Michele Hansen update: Section 174 and bootstrapping with kids

Hello, and welcome to Build your SaaS. This is the behind the scenes story of building Web apps in 2023. I'm Justin, and I've got Michele Hansen, Co founder of Geocodio, back on the show today. Michelle's been fighting the good fight With this rotten section 174 tax legislation in the USA, how's it going, Michele?

It's going. It's going.

What time right now, it's noon Pacific time for me because I'm in North America. You are originally from the States, but where where are you right now?

So I live in the Danish countryside now.

The Danish countryside.

It is 9:0:6 PM.

9:06pm, that's about the time when I'm thinking how how old are your kids, by the way?

We have one daughter, And she is 9.

9 years old. Okay. See, I always thought that once they got a little bit older, I would be, you know, around, Like, 8, 9 o'clock used to be just I was dead tired. And that's, like, you know, when they're younger, story time, bedtime, all that stuff. And I was just so exhausted.

I still get exhausted at 9 PM. Nothing's changed. So So you're you're in you're making it happen here, with the time zones. And, Yeah. You've You've got an update for us, I think, on section 174.

We've done a episode on this already. Folks can go back. Do you wanna maybe briefly, again, describe what Section 174 is. And then, yeah, just give us an update on what's happened since the last time you're on the show.

Yeah. So the TLDR is, in 2017, Congress passed a bunch of tax cuts, And one of the ways they sort of, quote, unquote, paid for these tax cuts according to the congressional budget office, which Sort of does an estimate of how much, any bill might cost, was that they said starting 5 years after the bill was was passed, Companies would no longer be able to expense what is called research and experimental, activities and instead would have to amortize them.

Mhmm. And

so I'm gonna unpack that jargon for a second. Basically, research and experimental is actually a huge category of things that businesses do. And for us, it specifically calls out Software development as a research and experimental activity. This is different than research and development, because they couldn't make it easy for us. And, you know, and there there's some r and d tax credits and people can get that, but, unfortunately, that's a much much much smaller group of things that qualify for that.

Mhmm.

So research and experimental is everything from software development, to market research. It's basically Anything that goes into building a new product or making improvements to an existing one Yeah. Is, I think the the biggest the one of the biggest surprises about this. And then, normally, we used to be able to expense all of that. Okay.

So your, you know, Your staging server, that's just an expense. The developer who spends, let's say, a 100% of their time building new products or improving existing ones, That used to be an expense. Now that has to be spread out over at a minimum of 5 years if that's happening in the US or for people who are working abroad, that's 15 years. So this has created a huge problem for A lot of companies, but really most acutely small software companies like ours. Yeah.

Who normally just you know, a huge percentage of our expenses were things we could just expense. And now instead, you can only take a small percentage of them every year as an expense, and then the rest of that is added to your profits, and then you get taxed on on it. And so you end up getting taxed on this profit that doesn't actually exist because you already spent that to run the business. So it's a huge problem. Congress never actually intended for this to take effect.

I mentioned it was kind of a sleight of hand to pay for the tax cuts. Yeah. The plan All along was for them to repeal this before it took effect because they knew it wasn't good tax policy. And so despite Despite the fact that they know it isn't good tax policy and they tended to repeal it before it took effect, they didn't repeal it before it took effect because congress. And so now we're all in this situation where we're we're in this sort of, difficult situation because Of

this really?

Unintentional tax policy. And so, I mean, people have seen their taxes go up, like, 400%. Like, it's it's people are talking about Shutting down their businesses, freezing hiring, laying people off. It's it's serious out there.

Mhmm. It's a real thing. And so, you put together the s s b alliance, small software business alliance.org. And, you've been doing some work behind the scenes. Can you give us an update on, yeah, what's happened, since We you you had the last time we talked, it was, like, April 14th was your date, because that was, what what was happening around that time, and what's happened Since then.

Tax day. What was happening around that time?

Day. Of course.

So yes. And so the reason why you heard from me last time was because, We're sending a letter to congress from small software businesses, about these section 174 changes and Describing the impact they have had on businesses like ours.

Mhmm.

And so we sent that letter on tax day, which was April 18th this year, to the leadership of both the house and senate, the senate finance committee, the ways and means committee, and also the leaders of the small business committees. Yep. And, so we had 500 And 97 small software businesses from all 50 states plus DC signed this letter, which I am Awesome. Hugely proud. Like, I just, like, beam with pride, thinking about how we came together to do this.

And, You know, let like, coalition letters like this, they're not the kind of thing that really makes the news

Mhmm.

But they're an important step in the legislative process, for companies who normally, like us, don't have any political power or any involvement, really, Mhmm. To come together and say, hey. This is an issue. Here's how it's impacting us. By the way, it's impacting every state.

Yeah. And not only to send it to those legislators, Then to have the people who signed the letter and even people who didn't sign the letter to send it to their congresspeople saying, this is happening. We're in your district. We're in your state. We're impacted by this.

Please see below for the letter. But, also, legislators who, you know, who who support this, who are, you know, already cosponsored of the bills, They can go to their colleagues and say, hey. This is an issue. Like like, here's an example. Here's a letter from small software businesses.

Here's a letter from small man manufacturers. Here's a letter from small biotech companies. Right? And so this is sort of part of that docket, that they can use, in their negotiations to encourage other legislators to support this and understand that this is an urgent issue.

