{"version":"1.0.0","segments":[{"startTime":0.0,"endTime":2.92,"body":"Software, finance,"},{"startTime":0.0,"endTime":2.92,"body":"capitalization, CapEx, OpEx,"},{"startTime":2.92,"endTime":5.03,"body":"that's what we were talking"},{"startTime":2.92,"endTime":5.03,"body":"about today with Newton."},{"startTime":5.08,"endTime":7.48,"body":"This is an exciting"},{"startTime":5.08,"endTime":7.48,"body":"topic, believe it or not."},{"startTime":7.51,"endTime":11.689,"body":"It's a critical topic and one that"},{"startTime":7.51,"endTime":11.689,"body":"other podcasts out there aren't really."},{"startTime":12.68,"endTime":18.02,"body":"I feel nobody's talking about it because"},{"startTime":12.68,"endTime":18.02,"body":"it is perceived as a difficult topic."},{"startTime":18.17,"endTime":19.8,"body":"I don't I don't think it's that difficult."},{"startTime":19.83,"endTime":21.79,"body":"I just think that that most teams."},{"startTime":21.94,"endTime":25.31,"body":"Don't have the skill they need"},{"startTime":21.94,"endTime":25.31,"body":"to deal with this topic properly."},{"startTime":25.46,"endTime":29.07,"body":"This, yeah, let's reframe a little"},{"startTime":25.46,"endTime":29.07,"body":"and say most teams don't have"},{"startTime":29.07,"endTime":32.258,"body":"the skill set on their team to do"},{"startTime":29.07,"endTime":32.258,"body":"but, somebody needs to know it."},{"startTime":32.448,"endTime":33.628,"body":"And somebody needs to care."},{"startTime":33.778,"endTime":34.868,"body":"At least be aware."},{"startTime":34.988,"endTime":36.088,"body":"Everybody needs to be aware."},{"startTime":36.338,"endTime":40.808,"body":"The finance folks Do really care about"},{"startTime":36.338,"endTime":40.808,"body":"this, but they may not be on the team."},{"startTime":40.958,"endTime":41.358,"body":"Right."},{"startTime":41.648,"endTime":42.688,"body":"Well, that is a problem."},{"startTime":42.928,"endTime":45.598,"body":"That is a problem, and we're gonna,"},{"startTime":42.928,"endTime":45.598,"body":"we're gonna talk about it today."},{"startTime":45.748,"endTime":47.808,"body":"Newton, you're you're a CPA."},{"startTime":47.808,"endTime":48.808,"body":"Is that your background?"},{"startTime":48.808,"endTime":48.998,"body":"Yes, I am."},{"startTime":48.998,"endTime":49.498,"body":"What's your background?"},{"startTime":49.648,"endTime":54.248,"body":"Well, I am a CPA wrestled many years"},{"startTime":49.648,"endTime":54.248,"body":"in corporate finance and corporate"},{"startTime":54.268,"endTime":56.378,"body":"accounting with capitalization."},{"startTime":56.528,"endTime":60.148,"body":"I've seen how it has evolved over"},{"startTime":56.528,"endTime":60.148,"body":"many years, the past 20 years."},{"startTime":60.298,"endTime":60.578,"body":"Wow."},{"startTime":60.728,"endTime":62.258,"body":"And survived to tell the tale."},{"startTime":62.408,"endTime":62.808,"body":"That's right."},{"startTime":62.808,"endTime":63.168,"body":"Yes."},{"startTime":63.178,"endTime":63.938,"body":"That's right."},{"startTime":64.088,"endTime":64.518,"body":"It's awesome."},{"startTime":64.528,"endTime":66.318,"body":"Now, the logic hasn't changed."},{"startTime":66.518,"endTime":70.028,"body":"If it's got a future"},{"startTime":66.518,"endTime":70.028,"body":"use, you capitalize it."},{"startTime":70.028,"endTime":72.818,"body":"If it's got no future use, you expense it."},{"startTime":72.938,"endTime":76.408,"body":"So, the logic hasn't changed,"},{"startTime":72.938,"endTime":76.408,"body":"but they've gotten more granular"},{"startTime":76.558,"endTime":78.838,"body":"on how to determine what it is."},{"startTime":78.948,"endTime":81.898,"body":"What is the purpose of capitalization?"},{"startTime":82.048,"endTime":84.408,"body":"We should cover that first because"},{"startTime":82.048,"endTime":84.408,"body":"I feel everything else is going"},{"startTime":84.408,"endTime":86.128,"body":"to build on that in this podcast."},{"startTime":86.278,"endTime":88.688,"body":"Well, it comes from the"},{"startTime":86.278,"endTime":88.688,"body":"old accounting rule."},{"startTime":88.838,"endTime":91.488,"body":"to match your expenditure"},{"startTime":88.838,"endTime":91.488,"body":"with the revenue."},{"startTime":91.638,"endTime":96.698,"body":"So, if you have software that can"},{"startTime":91.638,"endTime":96.698,"body":"continue to produce revenue for"},{"startTime":96.698,"endTime":100.358,"body":"another three years, they want you"},{"startTime":96.698,"endTime":100.358,"body":"to capitalize it for, so that you can"},{"startTime":100.358,"endTime":102.338,"body":"expense it over those three years."},{"startTime":102.488,"endTime":104.528,"body":"I mean, they call it amortized."},{"startTime":104.718,"endTime":106.788,"body":"So you amortize it over those three years."},{"startTime":106.938,"endTime":111.108,"body":"If it's got no future value, they"},{"startTime":106.938,"endTime":111.108,"body":"want you to write it off, or, I"},{"startTime":111.108,"endTime":115.118,"body":"mean, the, the, the regular case"},{"startTime":111.108,"endTime":115.118,"body":"is the case of software for sale."},{"startTime":115.158,"endTime":120.418,"body":"If there's no futures, It's got no"},{"startTime":115.158,"endTime":120.418,"body":"future value yet, so you expense it."},{"startTime":120.568,"endTime":124.558,"body":"So they want you to mark the"},{"startTime":120.568,"endTime":124.558,"body":"revenue against the costs."},{"startTime":124.708,"endTime":125.368,"body":"That's really it."},{"startTime":125.518,"endTime":128.123,"body":"Are are you trying to,"},{"startTime":125.518,"endTime":128.123,"body":"that that's interesting."},{"startTime":128.273,"endTime":130.008,"body":". Wait I don't know how, I don't"},{"startTime":128.273,"endTime":130.008,"body":"know where I want to go from here."},{"startTime":130.013,"endTime":131.358,"body":"I want to ask a million questions."},{"startTime":131.658,"endTime":133.588,"body":"I think you need to"},{"startTime":131.658,"endTime":133.588,"body":"capitalize on my camera."},{"startTime":133.738,"endTime":134.368,"body":"Sorry, man."},{"startTime":134.408,"endTime":138.338,"body":"Everything in my business is cash."},{"startTime":138.338,"endTime":142.508,"body":"We're a strictly OpEx operation"},{"startTime":138.338,"endTime":142.508,"body":"here at the Arguing Agile Podcast."},{"startTime":142.558,"endTime":144.568,"body":"Cash accruals."},{"startTime":144.568,"endTime":148.458,"body":"So when you capitalize you"},{"startTime":144.568,"endTime":148.458,"body":"have future income and you're"},{"startTime":148.458,"endTime":150.178,"body":"trying to basically offset."},{"startTime":150.443,"endTime":153.053,"body":"The capitalized cost is something"},{"startTime":150.443,"endTime":153.053,"body":"you did in the past with the"},{"startTime":153.063,"endTime":154.463,"body":"income that you're getting today."},{"startTime":154.783,"endTime":160.153,"body":"Yes, they like you to match the expense"},{"startTime":154.783,"endTime":160.153,"body":"against when the income is coming in."},{"startTime":160.303,"endTime":164.363,"body":"And if they don't have those rules,"},{"startTime":160.303,"endTime":164.363,"body":"it's totally open to manipulation."},{"startTime":164.513,"endTime":168.763,"body":"You know, so I can decide to build 1"},{"startTime":164.513,"endTime":168.763,"body":"million software, and because my revenue"},{"startTime":168.773,"endTime":170.933,"body":"is too high, I can decide to expense it."},{"startTime":171.083,"endTime":175.503,"body":"Now, if my revenue is not there, I may"},{"startTime":171.083,"endTime":175.503,"body":"decide to defer a 100, 000 expense."},{"startTime":175.653,"endTime":177.973,"body":"For many years, when"},{"startTime":175.653,"endTime":177.973,"body":"it has no future value."},{"startTime":178.123,"endTime":182.483,"body":"So the rule is simply say, match it"},{"startTime":178.123,"endTime":182.483,"body":"against basic accounts and principle,"},{"startTime":182.633,"endTime":186.933,"body":"matching, matching principle, matching"},{"startTime":182.633,"endTime":186.933,"body":"expense against when the revenue comes in."},{"startTime":187.083,"endTime":189.103,"body":"Things get a bit things get a bit gray."},{"startTime":189.173,"endTime":189.783,"body":"A lot."},{"startTime":189.793,"endTime":190.153,"body":"Great."},{"startTime":190.483,"endTime":193.803,"body":"When you talk about solutions"},{"startTime":190.483,"endTime":193.803,"body":"rather than just software."},{"startTime":193.953,"endTime":198.123,"body":"So in this definition, I'm saying the"},{"startTime":193.953,"endTime":198.123,"body":"solution is you're selling a piece"},{"startTime":198.123,"endTime":201.683,"body":"of software, but you're also bundling"},{"startTime":198.123,"endTime":201.683,"body":"some services in there as well."},{"startTime":201.833,"endTime":206.113,"body":"Say what we've seen in the industry"},{"startTime":201.833,"endTime":206.113,"body":"for a few decades now is the move"},{"startTime":206.113,"endTime":208.673,"body":"away from software to services."},{"startTime":208.673,"endTime":210.803,"body":"Many companies made that switch, right?"},{"startTime":210.803,"endTime":213.413,"body":"You know, a lot of time"},{"startTime":210.803,"endTime":213.413,"body":"you and I were both at IBM."},{"startTime":213.423,"endTime":214.703,"body":"That switch was being made."},{"startTime":214.853,"endTime":218.733,"body":"They would sign up billion dollar"},{"startTime":214.853,"endTime":218.733,"body":"contract, for example, and initially"},{"startTime":218.733,"endTime":221.933,"body":"in the early days, they would"},{"startTime":218.733,"endTime":221.933,"body":"go about and declare that go."},{"startTime":222.003,"endTime":225.323,"body":"We just got this contract a"},{"startTime":222.003,"endTime":225.323,"body":"billion dollars, but it's not"},{"startTime":225.353,"endTime":226.873,"body":"billion dollars in your pocket yet."},{"startTime":227.023,"endTime":228.723,"body":"It's over 10 years, right?"},{"startTime":228.873,"endTime":231.383,"body":"But the market sentiment is different."},{"startTime":231.463,"endTime":235.023,"body":"Like they look at this stuff and"},{"startTime":231.463,"endTime":235.023,"body":"the stock market does its thing."},{"startTime":235.173,"endTime":239.333,"body":"But anyway, so today, fast forward to"},{"startTime":235.173,"endTime":239.333,"body":"today, you still have that scenario"},{"startTime":239.343,"endTime":243.563,"body":"where people are selling Solutions,"},{"startTime":239.343,"endTime":243.563,"body":"software and services, which makes it"},{"startTime":243.563,"endTime":247.783,"body":"even more difficult to kind of get a"},{"startTime":243.563,"endTime":247.783,"body":"handle on what are you what are you"},{"startTime":247.933,"endTime":249.733,"body":"capitalizing versus what are you not?"},{"startTime":249.883,"endTime":250.763,"body":"Big challenge."},{"startTime":250.913,"endTime":251.683,"body":"Big challenge."},{"startTime":251.833,"endTime":254.793,"body":"Sometimes the challenge"},{"startTime":251.833,"endTime":254.793,"body":"for accountants is."},{"startTime":254.943,"endTime":260.953,"body":"The CEO or somebody else who is, the"},{"startTime":254.943,"endTime":260.953,"body":"guy who has the budget, like the head"},{"startTime":260.953,"endTime":266.253,"body":"of development, wants you to lease an"},{"startTime":260.953,"endTime":266.253,"body":"item for some reason because of cash"},{"startTime":266.253,"endTime":270.463,"body":"flow, but the accountants , don't want to"},{"startTime":266.253,"endTime":270.463,"body":"expense it, or they want to capitalize it."},{"startTime":270.613,"endTime":273.853,"body":"Totally against its own interest,"},{"startTime":270.613,"endTime":273.853,"body":"depending on what the situation is."},{"startTime":274.003,"endTime":277.453,"body":"So this argument has been going"},{"startTime":274.003,"endTime":277.453,"body":"on for, since accounting was born."},{"startTime":277.483,"endTime":280.583,"body":"I understand that the finance follows"},{"startTime":277.483,"endTime":280.583,"body":"like the business strategy that"},{"startTime":280.583,"endTime":284.213,"body":"you're kind of going for like the,"},{"startTime":280.583,"endTime":284.213,"body":"and what the world that I come from."},{"startTime":284.363,"endTime":288.793,"body":"You have CapEx and OpEx, and you"},{"startTime":284.363,"endTime":288.793,"body":"have reasons to pursue more of one"},{"startTime":288.793,"endTime":290.103,"body":"or less of the other or whatever."},{"startTime":290.253,"endTime":294.956,"body":"Those two buckets, and OpEx"},{"startTime":290.253,"endTime":294.956,"body":"capEx, capital expenditures."},{"startTime":295.106,"endTime":296.506,"body":"OPEX operational."},{"startTime":296.586,"endTime":297.826,"body":"This is your operational budget."},{"startTime":297.916,"endTime":301.166,"body":"What I understand about your"},{"startTime":297.916,"endTime":301.166,"body":"operational budget is, your operational"},{"startTime":301.166,"endTime":305.866,"body":"budget is things that you have to"},{"startTime":301.166,"endTime":305.866,"body":"pay for immediately out of pocket."},{"startTime":306.196,"endTime":307.336,"body":"In, in the current year."},{"startTime":307.476,"endTime":309.606,"body":"Things that, things that"},{"startTime":307.476,"endTime":309.606,"body":"you cannot capitalize."},{"startTime":309.756,"endTime":312.186,"body":"Well, well that's, that's"},{"startTime":309.756,"endTime":312.186,"body":"one way to look at it."},{"startTime":312.336,"endTime":317.806,"body":"But the exact definition is stuff for"},{"startTime":312.336,"endTime":317.806,"body":"which the value , expires in one year."},{"startTime":317.916,"endTime":318.486,"body":"Oh, okay."},{"startTime":318.556,"endTime":318.786,"body":"Okay."},{"startTime":318.786,"endTime":319.536,"body":"That's much better."},{"startTime":319.866,"endTime":324.186,"body":"So you may decide to put it on the"},{"startTime":319.866,"endTime":324.186,"body":"credit card and pay it over five years."},{"startTime":324.216,"endTime":328.036,"body":"But if the value expires in one"},{"startTime":324.216,"endTime":328.036,"body":"year it's still operational expense."},{"startTime":328.186,"endTime":334.646,"body":"But if it's If the value expires in five"},{"startTime":328.186,"endTime":334.646,"body":"years, and you pay cash, it's still CapEx."},{"startTime":334.796,"endTime":336.986,"body":"Because it's got a life"},{"startTime":334.796,"endTime":336.986,"body":"more than one year."},{"startTime":337.136,"endTime":341.046,"body":"Yeah, like that's, that's the mind blowing"},{"startTime":337.136,"endTime":341.046,"body":"part of this for me, is that, is that I"},{"startTime":341.046,"endTime":345.196,"body":"bought a network switch, and I'm gonna"},{"startTime":341.046,"endTime":345.196,"body":"use that network switch for five years,"},{"startTime":345.346,"endTime":348.716,"body":"Probably, likely more than five years,"},{"startTime":345.346,"endTime":348.716,"body":"but I'm going to use it for five years."},{"startTime":348.866,"endTime":351.046,"body":"But when I bought it,"},{"startTime":348.866,"endTime":351.046,"body":"I bought it with cash."},{"startTime":351.086,"endTime":354.556,"body":"Like I took cash out the drawer and"},{"startTime":351.086,"endTime":354.556,"body":"I threw it down and there it is."},{"startTime":354.556,"endTime":355.876,"body":"But when it goes on the ledger."},{"startTime":356.026,"endTime":360.859,"body":"Like now, it's, it's, yes, it's not,"},{"startTime":356.026,"endTime":360.859,"body":"it's not like, it's not 100, 000."},{"startTime":360.859,"endTime":365.866,"body":"It's 20, 000 for this year and then"},{"startTime":360.859,"endTime":365.866,"body":"for the next four years in advance."},{"startTime":365.946,"endTime":369.751,"body":"And then to make life more"},{"startTime":365.946,"endTime":369.751,"body":"confusing, the rules for IRS."},{"startTime":369.901,"endTime":372.751,"body":"For the tax authorities are different"},{"startTime":369.901,"endTime":372.751,"body":"from the rules for accounting."},{"startTime":372.901,"endTime":377.011,"body":"So you have to also, and the"},{"startTime":372.901,"endTime":377.011,"body":"IRS rules go by politics too."},{"startTime":377.301,"endTime":377.571,"body":"Yeah."},{"startTime":377.681,"endTime":381.171,"body":"And the accounting one, my"},{"startTime":377.681,"endTime":381.171,"body":"opinion is, the accountants do a"},{"startTime":381.231,"endTime":383.011,"body":"thorough job, especially in the U."},{"startTime":383.011,"endTime":383.221,"body":"S."},{"startTime":383.551,"endTime":387.161,"body":"I'm not familiar with the foreign"},{"startTime":383.551,"endTime":387.161,"body":"guys, but the FASB guys do an"},{"startTime":387.161,"endTime":392.001,"body":"extremely honest job in trying to"},{"startTime":387.161,"endTime":392.001,"body":"make this thing to be as pure as"},{"startTime":392.031,"endTime":394.861,"body":"possible, and to avoid Manipulation."},{"startTime":395.011,"endTime":399.571,"body":"Now, sometimes you say, well, this is"},{"startTime":395.011,"endTime":399.571,"body":"too anal this is too, too, too much"},{"startTime":399.841,"endTime":401.431,"body":"detail, but they do a thorough job."},{"startTime":401.531,"endTime":401.861,"body":"Yeah."},{"startTime":401.961,"endTime":405.871,"body":"And because the system, the business"},{"startTime":401.961,"endTime":405.871,"body":"is evolving the business is evolving."},{"startTime":405.891,"endTime":408.856,"body":"They are working extremely"},{"startTime":405.891,"endTime":408.856,"body":"hard to catch up with it."},{"startTime":409.006,"endTime":412.186,"body":"to shift us into talking about software."},{"startTime":412.336,"endTime":416.476,"body":"Most software that I, I have worked on"},{"startTime":412.336,"endTime":416.476,"body":"in my career has use over a longer term."},{"startTime":416.786,"endTime":419.746,"body":"So, I could see you want"},{"startTime":416.786,"endTime":419.746,"body":"to apply capitalization to"},{"startTime":419.746,"endTime":420.836,"body":"your software development."},{"startTime":420.986,"endTime":425.356,"body":"What I know about capitalization, because"},{"startTime":420.986,"endTime":425.356,"body":"again, I was at a company that, that got"},{"startTime":425.356,"endTime":429.126,"body":"bought by a private equity firm, and the"},{"startTime":425.356,"endTime":429.126,"body":"first thing a private equity firm wants"},{"startTime":429.126,"endTime":430.546,"body":"is they want to capitalize everything."},{"startTime":430.546,"endTime":430.936,"body":"They're like,"},{"startTime":431.076,"endTime":433.506,"body":"you got a lint in your pockets,"},{"startTime":431.076,"endTime":433.506,"body":"we want to capitalize it."},{"startTime":433.926,"endTime":435.376,"body":"Everything's getting capitalized."},{"startTime":435.526,"endTime":440.896,"body":"And so I had to quickly learn the"},{"startTime":435.526,"endTime":440.896,"body":"rules of internal use software versus"},{"startTime":440.906,"endTime":444.936,"body":"external use software and how to"},{"startTime":440.906,"endTime":444.936,"body":"capitalize the different categories."},{"startTime":445.136,"endTime":449.536,"body":"And I try to prepare for this discussion"},{"startTime":445.136,"endTime":449.536,"body":"and I pulled that, that I know the"},{"startTime":449.596,"endTime":452.031,"body":"FASB or whatever it was, the article,"},{"startTime":449.596,"endTime":452.031,"body":"the article I sent , I can't remember"},{"startTime":452.031,"endTime":454.191,"body":"what it was, the, the, from 1985."},{"startTime":454.191,"endTime":456.111,"body":"I was like, wow, this is from 1985."},{"startTime":456.111,"endTime":456.112,"body":"Yeah."},{"startTime":456.167,"endTime":457.757,"body":", they have updated it, to be honest."},{"startTime":457.847,"endTime":459.417,"body":"But I don't think it's, it's."},{"startTime":459.442,"endTime":464.702,"body":"It's updated to the point where it's"},{"startTime":459.442,"endTime":464.702,"body":"current as of now in the new modern world"},{"startTime":464.702,"endTime":468.602,"body":"of software being something that People"},{"startTime":464.702,"endTime":468.602,"body":"can lease, rent, and whatever else,"},{"startTime":468.622,"endTime":472.292,"body":"pay per use all of that stuff, I don't,"},{"startTime":468.622,"endTime":472.292,"body":"I don't think it's updated for that."},{"startTime":472.602,"endTime":476.992,"body":"Also, there's no amount of updates"},{"startTime":472.602,"endTime":476.992,"body":"that can take out human judgment."},{"startTime":477.022,"endTime":477.772,"body":"Right, yes."},{"startTime":477.802,"endTime":481.442,"body":"And you can't, there's no amount of,"},{"startTime":477.802,"endTime":481.442,"body":"with all the smart people who are"},{"startTime":481.442,"endTime":485.242,"body":"doing software, you never know what"},{"startTime":481.442,"endTime":485.242,"body":"features are coming down the pipe."},{"startTime":485.392,"endTime":489.602,"body":"So, I mean, how many years ago, 20"},{"startTime":485.392,"endTime":489.602,"body":"years ago, did we have cloud computing?"},{"startTime":489.752,"endTime":494.512,"body":"So, it's changes, it's difficult for"},{"startTime":489.752,"endTime":494.512,"body":"the accountants to keep up with it."},{"startTime":494.512,"endTime":497.332,"body":"Internal use software versus"},{"startTime":494.512,"endTime":497.332,"body":"external use software."},{"startTime":497.352,"endTime":499.952,"body":"External use software being"},{"startTime":497.352,"endTime":499.952,"body":"software that you plan to sell."},{"startTime":499.952,"endTime":500.492,"body":"Sell, yes."},{"startTime":500.532,"endTime":500.832,"body":"Right."