One of the biggest workforce paradigm shifts ever
Before March 2020 many of us knew someone who was working remote or has heard of companies that even went “full remote” i.e. they did not have an office and all their employees worked from home, but I would say that they were considered an exception to the common rule of “physical-only” office work. Fast forward to today and ~500M people have been catapulted into full remote set-ups.
To visualize the magnitude of this sudden change, data on Zoom usage could help:
This is potentially one of the biggest and quickest paradigm shifts in the history of the global workforce and while many will return to their physical offices, I think it´s safe to assume that some won´t. This got me thinking and in the past weeks, I tried to make sense of the ever-growing tech enablers of the remote work economy. While there are a number of great tools lists for remote work and future of work out there (CB Insights, Lightspeed, The Family and I am sure more) in this post I am attempting to do 2 specific things:
- provide a way to interpret the market and spot areas/ problems not yet solved
- try to understand if and for which companies remote work has potentially a positive ROI
Trying to make sense of a new, fast-moving and already complex market
To make sense of the remote work tools landscape, I stripped “remote work” to its essence -> there is no physical office any more (or there is one where only very few employees go). This has 3 main, immediate implications:
- employees/managers cannot physically see and talk to each other
- suppliers, customers, guests cannot be hosted or greeted in-person
- employees do not need to reside near a company’s office and therefore companies can now employ people from anywhere in the world (provided they have access to the internet)
Note that I make an arbitrary distinction between “future of work” and “remote work” where future of work is a broader space including remote work and other segments such as collaboration tools, email tools, virtual assistant, calendar tools etc.
In essence, to dissect the market, I propose a 2x2 matrix plus a 5th box outside the matrix.
1 Mimic Reality — tools that try to virtualize physical communication patterns that are (were?) typical of our everyday business life: 1–1 meetings, team meetings, stand-up meetings, trade fairs, office parties, a central office and similar
2 Digital Native Reality — platforms that offer communication styles that are typical of the “digital world” and do not have a physical counterpart. Think of webinars, chats and collaboration platforms or live streaming platforms
3 Synchronous communication — is a type of communication where the exchange of information happens without delay (in real-time), a typical example would be a Zoom call with a customer
4 Asynchronous communication — is a type of communication where there is a significant time lag in the information exchange, a good example would be an email chain
5 Remote HR tools — to sustain a remote organization in the back office a new set of HR tools is likely needed. Think of worldwide payrolls, feedback and culture without an office and finding and hiring talent
Here below is a graphical representation of how one can order the Remote Work tech market
🕵️♂️🕵️♂️🕵️♂️ did I miss a tool you like? Feel free to put it in the map 🕵️♂️🕵️♂️🕵️♂
️Positive ROI for companies thanks to WFH tech
I argue that remote work is a viable option with a positive ROI for the majority of companies that do not require a physical presence to carry out their business.
🎈Disclaimer: this is a rather qualitative and common-sense based analysis and is very much focussed on white-collar only companies 🎈
Tangible benefits: ✅
1 Increasing the talent pool (💡 common-sense based) -> The whole world is now your talent pool, no need to look for candidates living in the same town or willing to relocate. Also if the assumption that people like to work remotely is true (more later on) we can argue that offering WFH gives companies an edge vs companies that do not offer this option
2 Productivity (💾 backed by some data)-> Studies show that working from home, on average increases productivity. One of the most cited articles in the field is from Stanford professor Nicholas Bloom. He conducted a 2-years long experiment on 500 employees with a control group. WFH led to a 13% performance increase, of which 9% was from working more minutes per shift (fewer breaks and sick days) and 4% from more calls per minute (attributed to a quieter and more convenient working environment). Some studies do point in the other direction (productivity loss), more to that later
3 Cost savings (💡 common-sense based) -> No office rent, no HQ employees costs (think of cleaning, canteen, snacks etc)
1 Culture/loneliness (💾 backed by some data) -> Company culture is often associated with an office and also the majority of people tend to need a certain level of social interaction to stay motivated and function well. In a comprehensive survey done by Buffer and Angellist in 2020 on 3,500 remote workers, 20% of respondents cited “loneliness” as the biggest struggle associated with working remotely. This could be partially addressed by tech platforms offering virtual office environments fostering casual and social interactions
2 Old school organizations/ managers (💡 common-sense based) -> older and less “cloud-based” organizations might find the switch to remote work hard and unpleasant. While I believe that WFH tech can and will make the transition smoother and easier, there is no substitute for strong, flexible managers and good communication in a company
3 Freeriding/ productivity loss (💾 backed by some data) -> as mentioned above some studies point towards a productivity loss associated with working remotely. A Study from Glenn Dutcher, an Ohio University professor, found that people performed “dull” tasks better in a controlled cubicle setting than they did in a less-structured remote environment. Several tools can help with focus and time management and I would argue that team collaboration tools level the playing field for everyone and good contributors are easy to spot in a remote environment
But do people like to work remotely?
For Remote Work to be a permanent status quo and not just a trend, support from its “core users” seems to be a key factor. To try to answer this question I looked at the State Of Remote Work 2020, which is a survey (n=3,500) and a report conducted by Buffer in partnership with Angelist
My summary -> the data point towards a strong support for Remote Work from remote worker themselves, citing “Flexible Schedule” as the biggest advantage and “Unplugging After Work” as the biggest struggle. (see sources for the link to the whole survey).
Possible market winners and areas of growth
Considering all the above points, companies that will benefit the most from allowing WFH (for a portion of their employees, not necessarily 100%) are companies that:
- are in a position to quickly adopt WFH tech
- need to hire talent that is not abundant in their home region
- cannot afford to pay above-market wages
- have a focus on creative tasks and not on repetitive, efficiency-driven operations
From an entrepreneurial/ investment perspective I consider Video Calling, Webinars and Live Streams to be mostly solved.
Other areas such as Virtual Office, Virtual Fairs and Video-based Asynchronous communication tools are still blue oceans and are in my opinion an exciting place to be right now.
That´s it, folks! if you have feedback feel free to ping me at firstname.lastname@example.org; should wish to add a company in the map feel free to add it here: