6 VCs share their bets on the future of work

As tech companies like Twitter and Facebook gear up for longer-term remote work solutions, the future of work is becoming one of the more exciting opportunities in venture capital, CRV general partner Saar Gur told TechCrunch.

And as loneliness mounts with shelter-in-place orders implemented in various forms across the world, investors are looking for products and services that foster true connection among a distributed workforce, as well as a distributed society.

But the future of work doesn’t just entail spinning up home offices. It also involves gig workers, freelancers, hiring tools, tools for workplace organizing and automation. The last couple of years have particularly brought tech organizing to the forefront. Whether it was the Google walkout in 2018 or gig workers’ ongoing actions against companies like Uber, Lyft and Instacart for better pay and protections, there are many opportunities to help workers better organize and achieve their goals.

Below, we’ve gathered insights from:

Saar Gur, CRV

What are you most excited about in the future of work?

Future of work is one of the most exciting opportunities in venture.  

Pre-COVID, few tech companies were fully remote. While it seems obvious in retrospect, the building blocks for fully remote technology companies now exist (e.g. high-speed internet, SaaS and the cloud, reliable video streaming, real-time documents, etc.). And while SIP may be temporary, we feel the TAM of fully remote companies will grow significantly and produce a number of exciting investment opportunities.

I don’t think we have fully grokked what it means to run a company digitally. Today, most processes like interviewing, meetings and performance/activity tracking still live in the world of atoms versus bits. As an example, imagine every meeting is recorded, transcribed and searchable — how would that transform how we work?   

There is an opportunity to re-imagine how we work. And we are excited about products that solve meaningful problems in the areas of productivity, brainstorming, communication tools, workflows and more. We also see a lot of potential in infrastructure required to facilitate remote and global teams.

We are also excited by companies that are enabling new types of work. Companies like Etsy (founded 2005), Shopify (2004), TaskTabbit (2008), Uber (2009), DoorDash (2013) and Patreon (2013) have helped create a new workforce of entrepreneurs. But many of these companies are over a decade old and we fully expect a new wave of companies that give more power to the individual.

What are you looking for in your next investment?

We tend to be product-oriented investors. We love founders who have a unique insight into a problem and how they might solve it (original product thought), and/or early signs from customers of real LOVE for a product.

On this point, even if the user numbers are tiny, we love when users are having active conversations about a product on sites like Twitter, Reddit and even YouTube — whether their feedback is positive or constructive. The “barrier to entry” in terms of time and energy for a user to share product experiences is actually fairly high, so this kind of engagement is often a good sign that users care about both the product and the problem. 

We also spend time thinking about how to answer the question “Why now?” We love when founders can articulate what changes in platforms, devices, consumer behavior or even regulation make this the right time to build a $1 billion+ company. A few examples for future of work specifically: (1) millennials and Gen Z seeking freelance opportunities instead of traditional jobs, (2) new entrepreneurial opportunities around live streaming and live events and (3) productivity tools that give users “superpowers” in areas of workflow and automation. 

What are some overlooked opportunities in the future of work space right now?

Reputation and credentialing continue to be a massive issue. LinkedIn is a good resource for basic details on work history, but the “endorsements” are essentially useless, and there’s no way to verify past work experience or skills. Other industries (e.g. doctors, many blue-collar professions) don’t use LinkedIn at all, and there’s an opportunity to build solutions here. And in a fully remote workforce, many existing hiring signals (e.g. school) or connections become less relevant.  

We’re investors in a few gig-oriented companies (e.g. DoorDash, Bird), and think the current economic uncertainty may create more growth here. High unemployment will increase supply for gig tasks, while relatively cheap labor may enable new markets within gig work where the unit economics may not have worked before. As companies return to work in a more distributed way, there will likely also be an increased need for gig or contract workers to help with tasks that in-house teams at an HQ office were previously responsible for (like IT). 

The mass enterprise shift toward a digital setup also creates an opportunity for verticalized versions of broadly focused products like Slack and Zoom. We wrote recently about how the mass adoption of smartphones and explosion in time on mobile makes more niche social products (like Discord and Strava) particularly interesting. We feel similarly about enterprise companies — especially as COVID has accelerated tech adoption, many companies may be willing to pay extra for “killer features” that are more suited to their specific needs. 

Which areas within the future of work are either oversaturated or would be too hard to compete in at this point for a new startup?

Pre-COVID, we saw a number of startups operating physical co-working spaces — they took out long leases on large commercial spaces, built out infrastructure, and then sublet offices or desks. For many of these companies, we’ve also struggled to understand whether there’s any form of “tech leverage” that would create an exciting return profile for venture investors. And in any kind of economic downturn, these kinds of capital-intensive business models are less attractive (as we’ve seen with WeWork). 

