In this episode of the Business of Laravel podcast, Matt Stauffer interviews Jason McCreary, the founder of Shift. They discuss Jason's role and journey in the Laravel community, the functionality of Laravel Shift as an automation tool for upgrading Laravel versions, and the importance of keeping Laravel applications up to date. Jason shares his experience in building a successful SaaS product for developers, offers advice for aspiring founders and business owners, and discusses the unique challenges and rewards of being a solo founder.

• Matt Stauffer Twitter
• Jason McCreary Twitter
• Shift
• Jason’s Twitter Thread
• Jason’s Video on Adding an SMS Admin Action to Download Logs
• Jason’s Article on SMS admin in 8 lines of code
• Origin story of Shift

Transcript

Matt Stauffer: All right. Welcome back to the Business of Laravel podcast, where I talk to business leaders who are working in and with Laravel. My guest today is Jason McCreary, a wonderful human being who is also happy to be the founder of Laravel Shift. And Jason's been around, Jay or JMac, has been around the Laravel community since the early days and has been helping us build up tooling to help Laravel developers and companies that use Laravel. And I'm not supposed to give the intro at all and just hand it off to you. So I'm going to hand it off to you. Could you just kind of tell us who are you and kind of what's your business and what's your business's relationship to Laravel?

Jason McCreary: Sure, yeah. I am JMac. I think most of the community probably knows me as JMac. But Jason McCreary is the full name.

Matt Stauffer: It's your government name.

Jason McCreary: Yeah, and I've been... Gosh, you know, it was funny when I was at Laracon the other week and listening to Taylor on stage, you know, with his announcements and he was talking about how Laravel, you know, is 14 years old or whatever. And I was thinking, oh my God, Shift is almost 10 years old. So I mean, I've been around...for a while in the community. And Shift started really early. In fact, it started in December of 2015. So it's nine full years. I mean, it's almost 10 years, but it started in December. So it's kind of one of those like fun off by one, got us started zero, mind-bendy, date math things. But anyway, the point is, yeah, I've been around for a long time. It's been interesting to be in the community, but in a way I've, in the last year or two, especially, and becoming a dad. I feel a little more OG in the community.

Matt Stauffer: Absolutely.

Jason McCreary: I feel a little bit off my lawn every now and then, little boomer, little zoomer going on. So it's funny. But you'll hear me talk about things like that, especially in relation to Shift. Follow the conventions, don't fight the framework, all these kinds of things. And then of course the standard stuff of formatting your code and writing tests and all the things. Eat your vegetables.

Matt Stauffer: Exactly, get off my lawn, you know.

Jason McCreary: So yeah, I feel that way sometimes, but I'm okay with that I think.

Matt Stauffer: Uh-huh. Old man yelling at Cloud. So if somebody has never heard of Laravel Shift before, can you kind of tell us, what does it do? And, you know, give me, I know you've given the origin story on a longer scale, but can you give us kind of the compressed version of it?

Jason McCreary: Absolutely. Yeah, so Shift is an automation tool for upgrading between Laravel versions. That's kind of its bread and butter. So if you want to go from Laravel 10 to Laravel 11, you can run the Laravel 11 Shift. And that one specifically, you know, it's going to do all the obvious stuff that it needs to do, like convert, you know, eloquent model attributes for CAS to the method, you know, things of that nature. But it's also really going to go...

These days it goes above and beyond the upgrade guide. In fact, Laravel 11 specifically, the upgrade guide doesn't really outline how to slim your application. But it's entirely possible to do so. And I think a lot of developers want the slim structure. That's something that's very awesome in Laravel 11 and I think will continue to be present in future versions. So if you want all of that automation...

You know, if you want all of that upgrade, make your Laravel 10 app feel like Laravel 11. Like it was always written in Laravel 11. It's not old, it's not legacy, it's not crusty in any way. It's all modern. That's where Shift comes in. It automates all that stuff for you. For what I feel, and we can talk about it more, but for what I feel is a very low price.

Matt Stauffer: It is a very low price. As a consumer of Shift, I will tell you it's a very low price. And just for the non-programmers in the audience, I want to share a little bit of context for what Jason just told us.

So what he's saying is basically the bare minimum that Shift and an upgrade guide could do is say, as long as you make these, let's say, six changes, when you update your dependency of Laravel from Laravel 10 to Laravel 11, your app will keep working. So that's kind of the bare minimum. But when he was talking about the slim framework...

Jason McCreary: Yeah.

Matt Stauffer: One of the things that's happened historically is that you can make the upgrade and it functions but it's still structured like the old app, the old versions, the old way of doing things in a lot of ways because Laravel is very permissive and it allows you to have Laravel apps that are structured in a lot of different ways that still work. So the bare minimum and what the upgrade guide usually says is here's how to keep it working, what you're kind of saying is that Shift doesn't just keep it working it actually makes more changes than are absolutely necessary in order for this app to stay new feeling as long as possible. Does that sound like a good kind of description of what you're saying?

Jason McCreary: Exactly. And that's important because, you know, your developers, as a developer, you're going to get into the docs, right? And the docs are going to show you how to do things in the Laravel 11 new, latest, greatest way. And if you've left parts of your application in the Laravel 10 way or the Laravel 9 way or whatever version you're coming from, it's just going to be a jarring experience. It's not going to be very efficient over time.

Can you do it? Sure. But Shift's goal is to really, again, make it feel like your app has always been running that latest version. There's no technical debt, right? You're upgraded, it's ready to go, it's looking fresh and clean, and you focus on the stuff you need to be focusing on, like building features, not manually upgrading these mundane things, right? Not copying, pasting code, and bumping composer hell dependencies.

Matt Stauffer: Yeah. Yeah.

Jason McCreary: Hopefully I can help avoid all that with Shift. That's the goal. And the genesis, I think, of that is like, I've been a PHP developer for 25 years now and I've jumped around a lot of the communities. WordPress is kind of the ready example. And when sites and projects are not upgraded, you can get on stage and you can talk about all these latest and greatest things, but if your community is not using those things, there's a drag that gets created. And that drag, I think over time can kill a community.