},{"startTime":500.982,"endTime":505.152,"body":"I pulled a couple graphics that"},{"startTime":500.982,"endTime":505.152,"body":"I probably will roll into, let me"},{"startTime":505.152,"endTime":508.132,"body":"see, let me find them, but it's not"},{"startTime":505.152,"endTime":508.132,"body":"just software that you're selling."},{"startTime":508.172,"endTime":511.922,"body":"I know this is a nuanced discussion, but"},{"startTime":508.172,"endTime":511.922,"body":"it's software that you're renting as well."},{"startTime":512.232,"endTime":512.472,"body":"Right?"},{"startTime":512.622,"endTime":515.312,"body":"Instead of just paid out"},{"startTime":512.622,"endTime":515.312,"body":"selling, people are using it."},{"startTime":515.462,"endTime":517.232,"body":"You're not shipping anything, right?"},{"startTime":517.272,"endTime":521.652,"body":"You're just giving them time to use your"},{"startTime":517.272,"endTime":521.652,"body":"software, and you're charging for that."},{"startTime":521.802,"endTime":526.072,"body":"I mean, everything that we"},{"startTime":521.802,"endTime":526.072,"body":"know of today X, AAS whatever."},{"startTime":526.162,"endTime":529.132,"body":"Software as a service,"},{"startTime":526.162,"endTime":529.132,"body":"platform as a service, etc."},{"startTime":529.282,"endTime":530.202,"body":"People are renting that."},{"startTime":530.202,"endTime":534.442,"body":"But the accountants would like to"},{"startTime":530.202,"endTime":534.442,"body":"look at the economic life of the rent."},{"startTime":534.592,"endTime":535.112,"body":"Exactly."},{"startTime":535.142,"endTime":539.072,"body":"And it's a finite compared to the"},{"startTime":535.142,"endTime":539.072,"body":"old days of shipping software."},{"startTime":539.412,"endTime":541.522,"body":"That life is finite, but recurring."},{"startTime":541.672,"endTime":542.532,"body":"It could be."},{"startTime":542.822,"endTime":545.352,"body":"So you might decide that you are renting."},{"startTime":545.502,"endTime":550.542,"body":"Software X, and you only pay in every"},{"startTime":545.502,"endTime":550.542,"body":"year, but chances that you may want to"},{"startTime":550.542,"endTime":552.632,"body":"keep it for three years or four years."},{"startTime":552.782,"endTime":556.042,"body":"So the question is, do you"},{"startTime":552.782,"endTime":556.042,"body":"expense every year's payments?"},{"startTime":556.192,"endTime":559.682,"body":"Because the payment is not equal"},{"startTime":556.192,"endTime":559.682,"body":"to the economic life of the asset."},{"startTime":559.802,"endTime":560.152,"body":"True."},{"startTime":560.302,"endTime":561.802,"body":"This is where things get challenging."},{"startTime":561.952,"endTime":562.272,"body":"Challenging."},{"startTime":562.502,"endTime":562.722,"body":"Yeah."},{"startTime":562.722,"endTime":563.932,"body":"that's one that I am less concerned about."},{"startTime":563.972,"endTime":568.282,"body":"clear on is if I decide that I"},{"startTime":563.972,"endTime":568.282,"body":"want to for all my employees,"},{"startTime":568.312,"endTime":569.992,"body":"I want to buy what's it called?"},{"startTime":569.992,"endTime":574.392,"body":"Like the Microsoft suite of"},{"startTime":569.992,"endTime":574.392,"body":"tools, like office 365, right?"},{"startTime":574.532,"endTime":575.782,"body":"Yeah, I want to buy that."},{"startTime":575.812,"endTime":578.502,"body":"It all lives, the subscription"},{"startTime":575.812,"endTime":578.502,"body":"all lives in the cloud now."},{"startTime":578.652,"endTime":582.912,"body":"So do I have to put that on"},{"startTime":578.652,"endTime":582.912,"body":"OPEX every year because I renews"},{"startTime":582.912,"endTime":584.112,"body":"every year does that work?"},{"startTime":584.292,"endTime":586.162,"body":"Like, I think the same thing"},{"startTime":584.292,"endTime":586.162,"body":"is like cloud computing."},{"startTime":586.172,"endTime":589.842,"body":"If I buy, if I buy bandwidth in the"},{"startTime":586.172,"endTime":589.842,"body":"cloud, like AWS, a lot of people"},{"startTime":589.842,"endTime":593.812,"body":"use AWS as their backend, like"},{"startTime":589.842,"endTime":593.812,"body":"the, the operational expenditure."},{"startTime":593.962,"endTime":597.402,"body":"of running my AWS server farms every year."},{"startTime":597.552,"endTime":601.002,"body":"Like, am I now, because I'm"},{"startTime":597.552,"endTime":601.002,"body":"paying that as a service, do I"},{"startTime":601.002,"endTime":603.402,"body":"have to put that OPEX every year?"},{"startTime":603.402,"endTime":607.342,"body":"Or am I saying like, Oh, this"},{"startTime":603.402,"endTime":607.342,"body":"year's run of all my servers is"},{"startTime":607.342,"endTime":609.542,"body":"actually, I can leverage that"},{"startTime":607.342,"endTime":609.542,"body":"over a certain number of years."},{"startTime":609.582,"endTime":610.742,"body":"Yeah, I think it's the former."},{"startTime":610.762,"endTime":611.572,"body":"That I don't know."},{"startTime":611.742,"endTime":614.372,"body":"I don't know, but I think it's"},{"startTime":611.742,"endTime":614.372,"body":"the former because otherwise"},{"startTime":614.402,"endTime":615.582,"body":"things, how would you know?"},{"startTime":615.792,"endTime":617.862,"body":"Otherwise things will get just"},{"startTime":615.792,"endTime":617.862,"body":"completely out of the way."},{"startTime":618.012,"endTime":622.422,"body":"My, my sense is that, well now, without"},{"startTime":618.012,"endTime":622.422,"body":"looking at the actual accounting ruling,"},{"startTime":622.572,"endTime":626.492,"body":"and most times accounting ruling follows"},{"startTime":622.572,"endTime":626.492,"body":"common sense, but sometimes you're wrong."},{"startTime":626.642,"endTime":630.992,"body":"But my sense is that, They would look"},{"startTime":626.642,"endTime":630.992,"body":"at, I mean, what is the chances that"},{"startTime":631.012,"endTime":637.052,"body":"I would buy a cloud contract, cloud"},{"startTime":631.012,"endTime":637.052,"body":"system, or everything from IBM or so, and"},{"startTime":637.052,"endTime":638.802,"body":"get rid of it by the end of this year."},{"startTime":638.952,"endTime":640.222,"body":"That's a huge churn."},{"startTime":640.222,"endTime":642.982,"body":"Probably very, very close to zero."},{"startTime":643.002,"endTime":647.462,"body":"Now, the good thing, though, is"},{"startTime":643.002,"endTime":647.462,"body":"for you and I, mom and pop, guys,"},{"startTime":647.612,"endTime":651.912,"body":"the rules don't always apply to us"},{"startTime":647.612,"endTime":651.912,"body":"because there is some de minimis rule."},{"startTime":652.012,"endTime":652.332,"body":"Sure."},{"startTime":652.512,"endTime":654.732,"body":"If it's too little, just expense it."},{"startTime":655.042,"endTime":655.312,"body":"Right."},{"startTime":655.462,"endTime":659.572,"body":"But then, like you mentioned, the,"},{"startTime":655.462,"endTime":659.572,"body":"what is it, the venture capital firms"},{"startTime":659.572,"endTime":663.412,"body":"that buy, buy businesses, some of"},{"startTime":659.572,"endTime":663.412,"body":"them like to capitalize everything,"},{"startTime":663.412,"endTime":664.862,"body":"so net income looks really great."},{"startTime":665.012,"endTime":666.152,"body":"That's the first year."},{"startTime":666.302,"endTime":670.022,"body":"And, and that I bring that up because"},{"startTime":666.302,"endTime":670.022,"body":"that's been my direct exposure to this"},{"startTime":670.072,"endTime":674.982,"body":"is, is PE firms that private equity"},{"startTime":670.072,"endTime":674.982,"body":"firms, venture capital firms, whatever."},{"startTime":675.132,"endTime":677.412,"body":"Basically, firms run by accountants."},{"startTime":677.562,"endTime":682.742,"body":"That are trying to make the books look"},{"startTime":677.562,"endTime":682.742,"body":"as good as they can with no regard to"},{"startTime":682.742,"endTime":686.812,"body":"the future because two years from now,"},{"startTime":682.742,"endTime":686.812,"body":"we might get to two years from now and"},{"startTime":686.862,"endTime":691.482,"body":"revenue will have dropped, but we've"},{"startTime":686.862,"endTime":691.482,"body":"incurred those expenses from previous"},{"startTime":691.482,"endTime":693.802,"body":"years that now we're still paying down."},{"startTime":694.142,"endTime":696.592,"body":"So the things that we've"},{"startTime":694.142,"endTime":696.592,"body":"capitalized from two years ago."},{"startTime":696.742,"endTime":701.262,"body":"And now we've lost 50 percent of our"},{"startTime":696.742,"endTime":701.262,"body":"businesses Oh, now we, suddenly there's"},{"startTime":701.262,"endTime":705.002,"body":"no money for raises and no money for"},{"startTime":701.262,"endTime":705.002,"body":"new equipment and no money for anything"},{"startTime":705.002,"endTime":709.662,"body":"because we're still paying stuff from"},{"startTime":705.002,"endTime":709.662,"body":"two years ago when like two years at a P."},{"startTime":709.662,"endTime":709.882,"body":"E."},{"startTime":709.892,"endTime":712.612,"body":"Backed firm is like,"},{"startTime":709.892,"endTime":712.612,"body":"that's like two dog years."},{"startTime":712.612,"endTime":717.172,"body":"Yeah, it's like, that's like 15 normal"},{"startTime":712.612,"endTime":717.172,"body":"years that you go back for a second"},{"startTime":717.172,"endTime":718.992,"body":"round of funding for just like dead."},{"startTime":719.042,"endTime":721.682,"body":"Debt cap space on the football team."},{"startTime":721.842,"endTime":725.302,"body":"Yeah, right, you know you pay for you"},{"startTime":721.842,"endTime":725.302,"body":"hire this great quarterback paying"},{"startTime":725.452,"endTime":729.692,"body":"But five hire him for five years and"},{"startTime":725.452,"endTime":729.692,"body":"then after one year you kick him out."},{"startTime":730.042,"endTime":732.642,"body":"You've got debts Yeah, you"},{"startTime":730.042,"endTime":732.642,"body":"still got to pay that money"},{"startTime":732.652,"endTime":734.212,"body":"exactly now on the other hand."},{"startTime":734.242,"endTime":738.762,"body":"I am also aware of many CEOs who"},{"startTime":734.242,"endTime":738.762,"body":"have the different, the CFOs,"},{"startTime":738.912,"endTime":740.512,"body":"who have a different philosophy."},{"startTime":740.662,"endTime":744.652,"body":"So I'm buying this business, I want to"},{"startTime":740.662,"endTime":744.652,"body":"start fresh, I don't want any expenses,"},{"startTime":744.792,"endTime":746.472,"body":"I want the next few years to look good."},{"startTime":746.622,"endTime":749.082,"body":"They will bury everything the first year."},{"startTime":749.232,"endTime":752.362,"body":"Write off everything, so if anyone"},{"startTime":749.232,"endTime":752.362,"body":"says, Wow, this year is bad."},{"startTime":752.492,"endTime":756.292,"body":"Yeah, we are cleaning house, so that"},{"startTime":752.492,"endTime":756.292,"body":"we can look better next few years."},{"startTime":756.442,"endTime":759.312,"body":"That's especially true if they're"},{"startTime":756.442,"endTime":759.312,"body":"looking to flip the company."},{"startTime":759.372,"endTime":759.652,"body":"Huh."},{"startTime":759.682,"endTime":759.922,"body":"Right?"},{"startTime":759.972,"endTime":761.612,"body":"Looking to sell it pretty quickly."},{"startTime":761.632,"endTime":762.322,"body":"Year or two."},{"startTime":762.647,"endTime":763.967,"body":"Then that's exactly right."},{"startTime":764.117,"endTime":766.247,"body":"Because now your bottom"},{"startTime":764.117,"endTime":766.247,"body":"line looks so good."},{"startTime":766.507,"endTime":768.387,"body":"And the company looks"},{"startTime":766.507,"endTime":768.387,"body":"attractive to purchase."},{"startTime":768.387,"endTime":773.827,"body":"Wouldn't your, let's pretend for a second"},{"startTime":768.387,"endTime":773.827,"body":"that I'm I'm co CEO in Brian and Om's"},{"startTime":773.847,"endTime":775.567,"body":"development, software development company."},{"startTime":775.717,"endTime":779.247,"body":"And like, Om is like, capitalize"},{"startTime":775.717,"endTime":779.247,"body":"everything, I want the books"},{"startTime":779.257,"endTime":780.317,"body":"to look as good as possible."},{"startTime":780.547,"endTime":785.007,"body":"And my, my outlook is I want"},{"startTime":780.547,"endTime":785.007,"body":"to book everything this year."},{"startTime":785.077,"endTime":787.007,"body":"Every scrap of extra cash I have."},{"startTime":787.337,"endTime":791.667,"body":"I want it to go into, straight into the"},{"startTime":787.337,"endTime":791.667,"body":"software to make a better product because"},{"startTime":791.817,"endTime":795.897,"body":"two and three years from now, I expect"},{"startTime":791.817,"endTime":795.897,"body":"more revenue to come in two and three"},{"startTime":795.907,"endTime":797.207,"body":"years from now than is coming in now."},{"startTime":797.207,"endTime":801.407,"body":"And we won't have Any expense"},{"startTime":797.207,"endTime":801.407,"body":"carried over in any of the years."},{"startTime":801.417,"endTime":805.747,"body":"So, so all those other years will be pure,"},{"startTime":801.417,"endTime":805.747,"body":"but I'm going to say they're pure profit."},{"startTime":805.767,"endTime":807.607,"body":"I know in actuality we"},{"startTime":805.767,"endTime":807.607,"body":"have maintenance costs."},{"startTime":807.607,"endTime":809.607,"body":"We have other things"},{"startTime":807.607,"endTime":809.607,"body":"we have to pay, right?"},{"startTime":809.647,"endTime":811.847,"body":"But, we'll have those maintenance costs."},{"startTime":811.997,"endTime":815.247,"body":"On top of all of our"},{"startTime":811.997,"endTime":815.247,"body":"capitalized costs, right?"},{"startTime":815.287,"endTime":819.507,"body":"So my strategy is, I don't know what the"},{"startTime":815.287,"endTime":819.507,"body":"market's going to look like in two years."},{"startTime":819.647,"endTime":822.157,"body":"I'm looking at the economic"},{"startTime":819.647,"endTime":822.157,"body":"outlook and whatnot."},{"startTime":822.187,"endTime":823.457,"body":"I don't feel good about it."},{"startTime":823.537,"endTime":828.047,"body":"I want the next two years to be unburdened"},{"startTime":823.537,"endTime":828.047,"body":"from all these capitalized costs."},{"startTime":828.237,"endTime":830.257,"body":"Because I'm worried about"},{"startTime":828.237,"endTime":830.257,"body":"what's going to happen."},{"startTime":830.257,"endTime":833.697,"body":"And if everything turns out great,"},{"startTime":830.257,"endTime":833.697,"body":"and like we have all this extra money"},{"startTime":833.697,"endTime":837.047,"body":"laying around, Maybe we can kick off"},{"startTime":833.697,"endTime":837.047,"body":"some R\u0026 D activities, or maybe we can"},{"startTime":837.047,"endTime":840.887,"body":"kick off some extra lines of service, or"},{"startTime":837.047,"endTime":840.887,"body":"extra pieces of software, or whatever."},{"startTime":841.037,"endTime":842.317,"body":"You know, spend some extra cash."},{"startTime":842.487,"endTime":845.137,"body":", I have too much money is not"},{"startTime":842.487,"endTime":845.137,"body":"a problem that I've ever had."},{"startTime":845.377,"endTime":845.737,"body":"Never!"},{"startTime":845.997,"endTime":846.537,"body":"Never!"},{"startTime":846.687,"endTime":851.277,"body":"Now, the topic you are talking"},{"startTime":846.687,"endTime":851.277,"body":"about, it's driven also sometimes"},{"startTime":851.277,"endTime":853.227,"body":"by lots of external items."},{"startTime":853.377,"endTime":857.607,"body":"So the venture capital is borrowed"},{"startTime":853.377,"endTime":857.607,"body":"money from a bank, and they have"},{"startTime":857.607,"endTime":860.577,"body":"these governors that say your"},{"startTime":857.607,"endTime":860.577,"body":"net income cannot go below this."},{"startTime":860.727,"endTime":863.337,"body":"So they may decide to"},{"startTime":860.727,"endTime":863.337,"body":"capitalize everything."},{"startTime":863.487,"endTime":866.847,"body":"But your philosophy is the"},{"startTime":863.487,"endTime":866.847,"body":"one I would like, because you"},{"startTime":866.847,"endTime":867.687,"body":"don't know what tomorrow is."},{"startTime":867.687,"endTime":869.167,"body":"Go with a clean balance sheet."},{"startTime":869.317,"endTime":874.057,"body":"So, but some of them have a Contracts,"},{"startTime":869.317,"endTime":874.057,"body":"I tell them, you can't go, I would think"},{"startTime":874.057,"endTime":877.847,"body":"it's even short sighted to try and measure"},{"startTime":874.057,"endTime":877.847,"body":"you on the first year because the first"},{"startTime":877.867,"endTime":879.627,"body":"year you used to be cleaning house."},{"startTime":879.747,"endTime":879.987,"body":"Right."},{"startTime":879.987,"endTime":880.177,"body":"Yeah."},{"startTime":880.247,"endTime":880.597,"body":"You know."},{"startTime":880.747,"endTime":883.697,"body":"For external software, this"},{"startTime":880.747,"endTime":883.697,"body":"is, this is my experience."},{"startTime":883.847,"endTime":889.247,"body":"We were producing external use software"},{"startTime":883.847,"endTime":889.247,"body":"and we were going through a ramp period"},{"startTime":889.397,"endTime":894.017,"body":"where we had all of our internal teams"},{"startTime":889.397,"endTime":894.017,"body":"plus some offshore teams and we were"},{"startTime":894.097,"endTime":898.107,"body":"capitalizing everything from every"},{"startTime":894.097,"endTime":898.107,"body":"single team as heavily as possible."},{"startTime":898.117,"endTime":902.997,"body":"Every single dollar as possible because"},{"startTime":898.117,"endTime":902.997,"body":"we, we said there's going to be a solid."},{"startTime":903.147,"endTime":907.837,"body":"probably 18 months, maybe two"},{"startTime":903.147,"endTime":907.837,"body":"years ramp period where we're"},{"startTime":907.837,"endTime":909.157,"body":"just spending money like crazy."},{"startTime":909.297,"endTime":913.637,"body":"And then we heavily use a capitalization"},{"startTime":909.297,"endTime":913.637,"body":"strategy so we can build, build, build."},{"startTime":913.897,"endTime":918.237,"body":"And then there will be a tipping point"},{"startTime":913.897,"endTime":918.237,"body":"where we will start rolling off the"},{"startTime":918.237,"endTime":920.547,"body":"offshore team and taking the internally."},{"startTime":920.547,"endTime":922.537,"body":"But you know, the internal team"},{"startTime":920.547,"endTime":922.537,"body":"is like, we're not replacing"},{"startTime":922.537,"endTime":923.227,"body":"people when they leave."},{"startTime":923.227,"endTime":926.947,"body":"And so that so that the we'll get to a"},{"startTime":923.227,"endTime":926.947,"body":"point where we're bringing in revenue"},{"startTime":927.107,"endTime":930.727,"body":"and the internal team that we have that"},{"startTime":927.107,"endTime":930.727,"body":"stabilizes over time, we'll be able"},{"startTime":930.727,"endTime":932.187,"body":"to maintain the solution that we have."},{"startTime":932.507,"endTime":935.627,"body":"And then all the debt that's been"},{"startTime":932.507,"endTime":935.627,"body":"leveraged, all of the things that have"},{"startTime":935.627,"endTime":940.597,"body":"been amortized with our current profit"},{"startTime":935.627,"endTime":940.597,"body":"that's coming in will be enough to"},{"startTime":940.607,"endTime":944.697,"body":"run the business, make a profit and"},{"startTime":940.607,"endTime":944.697,"body":"maintain all the employees that we have."},{"startTime":944.877,"endTime":945.847,"body":"That was the strategy."},{"startTime":945.997,"endTime":946.577,"body":"It didn't work."},{"startTime":946.727,"endTime":947.487,"body":"It didn't work at all."},{"startTime":947.487,"endTime":951.537,"body":"But that was what they"},{"startTime":947.487,"endTime":951.537,"body":"were going for, you know."},{"startTime":951.687,"endTime":955.527,"body":"Now, the irony of all this is"},{"startTime":951.687,"endTime":955.527,"body":"that what we are discussing has"},{"startTime":955.537,"endTime":957.147,"body":"nothing to do with cash flow."},{"startTime":957.297,"endTime":957.927,"body":"Right, right."},{"startTime":957.957,"endTime":959.897,"body":"Yeah, which is what runs the business."},{"startTime":960.047,"endTime":963.927,"body":"And private companies, when you're"},{"startTime":960.047,"endTime":963.927,"body":"not owing too much money outside."},{"startTime":964.077,"endTime":968.917,"body":"Focus entirely on cash flow and"},{"startTime":964.077,"endTime":968.917,"body":"they say damn, CapEx or OpEx."},{"startTime":969.017,"endTime":972.967,"body":"So they do it the right way or they"},{"startTime":969.017,"endTime":972.967,"body":"clean house and sometimes excessively"},{"startTime":972.967,"endTime":975.157,"body":"clean house in their accounting."},{"startTime":975.327,"endTime":975.547,"body":"Yeah."},{"startTime":975.637,"endTime":978.717,"body":"But they don't care because they don't"},{"startTime":975.637,"endTime":978.717,"body":"have to report to the stock market."},{"startTime":978.987,"endTime":979.537,"body":"Mm hmm."},{"startTime":979.537,"endTime":979.877,"body":"Okay."},{"startTime":980.027,"endTime":983.617,"body":"But some of it even the stock market"},{"startTime":980.027,"endTime":983.617,"body":"depends entirely on your communication."},{"startTime":983.767,"endTime":986.787,"body":"If the stock market expects That"},{"startTime":983.767,"endTime":986.787,"body":"this year is going to be bad"},{"startTime":986.837,"endTime":988.107,"body":"because you're a cleaning house."