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

And I could say, oh, people are talking about this. There's already a movement underway. Don't start another change.org thing. Just go to SSB Alliance dotorg and sign up there, and then we could galvanize all the support in one place. So well done.

I think for you to get ahead of this and then to create the, the container for people to like, When they did wake up and realized it was a big deal for the it gave us a place to go and then put our efforts all kind of in one spot. And I'm guessing that there's gonna be more and more people kinda waking up to this still, and they're gonna be looking for Where do I go? Well, you can still go to s s b alliance.org, put your name and email in, and then get updates on what's happening.

Yes. And and Sorry. Even people who didn't sign the letter, it's still incredibly impactful if you contact your congresspeople, so your representative and your senators, about this, you know, if you run a small business, include a couple of lines about about how it's impacting you and include a letter of the copy because we wanna make that a copy of this letter gets to every single legislator because it is having an impact. I heard from contacts in DC this week That emphasizing the impact of this on small businesses is a salient message both for Republicans and Democrats and for Independents, and offices are hearing from small business owners in their states and districts who are caught off guard by this, and that is making an impact. People are having really good productive meetings, with their with their legislators on this.

I've heard from people who've, You know, they used the contact form. They ended up having, a phone call or even a meeting with their senators. The guys from Divergent Labs, they met with Their representative and said that, you know, they they were very receptive to it and and and that that going with the letter in hand really gave them a A level of, of sort of of legitimacy Yeah. That they might not have otherwise had Going in just as or felt like they had going in as small business owners themselves. So even if you didn't get a chance to sign the letter Before, tax day, you can still get involved.

You know, we actively need more people reaching out as well because just as of today, There are now 30 cosponsors on the senate bill to fix this. And last congress, when there was also a bill, there was 36, so there's still Another 6, we need to get to at a minimum. 30 is not a 100. So we need to make sure this is getting in front of every senator and every representative, and that they understand that small businesses, are impacted by this. And so on the SSB Alliance website.

I actually have templates and links for contacting Congress. So there's a tool you can go to. It you know, you put in your ZIP code. It gives you a link to their contact form, And then there's a template for, you know, describing the impact and including the letter, like and all of that, honestly, should take you Less than 10 minutes to do. Yeah.

And and it and it really is impactful because their staff have to keep tallies on every single contact about specific bills. And so, and and the key thing there is that is that you have to customize it a little bit. So if you simply just send them a copy of the letter, Everybody who just sends, say, a copy of the same letter, that gets counted as 1. But if they're they're unique, they get counted as separate contacts about this, And that is something that offices really pay attention to.

Yeah. This is great. I'm just looking at your you've got, yeah, letter to congress as a PDF and then Contact, congress, and then you can go to congress.gov and search for your congress members if you're in the US. If folks follow those instructions and then customize the letter a little bit, that even that that creates more Momentum that that that has a bigger impact than them just copying the same thing over and over again.

Yes. Exactly. And, unfortunately, this is something that only, US citizens and permanent residents can do. I recognize that there are a ton of people who have US LLCs, USC Corps, who are impacted by this but don't live in the US Yeah. Aren't US citizens.

Unfortunately, there there isn't a whole lot, that you that that, you know, folks in your position, quite frankly, can do, but Raising awareness about this and encouraging all of the US founders you do know, regardless of whether they're in the country or not, because US citizens have the right to vote regardless of what where we live in the world, which not all countries have. Using whatever platform and network and and connections you have to encourage, the US citizen or resident founders, you know, to contact Congress. That is Hugely impactful.

Yeah. Yeah. And then talk about it on Twitter. I was just, yeah, looking at this one from the Emergent Labs, and them Talking about it on Twitter creates more momentum. So if you share your experience and, yeah, they felt empowered bringing that printed letter that you had and all the people who signed it when they went and, met with their their house representatives.

Do something about it, Then talk about it, and we gotta keep this thing going.

Create social proof.

Yeah. And and and so what's what's happening next? What are what are the next Steps in this. What what are is there other dates we need to be thinking about? Is there are we just waiting for it to hit a critical mass?

What are the other things to be considering?

So Right now, you know, as as far as sort of my read on the political situation, which is to say, you know, what I'm reading and reading between the lines, in, you know, political and whatnot is DC is focused on the debt limit right now, like the US federal government's, spending level. And that is proving to be just a tad contentious. There's a there's different ways that could shake out. It could be that they just try to just do the debt limit alone and just only do only pass a bill that does that and then leave everything else to the side. Mhmm.

Or there could be some sort of compromise package in there, as part of the debt limit, but that is sort of the Soonest opportunity for anything to happen because not every, like, piece of legislation has a has a tax section in it. That is possible, but not likely. And that I I believe that has to be sorted out before they go on recess in August. Okay. Now it's Also possible there, you know, that that we go into recession and this sort of, you know, bubbling, You know, mini bank crisis turns into a bigger bank crisis, and there needs to be some sort of economic recovery bill.

It could go in there, but, you know, I mean, predicting recessions, I mean, that's not my department. So Yeah. The House Republicans are also expected to release a budget or or sorry, an economic package bill that will include this. But from what I have Been reading that's not really considered a sort of a serious proposal. That's that's Okay.

It's it's the yeah. They're gonna that's sort of their wish list of everything, but not really, something is gonna happen. There's been a lot of talk basically about the negotiating side of this. So because this was part of paying for those tax cuts, Which were Republican led effort, there is a sense among Democrats that Republicans need to give them something in order to for them to give them this thing.

