Lesson 19: Emotional Check-In, Duration, R&D Tax Credit

Well, it's raining here today, as you can see, and, uh, I was gonna head to the beach and do a recording there because there's this place where it's incredibly magical. So obviously today wasn't going to be the day, and I had just remembered that this is a possibility because I live near one. So maybe we should record some content there. So, uh, might have to stay tuned to get that one. Um, today we're going to talk about 3 topics, which is insane. First, we're going to talk about an emotional check-in, then we're going to talk about duration, and then we're going to get into the R&D tax credit. So those are quite the broad topic areas. Um, doing this product development thing, service development thing, creating something unique, totally unique, from scratch, that's never existed before, connecting with the market and building a durable brand with strong core values that lasts centuries is not for the faint of heart. If it was easy, every single person on this planet would be doing it. It is very, very rare and very difficult. However, It is also, um, really valuable work that needs to be done because very few are actually on this journey and on this path. And most of the time it's just take whatever's already there, remix it slightly, shove it out there, and sort of care less. Or like maybe flip something and there's less care. And, and so just by that very nature of doing this— You have inherent differentiation, defensibility, there's less competition. But it's a struggle. If you listen to interviews with people who've made it, sometimes you have to wait a decade for it to hit, sometimes 2 decades, sometimes 3. You listen to an interview with like Kevin Hart, an entertainer, took him 12 years before he finally had like the moment. where he kind of took off. Steve Carell, an actor, took decades before a movie finally took off, and then a series and that sort of thing. So, um, and even painters and artists, sometimes they have to go through their entire lives, then pass, never experiencing the value of their creations, and then it hits. Same things with inventors, only in hindsight, or people who are really pushing the society and the thought and the mindset forward, the current generation does not get you. They just don't. And so it takes a long time for the rest of the world to catch up to you. So what this means in order to create long-running duration is that you need emotional resilience. How do you develop that? How do you develop the lack of a sprint mindset where you just do it for a couple days, weeks, months, maybe one year, and then give up and quit and switch to the next thing. How do you develop that resilience for a marathon? The only way— you've got to go all the way back to our first couple videos— the only way is that you got to truly love this stuff. Steve Jobs used to talk about this. If you didn't love it, you would quit because it's just too hard, it's too long. And so, um, the folks who really succeed are the ones who have actually found the thing that they're excited about. It's like, find your fascination, the things that you're doing and you're not getting paid for it, the thing that's been there since you were a kid. Um, and, and the first job is to find that. And it's likely that there's something in this world that attracts you, that fascinates you, that pulls you forward. If that's the thing, then zoom in on it, figure it out. I mean, you already know more than 99% of the population about that Guaranteed. Like, you could probably talk about that thing for years and years, to the point where people will get sick of it. I mean, look at these videos, right? Like, people will get sick of this content, but I have a never-ending trove of thoughts, ideas from trying to figure out the core base principles of being able to do it again. And that's the difference between, uh, here today, gone today. And the best who's ever done it is the fact that you can't— you don't just do it once. You can do it again and again and again and again. That repeatability is skill. And if you can have that repeatability and make hits over and over again, given whatever time duration you're playing on, centuries maybe, then that is the mark of true success. So then extracting those principles out. And creating a foundation such that it works for any, in my example, product or service that you could possibly think of or create today and into the far future has taken me decades. I'm 31, 32 years into this thing right now. And if you count my whole life, I'm— I'll be 46 this year. So 46 years of never-ending struggle doing 3 times a day, just trying to figure this out so I can make this video. And give that stuff to you guys. It's, it's important to me. I'm fascinated by it. I love this stuff. I'll do it till the day I kick the bucket, which is hopefully a long way off. So resiliency, personal story, I put myself in the hospital at least twice, because I've just gone so hard. And maybe it's a middle-aged thing. But like, I've been getting up at 3 AM and all my friends and colleagues who know me, like I'm wearing these red lens glasses during conference calls in the morning. I'm wearing them at night. Like, I'm up at 3 AM sending emails. I'm on Europe time and American time, like working 18 hours, 20 hours a day. Like, while I'm awake, while I'm sleeping, I'm working. So there's a danger in that if you don't take moments and get rest, because you could just very quickly burn out, even if you love this stuff and it's super— you're passionate about it. So I've learned over the years that you got to find that healthy balance, whatever that is for you, and only you know what that is. Where you're starting to feel overwhelmed, burnt out, tired. Um, at this point I still have a lot of energy. I'm just— I sleep for 6, 7 hours, maybe less sometimes, and I wake up and I get after it, and I go to sleep early. I'm in bed by like 7:30 or 8. So I've learned how to manage this stuff over the decades such that I can keep a consistent pathway and just like a smooth A smooth process, a smooth ingestion, analytics, analysis, creation, execution, distribution, all of those things in just a steady drumbeat cycle. And I think that's the key, is you got to find that steady drumbeat that works for you. And there'll be moments where you'll pick up on an energy and it's just explosive, and you ride that wave. Ride that wave as long as you can ride it, because they're rare. When they come, you got to hang on and you got to use that, that tailwind gale force to like propel yourself forward. But then once it starts to wind down, you got to just stay in that consistent sort of, um, drumbeat and cadence. The cadence that you can have for the rest of your life is the thing that will