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Remote workers and nomads represent the next tech hub

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Image Credits: John Holcroft (opens in a new window) / Getty Images

Amid calls for a dozen different global cities to replace Silicon Valley — Austin, Beijing, London, New York — nobody has yet nominated “nowhere.” But it’s now a possibility.

There are two trends to unpack here. The first is startups that are fully, or almost fully, remote, with employees distributed around the world. There’s a growing list of significant companies in this category: Automattic, Buffer, GitLab, Invision, Toptal and Zapier all have from 100 to nearly 1,000 remote employees.

The second trend is nomadic founders with no fixed location. For a generation of founders, moving to Silicon Valley was de rigueur. Later, the emergence of accelerators and investors worldwide allowed a wider range of potential home bases. But now there’s a third wave: a culture of traveling with its own, growing support networks and best practices.

You don’t have to look far to find startup gurus and VCs who strongly advise against being remote, much less a nomad. The basic reasoning is simple: Not having a location doesn’t add anything, so why do it? Startups are fragile, so it’s best to avoid any work practice that could disrupt delicate growth cycles.

But that view is incorrect. For companies that have chosen to be distributed, remote has added value. Some claim they wouldn’t have grown as fast or as well if they weren’t remote. And there’s more to being a nomad than making sure your prime years go to better experiences than a daily commute between San Francisco and San Mateo.

The tools of remote work

Most large companies with a remote workforce were started in 2010 or after, during the same timeframe that a new generation of tools was becoming popular. Slack launched in 2009, Asana in 2008, their competitors not long after. Amazon’s Elastic Cloud launched in 2006, and is also important to the story of distributed startups: they no longer needed to run their own physical server.

But the use of these tools for occasional remote work at companies that aren’t distributed has caused some confusion. Just using the tools doesn’t imply being good at remote work. A company that uses Slack as part of its distributed DNA is a different beast from a company with an office, where Slack is used in between visits to coworkers’ desks or the water cooler.

As Jon Evans wrote in a recent Extra Crunch piece, How to be remote: “When you’re remote, scheduled synchronous communications like stand-ups or other video calls, are no substitute for the absence of unscheduled asynchronous ones. Inclusion doesn’t require fancy tools. Email, Google Docs and a single Slack channel will do — if people actually use them. But that Slack channel has to be the primary water cooler in order for your remote workers to feel like first-class citizens.”

So the first correct step that distributed companies take is simply going all-in on being distributed. Being partially distributed, or having just a few remote workers, may be worse than committing fully to either an office-bound culture or a remote one.

What’s truly interesting at distributed companies, though, is when remote work makes their management better than their office-bound peers. At first, that sounds unlikely. Humans thrive on the kind of subtle facial expressions and tonal shifts that don’t work well with remote tools, even if you’re video conferencing. How can you know your employee is engaged in their work if you can’t see them at their desk or talk to them face to face?

The answer: judge employees on results and merits. Greg Mercer, the founder of the distributed startup Jungle Scout, says remote work provided an extra incentive to get management right.

“The company grew quickly and added tons of remote people. It really forced us to change and think about what productivity we expect out of a particular person and how that’s measured,” recounts Mercer, who launched Jungle Scout in 2015 and now has over a hundred employees. “We use the OKR system, and I think we probably use it better than 99 percent of companies, because we’ve forced ourselves to write really good key results.”

Zapier, with over 200 people, also uses OKRs. Co-founder and CEO Wade Foster says that remote doesn’t allow for the typical Silicon Valley dysfunction of waiting until there’s an emergency to implement managerial reforms. “Remote forces you to over-communicate. If you’re a bad manager, it really is harder to hide in a remote company,” says Foster. “You have to know how to give feedback, set expectations and delegate. You can’t get away with managers who are winging it.”

Using OKRs isn’t the moral of these stories — other evaluation systems could also work. The point is that remote companies are finding that they must focus on the results of actual work, which has long been a weak point of office culture. If an employee spends hours trading obnoxious memes on 4chan, that’s not just irrelevant to their remote work, it’s unseen. The measuring stick is whether they’ve written that key software function this week, or found a dozen new customers.

But a focus on results also doesn’t mean remote management has a shallow view of workers. In many years of working closely with several people, I’ve learned to intuit their feelings and attitude toward the work, and the best way to motivate each. I’m only missing an unnecessary social dimension: an understanding of how they gossip, how they perform at office politics, or whether they’re working at any given moment.

Jason Fried, the CEO of Basecamp, calls that knowledge the “presence prison,” and advises against it. As he told TechCrunch last year: “As a general rule, nobody at Basecamp really knows where anyone else is at any given moment. Are they working? Dunno. Are they taking a break? Dunno. Are they at lunch? Dunno. Are they picking up their kid from school? Dunno. Don’t care.”

Remote, nomad, slowmad

Most remote workers are still bound to one place. Zapier began offering a “de-location” package in 2016, which gave workers who were willing to move out of expensive places (mainly, Silicon Valley) $10,000 to do so. The package was great press for the company, but only a handful of the company’s employees have taken it so far. Most people aren’t interested in moving.

