely hit by 174 changes. Even if you don't take a salary, even if you don't have employees, even if you don't have contractors, right. Like, for example, think about the time you spend, you know, say let's say using your development server to work on a new feature, like you're going to have to split out that time, by the time you're working on that servers use for a new feature versus the time you're spending doing bug fixes, which is still expensable, right, like just the administrative headache of this is going to be a nightmare. But it's not just about salaries, it's about servers, it's about that at a UI libraries, whatever you might buy, in order to make a product or improve a product.

Unknown Speaker 2:51
And

Unknown Speaker 2:54
as I've kind of mentioned before, like there are some accountants who still aren't really aware of this, because the IRS has not issued full guidance yet. They've never had to define software development. But this is the way most big companies are proceeding.

Unknown Speaker 3:10
And

Unknown Speaker 3:12
and this is the this is also what I'm being told from tax experts.

Unknown Speaker 3:18
And related to that, and I and this one is kind of sort of the broad a broader thing is that

Unknown Speaker 3:25
some people's accountants have told them to proceed as if these changes aren't taking effect, because Congress is still expected to revert the change and make it retroactive.

Unknown Speaker 3:42
Now,

Unknown Speaker 3:44
while it is true that there is the chance of it, I think that kind of an attitude is really not helpful at the moment because it encourages the bystander effect, right? You're probably aware of, of the phenomenon known as the bystander effect when you know, let's say, somebody has a medical emergency on

Unknown Speaker 4:08
on a train car, for example. And people just stand there and don't do anything. Right. And very often, it's because they assume that somebody else will do something, right. I think they've done studies where, you know, there's somebody like collapsed on a sidewalk, and people just keep walking by.

Unknown Speaker 4:27
And this is a

Unknown Speaker 4:32
I mean, a human group phenomenon, quite frankly. And so I think there, there is a bit of complacency sometimes that people think well, you know, big companies, they have, you know, lobbyists and whatever, like they'll take care of this. And I need to say no, because they have been working on this since 2019. And it hasn't happened.

Unknown Speaker 4:55
And I think part of that is because big tech is

Unknown Speaker 5:00
be the opposite of sympathetic on the hill, right? them speaking on issues actually kind of makes them worse.

Unknown Speaker 5:08
Especially if you know Google or whatever was about come say they don't pay enough taxes, right? Like that's, that's not going to fly, that's not going to help at all.

Unknown Speaker 5:17
So

Unknown Speaker 5:21
so you can't rely on other people to make this happen. And the one thing that cuts through the bystander effect is if there is someone who takes action, and then points at specific people and tells them to do a specific task. So for example, somebody crouches down and says, You go call 911, you go, you know, go to a store nearby, get some water, see if they have any band aids, whatever it is, right, giving people specific tasks. So this is what I am doing right now, I am telling you to go sign the coalition letter. And to tell the founders, you know, to sign it, personally, reach out to them on Slack, DM them on Twitter, email them, however, that is reach out to people personally, tell them that this thing is an asteroid that is headed for the indie software community, and anybody who builds software, really.

Unknown Speaker 6:21
And tell them to sign it.

Unknown Speaker 6:27
Go sign it and go tell people to sign it.

Unknown Speaker 6:32
This is the equivalent of me telling you to go call 911. Right, do it.

Unknown Speaker 6:39
And the thing about this letter, too, there's also a little bit of confusion, that this is not just a like a regular petition. This is not like seeing something floating around online. It's like, oh, we should, you know, save kittens and tell Congress to save kittens, right? Let's sign this petition.

Unknown Speaker 6:58
Those usually go nowhere. And quite frankly, in politics very often, they're just used for harvesting people's email addresses.

Unknown Speaker 7:07
So that they can send you fundraising asks,

Unknown Speaker 7:11
and that is not this effort. First of all, this letter is going to go directly to congressional offices, you can think of it as a formal version of a petition.

Unknown Speaker 7:24
But also, nobody else is getting your info, nobody else is getting your email, because I know how that world works. And I am not letting them get your info.

Unknown Speaker 7:33
So

Unknown Speaker 7:36
So sign the letter, it is very impactful, and get your friends to sign it too.

Unknown Speaker 7:42
I,

Unknown Speaker 7:44
I hate to be so so sort of direct in that ask, but

Unknown Speaker 7:53
this this is, I feel like it's just this weird situation where there's this meteor that has come and hit our community. And there are people who are aware of it, and they've already had to start laying people off and taking out loans and are panicking. And then there are people who are standing around who aren't aware that it's impacting them or their accountants are telling them to act like it isn't impacting them. And

Unknown Speaker 8:22
so so even if you aren't sure how this is going to impact you.

Unknown Speaker 8:27
Please sign the letter as a member of the community in solidarity with the community because the more people sign this, the more impact we can have. We have strength in numbers.

Unknown Speaker 8:40
I found myself thinking a lot about the I think it was the the old Join or Die.

Unknown Speaker 8:48
image from, you know, the Revolutionary War.

Unknown Speaker 8:53
We have to work together on this. We're not the most organized bunch. I mean, this is why small businesses generally don't exert a lot of organized, you know, political influences, because we're, you know, we're spread out all over the place, right.

Unknown Speaker 9:11
But we have to do this and, and I guess for me, you know, it's

Unknown Speaker 9:18
it's not only about my own business because we are hit even worse by this since we live abroad. And so it's 15 years of amortization rather than five.

Unknown Speaker 9:30
Year I think something that drove me to to have this podcast in the first place was

Unknown Speaker 9:36
this really strong belief that

Unknown Speaker 9:40
people's lives are better when they run their own companies in so many cases and showing them that it's possible to do that and that they are capable of it and that this is a way of life that's possible for them.

