> Taste continues to be the single most important thing. The vast, vast majority of AI art out there is...not very good. It's not going to get better, because the lack of taste isn't a technical problem.
This is precisely and importantly true. I just wonder if most of the world cares. I'd like to think so, but experience tells me that most of the world is satisfied with mediocre stuff. And I don't say this as a criticism; it's just a fact that artists have to come to grips with.
I'm sure author's company does good work, but the marketplace doesn't respond well to, "we're really, _really_ good,", "trust me," "you won't be disappointed." It not only feels desperate, but is proof-free. Show me your last three great projects and have your customers tell me what they loved about working with you. Anybody can say, "seriously, we're really good."
I think you're just missing the whole venture capital/startup ecosystem concept. VCs and founders are well aware of accounting principles and can/should plan accordingly.
BTW, I founded and ran four companies and faced this very situation plenty of times. In my day (this was a while ago), we generally had to, or did, amortize development costs. I'm not saying I loved paying the tax bills, but the concept is neither farcical nor ridiculous.
Well, yes, increased tax revenue, of course. There may be no/little difference in the long term; that's over my economics pay grade. It seems like the model of raise a lot of money, spend a lot of money, expense it, pay no taxes, then go bankrupt is a pretty straightforward way there might be a difference long term. And that's a very common scenario, I think you'd agree.
> Do you see a difference between software development in a consulting business model (instant one-off benefit) and software development in a saas product business model (benefit over multiple years)?
Yes. Not sure what that has to do with this discussion.
> Can you provide the good arguments for capitalizing software development costs and not expensing it?
Yes. The well-established accounting principle of matching income and expenses.
> Can you explain the reasoning of charging taxes to a company that has revenue beyond merely 1/5th of its expenses (actually 1/10th in the first year, or 1/30th for international operations) and hence still heavily investing cash?
Yes. See the answer to your second question. Companies often have to make investments. If they buy a Big Machine, they don't get to write it off in one year. There's nothing nefarious about amortizing costs over their useful life.
That could well be. But maybe it's not so obviously a good thing as it may sound to startup ears. Matching income and expenses is a pretty good way to keep your financial head about you.
Founders work for free because they're investing, taking a risk like all investments. If they lose the bet, they lose. No harm, no foul. That's true of any investment you and I make. People lose money on investments every day.
There are a lot concepts being not very well defined here: employment, investing, taxation, salaries. It's not all one thing.
What is it that you think "we" are having both ways?
> The problem is that this tax change is artificially inflating profits
Not exactly. It's a well-established accounting principle that you capitalize costs that provide a benefit over multiple years. Depreciation is an easy-to-understand example. It's more true that the historic practice of expensing R&D costs was artificially inflating costs.
What the tax change is doing is forcing amortization, which, for early-stage companies is difficult, because they have depended on expensing early and recognizing income later.
It's a difficult issue. There are good arguments on both sides. But it sounds like this was a surprise, which is surely not optimal.
fwiw, when I was running start-ups (80s/90s/00s), my recollection is that we amortized our software development costs. I guess this got turned around by the rise of the sophisticated startup world, with more accountants, lawyers, and lobbyists. And now the government is pushing back, not without reason.
I'm not using gmail, but am seeing the exact same thing in the last 3-4 weeks with my email provider (Hover). Mine are all loan-related. Marking as spam has no effect.