You’ve got product market fit. Time to think about scaling and consider whether Remote Working can help. At the heart of the debate you’ve these questions to answer. Can you:
- Scale your business using Remote Working, and not carry the overhead of expensive office space?
- Attract the worlds best talent to the payroll and get them excited about working with you, buy into your values and pursue a career with your SaaS Company over the many other SaaS companies out there?
- Manage and develop a happy and engaged workforce?
- Manage and minimize the short and long-term impact of not having face-to-face in-person communications and relationships?
And to be clear, this debate has gone, is going on, or will go on in every early stage, fast growth SaaS company.
This post will help you shape the debate and come up with the right answer for you. And if it is right for you, providing you with tips and advice on how to get Remote Working working effectively for your company.
Recognizing Our Evolving Needs
We’ve all heard about Maslow’s Hierarchy of Needs and how it segments what matters to us the most. When applied to work you’ll find our needs have evolved, and our “basic needs” include a convenient and nice office location, places to eat and socialize, available meeting rooms, break out areas and so on. These are not cheap and dramatically increase Fixed Costs.
In fact, a study conducted by Jim Link, the Chief Human Resources Officer of Randstad North America, found that 75% of 3,000 workers across the USA also considered “the work computer/laptop/device” the most important aspect of the workplace and 68% thought of “fast internet and Wi-Fi” as a basic need when working as well. In today’s working world, especially SaaS, this is evident.
When combining those physical and digital aspects of work, how can SaaS startups compete with larger and well established companies when attracting and retaining the quality of employees needed to grow the company?
Three choices you will need to consider:
- Tech Hub: Do you find office space in a major City and nestle yourself amongst the competition and Tech talent?
- Out of Town: Perhaps you do the opposite, and find a base outside the Tech hub at the risk of the talent pool being smaller.
- Go Remote: Or do you develop a culture of remote working, where you’ll have the world’s talent at your fingertips but face the struggles that come with an geographically dispersed workforce?
Tech Hub City Space
It would seem like a great plan to set up headquarters in a Tech Hub City. You’d do this to be amongst the best talent with the intention to attract them to your company. You’d also do it to benefit from the advantages being in the same building provides.
But it’s not all upside. There’s a cost. For example, office space is expensive. In London, Instant Offices estimates that the average monthly cost of non-shared office space per person is between £650 and £1,400. Office space in London is also predicted to rise 11.4% over the next three years. MarketWatch tell us that New York would cost $1,233 per person per month and San Francisco would be $1,086. For a company of only 30 people that could mean over $30,000 Per Month. This alone could buy 3 or more people, or give you needed marketing spend, or a longer runway.
So what if you can’t afford to provide a suitable office in a top location or chose not to afford it?
Non Tech Hub, Out Of Town Spaces
What about bucking the trend and setting-up out of town in places that are not traditionally tech hubs?
Based in the beautiful City of Boca Raton, southeastern Florida, the interactive content platform ion interactive was scaled. Being located in a lower market area like Boca Raton meant that they could keep office expenditure and salaries much lower than if they were based in major Tech hub locations.
Recruiting enough technical talent was a challenge in this City though. The strategic solution was to open an office specifically for an engineering team based in Boston. This allowed them access to the vast pool of technical talent that they wanted.
“I am supportive of SaaS companies being located outside of the valley and other Tech hubs, and I do think that is the right choice for many companies. The quality of life and lower cost of living are strong enough reasons on their own. That said, recruiting experienced talent in these markets can be tough and I think companies need to go into it with eyes wide open. There may be challenges finding the top talent, so you either need to grow that talent yourself, which can be time consuming, or look outside your market. I think the right approach is to build the home base in a smaller market, and be willing to recruit outside of that market or support remote work when you need to.”
The year was 1979. IBM introduced a pioneering policy allowing their employees to embrace remote working. Fast forward to 2009. 40% of IBM’s 386,000 workforce enjoy the perks of working from home. So why in 2017 did they request that their employees relocate to an IBM office? Why did they reverse what seemed to be a successful policy?
IBM’s rationale was to bring the teams together to ensure employees are more productive, collaborative, innovative and agile.
Those are some interesting words…
Sure, face-to-face meetings and peer-to-peer rapport in an office environment could make employees productive, collaborative, innovative and agile. But these are the same words I would associate with SaaS companies like Zapier and Buffer – all of which embrace remote working.
Let’s look at InVision. In 2017 the digital product design app had scaled to 700+ employees without actually having a physical headquarters. With Google expanding its presence to Manhattan (taking the East Coast Tech talent in the process) plus the ever increasing costs of real-estate in New York City – office space wasn’t feasible for the start-up back in 2011. Developing a strong remote working culture at InVision meant that they had access to the best talent from across the globe, having employees based in the USA, Britain, Israel, Australia, Argentina, and Nigeria. So with the success of InVision as an example, why the debate about remote working?