Unknown Speaker 9:59
That that

Unknown Speaker 10:00
Mom and Pop software, you know, is a great way to make a living.

Unknown Speaker 10:07
And, and that's threatened right now.

Unknown Speaker 10:12
Directly.

Unknown Speaker 10:15
And I think that's why I'm pushing this

Unknown Speaker 10:19
is so hard also, you know, having the weird position of previously worked in DC but like, our way of life our way of doing businesses is, is not just like threatened right now, because this is not hypothetical. It's like under attack, and we have to unite and fight this. And so, okay, all right, I told you, I was gonna do a number that right now I'm just soapboxing. So I'm

Unknown Speaker 10:45
right, sign it. So, um,

Unknown Speaker 10:52
so numbers update, little numbers update, and then I was gonna do a little legislative update to so um,

Unknown Speaker 10:57
so we crossed 200 signatures, I've totally buried the lead again, here I am, 11 minutes in, okay. We've had 200 signatures on the letter. As I stand here recording this right now we have 209 signatures. And there's also a couple dozen people who previously signed up before the letter was up. But I have not then resigned the letter because, you know, I want to make sure that like before I send somebody's company name to Congress, they definitely want it there. Right. So I'd have to reconfirm with people who sign up before the letter was up.

Unknown Speaker 11:27
And

Unknown Speaker 11:30
so that's great 209 signatures, which is awesome.

Unknown Speaker 11:34
Well, on our way to, to getting 250.

Unknown Speaker 11:40
And we also now have 40 states plus DC in here. So we're 80% of the way there on states, which is amazing. In addition to trying to get 1000 signatures, also trying to get all 50 states so that every member of Congress knows that people in their states are impacted by this.

Unknown Speaker 12:02
And on the legislative side,

Unknown Speaker 12:05
there are currently 22, co sponsors

Unknown Speaker 12:10
of the Senate Bill.

Unknown Speaker 12:13
So that is up from the 14 original which is great.

Unknown Speaker 12:17
For context, context.

Unknown Speaker 12:23
last sessions, Bill had 36

Unknown Speaker 12:27
co sponsors in the Senate. So there are definitely more people who are going to be signing this.

Unknown Speaker 12:34
It just it just takes some time.

Unknown Speaker 12:37
And there's no reason to think that this issue has gotten any

Unknown Speaker 12:41
less supported.

Unknown Speaker 12:43
So there, you know, also, you know, there was a Senate bill last Senate so we can sorry, a house bill. So we can also expect that there will be a house bill

Unknown Speaker 12:54
at some points. And that one also had over 100 co sponsors. And like both of these, like, like all of these bills are broadly bipartisan, which I think is important to note that this is this is not a political issue, right. This is

Unknown Speaker 13:13
there isn't anyone who thinks this is a good idea, or that shouldn't be on the books.

Unknown Speaker 13:19
So So I think if we work together and show Congress that this is an urgent issue, impacting small businesses, that there are people getting hit with their 2022 taxes being much higher than expected, plus having to make their first quarter 2023 estimated payments at the same time.

Unknown Speaker 13:39
That if the even if you know congress reverts this in December.

Unknown Speaker 13:46
Small businesses can't afford to float the IRS you know,

Unknown Speaker 13:50
you know, 10s or hundreds of 1000s of dollars, or even millions of dollars in tax payments.

Unknown Speaker 13:59
For the next nine months, right, like people are gonna go out of business. And I mean, when people are signing this i

Unknown Speaker 14:07
and giving me information on on how it's impacting them. My heart is just breaking every single time, you know, so many people saying like, they got through COVID, they thought things were getting better. And then now they have to take out a loan to pay off their taxes or they're, they're, you know, trying to do everything they can to lay people off or they just started their business last year, they're not even making money and now they realize they owe money on a product that didn't even make any revenue.

Unknown Speaker 14:34
Because this impacts you, regardless of if you have employees regardless of if you're making money. You could be losing money every year and still now have a tax bill.

Unknown Speaker 14:48
So is that the numbers update? I think that's a numbers update. We've crossed 200. So I'm also going to add on here and episode I recorded last week.

Unknown Speaker 14:59
With Landon and

Unknown Speaker 15:00
Kyle from made with grits.

Unknown Speaker 15:05
Yeah, yeah, that that's that's all for this week. Thank you for

Unknown Speaker 15:13
supporting this for putting up with me tweeting about politics so much. I promise after all this is over, you won't see another political tweet from me again.

Unknown Speaker 15:22
But we gotta get this done first. So let's do it.

Unknown Speaker 15:29
We don't have that kind of access. And so this is a very real problem, which is why I am organizing people to send a coalition letter to Congress so that they understand that this is having an effect on small software businesses now, and that we urgently need to do something about this, this can't just keep getting pushed down the line and bundled in with other things. It's not a big business as you it is a small business issue that is impacting small businesses across the country.

Unknown Speaker 15:58
Who people now like I mean, I've talked to people are saying they're using their personal credit cards to pay their taxes. They're using like lines of credit. They're like laying people off. They're freezing hiring, like, like, it's bad. And the thing is, is that we have to fight this, because everybody loves small businesses, like just everybody loves us, right.

Unknown Speaker 16:23
And we're getting run over by a truck by this. And so if there's any hope of getting this through Congress, we have to speak up on this

Unknown Speaker 16:33
characteristic emerge as a significant predictor of success. It was grit.

Unknown Speaker 16:40
All right, cool. We're all on.

Unknown Speaker 16:44
Hey, Michelle, I was just,

Unknown Speaker 16:47
I was just telling Kyle right before this, that I so I'm a very one track minded person. So like, whenever I get into something, I like really get into it. What and that can be good and bad, right? So like a week ago, this is all I could think about. And so it's like I was, every single day, like pretty much the whole day, it was

Unknown Speaker 17:10
it was very distracting, because it was all I could think about as I could talk about, it's all I could read about.