},{"startTime":988.397,"endTime":989.777,"body":"They might even raise your stock."},{"startTime":989.927,"endTime":993.767,"body":"That you're going to be such a"},{"startTime":989.927,"endTime":993.767,"body":"great company in the near future."},{"startTime":994.037,"endTime":998.017,"body":"He's got a cleaning house, no old"},{"startTime":994.037,"endTime":998.017,"body":"equipment, everything will be brand new."},{"startTime":998.047,"endTime":1001.627,"body":"So, it's, it's changes"},{"startTime":998.047,"endTime":1001.627,"body":"from market environment."},{"startTime":1001.777,"endTime":1003.577,"body":"And also the philosopher of management."},{"startTime":1003.577,"endTime":1005.702,"body":"The other way that I've seen things"},{"startTime":1003.577,"endTime":1005.702,"body":"done is you're getting close to the"},{"startTime":1005.702,"endTime":1008.762,"body":"end of the year and that opex is"},{"startTime":1005.702,"endTime":1008.762,"body":"way higher than you want it to be."},{"startTime":1008.942,"endTime":1012.762,"body":"So the thing that I see whenever"},{"startTime":1008.942,"endTime":1012.762,"body":"I see like especially in agile,"},{"startTime":1012.762,"endTime":1016.452,"body":"like I'm su super sensitive, that"},{"startTime":1012.762,"endTime":1016.452,"body":"when I see people cutting jobs and"},{"startTime":1016.452,"endTime":1017.982,"body":"cutting like hundreds of employees."},{"startTime":1018.277,"endTime":1022.717,"body":"Like that they see as quote overhead"},{"startTime":1018.277,"endTime":1022.717,"body":"Spotify just that we try not to"},{"startTime":1022.717,"endTime":1025.997,"body":"name company names on the podcast,"},{"startTime":1022.717,"endTime":1025.997,"body":"Spotify deserves it by the way,"},{"startTime":1026.207,"endTime":1030.427,"body":"like they're like, oh we need people"},{"startTime":1026.207,"endTime":1030.427,"body":"that are quote Producing or what?"},{"startTime":1030.427,"endTime":1032.577,"body":"I can't remember what the"},{"startTime":1030.427,"endTime":1032.577,"body":"CEO said in his thing."},{"startTime":1032.787,"endTime":1036.017,"body":"It's like no, that's not what you're"},{"startTime":1032.787,"endTime":1036.017,"body":"doing You're you're you're going to"},{"startTime":1036.017,"endTime":1039.917,"body":"the end of the year and your opex is"},{"startTime":1036.017,"endTime":1039.917,"body":"a little high So you're trimming it"},{"startTime":1039.917,"endTime":1044.437,"body":"down so that by the end of the year"},{"startTime":1039.917,"endTime":1044.437,"body":"that like the when you book out And"},{"startTime":1044.437,"endTime":1046.257,"body":"you finish, that number looks good."},{"startTime":1046.407,"endTime":1048.137,"body":"That, I think, is what they're doing."},{"startTime":1048.287,"endTime":1050.807,"body":"Like, does that, first of all,"},{"startTime":1048.287,"endTime":1050.807,"body":"does that financially work?"},{"startTime":1050.817,"endTime":1051.557,"body":"Can you do that?"},{"startTime":1051.557,"endTime":1053.387,"body":"Can you just be like, You know"},{"startTime":1051.557,"endTime":1053.387,"body":"what I'm gonna get to like the"},{"startTime":1053.387,"endTime":1055.627,"body":"end of November and I'm gonna fire"},{"startTime":1053.387,"endTime":1055.627,"body":"like three quarters of my staff"},{"startTime":1055.837,"endTime":1057.917,"body":"listen, there's nothing to"},{"startTime":1055.837,"endTime":1057.917,"body":"stop you from doing that."},{"startTime":1057.967,"endTime":1059.237,"body":"Right?"},{"startTime":1059.237,"endTime":1060.927,"body":"It's not just that company."},{"startTime":1060.947,"endTime":1061.757,"body":"Others have done that."},{"startTime":1061.807,"endTime":1063.937,"body":"There's nothing illegal about doing that."},{"startTime":1064.087,"endTime":1065.897,"body":"I'm not talking about"},{"startTime":1064.087,"endTime":1065.897,"body":"morality or anything."},{"startTime":1065.927,"endTime":1066.737,"body":"There's nothing illegal."},{"startTime":1066.887,"endTime":1070.167,"body":"In fact, in that specific instance,"},{"startTime":1066.887,"endTime":1070.167,"body":"they immediately turned around"},{"startTime":1070.167,"endTime":1071.427,"body":"and made a profit because of that."},{"startTime":1071.707,"endTime":1073.827,"body":"Which is what happens when"},{"startTime":1071.707,"endTime":1073.827,"body":"you get rid of people, right?"},{"startTime":1073.977,"endTime":1075.467,"body":"So yeah, can they do that?"},{"startTime":1075.467,"endTime":1075.977,"body":"Yes."},{"startTime":1076.127,"endTime":1077.247,"body":"There's nothing wrong with that."},{"startTime":1077.397,"endTime":1081.097,"body":"Now, I don't like it, because"},{"startTime":1077.397,"endTime":1081.097,"body":"you're not talking about resources"},{"startTime":1081.097,"endTime":1083.597,"body":"and cells, especially if you're"},{"startTime":1081.097,"endTime":1083.597,"body":"talking about real, live human"},{"startTime":1083.597,"endTime":1086.917,"body":"beings with families and whatnot,"},{"startTime":1083.597,"endTime":1086.917,"body":"so I don't like it for that reason."},{"startTime":1087.067,"endTime":1090.937,"body":"And some of them fire the guy, and next"},{"startTime":1087.067,"endTime":1090.937,"body":"day he's back there as a contractor."},{"startTime":1091.087,"endTime":1091.717,"body":"Right, yes."},{"startTime":1091.817,"endTime":1096.117,"body":"Now, it's easier in the United"},{"startTime":1091.817,"endTime":1096.117,"body":"States, because most jobs are at will."},{"startTime":1096.267,"endTime":1098.387,"body":"In foreign countries, it's hard to do."},{"startTime":1098.537,"endTime":1101.557,"body":"To fire a person in England"},{"startTime":1098.537,"endTime":1101.557,"body":"or France takes forever."},{"startTime":1101.707,"endTime":1104.067,"body":"So, and and now here is"},{"startTime":1101.707,"endTime":1104.067,"body":"the other thing though."},{"startTime":1104.217,"endTime":1107.927,"body":"Sometimes when they do that, they"},{"startTime":1104.217,"endTime":1107.927,"body":"actually may have to report a"},{"startTime":1108.097,"endTime":1110.167,"body":"loss because severance payments."},{"startTime":1110.317,"endTime":1113.267,"body":"You know, when a person, when you"},{"startTime":1110.317,"endTime":1113.267,"body":"fire a whole bunch of people, you"},{"startTime":1113.267,"endTime":1117.017,"body":"buy out contracts, severance payments"},{"startTime":1113.267,"endTime":1117.017,"body":"and those severance payments are"},{"startTime":1117.027,"endTime":1120.577,"body":"usually more than their actual salary"},{"startTime":1117.027,"endTime":1120.577,"body":"between November and end of December."},{"startTime":1120.727,"endTime":1124.897,"body":"But because the market now hears"},{"startTime":1120.727,"endTime":1124.897,"body":"that you are getting leaner in the"},{"startTime":1124.897,"endTime":1126.787,"body":"future, your stock still goes up."},{"startTime":1126.907,"endTime":1130.657,"body":"The reason I bring this up is because"},{"startTime":1126.907,"endTime":1130.657,"body":"Om and I in previous podcasts have"},{"startTime":1130.662,"endTime":1135.307,"body":"talked about the development teams,"},{"startTime":1130.662,"endTime":1135.307,"body":"the, the teams producing your software."},{"startTime":1135.457,"endTime":1138.347,"body":"Slash running big segments of"},{"startTime":1135.457,"endTime":1138.347,"body":"your business because development"},{"startTime":1138.347,"endTime":1140.767,"body":"teams can scale to like large"},{"startTime":1138.347,"endTime":1140.767,"body":"groups or whatever for sure."},{"startTime":1140.917,"endTime":1144.427,"body":"They need to have all of the skill"},{"startTime":1140.917,"endTime":1144.427,"body":"sets that they need to actually"},{"startTime":1144.757,"endTime":1148.417,"body":"produce the software that they're"},{"startTime":1144.757,"endTime":1148.417,"body":"trying to produce and the teams"},{"startTime":1148.417,"endTime":1150.157,"body":"are supposed to be self managing."},{"startTime":1150.307,"endTime":1153.547,"body":"Which means that the teams, now"},{"startTime":1150.307,"endTime":1153.547,"body":"the teams need additional skill set"},{"startTime":1153.547,"endTime":1154.577,"body":"outside of software development."},{"startTime":1154.577,"endTime":1156.737,"body":"They need to be able"},{"startTime":1154.577,"endTime":1156.737,"body":"to hire new people in."},{"startTime":1156.747,"endTime":1160.727,"body":"They need to be able to deal with the"},{"startTime":1156.747,"endTime":1160.727,"body":"financial numbers of their software."},{"startTime":1160.867,"endTime":1163.457,"body":"They need to be able to,"},{"startTime":1160.867,"endTime":1163.457,"body":"and again, I'm the product"},{"startTime":1163.457,"endTime":1164.647,"body":"management side of the podcast."},{"startTime":1164.887,"endTime":1168.737,"body":"So when I talk a lot about"},{"startTime":1164.887,"endTime":1168.737,"body":"business dysfunction, I'm saying"},{"startTime":1168.737,"endTime":1171.477,"body":"like, well it sounds like your"},{"startTime":1168.737,"endTime":1171.477,"body":"business has no solid strategy."},{"startTime":1171.627,"endTime":1171.997,"body":"Right?"},{"startTime":1172.007,"endTime":1176.927,"body":"Like your strategy is, I've got some"},{"startTime":1172.007,"endTime":1176.927,"body":"customers, they pay me money, and"},{"startTime":1176.947,"endTime":1178.467,"body":"that's as far as I've thought about it."},{"startTime":1178.617,"endTime":1180.847,"body":"And then product manager Brian's"},{"startTime":1178.617,"endTime":1180.847,"body":"like, no, that's not good enough."},{"startTime":1180.847,"endTime":1183.717,"body":"Like, you get those customers"},{"startTime":1180.847,"endTime":1183.717,"body":"could disappear tomorrow."},{"startTime":1183.977,"endTime":1187.547,"body":"If a competitor rolls in who's a little"},{"startTime":1183.977,"endTime":1187.547,"body":"savvy and understands your market, or"},{"startTime":1187.547,"endTime":1189.917,"body":"snatches a couple of your employees"},{"startTime":1187.547,"endTime":1189.917,"body":"who are your experts like that."},{"startTime":1189.937,"endTime":1191.497,"body":"Things could disappear tomorrow, right?"},{"startTime":1191.647,"endTime":1196.187,"body":"So, so one of the things that I, I"},{"startTime":1191.647,"endTime":1196.187,"body":"pretty firmly believe is the, the,"},{"startTime":1196.337,"endTime":1200.217,"body":"there are experts in your business that"},{"startTime":1196.337,"endTime":1200.217,"body":"need to intersect with these teams."},{"startTime":1200.367,"endTime":1203.617,"body":"To help them develop the"},{"startTime":1200.367,"endTime":1203.617,"body":"skill that they don't have."},{"startTime":1203.837,"endTime":1206.497,"body":"Finance is one of these skills,"},{"startTime":1203.837,"endTime":1206.497,"body":"but I'm not going to use that"},{"startTime":1206.517,"endTime":1207.917,"body":"because it's not in my wheelhouse."},{"startTime":1208.007,"endTime":1211.617,"body":"I'll, I'll use something that's way close"},{"startTime":1208.007,"endTime":1211.617,"body":"to my wheelhouse, which is marketing."},{"startTime":1211.767,"endTime":1214.787,"body":"A lot of product managers, especially"},{"startTime":1211.767,"endTime":1214.787,"body":"people like me who come from the"},{"startTime":1214.787,"endTime":1218.177,"body":"development side of the house, They"},{"startTime":1214.787,"endTime":1218.177,"body":"don't have the marketing skills"},{"startTime":1218.217,"endTime":1219.857,"body":"that they need to be successful."},{"startTime":1220.077,"endTime":1222.627,"body":"So if you were to take someone off the"},{"startTime":1220.077,"endTime":1222.627,"body":"development side of the house and be"},{"startTime":1222.627,"endTime":1225.927,"body":"like, Hey, you're going to create software"},{"startTime":1222.627,"endTime":1225.927,"body":"now and I need you to talk to customers."},{"startTime":1226.077,"endTime":1226.937,"body":"Cool, I can do that."},{"startTime":1227.147,"endTime":1228.527,"body":"I need you to vet requirements."},{"startTime":1228.647,"endTime":1229.687,"body":"Cool, I can do that."},{"startTime":1229.967,"endTime":1234.067,"body":"I need you to go out and position"},{"startTime":1229.967,"endTime":1234.067,"body":"yourself in the market as the software"},{"startTime":1234.067,"endTime":1235.567,"body":"to take care of this problem or whatever."},{"startTime":1235.827,"endTime":1237.237,"body":"I have no idea how to do that."},{"startTime":1237.267,"endTime":1238.847,"body":"So I need someone to help me."},{"startTime":1238.997,"endTime":1240.847,"body":"Like, I'm not saying I'm"},{"startTime":1238.997,"endTime":1240.847,"body":"not willing to do it."},{"startTime":1240.857,"endTime":1242.037,"body":"I'm not saying that's not my job."},{"startTime":1242.172,"endTime":1243.702,"body":"I'm not coming at it"},{"startTime":1242.172,"endTime":1243.702,"body":"with a crappy attitude."},{"startTime":1243.852,"endTime":1246.432,"body":"What I am saying is I've"},{"startTime":1243.852,"endTime":1246.432,"body":"never done that before."},{"startTime":1246.582,"endTime":1249.122,"body":"I need someone who has done"},{"startTime":1246.582,"endTime":1249.122,"body":"it to come onto my team."},{"startTime":1249.142,"endTime":1250.432,"body":"I'm willing to pay, right?"},{"startTime":1250.462,"endTime":1255.662,"body":"Oh, maybe hire somebody, maybe pay a"},{"startTime":1250.462,"endTime":1255.662,"body":"contractor, help me and my developers"},{"startTime":1255.812,"endTime":1257.922,"body":"learn that skill, try different things."},{"startTime":1258.082,"endTime":1260.982,"body":"And now over a couple of"},{"startTime":1258.082,"endTime":1260.982,"body":"months, now we can do marketing."},{"startTime":1261.042,"endTime":1264.332,"body":"Now we own the marketing"},{"startTime":1261.042,"endTime":1264.332,"body":"for our own products."},{"startTime":1264.482,"endTime":1267.012,"body":"HR Hiring people when"},{"startTime":1264.482,"endTime":1267.012,"body":"people leave our team."},{"startTime":1267.162,"endTime":1269.272,"body":"Interviewing, good"},{"startTime":1267.162,"endTime":1269.272,"body":"interviewing techniques."},{"startTime":1269.282,"endTime":1271.052,"body":"What to say in an interview,"},{"startTime":1269.282,"endTime":1271.052,"body":"what not to say in an interview."},{"startTime":1271.112,"endTime":1273.242,"body":"How to get rid of employees"},{"startTime":1271.112,"endTime":1273.242,"body":"that are a problem or whatever."},{"startTime":1273.242,"endTime":1274.272,"body":"That's a skill."},{"startTime":1274.582,"endTime":1276.962,"body":"Now my team members and I have that skill."},{"startTime":1277.112,"endTime":1278.782,"body":"I think of finance the exact same way."},{"startTime":1279.052,"endTime":1282.342,"body":"How, how is what we're doing"},{"startTime":1279.052,"endTime":1282.342,"body":"contributing to the bottom line?"},{"startTime":1282.342,"endTime":1285.402,"body":"If you're Spotify, okay, we're"},{"startTime":1282.342,"endTime":1285.402,"body":"getting to the end of the year."},{"startTime":1285.552,"endTime":1288.132,"body":"Our OpEx is about, I don't know, 8."},{"startTime":1288.212,"endTime":1289.572,"body":"3 percent short."},{"startTime":1289.722,"endTime":1290.402,"body":"Let's go fire 8."},{"startTime":1290.402,"endTime":1292.632,"body":"3 percent of our people"},{"startTime":1290.402,"endTime":1292.632,"body":"and make that money up."},{"startTime":1292.802,"endTime":1293.112,"body":"Boom."},{"startTime":1293.112,"endTime":1293.602,"body":"Like that."},{"startTime":1293.712,"endTime":1294.052,"body":"Yeah."},{"startTime":1294.242,"endTime":1294.972,"body":"Great idea."},{"startTime":1294.992,"endTime":1295.582,"body":"Great idea."},{"startTime":1295.632,"endTime":1299.292,"body":"However, Why don't I just go out to"},{"startTime":1295.632,"endTime":1299.292,"body":"my teams and say like, can we make"},{"startTime":1299.302,"endTime":1304.752,"body":"up this reduction from what you spend"},{"startTime":1299.302,"endTime":1304.752,"body":"team members, can every team go out"},{"startTime":1304.752,"endTime":1306.552,"body":"and kind of tighten their belts for 8."},{"startTime":1306.552,"endTime":1308.272,"body":"3 percent or whatever, whatever"},{"startTime":1306.552,"endTime":1308.272,"body":"number we're trying to make up."},{"startTime":1308.272,"endTime":1308.472,"body":"Right?"},{"startTime":1308.792,"endTime":1310.742,"body":"I feel people wouldn't"},{"startTime":1308.792,"endTime":1310.742,"body":"even appreciate that."},{"startTime":1310.742,"endTime":1315.042,"body":"Approach their teams because most teams"},{"startTime":1310.742,"endTime":1315.042,"body":"don't have that skill set to look at"},{"startTime":1315.042,"endTime":1318.562,"body":"their budgets to understand what we're"},{"startTime":1315.042,"endTime":1318.562,"body":"talking about now and say, Oh, we can"},{"startTime":1318.562,"endTime":1322.892,"body":"contribute rather than firing 8 percent"},{"startTime":1318.562,"endTime":1322.892,"body":"of all these people that let's be"},{"startTime":1322.892,"endTime":1326.702,"body":"honest, 18 months from now, they're going"},{"startTime":1322.892,"endTime":1326.702,"body":"to be Spotify is going to be hiring."},{"startTime":1326.852,"endTime":1329.902,"body":"We can like Siri set a"},{"startTime":1326.852,"endTime":1329.902,"body":"reminder for 18 months."},{"startTime":1330.052,"endTime":1330.082,"body":"Yes."},{"startTime":1330.242,"endTime":1332.682,"body":"And we'll go look at Spotify's"},{"startTime":1330.242,"endTime":1332.682,"body":"job boards to see if they're"},{"startTime":1332.682,"endTime":1334.002,"body":"rehiring all these positions."},{"startTime":1334.222,"endTime":1334.732,"body":"Yes."},{"startTime":1334.762,"endTime":1335.102,"body":"Right?"},{"startTime":1335.102,"endTime":1335.362,"body":"Yeah."},{"startTime":1335.512,"endTime":1336.342,"body":"Beginning of the year."},{"startTime":1336.412,"endTime":1341.942,"body":"But this podcast is real big on distribute"},{"startTime":1336.412,"endTime":1341.942,"body":"those skills to the teams, let them help"},{"startTime":1341.942,"endTime":1343.312,"body":"you achieve whatever your goals are."},{"startTime":1343.502,"endTime":1347.442,"body":"And if your goals are, we need to reduce"},{"startTime":1343.502,"endTime":1347.442,"body":"10 percent of our costs across the board."},{"startTime":1347.592,"endTime":1348.962,"body":"Ask the teams how they reduce."},{"startTime":1349.262,"endTime":1350.762,"body":"yes, this sounds great."},{"startTime":1350.912,"endTime":1355.422,"body":"But, the guys who are making"},{"startTime":1350.912,"endTime":1355.422,"body":"the firing and hiring decision"},{"startTime":1355.462,"endTime":1357.142,"body":"are so far from the front line."},{"startTime":1357.292,"endTime":1360.312,"body":"We often touch on the podcast"},{"startTime":1357.292,"endTime":1360.312,"body":"about how they're rewarded and"},{"startTime":1360.322,"endTime":1362.092,"body":"all of that organizational design."},{"startTime":1362.112,"endTime":1363.202,"body":"All of that plays into it."},{"startTime":1363.462,"endTime":1366.102,"body":"Like they're not rewarded"},{"startTime":1363.462,"endTime":1366.102,"body":"to engage with the teams."},{"startTime":1366.102,"endTime":1367.392,"body":"They're rewarded in some other way."},{"startTime":1367.662,"endTime":1370.997,"body":"So they're going to follow the patterns"},{"startTime":1367.662,"endTime":1370.997,"body":"of behavior that Maximize their reward."},{"startTime":1371.127,"endTime":1371.697,"body":"That's right."},{"startTime":1371.757,"endTime":1374.427,"body":"He or she wants bonuses"},{"startTime":1371.757,"endTime":1374.427,"body":"at the end of the year."},{"startTime":1374.577,"endTime":1377.027,"body":"Now, it's not every"},{"startTime":1374.577,"endTime":1377.027,"body":"business that is doing that."},{"startTime":1377.077,"endTime":1380.257,"body":"There are some people who are,"},{"startTime":1377.077,"endTime":1380.257,"body":"it's a little bit of an adversarial"},{"startTime":1380.467,"endTime":1382.347,"body":"relationship in some businesses."},{"startTime":1382.497,"endTime":1385.527,"body":"But I think some CEOs are"},{"startTime":1382.497,"endTime":1385.527,"body":"going all the way down."},{"startTime":1385.677,"endTime":1385.927,"body":"Yeah."},{"startTime":1386.077,"endTime":1387.477,"body":"To engage their staff."},{"startTime":1387.607,"endTime":1391.367,"body":"I mean, I've been in businesses where"},{"startTime":1387.607,"endTime":1391.367,"body":"they actually encourage you to come with"},{"startTime":1391.367,"endTime":1396.097,"body":"suggestions on how we can cut costs,"},{"startTime":1391.367,"endTime":1396.097,"body":"and they give awards for people who"},{"startTime":1396.097,"endTime":1398.047,"body":"came with some of the great suggestions."},{"startTime":1398.197,"endTime":1403.387,"body":"Now, they're having a lot of abuse of"},{"startTime":1398.197,"endTime":1403.387,"body":"that system, too, but some CEOs do that"},{"startTime":1403.577,"endTime":1408.127,"body":"and when they can't make any more, then"},{"startTime":1403.577,"endTime":1408.127,"body":"they cut heads, and cutting heads is."},{"startTime":1408.277,"endTime":1412.327,"body":"At the end of the year is that not too"},{"startTime":1408.277,"endTime":1412.327,"body":"late because you've already paid twelve,"},{"startTime":1412.577,"endTime":1415.017,"body":"eleven months, ten months of salary."},{"startTime":1415.217,"endTime":1419.697,"body":"I bring it up to reiterate that it"},{"startTime":1415.217,"endTime":1419.697,"body":"is extremely important For people to"},{"startTime":1419.697,"endTime":1423.537,"body":"understand, especially when they're on"},{"startTime":1419.697,"endTime":1423.537,"body":"teams that contribute to the bottom line"},{"startTime":1423.737,"endTime":1427.207,"body":"in the development, the product teams that"},{"startTime":1423.737,"endTime":1427.207,"body":"they're on contribute to the bottom line."