However, we’ve all now experienced the loneliness and lack of connection that comes from working at home all the time. So we continue to be excited about digital solutions that help employees and freelancers have more regular and meaningful interactions with others in their company or industry! Something will need to replace the water-cooler moments that happen more naturally in a physical office. 

Are there any types of products/services you are wary about in the future of work category? If so, what are they?

We see a lot of products that seem to be marginally different in their value proposition from products that have market dominance (e.g. slack competitors). We are product-oriented and want to see significant (10x) improvements to an existing process or interaction.   

What is your advice to startups in your portfolio right now?

While some markets seem to be reopening, it’s still unclear how long it will take to return to normal — and what the new normal might look like! Given this uncertainty, we’ve been advising our companies to minimize burn to the extent possible, particularly for companies that are significantly impacted by COVID and will need to “hibernate” for a while. Hire into an upside scenario but plan (and operate) for the downside.

For the few companies benefiting from changes in consumer demand and low CACs, we are encouraging them to be aggressive.   

Any general predictions on the future of work?

We know that new platforms will be created in the next few years that provide meaningful work for millions of people in the future. And new tools will be created today that change how hundreds of millions of people do their work. What an exciting time to be in our industry!  

Roy Bahat, Bloomberg Beta

What are you most excited about in the future of work?

Many people in Silicon Valley think of the future of work too narrowly. The future of work is about more than just the future of working for a tech company. Productivity tools are great, and we love investing in them. It’s just that the future of work has to be a future that works for everyone, all socioeconomic classes, and people from every background, not just tech people working from home.

We’re excited about the same things we’ve been excited about for all three of our funds: businesses that use AI to solve a real problem, new entrants into old industries in “boring” areas like real estate titles and logistics and tools that directly support working people by helping them to become more productive, happier or to organize themselves. Tools for organizing is a new category, after the Google Walkout and Amazon Employees for Climate Justice reminded many in tech that there’s a real opportunity.

What are you looking for in your next investment?

From my equal partner James Cham:

The way we make decisions in business remains too messy and biased. We can record numbers on spreadsheets and pictures in slides, and we lack a way to record decisions. We need to build those decisions into AI models so we can make better choices in the future, not just work faster making the choices we made before.

(My answer here is pretty boring: We want the exact same things we’ve always wanted, and we’re extremists about transparency, we open-sourced our criteria for what we seek in an investment — 45 specific points we think about.)

What are some overlooked opportunities in the future of work space right now?

Now more than ever, we wished more founders tried to serve older people. The easiest change to predict is that the working population is going to get much older, as it has been for decades. (Something I’ve written about before, with a close collaborator, in TechCrunch.)

James:

Many old industries still rely on paper to get work done. There is an underrated opportunity for software to collect information in a structured way — something as simple as better forms, which are still a mundane use of time for many people at work, to prepare for future automation.

Which areas within the future of work are either oversaturated or would be too hard to compete in at this point for a new startup?

Unsure if we have a good answer, TBH. There’s always a way to do anything better, and many of the more successful startups were born into markets that many people thought were overly competitive. (Think of Facebook and Google.) So we’re unafraid of competition. If you’re going to beat a good service though, you need to be much, much better, not just fix your pet peeve about Zoom.

Are there any types of products/services you are wary about in the future of work category? If so, what are they?

Any product or service, if successful in the wrong way, can be dangerous. It’s more about how you build it than what you build — an insurance company can be one of the most noble companies in the world, and an education company can be exploitative. To learn about how to do it right, we hosted an ethics course taught by Stanford faculty this year. (My teammate wrote about it in TechCrunch.) More to come on that front.

We also worry about certain products or services diminishing the power of working people. When our economic system becomes too unfair, too unequal, we put it all at risk. If we want the best ideas, the best founders, the best future, we need to empower everyone to have a meaningful shot at providing for themselves.

What is your advice to startups in your portfolio right now?

From my equal partner Karin Klein:

I joined SoftBank in 2000, right when the dot-com startup market plummeted. The founders who emerged the strongest did three things: made their operating runway last, prioritized with a mindset of scarcity and acted decisively with limited information. Today’s uncertainty is unprecedented. The best founders will make swift decisions based on the available information and adjust as they go.

(I’ve started sharing some thoughts, though I’m reluctant to give advice because situations are so personal and specific, in a daily Q&A on Periscope.)

Any general predictions on the future of work?

People are making too many shallow, sloppy predictions right now, calling for canceling SF on Twitter or thinking that the way they’ve worked from home for a month is going to be the future of how everyone works in every industry forever. Usually the mistake is overgeneralizing from your own personal experience.