Nomads, in contrast, have no fixed location at all. They can be viewed as an elite subgroup of remote workers: an And Co and Fiverr study of remotes found that only 24 percent of remotes reported being nomadic, and of those, about half still spent their time in only one or two countries.

But in fact, it’s better for nomads not to travel too much. The glamorous stereotype of travel goes back to the beatniks: “I like too many things and get all confused and hung-up running from one falling star to another till I drop,” wrote Jack Kerouac, the original traveling hipster. As a remote employee, and especially as a founder, that whimsical, flittering existence is a recipe for disaster.

Mercer, who founded Jungle Scout in early 2015 while traveling with his wife, quickly found the same. “For the first six months, we were moving every week or two. We didn’t know any better, and historically our traveling was on vacation, so it just seemed like how long you stay somewhere. Quickly we realized, after four to six months, that it was way too hard to try to run these companies and move this much.”

Moving around slowly, on the other hand, can offer significant benefits. Matt Mullenweg, whose startup Automattic is the second-largest remote company, advises approaching travel strategically. “With proper planning, travel can allow you to bootstrap community in different locations, connect with customers, meet non-traditional investors or advisors, and recruit talented colleagues outside of the normal fishing grounds of the internet giants. Something closer to ‘slowmad’ than ‘nomad’ is probably the right approach,” he told TechCrunch. “Starting a company is very intense, and you have to make it your very top priority. Your location is secondary to that — you need to be wherever is going to be best for connecting with your customers, your colleagues, and your investors.”

For now, traveling founders who are successful at the level of Mullenweg or Mercer are still a rarity. But the startup world may be surprised by how many appear in coming years, nourished by a connected system of other traveling founders. “When you’re hanging out in cities that are nomad hotspots, you’re typically surrounded by other nomads, particularly in the more popular coworking places. I realized I was running into these people on the other side of the world in another city. I’d walk into a new place and realize I knew five people in it already. You started to see familiar faces,” says Mercer.

Just as happened in Silicon Valley, the network of remote work spaces, hostels, and popular destinations (as promulgated by sites like Nomad List) is creating a community of like-minded travelers. If you’re an adventurous-minded young founder, you don’t have to move to a single innovation center — you can find them all over the world.

One concern, of course, is that venture capitalists may not want to invest in a nomadic team. Many VCs are from an older generation, and lack of a fixed location may look like a risk — not to mention that the startup’s founders won’t be handy for a meeting at Buck’s or The Creamery. “You may still be at a little bit of a disadvantage,” says Mercer, who hasn’t taken any venture funding. “If you’re going for very traditional VC, I can see that would be a little harder. They don’t love the idea of change or feeling uncomfortable.”

But other VCs already understand that remote work can have advantages. When Zapier was founded in 2011, says Foster, explaining its remote methodologies was challenging. “Fast forward to 2019, you talk to VCs across the Valley and they’re saying remote work is the future. So certainly the attitude and opinions around remote work have done a pretty big 180,” says Foster. And Jungle Scout’s Mercer thinks that even raising funds as a nomad isn’t an insurmountable challenge. “I think there are more and more funds that are more modern, like Tiny Seed for example… You’d probably have to at least make sure you could explain that you understand some of the challenges of remote work and building remote teams,” he says.

A distributed future

Remote and nomadism will likely grow in tandem. The global talent pool is deep, but workers, managers and founders can have a host of reasons for not moving to one of the handful of highly active hubs. The response of an older generation of companies to this challenge is already visible: Google, for instance, has nearly a hundred thousand employees spread across over 70 offices in 50 countries, in an effort to reach into every significant market.

By comparison, the largest distributed tech startup I’m aware of is InVision, which claimed 700 employees last year. The only reason there aren’t any larger is that they aren’t old enough: InVision is eight years old, about the same as most large distributed startups (with Automattic, founded in 2005, being the notable exception).

Foster doesn’t see an upper limit to the model. “My hypothesis is that these kinds of companies will scale immensely… I don’t think it’s that much of a logical leap to say there will be massive companies with minimal offices,” he says.

The technology for remote work, too, has continued improving. Slack started without video conferencing but added it in 2016. Zoom is even better, and is now a standard among remote workers. And in the same period these tools grew among tech workers, internet connections improved massively in a range of developing countries, giving even more remote workers the chance to compete.

The next step for video, which will unfold over the coming decade, is wider availability of technology like high fidelity immersive telepresence, which will help employees engage face to face as needed. Text communication can improve, too, as remotes build up what Foster calls an “etiquette” of communicating in apps like Slack.

Nomadic founders will enjoy these same benefits, plus a few others. One advantage will be a unique networking scene that encompasses both travelers and the spaces they meet and work in. Another advantage is breaking out of Silicon Valley myopia. Startups could do worse than to have more founders that understand the needs, and possibilities, inherent to other cultures and places.

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