Do remote SaaS companies have an advantage?
I’ve just been reading a SaaStr post that asks the question: can remote SaaS companies scale as effectively as those with co-located teams? It’s a great read which has inspired some of my own reflections and a question. Do remote (distributed, virtual) SaaS companies have an advantage?
It’s hard to be a David with smaller pockets
ZOKRI is the second SaaS company I’ve founded – an OKR Software to share aligned and outcomes-based goals. My first was a Martech platform called Linkdex that exited in 2016. This was our set-up.
London (Head Office)
London was our Head Office and birth place of the company. Local teams were:
-
Product Management
-
Data Science
-
Management distributed Engineering team (UK, Eastern Europe)
-
Global Marketing team developed the brand and created leads
-
Local Sales and Customer Success teams served European markets
-
Accounts and support services
NYC and LA
Once we had roots in the UK, momentum and some US reference customers we went global. Local teams were:
-
Local Sales and Customer Success Teams
The logic
In 2009 / 2010 we were a very inexperienced executive team. Teams like Marketing scaled as we hired cost-effective, young and inexperienced talent. This talent needed training and development.
This meant that we benefited hugely from having Product, Engineering and Marketing together in one location. The exception was a super smart outsourced Eastern European engineering team. What was amazing about this team was that we worked with them (mostly the same people) for over 5 years!
Communications were efficient and effective, and team morale was high. We knew our mission and wanted to change the world. We went from a small start-up office to larger offices within a few years. Needless to say these offices came with a big overhead in London.
The US was a key market. We decided early on that if you’re a US customer, you’d be more likely to buy from people in the time zone, with local accents, and local market understanding . This was true. What was hard to know and manage:
-
Time zone difference (+5 or + 8)
-
Sales and Marketing culture: the UK is far more passive, and the US more direct and aggressive
-
Cost: having teams in NYC and LA was and is expensive and we burnt a lot of cash trying to get established in the US
So I’d guess at this stage you’d say we blended both remote working teams and co-located teams. It was working OK. What was challenging was our cost base. Also, the amount of effort the London based executive team put into flying back and forth to the US came with both an economic and physical cost – it’s expensive and tiring!
Reality check
The reality was we were in a market where we were David, not Goliath. We had less VC funding than the competition, had fewer staff and lower market share.
This is normal for a start-up, so what do you do?
The answer was we had to be smarter and find advantages from everywhere we could. Something every early stage Start-up needs to do.
We typically found these in Product, Marketing, and in relationships.
But make no mistake, it’s hard. And the truth is we’re doing it differently this time around.
8 lessons to help you decide: Remote, No Office, Hybrid?
The world of SaaS has moved on since the experiences I shared above. We now know more, and the technology, and management processes we have at our disposal are better.
The buyer is more in control than ever. They have the ability to compare your software with others with ease. This means the influence of your Sales and Marketing team is less, and they need a great market winning product.
So here is what I have learnt:
-
Find talented people that love your Mission / North Star and want to join you – regardless of location. And if they’re in lower cost part of the world, great. You can either save money or hire more human horsepower.
-
Being in the same room is great, albeit expensive, but does not always correlate with staff being more effective, motivated or happier.
-
The more distributed you are, the more you need management systems like OKRs, Growth Initiatives, and Check-ins. These management systems are also proven to create more effective, motivated and happier teams.
-
Customers prefer local points of contact.
-
Flexible working e.g. working from home / flexible hours, allows you to access some amazing talent that can’t be in the city of your choice
-
Big city offices cost big city money – it has to be worth it
-
Less money spent on fixed cost overheads means relatively more money spent in the high impact areas: Product / Engineering, Marketing and Sales.
There are of course variables that impact yours and our own decision making.
-
Founder experience and ability to work effectively together: We now have lots of experience and work brilliantly together
-
Team experience and ability and need for training and development: We’re not going to develop really junior talent
-
Self-serve SaaS or Enterprise sales / Customer Success: It’s mostly self-serve this time around
-
Short-term or permanent full-time contract – Depends on what we need
Like the post? Share it.
Twitter
LinkedIn
