Embracing remote work
The last decade there has been a shift in perspective as to what it means “to go to work.” This change has been expedited by new technologies which essentially allow you to teleport. From Zoom to Facebook Portal, from Slack to Dropbox, we can all be in the same room, even though you may be 100 miles away.
Every day it becomes more clear that distributed teams and offices have become the normal practice for companies of all sizes. According to the U.S. Bureau of Labor Statistics (BLS), more than 26 million Americans, about 16% of the total workforce, now work remotely at least part time. And that number will inevitably rise as workers put a premium on location, flexibility, and convenience. In Buffer’s State of Remote Work 2019 99% of respondents said they would like to work remotely at least some of the time for the rest of their careers.
Companies like GitLab, Stripe, and many of BSV’s portfolio companies have capitalized on remote work. Even here at Basis Set Ventures, a VC firm, we’re embracing remote work with a distributed data science and engineering team.
Three Models of Distributed Remote Work
With employers around the world becoming more flexible to distributed teams and offices, it begs the question: how can we better enable remote workers?
I found three effective models that are becoming more popular, each with their own benefits.
Three models of remote work.
Basis Set Ventures
The first model consists of a centralized headquarters with complementary remote offices, which typically are in the same time zone. The main benefit for this model is employees have the choice of working at the HQ or remotely, or alternating between the two.
One example is Dropbox which has it headquarters in San Francisco and a dozen offices around the world. Initially, the remote offices were all sales offices in markets Dropbox had a strong presence, but over time, more engineering offices were established (including Seattle and Tel Aviv).
Similarly, Carta has their HQ in San Francisco and a satellite office for product and account management in Brazil, along with six other offices around the United States. Recently in October, Carta acquired Canadian messaging startup Kik along with its 51 employees and launched a Waterloo office to tap into the tech talent in this thriving ecosystem.
Multiple Centralized Offices
The second model is a web of centralized offices. In this setup, there are two (or more) equally prominent offices in separate locations; for example, you might have an HQ as well as a Research & Development or Sales hub. Unlike in the first model, where one office clearly has more concentration of people than the other, companies are able to establish multiple hubs with varying focuses across the offices. More often than not, one hub is the strong R&D center in a place with strong engineering talent, sometimes even outside of the U.S. Another hub might be sales and marketing centric to stay close to customers.
Many startups begin with this model since it’s much more low cost. Many companies, such as Stripe, employ distributed teams as does one of my portfolio companies, Rasa. Rasa started in Berlin, where they have built their product development team. After raising a Series A led by Accel, they have launched a sales and marketing office in SF to be close to the developer ecosystem and enterprise customers here.
The last model is completely distributed. This is where companies are fully remote, with each individual in a separate location and no physical office. The employees work from home, co-working spaces, or wherever they are happiest. Fully-remote companies reap three major benefits. First, they aren’t limited to specific geographic locations, which means they have access to a bigger talent pool. Second, salary expectations are drastically higher in certain regions; by building a remote team, you’re able to tap into cheaper, less saturated labor markets. Third, it’s easier to integrate all employees for completely remote teams vs half remote teams.
GitLab and InVision have famously pioneered this model and are now very large tech companies. Skeptical at first, I chatted with a few employees of InVision, who told us they are more productive working from home without the commute time. Another company, HashiCorp, ensured that no two people on the same team are co-located, such that all teams still have to operate as if everyone are remote and nobody feels like they are left out. Another younger company, Ergeon, launched only 1.5 years ago, has a fully distributed team of 60 across the Americas and Europe, which has given them significant cost and speed advantages when they needed to hire along their rapid growth.
What fits you? Comparing Different Options
Centralized HQ (usually in large cities)
- Able to raise funding to start your business
- Able to recruit and compete for talent where your HQ is (“why should the engineers join you vs Google or the other startups”)
- Working on ideas where tech is the most critical and hard to work across the continent for quality or security reasons, e.g. autonomous cars
Multiple centralized offices
- Very well connected in certain location to hire an A+ engineering team there without the cost (E.g. Berlin, Toronto)
- Able to develop M&S and local connections to establish a second HQ in a place that’s strategic to you (e.g. San Francisco)
- Able to set strong process and cadence to effectively manage a distributed workforce
- Business model is not dependent on a large group of people sitting in the same room
Not only are remote offices flexible for employees, but for companies as well. As seen, there’s a full spectrum of options ranging from one HQ to completely remote. When choosing what model best fits your company, make sure to consider both the stage and strengths of your company, and then what advantages remote working will provide to the entire team.
With the advent of new technologies, coupled with the rising costs of tech hubs like Silicon Valley, it’s been an inevitable shift to embrace distributed workforces as investors. What was once was considered a risk is now seen as an advantage.