Startups are betting that letting people work from home, an RV, or a New Zealand mountaintop will lure top talent away from Silicon Valley

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Startups are betting that letting people work from home, an RV, or a New Zealand mountaintop will lure top talent away from Silicon Valley

On New Year’s Day, David Biggar — a support manager at anti-malware company Emsisoft— moved into a fixer-upper RV with his wife.

He’s planning to leave his home in Caldwell, Idaho behind him. Biggar isn’t sure where he and his wife want to grow old together, so they’re going to hit the road and find out — somewhere warmer, perhaps, in the south, or on the coast.

He’s not leaving his job behind, though. In fact, Biggar will keep working from wherever he can find WiFi — a luxury he’s afforded because his whole companies works remotely, from wherever in the world they happen to be.

Emsisoft is just one of a growing number of all-remote tech companies, including well-known startups like GitLab and Zapier.

This kind of arrangement is attractive to both employers and employees: Salaries in Silicon Valley might be sky-high, but so too is the cost of living. By hiring remotely, employers can find the best talent, wherever they are in the world, while also saving on both salaries and office space. And for their part, employees like Biggar get to work from wherever they want.

“The funnest, neatest thing is being able to up and go, as long as it doesn’t impact work performance,” Biggar told Business Insider. “Having the flexibility is amazing, instead of being tied down to an office or a schedule.”

In 2017, 5.2 percent of U.S. workers employees worked from home, according to the last census. As it becomes more socially acceptable in America to work from home, it’s similarly encouraged startups to choose the all-remote path.

“People are just getting to used it,” Adam Ozimek, senior economist at Moody’s Analytics, told Business Insider. “Technologically, it’s been possible for a while. It takes a slow cultural change to allow people to work from home.”

Indeed, towards all-remote companies are changing. Megan Quinn, general partner at Spark Capital, says that just five years ago, most investors would balk at putting money into an all-remote startup. Now, it’s seen as less of a factor — Quinn herself led Spark’s investment in design platform InVision, which is all-remote.

“The thinking was you had to have everyone in the same four walls,” Quinn told Business Insider. “That’s changed really dramatically in the last five years.”

Recruiting the best talent

In Silicon Valley, there’s a war constantly raging to recruit the very best talent. Startups and mega-corporations alike try to lure new recruits with the promise of lavish perks to go with their famously high salaries.

By hiring only remote workers, though, startups are finding that they can bypass that battle altogether. Rather than go toe-to-toe with corporate giants in the major metropolitan areas, all-remote companies are finding success by recruiting from places that traditionally aren’t thought of as tech talent hubs.

Take, for example, Clark Valberg, CEO and co-founder of InVision. After the company raised its first round of funding, he was trying to figure out how he was going to hire engineers. Valberg was based in New York, and Google had just opened a New York office. He realized that, as a startup, it would tough to compete with Google.

“How are we going to hire for engineers when Google is competing for every single engineer we want to hire?” Valberg recounts to Business Insider. “What if we worked with people in places like Arizona? It was basically a hack. It started as a talent hack. I think a lot of companies are thinking of going remote because of the talent crunch.”

Quinn said that while she had some concerns about all-remote companies, the fact that InVision was remote didn’t have any impact on her decision to invest, positively or negatively. Rather, she says that she was impressed by the quality of talent on the InVision team.

“It’s the fact that they’re able to bring the best team possible because they opened their talent pool from San Francisco Bay Area to the entire world,” Quinn said. “It’s more about the people they’re able to bring into the community.”

These employers can be appealing to anybody looking to leave the San Francisco Bay Area, too. Zapier, an all-remote startup that helps integrate business software, actually provides a “de-location package” for people who want to move away from the Bay Area. After it started offering this deal, applications shot up about 50 percent, says Wade Foster, CEO and co-founder of Zapier.

Zapier cofounders Mike Knoop, Bryan Helmig, and Wade Foster.
Zapier

Notably, Foster sees the “de-location package” less as a cost-cutting technique, and more as a recruiting tactic.

