Welcome to the Mclowd Community Newsletter


Retailer JAX Tyres recently announced that they will be installing electric vehicle charging stations across their 89-strong network of stores.

As an EV owner myself the press release caught my eye, but of far greater import was their commitment that access would be Free Forever.

Free Forever is an unequivocal statement, both as to quantum and time, and as such not one to be taken lightly.

The fact that a privately-held firm of that size feels capable of making such a commitment reflects micro-economic realities that will have implications for all of us (whether in our role as consumers, or investors).

Of course, like Mclowd – which makes it’s core software freely available under precisely the same terms – JAX can make that announcement because they know that once installed, the marginal cost of customers (existing or prospective) accessing the infrastructure is / will approach zero.

(If need be they can install solar panels and battery storage across all those locations to drive marginal cost towards that level).

It is critical for subscribers to the Mclowd Newsletter to understand that as MC approaches zero, micro-economics begins to behave in a manner that has no precedent in modern history, because in this Zero Marginal Cost world we now live in, it becomes simply impossible to resist the temptation to give an element of your product (or service) away for free in order to drive customer acquisition / brand loyalty (as part of a wider, multi-sided business model).

Macroeconomic Implications

But it is when you scale up this process to a macro level that things get very interesting indeed.

90% of the software that we use to manage the Mclowd Community is free, which is inevitably reflected in:

  • Capital intensity
  • The pricing of the software itself (where not given away for free)

This is all reinforced by the fact that the Porter Family need not pay for petrol – and now electricity – to power its private mobility needs. (I’ve charged up our car hundreds of times across Melbourne’s network of charging stations over the last three years and the price I paid for all that electricity is precisely $0.00).

The growth that is now being seen in the Mclowd Community is an example of the second and third order effects of this process, which drives inherent scalability, while putting insane pressure on the business models of incumbents (whose entire DNA is inconsistent with this new ZMC reality).

The macroeconomic consequence of all these forces is quite simple: rapid and widespread deflation.

Accounting Software Update

In contrast to previous years, 2018 saw delivery against the vast majority of the key targets from last year’s Kick Off, including:

  • Pensions / interim entries logic
  • Ingestion of managed fund data from Morningstar
  • Development of the back-end infrastructure required to support mapping of the general ledger to the SMSFAR and Reports, as well as editability of the chart of accounts
  • Year end Reports Pack

Active and prospective users looking for details on 2019 deliverables can download the notes which have been prepared for the upcoming Kick Off Meeting, to be held in Sydney in mid-February.

Mclowd Marketplace

The following Marketplace review from Trustee Stephen Gooley provides a good proxy for the maturation of the Community over the last 12 months, and the foundation that has been laid for a transformation of the SMSF value chain moving forward:

I was a trustee determined to manage my Fund via Mclowd, have it audited by a marketplace member and then submit the return through LodgeIT. On the 17th December 2018 I succeeded in doing that and I could not have done it without ASTA Services’ help and perserverance. ASTA had to put up with me not knowing all the ins and outs of the system and I have now learnt an incredible amount.

In terms of outgoings, the total cost of this exercise (ie audit and software licence fees) was $470 ex GST, providing some indication of where the globally-defined marginal cost of SMSF administration is headed.


Just on 30 years ago I received an Economics degree from Macquarie University in Sydney.

While I have found the discipline to be useful in my 15 years as an entrepreneur, I don’t need a degree in Economics to understand that when the demand and supply curves intersect at a price which equals zero, most of what I learnt back in the late 1980’s becomes redundant.

Instead it is a deep understanding of governance that becomes the key to success (and longevity) in business.


The experience of stakeholders in listed software company Class Limited is a classic illustration of the forces described above.

Over the last 24 months the company’s share price has collapsed by almost 65%, representing more than $300 million in entity valuation.

For self-funded retirees the story of Class is a cautionary tale about the potential for capital destruction in what is now a highly deflationary and volatile world.


Ashley Porter
Managing Director
Mclowd Pty Ltd