I think if you look at Magento or even other frameworks, other things in PHP, probably one of the reasons they didn't stay as successful for as long as maybe something like Laravel has and continues to do is because of that freshness. So if Shift in a small way helps with that, that is honestly one of the founding premises of it. I didn't want the drag of maintenance. I knew that from working at agencies on WordPress stuff on cake PHP projects. I mean, we would spend weeks upgrading stuff and they weren't always, honestly, sometimes they weren't like billable hours in a way like it was tough or it was just slog work, right?

Matt Stauffer: Yes. Nobody likes it, nobody wants to pay for it, but it has to happen.

Jason McCreary: Yeah, exactly it has to happen we're not gonna work on a project that's you know, Level 2 so you kind of have to do it and so you end up making affordances for that to happen or compromises and I remember doing that. I remember upgrading like ten apps and that's kind of the genesis of Shift. It was in a way truly born out of the fact that like I don't want this to be a drag and so if it can help the community at large to do that then that's awesome.

Matt Stauffer: Yeah. And I mean, as somebody who sees hundreds of code bases, you know, Laravel code bases, maybe thousands at this point, I can say that allowing the thing to get out of date is probably one of the most easily predictably preventably solved, you know, significant issues that we're brought into fix for people like there's probably like a, the top five. But most of the top five are...

Jason McCreary: Yeah.

Matt Stauffer: pretty complicated, they have to do with your process and your engineering and your understanding, yada, yada, yada. But this one is easy, it's just like, just keep it up to date. And if you keep it up to date, even if you don't use Shift, if you just keep them up to date when it's time to keeping it up to date, and also follow programming practices, Jason mentioned some of them earlier, like hey, follow the conventions, stuff like that, to allow it to be easy to keep up to date.

It's one of those like an apple a day keeps the doctor away, you know? Like a Shift every six months keeps the miserable, five week long upgrade process where everything breaks away, you know, and Shift is my preferred tool for sure as an agency owner and also as someone who maintains some products, but even if not, you gotta find some way to keep it up to date, because it's gonna burn you in the end.

Jason McCreary: Yeah, for sure.

Matt Stauffer: Okay, so I think one of the things that's really interesting is that you have created one of the successful software as a service that targets Laravel developers. And when I introduced this podcast at the top, I say, you know, working in and with Laravel and you, a lot of folks have a business that uses Laravel to target non-Laravel people.

Jason McCreary: Sure.

Matt Stauffer: And of course, Laravel developers love the idea of targeting other Laravel developers because we know each other and it's easy to scratch your own itch. But not a lot of people have found the level of success that I think they want to have the people they look up to, right? You've got Taylor and you've got Beyond Code and you know, but there's a surprisingly small amount of people who have found long term, this can become my full-time job financial success from, because there's only so much space, right? So I was curious for you, what are the unique elements of what it's like having a thing built in code that is targeting coders versus a thing built in code that is targeting doctors or real estate agents or whatever. Is there something unique in pros or cons of that experience?

Jason McCreary: Yeah, I think there are a couple of things but going back just a second to something else I'm really glad that you said is we are in a community of giants, right? I mean, like you said look at Taylor and Laravel itself specifically like I remember a couple years ago Taylor having a podcast of like ten million dollars in ten years or something. And of course now again coming off these recent announcements 57 million, you know in series funding it's like huge, huge stuff, you know? And so, like you said, you feel in a way even I do sometimes still like, gosh, look at, look at all these, you know, huge, huge successful people. And I don't put myself in that category very readily or very often. And, you know, I do think Shift has success, but it is easy sometimes, when you're building something to, kind of look like the grass is greener in a way....

Matt Stauffer: Mm-hmm, yeah.

Jason McCreary: of like the stuff so it can it can be a slog and I think getting to your question though is like...

Building for developers explicitly I think has been so great for me, again, for kind of my goal and premise of Shift itself is like a tool for developers to help developers with the crappy work, right? Targeting Laravel specifically has been the most successful for me. And it's been kind of interesting. I've actually tried to break into other frameworks. I've tried to break into Rails. I've tried to break into Python. Tailwind is even a small subset of the market. PHP at large I tried to break into at one point. And it's never really worked out for those. And there might be a couple reasons, but I truly believe Laravel is a bit of a hotbed in a way for SaaS because when you first come into the community as a developer, I think you're immediately introduced in a way to paid services. Laracasts is the ready example, right? You're immediately, hey, nine bucks and subscribe for this infinite amount of like Netflix style content on Laravel and the community, nine bucks. I mean, it's a total value, but you're presented with...

Matt Stauffer: Yeah.

Jason McCreary: something paid right away, whereas if you look at PHP at large, you're not. I mean, gosh, there's free web hosting at some places for PHP. Like, you're not used to paying for anything. And so I think one aspect of Laravel specifically is I think the community's willingness to open their wallet for something that they find valuable. And an underlying premise of that is also valuing their time.

Matt Stauffer: Yeah, yeah.

Jason McCreary: A lot of developers don't value their time. My time's free in a way is in their mind and it's not. Your time is not free people. Your time is actually your most precious asset. You'll never have any more of it. You know, so to me time is the most precious thing.

So anything that gives me a leg up or maximizes my time, you know, is totally valuable for me. But also too, being developers I think specifically is nice because I've gotten wonderful feedback. Shift would not be what it is without the feedback from developers. If I just immediately sold this to businesses or other large entities or built it for something specific in that way, I honestly don't think it would have reached its level of success.

Those developers getting in there is a double-edged sword on one hand. They're kind of willing to accept that it has some bugs.

Matt Stauffer: Yeah.

Jason McCreary: And on the flip side of that, they're ready to tell you about it. And most of them tell you about it and most will tell you about it in a positive way. Now, of course, you get the angry coders sometimes that are like, is blah, blah, blah, blah, and they want to tell you how to do it right. And I just roll with those emails. But again, 99 out of 100 are like, hey, you did a great job. There was just this really small thing that it missed over here and it might have not actually been so small, but they're pretty cool about it.

They even give me a code snippet, or they'll give me access to their repo. And I've been able to incrementally improve it because of that feedback. In a way, it's almost, I don't want to say artificial intelligence, because it's not at all that, and it's such a buzzword now. But it is very much collective intelligence. The community has helped improve Shift. The more people that use it, the better it gets, in a way. And it's because of that developer...