“The de-location package started because we had many folks in the Bay Area who were interested in Zapier because it meant they could work at a fast growing company and move out of the Bay Area,” Foster told Business Insider. “It’s a way to appeal to a certain set of folks who would rather work and live somewhere else.”

Read more: The CEO paying employees $10,000 to leave San Francisco explains how it’s helping him build a $20 million business

Cutting costs and living where they want

Still, for many companies, hiring only remote workers is indeed a cost-cutting measure.

“The advantages of an all-remote firm is that you don’t have to buy new office space,” Ozimek, the economist, said. “There are cost savings to the firm by going all remote. You get to reach into a wider number of labor markets. You can cast a wider net. You can hire people living in a low-cost of living area.”

Christian Mairoll, founder and CEO of Emsisoft, made his company all-remote for this reason. When he founded Emsisoft over 15 years ago, he didn’t have the capital to invest in hiring talent from more competitive markets.

“It was just far out of reach,” Mairoll told Business Insider. “I was never a fan of external funding. I was never a fan of venture capital. When the software was reaching a viable level, as you can imagine without a marketing budget, it was a long process.”

Meanwhile, he found developers in Russia and Siberia who were excited about doing work for Emsisoft, and whom Emsisoft could pay at competitive rates for their areas, in turn. And soon, Emsisoft was able to hire more employees and the company grew.

Nowadays, Mairoll lives in rural New Zealand, where he tends to his sheep, chickens, and fruit trees in between meetings with Biggar and Emsisoft’s other 40-plus employees. He doesn’t ever plan to open an office for Emsisoft.

“That’s not the nature of the business,” Mairoll said. “I don’t think it can be mixed very well. When you combine local offices with remote work, you quickly separate the remote workers and don’t see them as full members of the team anymore. I don’t think it would be a smart plan to start a local office.”

Building culture

When employees are spread all over the country and worldwide, not seeing your co-workers face-to-face can be a challenge to building a cohesive company culture. Still, employees at all-remote companies find a way to connect with each other, even if it they mainly interact on chat apps like Slack, or video conferencing systems like Zoom.

At Zapier, employees will occasionally have remote dance parties, where employees record and share gifs of themselves busting a move. At popular code-sharing service GitLab, a bot pairs random employees up for “coffee chats,” where they can talk about work or anything else they want. At Emsisoft, employees meet virtually Sunday evenings to play online board games.

“Something that I like about the culture is the ability to get to know people’s quirks,” Priyanka Sharma, director of alliances at GitLab, told Business Insider. “I’ve had coffee chats where we talk about work or growing vegetables at high altitudes in Colorado. I get to hear about interests and activities that are really different.”

Many of these companies also host regular real-life meetups for their employees, which can sometimes be fairly lavish. GitLab hosts a summit every nine months, with the location changing each time — the next one will be in New Orleans. InVision has rented out resorts and water parks for its employees.

InVision employees at its annual retreat
Invision

Not all fun and games

It’s not all fun and games, though: Remote work requires constant communication. With colleagues all over the world, employees lean heavily on services like Slack and Zoom to collaborate.

“I live on Zoom,” Sharma said.

Quinn says that investors like herself coach entrepreneurs to make sure they fully understand the limitations of relying on these tools for collaboration.

The secret, these companies have found, is transparency. Time zones mean that employees might not always be awake at the same time, so it’s important that as much information as possible is stored out in the open, so employees can make the best possible decision even when their teammates aren’t online.

“You want to be able to solve those problems with the best information available,” Foster, the CEO of Zapier, said. “When you’re asleep at night and someone needs to make a decision, they need to have access to that information.”

GitLab tries to apply this transparent approach to its entire corporate culture. For example, its handbook is completely open to everyone, and any employee can edit it, document how they do their work, or recommend improvements. It posts its goals publicly, such as how it plans to go public in November 2020.