},{"startTime":1427.447,"endTime":1429.877,"body":"It's extremely important"},{"startTime":1427.447,"endTime":1429.877,"body":"to understand these things."},{"startTime":1430.027,"endTime":1432.297,"body":"Again, it's like marketing"},{"startTime":1430.027,"endTime":1432.297,"body":"is someone else's job."},{"startTime":1432.477,"endTime":1433.807,"body":"Sales is someone else's job."},{"startTime":1433.997,"endTime":1436.707,"body":"Finance is someone else's job."},{"startTime":1437.792,"endTime":1440.752,"body":"Understand that these are some of"},{"startTime":1437.792,"endTime":1440.752,"body":"the most critical business tasks."},{"startTime":1440.952,"endTime":1442.452,"body":"These things are super critical."},{"startTime":1442.462,"endTime":1444.072,"body":"So that's why I want to highlight them."},{"startTime":1444.222,"endTime":1446.002,"body":"I'd like, I spent enough time preaching."},{"startTime":1446.012,"endTime":1448.672,"body":"let's actually dig into the,"},{"startTime":1446.012,"endTime":1448.672,"body":"to the main part of the podcast"},{"startTime":1448.702,"endTime":1449.742,"body":"I wanted to get to, which is"},{"startTime":1449.892,"endTime":1453.632,"body":"when I first was exposed to this, I"},{"startTime":1449.892,"endTime":1453.632,"body":"learned that there are two categories"},{"startTime":1453.892,"endTime":1457.482,"body":"external use software, meaning"},{"startTime":1453.892,"endTime":1457.482,"body":"software that's meant to be sold."},{"startTime":1457.652,"endTime":1462.212,"body":"Used by clients customers, end users,"},{"startTime":1457.652,"endTime":1462.212,"body":"whatever, and internal use software."},{"startTime":1462.212,"endTime":1465.842,"body":"There are two categories,"},{"startTime":1462.212,"endTime":1465.842,"body":"and I have worked on projects"},{"startTime":1465.842,"endTime":1467.342,"body":"that capitalized for both."},{"startTime":1467.492,"endTime":1470.232,"body":"I think the easier one to talk"},{"startTime":1467.492,"endTime":1470.232,"body":"about conceptually is internal use,"},{"startTime":1470.532,"endTime":1475.072,"body":"this is the internal use graphic, which is"},{"startTime":1470.532,"endTime":1475.072,"body":"this is the preliminary stage where you're"},{"startTime":1475.072,"endTime":1478.642,"body":"supposed to do all your requirements or"},{"startTime":1475.072,"endTime":1478.642,"body":"whatever, and then this is the actual"},{"startTime":1478.692,"endTime":1482.862,"body":"active development, and then this is"},{"startTime":1478.692,"endTime":1482.862,"body":"when it's out technical feasibility is"},{"startTime":1482.862,"endTime":1485.112,"body":"reached, intended use is reached here."},{"startTime":1485.262,"endTime":1488.252,"body":"And then, then you can count it,"},{"startTime":1485.262,"endTime":1488.252,"body":"like that's, that's, that's a very"},{"startTime":1488.252,"endTime":1489.212,"body":"straightforward to understand."},{"startTime":1489.362,"endTime":1495.312,"body":"The other one is all of the internal,"},{"startTime":1489.362,"endTime":1495.312,"body":"like this is, everything here and here on"},{"startTime":1495.312,"endTime":1497.872,"body":"this graphic is under this R\u0026 D category."},{"startTime":1498.022,"endTime":1502.592,"body":"And then Technical Feasibility"},{"startTime":1498.022,"endTime":1502.592,"body":"Establishment is here for external use."},{"startTime":1502.762,"endTime":1506.042,"body":"So in order to talk about"},{"startTime":1502.762,"endTime":1506.042,"body":"external use software, we have"},{"startTime":1506.042,"endTime":1508.202,"body":"to have a discussion about R\u0026 D."},{"startTime":1508.322,"endTime":1511.532,"body":"What most companies don't"},{"startTime":1508.322,"endTime":1511.532,"body":"have a concept of R\u0026 D."},{"startTime":1511.612,"endTime":1513.522,"body":"I think the government"},{"startTime":1511.612,"endTime":1513.522,"body":"has a concept of R\u0026 D."},{"startTime":1513.722,"endTime":1516.972,"body":"The government accounting"},{"startTime":1513.722,"endTime":1516.972,"body":"has a concept of R\u0026 D."},{"startTime":1517.022,"endTime":1521.037,"body":"Like, when you're a government"},{"startTime":1517.022,"endTime":1521.037,"body":"Customer and you pay for R and D costs."},{"startTime":1521.327,"endTime":1522.347,"body":"That is something different."},{"startTime":1522.487,"endTime":1526.527,"body":"Normal corporations, I don't"},{"startTime":1522.487,"endTime":1526.527,"body":"know if they even use R and D."},{"startTime":1526.577,"endTime":1528.467,"body":"So I don't, I don't"},{"startTime":1526.577,"endTime":1528.467,"body":"understand what R and D is."},{"startTime":1528.617,"endTime":1531.437,"body":"So maybe you can shed some"},{"startTime":1528.617,"endTime":1531.437,"body":"light on R and D if you want to"},{"startTime":1531.447,"endTime":1533.267,"body":"talk about external use first."},{"startTime":1533.417,"endTime":1534.857,"body":"Because I think the"},{"startTime":1533.417,"endTime":1534.857,"body":"easier case is internal."},{"startTime":1534.907,"endTime":1535.877,"body":"Yeah, I agree with that."},{"startTime":1536.147,"endTime":1537.027,"body":"That is easier."},{"startTime":1537.177,"endTime":1539.657,"body":"So, I think there's a lot there, right?"},{"startTime":1539.657,"endTime":1543.247,"body":"So first of all, you gotta figure out,"},{"startTime":1539.657,"endTime":1543.247,"body":"before you even start all of this."},{"startTime":1543.397,"endTime":1547.427,"body":"What is the potential return at the end"},{"startTime":1543.397,"endTime":1547.427,"body":"of it, whatever the end means, right?"},{"startTime":1547.447,"endTime":1549.847,"body":"Two years, three years,"},{"startTime":1547.447,"endTime":1549.847,"body":"five years at the end of it."},{"startTime":1549.997,"endTime":1553.697,"body":"And based on that correspondingly,"},{"startTime":1549.997,"endTime":1553.697,"body":"you're going to invest, right?"},{"startTime":1553.847,"endTime":1558.097,"body":"So before you get, before you make"},{"startTime":1553.847,"endTime":1558.097,"body":"a single dime on that product,"},{"startTime":1558.137,"endTime":1561.357,"body":"let's just say any software we're"},{"startTime":1558.137,"endTime":1561.357,"body":"speaking about, but that, there's"},{"startTime":1561.367,"endTime":1563.327,"body":"nuances, so we'll get to those later."},{"startTime":1563.502,"endTime":1567.212,"body":"So before you even do that, if"},{"startTime":1563.502,"endTime":1567.212,"body":"you don't have that idea up front,"},{"startTime":1567.362,"endTime":1569.202,"body":"you're just going blind, right?"},{"startTime":1569.272,"endTime":1571.122,"body":"Because the market can"},{"startTime":1569.272,"endTime":1571.122,"body":"change just like that."},{"startTime":1571.132,"endTime":1575.272,"body":"Like you said earlier, a competitor comes"},{"startTime":1571.132,"endTime":1575.272,"body":"in and now you're completely off rails."},{"startTime":1575.422,"endTime":1578.032,"body":"But as far as costs, this one here,"},{"startTime":1578.082,"endTime":1579.772,"body":"costs expensed as incurred."},{"startTime":1580.032,"endTime":1581.122,"body":"So in the early days."},{"startTime":1581.137,"endTime":1584.297,"body":"You're going to have some"},{"startTime":1581.137,"endTime":1584.297,"body":"serious expenses, right?"},{"startTime":1584.317,"endTime":1587.737,"body":"You ramp up the production of"},{"startTime":1584.317,"endTime":1587.737,"body":"whatever it is you're going to sell."},{"startTime":1587.807,"endTime":1591.417,"body":"It's not until you sell it, really,"},{"startTime":1587.807,"endTime":1591.417,"body":"that you start capitalizing it."},{"startTime":1591.457,"endTime":1594.667,"body":"Now, it says here, preliminary"},{"startTime":1591.457,"endTime":1594.667,"body":"project stage complete, right?"},{"startTime":1594.817,"endTime":1598.657,"body":"That could, that, this graphic is"},{"startTime":1594.817,"endTime":1598.657,"body":"simplistic in nature, meaning That's"},{"startTime":1598.657,"endTime":1601.687,"body":"closer to the start date, but in"},{"startTime":1598.657,"endTime":1601.687,"body":"practice it doesn't have to be."},{"startTime":1601.687,"endTime":1602.047,"body":"Mm-Hmm."},{"startTime":1602.052,"endTime":1603.952,"body":", that could be way over to the right."},{"startTime":1604.102,"endTime":1607.912,"body":"Well, a, again, I like the, the"},{"startTime":1604.102,"endTime":1607.912,"body":"graphics that I'm on, and when we do"},{"startTime":1607.912,"endTime":1611.272,"body":"the podcast, you, you guys can't see"},{"startTime":1607.912,"endTime":1611.272,"body":"the screen, the, the podcast screen."},{"startTime":1611.512,"endTime":1615.707,"body":"But when, when we when I post the"},{"startTime":1611.512,"endTime":1615.707,"body":"podcast, what I'll do is I will put"},{"startTime":1615.707,"endTime":1618.437,"body":"these graphics up as an overlay over us."},{"startTime":1618.527,"endTime":1618.617,"body":"Yes."},{"startTime":1618.687,"endTime":1621.502,"body":"For when we're talking and"},{"startTime":1618.687,"endTime":1621.502,"body":"what I think when these were."},{"startTime":1621.652,"endTime":1622.432,"body":"invented."},{"startTime":1622.582,"endTime":1626.582,"body":"The concept was you did all of"},{"startTime":1622.582,"endTime":1626.582,"body":"the software planning and then you"},{"startTime":1626.582,"endTime":1630.242,"body":"did all the software architecture"},{"startTime":1626.582,"endTime":1630.242,"body":"and then you wrote up all your"},{"startTime":1630.322,"endTime":1632.132,"body":"requirements and then you did all that."},{"startTime":1632.132,"endTime":1632.472,"body":"You know what I mean?"},{"startTime":1632.472,"endTime":1636.872,"body":"Like there was a phase before any"},{"startTime":1632.472,"endTime":1636.872,"body":"active development started and then you"},{"startTime":1636.872,"endTime":1639.882,"body":"brought it to your developers and then"},{"startTime":1636.872,"endTime":1639.882,"body":"they started actually writing code."},{"startTime":1640.102,"endTime":1643.462,"body":"And then there was like purely"},{"startTime":1640.102,"endTime":1643.462,"body":"again 1985 was the original"},{"startTime":1643.462,"endTime":1644.542,"body":"document that I posted for this."},{"startTime":1644.597,"endTime":1650.417,"body":"Right that like you, it was purely"},{"startTime":1644.597,"endTime":1650.417,"body":"waterfall development in its finest."},{"startTime":1650.687,"endTime":1653.807,"body":"You know, example of waterfall"},{"startTime":1650.687,"endTime":1653.807,"body":"development, that that's how you get"},{"startTime":1653.812,"endTime":1656.297,"body":"these phases is like a project start date."},{"startTime":1656.507,"endTime":1656.867,"body":"Basically."},{"startTime":1656.867,"endTime":1658.487,"body":"There's money in a pool somewhere."},{"startTime":1658.667,"endTime":1662.567,"body":"You start your people planning and"},{"startTime":1658.667,"endTime":1662.567,"body":"whatnot and all those activities."},{"startTime":1662.717,"endTime":1663.977,"body":"The lifecycle was also."},{"startTime":1664.317,"endTime":1670.207,"body":"Correspondingly long back then, you"},{"startTime":1664.317,"endTime":1670.207,"body":"didn't have, you'd have the situation"},{"startTime":1670.207,"endTime":1674.227,"body":"where within a couple of months, six"},{"startTime":1670.207,"endTime":1674.227,"body":"months or less, the market changed"},{"startTime":1674.227,"endTime":1675.717,"body":"so much that you'll get in trouble."},{"startTime":1675.747,"endTime":1679.987,"body":"I mean, it was pretty much stable where"},{"startTime":1675.747,"endTime":1679.987,"body":"you knew what mark, what the market was,"},{"startTime":1679.987,"endTime":1684.277,"body":"and it didn't change substantially despite"},{"startTime":1679.987,"endTime":1684.277,"body":"some new entrance in the market space."},{"startTime":1684.427,"endTime":1685.127,"body":"You're talking about."},{"startTime":1685.277,"endTime":1691.127,"body":"Many months to years back then,"},{"startTime":1685.277,"endTime":1691.127,"body":"1985, before you saw anything, right?"},{"startTime":1691.127,"endTime":1694.577,"body":"So you have to have deep pockets"},{"startTime":1691.127,"endTime":1694.577,"body":"to get there and have the patience"},{"startTime":1694.577,"endTime":1698.667,"body":"to go through it and withstand all"},{"startTime":1694.577,"endTime":1698.667,"body":"of that expense before you start"},{"startTime":1698.667,"endTime":1700.527,"body":"turning that into into profit."},{"startTime":1700.677,"endTime":1701.497,"body":"That's changed now."},{"startTime":1701.707,"endTime":1706.327,"body":"I'm not sure what the original"},{"startTime":1701.707,"endTime":1706.327,"body":"intent was, but the way I look at it"},{"startTime":1706.367,"endTime":1710.177,"body":"is when you're just poking around,"},{"startTime":1706.367,"endTime":1710.177,"body":"that this might be a good idea."},{"startTime":1710.327,"endTime":1712.907,"body":"You know, having beer, having"},{"startTime":1710.327,"endTime":1712.907,"body":"coffee, or having different people"},{"startTime":1712.937,"endTime":1716.107,"body":"doing requirements, talking to"},{"startTime":1712.937,"endTime":1716.107,"body":"different customers, trying to"},{"startTime":1716.107,"endTime":1717.807,"body":"see what the market might need."},{"startTime":1717.957,"endTime":1721.887,"body":"I would consider that R and D because"},{"startTime":1717.957,"endTime":1721.887,"body":"you're not sure what you want to do."},{"startTime":1721.887,"endTime":1727.947,"body":"And I would think that once you"},{"startTime":1721.887,"endTime":1727.947,"body":"finally determine what you're going"},{"startTime":1727.947,"endTime":1732.417,"body":"to do and you have actually designed"},{"startTime":1727.947,"endTime":1732.417,"body":"some features and I'm in my mind."},{"startTime":1732.567,"endTime":1736.257,"body":"I'm wondering if design some feature"},{"startTime":1732.567,"endTime":1736.257,"body":"is the same as having an MVP."},{"startTime":1737.397,"endTime":1738.547,"body":"Is it a viable product?"},{"startTime":1738.697,"endTime":1741.947,"body":"If you have already a viable"},{"startTime":1738.697,"endTime":1741.947,"body":"product, then, should, is that"},{"startTime":1741.947,"endTime":1743.697,"body":"when you start capitalizing it?"},{"startTime":1743.847,"endTime":1746.247,"body":"That's the way, that's"},{"startTime":1743.847,"endTime":1746.247,"body":"the way I like to do it."},{"startTime":1746.247,"endTime":1748.307,"body":"I like to expense as much as I can."},{"startTime":1748.457,"endTime":1751.467,"body":"Until, I know this is"},{"startTime":1748.457,"endTime":1751.467,"body":"really a viable product."},{"startTime":1751.757,"endTime":1755.497,"body":"If it's not viable, Move on to the"},{"startTime":1751.757,"endTime":1755.497,"body":"next end and expense all of that."},{"startTime":1755.497,"endTime":1755.647,"body":"Yeah."},{"startTime":1755.797,"endTime":1760.812,"body":"The, the MVP that you speak of"},{"startTime":1755.797,"endTime":1760.812,"body":"is, is a product, is a pro, is a"},{"startTime":1760.812,"endTime":1762.582,"body":"product increment that can be used."},{"startTime":1762.582,"endTime":1762.942,"body":"Right."},{"startTime":1762.942,"endTime":1767.542,"body":"So that's in that top image that is ga"},{"startTime":1762.942,"endTime":1767.542,"body":"general, general release to customers."},{"startTime":1767.602,"endTime":1767.722,"body":"Yeah."},{"startTime":1767.727,"endTime":1771.152,"body":"You may have a small group of"},{"startTime":1767.727,"endTime":1771.152,"body":"customers a focus group or whatever."},{"startTime":1771.152,"endTime":1771.632,"body":"That's fine."},{"startTime":1771.632,"endTime":1772.532,"body":"Or a pilot, but."},{"startTime":1772.682,"endTime":1775.032,"body":"You start capitalizing well before then."},{"startTime":1775.032,"endTime":1779.242,"body":"As soon as you have"},{"startTime":1775.032,"endTime":1779.242,"body":"feasibility established."},{"startTime":1779.472,"endTime":1783.892,"body":"That I have done this for external"},{"startTime":1779.472,"endTime":1783.892,"body":"use software is that we had a lot"},{"startTime":1783.912,"endTime":1788.612,"body":"of, before we did any capitalization"},{"startTime":1783.912,"endTime":1788.612,"body":"at all, we had a big discussion, a"},{"startTime":1788.612,"endTime":1792.732,"body":"lot of back and forth over a couple"},{"startTime":1788.612,"endTime":1792.732,"body":"weeks about technical feasibility."},{"startTime":1792.882,"endTime":1795.912,"body":"And really the, it wasn't"},{"startTime":1792.882,"endTime":1795.912,"body":"a difficult concept."},{"startTime":1796.062,"endTime":1799.832,"body":"It was, but it, it only was"},{"startTime":1796.062,"endTime":1799.832,"body":"drug out over a couple of weeks"},{"startTime":1799.832,"endTime":1801.652,"body":"because we all had to agree."},{"startTime":1801.802,"endTime":1802.422,"body":"Together."},{"startTime":1802.572,"endTime":1806.182,"body":"What we were going to call technical"},{"startTime":1802.572,"endTime":1806.182,"body":"feasibility, because even in your"},{"startTime":1806.182,"endTime":1810.652,"body":"discussion just now, you pointed out"},{"startTime":1806.182,"endTime":1810.652,"body":"I think Om was like oh, only during GA"},{"startTime":1810.652,"endTime":1812.512,"body":"when it sent out this to the customers."},{"startTime":1812.662,"endTime":1817.332,"body":"But for me, I'm like, theoretically,"},{"startTime":1812.662,"endTime":1817.332,"body":"if I have like a closed beta where I"},{"startTime":1817.332,"endTime":1821.652,"body":"only invite a couple customers to use"},{"startTime":1817.332,"endTime":1821.652,"body":"it, that could be technically feasible."},{"startTime":1821.882,"endTime":1824.802,"body":"Like, it may be super buggy and I"},{"startTime":1821.882,"endTime":1824.802,"body":"might have more maintenance costs"},{"startTime":1824.802,"endTime":1830.482,"body":"or whatever, but The moment that is,"},{"startTime":1824.802,"endTime":1830.482,"body":"it is made available for a single"},{"startTime":1830.502,"endTime":1832.792,"body":"customer to be able to use it."},{"startTime":1832.942,"endTime":1835.842,"body":"Meaning that customer, like"},{"startTime":1832.942,"endTime":1835.842,"body":"when that customer meets that"},{"startTime":1835.842,"endTime":1837.562,"body":"software, right, to use it."},{"startTime":1837.712,"endTime":1839.382,"body":"It is now technically feasible."},{"startTime":1839.392,"endTime":1842.632,"body":"That, that, that is what we settled"},{"startTime":1839.392,"endTime":1842.632,"body":"on at the business that I was at,"},{"startTime":1842.892,"endTime":1844.382,"body":"where we had to deal with this."},{"startTime":1844.622,"endTime":1847.122,"body":"That's an earlier point"},{"startTime":1844.622,"endTime":1847.122,"body":"than in my argument."},{"startTime":1847.132,"endTime":1849.172,"body":"They wanted it, they wanted"},{"startTime":1847.132,"endTime":1849.172,"body":"it to be as early as possible."},{"startTime":1849.172,"endTime":1849.662,"body":"Of course."},{"startTime":1849.942,"endTime":1850.722,"body":"It makes sense."},{"startTime":1850.752,"endTime":1851.112,"body":"Of course."},{"startTime":1851.342,"endTime":1852.112,"body":"They had, listen,"},{"startTime":1852.212,"endTime":1854.802,"body":"they had yachts to buy and we were"},{"startTime":1852.212,"endTime":1854.802,"body":"not getting in the way of that."},{"startTime":1854.862,"endTime":1856.332,"body":"Were you a private company?"},{"startTime":1856.412,"endTime":1857.122,"body":"They were, yeah."},{"startTime":1857.332,"endTime":1858.952,"body":"So, I don't understand."},{"startTime":1858.952,"endTime":1861.832,"body":"I still don't understand"},{"startTime":1858.952,"endTime":1861.832,"body":"when privacy was CFO's."},{"startTime":1861.982,"endTime":1863.502,"body":"Like to capitalize anything."},{"startTime":1863.652,"endTime":1866.182,"body":"Oh, I think it's because they"},{"startTime":1863.652,"endTime":1866.182,"body":"have boats to be financed."},{"startTime":1866.492,"endTime":1867.412,"body":"They don't buy themselves."},{"startTime":1867.422,"endTime":1867.822,"body":"Yeah, right."},{"startTime":1867.822,"endTime":1868.842,"body":"Oh, okay, so they are."},{"startTime":1868.892,"endTime":1871.142,"body":"It's, yeah, there's a motive."},{"startTime":1871.262,"endTime":1872.382,"body":"There's a motive behind it."},{"startTime":1872.592,"endTime":1877.022,"body":"Now, of course, the accounting geeks might"},{"startTime":1872.592,"endTime":1877.022,"body":"say, I mean, we all recognize that there"},{"startTime":1877.022,"endTime":1882.692,"body":"might be 200 conversations going on around"},{"startTime":1877.022,"endTime":1882.692,"body":"the country on what's the right point."},{"startTime":1882.842,"endTime":1885.782,"body":"But I think the key point is"},{"startTime":1882.842,"endTime":1885.782,"body":"usually to say be consistent."},{"startTime":1885.932,"endTime":1889.552,"body":"If you say this is the definition"},{"startTime":1885.932,"endTime":1889.552,"body":"of, don't come back tomorrow because"},{"startTime":1889.552,"endTime":1893.142,"body":"your net income is low, and change"},{"startTime":1889.552,"endTime":1893.142,"body":"it, or because your net income is"},{"startTime":1893.172,"endTime":1894.702,"body":"high, then try and manipulate it."},{"startTime":1894.912,"endTime":1898.022,"body":"Yeah, and that's why the conversation was"},{"startTime":1894.912,"endTime":1898.022,"body":"spread over a couple weeks, because we"},{"startTime":1898.022,"endTime":1900.572,"body":"had to decide what was more advantageous."