Yes, some trends in the future of work will accelerate. In the past, recessions have always brought in more automation, more software. Is that the change we’ll see this time? Will we see science become the next heroic profession? Dunno. Nobody has any idea how this is going to play out. This is more than a Chaos Monkey, this is the Chaos King Kong.

Any other thoughts you’d like to share with TechCrunch readers?

This crisis reveals the tech paradigm under which we live: tech’s about more than bits and computers now, it’s about everything. It’ll be critical to how we find and thrive at work in the years to come.

We want tech to play the most useful role possible, so we try to learn from leaders in other walks of American life. I’m the only investor on California’s Future of Work Commission, and I’ve seen how our industry’s struggle to speak the language of broader social issues will limit our ability to succeed. This might be our industry’s biggest limitation right now. It’s time to build, yes, and what if all the things worth building require us to understand walks of life we’ve spent a couple of decades ignoring?

COVID-19 might be the first global crisis where the solution must include tech. (Tech wasn’t part of responding to 9/11, for example, or the financial crisis.) If we want to succeed at being relevant, we need to be able to speak to people who don’t know what the initials YC mean or own multiple sets of AirPods. We want people from as diverse a set of backgrounds as possible in our industry, and we all need to learn to engage with others — government leaders, civic leaders, cultural leaders — in ways that we’re still figuring out.

Ann Miura-Ko, Floodgate

What are you most excited about in the future of work?

The future of work is here today. It’s faster than we could have expected, with incumbent industries facing massive restructuring that impacts workers from retail to high tech. Consider these fundamental and wide-ranging changes:

  • With COVID-19, structurally disadvantaged businesses faced a knockout blow while digitally prepared companies grew market share: Myriad former industry leaders have filed for bankruptcy recently (Gold’s Gym, J.CrewTrue Religion, Neiman MarcusJ.C. Penney and Pier 1, to name a few). Similarly, Macy’s sales were down 45% last quarter compared to the same time last year. Meanwhile Target with its acquisition of Shipt in 2017 saw its digital sales surge 282% in April alone. Instacart is hiring more than 500,000 shoppers in less than two months as consumers move from in-person grocery shopping to online.

  • Remote work is the new normal: Work-from-anywhere is becoming the standard. Facebook announced that 50% of its work force would become work-from-home in the coming years. Twitter and Square are letting some workers continue work-from-home forever. Shopify announced that the company’s office-centricity is over and most of their workers will work from home.

  • Digital tools are building a lifeline for small businesses: More than 7 out of 10 small businesses are reporting that they are turning to digital tools to weather the pandemic.

We’ve been literally thrown into the future of work with fundamentally new challenges for small business owners and knowledge workers alike in just a matter of two months. This is extraordinarily exciting.

What are you looking for in your next investment?

Our relationship to work is changing. I think of this as a fundamental change to the social contract between people and their work. This means that people won’t stick with a single job for a long period of time, and we are increasingly likely to work from anywhere. With the rise of soloprenuership, gig work and the creator economy, we rely more upon ourselves than we do on corporations. Ultimately that means there are huge opportunities for investment.

As an example, these changes create opportunities in infrastructure and support. Solving these key questions could create unicorns:

  • How do you enable solopreneurs to build businesses that are fully tech-enabled? We think of this as “the Iron Man suit” for the solopreneur. What financial products and software products can solopreneurs use to provide consumers or their customers with the tech-enabled experiences they have come to expect?
  • How does reputation follow someone? A resume or LinkedIn profile measures where you’ve worked and for how long. With people working more jobs at varied locales, measuring expertise will become a new challenge.
  • How does an organization maintain knowledge? If a company is reliant on its people to share its history and knowledge base, how can that be disseminated without relying on internal experts (who are on the decline)?
  • How should productivity tools (calendars & communication) and enterprise systems (CRM, HR, Finance, etc.) adapt to a multi-modal (work from anywhere) work environment? HR is perhaps the most out-of-date, but every tool will require better integration.

What are some overlooked opportunities in the future of work space right now?

I believe the future of work is about the relationship between people and work more than it is about the nature of their work. Twenty years ago, the relationship between people and work had to do with the benefits that were promised, which included a stable middle class existence, a fully funded pension and a promise of a better future for your children. With many of these benefits called into question, the relationship between people and work has shifted to a focus on what drives individuals in their personal and professional pursuits — in other words, their purpose. This purpose-driven economy can manifest in two ways:

  • Desire for flexibility in their work to pursue purpose in their personal life: rather than being tied to a professional pursuit, they will seek to balance their professional career against the backdrop of other priorities, be it family or other personal interests. This could look like contract labor, side hustles, remote work or digital solopreneurs.
  • Deriving purpose from the professional experience: in this case, we see employees driven to contribute to a larger mission. In this case, building culture and trust within an organization becomes front and center and companies aligned to tackle society’s grand challenges will have a distinct advantage.