Matt Stauffer: Yeah.

Jason McCreary: feedback. I think if my audience were someone else, a business, it probably either would have been lot more gripey or not more successful, right?

Matt Stauffer: Hmm. And I love that idea about, folks valuing their time. Cause I know that one of the early ideas that kind of came up was if we, as a consultancy can get, let's say we can charge a client two weeks to do an upgrade or we can charge them, you know, less than $50 to just run Shift, you know, it benefits them, but it doesn't actually benefit us. Right. Cause we're now not using that time. And then it's like, yeah, but what is the best for the client? Which is clearly to use Shift and then...

Do we believe that there is opportunity for us elsewhere? And the answer is yes. So we're like, great, let's do what's best for the client. And I think that one of the things that allows Laravel and the folks in Laravel to value our time is the knowledge that Laravel is a desirable enough thing and our skills are as wanted and needed enough that we don't have to balk at the idea of paying a service to take rote work off of our plates. If that rote work was our only way to get paid, then we may not be willing to pay for it. If that rote work is the stuff we don't want to do, so we can instead do the meaningful, significant stuff, which seems to be very much the case in the Laravel world, then Shift isn't a competition to us getting good work. It's actually allowing us to get good work, you know?

Jason McCreary: Yeah, focus in on the stuff that matters. I think that'd be an easy spin to say, okay, we need to get you upgraded, but here's this value package line item for that and let's stay focused on the good work, right? That's maybe even the higher dollar amount too. So I could see that working out. Yeah, but to that point, even Laravel itself is about developer ergonomics, about developer speed, right? Even it is about time and happiness and developer experience.

You know, the new Laravel Cloud coming out, deploy in under a minute, right? It's all about everything comes back in my mind to time. You know, so having something that fits that is important to me.

Matt Stauffer: Yeah. So if somebody coming along was like, you know, what I really want is I want to be the next next JMac. And I know that you said, you know, you'll always put yourself up at there at the top. But the reality is you have built a company with a tool that you like working on in a community you enjoy and you're able to provide for your family doing it, which is a dream. Right? So if somebody wanted to be the next JMac, you know, do you have any advice to give?

I mean, a lot of people have tried to come up with a developer targeted software as a service, and some of them have been successful and a lot of them haven't. Do you have any tips to give?

Jason McCreary: I do have some tips. I will preface though that I am very much open and on the side of founders that will kind of absolve themselves by saying luck. I'm not afraid to use the word luck. I think when you repeat something three, four times, fine, you don't have to say the word luck anymore. And there's plenty of people out there that have had repeat success. Those are successful people. Again, I look up to them. But...

Matt Stauffer: Yeah. Yeah.

Jason McCreary: I will freely admit I feel I'm a bit lucky and I'm a bit lucky again for all the reasons I just mentioned that Laravel, the placement, the timing, where I was in life, you know, how I built it, you know, meeting Taylor at the conference. Again, if you want the full origin story of Shift, you know, check out the Base Code podcast. I recorded a final season exactly of that, the origin story. So, check that out.

But from the business side, I will just claim initially that I do think luck very much had a role to play in it. But the two things I will say that I do think, one, you can't look for overnight success. I have struggled with that with Shift over the years and I've made those mistakes in other projects or other areas of my life where I tried to look for the quick win, the quick success.

It's typically not that, right? Like that's not what success looks like. Again, I'm in the ninth year of Shift and it's still around. It's awesome. It's had growth all along the way, but it did not start as a million-dollar project. That's not at all where it started.

Matt Stauffer: Right.

Jason McCreary: The power of compounding has been on my side, but that is not at all where it has started. And then the second bit of advice is kind of already to something else I said buried in there. Listen to your users like... If you can get feedback from your users, you need to get that and get as much of that as you can early on and roll with it. Doesn't mean you have to listen to everyone. Doesn't even mean in my opinion, you have to be nice necessarily to everyone. But you need to try to objectively, you could get an email and be like, gosh, this guy's being a jerk, but you should still try to objectively look at what they're saying and see if there's something in there that can improve the direction that you're heading, just to tweak it slightly.

You shouldn't change your direction entirely based off one email, but you should listen, always listen to your users in the sense of getting feedback in the direction in which you're heading to just dial in that degree, you know, one way or the other. I feel like that is huge. You can't just blindly go into a cave and build something for six months and pop it out the door and think that it's gonna be successful, you know.

Matt Stauffer: Yeah.

Jason McCreary: There are all sorts of other things you have to do. I'm no marketing expert. I'm not going to talk about those things, but I do think a hack in my opinion, in something like a SaaS, is to get it out there early and listen to feedback. I mean, literally, I remember Jeffrey Way, like my 11th user, the 11th run of Shift, and he sent me an email. Jeffrey Way, big in the community at the time, nine years ago, Laracasts, Jeffrey Way.

He sent me a reply and he said, yeah, it was pretty buggy. You know, I think as an early, you know, and he was right, it was buggy. He was right. There was nothing wrong with what he said, but to get an email like that from that level of someone in the community could have really hurt, right? It could have really hurt. But you know, again, I tried to stay objective. I let that...

Matt Stauffer: Uh-huh. Yeah.

Jason McCreary: pass over me and I looked at what he said was buggy and he was right. There were things Jeffrey Way was doing, you know, back then he's trying everything. He's got repositories, he's got custom namespaces, he's got all sorts of craziness in his app. And I didn't cover those bases at that time. I didn't honor those. And you know, I worked with him. Hey, can you send me this code? What was buggy? Expand, right? Tell me more. And I created a dialogue and I've done that with probably thousands of users at this point.

And again, that's why I talk about that collective intelligence and I will attribute, if anything, I will attribute Shift's success to that. It is my unwavering crusade to answer all support emails that come in to Shift.

Matt Stauffer: I love it. And I've been on the receiving end for quite a few of those answers. It is always, I mean, you say, getting an email from Jeffrey Way is a big deal and Jeffrey Way is a huge deal. But also it's to the point where sending an email back and getting an immediate response from J-Mac is also a pretty big deal. So just want you to hear that like people can get very excited to be like, the man who made this is directly handling my customer support response. This is great.