Unknown Speaker 17:15
And over the past like week or so I've completely shut that out of my mind, trying to just act as if like nothing's happening, because I have to, to like, just focus on, you know, our business.

Unknown Speaker 17:29
So this is all coming. We're all I'm coming back to this now. And I'm like reading through your entire thread so that I bring myself back into that mindset that I was in. But But yeah, we just wanted to just record like, a kind of a little bit different episode than we normally do. You know, normally we're talking about like a range of topics, especially if we bring on a guest. But in this particular scenario,

Unknown Speaker 17:53
we wanted to talk about something that I think either you haven't heard about yet as an entrepreneur, or maybe you have heard about it, but just kind of going into how bad Section One 174 is, for, you know, for entrepreneurs, whether you're at a tech business, or you know, I guess, when I read that wall, Wall Street Journal article, like I kind of I didn't even realize it, it would affect a lot of other types of small businesses as well, like life science companies, and things like that. But it's pretty devastating for tech businesses. So most of the people that listen to this podcast.

Unknown Speaker 18:32
So we we figured we bring on the expert, and, you know, just let you kind of talk a little bit about, you know, just a start for the folks that don't know what section 174 is. Just kind of go into what that is. And, you know, sort of why this is is so devastating for for companies if it if it's not repealed soon.

Unknown Speaker 18:55
Yeah. And first, I should say, my obligatory disclaimer is that I am not a tax accountant.

Unknown Speaker 19:03
So for advice about your specific situation, consult

Unknown Speaker 19:11
a tax accountant.

Unknown Speaker 19:12
Totally they know about this. Well, we'll get into that. But yeah, yeah, so that's very possible that they they may not have heard about it. So

Unknown Speaker 19:24
section 174 is the part of the US tax code that deals with what are called research and experimental

Unknown Speaker 19:33
costs.

Unknown Speaker 19:35
And in this section of the tax code, it specifically says that any amount paid or incurred in connection with the development of any software shall be treated as a research or experimental expenditure. So even if you don't think of it as r&d, like you know, like I think people think about r&d and they think about like pharmaceuticals for example, right.

Unknown Speaker 19:59
Even if you

Unknown Speaker 20:00
Don't think of building a new product with existing code and frameworks and tools as r&d. Or you don't think of adding a new feature as r&d, the tax code likely does.

Unknown Speaker 20:14
And so why we're talking about this is that for basically forever, least this past 6070 years, which is forever in software businesses,

Unknown Speaker 20:25
companies have the choice between taking those as expenses right away, which is probably what the vast majority of us do, right? You have a developer who makes $100,000 salary, it's just all an expense, you spend $1,000 on servers to build a new product, it's all an expense. It could be an expense, or it could be amortized, which is a accountant speak for saying spreading it out over several years, amortizing and capitalizing things like you might you might be more familiar with that with like a laptop, for example, right? Because you buy a laptop, you use it for five years, so you only get to take out, you know, say 20% of that per year as an expense.

Unknown Speaker 21:06
So, until 2022, companies had the choice, or the expensing or

Unknown Speaker 21:14
amortizing. And so nobody, like in our world really ever thought much about this.

Unknown Speaker 21:20
But then what happened was in 2017, when Congress passed the tax changes,

Unknown Speaker 21:26
one of the ways they paid for those changes, was to say that starting in 2022, all research and experimental expenditures, which which includes all software development, must be amortized.

Unknown Speaker 21:41
And this was basically a sort of legislative sleight of hand to pay for those tax cuts. But nobody in Congress thought it was a good idea to do this. Nobody thought it was good tax policy. And they intended to repeal it from beginning. So they would basically just, you know, keep sort of reverting it

Unknown Speaker 22:02
and pushing that problem out into the future.

Unknown Speaker 22:05
The problem is

Unknown Speaker 22:08
that they didn't revert it, as they had planned on, even though this has broad bipartisan support. And so big companies think, you know, your Microsoft, Intel's of the world, they have been writing letters to Congress since 2019. And engaging with Congress on this, it's 2019. About Hey, like, remember how you passed this really bad text change? And then you said you were going to fix it before it took effect? Let's just make sure that still on your list. Right. They have been doing that since 2019. So fast forward to 20, the end of 2022. Although tech companies aren't

Unknown Speaker 22:38
the most popular across Congress. Right. Right. Right. Yeah. Which is probably what is part of why we have to get involved. Exactly. Yeah, exactly. So fast forward to 2022. This is seen as a big business issue. In Congress, there's still broad bipartisan support, like I mean, seriously, like evenly bipartisan support in the House and Senate. And like there's over 100 co sponsors in the house. Like I mean, when do you get this kind of broad bipartisan support for anything these days,

Unknown Speaker 23:06
to revert this and fix it, and it fell apart at the last minute, because it got tangled in with other issues, it was seen as a big business things will then have to be played off of other things that aren't big business things. And you know, and then

Unknown Speaker 23:19
didn't get done. So Congress recesses for Christmas, and then it comes back

Unknown Speaker 23:24
to the new session of Congress. And it's been introduced again, but the problem now is that it has taken effect for tax year 2022. And so

Unknown Speaker 23:36
now, we small business owners are starting to get our taxes done, or have already had our taxes done, and have had our accountants tell us your taxes, like in your case, Landon, have gone up over 400%. And the thing about this is that since Congress was widely expected to revert this before it took effect, the IRS still has not issued full guidance on it. They have not defined what software development is they have. But the conservative approach that big companies with very well paid experts are taking and have been warning about is that all software development is now falling under this r&d, which is which includes your developer salaries for the time they spend building new products or building new features of existing products. It doesn't seem like bug fixes fall under this, which is kind of good news. But on the other hand, who is time tracking the time they spend fixing bugs versus building a new feature? And if you're improving a page with a confusing UI, is that a bug fix or is it a new feature like like, like the IRS has never had to define software development to that level.