},{"startTime":1900.722,"endTime":1903.042,"body":"It really was mainly on"},{"startTime":1900.722,"endTime":1903.042,"body":"the development department."},{"startTime":1903.232,"endTime":1904.472,"body":"I remember those conversations."},{"startTime":1904.472,"endTime":1907.532,"body":"It was mainly on the development"},{"startTime":1904.472,"endTime":1907.532,"body":"department to decide what was going to"},{"startTime":1907.532,"endTime":1909.102,"body":"be more advantageous to the business."},{"startTime":1909.392,"endTime":1911.651,"body":"We had internal use software."},{"startTime":1911.801,"endTime":1913.441,"body":"We had a couple different mobile apps."},{"startTime":1913.441,"endTime":1915.401,"body":"We had a couple different"},{"startTime":1913.441,"endTime":1915.401,"body":"enterprise applications."},{"startTime":1915.401,"endTime":1919.451,"body":"So we had a couple different pieces"},{"startTime":1915.401,"endTime":1919.451,"body":"of, Actually use software with any"},{"startTime":1919.451,"endTime":1921.121,"body":"finance folks in that conversation."},{"startTime":1921.151,"endTime":1921.941,"body":"Oh, absolutely."},{"startTime":1922.171,"endTime":1922.761,"body":"Absolutely."},{"startTime":1922.961,"endTime":1923.351,"body":"Absolutely."},{"startTime":1923.351,"endTime":1923.591,"body":"Yeah."},{"startTime":1923.621,"endTime":1927.141,"body":"We needed their input to look at the"},{"startTime":1923.621,"endTime":1927.141,"body":"finances over a longer period of time"},{"startTime":1927.371,"endTime":1929.581,"body":"to decide once we make this decision."},{"startTime":1929.731,"endTime":1933.861,"body":"And it applies to all products,"},{"startTime":1929.731,"endTime":1933.861,"body":"what will be most advantageous."},{"startTime":1933.991,"endTime":1936.741,"body":"And that, that is definitely"},{"startTime":1933.991,"endTime":1936.741,"body":"something that we were not"},{"startTime":1936.821,"endTime":1938.401,"body":"comfortable making just on our own."},{"startTime":1938.591,"endTime":1940.611,"body":"So, we needed to bring"},{"startTime":1938.591,"endTime":1940.611,"body":"the finance people in."},{"startTime":1940.961,"endTime":1943.421,"body":"And we needed to give them as"},{"startTime":1940.961,"endTime":1943.421,"body":"much information as possible."},{"startTime":1943.421,"endTime":1946.881,"body":"Luckily, we had a, we had a ALM tool"},{"startTime":1943.421,"endTime":1946.881,"body":"that all this information was in."},{"startTime":1947.031,"endTime":1952.271,"body":"Super easy to just get the numbers redo"},{"startTime":1947.031,"endTime":1952.271,"body":"the numbers or whatever, based off of"},{"startTime":1952.271,"endTime":1955.161,"body":"whatever we wanted to do . So over a"},{"startTime":1952.271,"endTime":1955.161,"body":"couple of weeks, we just crunched some"},{"startTime":1955.161,"endTime":1958.091,"body":"numbers, had a couple of sessions and"},{"startTime":1955.161,"endTime":1958.091,"body":"we decided what would work best across"},{"startTime":1958.091,"endTime":1962.851,"body":"all of our product lines, and it was, it"},{"startTime":1958.091,"endTime":1962.851,"body":"was to just try to go up with technical"},{"startTime":1962.851,"endTime":1967.001,"body":"feasibility as soon as possible, as"},{"startTime":1962.851,"endTime":1967.001,"body":"soon as we can get customers onboarded."},{"startTime":1967.011,"endTime":1969.171,"body":"it wasn't quite as"},{"startTime":1967.011,"endTime":1969.171,"body":"early as sprint reviews."},{"startTime":1969.321,"endTime":1972.741,"body":"It wasn't quite that early, but it"},{"startTime":1969.321,"endTime":1972.741,"body":"was, it was pretty close to that."},{"startTime":1972.841,"endTime":1974.366,"body":"It's pretty, it's safe."},{"startTime":1974.366,"endTime":1978.826,"body":"Fairly agile shop where our"},{"startTime":1974.366,"endTime":1978.826,"body":"technical feasibility was done."},{"startTime":1979.146,"endTime":1983.736,"body":"Not in like software release phases,"},{"startTime":1979.146,"endTime":1983.736,"body":"like a, like a waterfall type phases."},{"startTime":1983.886,"endTime":1985.896,"body":"Cause this shop released features."},{"startTime":1986.246,"endTime":1990.001,"body":"So the technical feasibility was"},{"startTime":1986.246,"endTime":1990.001,"body":"done at a feature level, which"},{"startTime":1990.041,"endTime":1992.111,"body":"is a little wrinkle in this,"},{"startTime":1992.361,"endTime":1995.871,"body":"this chart that we're looking at,"},{"startTime":1992.361,"endTime":1995.871,"body":"because now it's not just like, Oh,"},{"startTime":1995.871,"endTime":2000.581,"body":"project start date and project finish"},{"startTime":1995.871,"endTime":2000.581,"body":"date and delivered to customer date and"},{"startTime":2000.591,"endTime":2002.191,"body":"maintenance end of maintenance date."},{"startTime":2002.471,"endTime":2003.981,"body":"You got a continuum there, right?"},{"startTime":2003.981,"endTime":2004.381,"body":"Because the."},{"startTime":2004.451,"endTime":2008.641,"body":"because all now all of your software"},{"startTime":2004.451,"endTime":2008.641,"body":"has to be bucketed as features."},{"startTime":2008.641,"endTime":2008.971,"body":"Yeah."},{"startTime":2009.121,"endTime":2015.141,"body":"So yeah, but but that gave us as a company"},{"startTime":2009.121,"endTime":2015.141,"body":"a lot more control over our finances."},{"startTime":2015.371,"endTime":2018.761,"body":"Now, some businesses in this"},{"startTime":2015.371,"endTime":2018.761,"body":"conversation would even bring"},{"startTime":2018.761,"endTime":2020.501,"body":"in their external auditors."},{"startTime":2020.651,"endTime":2020.791,"body":"We did."},{"startTime":2020.941,"endTime":2021.631,"body":"Yeah, absolutely."},{"startTime":2021.931,"endTime":2025.871,"body":"I would think that when you start"},{"startTime":2021.931,"endTime":2025.871,"body":"the project Oh, to start When you're"},{"startTime":2025.891,"endTime":2029.581,"body":"determining what the company policy"},{"startTime":2025.891,"endTime":2029.581,"body":"should be, sometimes it's a good"},{"startTime":2029.581,"endTime":2033.831,"body":"thing to have the external auditors,"},{"startTime":2029.581,"endTime":2033.831,"body":"or even the internal auditors."},{"startTime":2034.081,"endTime":2037.141,"body":"Most current internal You know"},{"startTime":2034.081,"endTime":2037.141,"body":"how the old days, internal"},{"startTime":2037.141,"endTime":2039.256,"body":"audit used to be Gotcha, right?"},{"startTime":2039.406,"endTime":2042.586,"body":"But modern internal audits is"},{"startTime":2039.406,"endTime":2042.586,"body":"more like in a helping mood."},{"startTime":2042.736,"endTime":2045.426,"body":"They want to make you"},{"startTime":2042.736,"endTime":2045.426,"body":"to stay with the law."},{"startTime":2045.576,"endTime":2048.986,"body":"So, sometimes it's good to have"},{"startTime":2045.576,"endTime":2048.986,"body":"their means so that You know what"},{"startTime":2048.986,"endTime":2050.256,"body":"they can handle, what they cannot."},{"startTime":2050.406,"endTime":2053.326,"body":"How aggressive can you be"},{"startTime":2050.406,"endTime":2053.326,"body":"and not get into trouble?"},{"startTime":2053.327,"endTime":2055.726,"body":"You get external help as well, right?"},{"startTime":2055.727,"endTime":2060.036,"body":"In cases like this, you get a a"},{"startTime":2055.727,"endTime":2060.036,"body":"finance company to help you out."},{"startTime":2060.266,"endTime":2062.076,"body":"Maybe one of the big four, whatever."},{"startTime":2062.076,"endTime":2063.276,"body":"Depends on the size."},{"startTime":2063.426,"endTime":2063.756,"body":"Yeah."},{"startTime":2063.906,"endTime":2067.466,"body":"This will be the time to do it because"},{"startTime":2063.906,"endTime":2067.466,"body":"You make the wrong decision here."},{"startTime":2067.806,"endTime":2068.616,"body":"There is no going back."},{"startTime":2068.766,"endTime":2071.456,"body":"There would have definitely been"},{"startTime":2068.766,"endTime":2071.456,"body":"consequences to making the wrong decision."},{"startTime":2071.606,"endTime":2074.046,"body":"I don't think they reached out for"},{"startTime":2071.606,"endTime":2074.046,"body":"any help because again, I think they"},{"startTime":2074.046,"endTime":2075.626,"body":"were concerned with at that point."},{"startTime":2076.626,"endTime":2079.958,"body":"Yeah,  that makes sense."},{"startTime":2080.008,"endTime":2084.398,"body":"in external use software,"},{"startTime":2080.008,"endTime":2084.398,"body":"which is the R\u0026 D are there,"},{"startTime":2084.638,"endTime":2086.168,"body":"are there tax breaks for R\u0026 D?"},{"startTime":2086.168,"endTime":2088.338,"body":"I don't understand why"},{"startTime":2086.168,"endTime":2088.338,"body":"you record things as R\u0026 D."},{"startTime":2088.338,"endTime":2091.748,"body":"Is that some kind of Well, the"},{"startTime":2088.338,"endTime":2091.748,"body":"trouble is that R\u0026 D, by your"},{"startTime":2091.748,"endTime":2093.448,"body":"rules, are different from tax rules."},{"startTime":2093.598,"endTime":2097.848,"body":"Tax rules are usually, it's political,"},{"startTime":2093.598,"endTime":2097.848,"body":"whatever the politicians say you can do."},{"startTime":2098.048,"endTime":2100.013,"body":"We all know r and d when you see it."},{"startTime":2100.013,"endTime":2100.413,"body":"Mm-Hmm."},{"startTime":2100.563,"endTime":2105.693,"body":". But IRS would allow things that gap"},{"startTime":2100.563,"endTime":2105.693,"body":"may not allow or the other way around."},{"startTime":2105.693,"endTime":2105.783,"body":"Mm-Hmm."},{"startTime":2105.933,"endTime":2109.203,"body":", so they all know what r and d is, but"},{"startTime":2105.933,"endTime":2109.203,"body":"they may have, they may have different"},{"startTime":2109.203,"endTime":2111.153,"body":"thresholds, so for the purpose of."},{"startTime":2111.303,"endTime":2112.243,"body":"Externally used software."},{"startTime":2112.393,"endTime":2115.473,"body":"They say, anything from when you"},{"startTime":2112.393,"endTime":2115.473,"body":"started the project until you've"},{"startTime":2115.473,"endTime":2116.733,"body":"reached technical feasibility."},{"startTime":2116.733,"endTime":2119.903,"body":"And again, at my company, technical"},{"startTime":2116.733,"endTime":2119.903,"body":"feasibility was, it's available to"},{"startTime":2119.903,"endTime":2121.473,"body":"a customer, a customer can use it."},{"startTime":2121.623,"endTime":2123.053,"body":"So, it's like, it's in production."},{"startTime":2123.153,"endTime":2126.783,"body":"It was your, it was your definition"},{"startTime":2123.153,"endTime":2126.783,"body":"no matter how minimal the feature is,"},{"startTime":2126.793,"endTime":2128.433,"body":"it's in production, someone can use it."},{"startTime":2128.433,"endTime":2132.323,"body":"I mean, that's a lot of activity"},{"startTime":2128.433,"endTime":2132.323,"body":"that you're saying, this is R\u0026 D."},{"startTime":2132.403,"endTime":2132.653,"body":"Yes."},{"startTime":2132.713,"endTime":2134.283,"body":"Because we're going to pivot"},{"startTime":2132.713,"endTime":2134.283,"body":"here in a second to talk"},{"startTime":2134.283,"endTime":2135.313,"body":"about internal use software."},{"startTime":2135.533,"endTime":2137.393,"body":"So I guess is the advantage here?"},{"startTime":2137.543,"endTime":2141.503,"body":"That, if a software project comes to a"},{"startTime":2137.543,"endTime":2141.503,"body":"certain point and just like, doesn't work"},{"startTime":2141.513,"endTime":2143.843,"body":"out, you can write the whole project off?"},{"startTime":2143.873,"endTime":2146.203,"body":"Is that the reason to"},{"startTime":2143.873,"endTime":2146.203,"body":"have it in an R\u0026 D bucket?"},{"startTime":2146.413,"endTime":2148.223,"body":"That's the entire,"},{"startTime":2146.413,"endTime":2148.223,"body":"that's the entire reason."},{"startTime":2148.303,"endTime":2148.553,"body":"Oh."},{"startTime":2148.703,"endTime":2152.013,"body":"No use capitalizing an item that"},{"startTime":2148.703,"endTime":2152.013,"body":"doesn't have any future value."},{"startTime":2152.143,"endTime":2152.423,"body":"Huh."},{"startTime":2152.573,"endTime":2156.623,"body":"I think the basic rule is always, if"},{"startTime":2152.573,"endTime":2156.623,"body":"it has no future value, expense it."},{"startTime":2156.773,"endTime":2159.393,"body":"Yeah, I mean, it's basically"},{"startTime":2156.773,"endTime":2159.393,"body":"sunk cost at that point."},{"startTime":2159.543,"endTime":2160.133,"body":"That's right."},{"startTime":2160.273,"endTime":2161.953,"body":"And sunk costs are never recoverable."},{"startTime":2162.093,"endTime":2163.403,"body":"Never recoverable, yes."},{"startTime":2163.403,"endTime":2167.683,"body":"How would I handle it if I worked for"},{"startTime":2163.403,"endTime":2167.683,"body":"three months on this software project"},{"startTime":2167.683,"endTime":2171.353,"body":"and it ended up like no one can use it,"},{"startTime":2167.683,"endTime":2171.353,"body":"I don't, I just want to get rid of it."},{"startTime":2171.628,"endTime":2174.888,"body":"I mean, are you the, are you the"},{"startTime":2171.628,"endTime":2174.888,"body":"contractor or are you the owner?"},{"startTime":2175.038,"endTime":2175.918,"body":"Let's say I'm the owner."},{"startTime":2175.918,"endTime":2176.618,"body":"I'm the company."},{"startTime":2176.768,"endTime":2180.708,"body":"So usually you would, you would"},{"startTime":2176.768,"endTime":2180.708,"body":"expect, you were expensing it anyway."},{"startTime":2180.858,"endTime":2181.158,"body":"Yeah."},{"startTime":2181.218,"endTime":2182.798,"body":"So it just continues to expense it."},{"startTime":2182.878,"endTime":2184.478,"body":"Once the project ends, that's it."},{"startTime":2184.508,"endTime":2186.348,"body":"You, you expense the last amount."},{"startTime":2186.348,"endTime":2187.988,"body":"You record a loss that year, basically."},{"startTime":2187.998,"endTime":2188.758,"body":"On that project."},{"startTime":2188.818,"endTime":2189.118,"body":"Yeah."},{"startTime":2189.358,"endTime":2191.668,"body":"You record a loss on that"},{"startTime":2189.358,"endTime":2191.668,"body":"project for that year."},{"startTime":2191.818,"endTime":2193.928,"body":"So, you just keep expensing it."},{"startTime":2193.958,"endTime":2195.258,"body":"There's really nothing to do."},{"startTime":2195.408,"endTime":2197.798,"body":"Now, on the other hand, you may"},{"startTime":2195.408,"endTime":2197.798,"body":"have decided that, wow, I've got"},{"startTime":2197.798,"endTime":2199.328,"body":"a feature, let me capitalize it."},{"startTime":2199.478,"endTime":2201.768,"body":"Come next year, you find out,"},{"startTime":2199.478,"endTime":2201.768,"body":"well, that was a mistake."},{"startTime":2201.918,"endTime":2203.838,"body":"Then you end up having to write it off."},{"startTime":2203.988,"endTime":2208.888,"body":"So the judgment is not usually very, your"},{"startTime":2203.988,"endTime":2208.888,"body":"judgment is not usually very perfect."},{"startTime":2209.048,"endTime":2209.288,"body":"Yeah."},{"startTime":2209.438,"endTime":2213.238,"body":"So you see businesses writing off,"},{"startTime":2209.438,"endTime":2213.238,"body":"and you know, it's not usually a"},{"startTime":2213.238,"endTime":2214.848,"body":"bad thing to write off anything."},{"startTime":2214.918,"endTime":2215.098,"body":"Right."},{"startTime":2215.168,"endTime":2217.288,"body":"Because the market says,"},{"startTime":2215.168,"endTime":2217.288,"body":"wow, they're getting leaner."},{"startTime":2217.318,"endTime":2219.118,"body":"That's why they're writing it off."},{"startTime":2219.118,"endTime":2219.538,"body":"Yeah."},{"startTime":2219.538,"endTime":2219.848,"body":"Yeah."},{"startTime":2219.848,"endTime":2223.268,"body":"But you asked a good question"},{"startTime":2219.848,"endTime":2223.268,"body":"earlier, when you said you know,"},{"startTime":2223.418,"endTime":2226.798,"body":"are there incentives for, I think"},{"startTime":2223.418,"endTime":2226.798,"body":"in certain markets there might be."},{"startTime":2226.948,"endTime":2230.888,"body":"You know, I'm trying to think about some"},{"startTime":2226.948,"endTime":2230.888,"body":"of the cutting edge, like maybe you're"},{"startTime":2230.898,"endTime":2234.988,"body":"getting into one of the alternate energy"},{"startTime":2230.898,"endTime":2234.988,"body":"markets or something imagine way back"},{"startTime":2235.158,"endTime":2240.268,"body":"when people were first coming up with the"},{"startTime":2235.158,"endTime":2240.268,"body":"solar energy you might have some kind of"},{"startTime":2240.418,"endTime":2242.428,"body":"subsidy from the government or whatever."},{"startTime":2242.648,"endTime":2245.558,"body":"Okay, so you've just, you've just"},{"startTime":2242.648,"endTime":2245.558,"body":"touched on another reason why"},{"startTime":2245.788,"endTime":2247.998,"body":"people like to claim it's R\u0026 D."},{"startTime":2248.148,"endTime":2253.188,"body":"So the average Joe guy who watches"},{"startTime":2248.148,"endTime":2253.188,"body":"on CNBC say, Wow, this business"},{"startTime":2253.198,"endTime":2255.498,"body":"has spent so much on R\u0026 D."},{"startTime":2255.498,"endTime":2258.278,"body":"They must be coming out with"},{"startTime":2255.498,"endTime":2258.278,"body":"something great next year."},{"startTime":2258.338,"endTime":2259.818,"body":"So you could bump up your stock."},{"startTime":2259.968,"endTime":2263.938,"body":"So sometimes this, I mean, you may"},{"startTime":2259.968,"endTime":2263.938,"body":"think accounting is just numbers,"},{"startTime":2264.088,"endTime":2270.288,"body":"but the CFOs who have to Pleased the"},{"startTime":2264.088,"endTime":2270.288,"body":"CEOs you also have games to play too."},{"startTime":2270.438,"endTime":2272.768,"body":"You can see those in the"},{"startTime":2270.438,"endTime":2272.768,"body":"financial statements."},{"startTime":2272.768,"endTime":2274.808,"body":"Again, I'm the product"},{"startTime":2272.768,"endTime":2274.808,"body":"manager on the podcast."},{"startTime":2274.808,"endTime":2279.368,"body":"So I live in reality, which is a lot of"},{"startTime":2274.808,"endTime":2279.368,"body":"businesses run with no strategy at all."},{"startTime":2279.548,"endTime":2281.248,"body":"So I'm glad somebody has a strategy."},{"startTime":2281.248,"endTime":2284.248,"body":"It doesn't if it, if it's the accountants"},{"startTime":2281.248,"endTime":2284.248,"body":"that have the strategy in the business."},{"startTime":2284.493,"endTime":2287.533,"body":"It does worry me that they're the"},{"startTime":2284.493,"endTime":2287.533,"body":"only ones with a strategy, but I'm"},{"startTime":2287.533,"endTime":2290.353,"body":"just happy that I found someone"},{"startTime":2287.533,"endTime":2290.353,"body":"that has a strategy in the business."},{"startTime":2290.503,"endTime":2292.933,"body":"They have a really good toolbox, right?"},{"startTime":2292.933,"endTime":2295.993,"body":"These people that are making these,"},{"startTime":2292.933,"endTime":2295.993,"body":"These financial statements, they just"},{"startTime":2295.993,"endTime":2297.889,"body":"call them forward looking statements."},{"startTime":2297.889,"endTime":2299.793,"body":"They're forward looking."},{"startTime":2299.793,"endTime":2300.813,"body":"There are no guarantees."},{"startTime":2300.814,"endTime":2303.973,"body":"There is a thing at the"},{"startTime":2300.814,"endTime":2303.973,"body":"bottom, a disclaimer."},{"startTime":2304.123,"endTime":2306.523,"body":"Past performances, no"},{"startTime":2304.123,"endTime":2306.523,"body":"guarantee of future results."},{"startTime":2306.863,"endTime":2308.373,"body":"I mean, it does make a lot of sense."},{"startTime":2308.373,"endTime":2312.053,"body":"Let's go back to the Brian and"},{"startTime":2308.373,"endTime":2312.053,"body":"Om's software development example."},{"startTime":2312.053,"endTime":2314.614,"body":"Like Brian, Brian, With"},{"startTime":2312.053,"endTime":2314.614,"body":"Newton, who he has a CFO."},{"startTime":2314.614,"endTime":2315.304,"body":"That's right, that's right."},{"startTime":2315.304,"endTime":2316.314,"body":"Welcome to our company."},{"startTime":2316.354,"endTime":2317.834,"body":"Welcome to our company, Newton."},{"startTime":2318.104,"endTime":2319.314,"body":"Don't ask for raises."},{"startTime":2319.414,"endTime":2320.913,"body":"We don't care."},{"startTime":2321.063,"endTime":2324.423,"body":"We, like Brian wants everything"},{"startTime":2321.063,"endTime":2324.423,"body":"on opex because I want the"},{"startTime":2324.423,"endTime":2326.703,"body":"future completely clear for us."},{"startTime":2326.733,"endTime":2330.058,"body":"So like but om wants you know,"},{"startTime":2326.733,"endTime":2330.058,"body":"CapEx everything all day long."},{"startTime":2330.208,"endTime":2332.658,"body":"So this year Om wins in budgeting."},{"startTime":2332.688,"endTime":2334.368,"body":"Brian came in with a hangover"},{"startTime":2332.688,"endTime":2334.368,"body":"that day or something."},{"startTime":2334.368,"endTime":2335.118,"body":"I don't know what happened."},{"startTime":2335.298,"endTime":2335.388,"body":"Mm-Hmm."},{"startTime":2335.628,"endTime":2338.089,"body":". But on the balance sheet, we"},{"startTime":2335.628,"endTime":2338.089,"body":"have some extra money that's"},{"startTime":2338.089,"endTime":2339.229,"body":"going into the end of the year."},{"startTime":2339.319,"endTime":2342.445,"body":"So rather than you know, I was"},{"startTime":2339.319,"endTime":2342.445,"body":"gonna say firing people rather than"},{"startTime":2342.445,"endTime":2345.919,"body":"hiring a bunch of people that we're"},{"startTime":2342.445,"endTime":2345.919,"body":"that we can't afford next year."