Mhmm. Our

role in this is be like, hey, guys. That's that's great. You you've got these, like, feuds you wanna settle. This is an urgent problem for businesses that are gonna go out because this? So, like, can we try to put that aside?

Yeah.

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

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

Yeah.

Because that is you that is September 30th. So it is highly unlikely this is going to be solved by then. We still don't know if the IRS is going to actually have the regulations out yet that that define what software development versus maintenance versus all of these things are. I know they're working on it from what I've read. No idea when that's coming out.

If it doesn't happen in September, unfortunately, it would be at the end of the year.

I'm assuming if the IRS hasn't released guidance yet, it would it would be hard to know for your accountant to know what guidance to follow. Right? Like, how how this actually how this will actually be taxed or amortized. And so is that kind of for small businesses that are, You know, they're doing the advocacy work. They're contacting their congressperson, all that stuff.

On the accounting side, until there's guidance, I'm guessing that, Like, is it is it just a waiting game?

Well, from my understanding, and what you know, if you look at, like, the the filings of public companies, They are proceeding under the assumption that the definition will be that it is new feature development and new improvements on existing products, but not sort of straight maintenance.

Yeah.

VMware, for example, they talk about in the in their hot filings going back, over a year, a lot of companies talked about on their earnings calls. And so most of us don't have the expensive accountants that they have. Yeah. Most of us, you know, also use accountants who are also small businesses themselves.

Yeah.

But that is the guidance, that they are proceeding under. And so there there was partial guidance issued at the beginning of this year, basically, warning accountants, not to wait it out and just file as if nothing had changed. So accountants have already been put on literally on notice about this, But, yeah, we we will have to see how it shakes out. I mean, I do know some people who said, well, maybe we're just gonna pay it as if it was the same as last year because our accountant Told us that DC is gonna figure this out and we're just gonna trust that it's gonna happen. And then what their what their gamble is basically that is if it isn't fixed, Then they're gonna end up paying they're still gonna owe 400% more in taxes, and then they're gonna go, owe penalties and interest on top of that.

Mhmm. And so for some people that, you know, noncompliance is ostensibly always an option. Right? Yeah. That's, You know, that that that's up to them and their accountant.

But I think it's also important, I think, as you've you've mentioned when you did your first mention of this on the podcast, To not fall fall into magical thinking that, our community loves to fall into that, oh

Yeah.

You know, sales tax, that doesn't apply to us. GDPR, that doesn't apply to us. Like, it does. It does. That that's part of building ASAS is complying with government regulations, even when they are unclear.

Yeah. This is wild. Yeah. It's just every time we talk about it, it just feels like this is just, so unnecessary, but really here. Is there anything else that you want folks to know about right now at this stage other than that reminder to Go to ssballiance.org, contact Congress, get the letter, customize it, Send it.

Anything else folks should be knowing about?

Send the letter if you haven't done so already. That is the most important thing to do right now.

Okay.

It doesn't matter if you didn't sign the letter originally. That's fine. You can simply say I'm I'm a small business and, you know, Like, I support this letter that was sent. Right? I'll give you a link to include in the show notes, but that is the most impactful thing that you can do.

And everything I have just talked about, if you were not aware of this, probably sounds an awful combination of scary and confusing. There is an effort going on to try to fix this. What is in your control is to send a letter to Congress To tell the other founders, you know, to send the letter to congress, just send them the link, use the templates. You don't have to think about it too much, but it really does make an impact. Like, the the letter was mentioned in a, house small business committee hearing.

It was officially entered into the congressional record. It's Getting it's getting mentioned in other hearings and whatnot. It's it's these sort of small procedural things that that don't make the news, but they actually really make a difference. And so So the more legislators are receiving this letter, the more who are receiving it continually.

Mhmm.

That Has an impact in the sort of, you know, how the sausage gets made kind of a way Yeah. That that usually Is it isn't quite so public?

Alright, folks. So, yeah, make sure you do that. The link will be in the show notes, but it's also atssballiance.org. And then you click the contact congress link at the top, and it'll take you Michelle's got it really nicely laid out here. Thanks for doing

all this work. And Tailwind.

Yeah. You you're in Tailwind. That's perfect.

This is and GitHub Desktop. Yeah.

That's good. It's it's awesome. I I think

also larval vapor too. Yeah. We got we got the whole the whole gang.

You you got the whole stack Behind you. That's great. I if you have time, I'd I'd love to get your thoughts on I just had Erin Francis on, and we were talking about bootstrapping and, starting a family or bootstrapping while you have young kids and life balance and everything. And, we had done an interview, about the story of You and Matthias building Geocodio, which is your company. You're you don't do tax policy for a living.

That's just a hobby.

God, no. No. After between this and having gone just gone through sales tax compliance, I don't ever wanna talk about taxes again in my life. I will have to, but I am Extremely done with the topic.

It'd be I'd be curious because I I know one of my memories of Speaking to you was, you had this line of when you'd started Geocodio, you were like, if this could pay for, diapers, I think it was, or childcare, or, like, Each win you had, there was, like, this related milestone that related to family life. And I'm wondering what your perspective is on some of that. So yeah. What what do you think when you advise people, friends, who are thinking about starting, SaaS, and they also have young kids. What what kinds of things are you saying to them?