Jason McCreary: Yeah, well I appreciate that. Again, I tend not to try to inflate myself by any means, but it is funny every now and then I'll get an email and it talks about, the Shift team, or I was just talking to someone on the Shift team. And I do every now and normally I let it slide, but every now and then I'm kind of like, no worries, there's no team, it's just me. And then I get a reply and it like blows their mind, you know, cause they're like, wait, it's just you? Like, oh my God, this is amazing. And they're like even more impressed. It is fun, I don't think about the other side, so I appreciate that.

Matt Stauffer: Yeah, and that does take me into the direction where I'm gonna go in terms of a little bit of talking about like life as a solo founder. And one question I wanna ask you before we kind of move into the next section is being the solo founder and being the primary person who maintains it, do you take vacation?

Jason McCreary: Oh yeah, oh yeah, we just...

Matt Stauffer: How?

Jason McCreary: I don't know, I guess we get on a plane and we go somewhere, I don't know, I guess we just do it.

Matt Stauffer: Do you answer customer support emails? Do you have to drop everything? Okay, so like, could you take a vacation without a laptop?

Jason McCreary: Yeah, I'm never off. No. I'll admit that freely. For those, if some listeners are technical and they do happen to watch any of my live streams, I appreciate the three of you that do that. I do have my phone and I actually have an SMS admin from my phone. So I can text, you know, things that will help me kind of mitigate some of that support, you know, as I...

Matt Stauffer: Okay.

Jason McCreary: you know, as I kind of am traveling or doing something. I have Shift where I can like message Shift and I'll send it commands that are common support requests.

Matt Stauffer: and tell it to do things?

Jason McCreary: So I can just, I don't have to always break out the laptop is the point, but am I always on support? Absolutely, yes.

Matt Stauffer: Wow. That's very cool.

Just a side note, would you consider ever making a YouTube video for how I take vacations as a solo founder? Because I know they're in streams, but as someone who did streaming a lot, it's hard to pull the pieces out of a stream. I feel like a five-minute video where you're like, as a solo founder, I built a chatbot in my app so that I can take vacation. I feel like there's something interesting there. I don't know. Just think about it.

Jason McCreary: Sure, it actually was kind of my number. I did the post several years ago when I actually first made it and I was using Nexmo. There's a bit of a tangent, but I was using Nexmo at the time and out of nowhere I got like a box from them and they were like, thank you for making this. And they sent me a hoodie and a laptop case. I mean, they sent me a bunch of swag and I never even thought of, again, that side of it. But yeah, I wrote some kind of a dev two article way back, you know, five years ago when I first built it.

Matt Stauffer: We'll make sure we link that then.

Jason McCreary: Sure, in my recent video, I actually added, for those that are technically interested, I actually added a new command to that based on some stuff that I was having trouble with during Laracon, so I added another command to it. But yeah, maybe I'll make that video, that's true.

Matt Stauffer: Yeah, that's fine.

Jason McCreary: But kind of trying to answer your question, I am always on support. And again, I don't mind because it gives me insight into my users. I try to do that first thing in the morning, you know, nowadays after the girls are up, you know, I'll just tell my wife, hey, let me punch through these emails, for 15 minutes and you know, I'll normally do double duty. Like I'll clean up while I'm answering, you know something with the kids.

Matt Stauffer: Yeah. Yeah.

Jason McCreary: And then I'll get on again during their nap and then again at night. So three times a day basically I answer emails and to your point a minute ago. Sometimes if you hit me in one of those windows, you're gonna get an email ten seconds later, which blows people's minds. But even if not, you know, maybe you're not getting an email for you know, ten or twelve hours. But again, I pride myself on that support. So I do that. Do I have to do that? No. But I do.

But as far as Shift itself, like the work, there's typically not a lot of maintenance work because it is at the end of the day very much a seasonal business, right? It's around the seasons of the Laravel release, typically in Q1. And so Q1 is incredibly busy and then following it with marketing and updating and tweaks and just being relevant. And then, of course, I like to speak.

Not necessarily about Shift, but just staying involved in the community. I do a lot, but it is a seasonal business, so right now it's not too crazy. So most of our vacations are later in the year. I would not take a vacation in March, for example.

Matt Stauffer: Yeah, yeah, okay. And it's so funny because I knew it's seasonal and I never just, I never thought of it that way that like it's sort of like, you know, lawn care or something like that. There's a time of the year where everybody wants it and there's a time it still needs to keep running the other times of the year, but there's not, you know, 90 % of your use is all within the two month period or something like that. Okay.

Jason McCreary: Sure. Yeah, I'm like the opposite of a teacher. I'm like three months on and nine months off. Yeah, it's not bad when you phrase it that way. Is that the reality? No. Again, I'm answering support every day. But yes, from a nine-to-five work perspective, I'm more in that category than every day.

Matt Stauffer: It's not bad. Yeah. Okay. Got it. So let's talk a little bit more about being a solo founder. I know you're a big finance guy and we, you know, talked a little bit about like, what does the finances look like? And so I'm curious for you as you've established your personal finances, your business finances and all that kind of stuff.

What kind of things have you discovered and what's bitten you and what's that experience been like for you as a solo founder?

Jason McCreary: Yeah, I think it's been really good, probably in like 2018. 2018 I think is when I went full-time on Shift. So about six years ago. And even at that time, technically speaking, it was a pay cut to leave. I had a contract with Papa John's. It was a huge contract. And I kind of took a pay cut based on Shift. Now, of course, the next year, again, with the growth of Shift, it was okay. Kind of could forecast and say, okay, well, I've got a runway here. It's very safe. We didn't have kids at the time. And so, you know, there was a lot of flexibility for me to try. If I was going to do it, I was going to do it then. And it's worked out since then. But the point here is that I was in a place where once it surpassed a day job salary, there was money that was coming in that like...

In a way, it's awesome. What are we going to do? What are we going to do with this money? You know, this wasn't necessarily life-changing money at the time, but again, it started to be more than what I could make at a day job or what I was making at a day job.