},{"startTime":2345.939,"endTime":2348.959,"body":"Well when everything balances"},{"startTime":2345.939,"endTime":2348.959,"body":"out I'm gonna, I'm gonna use that"},{"startTime":2348.959,"endTime":2353.459,"body":"money to maybe try out some new"},{"startTime":2348.959,"endTime":2353.459,"body":"things that are somewhat risky."},{"startTime":2353.669,"endTime":2355.829,"body":"I'm gonna, I'm gonna try to"},{"startTime":2353.669,"endTime":2355.829,"body":"generate some new features that."},{"startTime":2355.979,"endTime":2357.179,"body":"Maybe we throw them away."},{"startTime":2357.179,"endTime":2360.909,"body":"Like, I'm already 50 50 whether these"},{"startTime":2357.179,"endTime":2360.909,"body":"new features are gonna work out."},{"startTime":2361.089,"endTime":2364.489,"body":"So, they go on the R\u0026 D section"},{"startTime":2361.089,"endTime":2364.489,"body":"of the budget of risky things that"},{"startTime":2364.489,"endTime":2367.519,"body":"Brian has started that he doesn't"},{"startTime":2364.489,"endTime":2367.519,"body":"really think is gonna turn a profit,"},{"startTime":2367.519,"endTime":2368.859,"body":"but he wants to do it anyway."},{"startTime":2369.009,"endTime":2371.499,"body":"Sorry, like that's too long"},{"startTime":2369.009,"endTime":2371.499,"body":"of a title on the budget."},{"startTime":2371.519,"endTime":2373.469,"body":"All the characters won't"},{"startTime":2371.519,"endTime":2373.469,"body":"fit into Great Plains."},{"startTime":2373.469,"endTime":2374.489,"body":"Like you need to, oh, okay."},{"startTime":2374.489,"endTime":2375.219,"body":"R and D fine."},{"startTime":2375.249,"endTime":2375.489,"body":"Fine."},{"startTime":2375.509,"endTime":2378.329,"body":"That's the way that I'm starting"},{"startTime":2375.509,"endTime":2378.329,"body":"to envision the R and D categories,"},{"startTime":2378.329,"endTime":2382.329,"body":"but if it doesn't work because our"},{"startTime":2378.329,"endTime":2382.329,"body":"profits are over here and it's not"},{"startTime":2382.329,"endTime":2386.489,"body":"going to exceed You know zero at the"},{"startTime":2382.329,"endTime":2386.489,"body":"end of our budget at the end of the year"},{"startTime":2386.639,"endTime":2387.829,"body":"hey, I'm willing to throw some money."},{"startTime":2387.979,"endTime":2391.349,"body":"I think that risk has to be"},{"startTime":2387.979,"endTime":2391.349,"body":"a calculated risk, obviously."},{"startTime":2391.349,"endTime":2391.989,"body":"Sure, sure."},{"startTime":2392.259,"endTime":2394.859,"body":"It's calculated by how much"},{"startTime":2392.259,"endTime":2394.859,"body":"money I'm willing to throw at it."},{"startTime":2394.859,"endTime":2396.339,"body":"Yeah, how much can you bear to lose?"},{"startTime":2396.379,"endTime":2396.579,"body":"Yeah."},{"startTime":2396.889,"endTime":2398.849,"body":"So this is the casino technique, right?"},{"startTime":2398.869,"endTime":2400.019,"body":"How much are you going to put?"},{"startTime":2400.019,"endTime":2402.069,"body":"I'll look at Newton and say, how"},{"startTime":2400.019,"endTime":2402.069,"body":"much money are we willing to lose?"},{"startTime":2402.069,"endTime":2409.137,"body":"And Newton will be like, well, this"},{"startTime":2402.069,"endTime":2409.137,"body":"is Well, first thing Newton will say"},{"startTime":2409.137,"endTime":2414.189,"body":"is What did we decide on what is R\u0026"},{"startTime":2409.137,"endTime":2414.189,"body":"D, what's not R\u0026 D at the beginning?"},{"startTime":2414.339,"endTime":2416.469,"body":"You know, so how much"},{"startTime":2414.339,"endTime":2416.469,"body":"wiggle room do we have?"},{"startTime":2416.479,"endTime":2422.009,"body":"You know, I mean, CEOs, CFOs, and"},{"startTime":2416.479,"endTime":2422.009,"body":"controllers are always pushing"},{"startTime":2422.159,"endTime":2425.649,"body":"the limit, the boundary to see"},{"startTime":2422.159,"endTime":2425.649,"body":"how much, how much room they have."},{"startTime":2425.699,"endTime":2430.189,"body":"Well, if we look at the top chart, it's"},{"startTime":2425.699,"endTime":2430.189,"body":"everything short of technical feasibility."},{"startTime":2430.459,"endTime":2434.309,"body":"So there's a, there's also a strategy"},{"startTime":2430.459,"endTime":2434.309,"body":"here of Stopping short of technical"},{"startTime":2434.309,"endTime":2438.389,"body":"feasibility with a, with a, we did a"},{"startTime":2434.309,"endTime":2438.389,"body":"podcast before where we talked about"},{"startTime":2438.419,"endTime":2441.479,"body":", testing MVP to make sure that there's"},{"startTime":2438.419,"endTime":2441.479,"body":"a signal there in the market, right?"},{"startTime":2441.479,"endTime":2445.469,"body":"So like I could run 10 MVPs,"},{"startTime":2441.479,"endTime":2445.469,"body":"find that there's no signal in"},{"startTime":2445.469,"endTime":2446.899,"body":"the market, and now all that is"},{"startTime":2446.899,"endTime":2447.579,"body":"R and D budget."},{"startTime":2447.729,"endTime":2449.659,"body":"Like it's, hey, I tested all these ideas."},{"startTime":2449.859,"endTime":2450.759,"body":"They're all garbage."},{"startTime":2450.909,"endTime":2452.719,"body":"We're writing all of that off."},{"startTime":2452.869,"endTime":2454.689,"body":"So you go back and become R\u0026D."},{"startTime":2454.739,"endTime":2455.439,"body":"You write it off."},{"startTime":2455.439,"endTime":2455.949,"body":"Exactly."},{"startTime":2455.959,"endTime":2456.369,"body":"Exactly."},{"startTime":2456.709,"endTime":2458.719,"body":"So, okay, so that's making"},{"startTime":2456.709,"endTime":2458.719,"body":"a lot of sense to me."},{"startTime":2458.869,"endTime":2460.969,"body":"And we're stopping short"},{"startTime":2458.869,"endTime":2460.969,"body":"of technical feasibility."},{"startTime":2461.229,"endTime":2464.389,"body":"So the, the confusing part"},{"startTime":2461.229,"endTime":2464.389,"body":"for external use software for"},{"startTime":2464.399,"endTime":2466.029,"body":"me when I was doing this was"},{"startTime":2466.179,"endTime":2472.889,"body":"you can only capitalize the tiny piece"},{"startTime":2466.179,"endTime":2472.889,"body":"between technical feasibility and"},{"startTime":2472.929,"endTime":2475.479,"body":"general release to all your customers."},{"startTime":2475.629,"endTime":2478.009,"body":"When it's a normal feature"},{"startTime":2475.629,"endTime":2478.009,"body":"that's in your software."},{"startTime":2478.349,"endTime":2481.569,"body":"And I, I, like when I originally"},{"startTime":2478.349,"endTime":2481.569,"body":"heard that I was like, wait a minute,"},{"startTime":2481.569,"endTime":2482.779,"body":"like We're an agile development shop."},{"startTime":2482.789,"endTime":2487.169,"body":"That, that, that phase is so tiny"},{"startTime":2482.789,"endTime":2487.169,"body":"that you're almost capitalizing"},{"startTime":2487.169,"endTime":2488.859,"body":"nothing in that, in that phase."},{"startTime":2489.009,"endTime":2489.509,"body":"I, I agree."},{"startTime":2489.509,"endTime":2491.639,"body":"And then on top of that, if"},{"startTime":2489.509,"endTime":2491.639,"body":"you throw in the fact that"},{"startTime":2491.649,"endTime":2493.749,"body":"this isn't a singular product."},{"startTime":2493.899,"endTime":2495.679,"body":"You've got features that"},{"startTime":2493.899,"endTime":2495.679,"body":"you're trying to do this with,"},{"startTime":2495.729,"endTime":2497.219,"body":"then it's a continuum, right?"},{"startTime":2497.219,"endTime":2499.269,"body":"You're always doing"},{"startTime":2497.219,"endTime":2499.269,"body":"that for every feature."},{"startTime":2499.419,"endTime":2503.559,"body":"So it's a kind of rolling wave,"},{"startTime":2499.419,"endTime":2503.559,"body":"superimposed, this line's not one line."},{"startTime":2503.559,"endTime":2505.999,"body":"There's maybe, I don't"},{"startTime":2503.559,"endTime":2505.999,"body":"know, 30 lines, right?"},{"startTime":2506.319,"endTime":2510.069,"body":"It gets very difficult to focus away"},{"startTime":2506.319,"endTime":2510.069,"body":"from that and say, where is that?"},{"startTime":2510.274,"endTime":2512.944,"body":"Point is that point varies per feature."},{"startTime":2513.094,"endTime":2513.894,"body":"Nothing wrong with that."},{"startTime":2513.964,"endTime":2517.824,"body":"We can, we can still do that, but"},{"startTime":2513.964,"endTime":2517.824,"body":"it's just harder to get to grips with."},{"startTime":2517.974,"endTime":2518.364,"body":"Yeah."},{"startTime":2518.514,"endTime":2524.324,"body":"So some features that costs capitalized"},{"startTime":2518.514,"endTime":2524.324,"body":"bracket would be More towards the left."},{"startTime":2524.404,"endTime":2524.744,"body":"Right."},{"startTime":2524.794,"endTime":2525.974,"body":"Some more towards the right."},{"startTime":2525.984,"endTime":2528.904,"body":"So, and it depends on how you"},{"startTime":2525.984,"endTime":2528.904,"body":"defined it at the beginning too."},{"startTime":2529.054,"endTime":2529.464,"body":"Right."},{"startTime":2529.484,"endTime":2533.684,"body":"So, I, yeah, and one would think it would"},{"startTime":2529.484,"endTime":2533.684,"body":"have to be consistent in how you define"},{"startTime":2533.684,"endTime":2535.404,"body":"it and apply it across all the features."},{"startTime":2535.404,"endTime":2535.604,"body":"Yeah."},{"startTime":2535.604,"endTime":2535.904,"body":"Right?"},{"startTime":2536.044,"endTime":2539.144,"body":"This has been a big point of"},{"startTime":2536.044,"endTime":2539.144,"body":"contention when I've done this and"},{"startTime":2539.144,"endTime":2540.814,"body":"I've reported , capitalizable metrics."},{"startTime":2540.964,"endTime":2547.494,"body":"One place was we developed this strategy"},{"startTime":2540.964,"endTime":2547.494,"body":"where we, we, if you think about a feature"},{"startTime":2547.644,"endTime":2551.344,"body":"like if you, it depends on the ALM tool"},{"startTime":2547.644,"endTime":2551.344,"body":"you're using because like whatever epics"},{"startTime":2551.344,"endTime":2554.524,"body":"break down the features, which break down"},{"startTime":2551.344,"endTime":2554.524,"body":"the stories or whatever, but that, that's"},{"startTime":2554.524,"endTime":2555.774,"body":"kind of semantics for this discussion."},{"startTime":2555.784,"endTime":2559.754,"body":"Anyway, the idea is you have a big bucket"},{"startTime":2555.784,"endTime":2559.754,"body":"of work that's very similar to each other."},{"startTime":2559.904,"endTime":2561.364,"body":"I'm going to develop a new feature."},{"startTime":2561.514,"endTime":2564.824,"body":"You're going to be able to go to"},{"startTime":2561.514,"endTime":2564.824,"body":"our website and sign up on your own."},{"startTime":2564.974,"endTime":2565.814,"body":"Like, that's the new feature."},{"startTime":2565.814,"endTime":2567.384,"body":"You can go to our website"},{"startTime":2565.814,"endTime":2567.384,"body":"and sign up on your own."},{"startTime":2567.734,"endTime":2571.294,"body":"Okay, new, new sign up functionality,"},{"startTime":2567.734,"endTime":2571.294,"body":"right, for external users."},{"startTime":2571.444,"endTime":2574.324,"body":"And I have a, a very basic form."},{"startTime":2574.484,"endTime":2577.964,"body":"You can put in your information, hit go,"},{"startTime":2574.484,"endTime":2577.964,"body":"and now you're signed up on the website."},{"startTime":2577.974,"endTime":2579.554,"body":"And that's like, technical feasibility."},{"startTime":2579.564,"endTime":2581.884,"body":"The first customer does it,"},{"startTime":2579.564,"endTime":2581.884,"body":"they can sign up, great."},{"startTime":2582.034,"endTime":2586.554,"body":"Except when you sign up on our website we"},{"startTime":2582.034,"endTime":2586.554,"body":"want to the first customers we open it up"},{"startTime":2586.554,"endTime":2588.554,"body":"to they can sign up and get in for free."},{"startTime":2588.704,"endTime":2590.764,"body":"And we'll deal with their"},{"startTime":2588.704,"endTime":2590.764,"body":"payment outside of the system."},{"startTime":2591.104,"endTime":2593.364,"body":"But we always know that you"},{"startTime":2591.104,"endTime":2593.364,"body":"have to pay to use our website."},{"startTime":2593.364,"endTime":2597.204,"body":"So, pay by credit card, pay"},{"startTime":2593.364,"endTime":2597.204,"body":"by ACH, pay by something else."},{"startTime":2597.204,"endTime":2598.644,"body":"You know, pay by corporate account."},{"startTime":2598.814,"endTime":2600.714,"body":"Like, there's all kinds of"},{"startTime":2598.814,"endTime":2600.714,"body":"additional features now."},{"startTime":2600.714,"endTime":2604.364,"body":"So like, we introduced the first,"},{"startTime":2600.714,"endTime":2604.364,"body":"the first piece of technological"},{"startTime":2604.364,"endTime":2605.584,"body":"feasibility in the feature."},{"startTime":2605.734,"endTime":2609.584,"body":"And now, we're, we're both adding"},{"startTime":2605.734,"endTime":2609.584,"body":"features and doing maintenance"},{"startTime":2609.584,"endTime":2610.824,"body":"on the features that exist."},{"startTime":2610.974,"endTime":2617.374,"body":"After that, until we book out all of the"},{"startTime":2610.974,"endTime":2617.374,"body":"work in the quote, Project of allowing"},{"startTime":2617.374,"endTime":2618.634,"body":"people to sign up for the website."},{"startTime":2618.924,"endTime":2622.314,"body":"So, it seems like there's not"},{"startTime":2618.924,"endTime":2622.314,"body":"a lot of wiggle room in here."},{"startTime":2622.614,"endTime":2625.674,"body":"But in actuality there's a lot"},{"startTime":2622.614,"endTime":2625.674,"body":"of wiggle room if you really get"},{"startTime":2625.674,"endTime":2627.174,"body":"There's definitely wiggle room there."},{"startTime":2627.214,"endTime":2628.254,"body":"So, yeah."},{"startTime":2628.484,"endTime":2631.424,"body":"Yes, and, right, here's the"},{"startTime":2628.484,"endTime":2631.424,"body":"other thing that you could say"},{"startTime":2631.424,"endTime":2632.814,"body":"to that piece of functionality."},{"startTime":2632.834,"endTime":2636.164,"body":"You could say, well, it's a freemium"},{"startTime":2632.834,"endTime":2636.164,"body":"model, so you can sign up, but in"},{"startTime":2636.164,"endTime":2637.424,"body":"order to do anything meaningful."},{"startTime":2637.574,"endTime":2641.134,"body":"You gotta pay, but sign up pieces"},{"startTime":2637.574,"endTime":2641.134,"body":"later, so you're in, because we"},{"startTime":2641.134,"endTime":2643.974,"body":"want to grab your details so we"},{"startTime":2641.134,"endTime":2643.974,"body":"can spam the hell out of you."},{"startTime":2644.214,"endTime":2644.264,"body":"Right?"},{"startTime":2644.414,"endTime":2646.804,"body":"Until, until you actually"},{"startTime":2644.414,"endTime":2646.804,"body":"become a paying customer."},{"startTime":2646.954,"endTime":2650.654,"body":"So it's like, at what point, at"},{"startTime":2646.954,"endTime":2650.654,"body":"what point do you then say, this"},{"startTime":2650.664,"endTime":2651.924,"body":"is when we start capitalizing?"},{"startTime":2652.074,"endTime":2652.994,"body":"It's very tricky."},{"startTime":2653.144,"endTime":2654.684,"body":"I don't know how that's"},{"startTime":2653.144,"endTime":2654.684,"body":"done, to be honest."},{"startTime":2654.934,"endTime":2655.904,"body":"Lots of judgment."},{"startTime":2656.054,"endTime":2659.244,"body":"And no two businesses are the"},{"startTime":2656.054,"endTime":2659.244,"body":"same, and it's a dark art."},{"startTime":2659.414,"endTime":2665.454,"body":"That's why I'm, I'm, I'm big on having the"},{"startTime":2659.414,"endTime":2665.454,"body":"auditors sit in on the decision making."},{"startTime":2665.604,"endTime":2667.864,"body":"Or present whatever you've decided on."},{"startTime":2668.014,"endTime":2670.594,"body":"Because they're expensive folks,"},{"startTime":2668.014,"endTime":2670.594,"body":"so just present it to them."},{"startTime":2670.594,"endTime":2671.684,"body":"So this is what we think."},{"startTime":2671.684,"endTime":2674.214,"body":"Yeah."},{"startTime":2674.214,"endTime":2677.304,"body":"Yeah, it's kind of a standardization"},{"startTime":2674.214,"endTime":2677.304,"body":"thing once you've decided on something."},{"startTime":2677.304,"endTime":2680.944,"body":"Hey, we're going to, we're going to"},{"startTime":2677.304,"endTime":2680.944,"body":"deliver the first feature, and then a"},{"startTime":2680.944,"endTime":2684.684,"body":"couple other features behind it will kind"},{"startTime":2680.944,"endTime":2684.684,"body":"of qualify for what we're talking about."},{"startTime":2684.684,"endTime":2686.664,"body":"But again you can get in"},{"startTime":2684.684,"endTime":2686.664,"body":"real trouble with this."},{"startTime":2686.694,"endTime":2687.914,"body":"Because like, how many what do you get?"},{"startTime":2688.064,"endTime":2690.104,"body":"How many features are you going"},{"startTime":2688.064,"endTime":2690.104,"body":"to get in line behind this"},{"startTime":2690.104,"endTime":2691.344,"body":"once you deliver the first one?"},{"startTime":2691.344,"endTime":2692.254,"body":"Like a hundred?"},{"startTime":2692.404,"endTime":2693.844,"body":"Exactly, yeah."},{"startTime":2693.844,"endTime":2695.424,"body":"At what point does it"},{"startTime":2693.844,"endTime":2695.424,"body":"become another product?"},{"startTime":2695.574,"endTime":2695.804,"body":"Right?"},{"startTime":2695.804,"endTime":2695.984,"body":"Right."},{"startTime":2696.004,"endTime":2696.594,"body":"Yeah, yeah."},{"startTime":2696.654,"endTime":2696.914,"body":"Right."},{"startTime":2697.114,"endTime":2700.124,"body":"Also in, inside of this is the"},{"startTime":2697.114,"endTime":2700.124,"body":"concept of You're going to be"},{"startTime":2700.124,"endTime":2701.464,"body":"doing maintenance on these things."},{"startTime":2701.614,"endTime":2703.134,"body":"It's a given for a while."},{"startTime":2703.144,"endTime":2703.454,"body":"Yeah."},{"startTime":2703.514,"endTime":2706.864,"body":"And none of that maintenance"},{"startTime":2703.514,"endTime":2706.864,"body":"is capitalizable unless, unless"},{"startTime":2706.864,"endTime":2708.404,"body":"you're in that period, right?"},{"startTime":2708.674,"endTime":2713.174,"body":"That, that period in between"},{"startTime":2708.674,"endTime":2713.174,"body":"feasibility and your general release"},{"startTime":2713.184,"endTime":2714.704,"body":"when you're, when you call it done."},{"startTime":2714.954,"endTime":2715.204,"body":"Right."},{"startTime":2715.354,"endTime":2716.704,"body":"That's the only time that is."},{"startTime":2716.704,"endTime":2718.114,"body":"Yes, that's that's not."},{"startTime":2718.364,"endTime":2718.594,"body":"Yeah."},{"startTime":2718.744,"endTime":2719.024,"body":"All right."},{"startTime":2719.034,"endTime":2720.444,"body":"So that's pretty clear to me."},{"startTime":2720.464,"endTime":2723.434,"body":"I'd like to pivot again"},{"startTime":2720.464,"endTime":2723.434,"body":"to internal use software."},{"startTime":2723.554,"endTime":2728.189,"body":"Internal use software seems really"},{"startTime":2723.554,"endTime":2728.189,"body":"straightforward to me because this This"},{"startTime":2728.189,"endTime":2731.739,"body":"is when I introduce this concept to"},{"startTime":2728.189,"endTime":2731.739,"body":"people that have never heard it before."},{"startTime":2731.889,"endTime":2734.679,"body":"I introduce internal use software"},{"startTime":2731.889,"endTime":2734.679,"body":"because internal use software"},{"startTime":2734.679,"endTime":2735.659,"body":"seems really straightforward."},{"startTime":2735.889,"endTime":2737.589,"body":"You have the beginning of the project."},{"startTime":2737.589,"endTime":2740.749,"body":"You have all the planning activities"},{"startTime":2737.589,"endTime":2740.749,"body":"before you actually start any development."},{"startTime":2740.899,"endTime":2744.989,"body":"And what I tell people is, any planning"},{"startTime":2740.899,"endTime":2744.989,"body":"cost, any cost of you sitting in meetings"},{"startTime":2744.989,"endTime":2748.959,"body":"deciding how to do something, before"},{"startTime":2744.989,"endTime":2748.959,"body":"code is written, not capitalizable."},{"startTime":2749.109,"endTime":2751.499,"body":"The this is, this is an"},{"startTime":2749.109,"endTime":2751.499,"body":"interesting topic because like"},{"startTime":2751.499,"endTime":2753.849,"body":"the daily standup, for example."},{"startTime":2753.949,"endTime":2756.179,"body":"The daily scrum, for example,"},{"startTime":2753.949,"endTime":2756.179,"body":"if you're using scrum."},{"startTime":2756.329,"endTime":2758.169,"body":"The daily scrum is supposed to be."},{"startTime":2758.319,"endTime":2761.629,"body":"a planning session of how we're"},{"startTime":2758.319,"endTime":2761.629,"body":"going to do our work for the day."},{"startTime":2761.779,"endTime":2762.129,"body":"Okay?"},{"startTime":2762.279,"endTime":2766.369,"body":"So, that is, that is, it's not a"},{"startTime":2762.279,"endTime":2766.369,"body":"planning session meaning like, we have"},{"startTime":2766.369,"endTime":2768.139,"body":"to talk about architecture and concepts."},{"startTime":2768.289,"endTime":2772.149,"body":"It's a planning session meaning my direct"},{"startTime":2768.289,"endTime":2772.149,"body":"work that I'm working on right now."},{"startTime":2772.299,"endTime":2774.819,"body":"Most people don't get grain,"},{"startTime":2772.299,"endTime":2774.819,"body":"they just say, just exclude"},{"startTime":2774.819,"endTime":2776.069,"body":"the planning and all that."