Whew. I mean, it's, you know, it's tough. I should say that I have not listened to the episode with Erin yet, but it is queued up, because I think I think it sparked a good Conversation about this, you know, I've noticed conversation you and Aaron and and Matt Wencing has been jumping in on that, and I guess it's a good one to have. Right? You know, because, yeah, when we started to do Codeo, the the original idea was the thing that sort of, you know, Got us off the couch because we would just yeah.

We spent our weekends catching up on Game of Thrones or whatever. Mhmm. Right? And then, you know, no kids. Like, just the world.

You know, the weekends were our oyster. Right?

Yeah.

And then, you know, kind of things got real when we truly understood, you know, how much the cost of daycare would be, which For context, in the US, in in a majority of states, is more expensive than state college tuition.

Mhmm.

And so where we lived In a major city, it was $25,000 a year for infant day care.

Wow.

And at the time, I'm you know, we both had, You know, good professional jobs, you know, working in web development, but that was a lot of money. And we're like, okay. So we can either kill it at work and try to get raises of $25,000 this year. Mhmm. Or we can start something on our own, and so we can just keep the same level of living.

And so that was sort of the initial goal was to to try to pay for that. I didn't even think about going full time on it for a long time because it was like, okay. Well, now we're at least making the same amount of money if you're taking, you know, day care into account. And it was like, oh, well, okay. Maybe, you know, we got to, fix our broken air conditioner, you know, that was $8,000 without having to take out a loan.

That is amazing. Mhmm. Or I got to pay off my student loans. Like, it wasn't Yeah. It was it was very focused on things that kind of made our family budget better.

Initially so you you were working as a product Manager, I believe, or something like that?

Yeah. Yeah. So I started out as as, like I I actually transitioned from being a Technical project manager, like, at an at an agency managing web development builds, to then being a product manager.

Okay. And, and Matthias was, was he working he's a w2 as well?

Yeah. Yes. We were both w2.

So you're both w2. You have a baby In in in that time. And then, you folks made the decision. You're both gonna keep continue working full time, but That means daycare. And daycare is $25,000 a year.

And then you're like, okay. How we gotta figure out how we can do this. One option is we could try to get raises. Another option is we could try to build something on the side. Did you try a few things to build on the side?

Like, how long did it take?

Yeah. We did try a few things. You know, most of them didn't didn't work. Yeah. I remember I remember going to a hackathon, like, I don't know, 6 or 7 months pregnant.

Okay.

Trying to wear baggy clothing so I didn't look pregnant, which makes me incredibly sad to think that was only 10 years ago, and that was just I like, it was

What? Sorry. Sorry. You you were you were trying to not look pregnant just because you didn't want the What? Sorry.

Explain that part

for me. Lose legitimacy to the judges and investors present.

Got it.

Because it was also like it was, you know, it was a 24 hour all night, like, pizza and beer at 2 AM kind of it was a I mean, it Yes. This this sounds like very 2012 when I say it. But it's I don't even know if these kinds of things still happen anymore because it seems like as a community, we've kind of Moved beyond that and now recognize it's, like, really terrible for work life balance. But, you know, like, that was, like, That was what we did back then, I guess. Yeah.

And no one told me that it would be bad to be pitching pregnant, but that was just something I had Internalized?

Yeah. I mean, and if you think about the everything else kind of associated with that event, like pizza and beer and stay up all night is not exactly welcoming To to, you know, to, well, to an expectant parent, a new parent, or, You know, you can keep going down the list.

People who need sleep. Right? Yeah. I mean, it's I think there there's a lot of downsides of that. But, yeah, we we built an app For that thing, that didn't go anywhere.

Built, I don't know, a couple of other things that maybe one other thing before that. Then we built this mobile app, that actually ended up getting somewhere in the range of, like, 3, $400 a month in ad revenue

Mhmm.

Which was amazing. And then we want something else after that, and that one, like, Totally failed. And so but then by that point, we kind of had that one going, but then we actually needed geocoding for it. And I've told this story a 1000000 times. Anyway, so Geocodio comes sort of out of that app, actually, in order to keep that running.

Because then it was like, oh, okay. This is making, like, 3 or $400 a month. Like, this is amazing.

Mhmm.

Let's just keep this going. Like, let's just ride this gravy train as long as we can.

Yes.

And intentionally, actually, not spending too much time on geocodio, at the beginning. And then it completely blew, away our expectations. I remember my I remember I had this, like, spreadsheet that I can't find, but I remember making it of what our definitions of success were.

Mhmm.

And a wild success was We earn more than our server costs, which were $20 a month. So yeah. And all of that is happening. Meanwhile, you know, I think when Geocodio launched, our our daughter was, Yeah. She would have just turned 4 months old.

Like, we incorporated a week after she was born.

Wow. So so you got some of that started before before she was born. You you were, like, ramping up and you were like, okay. We're gonna build some of this. And then she was born.

And then the what was was the app launched after she was born or before she was born?

So the the the app that had the ad revenue, that was launched, I think, October of 2013. So she was about 2 months old at that point. And then at that point, we so, you know, our evening hours, you know, At least, you know, thankfully, babies kind of go to bed to sleep early. So, like Yeah. You know, come 7, 7:30, we could actually work on it for a couple of hours a day.