Unknown Speaker 24:47
And they won't be able to just work yet, because it was expected to be reverted. They did issue a letter at the beginning of this year to accountants it was like hey, by the way, remember that this is happening, but we are still waiting on full guidance.

Unknown Speaker 25:00
And so there's a lot of people who don't even know that this is happening, because their accountants aren't aware, or they haven't told them about it yet. Which means that if this doesn't get reverted, like, if you haven't heard from your accountant yet, it's likely that you will hear from them in six months when these rules are out. And then it turns out, you may have filed wrong for 2022. And now additional taxes, plus penalties. So it could be huge penalties who, because it's like you what you just heard you didn't hear that wrong. 400% increase? That's like,

Unknown Speaker 25:31
I mean, that's insane. So if you're off by that much, like, just imagine what that penalty could look like, depending on the size of the business. I mean, it could be pretty, pretty big. I mean, it's massive, right. And one thing, you know, with Congress is, so nobody agrees this is a good idea, right? They all, you know, like, by and large, there's agreement that this should be fixed. The problem is, is that, you know, like tax bills are never voted on their own, and Congress, right always has to be part of something else. And it's kind of getting kicked down the road. And they're like, Well, you know, maybe there's, we could do this in September, or maybe we just push it to December again, because they're like, Well, you know, a big company, they can shoulder an extra 10 20 million in taxes, and then we'll just when we revert it, we'll refund them, they can handle that.

Unknown Speaker 26:16
A small company that does not have access to capital markets that can barely get a bank to give the owners a mortgage, nevermind, like a line of credit or small business loans, right, because they don't understand software, we don't have a physical building that they can seize, if we don't pay them, right. They just, I I'm preaching to the choir on this one.

Unknown Speaker 26:36
But like, we don't have that kind of access. And so this is a very real problem, which is why I am organizing people to send a coalition letter to Congress so that they understand that this is having an effect on small software businesses now, and that we urgently need to do something about this, this can't just keep getting pushed down the line and bundled in with other things. It's not a big business as you it as a small business as you that is impacting small businesses across the country.

Unknown Speaker 27:07
Who people now like I mean, I've talked to people are saying they're using their personal credit cards to pay their taxes. They're using like lines of credit. They're like laying people off, they're freezing hiring, like, like, it's bad. And the thing is, is that we have to fight this, because everybody loves small businesses, like just everybody loves us, right.

Unknown Speaker 27:31
And we're getting run over by a truck by this. And so if there's any hope of getting this through Congress, we have to speak up on this, we can't just assume that the big companies with you know, their, you know, people that talk to Congress and whatnot are going to take care of this, like they've tried. They've been working on this for four years, and they haven't hadn't made it happen. And so now, you know, it's, you know, it's kind of an underdog story at this point. But I believe we can do it, right? Because there are a lot of I mean, and we are all over the country.

Unknown Speaker 28:05
That's what it does. It does like, I guess that's not it resurfaces that, that dynamic where the power of the voice is, like, proportional to the size of the biggest player in the crowd. Like, we there's so many small businesses and every politician, whether they believe it or not, is gonna go say they support small business. But the fact is, there's not like a voice. We don't have like a unified I mean, which is obviously what you're trying to do here, but right, we are pretty disorganized, bunch, like,

Unknown Speaker 28:33
challenge, like find everybody. And then like and so we set this goal of 1000 signatures on this, because individually, we are not very strong individually. I mean, none of us have any representation in DC. None of us are part of trade associations, like we like we don't play the DC game, right? I mean, companies don't usually start hiring their first, like DC people until they're at like 10s of millions if not more in revenue, annual revenue, right. Like

Unknown Speaker 29:05
and, like I like so I the reason why I'm the one doing all this is because I used to work in DC.

Unknown Speaker 29:12
And like, I remember, it was like everyone was like, oh my god, Facebook got their first public policy person like, wow, that isn't like Snapchat has a public pot. Like it was like kind of like, like a big deal.

Unknown Speaker 29:24
And, and, you know, so I started out in that world and still have a lot of friends there.

Unknown Speaker 29:32
And so that's why I'm in the sort of weird position of the person who was organizing this.

Unknown Speaker 29:37
But we have to do it like for like, and it sounds so dramatic, but like it's like an existential threat to anyone who builds and sells software but especially small businesses, and an unforced error like that's what it to me. They didn't even want to do it in the first place.

Unknown Speaker 29:56
It's just like, wow, like we have to like this is like why

Unknown Speaker 30:00
Are you putting small businesses through all of this pain and potential bankruptcy? Because you didn't get your stuff together in time? Like, it's almost like we kind of got to show up there with like a wooden spoon or like, Come on, guys. Let's do it. And that's what so like, the fact that it was sort of like everyone, including the accounting community expected it to be gone. So no one really talked about it, which I understand the IRS did.

Unknown Speaker 30:26
Yeah, I didn't even know about it still. Yeah. So we're basically like,

Unknown Speaker 30:30
yeah, like you just incurred a giant bill like is what is how we're finding out, right? It's like, we didn't mention this, because we thought it'd be gone. But now that it's not, we have to let you know that your tax, you actually owe us a bunch of money. That's kind of and also, I'm fascinated by the fact that there is no guidance like this sort of

Unknown Speaker 30:46
the lack of dialogue between like the IRS as like a governing body and then like Congress, the I find that it's not entertaining in a good way sometimes, but they're like, we're not gonna change, we can't get this thing passed. So you guys have to do it. But like the people who are in charge of telling you how haven't told you how yet. So I think it's because I figured everybody in DC expected this to be reverted. Nobody expected it to take effect. And I don't know how those you know, the those wires usually work in DC when it comes to implementing regulations. But usually, they're pretty on the ball about it is an

Unknown Speaker 31:27
extraordinary situation.