Ultimately, we see some major questions arise:

  • How can remote-first companies build this type of culture and trust?
  • Can software provide the right financial and operational support to workers who seek flexibility to maximize their value creation?
  • Can software recreate serendipitous discovery that happens within in-person interactions (water-cooler conversations, dropping into someone’s office as you walk by, etc.)?

Companies that provide more flexibility so people can pursue purpose in their personal lives and companies that allow people to see and contribute to the purpose behind their work will thrive in this new normal.

Another overlooked space is the future of work for those who are not knowledge workers. What will happen to all of the people who are working in low-margin, in-person experience businesses like anything related to travel or restaurants? How do we create software to increase margins for these businesses?

Which areas within the future of work are either oversaturated or would be too hard to compete in at this point for a new startup?

As a seed investor, it’s critical for me to make investments in insights that have not become widely accepted. Otherwise the space is either overcrowded or incumbents are well-positioned to defend themselves. In cases where the fundamental insight is generally understood, Series A/B investors are advantaged because they can wait to see who executes the best. Some spaces where I believe this is the case:

  • Coaching platforms
  • Remote workforce hiring platforms
  • Verticalized applications on Zoom
  • New HR benefits (e.g. elder care, mental health, etc.)

What is your advice to startups in your portfolio right now?

There are three areas we are strongly advising our portfolio companies:

  1. Get minimum 24 months of cash either by lowering burn and setting burn caps or raising capital right now. Getting to cash flow positive makes you anti-fragile and frees you from the uncertain future sentiments of venture capital.
  2. Reassess your customers right now to make sure your customer base continues to be attractive. If your customer base has been negatively impacted by COVID-19, you want to understand if their situation will change in the near future.
  3. Product market fit is changing in real time. You may have had it in January, but it doesn’t mean you’ll have it in a month or two. You may even have it today, but it doesn’t mean you will have it in the future. Do you have COVID-market fit? Should you build for COVID-market given the uncertainty of the future market?

Quentin Clark, General Catalyst

Until the COVID-19 pandemic hit, most remote individuals or distributed teams were thought of as being either time or location displaced but not both. For most companies, distributed meant having multiple offices that might exist in multiple time zones or having a subset of the team working from somewhere other than the office but usually during the same core hours as everyone else. This is all changing.

With shelter-in-place (SIP) and offices closed, schedules shifted and we went fully distributed in time and place nearly instantaneously. Work will never be the same again and that makes the productivity space incredibly well set up for change. But the last wave of innovation here, introducing multi-player to productivity software, isn’t enough.  This change will bring about multi-presence work.  

The coming next wave of innovation in productivity tools will be built to support teams that are dislocated in both time and place. They’ll integrate project and people interactions and will need to handle the synchronous and asynchronous equally well for lower and higher bandwidth communication. The extreme corners of text comments on a document or an entire video conference meeting are not cutting it — we need higher-bandwidth communication outside the formal meeting and we need async communication woven throughout. There will also be tools built to better capture process and documentation — ask anyone responsible for onboarding new employees over the last six weeks and you will find out just how much more documentation is being written. Many contemporary all-remote teams have painstakingly documented processes and decision making with deep, detailed handbooks. For the post-SIP team structure, that’ll be templated and tooled versus documented longhand.

We are also going to see a next gen of communication platforms to meet the specific needs of distributed teams.There’ll be an evolution of product communications that go beyond @mentions and edit alerts. They’ll seamlessly integrate myriad communication channels that include project and product communications. We’ll also see tools that help with dynamic team time management. When co-location matters less, teams will spin up and down more fluidly and that’ll happen less frequently via a human-mediated Gantt chart and more often through tools.

Performance evaluation is another area that will be remade by post-SIP organizational structures. Performances evaluations are currently a significant time and resource spend within large orgs, and are highly qualitative. With less time spent face-to-face, the more qualitative aspects of evaluations will take a backseat to the quantitative. Quantitative — and even some aspects of qualitative — will likely be more accurately and efficiently assessed by algorithms. There will be some breakout products here in the near future.

It continues to be true that end-user products in the workplace need to be designed and adopted by those end-users. But if you are building new products in this space, and you aren’t thinking about how that software is part of this new multi-presence tapestry, it’s going to be tough. We aren’t going back to commuting five days a week. It won’t be just the one person who we always have to remember to “dial-in,” it won’t be just that one project that is being done by that team “at the remote site.” We are shifting from hub-and-spoke to a mesh network.