And we probably should have been sleeping because she would, you know, wake up at 1 or 2 AM, but, so it is. And started working on Geocodio more. There's a great picture of Matthias actually going down to, this, like, incubator co working space While while he was on paternity leave, I think, with her in the, like, you know, in the car seat carrying her in, like like, Geocodio, like, very Preliminary version of Geocodio is running on a laptop. He's testing it with his friends, and she's just, like, sitting there hanging out, you know, in the car seat.

That is an interesting perspective is that, talking about balance, I mean, this really depends on a lot of factors like post Maternal care, how well you're sleeping, if there's any health complications for for mom and baby. You know, there's all these other factors. But if baby is healthy and sleeping, those first and if you're on parental leave, that Could actually give some space to work on things because you newborns often do sleep and you can put them in a seat and they just kinda Hangout. Was was that your experience? How hard was managing all of that, and would you recommend it to others?

Yeah. I think this is one of those times where it's like, this is what I did. And if I was doing it again, I don't know if I would do it the same way, and I don't know if I would recommend someone else do it either. As you said, it's very contingent upon personal factors, Like, my own recovery was actually quite rocky. So, but, like, you know, Matthias was able to, you know, Put her in the Moby wrap, which is like a wrap that you sort of yeah.

You wrap around you and it holds the baby to your chest very tightly and, like, they love it and will sleep She would sleep for hours in that, and so he would just have the wrap on and be coding, like, with his arms kind of outside and, you know, it worked. I think he was highly dependent on on situation, but I knew actually, I do know other people who launched something on maternity leave. Do you know Anna Mast? Yeah. She yeah.

So she, I believe, launched Her business that the she then ended up, she sold out, I think, last year or the year before, she launched that while she was on maternity

Yeah.

And so I I think, you know, for me, it's not just about the parental leave aspect. It's that I found the early stages of parenting, to be just really exhausting and depleting and the lack of sleep And the kind of, you know, you're you're you're just on call 247 and have no social life and, you know, If you are going to work, that's your only adult interaction of the day. There's not really a whole lot of sources of dopamine unless you're someone who just absolutely, Like, loves childrearing, which

Yeah.

I mean, on it, like, I I I have a lot of other interests in life. And so, like, For me, it was actually quite motivating to be like, okay. I only have 1 hour a day

Yeah.

To work on whatever I wanna work on. And so, like, I would think about that all day. And then when I actually got time to do it, I would sit down, and I was very motivated. And maybe this is because I have ADHD, and, like, I need a deadline, and I like, things have to be a crisis. Right?

Yeah. And so but Matthias doesn't have ADHD, and he also I kinda felt the same way that it was actually really good because, otherwise, it was like, we don't have to work on the app now. Like, what you know, time just kind of without kids, like, I felt like time just kind of stretched in front of me forever. And Yeah. It was so, procrastinating was so much easier for me versus when kind of, you know, family life comes into play.

You don't have control or influence even over your own schedule in many cases. And so those rare times you do have Mhmm. For me, I got a lot of dopamine out of working on our projects. For other people, they, you know, they might use that time differently, and I think that's equally valuable. I probably Shouldn't have been working all the time.

I was probably a workaholic for many years there.

Mhmm.

It's not really healthy to have, like, work, I think B is such a core source of dopamine, but that's only something I have, you know, learned in the past 4 or 5 years.

Yeah. Well, the the struggle I have is and and now I'm hearing it in your story as well. Even hearing you You tell that story. I'm like, I re it it's bringing up old feelings for me. Like, yeah.

I remember how motivating that was to feel like I have this baby. Now we have this child and it's us. Like, we're responsible for this child. And how are we gonna do this? And Such a big portion of that ends up being money.

Like, we're gonna need money for all these things. And it's It was motivating to feel like, okay. Well, what can we do? You know? What can I start on the side?

What can I do on the side? And, I I feel that. I feel like okay. And and it does feel like, you know, there there's probably, a relatively healthy way to do that. And but there's also this part of me now that I can see it can go both ways.

Like, It happens to have played out for you and I, meaning, we're the survivors in the survivorship bias. Right? But I have also talked to lots of people who really kind of destroyed themselves, Pushing themselves to be like, I'm gonna start a bit I'm a new parent, and now I'm gonna start a business. And, for them, It ended up being the wrong decision and which leaves me in this awkward place of, In retrospect, just hit the same way you were saying, I don't know if I would necessarily advise people to do that. It's difficult to know what advice to give to folks.

Because On one hand, it worked out, for us. It seems like it would be terrible to rob somebody of that opportunity. But on the other hand, I just feel like business is a real crapshoot. Like, it just it it it can't happen for the majority of people who try it. It it's gonna be like if you get a person who doesn't have kids and they have every you know, they've got lots of financial margin and lots of time margin and lots of energy margin, Even for them, the chances of success are low.

And then you add in this idea of, like, you're also going to be, You know, in the top, I don't know, top 1% of parents who can have the energy to do this and be a good parent, and you're gonna be in the top 1% of couples who can, manage the emotional stuff of being new parents And still have a relationship, and you're gonna be in the you know, there's all these other factors. Do you think there's any Guardrails or advice we could give to folks who are considering it? Like, what are the considerations if you have A new child and you're thinking, okay. Well, I gotta do something. When should you pursue that dream and when should you not?

And is there any sort of wisdom that can come from the folks who have gone through it to say, well, here's the things to consider. Here's when, You know, maybe I would pull the plug or here's where the guardrails would be, I guess. Do you have any thoughts on that?