Unknown Speaker 31:30
And it also I've heard from some people who said, Oh, well, you know, Congress didn't revert it last year. But they probably will this year, so just don't worry about it. That's which, yeah, that is not the right approach to take, we have to worry about this, we have to get involved. Because we actually have a little bit of an advantage here that small businesses are very lovable. As you said, No politician is going to come out and say that they don't like small businesses. The problem is, is that, you know, they didn't really know that small software businesses existed, which, you know, kind of forgive them, because, you know, the rest of the tech community kind of looks down on us at points, right. Like, you know, we're not cool. We're not venture funded, right? We're not in California, the Lord knows, I mean, those companies are also suffering right now, because of SBB. And everything going on there, right. So I mean, nobody's in a good spot at the moment. And I wouldn't be surprised if they have their own letter at some point as well. But for right now, it's us the small software businesses, but as you mentioned, there are small manufacturers, small biotechs, like, like, there are a lot of small businesses that are getting

Unknown Speaker 32:35
seriously hammered,

Unknown Speaker 32:38
potentially, to the point of extinction because of this, and we have to do something about it.

Unknown Speaker 32:46
All right, I wanted to break away real quick just to talk about our sponsor for the week fetch. And it's fetch truck.com. So this is a really cool product that that I've used that my neighbor uses all the time. And it's, you know, that challenge you run into where you have something big that you just purchased, or something really big that you have to move, and you have no way to move it because it's impossible to pick up and carry somewhere, or you don't have a truck or some sort of larger vehicle that you can, you know, move that stuff. And so,

Unknown Speaker 33:22
so fetch makes it really easy for you to just go, go to their site, or go to their app and find, you basically just find a truck or van on demand, they have all different types of trucks that, that you can, you know, different vehicle sizes that you know, depending on what you're moving, it just makes it really easy to be able to access that when you need it. But the the real thing that I wanted to focus on that's really interesting to me as an entrepreneur is their, their partnership program. So if you have, you know, a truck or some sort of van that you already own, or you're thinking about, you know, maybe you're going to buy one, they have this really cool program where you can basically rent out your truck, rent out your van.

Unknown Speaker 34:08
And you don't have to do any work. You basically just sit there, they do all the marketing, they put the insurance on the cars.

Unknown Speaker 34:19
And, and obviously they have the marketplace for folks to find you. So they basically do all the work and you just sit there and rake in cash. So while you hear all these podcasts out there, and all these different creators and entrepreneurs talking about, you know, buying a house and renting out, you know, for Airbnb and things like that, and that's how they make passive income. You know, that's great, and those are cool ways to make income but sometimes they're not super practical, especially if, you know, maybe you don't have the money to kind of put a downpayment on on a home.

Unknown Speaker 34:55
And fetch really makes it kind of your barrier to entry is a little bit lower, which I

Unknown Speaker 35:00
think is really cool. And, you know, I love that they do all the work for you, essentially. So this is just a great way to kind of, you know, get a business off the ground. And, you know, maybe it's not maybe it's not something you focus on full time, maybe it's just a part time thing. But, you know, being able to make up to $30,000 per year renting out your truck, or your van is, is pretty insane. And so they have a, they have a ton of great resources on how you can do this, a full kind of partner program guide as well. If you go to fetch truck.com, and they have a little link at the top that says list your truck, that's where you can find it.

Unknown Speaker 35:41
And, you know, if you have any other questions about this, they are super helpful. So you can reach out to them on the on their site. And again, that's fetch truck.com. And it's listed your truck. So

Unknown Speaker 35:57
definitely check them out. And at a very minimum, the next time you have to move something large, or you have to pick something up. Definitely go to the site and and give it a try. All right, back to the show.

Unknown Speaker 36:15
Well, yeah, you have like the the sort of impending crisis, which is what's happening this year with your tech with all of our taxes, which could, like you said, put people out of business, it could, it could mean that you have to go like trying to, like get loans to pay off your tax bills can mean layoffs, it can mean all these different things. But then there's also like the, like, if this just sticks, and we have this for the next, you know, couple years, three years for like, whatever, then people aren't going to start companies here in America. Like it's just not. I say here, I know you're not even. You're not.

Unknown Speaker 36:55
Yeah, yeah, exactly. Yeah, you're a bit you're based here. But yeah, we Yeah. So I mean, like, it's like something that has never crossed my mind is like, you know, incorporating somewhere else. But like that has crossed my mind at this point. Like, obviously, that's not the initial thing you're going to do. But if this sticks, if this stays for the foreseeable future, you have to start thinking about those things, because it is so devastating for a small business like ours, who, like you said, doesn't have just like this massive, you know, amount of cash in the bank, and funding. So, yeah, it's, there's a lot of like, there's a lot of really bad things to happen this year, and then there's gonna continue to be bad things. And do you want to have like, you don't want to have tech businesses being started in the United States, you don't want to have companies trying to innovate in medicine and these different things in the United States? Like, of course, you do, like, we need to get this done. Why is this not happening? But I, the thing I worry about is, you know, I they you know, they The saying is time kills all deals will people keep, you know, our accounting and other, you know, firms and stuff, they keep saying, like, it's probably going to get, you know, it's probably going to get repealed, like before, the extension deadline, and all these things. And I look at that, like I look at all the problems we have going on right now. And things that are like on the table being discussed in Washington that aren't this that are really important things. And like, I just look at those as like potential things that could just, you know, are more important are going to get more exposure, and this is just going to continue to get kicked down the

Unknown Speaker 38:33
down the curb, and it's just not going to like it just to me, it feels like it's not gonna happen.