},{"startTime":2776.219,"endTime":2780.219,"body":"But that type of planning"},{"startTime":2776.219,"endTime":2780.219,"body":"is not like conceptual, you"},{"startTime":2780.219,"endTime":2782.179,"body":"know divorce from software."},{"startTime":2782.179,"endTime":2783.839,"body":"It's software design."},{"startTime":2783.989,"endTime":2785.879,"body":"As part of actually doing coding."},{"startTime":2786.029,"endTime":2787.019,"body":"It's part of development."},{"startTime":2787.019,"endTime":2788.009,"body":"It's part of development, yeah."},{"startTime":2788.014,"endTime":2788.254,"body":"Mm-Hmm."},{"startTime":2788.404,"endTime":2788.614,"body":". Yeah."},{"startTime":2788.734,"endTime":2792.874,"body":"So, so the that, again, most people just"},{"startTime":2788.734,"endTime":2792.874,"body":"say like, Hey, if you're meeting and"},{"startTime":2792.874,"endTime":2795.109,"body":"you're not actually sitting here, desk"},{"startTime":2792.874,"endTime":2795.109,"body":"coding, don't count because it's easier."},{"startTime":2795.119,"endTime":2795.629,"body":"Don't count it."},{"startTime":2795.629,"endTime":2795.749,"body":"Yeah."},{"startTime":2795.754,"endTime":2796.564,"body":"Because it is easier."},{"startTime":2796.564,"endTime":2799.684,"body":"And it, and I'll tell you, it"},{"startTime":2796.564,"endTime":2799.684,"body":"is easier to do it that way."},{"startTime":2799.804,"endTime":2801.304,"body":"In fact, I, I do it that way."},{"startTime":2801.304,"endTime":2803.764,"body":"In the spreadsheets that I"},{"startTime":2801.304,"endTime":2803.764,"body":"showed everyone before we started"},{"startTime":2803.764,"endTime":2805.174,"body":"here, I was doing it that way."},{"startTime":2805.174,"endTime":2807.694,"body":"I was counting that time away"},{"startTime":2805.174,"endTime":2807.694,"body":"from the capitalized cost."},{"startTime":2807.694,"endTime":2808.279,"body":"But the idea is."},{"startTime":2808.429,"endTime":2812.959,"body":"When you start, when things are ready to"},{"startTime":2808.429,"endTime":2812.959,"body":"start and development actually starts,"},{"startTime":2813.199,"endTime":2817.519,"body":"like I do this with the beginning and"},{"startTime":2813.199,"endTime":2817.519,"body":"ends of sprints just to be super easy to"},{"startTime":2817.529,"endTime":2819.569,"body":"have a real clear start and end, right?"},{"startTime":2819.719,"endTime":2821.299,"body":"Hey, we've done backlog refinements."},{"startTime":2821.299,"endTime":2824.989,"body":"We've done planning on these things,"},{"startTime":2821.299,"endTime":2824.989,"body":"but now the sprint is going to start."},{"startTime":2825.139,"endTime":2827.319,"body":"We start the timer on"},{"startTime":2825.139,"endTime":2827.319,"body":"the capitalized cost."},{"startTime":2827.469,"endTime":2832.129,"body":"And when we deliver the feature for"},{"startTime":2827.469,"endTime":2832.129,"body":"its intended use, when we deliver"},{"startTime":2832.129,"endTime":2835.499,"body":"that, I know the language here"},{"startTime":2832.129,"endTime":2835.499,"body":"doesn't say technological feasibility"},{"startTime":2835.649,"endTime":2838.429,"body":"but we were using it when we"},{"startTime":2835.649,"endTime":2838.429,"body":"originally did this, when I, when I"},{"startTime":2838.439,"endTime":2839.519,"body":"did the original planning for this."},{"startTime":2839.779,"endTime":2843.249,"body":"When the feature is delivered for"},{"startTime":2839.779,"endTime":2843.249,"body":"its use and a customer can use it,"},{"startTime":2843.279,"endTime":2848.179,"body":"again, we agreed on the standard"},{"startTime":2843.279,"endTime":2848.179,"body":"that's when the amortization started."},{"startTime":2848.329,"endTime":2851.719,"body":"So again, this is a lot more"},{"startTime":2848.329,"endTime":2851.719,"body":"straightforward than external use."},{"startTime":2852.004,"endTime":2856.294,"body":"Yeah, I mean, you can generalize"},{"startTime":2852.004,"endTime":2856.294,"body":"it and say until the product"},{"startTime":2856.314,"endTime":2858.334,"body":"starts taking shape, right?"},{"startTime":2858.334,"endTime":2861.454,"body":"So when you're developing, you just"},{"startTime":2858.334,"endTime":2861.454,"body":"do a mock up screen, put up Hello"},{"startTime":2861.454,"endTime":2863.424,"body":"World, but that's getting somewhere."},{"startTime":2863.574,"endTime":2866.914,"body":"So at that point, you can start it,"},{"startTime":2863.574,"endTime":2866.914,"body":"but until then, it's just all planning."},{"startTime":2867.114,"endTime":2870.724,"body":"I would include even the business"},{"startTime":2867.114,"endTime":2870.724,"body":"case, the vision in session"},{"startTime":2870.774,"endTime":2872.194,"body":"when you're trying to determine."},{"startTime":2872.344,"endTime":2876.504,"body":"Realization planning and trying to"},{"startTime":2872.344,"endTime":2876.504,"body":"determine what the business case is"},{"startTime":2876.504,"endTime":2880.784,"body":"would, because if it's internal use,"},{"startTime":2876.504,"endTime":2880.784,"body":"I suspect in any large firm, they"},{"startTime":2880.784,"endTime":2884.724,"body":"have a group of people determining"},{"startTime":2880.784,"endTime":2884.724,"body":"if it's going to be of any value."},{"startTime":2884.874,"endTime":2886.804,"body":"And that could take"},{"startTime":2884.874,"endTime":2886.804,"body":"three months, six months."},{"startTime":2886.954,"endTime":2889.744,"body":"Especially if you're at scale,"},{"startTime":2886.954,"endTime":2889.744,"body":"that could be a substantial number."},{"startTime":2889.744,"endTime":2891.614,"body":"I mean, even the daily stand up, right?"},{"startTime":2891.614,"endTime":2893.764,"body":"If you think about it from a team"},{"startTime":2891.614,"endTime":2893.764,"body":"perspective, that's one thing."},{"startTime":2893.914,"endTime":2896.494,"body":"It's a reasonably sized team, but"},{"startTime":2893.914,"endTime":2896.494,"body":"what if you have a team of teams?"},{"startTime":2896.494,"endTime":2897.624,"body":"And there's lots of teams."},{"startTime":2897.634,"endTime":2898.664,"body":"See, it adds up."},{"startTime":2898.814,"endTime":2903.434,"body":"I'm not sure that you can do that because"},{"startTime":2898.814,"endTime":2903.434,"body":"like, what I think of Like what you"},{"startTime":2903.434,"endTime":2907.509,"body":"just brought up Newton about I, I, I"},{"startTime":2903.434,"endTime":2907.509,"body":"think I see that as architecture, right?"},{"startTime":2907.509,"endTime":2909.329,"body":"And in agile development."},{"startTime":2909.479,"endTime":2912.929,"body":"Like, let, let's, let's look at agile"},{"startTime":2909.479,"endTime":2912.929,"body":"development versus waterfall development."},{"startTime":2912.929,"endTime":2913.799,"body":"This is the reason I say that."},{"startTime":2913.804,"endTime":2917.279,"body":"I don't think you can do that because in"},{"startTime":2913.804,"endTime":2917.279,"body":"waterfall development, the way that the"},{"startTime":2917.279,"endTime":2921.909,"body":"graphic that we're looking at outlines"},{"startTime":2917.279,"endTime":2921.909,"body":"it is you have this big primary phase."},{"startTime":2922.059,"endTime":2924.889,"body":"That is all operational expenditures."},{"startTime":2925.039,"endTime":2929.279,"body":"It's all, it's all immediately expense"},{"startTime":2925.039,"endTime":2929.279,"body":"of, I have a lot of planning time up front"},{"startTime":2929.429,"endTime":2934.229,"body":"to decide what business requirements that"},{"startTime":2929.429,"endTime":2934.229,"body":"I'm going to work on, what architecture"},{"startTime":2934.249,"endTime":2935.609,"body":"is going to be built to do it."},{"startTime":2935.759,"endTime":2938.329,"body":"Basically a big phase before"},{"startTime":2935.759,"endTime":2938.329,"body":"my actual coding begins."},{"startTime":2938.479,"endTime":2941.779,"body":"In Agile development, the architecture"},{"startTime":2938.479,"endTime":2941.779,"body":"is done as part of the work."},{"startTime":2941.789,"endTime":2943.649,"body":"The architecture emerges as the work."},{"startTime":2943.664,"endTime":2949.474,"body":"So I see a need to extract those"},{"startTime":2943.664,"endTime":2949.474,"body":"little architecture sessions, those"},{"startTime":2949.484,"endTime":2951.344,"body":"little ad hoc playing sessions."},{"startTime":2951.494,"endTime":2956.394,"body":"Out of the phase of development, and"},{"startTime":2951.494,"endTime":2956.394,"body":"on paper, move them over here where"},{"startTime":2956.394,"endTime":2959.524,"body":"they should, where they would have"},{"startTime":2956.394,"endTime":2959.524,"body":"occurred at the beginning of everything,"},{"startTime":2959.834,"endTime":2961.674,"body":"to say, this is all expensive."},{"startTime":2961.824,"endTime":2963.034,"body":"And then and separate it."},{"startTime":2963.044,"endTime":2966.194,"body":"That's a, that's the way that I've"},{"startTime":2963.044,"endTime":2966.194,"body":"done this when I had to, when I had to"},{"startTime":2966.354,"endTime":2968.124,"body":"capitalize for internal use software."},{"startTime":2968.274,"endTime":2973.694,"body":"Now, the way it happens in corporations"},{"startTime":2968.274,"endTime":2973.694,"body":"is, some guy who is the user, who intends"},{"startTime":2973.694,"endTime":2978.294,"body":"to be the user of the product, of this"},{"startTime":2973.694,"endTime":2978.294,"body":"new feature you're developing, would come"},{"startTime":2978.294,"endTime":2980.644,"body":"tell management that we need to develop A."},{"startTime":2980.944,"endTime":2981.324,"body":"Sure, yeah."},{"startTime":2981.474,"endTime":2984.274,"body":"So, they would set people out"},{"startTime":2981.474,"endTime":2984.274,"body":"there to do business cases."},{"startTime":2984.314,"endTime":2986.324,"body":"They would bring in experts like you."},{"startTime":2986.474,"endTime":2989.624,"body":"Then they would bring finance"},{"startTime":2986.474,"endTime":2989.624,"body":"folks, potential users to"},{"startTime":2989.624,"endTime":2991.164,"body":"see, is this of any value?"},{"startTime":2991.314,"endTime":2993.544,"body":"Well, the guy who suggested it"},{"startTime":2991.314,"endTime":2993.544,"body":"would always say that it's valid."},{"startTime":2993.694,"endTime":2997.464,"body":"And then the finance guys will say, look,"},{"startTime":2993.694,"endTime":2997.464,"body":"this is no value, or it is no value."},{"startTime":2997.614,"endTime":3001.264,"body":"So when you're capturing all that, even"},{"startTime":2997.614,"endTime":3001.264,"body":"before your first sprint, even before"},{"startTime":3001.264,"endTime":3005.314,"body":"your first sprint, there's a whole lot of"},{"startTime":3001.264,"endTime":3005.314,"body":"work done before management agrees to even"},{"startTime":3005.314,"endTime":3007.324,"body":"hire a development group to do sprints."},{"startTime":3007.474,"endTime":3011.704,"body":"So all that work, I would suggest,"},{"startTime":3007.474,"endTime":3011.704,"body":"should be in the expensing phase."},{"startTime":3011.854,"endTime":3015.454,"body":"Because there's nothing out there,"},{"startTime":3011.854,"endTime":3015.454,"body":"they're simply thinking of what to do."},{"startTime":3015.634,"endTime":3017.154,"body":"So the product hasn't formed yet."},{"startTime":3017.324,"endTime":3017.894,"body":"It's what I'm saying."},{"startTime":3017.894,"endTime":3021.504,"body":"If you can touch and feel the product, so"},{"startTime":3017.894,"endTime":3021.504,"body":"to speak, right, you can't touch software."},{"startTime":3021.504,"endTime":3025.674,"body":"But if it starts forming at that,"},{"startTime":3021.504,"endTime":3025.674,"body":"to me, that's a simple trigger."},{"startTime":3025.684,"endTime":3029.244,"body":"And that's when you say, okay, now"},{"startTime":3025.684,"endTime":3029.244,"body":"we're starting to make it, right?"},{"startTime":3029.244,"endTime":3029.464,"body":"Right."},{"startTime":3029.634,"endTime":3029.914,"body":"Yeah."},{"startTime":3030.194,"endTime":3034.304,"body":"Well, I guess another way to say what I'm"},{"startTime":3030.194,"endTime":3034.304,"body":"saying is When we finish this software,"},{"startTime":3034.514,"endTime":3037.964,"body":"and we disband the team and get rid of"},{"startTime":3034.514,"endTime":3037.964,"body":"it, or whatever, or you know, spin it down"},{"startTime":3037.964,"endTime":3039.304,"body":"to just a maintenance team, or whatever."},{"startTime":3039.454,"endTime":3044.344,"body":"What you're going to be left with in your"},{"startTime":3039.454,"endTime":3044.344,"body":"in your ALM tool whatever you use, Azure"},{"startTime":3044.344,"endTime":3046.604,"body":"DevOps, or Jira, or whatever you use."},{"startTime":3046.954,"endTime":3049.814,"body":"You're going to be left with , all"},{"startTime":3046.954,"endTime":3049.814,"body":"the requirements that it took to"},{"startTime":3049.964,"endTime":3051.444,"body":"generate the system that you built."},{"startTime":3051.594,"endTime":3057.264,"body":"And the way that this graphic is written,"},{"startTime":3051.594,"endTime":3057.264,"body":"and originally probably interpreted,"},{"startTime":3057.264,"endTime":3060.664,"body":"right, and originally probably written,"},{"startTime":3057.264,"endTime":3060.664,"body":"was you did all those requirements and"},{"startTime":3060.684,"endTime":3063.724,"body":"everything that was intended to be done"},{"startTime":3060.684,"endTime":3063.724,"body":"before any developers came on board."},{"startTime":3063.874,"endTime":3064.284,"body":"You're right."},{"startTime":3064.284,"endTime":3064.554,"body":"Yeah."},{"startTime":3064.694,"endTime":3067.674,"body":"So I'm just saying you're taking that"},{"startTime":3064.694,"endTime":3067.674,"body":"and you're just piecing it up along all"},{"startTime":3067.674,"endTime":3068.834,"body":"the sprints and all that kind of stuff."},{"startTime":3068.964,"endTime":3074.174,"body":"So that's why I say like, you probably"},{"startTime":3068.964,"endTime":3074.174,"body":"need to just take those hours out"},{"startTime":3074.234,"endTime":3077.704,"body":"of whatever you're reporting for"},{"startTime":3074.234,"endTime":3077.704,"body":"capitalization for internal use."},{"startTime":3077.884,"endTime":3078.994,"body":"And again, it's doable, right?"},{"startTime":3078.994,"endTime":3082.244,"body":"I mean, ALM tools allow you to do"},{"startTime":3078.994,"endTime":3082.244,"body":"that by role, by WBS code or whatever."},{"startTime":3082.254,"endTime":3086.744,"body":"So may I ask you, would you have the"},{"startTime":3082.254,"endTime":3086.744,"body":"sprint team do requirements gathering?"},{"startTime":3086.894,"endTime":3087.384,"body":"Yes."},{"startTime":3087.534,"endTime":3092.794,"body":"So, when you, generally the way I have"},{"startTime":3087.534,"endTime":3092.794,"body":"seen it, most times, the corporations"},{"startTime":3092.794,"endTime":3096.674,"body":"would not even hire a team to do"},{"startTime":3092.794,"endTime":3096.674,"body":"requirements gathering until they've"},{"startTime":3096.674,"endTime":3098.594,"body":"got a business case to say, Sure."},{"startTime":3098.814,"endTime":3099.344,"body":"Go ahead."},{"startTime":3099.474,"endTime":3099.784,"body":"Sure."},{"startTime":3099.834,"endTime":3102.434,"body":"So now requirements gathering,"},{"startTime":3099.834,"endTime":3102.434,"body":"is there any point when you"},{"startTime":3102.434,"endTime":3103.769,"body":"start requirements gathering?"},{"startTime":3104.079,"endTime":3106.369,"body":"When you will decide that"},{"startTime":3104.079,"endTime":3106.369,"body":"you don't want to continue."},{"startTime":3106.519,"endTime":3107.659,"body":"Continue the software?"},{"startTime":3107.729,"endTime":3108.239,"body":"Yes."},{"startTime":3108.549,"endTime":3110.299,"body":"I mean during requirements"},{"startTime":3108.549,"endTime":3110.299,"body":"gathering space."},{"startTime":3110.299,"endTime":3112.629,"body":"It can happen?"},{"startTime":3112.779,"endTime":3113.289,"body":"Yes."},{"startTime":3113.429,"endTime":3117.639,"body":"So if, in that case, I would even"},{"startTime":3113.429,"endTime":3117.639,"body":"consider expensing requirements gathering."},{"startTime":3117.789,"endTime":3118.089,"body":"Sure."},{"startTime":3118.209,"endTime":3118.639,"body":"Sure."},{"startTime":3118.789,"endTime":3121.224,"body":"So, after your first meeting"},{"startTime":3118.789,"endTime":3121.224,"body":"with the product owners."},{"startTime":3121.374,"endTime":3124.724,"body":"You know, when you're building"},{"startTime":3121.374,"endTime":3124.724,"body":"the backlog initially, I would"},{"startTime":3124.724,"endTime":3126.964,"body":"say that's preliminary work."},{"startTime":3127.114,"endTime":3130.974,"body":"I'll give you, I'll give you an example"},{"startTime":3127.114,"endTime":3130.974,"body":"of what I do,  every week, my team does"},{"startTime":3131.074,"endTime":3135.004,"body":"at least one hour of, backlog refinement."},{"startTime":3135.314,"endTime":3135.414,"body":"Okay."},{"startTime":3135.564,"endTime":3140.474,"body":"And my backlog refinement may be"},{"startTime":3135.564,"endTime":3140.474,"body":"spent on talking about problems,"},{"startTime":3140.674,"endTime":3143.754,"body":"potential solutions to problems"},{"startTime":3140.674,"endTime":3143.754,"body":"that we will never implement."},{"startTime":3143.904,"endTime":3147.804,"body":"Like I mean, I will say I think that"},{"startTime":3143.904,"endTime":3147.804,"body":"this business process and I'll, I'll"},{"startTime":3147.804,"endTime":3152.254,"body":"bring subject matter experts from across"},{"startTime":3147.804,"endTime":3152.254,"body":"the business or we'll reach out to a"},{"startTime":3152.254,"endTime":3156.564,"body":"customer or a business development person"},{"startTime":3152.254,"endTime":3156.564,"body":"or a customer representative sometimes."},{"startTime":3156.714,"endTime":3160.834,"body":"So I'll bring different experts from"},{"startTime":3156.714,"endTime":3160.834,"body":"around the business into my backlog"},{"startTime":3160.834,"endTime":3163.564,"body":"refinements who are experts on the"},{"startTime":3160.834,"endTime":3163.564,"body":"subject that I want to talk about."},{"startTime":3163.714,"endTime":3164.264,"body":"And I want to say."},{"startTime":3164.414,"endTime":3166.044,"body":"The software currently operates like this."},{"startTime":3166.194,"endTime":3167.334,"body":"These are the gaps I see."},{"startTime":3167.484,"endTime":3170.984,"body":"To do your job well what will"},{"startTime":3167.484,"endTime":3170.984,"body":"we have to add to the software?"},{"startTime":3171.024,"endTime":3172.954,"body":"So what will we have"},{"startTime":3171.024,"endTime":3172.954,"body":"to add to the software?"},{"startTime":3173.224,"endTime":3177.084,"body":"And we might, we may burn the whole"},{"startTime":3173.224,"endTime":3177.084,"body":"hour, and not produce a single story."},{"startTime":3177.374,"endTime":3180.284,"body":"So to the business, that's like,"},{"startTime":3177.374,"endTime":3180.284,"body":"that's a complete waste of money."},{"startTime":3180.424,"endTime":3182.684,"body":"You know, they completely got"},{"startTime":3180.424,"endTime":3182.684,"body":"to write off that whole time for"},{"startTime":3182.684,"endTime":3185.734,"body":"everyone in the meeting, because we"},{"startTime":3182.684,"endTime":3185.734,"body":"produced nothing in that session."},{"startTime":3185.994,"endTime":3187.474,"body":"See, that would not be my standard."},{"startTime":3187.544,"endTime":3191.234,"body":"If you've already started You've set up"},{"startTime":3187.544,"endTime":3191.234,"body":"your sprints and you've set up developing"},{"startTime":3191.234,"endTime":3195.844,"body":"application and it's just out of caution"},{"startTime":3191.234,"endTime":3195.844,"body":"you bring in guys to try and look at it"},{"startTime":3195.994,"endTime":3201.704,"body":"to define the backlog, then I would say"},{"startTime":3195.994,"endTime":3201.704,"body":"that's part of application development"},{"startTime":3201.734,"endTime":3202.944,"body":"because you're already doing it."},{"startTime":3203.274,"endTime":3204.844,"body":"You just want to make a better product."},{"startTime":3204.994,"endTime":3207.334,"body":"But that, that happens"},{"startTime":3204.994,"endTime":3207.334,"body":"every single sprint."},{"startTime":3207.354,"endTime":3208.674,"body":"This isn't a one off, right?"},{"startTime":3208.714,"endTime":3210.524,"body":"Every sprint, you're going"},{"startTime":3208.714,"endTime":3210.524,"body":"to do that refinement."},{"startTime":3210.524,"endTime":3211.004,"body":"I do it, yeah."},{"startTime":3211.154,"endTime":3211.874,"body":"Every week, yeah."},{"startTime":3212.024,"endTime":3214.574,"body":"I mean, I would say once you"},{"startTime":3212.024,"endTime":3214.574,"body":"started coding, like you said,"},{"startTime":3214.724,"endTime":3218.114,"body":"once you started coding, I would,"},{"startTime":3214.724,"endTime":3218.114,"body":"I would not expense anything."},{"startTime":3218.284,"endTime":3218.654,"body":"Sure."},{"startTime":3218.954,"endTime":3222.584,"body":"I mean, I would, I would capitalize"},{"startTime":3218.954,"endTime":3222.584,"body":"everything for application development."},{"startTime":3222.734,"endTime":3223.344,"body":"Internal use."},{"startTime":3223.394,"endTime":3224.544,"body":"Yes, for internal use."},{"startTime":3224.694,"endTime":3226.264,"body":"It may not matter for internal use."},{"startTime":3226.264,"endTime":3229.024,"body":"I think the takeaway here"},{"startTime":3226.264,"endTime":3229.024,"body":"is there's some flexibility."},{"startTime":3229.074,"endTime":3229.874,"body":"You know, there's a lot."