make you win, right? Because you get multiple value out of this. You get Just the intrinsic value of something that you like and love, and like you're engaging with it and you're creating and you're talking to the community and you're doing stuff with it— just that alone, you've won. Second, you can maybe get paid for it. And third, maybe you become one of the greatest and people celebrate you, which— that's sort of like off to the side. That comes with a whole set of different problems that you probably don't want. I don't want them. Um, I just want to be in this space of pure creation. So if you can find that space where you're creating from raw authenticity and like that universal truth, then, you know, like you're in a, in a strong cadence. So that— so the emotional check-in is a place here after we're almost at, you know, 20 videos or so, um, to take a pause and go, am I on the right path? Can I do this thing for the rest of my life, 20 years? If not, you got to find the thing that like you're actually passionate about, because you will burn out. And then the people who are actually passionate about it will beat you. They'll just go longer than you. Success is really just, I went longer than everyone else, and you're the only one left standing. Like Michael Phelps swimming, he swam every day, come rain, shine, Christmas, didn't matter. Every day, no days off. And he just won gold. I mean, he won so many gold medals that they don't even fit around his neck anymore. It's insane. Um, and then he rested later, but he's still got that fire and spirit. So that's the piece. So check in with yourself, figure out where you are, have the real talk with yourself. It's a safe place. Like, don't beat yourself up. And just ask yourself, like, is this thing that I'm doing actually the thing that I'm called to do? Like, I'm actually passionate about this? They don't, you know, they don't necessarily have to be the same. Like, your job, your income source doesn't have to be like the thing you're passionate about. But given you can combine them, holy moly, amazing. Do that. Like, double, triple benefit. Do that. So that's that. Now, um, let's get into tax consequences. R&D tax credits. So if you're making stuff, especially software, There's this rule called the R&D tax credit. I want you to Google this. And like, disclaimer, this is not tax, accounting, audit, legal, or investment advice. Let me say that again. This is not tax advice. Okay? This is just to open a door in your mind such that you can go talk to advisors to get this kind of advice to help you reduce your costs, reduce your expenses, increase your cash flow. Reinvest that money back into the business so you can go longer and build better products and services. So this R&D tax credit came back with a force with the big beautiful bill that was passed in the United States in middle 2025. And as more or less, it allows you to deduct a lot of the expense that you use on R&D. So if you hire an engineer, if you hire a designer, if you hire a product person, If you have cloud computing costs like AWS costs, Azure, Google Cloud, whatever, OpenAI costs potentially that runs your software, the hosting costs, you can deduct a lot of that cash, which means you pay less in tax at the end of the year for the revenue you generated. So but one of the key things is this is why invention is so important. If it's just, I just did a little like extra feature, that doesn't count. The thing that counts is true R&D, true invention, true creation, which basically says I had to figure something out that I didn't think I was able to do. We had to actually develop some new capability, which— ding, ding, ding, quiz question, back to our other videos— new capabilities drive growth. The market values new capabilities that give them superpowers. They're willing to pay a premium for that. So not only are you winning on revenue growth, you're also winning on cash flow growth and you're winning on the ability to deduct those taxes in the United States. So if you pay for that and it's domestic talent based here in the United States, you get a double benefit for that. Amazing. That's below the EBITDA line. This is cash that like stays in the bank that you can pay additional like interest fees on. You can pay for marketing and advertising expenses. You can pay for more product development. Imagine that instead of paying the IRS just cash and getting no benefit from it, you can hire more real R&D invention people. Which then creates better product with new capabilities and allows you to grow even more faster. And there's a flywheel that develops and you just take off. So, um, yeah, like, you can literally call me and get double benefit by working with me. Like, what? So anyways, this is not a— this is not a sales pitch. Um, I don't care who you call, but that's like, if you're creating something from scratch, you can do that, especially in the software world, especially where we are with AI. Like, that will pass muster if you're developing AI, artificial intelligence models, new types of logical algorithms that create new capability sets in the physical or digital world. Double, triple word letter score benefit to the moon. Let's giddy up. Let's go. Bitcoin, blockchain, emerging tech. Emerging tech literally gives you multiple benefits. So why everyone doesn't do this, I have no idea. They think that investing in this stuff is like risky. And my point is, I've been doing this a long time, and actually your— the other approach is more risky. It's riskier to do the same old thing that everyone else is doing because You're not going to grow revenue. You're not going to be able to deduct that as an expense. And you're just going to be a lookalike me too. And then you're going to come later and you're going to go, help me, I need to grow. And I'm going to go, but are you investing in emerging tech? Are you paying for the talent that knows how to manipulate emerging tech into a product with strong core values that the market wants and then push this into the market in a way that drives word of mouth because it gives people superpowers and they're willing to pay for it and they're going to talk to other people about it because like it's crazy. So, all right, let me step off of my soapbox here and enjoy the rain. So, um, that's it. Uh, save nature, save your R&D team, save your income statement from mortal death, and you know, Save yourself. Like, work on stuff that you're fascinated by. Anyways, that's, uh, that's my diatribe today. I don't know how you feel about that. Hopefully you're still here and you haven't thrown your computer or your phone against the wall and, um, cussed me out, you know, till the ends of time. Um, all right, well, that's it. Talk to you later. Have a great rest of your week.