The Pro’s and Con’s of Remote Working
A Remote Collaborative Worker Survey study found that there are significant benefits to be gained by both remote workers and their employers. It found that:
- Workers were motivated to work harder and more efficiently
- There were cost-savings and productivity gains for companies that employ remote workers
- Workers tend to be happier, less stressed out, and healthier, thereby bringing down the costs of turnover, absenteeism, lower productivity, and other issues
- 45% of remote workers are getting more sleep
- 35% are getting more physical exercise
- 42% are eating healthier
- 44% have a more positive attitude and 53% report reduced stress.
- 51% spend more time with their significant others, adding to the greater job satisfaction
- Working Too Much
- Prioritizing Work
- Time Zones
- Technology Hiccups
- Bad Health Habits
Note that the same post offered some great advice on how to minimize these potential challenges. Most of them come down to management and management of expectations.
But we have to accept that there are some contradictions between the two surveys, and the real answer is probably it depends. It will depend on who you hire, the how you onboard, support and manage them.
“Being a remote manager and especially a remote employee is not for everyone. Some employees take to the challenge and responsibility it brings well and enjoy the privilege of working remotely. However, some can require extra management cycles to help keep them focused.”
Does It Make Sense For You To Go Remote?
Start-up founders are remote working because it’s a necessity rather than a luxury. John Cunningham writes in an article on Product Hunt that more and more start-ups are opting for the distributed work model.
1. It makes business sense to go remote
First off, founders are kissing the office overhead goodbye because almost every job at a company can be done remotely.
When it comes to hiring salespeople, most salespeople are considered to be “inside sales.” As someone who has sold software (inside sales), from both a traditional and remote office, there’s almost no difference other than swapping out loud coworkers for mostly quiet dogs.
Customer support? They’re monitoring a dashboard on a piece of cloud based software and responding to issues by chat or other cloud based meeting tools.
2. Advances in enterprise software
New technology and better iterations of old technology have made workflow and communication faster, and in general, much more feasible in a remote work environment.
3. Access to a global talent pool
The third, and maybe most important reason that startups are going remote is access the global talent pool. For software companies, the norm has been to put down roots near a local pool of tech talent. Niche skill-sets are highly sought after within local talent pools, so why limit the company to one local talent pool? – John Cunningham
Do Some Job Roles Suit A Remote Working Environment Better Than Others?
What happens if you have a client facing role where your customers want to interact with you, get to know you and buy into your business and it’s values? Yes, your working environment at home is fine for internal meetings but perhaps it’s less than adequate for sales lead and client video calls.
If I were in a sales team, would I be confident in having a live video call with someone outside the business? Would I be confident in feeling like I could close that mega upgrade deal with a client who is starring at the wardrobe and TV wall bracket behind me? Almost certainly not. Your image to outsiders is the image they remember about your company. Imagine you’re about to close a deal with an enterprise level client then something like this happens…
From an article on Pipedrive we learn that as humans we take mental shortcuts when forming opinions or judgements called heuristics. These allow us to function efficiently, without constantly stopping to think about our next course of action. While heuristics play a critical role in decision-making, they also leave us prone to cognitive biases. We make bizarre, illogical and irrational choices all the time. Why? Because our brains are wired to rely on shortcuts and patterns to solve problems and make judgment calls quickly.
Your SaaS product is great. It’s exactly what your lead needs. It’s logical for them to buy it. Yet negative heuristics and unconscious bias put a halt to closing the deal. Was it your remote working environment? Did they not appreciate the dog barking for ten minutes? Regardless of their need for your product, chances are they have unconscious bias and see you, or more importantly, the company as unprofessional.
The REMOTE Formula
So how can SaaS leaders and companies effectively support and manage employees who aren’t in an office?
We’ve created the REMOTE formula to help. Resources, Engagement, Motivation, Objectives, Trust and Expectations are what you need to remember when working with, or developing a team remotely.
Get the right tools. There’s an abundance of online collaboration resources which, in some cases, are specifically designed to ease the struggles of remote working.
Jes Kirkwood from InVision collates “The 9 best online collaboration tools for remote workers”.
1. Slack: The best team communication app
2. Zoom: The best video conferencing app
3. InVision: The best design collaboration app
4. GitHub: The best software development tool
5. Trello: The best project management software
6. Dashlane: The best password manager
7. Google Drive: The best file management app
8. Zapier: Workflow automation for business
9. World Time Buddy: Time converter for distributed teams
Engage with your remote workers on a daily basis as you would do if they were based in an office. You must eradicate all feelings of isolation. Communication is key and setting out clear goals and outcomes is important to achieving success.
But it doesn’t always have to be strictly business. How was the weekend? How’s the dog? What have you been doing with all of your free time now you’re not commuting 2 hours a day to the City? Those human to human interactions are what start to fulfil our Psychological Need which might otherwise be missing with remote working.
