The rise of hybrid remote hiring

Congratulations on your funding round. The cash in your bank is now a leverage for your startup’s activities. You can now go faster than you ever did before. If you handle your resources wisely.

You will be confronted with tons of decisions for the next weeks. Most of them will be vital but none is more important than the people you will recruit. A company is its people.

It is easy to get lost in the millions of articles about sourcing good profiles, how to give good interviews or how much you should pay your developers.

But before all of that, to hire accurately and effectively you have got to understand the current context of startups vs talents in the bay and why would a Tech Hub based series A company hire remotely.

Hiring remote developers. A story of burn rate and talents war.

- Your Cash burn is your oxygen.

It became increasingly dangerous through the last years. Startups’ cash burns are peaking to heights we have never seen before. Despite all the horror stories where high burn rates killed multimillion dollars companies.

As long as you did not achieve product/market fit, you must keep your burn rate as low as possible to be able to pivot if the environment or the market changes. When a sudden shift in the market challenges your model, the cash left in your bank can buy you more time to tackle the problem and reach profitability.

“Treat every round of financing like it’s your last.” Sam Altman, Ycombinator

On the other hand, low burning rates might be dangerous. As a founder, you are asked to find a compromise between speed of development and resources.

“We’re here to invest when doing so will bring about positive progress faster, which often manifests as the conversion of cash into assets and increased burn.” Scott Nolan, the Founders Fund

Here is the bad news. There is no bible on defining the optimal net cash outflow per month. It is all about finding a moderate burn rate that allows high efficiency and fast execution.

The following tweet of Marc Andreessen gives you a good insight on how you should treat you burn rate:

Worry about each dollar you invest to make your startup take-off.

Now that we are talking about dollars, let us dive a bit into how much it would cost you to hire developers (if you find the profiles you are looking for).

- Tech hubs talents’ war

There are great resources on the internet to figure out how much a developer costs in each part of the world depending on both his experience and the Tech stack skill/s he masters.

If you want the specific numbers for each location check reports from: payscale.com, glassdoor, visionmobile, Nine hertz, indeed.com,… . While looking at the numbers, do me a favor, and start changing cities and countries to gain insight on the following correlation.

For example, if you are looking for an iOS developer in the US the salaries range goes from $51K to $120K with a median of $78,861. The median will jump to $99,192 if you are recruiting in San Francisco without taking into consideration the bonus nor the additional costs of recruitment, taxes,… . The cost of getting good developers on board will change drastically from a place to another.

The point is, especially in the SaaS industry, another entrepreneur in a different city/country will need less resources to develop the same product you are working on.

With the same budget, he can get twice the resources you are having, develop two times faster or even two times better, if he is smart. The very definition of competitive advantage.

In your case, a competitive disadvantage. And that should Worry you.

- It is not going to cool down

The continuous demand for tech profiles in startup agglomerations is not going to be decreasing tomorrow. Which makes the fight for talents inside hubs more and more aggressive.

“Competition for talent has certainly become much more fierce. It’s never been easy, and it’s only going to get tougher.” Shravan Goli, president of Dice.

Several startup veterans such as Paul Graham already rang the alarm bell. He followed a simple logic into explaining the situation: “The US has less than 5% of the world’s population. Which means if the qualities that make someone a great programmer are evenly distributed, 95% of great programmers are born outside the US”.

Graham’s point is that the US should open its borders to get more “exceptional” developers and if it does not, “the US could be seriously fucked.” Unfortunately the US policy for immigration will not be following any soon. And you cannot wait for it to happen.

What then?

Then comes the other perspective — remote hiring.

Following the statement of Graham, Matthew Mullenweg from “Automattic” (a fully remote company) qualified the discussion over lack of talents in the bay area of being “humorous”.

I tend to share his opinion. If the talents are growing more rare and more expensive why keep the fight inside the hub while you can hire outside. In the current context, being next to your colleague 8 hours a day, 5 days a week is no more a prerequisite for productivity nor efficiency.

“In a time where good tech talents are rare, when you should be focusing on product development and customer acquisition, you cannot afford raising your burn rate for the luxury of having a developer next to you. Deal with it.”