Read more: Investors are betting hundreds of millions of dollars that startups like PagerDuty, GitLab, and CloudBees can change the way software gets made

Dave Munichiello, who led GV (formerly Google Ventures) in its investment in GitLab, recalls that when he was at first “hesitant and skeptical” about the company’s all-remote approach, but was ultimately proved wrong.

“I was a bit skeptical about the fact that a company could scale,” Munichiello said. “I was worried about the cost of a company being geographically separated, but what we learned was what’s very important here was great documentation.”

Still, Munichiello warns that all-remote is only the right strategy if the team is completely on board with the idea and is confident that they can communicate effectively.

Unexpected pitfalls of remote

At the same time, the introduction of all-remote workforces introduce unique challenges.

For instance, Barbie Brewer, chief culture officer at GitLab, says that hiring outside of Silicon Valley gives it access to upper-tier talent that would otherwise go ignored. At the same time, it’s surprisingly complicated to figure out how to compensate that talent fairly — if pay is based on each employee’s cost of living, it raises the very real possibility that two people doing the same work with the same job title will see a huge disparity in their salary.

“Paying someone in San Francisco the same as you’d pay someone in Nigeria might be nice on paper, but in reality, one of you will be very well-off, while the other is average,” Brewer said. “Or one will be very poor and not able to afford a place to live while the other is doing great. We try to have parity as much as possible, but that doesn’t mean everything based on where you live will be the same.”

To try to normalize the pay range, GitLab has committed to a policy that no employee will be paid less than 41% of what an employee would be making for the same work if they lived in San Francisco.

What it’s like to work remote all the time

At the same time, employees see tangible benefits in not having a physical office.

Employees at all-remote companies don’t have to commute, have lots more flexibility around working hours, and generally get more hours in their day for family time, medical appointments, physical fitness, and other important things that can otherwise go neglected.

Brewer, for her part, says that working remotely has allowed her continue working while taking care of her children, and more recently, start chemotherapy treatments without having to take time off.

Elsewhere in the world, Frank Huisman left a job where had to drive over 100 miles from his farm in rural Portugal to get to work. The company had an apartment that he could stay in on weekdays, but he still found it exhausting to drive two hours after a long workday to return home for the weekend.

Now, as a quality assurance manager at Emsisoft, he uses the time that he was spending on his commute to instead clean the stables and run errands like groceries and going to the post office.

“I don’t really miss working in an office,” Huisman told Business Insider. “There are a lot of advantages to working remotely. There’s no cars, no traffic jams…On the computer, I can really focus on my work. I think the biggest challenge is to keep focused and to make yourself be honest to your employer that you really make the hours.”

Priyanka Sharma, director of alliances at GitLab, occasionally works in her onesie.
Priyanka Sharma

Indeed, GitLab’s Sharma says that it’s very important for remote workers to be self-starters, while at the same time making sure you find ways to separate your work life from your home life. She says it’s tempting to default to working from your bed in pajamas — so she makes it a habit to get dressed for work, even though she’s not going into an office, just to make sure her brain shifts gears into work mode.

“The one thing you do is wake up, get dressed, and then you start work,” Sharma said. “Just that one thing has made my day so productive.”

Nailing that balance, though, has many rewards, she says.

“I’ve had the privilege of working with people around the world,” Sharma said. “My worldview has changed. I’ve learned about other parts of the world without leaving my room. I’ve really learned and appreciated that intelligence and competence doesn’t have a zip code…I think the world is changing and remote is making that happen.”

Biggar would likely agree. He’ll start his day with coffee and breakfast with his wife at a nearby restaurant, where he will begin doing his work. This routine is about to change when he takes off in his RV with his wife, but for the most part, his work schedule won’t.

“It’s really kind of a dream job. I can’t imagine anything better, especially since I’m getting older,” Biggar said. “As long as you can arrange your priorities right and be responsible, this is an amazing kind of thing.”

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