“Just because a company doesn’t have to house an employee for the hours of their workday, it does not excuse the organization of not having well developed internal communications.”
SaaS leaders and companies should digitize their culture. Instead of crowding around a whiteboard to brainstorm, take it online and introduce software like Mural. This tool allows employees to scribble, take notes and collaborate effectively anywhere in the world at the same time.
Create a Slack channel specifically for people to let off steam – a place where they can share photos, memes and jokes. A chance for them to engage with each other on a personal level.
In an article on Entrepreneur, Anna Johansson suggests arranging yearly meet-ups. “No matter how spread out your team is, try to get everyone together in person at least once a year. If that’s too expensive, consider regional meetings where you gather smaller groups. This face time will be highly beneficial in team-building, which will make each worker more productive.”
This is exactly the same as in an office environment. You don’t want your team soft pedalling and giving just a small percentage of their full potential.
So let me ask you this… Are you a multiplier or a diminisher? Your managerial styles need to be adapted with a remote workforce. Liz Wiseman, author of a Wall Street Journal Bestseller “Multipliers”, says that “as leaders in your business you can be multipliers. You can use your intelligence and your capabilities to make everyone around you smarter”.
Not only is being a leader and a multiplier important. But “perhaps this is the most important role you play in growing and scaling your business”. Being a leader in this way will get more out of your team because essentially you are asking for more. You will see talent and unused brain power within your organization. Motivating your team to achieve tasks they may have never done before will better utilize their just discovered skillset, improve productivity and maximize effort. Multipliers attract talent, you need that talent to grow.
SaaS team leaders should focus on setting direction via goals, not activity. Ensure that your remote workers are aligned with your North Star and that OKRs are defined, aligned and clearly set out for all to see.
Try not to be overly concerned with details, and when goal achievement confidence is low, know when and how to jump in and find a way to support the area that’s a challenge.
If you’re thinking about adopting OKR Software read this resource where we outline the Top 20 OKR Software Programs.
This is a biggie. You must trust your remote workforce. But how does trust really work in an environment which is partly or entirely remote? Well it starts with whether you’re a high trust company or a low trust company – start-ups take note.
A high trust organization would have their fair share of multipliers. The company shows empathy, collaboration and recognises their employees as people who are achieving great things. They make sure that employees develop as a person as well as a professional by pushing them and motivating them. Thumbs up from everyone involved…
A low trust organization tends to express toxic cultures and would have diminishers amongst the teams. Most of the time formality takes over friendliness. Job titles, job descriptions and job positions in the company organization chart are a constant reminder and road block which stops many aspects of work getting accomplished. You wouldn’t recommend a friend to work here. Thumbs down from everyone involved…
A study in the Harvard Business Review showed that employees who work at high trust companies are 74% less stressed with 50% higher productivity than those at low trust companies. 76% are more engaged with each other while being 106% more energetic at work.
“For me, trust is crucial in managing remote workers, and actually something I think a lot of traditional businesses lack. We need to trust any employee, remote, freelance, or otherwise to deliver against the task they they have been set. Without this, we can find ourselves wasting time and energy micro-managing people because we are not convinced they will get the job done. This starts at the beginning of the working relationship, only choose to work with those who you trust to do good work in the first place. Do this by seeking out recommendations and referrals for staff, or finding testimonials or reviews on previous work.
The benefit about working with remote teams, is that we remove the arbitrary idea that you have to be at work to get work done. With remote teams, the focus becomes specifically on output. We ask ourselves, is this person delivering against the defined project, rather than was this person late today. A key way to be able to develop trust through understanding output, is by having a very tight specific brief, and to know exactly what each person expects from each other. Any good working relationship is an adult to adult dynamic; set clear goals and expectations and have conversations that focus on those.
Some people are more productive at 7am, others are their most effective at 10pm, in trusting people to manage their own time and give them professional autonomy and focusing on specific deliverables and actions, you will create a productive team environment built on respect and trust which will deliver better results in the long term.”
By introducing a remote working culture you’re leaving your employee more control of their working structure. Expectations of them and the work they produce for the company needs to be made extremely clear.
“Everyone has a different idea of what doing something “quickly” or “well” means. Whether showing examples of what you expect to be done, calendar sharing, etc., make sure you have clear expectations from those you work with online. The more prepared they are, the better they can serve.” – Ilean Harris
The debate of remote working is one that will continue to develop. The purpose of this long post is to aid SaaS companies when making a decision to grow and scale, but a work from home culture is not for every organization.
ZOKRI is currently embracing remote working with no immediate plans to have a headquarters. By following the advice in this post and remembering the 6 point REMOTE formula, you too can make a success of developing a remote working team.
Do you have any advice for SaaS leaders looking to put together a remote team? Have you introduced a work from home culture yourself? If so, please let us know of your results. Which part of the REMOTE formula do you think you need to focus more on? Leave us a comment below.