Matt Stauffer: Yeah.

Jason McCreary: And so I kind of went down this path as someone who likes investing. Doesn't necessarily mean I'm great at it. I've definitely lost my fair share of money in the stock market, but I've also had some winners. And I know the, I guess the power of money, let's say. I know what it can afford you in life, right? It's just the world in which we live in. If we didn't live in that world, I would be a lumberjack probably. But we live in that world, so I try to game it, right, if you can. And so when that money was coming in, I went down this path of like, okay, well how do I do this from a tax thing?

Because as a solo founder, maybe you're just an LLC or something and you're bringing that money in all yourself. If you're doing that, you're maybe not getting the tax breaks as a business. So step one for me was to figure out what kind of tax classification as a solo founder is best for me. And what I found at the time, and I think this may still be the case now, of course, not financial advice, talk to your accountant, yada yada, all that stuff.

Matt Stauffer: Alright, alright.

Jason McCreary: But for me, the type S corp worked best right? I wasn't passing the money through to me as LLC I was actually having it as a corporation if you will effectively it's being taxed at a corporate tax rate. And then the remainder the profit of the business is what became passed through so this affords you a lot of stuff. It affords you like better depreciation if you go and buy a computer or an iMac or a company car or whatever you do, travel business expenses, a lot of things start to become more readily deductible in that tax classification. So I would definitely kind of check out tax classification, I think that's kind of the first level I went to, right?

So that one may be pretty obvious. I think, then in the coming years, it was like, okay, well, I'm not getting a 401k anymore. How do I do a 401k, right? So I started looking at this and everybody's like, get an SEP or all these acronyms and stuff. Those actually aren't the best. You can put more money away, they have what is called a solo or an individual 401k.

Matt Stauffer: Okay.

Jason McCreary: I think they call it a uni 401k. It's as sole founders or sole operators of a business and technically your spouse can be included. You can read all this on the IRS website. But yeah, the solo 401k, you can actually put more money away there than you can just a simple retirement plan, an SEP plan, I think.

Matt Stauffer: Okay.

Jason McCreary: I don't know the exact numbers this year because they kind of increase every year, but let's just say the SEP at the time I think I could put in like 20 a year, 20K a year. Whereas the 401K you can put in like 55. So almost two and a half times more.

Matt Stauffer: All right, love it.

Jason McCreary: And again, these are all business things. So it's money that I don't touch, but of course it's money that's still mine. And by not touch I mean I don't go and pay taxes unnecessarily on personal income, right? That's being passed through to me as a profit. So it became this thing where it's like the more and more, how much money from the business can I squirrel away so I don't have to pay taxes on it? And this is just the game of being a solo founder, I think. And it's one that again, I've become kind of interested in, in the process of making mistakes over the years. So there's other stuff I don't want to geek out too much. We'll take it where you want to take it. But, you know, these are some things that I kind of discovered early on. On little loopholes. Not loopholes, it's all legal, it's not a loophole, it's just...

Matt Stauffer: Yeah, I wanted to go there, you know, because we've all heard these stories of the big billionaire business owners who are dodging taxes. And sometimes I talk to some of my friends who don't own businesses. They're like, so what I hear you talking about trying to minimize your tax burden, it sounds to me like you're trying to run away from paying taxes.

And so I want to clarify for anyone who's not familiar with that, what we're talking about here is there are ways taxes are supposed to be allocated and also avoided within legal frameworks and parameters in the United States, but not everybody knows about them. And so if you don't know about those, you're paying more than you're supposed to. Now, there are also ways to illegally and unethically try and avoid taxes, but that's not what we're talking about. It's this whole mill world of knowing what things are available to you. So things like 401ks and IRAs are, for example, retirement vehicles where if you put your money towards retirement, you're going to pay less taxes on it. Corporation type S,

Jason McCreary: Sure. Yeah, not at all.

Matt Stauffer: is because a lot of founders have to pay their taxes twice if their business isn't organized right. The business pays taxes on the money and then the founder pays money on those taxes and they get paid.

Jason McCreary: Exactly.

Matt Stauffer: You're getting double taxed. So an S-Corp allows you to have minimizing, to minimize the amount of double taxation that you're having. So it's all like, it's not avoiding what you should be doing. It is understanding that there are options available that you don't get unless you learn about it and take advantage of it, right?

Jason McCreary: Exactly. Yeah, I think if you have a if you're just getting started then yeah fire up the LLC for the legal protection and go from there but you know, if you search for any of this stuff you're gonna get retargeted ads on all your platforms of people saying if you make over 100k do this and it does become true at some level again.

If you're starting to make more than the day job or something you should probably look into some of these things because they can help you set up the correct tax classification for yourself. And then that starts to open doors to more things that are again, are now allowed.

I can't do those things if I'm not a type S corp, right? I can't start to get into these things. I can't do these things if I'm not a solo founder. If I have employees, well, I'm probably a type C corporation right now, right? Like I don't know those things, I'm not that. But like, that's a whole different classification, a whole different set of rules. And even at that level, you have different things that you can you can kind of look into there.

But yeah, they're just things I've tried to figure out over the years. Cause yeah, when you're, when you're paying like a 40 % self-employment tax, like that's not right. That's not what it was. That's not how the system was set up. That's fine if you make extra cash mowing a lawn. Okay. But not fine when you make, you know, more than a day job at a business. That's a legitimate business. It should be set up as a legitimate tax corp business.

Matt Stauffer: Yeah, when it's your primary salary. Yeah.

Jason McCreary: I have those opportunities. So yeah, that solo 401k was probably a big one. I picked up on that like two or three years ago. Cause yeah, you know, there were, I think, what was it? It was probably 2021. I won't get into the exact numbers, but in April, I didn't know some of these things. And of course in April, I go to do my personal taxes and I'm still in TurboTax. I'm still in TurboTax.

Matt Stauffer: Oof.

Jason McCreary: I go to do my personal taxes. And like legit, the number didn't even fit in the little box where they say how much you owe. It was like, they had to, I mean, it was tiny in there. It was tiny. I was like, what is this? So, you know, you want to get this set up right. You want to get it set up right.