Unknown Speaker 38:38
And I'm trying to do everything I can. And obviously, that's why we're having this podcast and while you're doing, why you're doing everything you're doing, and

Unknown Speaker 38:46
but it's definitely it's definitely scary. For sure. I'm worried. I think you get a tax bill that's 400 times higher than you expected. I think it is very natural to feel defeated. Right? I mean, and

Unknown Speaker 39:05
we have to fight it and I am

Unknown Speaker 39:09
working, the connections I've got in DC, people are very receptive to having us as part of the conversation. These letters work. I mean, the the small biotechs, who sent a letter like that was mentioned by a senator and a hearing last week like these make a difference. Like I just checked this morning that the number of co sponsors on the bill, it started out the Senate bill, it started out at 14 last week. I checked it was 18. I just checked an hour ago and now it's 21. So like, there's there's things are happening, like, you know, there's a Senate bill that usually means there's gonna be a house bill as well. There was a house bill last year with over 100 co sponsors like

Unknown Speaker 39:47
I think we can fight this. I don't think it's going to I don't think it'll get reverted if it stays the course as it is right now with the large tech companies being the only ones in the conversation.

Unknown Speaker 40:00
Do we need to insert ourselves and basically try to be,

Unknown Speaker 40:05
you know, try to get in there and on jam this?

Unknown Speaker 40:12
So, I guess, make it clear that this is like an urgent crisis for small businesses? Totally. Yeah. What so what I mean, you have much more like familiarity with the goings on of like, the attempts at getting rid of this thing.

Unknown Speaker 40:29
What what do you expect? Like, if you could guess right now, like, what shaped? Is it going to be like, hey, this thing that was a thing, like it wasn't a thing. Now it's a thing, now it's gone? Or like, what shape do you think that will actually take? So there's been a little bit written about this. And basically, what happens is that tax never gets voted on its own. It's always in another larger bill. And as of right now, as of things look, right now, the first opportunities will be in September, either in the Farm Bill, or potentially the FAA reauthorization bill, or the

Unknown Speaker 41:07
the continuing resolution to fund the government in September. If it doesn't happen, then it could also happen in in sorry, in December, the end of the year, again.

Unknown Speaker 41:20
Now, that assumes things stay as they are, right. So it's possible like like, I mean, you know, the economy isn't doing great, right now, we're

Unknown Speaker 41:32
sort of got a banking crisis going on,

Unknown Speaker 41:36
we could end up in a recession, and there might need to be a stimulus bill sooner. So like, it's hard to say what's going to happen here. But this is what people like, kind of have been writing about is like sort of what the calendar looks like for the year, there's also this whole debt ceiling thing, right? There's a lot of other issues going on. And I think, for this effort, it's important for us to just communicate that this is having an urgent impact. And

Unknown Speaker 42:02
we can't begin to get involved in the machinations of Congress and how they put deals together and how things get fit in where right and it's kind of just, it's a sort of, it's not productive for us to try to do so.

Unknown Speaker 42:14
Because

Unknown Speaker 42:16
if we just make it clear that this is an urgent problem that needs an urgent solution, and we get a lot of people on board with it, then they can figure something out.

Unknown Speaker 42:24
That's what the priority is, right now. And so that's why I'm trying to get 1000 signers on this letter, the biotech, the small biotechs had 500. And so I don't know, I'm a little bit competitive, I'm like, we can do 1000, right, like, and then they've got 1500 small businesses who have said something about this, right. And the thing about this is that this is not just something that impacts companies that have employees, this is not just something that impacts people who are working full time. Like if you have a side project making $10,000 a year, this is going to impact you as well.

Unknown Speaker 42:59
This impacts everybody who builds and sells software.

Unknown Speaker 43:05
And to every time this gets brought up, I feel like and you've been in a lot of these conversations too. And like different slack groups and things, you know, even on on Twitter, and

Unknown Speaker 43:14
when you when we bring this up, people start asking questions, or they start saying like, well, this doesn't really like, like I you know, this doesn't impact me. And we don't do a lot of like r&d. Even you know, we're a software company, but we don't do a lot of r&d. And it's like not on our standards, not according to smacks code. Not according to this code. Yeah, like you do r&d or r&d, I guess. Yeah. So I think, yeah, like the first. I feel like the first part of this is just getting the knowledge, like getting this information out to people so that they understand what they're up against. Because I think, again, like, I just think a lot of people either don't know about it, or they don't understand it.

Unknown Speaker 43:50
And to be fair, like no one really understands, it's because again, they haven't given like proper guidance, but from what we have, like, people just understanding that and what they're up against, and then, you know, I guess from there, like, obviously, we're talking about getting this letter out to them with signatures. What else can people do to try to make their voice heard? So let me let me give you a little bit of the the kind of approach here that we're taking, the first goal is to get this letter out. The deadline for signatures is April 10. So that we can get it to Congress before tax day, which is great in terms of impact. It's also great in terms of media coverage.

Unknown Speaker 44:33
So we're going to get this letter to them before tax day. After that.

Unknown Speaker 44:40
We see kind of what what what the reaction is.

Unknown Speaker 44:44
And it will probably start make sense for people to start talking with their

Unknown Speaker 44:50
representatives and senators and their staff directly. People who are like who have already, you know, sort of joined in on this effort like that

Unknown Speaker 45:00
They have already been connected with Hill staff in particular offices about this, their stories are already getting transmitted on the hill. Like when you go to SSP alliance.org. There's a thing that says, how is this impacting you? You know, are you laying people off? Are you taking a lens? Like, like, how is it like those snippets that people are are putting there, those are being anonymously, sent to people who are talking on the hill, about this and getting there. So they are already hearing people are laying people off, people are taking out loans. But then there will get to a point when people may also need to speak directly to congressional staff.