},{"startTime":3230.024,"endTime":3233.064,"body":"Arguably, there's a lot more"},{"startTime":3230.024,"endTime":3233.064,"body":"flexibility here than there"},{"startTime":3233.064,"endTime":3234.844,"body":"was for the other category."},{"startTime":3235.044,"endTime":3237.114,"body":"But, but also I've been in, I've been."},{"startTime":3237.264,"endTime":3241.434,"body":"Partnered in small, very small"},{"startTime":3237.264,"endTime":3241.434,"body":"businesses, where the CFO just says"},{"startTime":3241.434,"endTime":3245.534,"body":"I'm not dealing with all this, I'm just"},{"startTime":3241.434,"endTime":3245.534,"body":"going to capitalize 50%, and I'm done."},{"startTime":3245.684,"endTime":3247.864,"body":"It's not publicly traded."},{"startTime":3248.014,"endTime":3248.984,"body":"No one's going to look at it."},{"startTime":3249.134,"endTime":3252.004,"body":"Yeah, they don't want to deal with all"},{"startTime":3249.134,"endTime":3252.004,"body":"the nuance of what we just talked about."},{"startTime":3252.294,"endTime":3253.054,"body":"They don't want to deal with that."},{"startTime":3253.054,"endTime":3255.334,"body":"They just pick a number and"},{"startTime":3253.054,"endTime":3255.334,"body":"that's what they capitalize on."},{"startTime":3255.334,"endTime":3255.584,"body":"Yeah."},{"startTime":3255.734,"endTime":3260.164,"body":"So if, if they have no loans,"},{"startTime":3255.734,"endTime":3260.164,"body":"and nobody else cares about their"},{"startTime":3260.164,"endTime":3264.764,"body":"financials, he can do whatever he wants."},{"startTime":3264.914,"endTime":3267.504,"body":"Because the focus really"},{"startTime":3264.914,"endTime":3267.504,"body":"should be on the cash."},{"startTime":3267.504,"endTime":3268.794,"body":"You know, the basic thing."},{"startTime":3268.829,"endTime":3270.819,"body":"thing is focus only on the cash flow."},{"startTime":3270.969,"endTime":3274.739,"body":"Forget about accounting, accounting"},{"startTime":3270.969,"endTime":3274.739,"body":"numbers, capitalization and expensing."},{"startTime":3275.039,"endTime":3275.969,"body":"That's really what it is."},{"startTime":3275.969,"endTime":3280.219,"body":"The capitalization and expensing is"},{"startTime":3275.969,"endTime":3280.219,"body":"for the other consumers of the reports."},{"startTime":3280.369,"endTime":3284.729,"body":"The market folks, the banks,"},{"startTime":3280.369,"endTime":3284.729,"body":"they're interested in net income."},{"startTime":3284.879,"endTime":3286.819,"body":"When really the business runs on cash."},{"startTime":3286.969,"endTime":3290.099,"body":"Yeah, that, and that, that was,"},{"startTime":3286.969,"endTime":3290.099,"body":"that was exactly my experience."},{"startTime":3290.229,"endTime":3294.049,"body":"And why, why I've done this so many"},{"startTime":3290.229,"endTime":3294.049,"body":"times is I've been at these firms that"},{"startTime":3294.049,"endTime":3299.019,"body":"are owned by private equity and they,"},{"startTime":3294.049,"endTime":3299.019,"body":"they are very, Concerned about getting"},{"startTime":3299.169,"endTime":3302.499,"body":"getting their money back for their"},{"startTime":3299.169,"endTime":3302.499,"body":"investment and they want to, yeah."},{"startTime":3302.679,"endTime":3304.539,"body":"Yeah, and they may have"},{"startTime":3302.679,"endTime":3304.539,"body":"conditions, as you said."},{"startTime":3304.539,"endTime":3305.64,"body":"They may have conditions, yeah."},{"startTime":3305.64,"endTime":3306.551,"body":"For the loans."},{"startTime":3306.551,"endTime":3306.855,"body":"Right."},{"startTime":3306.855,"endTime":3307.439,"body":"So, yeah."},{"startTime":3307.759,"endTime":3307.979,"body":"Yeah."},{"startTime":3308.129,"endTime":3311.359,"body":"I mean, I have another, I have another"},{"startTime":3308.129,"endTime":3311.359,"body":"category Newton, you just wrapped"},{"startTime":3311.359,"endTime":3313.309,"body":"this up pretty perfectly right there."},{"startTime":3313.459,"endTime":3313.639,"body":"Okay."},{"startTime":3313.889,"endTime":3315.569,"body":"What category do you have"},{"startTime":3313.889,"endTime":3315.569,"body":"as a matter of interest?"},{"startTime":3315.599,"endTime":3318.589,"body":"I have a leading versus"},{"startTime":3315.599,"endTime":3318.589,"body":"lag, leading versus lagging"},{"startTime":3318.589,"endTime":3320.369,"body":"indicators for software finance."},{"startTime":3320.519,"endTime":3323.879,"body":"Anything that we can do to, to,"},{"startTime":3320.519,"endTime":3323.879,"body":"to watch out for with leading"},{"startTime":3323.879,"endTime":3324.959,"body":"versus lagging indicators."},{"startTime":3324.999,"endTime":3327.109,"body":"I think that's a great"},{"startTime":3324.999,"endTime":3327.109,"body":"topic for the next podcast."},{"startTime":3327.109,"endTime":3328.939,"body":"I agree."},{"startTime":3328.939,"endTime":3331.169,"body":"I think you're right because I think"},{"startTime":3328.939,"endTime":3331.169,"body":"a lot of people just don't know"},{"startTime":3331.169,"endTime":3334.829,"body":"what to look for with their software"},{"startTime":3331.169,"endTime":3334.829,"body":"finance of, of, of leading indicators."},{"startTime":3334.859,"endTime":3337.219,"body":"Because anyone can look"},{"startTime":3334.859,"endTime":3337.219,"body":"at  how much cash we have."},{"startTime":3337.369,"endTime":3340.939,"body":"After the fact, after the year"},{"startTime":3337.369,"endTime":3340.939,"body":"closes, and say, Oh, it looks"},{"startTime":3340.939,"endTime":3342.279,"body":"like we're not doing too good."},{"startTime":3342.469,"endTime":3343.399,"body":"But it's too late by then."},{"startTime":3343.399,"endTime":3344.219,"body":"It's too late, yeah."},{"startTime":3344.369,"endTime":3349.009,"body":"So in your sprint, how many of your"},{"startTime":3344.369,"endTime":3349.009,"body":"development team even gets involved"},{"startTime":3349.009,"endTime":3350.949,"body":"in the discussions on capitalization?"},{"startTime":3351.099,"endTime":3357.339,"body":"None, none, none, only because I have"},{"startTime":3351.099,"endTime":3357.339,"body":"experience doing this for my team."},{"startTime":3357.579,"endTime":3361.039,"body":"The the, the reason I have experience"},{"startTime":3357.579,"endTime":3361.039,"body":"doing this for my team is because I"},{"startTime":3361.039,"endTime":3365.289,"body":"was a manager in that organization"},{"startTime":3361.039,"endTime":3365.289,"body":"where the company got bought by private"},{"startTime":3365.299,"endTime":3370.969,"body":"equity, and I volunteered to work with"},{"startTime":3365.299,"endTime":3370.969,"body":"the finance people to figure this out"},{"startTime":3370.969,"endTime":3374.299,"body":"because I was super interested in You"},{"startTime":3370.969,"endTime":3374.299,"body":"know, not only why we were doing it,"},{"startTime":3374.529,"endTime":3378.309,"body":"but I wanted to actually understand how"},{"startTime":3374.529,"endTime":3378.309,"body":"we did this because it was something"},{"startTime":3378.309,"endTime":3379.759,"body":"that was completely foreign to me."},{"startTime":3380.049,"endTime":3381.139,"body":"I was like, this is really cool."},{"startTime":3381.289,"endTime":3382.739,"body":"Because I've never done it before."},{"startTime":3382.769,"endTime":3384.679,"body":"I've never heard any"},{"startTime":3382.769,"endTime":3384.679,"body":"software development team."},{"startTime":3384.829,"endTime":3387.309,"body":"All the networking events I"},{"startTime":3384.829,"endTime":3387.309,"body":"ever go to, I've never heard"},{"startTime":3387.309,"endTime":3388.449,"body":"anyone bring up any of this."},{"startTime":3388.499,"endTime":3391.239,"body":"I'm like, I don't quite understand"},{"startTime":3388.499,"endTime":3391.239,"body":"how to capitalize on this."},{"startTime":3391.499,"endTime":3393.209,"body":"Which is why we do on this podcast."},{"startTime":3393.229,"endTime":3396.639,"body":"But to your point though, right,"},{"startTime":3393.229,"endTime":3396.639,"body":"somebody, especially in your role."},{"startTime":3396.864,"endTime":3397.764,"body":"Product management."},{"startTime":3397.784,"endTime":3401.444,"body":"I think product managers should be"},{"startTime":3397.784,"endTime":3401.444,"body":"savvy on this stuff because whatever"},{"startTime":3401.444,"endTime":3404.124,"body":"they're doing is impacting the"},{"startTime":3401.444,"endTime":3404.124,"body":"bottom line for better or worse."},{"startTime":3404.184,"endTime":3406.254,"body":"I'm thinking also of the product owner."},{"startTime":3406.404,"endTime":3406.664,"body":"Mm hmm."},{"startTime":3406.974,"endTime":3408.864,"body":"So it could be the product owner also."},{"startTime":3409.154,"endTime":3412.204,"body":"I mean it depends because he, on"},{"startTime":3409.154,"endTime":3412.204,"body":"a theoretical basis, he's the guy"},{"startTime":3412.204,"endTime":3416.884,"body":"who, who Who has direct contact"},{"startTime":3412.204,"endTime":3416.884,"body":"with the owners of the business."},{"startTime":3417.034,"endTime":3418.704,"body":"And he has their best interest at heart."},{"startTime":3418.724,"endTime":3421.134,"body":"Which includes also the financials."},{"startTime":3421.164,"endTime":3421.394,"body":"Right."},{"startTime":3421.624,"endTime":3424.044,"body":"So I would think the product"},{"startTime":3421.624,"endTime":3424.044,"body":"manager, the product owner."},{"startTime":3424.364,"endTime":3426.904,"body":"Most product managers I know"},{"startTime":3424.364,"endTime":3426.904,"body":"don't usually care too much."},{"startTime":3427.054,"endTime":3427.234,"body":"Right."},{"startTime":3427.234,"endTime":3427.614,"body":"They should."},{"startTime":3427.764,"endTime":3428.484,"body":"That's what I'm saying."},{"startTime":3428.514,"endTime":3428.884,"body":"They should."},{"startTime":3429.034,"endTime":3430.994,"body":"If you're a product manager,"},{"startTime":3429.034,"endTime":3430.994,"body":"you're managing the product."},{"startTime":3431.144,"endTime":3434.914,"body":"You, you, you, you have to have"},{"startTime":3431.144,"endTime":3434.914,"body":"finance, so there, there, there are two"},{"startTime":3434.914,"endTime":3437.144,"body":"things that we believe on the podcast."},{"startTime":3437.184,"endTime":3439.194,"body":"I, I think, I'm going to"},{"startTime":3437.184,"endTime":3439.194,"body":"speak for Om for a second."},{"startTime":3439.344,"endTime":3443.354,"body":"You have to have financial literacy but"},{"startTime":3439.344,"endTime":3443.354,"body":"financial literacy is not good enough."},{"startTime":3443.484,"endTime":3447.884,"body":"Teams without financial information"},{"startTime":3443.484,"endTime":3447.884,"body":"cannot make financial decisions."},{"startTime":3448.034,"endTime":3451.944,"body":"That's a that's a Mike Miller special"},{"startTime":3448.034,"endTime":3451.944,"body":"right there So if you hide the financials"},{"startTime":3452.164,"endTime":3456.324,"body":"from your product owner to the team How"},{"startTime":3452.164,"endTime":3456.324,"body":"is your product owner and how is the team?"},{"startTime":3456.474,"endTime":3459.574,"body":"Going to make good, sound"},{"startTime":3456.474,"endTime":3459.574,"body":"financial decisions."},{"startTime":3459.784,"endTime":3462.324,"body":"do we build versus buy this feature?"},{"startTime":3462.464,"endTime":3465.734,"body":"Do we spend more time on maintenance of"},{"startTime":3462.464,"endTime":3465.734,"body":"this feature, or do we just cut it off?"},{"startTime":3465.944,"endTime":3468.554,"body":"Do we decide that we'd rather"},{"startTime":3465.944,"endTime":3468.554,"body":"just build a whole new feature"},{"startTime":3468.554,"endTime":3469.604,"body":"and not maintain this anymore?"},{"startTime":3469.704,"endTime":3472.064,"body":"Or, or do we decide,"},{"startTime":3469.704,"endTime":3472.064,"body":"there's no value in this."},{"startTime":3472.134,"endTime":3473.944,"body":"We're not gonna keep"},{"startTime":3472.134,"endTime":3473.944,"body":"continuing doing this."},{"startTime":3474.064,"endTime":3479.179,"body":"That, when you take away finances from"},{"startTime":3474.064,"endTime":3479.179,"body":"the team and if the product manager or"},{"startTime":3479.179,"endTime":3483.089,"body":"product owner is a representative of the"},{"startTime":3479.179,"endTime":3483.089,"body":"team with regard to these finances if you"},{"startTime":3483.089,"endTime":3487.509,"body":"take away finances from that person and"},{"startTime":3483.089,"endTime":3487.509,"body":"and the whole team your team now becomes"},{"startTime":3487.529,"endTime":3492.479,"body":"blind exactly to the most to the arguably"},{"startTime":3487.529,"endTime":3492.479,"body":"arguably right we could argue about"},{"startTime":3492.479,"endTime":3496.489,"body":"this arguably the most important metric"},{"startTime":3492.479,"endTime":3496.489,"body":"which is finances the power of that team"},{"startTime":3496.649,"endTime":3500.089,"body":"how much you bring in How much does it"},{"startTime":3496.649,"endTime":3500.089,"body":"how much does it cost to run the team?"},{"startTime":3500.319,"endTime":3501.879,"body":"How much does it cost"},{"startTime":3500.319,"endTime":3501.879,"body":"to produce each feature?"},{"startTime":3502.029,"endTime":3505.029,"body":"And how much are you bringing in"},{"startTime":3502.029,"endTime":3505.029,"body":"based on the features and everything?"},{"startTime":3505.159,"endTime":3507.049,"body":"Like, now you don't have"},{"startTime":3505.159,"endTime":3507.049,"body":"the information you need."},{"startTime":3507.379,"endTime":3509.419,"body":"How can you decide to"},{"startTime":3507.379,"endTime":3509.419,"body":"run a business that way?"},{"startTime":3509.429,"endTime":3511.869,"body":"You, you're basically muddling"},{"startTime":3509.429,"endTime":3511.869,"body":"through at that point."},{"startTime":3511.869,"endTime":3515.069,"body":"It's like taking the compass away from"},{"startTime":3511.869,"endTime":3515.069,"body":"you know, the captain of a ship, right?"},{"startTime":3515.079,"endTime":3516.359,"body":"It's just like, you just go somewhere."},{"startTime":3516.509,"endTime":3517.619,"body":"Everything looks the same."},{"startTime":3517.629,"endTime":3518.819,"body":"Everything's a horizon, right?"},{"startTime":3518.819,"endTime":3519.719,"body":"Whichever way you go."},{"startTime":3520.039,"endTime":3521.309,"body":"It just makes no sense to me."},{"startTime":3521.329,"endTime":3523.869,"body":"But that, unfortunately"},{"startTime":3521.329,"endTime":3523.869,"body":"though, Is the reality."},{"startTime":3523.869,"endTime":3525.979,"body":"I don't see that on the ground too much."},{"startTime":3525.989,"endTime":3531.229,"body":"So really that's why I'm, I'm, I'm, I"},{"startTime":3525.989,"endTime":3531.229,"body":"advocate for the decision support model."},{"startTime":3531.559,"endTime":3535.599,"body":"Which means that the CFO has to"},{"startTime":3531.559,"endTime":3535.599,"body":"have some of his staff integrated"},{"startTime":3535.599,"endTime":3537.489,"body":"with someone in development."},{"startTime":3537.639,"endTime":3540.219,"body":"Maybe it's not every day he's"},{"startTime":3537.639,"endTime":3540.219,"body":"not doing sprints with them."},{"startTime":3540.369,"endTime":3542.959,"body":"But once every few weeks"},{"startTime":3540.369,"endTime":3542.959,"body":"there's somebody in finance who"},{"startTime":3542.959,"endTime":3544.369,"body":"understands all their pains."},{"startTime":3544.519,"endTime":3545.939,"body":"All the, all the gray areas."},{"startTime":3545.949,"endTime":3547.659,"body":"So he can go back to the CFO."},{"startTime":3547.929,"endTime":3551.579,"body":"And explain with some kind of"},{"startTime":3547.929,"endTime":3551.579,"body":"expertise on the issues down there"},{"startTime":3551.619,"endTime":3556.959,"body":"and then come back and give the same,"},{"startTime":3551.619,"endTime":3556.959,"body":"the developers also why the CFO has"},{"startTime":3556.959,"endTime":3558.699,"body":"some net income targets to meet."},{"startTime":3558.849,"endTime":3561.769,"body":"So he has to do truthful,"},{"startTime":3558.849,"endTime":3561.769,"body":"of course accountants don't"},{"startTime":3561.769,"endTime":3563.739,"body":"fix, don't maneuver anything."},{"startTime":3563.889,"endTime":3568.139,"body":"So the CFO has to figure out a way"},{"startTime":3563.889,"endTime":3568.139,"body":"truthfully to meet his targets with"},{"startTime":3568.139,"endTime":3569.639,"body":"the help of the development team."},{"startTime":3569.789,"endTime":3573.539,"body":"So I really don't believe in"},{"startTime":3569.789,"endTime":3573.539,"body":"this idea of separating them"},{"startTime":3573.539,"endTime":3575.209,"body":"and then hoping for the best."},{"startTime":3575.249,"endTime":3576.489,"body":"Hoping for the best, you know."},{"startTime":3576.489,"endTime":3580.359,"body":"I think in practice, this might be"},{"startTime":3576.489,"endTime":3580.359,"body":"like a this might be a delivery manager"},{"startTime":3580.379,"endTime":3582.144,"body":"or somebody like that who has that."},{"startTime":3582.294,"endTime":3584.194,"body":"The financial chops to do this, right?"},{"startTime":3584.224,"endTime":3586.954,"body":"Working with the finance"},{"startTime":3584.224,"endTime":3586.954,"body":"arm of the organization."},{"startTime":3586.954,"endTime":3587.784,"body":"Maybe PMO, I don't know."},{"startTime":3587.934,"endTime":3590.714,"body":"I would rather work directly"},{"startTime":3587.934,"endTime":3590.714,"body":"with a finance person to get"},{"startTime":3590.714,"endTime":3591.894,"body":"that skill onto the team."},{"startTime":3591.934,"endTime":3592.294,"body":"Right."},{"startTime":3592.314,"endTime":3594.534,"body":"But again, in practice"},{"startTime":3592.314,"endTime":3594.534,"body":"that doesn't happen."},{"startTime":3594.534,"endTime":3598.494,"body":"So I'm thinking, what is out there that"},{"startTime":3594.534,"endTime":3598.494,"body":"can be leveraged to get to that end state?"},{"startTime":3598.644,"endTime":3600.864,"body":"So what does the product"},{"startTime":3598.644,"endTime":3600.864,"body":"owner do on things like this?"},{"startTime":3601.014,"endTime":3602.344,"body":"What does a product manager do?"},{"startTime":3602.494,"endTime":3605.524,"body":"Manager backlog."},{"startTime":3605.524,"endTime":3609.104,"body":"I was gonna say, get, get, get"},{"startTime":3605.524,"endTime":3609.104,"body":"fired at late November, early"},{"startTime":3609.104,"endTime":3613.384,"body":"December when it comes time to"},{"startTime":3609.104,"endTime":3613.384,"body":"make up that, make up that OPEX."},{"startTime":3613.534,"endTime":3614.014,"body":"Not a lot."},{"startTime":3614.024,"endTime":3615.004,"body":"So there's two sides."},{"startTime":3615.104,"endTime":3617.534,"body":"One is, yes, they don't"},{"startTime":3615.104,"endTime":3617.534,"body":"have the information, right?"},{"startTime":3617.554,"endTime":3620.464,"body":"And then the second side is they don't"},{"startTime":3617.554,"endTime":3620.464,"body":"have the autonomy to make decisions."},{"startTime":3620.514,"endTime":3620.784,"body":"Right."},{"startTime":3620.934,"endTime":3622.714,"body":"You need the information"},{"startTime":3620.934,"endTime":3622.714,"body":"to make decisions."},{"startTime":3622.864,"endTime":3625.614,"body":"But you also need to empower"},{"startTime":3622.864,"endTime":3625.614,"body":"them to make those decisions."},{"startTime":3625.614,"endTime":3628.864,"body":"The division I see is the product"},{"startTime":3625.614,"endTime":3628.864,"body":"owner is in bed with both the"},{"startTime":3628.864,"endTime":3630.554,"body":"team and the finance folks."},{"startTime":3630.554,"endTime":3631.464,"body":"Yeah, ideally."},{"startTime":3631.464,"endTime":3632.874,"body":"So that's what he should do."},{"startTime":3633.024,"endTime":3635.054,"body":"Ideally that would be best"},{"startTime":3633.024,"endTime":3635.054,"body":"because you don't have any"},{"startTime":3635.204,"endTime":3636.714,"body":"middle layers getting in the way."},{"startTime":3636.714,"endTime":3636.904,"body":"Right."},{"startTime":3637.054,"endTime":3640.024,"body":"But again, hierarchical company,"},{"startTime":3637.054,"endTime":3640.024,"body":"that doesn't happen, right?"},{"startTime":3640.174,"endTime":3640.554,"body":"That's the sad part."},{"startTime":3640.614,"endTime":3642.614,"body":"We always give good"},{"startTime":3640.614,"endTime":3642.614,"body":"advice on this podcast."},{"startTime":3642.644,"endTime":3646.404,"body":"In those scenarios, we say,"},{"startTime":3642.644,"endTime":3646.404,"body":"Hey, keep that resume updated."},{"startTime":3646.554,"endTime":3650.654,"body":"Alright, so this was a topic that"},{"startTime":3646.554,"endTime":3650.654,"body":"has been on our minds for some time."},{"startTime":3650.654,"endTime":3652.704,"body":"Hopefully, You've stayed"},{"startTime":3650.654,"endTime":3652.704,"body":"with us this long."},{"startTime":3652.744,"endTime":3656.664,"body":"Let us know what you think down below"},{"startTime":3652.744,"endTime":3656.664,"body":"in the comments and let us know if your"},{"startTime":3656.664,"endTime":3661.204,"body":"experiences are You know different or"},{"startTime":3656.664,"endTime":3661.204,"body":"the same we'd love to hear from you or"},{"startTime":3661.204,"endTime":3663.854,"body":"if you manage a budget like that would"},{"startTime":3661.204,"endTime":3663.854,"body":"be nice Yeah, that would be good too."},{"startTime":3663.954,"endTime":3666.444,"body":"And don't forget to subscribe"},{"startTime":3663.954,"endTime":3666.444,"body":"and like while you're there"}]}