Matt Stauffer: Yeah, well, when people go off and start their own business, I think there's very seldom a full understanding of what are the things that A- come along with starting a business, but B- the things that are going happen no matter what, but your job used to be taking that for you. And one of the first ones, and this is not what happened to you, but one of the first things is your job was withholding taxes from you. And for the folks outside the United States, sorry, this is a very US-focused one, but your job was withholding taxes from you.

If you're a freelancer or you have your own thing, you need to figure out what tax bracket you're going to be in. And the best way to do it is to get an accountant, get an accountant who is responsible for your relationship with your taxes and ask them the question of how much should I set aside from every paycheck? And they're probably going to give you a number that's somewhere between 20 and 50 percent and they're going to say for every single paycheck take that money out and put it in a bank account and you're either going to pay it at the end of the year or you're going to pay it quarterly but either way it's not it's not two percent it's not five percent it is going to be a large chunk.

Jason McCreary: No, it's, yeah. Well, yeah, Shift had a good growth year, actually, you know, coming out of COVID, you know, people going back to the office, people getting back up to date, it had a good year. And yeah, old J-Mac was so naive. And the numbers went up and I paid nothing.

Matt Stauffer: Look at all this money!

Jason McCreary: I was like Scrooge McDuck. I was like swimming in dollar bills. And then the IRS came along and said, yeah, we're gonna take all that and then some. For your naivete. So, but yeah, so the next year, I got, then I really knuckled down and so I did all the estimated stuff to your point. So this last year, you know, starting again, starting to get to levels with growth, you know, nine years into Shift that I okay, well, how can I take this farther than the solo 401k? So the next level beyond solo 401k is a defined benefit plan.

Jason McCreary: Have you heard of this one?

Matt Stauffer: No.

Jason McCreary: So a defined benefit plan is, again, only available to solo founders. So sorry to, again, keep segmenting the audience. But if you're a solo founder in the US and you have a business that's doing well and you've kind of checked some of these other boxes, you should look into this. The defined benefit plan according to the IRS, again, there's a lot of calculation that goes into this based on your age and how much the business actually makes and how much you pay yourself. There's all of these little variables and we should talk about how much you pay yourself too here in a minute because that's something else I kind of dialed in. But for the defined benefit plan, the IRS allows you to put a large sum of money, I'm talking like hundreds of thousands of dollars away to a retirement plan.

Matt Stauffer: Wow, okay.

Jason McCreary: Now there are two things about this plan that are nice. First, it's a defined benefit plan, meaning that it's capped. It can only make like 6 % a year. You're capped. Now, in the current economic climate, making 6 % is pretty effing easy because you just go buy a T -bill from the government that's guaranteed by the United States to give you 6%. So you're set, and you're not talking about small numbers because again, you're able to put $100,000 into this plan. So every year you're making in this retirement plan,

Matt Stauffer: Okay.

Jason McCreary: at least 6,000 bucks, doing nothing. The other part, this is the really interesting part, because 6 % might not sound that awesome when the market's up 20 % in a year, but 6 % is still something. You're beating inflation currently. The second part that's awesome is it's a business expense.

Matt Stauffer: Really?

Jason McCreary: So I just lowered, I just lowered the overall income of my business that I pay myself at the end of the year. So basically what I'm trying to do with that,

Matt Stauffer: Liability. Wow.

Jason McCreary: What I try to do with the defined benefit plan is maximize that calculus now. That's my new game. Maximize the calculus of the defined benefit plan. How much can I defer for taxes? Because I'm in a good place. I don't necessarily need all of the money coming in from Shift right now. But I might like that when I'm old and not doing Shift anymore. So, you know, because you got to think of that as a solo founder. You have to think about that. I'm not going to, even if I might code forever, I'm not going to probably have Shift forever. Like there is a lifespan to this business.

Matt Stauffer: Yeah. Wow.

Jason McCreary: You know, having that money for retirement, again, as a job, a day job, you don't have to think about that. They give you a match and they give you all these cool little programs because that's what they can do as an employer. And hopefully you're set by the time you're done. But as a solo founder, if you don't squirrel away some of this money, you better keep on working or just have an awesome exit or something. So the defined benefit plan is awesome because then effectively I'm almost bringing no money in at the end of the year. So I have no tax in April, according to the IRS more or less.

Matt Stauffer: Yeah. Yeah.

Jason McCreary: But I've still given myself a good paycheck and I've put tons of money away for retirement.

Matt Stauffer: And I want to kind of set a framework for it, and then let's talk about how you decide how much to pay yourself. For those who aren't familiar, you aren't taxed by the amount of money that comes into your company. You're taxed based on the amount of money that comes in with the amount of money that was spent basically subtracted from it. So it's basically you're trying to be taxed on your profit, not on the revenue.

So one of the things that a good lawyer or a good accountant does at the end of the year is says, well, what are the things that we can write off? A lot of people have heard about write-offs, but don't fully understand what it means. And a write-off is basically a qualified expense that the business made that can be extracted, like subtracted from the amount of revenue that the business made. And the goal is basically you put all the income in one column and you put all the qualified expenses in the other column and you hope they sum out to zero or a negative number because then you don't pay taxes. And the taxes, again, this is not cheating.

This is not manipulating. This is literally how taxes are supposed to work. The only money that you're supposed to be taxed on is the money that comes basically effectively out of the business to be seen as profit or that the business puts in their savings, whatever, basically anything the business has outside of its operating costs. So the way it's relevant to the one you just said, as you said, putting this money in this retirement plan is actually a qualified business expense. And so that kind of diminishes your likely taxable income at the end of the year. That's big brain. So can you tell a little bit about

Jason McCreary: Yeah.

Matt Stauffer: I'm assuming it touches on the same calculus. How do you then define what your salary is in the first place?

Jason McCreary: Yeah, so I think an accountant, I think my accountant for the state of Kentucky, and again, this probably varies state by state, but for the state of Kentucky, he basically said you need to be within 10 % of your profits is kind of a calculus, or you have to be able to say, what is a reasonable salary for someone that does what you do?

Matt Stauffer: Doing what you do. Yeah, uh-huh.

Jason McCreary: That's kind of another one. So I think those are kind of like the two bullet points. I think as long as you're kind of like above 10%, you don't really hit any red flags and then also if you can say, well this person over here is a programmer and they make 55 in Kentucky. That's hard to do as Shift becomes bigger and more unique.

Matt Stauffer: Yeah. Yeah.

Jason McCreary: In the beginning maybe that was easy. I just said, I'm a programmer and I write this software. But it's beyond that now. So I kind of follow the 10 % rule now. So every year I kind of tick up. But I did, again, I did increase that to help the calculus. Now it's about increasing it to help the calculus of the defined benefit plan. So at first, it's kind of like a balance of paying yourself enough so you can take in the money, because that is also a game, right? You don't want any flags from the IRS. You want to do it right, but no more right than you have to.

Matt Stauffer: Yeah, right,

Jason McCreary: So if I got it right, then I want the rest of the money to go into my pocket as, you know, basically like you said, profit. Because if you pay yourself everything, if you pay every dollar that you make in your solo run business as a paycheck, you're paying into the social security, your county taxes, everything, all up and down the scale. You're paying all into that when you don't have to.

Matt Stauffer: Yeah.

Jason McCreary: You don't have to do that if you take the money home at the end of the year because basically it's a qualified business income and it's taxed as that separately. That's a percentage that's varied as well, but you're not paying... You're paying federal and state, that's it. You're not paying social security, you're not paying Medicare, you're not paying your fire department. Like they take it out of the paycheck, that's what they get. So again, you're doing more than you need to if you're, and that's nice, they'll thank you for it, I guess, probably not, but they'll take it and they'll take it and never say anything. So you kind of just, yeah, I was just gonna say you kind of want to be in a place where you, you're not getting any letters from any official organization saying you owe. Because you're never gonna get a letter that says, here's a little money back.

Matt Stauffer: You paid too much. Yeah. And for those who aren't familiar, and I guess I'm the context guy here, when you own a company and you also work in the company day to day, whether it's a solo founder or you've got 20 employees, you are compensated at least two ways. You're compensated for the work that you do by your salary, and then you're also compensated potentially if the company's profitable by owner draw, or basically just like money that comes to the company that you and any other owners of the company can choose to either keep in the company as savings or take home because your ownership pays you out for that.

If there's a company profit share, the owner draw really just basically like it's the money that the company has over at the end of the year. What happens with that money? Does that money go into savings? Does it go just to owners? Does it go out to the employees? Whatever it is, it's not a part of anybody's salary.

And so as an owner, you always have to make this decision of like, what's my baseline salary above which any extra income that comes to the company will not come to me as an increase in salary. It will come in as this concept of owner draw. And we have a full team like I do. It's a lot easier just because like there's so many financial reasons why it makes sense for me to get paid exactly what I should get paid as if I were not an owner of the company. There's a million reasons why it's much simpler that way but to your point as a solo founder. It's sort of like your pay relative to somebody else's pay is just sort of like a like who you know... If there were no government restrictions and government reasons for you to do it there'd be no reason for you not to take the entire thing as owner draw and take a salary of one cent. But you are trying to line up with the ethical and legal guidelines of what the IRS wants you to do, which is hey what's reasonable for you to get paid, pay that amount and that's it. And some people just take the full thing of salary and they're getting overtaxed. So it's good to have that note.

Jason McCreary: Yeah, yeah, exactly. So I think I'm in a place where I dial it in to reflect Shift's overall revenue growth as a company, but then also dial it in because again, some of the percentages start to matter if you dig into it and look at kind of the IRS for the solo 401k or the defined benefit plan or a profit sharing plan, all these different plans that are available to you as a solo founder.

They say things like, 20 % of salary, you know, or so if your salary's higher, then you can put them way more. You know, the calculus changes then, but yeah, if you're just starting out, you know, as you go through these levels that I've kind of briefed over, like, do check these things out, especially as a solo founder.

The final hack I'll mention real briefly that I'm getting into now as a kind of a newer parent is of course, even as a solo founder, can technically hire, employ your spouse and then your children as well. And there's stipulations on what those are and what those have to be. And of course you can't just say, you know, I can't just say my wife Ashley, can't just say, Ashley works for me. Like there has to be something legitimate that she does. So, you know, this year we've discussed her kind of rolling into that umbrella. And so she, you know, she does certain, you know, tracking and analysis for me because she's good at that. And that's what she did at her own previous job.

Matt Stauffer: Yeah.

Jason McCreary: So, you know, I'll hand her this data set and she jumps in tableau and makes these things and helps me figure out like what's being run the most, what's not being run. So I know kind of where to attribute my time. So as long as there's something with, you know, my daughter, she's in my pin picture on Twitter because we had this little copy paste, you know, t-shirts on like a little geek thing and I was excited.

My wife got us those when she was born, so that's on there. So that counts, that's marketing, that counts. They're kids, it's not like, get over here and program. She's a kid, so there's not as much to do as a child as maybe your spouse. But the point is, is you can hire them, you can pay them, and now they have access to all of these things I mentioned, retirement, defined benefit, profit sharing. You can put up to 18,000, I think, for your child, completely untaxed per year.

So, know, hey, that's a nice savings account for them someday, year over year over year. I mean, by the time they're 18, that's good money. So, you know, you don't have to get crazy and set up these trusts and look into these like survivorship things you hear about in San Francisco or some of these bigger podcasts. Like I'm not there. I understand why they're doing that, but I don't need to like, I don't need to set up a trust for my business per se. It's not that big. But I think I'm in that in-between land where it's not, it's clearly not a hobby.

Matt Stauffer: Yeah.

Jason McCreary: So I've kind of had to go through these things, but it's not so large that I'm like hiring people or taking funding like maybe you or Laravel team or anything like that. So I'm kind of in that middle land.

Matt Stauffer: Yeah. Well, I appreciate you sharing all this. Yeah, because I've never been at the size that you're at right now. And so I usually follow most of this stuff and can translate it. But this last section here about hiring the kids, that is completely, I've never been at the size of company where that's something I can do. So I have to go kind of look up, you know, go learn about that. And if I find any good resources, I'll share them in the show notes as well.