Unknown Speaker 45:38
So we will get to that point.

Unknown Speaker 45:42
It's, again, the focus right now is to make it clear that this is an urgent problem, and hope that Congress finds the soonest opportunity to fix this before, they have a wave of bankruptcies of small software, businesses and layoffs at much larger tech businesses, right? Like, this isn't something we're talking about as part of this. But if you think about a developer salary, no longer being an expense. And tech companies are already starting to lay people off that that's only going to get worse, if developers all of a sudden, all of a sudden become way more expensive

Unknown Speaker 46:17
than their other employees.

Unknown Speaker 46:20
This is what we can do about it. This is what we have control over. And so

Unknown Speaker 46:25
if you are concerned about it, if you are already getting that tax bill, if you haven't gotten the tax bill yet, now you're worried about it. If you just own a software business in the US, and you're a US citizen, sign a letter, and then tell everybody you know, who has a small software business to sign the letter as well. And then we will take it from there. Should we do some like I'm just as as your, you're like, pumping me up, I'm like ready to go? Like quit need to put selling, selling for my own business and sell like? Yeah, like, should we?

Unknown Speaker 46:55
My first thought was like, Oh, should we like run some ads or something on this to like, like, is there some audience, we could run athletes and then also, like, are there certain like, kind of target individuals that may have like a little bit larger audience or voice that we could be trying to get in front of and get them talking about it? Like, I'm just trying to think of some different things we could do to sort of amplify this? Because, you know, I only have so many people that pay attention to what I do, or what I say, on Twitter or whatever. So like, Are there different? I don't know. And maybe this is something we talk talk through offline as sort of like a outbound strategy here. But

Unknown Speaker 47:34
yeah, like, how do we get how do we get this amplified? Because I feel like even with all the stuff that we've done,

Unknown Speaker 47:41
you know, the tweets we put out, like all these different things, I feel like there's still not that much

Unknown Speaker 47:47
chatter about it.

Unknown Speaker 47:50
So first, you're literally having me on your podcast right now. So that is helping to spread the word.

Unknown Speaker 47:58
Right, not only in terms of the people who are listening right now, but then they go and share it somewhere. Also, it's gonna go on the website for SSP. alliance.org, which is, again, more when people hear like, What the heck is this thing? And like, what is this website, right? Like, all of the media coverage of this is going on that page so people could see I mean, social proof, right? Oh, wait, this actually is a real thing that I should be worried about. And here's made with grid and build your SAS and startups, Rest of Us and the Wall Street Journal talking about this.

Unknown Speaker 48:25
There are a lot of like, I mean, I mean, people have been just kind of throwing their connections at me. And that has been amazing. And so people writing LinkedIn posts and Twitter and sending out in their, you know, private slack communities, and whatnot, like all of that is helping. But quite frankly, the reason why you haven't seen too much of a push is because it wasn't until right now that I had a very clear and specific ask of people that would have a direct impact on Congress. We have this letter, we need to get this letter out. I've also spent a lot of the last two weeks just talking to experts trying to figure out like, what does this really mean? What is the situation in DC like, like, what does this mean? What does that mean? Right, like? So I've been intentionally kind of quiet, like that tweet thread that you mentioned, like that was being reviewed by professionals. So to make sure that everything was accurate, and so and that took a week. So there's been a lot going on behind the scenes. But it's not until now that there was really something very clear for people to do and share. And so now is when we hit the gas, the gas has intentionally not been hit until now. Yeah, I'm thinking of one other kind of like, I guess, contingency planning. So like, obviously, goal number one and focus number one is like let's make this thing let's change what's happening and save ourselves and our fellow business owners.

Unknown Speaker 49:49
Assuming that takes a while, like in the best case scenario, that's going to take some time.

Unknown Speaker 49:54
And in the worst case scenario, that time horizon gets really really long. What were you thinking of

Unknown Speaker 50:00
about contingency planning, like for your own business? Or is that something you're just kind of like ignoring for now? How are you engaging with that part? My accountants are also in the camp of this is a giant hairball that we need to figure out like, so I don't even know personally what the impact is.

Unknown Speaker 50:20
I just know that it's going to be bad.

Unknown Speaker 50:23
And I know enough about this to know that it's going to be bad.

Unknown Speaker 50:27
So for me, personally, I am pouring all of that nervous energy into this project and doing my darndest to make sure that it doesn't happen.

Unknown Speaker 50:37
Because for me in times of

Unknown Speaker 50:41
uncertainty, I, I throw myself into action, so

Unknown Speaker 50:47
and it makes me feel better to help other people. So and I'm hopeful that like, that's sort of that's that's for your plans, the board is make it not a problem. That's, that's, that's the, that's the plan. And we're sticking to it. I liked that plan. I like,

Unknown Speaker 51:05
yeah, once you get over how horrible it is, and you just sort of like just think about it constantly for like,

Unknown Speaker 51:12
like three days, you're just like, like just basking in it, then it's sort of like, okay, well, that's not this isn't going to help, right? Like we what can we do to try to prevent this or do something to change it? And at the end of the day, we can all we can do is do our best? And if nothing happens, nothing happens. But yeah, at least we don't think I don't think that's gonna happen. Like, I don't either. No, I ain't like small businesses. We are the cute kittens of the policy world. And we're getting run over. Right. So we need to make it clear that this is happening, right? Like, you know, from Congress's perspective, we've only come out of the woodwork in the last two weeks, other companies have been talking about them about this for four years. So we are very new on the scene.

Unknown Speaker 51:59
But we can make an impact. And the more people sign the letter, the more small business owners sign the letter, the better we are, the more of an impact we're gonna have.