So now let us stop wasting time on the 99 reasons that may push series A startups to hire remote and let us start checking the pros and cons of changing your talents acquisition strategy. After all your time is valuable. Burn rate, remember ;)

Remote Hiring Advantages:

All the advantages of the remote hiring are listed here and there and go from finding kickass hackers to having more productive teams through the impact of having cross-cultural teams on your company’s workflow.

I just want to clear one myth on remote hiring about cost and productivity. Myths are talks in the air, and a startup founder only believes in data. I invite you to check the data of companies that tried and monitored the impact of remote options in their headquarters such as Bestbuy, Cisco, etc:

“Many assume that remote work jobs are expensive and that remote workers average lower levels of productivity, however, the data suggest otherwise. The most famous case of remote work, Best Buy, reported that by offering remote work options at its headquarters, resulted in as much as a 35% increase in productivity and a 90% decrease in turnover. McGraw-Hill and Cisco have both reported multimillion dollar increases in productivity as a result of remote work options.” Dr. John Sullivan

It is all said now. Remote is beautiful. But where is the “But”?

Every approach has its own set of challenges. I have gathered them in order of “worseness” based on our interaction with startup founders that work with remote developers.

Remote hiring nightmare:

- Dealing with the paperwork:

It is the worst situation you can put yourself in after raising funds. It takes money, time and focus. You have none of them right now to waste on skyping with lawyers and CPAs to understand the laws and regulations of other countries.

- Unadapted profiles:

Bringing a corporate dude to do the startups stuff. It is a rookie mistake a lot of founders made in the beginning. I will not lecture you about the mind-set shift from corporate to startup. But believe it or not, as pragmatic and logic as code can be, it is extremely important that your developer speaks your language.

There is a sea of options between developing in a corporate environment and developing in a fast highly iterative startup. Truth is most of startups go through “tech chaos” when going from MVP to product. In this specific period the difference between developers’ backgrounds becomes critical.

Corporate hackers need more organization and processes to follow. While startup hackers tend to be autonomous. Resulting in a significant decrease in the time you spend plugging your developer to the way of work.

It helps a lot to have somebody that already worked in startups’ most chaotic and disorganised periods.

- Syncing with your hacker:

The syncing problem is a recurrent situation remoters and startups are facing. The fact that your developer is in a different time zone creates collaboration challenges.

You will probably get to give guidelines when your developer is offline, and receive requests hours after the developer needs them. Another aspect is that your developers may not be used to work with communication and project management tools. Making it even harder to get a functioning remote team.

If you made it this far, it means that you know how sensitive is your situation. You want all the Pros without the cons. Well, here you go:

The Hybrid Model

Just to be clear I did not invent the model. It is just the result of several interactions, feedbacks and discussions with freshly founded startup founders.

To make it fast there are mainly three axis of optimization where we tried to tackle Remote hiring pain points and emphasize on its advantages.

- Profiles personal/startup experience :

Used to work remote:

If it is your first time hiring remote, know that our hackers spent at least 12 months working remote. It is Our way of making sure they are comfortable using all the platforms enabling remote work (slack, asana, trello, skype,…).

Startup experience:

Each of our hackers go through an intensive 12 months program developing MVPs for our batch of startups. To make sure they understand the startup language and expectations. Check the program they go through here..

Sense of initiative:

We have built a culture of fixers. Where the developer is asked to be autonomous and solutions oriented. A necessity on tackling the tech chaos most startups go through in the beginning.

- Finance/administration: costs less, consumes no time.

Allowing you to focus 100% on your product development. We take in charge the hunt, the training, the induction, the paperwork, the taxes and payroll of your remote hacker. Even your CPA will be happy, as we will provide you with a monthly invoice to avoid any additional costs.

- Seniors assistance :

As you might have noticed in the cons, syncing section. For few “precious” hours of the day, your developer will be on his own. He might get stuck and need assistance. No need to waste more time. Our office is full of senior developers who are fully dedicated to supporting remote hackers operating on a different time zone. Once you agree on it, your hacker will have support whenever he needs it. Whether it is 10am or 3pm in SF, your developer is never stuck.

- Environment and office hours :

Working from non-adapted spaces is not sustainable. Coming every day to a workplace to meet with like-minded people is. Remote does not have to rime with lonely, that is exactly why we have built a dedicated space where local remote hackers can gather. This creates a much-needed balance in your remote employee’s life.

If you are a Founder, want to push the discussion a bit further and test “free of charge” remote developers, ping me : omar@unitedremote.com .