Jason McCreary: Yeah, they're all in the IRS website is normally where I look and then I kind of have a little bit of information I can go and ping my accountant. But I like to try to find the reference so that's how they speak and so I can say like, it's just like giving somebody a line and a code or an error message, right? You can, it didn't work. Well, that doesn't help me for shit. Like, please send me the stack trace. You know what I mean? Like, so I can speak their language. I send them the IRS. Hey, I saw this page. Does this apply to me? Ya know?

Matt Stauffer: Mm -hmm subsection to 41 a whatever got it. Well, that's real cool. Yeah again I've never heard of any of the things you're saying right there So I'm gonna have to go learn and you've taught me something.

Jason McCreary: Yeah, I got it. I did a thread on Twitter maybe last fall. I'll dig it up for the show notes where I kind of mentioned my journey through some of these things, but it got a lot of discussion, you know, some on both sides. Business savings accounts is another one I didn't mention. You know, I just kind of got into, know, you can earn interest on your business funds over the year. Like, don't just let it sit and earn, especially in the current economic client. Like, like, don't.

Matt Stauffer: Yeah.

Jason McCreary: Don't let 100K sit in your bank account from January to December doing nothing.

Matt Stauffer: Turn it into 95K after inflation, functionally. Yeah.

Jason McCreary: Yeah, exactly. Mean, you could make it 110K if it's invested in a proper business savings account. And sure, you're gonna pay a little bit of money on that, so you could argue it's negligible, but hell, it's still something. Buy yourself a beer at the end of the year for free. You know what I mean? I don't care. Money's money. I'll take it. So.

Matt Stauffer: Yeah. I love that. Fantastic. Well, unfortunately, I'm bummed because I want to keep talking. I got to wrap because I got a meeting right after this. But I have one question that I ask everybody at the end, and it's a money question. So I want to ask you that money question, which is if somebody came along and said, Shift is the future. Here's 100 million dollars. Give me the code base and walk away. What do you do tomorrow?

Jason McCreary: Done, where do I sign?

Matt Stauffer: Yeah, but what are you gonna do? Let's say you've signed tonight. What do you do tomorrow morning?

Jason McCreary: What do I do? Sorry, what do I do? Well, I'll say two quick things on that. It's funny, because at Laracon, I had like 12 different people ask me, pre-Taylor's talk, like, are you gonna sell Shift? Or is Laravel gonna buy Shift? Even Wathan asked me if Taylor had made an offer on Shift. Now, I don't know if he was kidding or not, but it was just like, it's just funny timing that everyone kind of mentioned that.

Matt Stauffer: Uh- huh.

Jason McCreary: So I will say there are no formal offers or anything like that on the table. I'm probably, again, I'm probably small potatoes to Laravel. They have so many other things doing. And again, I'd like to think I'm a value add to the community. There's no reason to like take me out as a purchase.

Matt Stauffer: Yeah, for sure.

Jason McCreary: But yeah, anyway, I do think that if someone did come along for the right multiple and so forth, maybe, maybe I would sell and I would probably, yeah, I would probably do woodworking more than I do currently, which isn't a lot with the girls anymore. So I would definitely do more woodworking during the day. I still, I have that like creator bit, I think, in me. I wouldn't say I'm super creative, but I have that creator, like sharing, teacher-esque thing in me, I think. I like doing, I like learning, I guess, is the bottom line. And if I can do that with other people, I can share that with other people.

I'm probably going to be happy doing that. So I think I would maybe like teach more at a high school or maybe I'd try to do something more in the community locally, right?

Matt Stauffer: Hmm.

Jason McCreary: Like on that level, like a guest lecture at the high school programming class or I don't know, something. I would try to find those things. I think if I just really truly did not have to worry about money and squirreling it away from the IRS, I would, I would just chill and do that and probably fly private every now and then. That sounds really cool. Haven't done that yet, but I think I'll probably try to do that someday.

Matt Stauffer: Okay, yeah. I have one friend who does it and it is an entirely different world than I'm in.

Jason McCreary: It looks cool.

Matt Stauffer: It does.

Jason McCreary: I'm right next to like a private airport actually and I see them after the Kentucky Derby just all day long and they're in their jets just zoo zoo zoo and I'm like that looks pretty sweet.

Matt Stauffer: You know, I thought your answer was going to be woodworking and hanging out with the kids, but I didn't think about any of that stuff with the teaching. It's really fun. I mean, obviously you're a great teacher. You're always out here teaching stuff.

Jason McCreary: Hanging out with the kids is a given, I will admit that the thing I love about Shift and the thing I'm probably most grateful for, you know, of course the community and its success and everything like that, but we kind of mentioned pre-call, but the flexibility it has afforded me, the jokes aside on like the opposite of the teacher schedule, the fact that I can, after this, go pick up the girls from daycare and do all that stuff, that I think has proven lately to have become the ultimate treat, you know, of the ultimate success in my mind of Shift. Like I love the community impact. I love my part in all that.

But, you know, it's something I don't see, but I definitely get to experience is that, yeah, I get to be around the girls. So I don't think that would increase with the buyout per se. So that's why I didn't, I'm just disclaiming in case my wife ever listens, that's why I didn't mention that. I love the children. I love them.

Matt Stauffer: We all know you talk about them all the time. We know you love them. Well, that's awesome. Well, I love a podcast with a friend, but I especially love podcasts when I learn things.

So thank you for teaching me things. Thank you for sharing all the stuff that you know with everybody. And, you know, this goes without saying, but I'm gonna say it anyway.

Thanks for Shift, man. The amount of wasted rote, you know, coding, banging head on the desk time you've saved me alone, let alone the rest of the community, very grateful for you.

Jason McCreary: I appreciate it, yeah. Sometimes as a solo founder, it can be isolating and so to hear those things, it does help, maybe not in the moment, but it gets reminded to kind of keep slogging sometimes when you're on something. So, it's awesome.

Matt Stauffer: We're very grateful for you. So for everybody else...

Jason McCreary: Cool, man.

Matt Stauffer: Everybody else, thank you so much for hanging out with us. If you have any questions, I'm sure we'll have JMacs Twitter handle and any other ways to contact him in the show notes. Yeah, we'll see you all next time.