Unknown Speaker 52:11
We just, it's an existential threat. Like we just we just have to, we have to throw whatever we got at it. I'm thankful for you in our in our community we have you're uniquely qualified to sort of like bridge this. I'm guessing you never thought that you would, those two worlds would collide in such a dramatic way. But because we're we're grateful that you're here. It is it like I had this moment yesterday when I was writing the letter

Unknown Speaker 52:37
that was like, holy, like, I'm writing a letter to Congress right now. Like, they're going to read this. And then this, the next moment was, Oh, my God, and I can hear my public policy analysis professor from college telling me this isn't concise enough, and it's way too long. And he would give me a C on this. God, what did I learn in that class? Like, you're like, oh, like, take me back there. Right. I mean, because I, you know, I worked in DC for a couple of years. And then, you know, I always sort of joke that I fled to the relative moral high ground of finance. And then, and then, you know, kind of settled into a nice life as a small software business owner and sort of left all that behind.

Unknown Speaker 53:17
I now it's coming full circle.

Unknown Speaker 53:20
So yeah, so I just, it's yeah, it's a weird thing. But we got to do it. And

Unknown Speaker 53:27
I don't know, we got to find it. Right. We can't just take it. So absolutely. Yeah, I have not. I have

Unknown Speaker 53:37
I don't think I've ever actually called My, my representatives before.

Unknown Speaker 53:44
Just because I don't know, I just felt like not, you know, wouldn't matter or like it, there's so many, there's such a range of issues, right? This one just just impacts you so directly that you're like, Okay, well, whatever, whatever I have to do, right.

Unknown Speaker 53:58
And I've already, I called them and, you know, you get AIDS that answer the phone or whatever, you're not going to get the actual person. And they just seem to have no clue, like, no clue about this. Maybe nobody, maybe they haven't talked to anybody else that has mentioned this. Like they're just like totally clueless. So hopefully,

Unknown Speaker 54:18
if we all start calling them, right, like, they'll start to get a clue.

Unknown Speaker 54:23
They'll start to see a pattern and and trend, I guess, when you call Congress, by the way, like they are required to keep tabs on every issue that people call about, that can be recorded. Like, they don't record the phone call, but they literally have like Google Spreadsheets of like we had, so and so people call in about this issue. And like, you know, so we had 10 people calling about this, like this issue related to this bill and like whatnot. The thing is, is before there's a like, I didn't start saying anything about this until there's a Senate bill, because if you call in at that point, there's really like there. It doesn't really fit in the system to say like, oh, we had Landon and he called

Unknown Speaker 55:00
Then on s 866. Great. Like, that's the build up the right bill. Yeah, there's nothing to upvote. Right. So, so what we're going to do with this letter is we're going to send the letter, but then we're going to have everybody, as many signers as possible, send it to their members, with, you know, that sort of anecdote about how it's impacting them personally, which is again, going to count as another contact, right. So whenever you call, whenever you fill out the contact form, it may feel like it's disappearing into a black hole. But those actually, like they do keep tabs on every unique correspondence. So if you take this letter, and then send it to your congress person with some, you know, with something that makes it unique, right, compared to another letter,

Unknown Speaker 55:45
you add in a couple of sentences on your own experience, right? That counts as a unique contact. And especially when we get to the point of this being close to being voted on. That's going to be really, really key.

Unknown Speaker 55:56
But the staff, I mean, the staff are important. They're a very, very important part of it, it's just a matter of getting to the right staff member. And so that will be something down the line that

Unknown Speaker 56:07
you know, just depending on how things shake out in Congress and whatnot, like, people people have already heard from me, that's like, hey, like, there's this tech staffer that you should talk to? And here's their email, like, so.

Unknown Speaker 56:22
That is part of this as it's sort of strategically relevant.

Unknown Speaker 56:28
But I mean, things are moving. Right. There's, there's, there's more co-sponsors.

Unknown Speaker 56:33
I think that's the thing that that people are very receptive to us being part of this.

Unknown Speaker 56:40
And we have, you know, an ability to make a direct impact in a way that groups of people who are not normally represented in DC don't normally get to.

Unknown Speaker 56:54
So we got to make most of it and get 1000 signatures on that letter. Absolutely. Well, are we so yes, if you have not, so we get this?

Unknown Speaker 57:03
Yeah, please, if you're listening, so we're a US Small Business Software.

Unknown Speaker 57:10
If you are a US citizen, small software business owner in the US, go to SSP. alliance.org, to sign a letter and sign up to stay updated. And by signing up, stay updated means I will send you an email whenever there is something that you should do, or you should know about this. Nobody else is getting your email. Nobody else is seeing your information except for the information I tell you is going on the letter which is your company name, and the city and state of your of your company.

Unknown Speaker 57:39
SSP. alliance.org, sign up, share it, tell people personally reach out to your founder friends, personally, and ask them to sign it.

Unknown Speaker 57:52
Perfect. And we'll let's do include all these links, all the links to the Tweet, tweet threads, to,

Unknown Speaker 58:01
to the websites that you can sign

Unknown Speaker 58:04
to everything in the show notes and on YouTube and all the different places.

Unknown Speaker 58:10
Thank you so much, Michele for coming on. And also just, you know, again, thank you for doing all of this and like being kind of the the leader of this charge.

Unknown Speaker 58:21
I think we're gonna get it done. We just got to, we just got to keep pushing. So

Unknown Speaker 58:26
so we'll do our part and hopefully everybody listening will as well. And

Unknown Speaker 58:32
then we'll have a maybe we could do a follow up episode after this gets repealed. Yeah. Victory to her a victory lap. Yes. Awesome. Awesome. Well, guys, all right. That's it. Cheers. Thanks, Michelle.

Sign the letter at ssballiance.org