It's a it's a tough question. Right? Because, you know, the both of us We're we're only speaking from our personal experience. You know, this isn't something that we have studied. This isn't something that we have, I don't know, applied, right, in in, You know, 100 of companies, and we can say, okay.

Here are the things that worked in here. Like like, we don't have any sort of, like, empirical evidence. We we just have our own experiences, and and that makes me not wanna give any advice, on the topic because because I I only have my personal experience. You know, I remember when this this would be so interesting to listen back to. I remember when we were talking a couple years ago, and I don't even know when that was, but it was before COVID.

So this is a while ago. Mean, that that was, like, what, like, at least a decade ago. And I remember we were talking about this, and you asked me, you know You know, about this, like, family balance and whatnot. And you said, well, so what about somebody who has a w two job? You know, they're a developer.

They come home. They eat dinner with their family, and then They go into the basement to work on the side projects right after dinner. They're doing it for their family. They have a financial need for it. Right?

Necessity breeds invention. And I and and I remember thinking, like, very clearly, like, no. They can't like, they shouldn't do that. Right? Because, like, their spouse, you know, who I think in your scenario, like, was a stay at home house.

Right? Like Mhmm. They are clearly putting work in all of its forms, whether it's sort of self directed or Employer directed, like, above family and above their relationship with their spouse and and sort of, like, social interaction and support like that. Right?

Mhmm.

And so and I think this is where I think, like, Matt Wencing, you know, tweeted this the other day of, like, you know, you have 4 buckets. Right? You have family. You have social. You have What what were the other ones?

Like, health Hobbies. And oh, yeah. Hobbies and and and business.

Startup. Startup.

Right? And in order for the start to be successful, you be putting 9 at least 9 of your 20 tokens in that bucket.

Mhmm.

And

and Jason Cohen, he even separates out Kids and spouse. So he says you can do 2 things 2 big things well. And And then he lists everything. But he separate he puts family into 2 buckets. Spousal relationship and then just being a parent and Child rearing.

So, yeah, there's all sorts of ways to separate it out.

But yeah. And and so there's kind of this conversation going on about it, and And I thought that was a really interesting way of looking at that that like, I remember, you know, I had to do this an activity like that at founder summit a couple years ago of And from a burners perspective, right, is that you can't be running on full steam in every area of your life. Like, something is going to suffer. Mhmm. And I guess I wish I had known about that concept and way of framing it beforehand because I think that would have given me some perspective Earlier that it took me years to get, and I'm still in the process of attempting to apply.

And, like, you can't do everything a 100%, and it's worth it to kind of sit down and sort of audit where you're spending your time and Whether those are the things that are most valuable in the long term. Like, I I actually, I saw something on Well, it was on Twitter, but it was from Reddit the other day about, you know, the only person who is going to remember in 20 years that you worked late is your kids.

Mhmm.

And I was like, oh, oh, that hurts. Especially, like, as somebody who has to do a lot of late night Calls because of time zones and, you know, like, did an evening MBA program, like, as a parent and, like, you know, was working at night. You know? Like Like, that really that like, that's, like, still that's, like, still just hitting and sort of, living, you know, rent free in my heart right now. But then it's a question of, like, well, but if I'm working what if I'm doing that work for my own business, for something that's building an asset, You know, for our family.

Right? Like, doing that like like, I think I look back on those early years and, like, you know, the times I regret working, they're, you know, when That that they're regretting doing w two work on the weekend when it didn't really matter.

Mhmm.

Right? Like, And I wasn't really getting all that much out of it. Right? Versus, like, opening my laptop at 9 PM when she's already asleep and I'm building it my spouse and we genuinely enjoy working together, I don't I don't I think that's very positive.

Yeah.

And so it Really, really depends on the situation, but, like, I think talking about being, like, you know, some somebody was saying, you know, they wish they had been more present. Right? And I'm like Mhmm. I look back and, yeah, I wish I had been less distracted by nighttime and weekend Slack drama from my w twos. Mhmm.

Because that distracted me. Like like, just corporate drama, like, was very, very distracting. Like Yeah. But there was never really a time when, like, You know, for me, I guess, that, like sure. There were times when we were talking about Geocodio, like, at dinner time or whatnot, but, like, I don't know.

I hope she absorbed Something from that. Right? You know? Yeah. So, like, it wasn't like yeah.

Those those are the work related, but I I didn't have very good boundaries at the time. And so I guess it kind of all It kind of all blurred, and it took me some years to really separate those things. Yeah.

Yeah.

And that's a journey that I can't I don't I don't know how to I don't know. I wouldn't wish it on anybody, and I also don't know how to give you advice on here's how you, you know, expedite your own journey through workaholism and recovering from it. Like, don't know how to give advice on that.

Yeah. Well and and this is the thing. Right? Is the in some ways, I do have some empirical evidence Because I have this inbox that I've had since 2012 when I started podcasting and blogging filled with people's journeys.

Oh, you've got the mega maker people.

And I've got the mega maker community and podcast listeners, and and I have You know, I started off with this kind of very this this so, you know, maybe some bravado of, like, this is what folks need to do. The best life you could ever attain is, you know, starting your own independent business. And Now I've I have these real life case studies of folks. And, again, there's this realization that it just the there is a risk In all of this, and the gauges are, you know, the gauges for your life are sometimes hard to self assess. Nobody else well, not nobody else.

But, Often we don't get them assessed by some outside professional. And the Everybody's experience is different. The context is different, etcetera. And so I on one hand, I wanna Encourage folks and say, well, look, like, it really has starting this business has had a tremendous Positive impact on my family. There's no doubt about it.

But I wanna have some some caveat caveat to that to say so on one hand, I wanna encourage people that are doing it. Go, Yeah. Like, go after it. But on the other hand, I wanna say You you do need something. You need some guardrails and because the the again, this is where magical thinking can get us in trouble.

This thought of like, well, I could never get divorced, or I could never become, you know, alienate my children, or I could never Cause us financial ruin. Well, you could. Those are all possibilities. Like, those are all things that could happen that We need to take a responsibility for in the same way we take responsibility for GDPR and sales tax compliance and all these other things. So, yeah, it's a it's a tricky I'm glad that the conversation is happening because I think a a binary Answer of just like, rah rah, go for it isn't enough.

It doesn't cover enough of the material. And My hope, I guess, is that a deeper nuanced discussion Where we kind of consider some of these things and say, well, this is what it cost, and these were the risks. And And I'm speaking as someone who made it through, but not everyone makes it through. So those are things to consider. And, ultimately, What your kids really need are love and care and, presence.

You know? And, not presence.

With a c, not with a t.

Yeah. Not guess.

Though if you ask them, they would say they definitely need presents with a t.

Did you Did you see Venny's tweet? This is a side, but Venny Venny, who runs Diversified Tech, she had this ossitory tweet where She her her child go goes to her and goes, mom, I'm scared of dying. And her mom goes, oh, Vinnie goes, what? Oh, dear. Why are you scared of dying?

Well, that means I won't have any more screen time.

Oh, dear. Yeah. There's

a priority right there.

There's a real conflict here. Right? Like, a very, very strong Two sides pulling, with force at one another conflict. And I think also within us about this. Right?

Because On the one hand, it's like, wow. This has been life changing for my family, for me personally, for for my professional satisfaction, like, For the kinds of opportunities that that that my family can have, feeling enormously grateful and lucky to be in this position And feeling and going beyond that to feeling a responsibility to help others recognize that is an option they have available to them

Mhmm.

And to help them pursue that and achieve that if they want that. Right? Like, there is just this kind of and And I see this in you as well that it's like this sort of, this the the this compulsion That if if one has been fortunate in their life that they have a an obligation to help other people recognize that, like, to like, in their own lives as well. Right? Like, there's a responsibility Totally.

Yeah. Duty. Right? It's not an option. But then at the same time, also realizing that it's not for everybody, and there are people who are very happy to even just having a stable 9 to 5 job for 40 years is a dream come true for them, and they want that.

And they genuinely genuinely want that or that, You know, their situation in life has not set them up in the way to be able to succeed on their own entrepreneurially. Mhmm. Or What you know, so whatever their context is, right, that it's like, people want different things in life. Mhmm. And that's okay.

And there might Be somebody who, you know, in my situation says, okay. Well, daycare is gonna be $25,000 a year, and I'm, you know, I'm gonna try to kill it at work between the hours of 9 and 5.

Mhmm.

And if I make an extra $25,000 a year, that's great. And if I don't, you know what? We'll we'll cut back, and we'll do free activities

and

don't have to take plane trips. You know? Right? Like, we'll We'll make it work because love is free, and it doesn't matter. And, like, there's and that's true as well.

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

Mhmm.

Wanting people to know that they they can do this if they want to.

Mhmm.

But it's also completely fine if they don't. Yeah. And that that's valid too. And it's just It's tough, to balance that and and not want to get also, you know, for me, I mean, like, you know, I try to only give advice about the areas where I am sort of generally have an expertise in. Like Mhmm.

Customer research stuff, Ask me about it. I will I will claim to be an expert in that, but that's kinda the only area, really.

Yeah. You know,

a lot of other stuff is just my own personal understanding and education and reading. And so

And but there is another Where

is that line?

Yeah. Where it is really hard, but there is this other thing which is to bring awareness to something. The receiver still needs to do the work. They need to process it. They need to decide if it's right for them.

They need to decide if the timing right, all those things. But sometimes people just don't know. They just haven't thought about it. So for example, one thing that came up in the Twitter threads quite a bit was Folks said, well, I don't see how you could do this. I don't see how you could have one spouse building something on the side on top of a w two Unless their spouse was a superhero and doing 90 to a 100% of the childcare and the housework.

And, you know, there are some old cultural ideas in there that might need to be challenged. And sometimes even just you might have never even thought of it. Like, you may have grown up a certain way where Your mom or dad, one of them went to work and the other one stayed home. And it was like, that was just how life was. But there's this other consideration that Some people just have never thought about, which is, if you're thinking about doing this and I think it did come up in our first conversation because The title of the episode is should you start a startup with your spouse?

The, the the other consideration is, okay, Frank, Eileen, whoever you are that wants to do this, the other party in this is your spouse. And, you may be bringing some assumptions to the table that you haven't even actually thought of. Like, you you haven't explicitly said, well, My spouse is gonna do 90% of the childcare and the housework. But that's actually something you you need to Explicitly bring up to your partner and say, hey, this is what we're thinking about doing, or I'm thinking about doing. And it could have this benefit, But I guess we should think you know, we have to think through what what's this going to mean for you?

And are you okay with that? And We have to be okay with the idea that your partner might say, actually, I'm not okay with that. I don't want that. I want You to be helping more with the kids. I want you to be helping more with the chores, etcetera.

I

mean, I think that's kind of setting it up for failure. Right? To say, alright. I'm gonna start a business, and you're gonna do 90% of the housework. Mhmm.

That, you know, may may maybe that That flu in, like, you know, the 19 thirties, but

Mhmm.

And not anymore. And, you know, speaking to what I have seen in people I know, Like, I know someone who who's getting a company going, has already had a side project for a long time, but is now going full time.

Mhmm.

They're supposed I I believe their spouse either works very part time or stay at home. Mhmm. And they're like, oh, yeah. And my wife is gonna be doing, like, Customer support on this too. Like and so it's not just like it's like, you know, doing it with your spouse.

Right? Like, there's a long tradition of mom and pop businesses.

Mhmm.

Right? Right? And, I mean, you know, talking to congress, like, I think part of this has been, hey. So mom and pop software businesses, like, They exist. Like, it's not just grocers and, you know, other things like that.

Right? Like, there are mom and pop software companies where, you know, The wife is a developer and the husband's a business person or vice versa or they're both, you know, doing things or, like, they've got, you know, like, they're, Like so there that are real collaborations.

Yeah.

That is definitely not for every couple. Mhmm. For some people, you know, Could still be a family member they're they're cofounding with, for some people, you know, what other I'd say, definitely not. Right? It really comes down to context and and but yeah.

I mean I mean, making things stated up front, I think, is important and making sure that your Your goals align and your expectations align. And then if they don't, having the kind of relationship where you can Continually renegotiate those kinds of things in a in in the same way that you would in the office And and and, b, just kind of sort of clear headed about it, and and be willing to say, hey. Like, this actually isn't working right now or, like, You know? Okay. Like, option a, like, you're doing all the housework.

Option b, like, oh, you're actually using your accounting degree, and then we hire a house keeper. Like Mhmm. You know, like right? Like, there's many different options. But if you're both aligned on it being something you want to do

Mhmm.

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

I mean, I think that's a, Even what you just mentioned, it's again, people need tools that we're we're not we don't come to anything really intuitively knowing any of these things And the idea of okay. Like, let's try this, but let's have a regular review meeting where we do sit down and say, okay. How is this working for you? Is this, you know, is this okay, for you? And how's how you know, I've had times where the people in my family have come to me and said, dad, you when you are on Twitter all the time, you are just More aggravated.

So let's have a review meeting on that because maybe, some of your Twitter usage is is causing Use some distress, which then in turn is affecting all of us. So let's just have a review on that, dad. You know? Like, maybe we can Scale that down or whatever. And, yeah.

I think you're gonna need stuff like that in your Relationship and your family.

And it's it's it's okay if people, you know, don't wanna be cofounders with their spouse. Right? There's I know plenty of people who have Great relation with their spouses who could not run a business together. Mhmm. That doesn't necessarily like, right, like, that that this is just a very particular type, of relationship.

And and, I mean, that point of, you know, spouse, children, Startup pick 2.

Mhmm.

That that's that's something I'm gonna be thinking about too, because, You know, there were definitely a lot of times when my husband and I were talking about geocodia at the table, and we thought it was a perfectly fun conversation. But our daughter, when she was 3, like, Probably did not think it was so thrilling to talk about, the multitude of issues that come when you allow people to upload spreadsheets.

Yeah.

You know, like or, you know, like me, like, you You know, I remember there was one day, like, Sunday breakfast, and I started, like, wireframing something on the like, and, like, I was literally, like, had printer paper and was, like, Taping it to, like, the living room wall, and we were, like, having so much fun, like, while eating bites of pancakes. And it's like, maybe, like, should we have been Engaging and having a conversation with her about what was going on in her world. Mhmm. Right? Like, that's also the kind of thing that I look back on.

It's like, I didn't really think about that much at the time, but maybe maybe I should have. Right? And and I guess and also in terms of life, it's like, you know, Everyone is gonna have regrets in life. Which regrets do you want? It's not a matter of not having regrets.

It's a matter of which ones and how bad they are and whether you can live with them and whether they are also things you can recover from. Right? And I think that's the beautiful thing About a relationship that has a solid foundation is that the relationship can grow and it can evolve and it can be bended. And Mhmm. And and I Like to believe that's, you know, with spouses or with children or or anyone else.

Right?

Yeah.

And so it's never like you know, if you look back and say, oh, I really wasn't present, You know, during the 1st 5 years, you can be like, well, great. Like, you can fix that.

Yeah. What am I gonna do now?

Right. Exactly. You know, you always have that opportunity to change. Totally. And that's that's that's something I guess I I I find myself Saying even when I don't take my own, course of action, and I'm podcasting at 10 o'clock on a Thursday night.

Well, thank you so much, Michelle, for your time. This is great. It's always great to talk to you. Thanks for all you're doing for with the SSP Alliance and folks can check out geocodio online. Geocodio.com.

Right?

Geocode.i0. I say geocod like the fish.i0. Geocode.i0. We don't have geocode.i0. We we didn't get that.

And, I'll also put links to Michelle's Twitter, to the links, to everything else going on. Check those out in the show notes. Thanks again, Michelle.

Thank you.