The Hidden Value of Remote Teams
There are more advantages to building remote teams than meet the eye.
When we talk about why companies choose to build remote teams, we often suffer from talent acquisition tunnel vision. That’s understandable given the soaring tech skill deficit in the United States. By 2020, there will be 1.4 million more software developer jobs in the U.S. than there are applicants to fill them. Talent acquisition is the undisputed heavyweight concern for companies, a fact venture capitalist Joe Lonsdale candidly addressed in an interview with us earlier this year. Head for greener pastures. In the heat of the recruiting battle in both local and secondary markets, we often lose sight of some of the more subtle advantages of remote teams.
That’s a mistake.
Remote teams have been used for decades in technology to foster creativity, expedite ideation, and jump ahead of competitors. They are the quintessential secret weapon. Why? Because at the end of the day, remote teams can develop new and novel approaches to innovation that are rarely born inside a company’s HQ.
Here’s a look into a handful of those success stories:
Who doesn’t love a good codename?
Does anyone remember Acorn? It’s the nut that IBM cracked, and when they did, it changed the world forever.
Acorn was the codename for IBM’s first personal computer known most commonly as the IBM PC. Back in the 60s and 70s, the idea of IBM creating a PC was ludicrous. Everything to come out of the company’s Armonk, New York, headquarters was built for enterprise. It was all b-i-g and took years, if not decades, to develop. The leadership team knew that if they were to compete with a slew of competitors including Atari and Apple in the race to make the first viable personal computer, they would have to do something different. Very different. They wanted speed; they needed a distraction-free environment, and they had to think outside the massive box they had been building in for decades.
So what did they do? IBM put together an all-star team of twelve engineers, sent them 1,400 miles south to carry out their project in Boca Raton, Florida, and gave them a mysterious project codename — Acorn.
Although the team checked in regularly with leadership back in drizzly Armonk, they were given complete autonomy and ownership of the project. The only restriction weighing over them was their budget, which barely carried them through a calendar year.
“In sum, the development team broke all the rules. They went outside the traditional boundaries of product development within IBM. They went to outside vendors for most of the parts, went to outside software developers for the operating system and application software, and acted as an independent business unit. Those tactics enabled them to develop and announce the IBM PC in 12 months — at that time faster than any other hardware product in IBM’s history.” — IBM History Site
Yet, twelve months was enough for the twelve engineers. They released the PC in August of 1981. It was an immediate success, garnering over 40,000 orders on its first day. “IBM compatibility” became a standard for software producers. Less than one year after its release, more than 753 software packages in more than 200 languages were built for the PC. To put that into context, Apple Macintosh had 422 packages in 1985, a year after its release. That same year, a Fortune survey found that 56% of American companies with personal computers used IBM PCs. Apple would go on to win the war, but IBM’s small remote team and its rapid innovation won the battle, solidifying the company’s place in the industry for another decade.
Despite the impact of IBM’s Acorn project, its tale is far from unique. Apple utilizes Skunkworks projects to achieve the same results. If we were to lay out our ubiquitous Apple devices on a table, chances are that the majority were developed by a small, creative independent team. What Steve Jobs didn’t have to worry about was the technical talent crisis that the Valley faces now. If he did, he may have done what Square chose to do with Jessie Wilson and Marcelo Cortes.
Guess Who Built The Fastest Growing P2P Payment Platform?
Founder of Square and serial entrepreneur Jack Dorsey has put forth some great ideas over the years, but this one didn’t originate on his desk. The short answer is it was created by an unlikely, small team in Kitchener-Waterloo.
In 2013, entrepreneurs and former Google employees Marcelo Cortes and Jessie Wilson both joined San Francisco-based online payment platform Square. Unlike other talented engineers from across the globe who got the call from the exciting startup, they didn’t move to San Francisco to work at HQ. Despite pushback from management, Wilson got permission from Square CTO and former Google colleague, Bob Lee, to stay in Kitchener-Waterloo. Cortes, with Wilson’s help, was able to ride the coattails of that decision. The early repercussions of those decisions, however, were a bit rough on the two up in Waterloo. “Every week we were helping on different projects, but we didn’t own anything; we were floating aimlessly. We called ourselves engineering mercenaries,” said Cortes. Everything changed when Cortes was handed a prototype that originated at a Hack Week event. The barebones project was Square Cash. Wilson and Cortes worked on the project together and assembled a team of five engineers. The group brought the back-end to life in a matter of months. “The key was autonomy — Jessie and I had it. If things were different, and we had to check every decision with HQ in San Francisco, we would never have been able to build the product as quickly as we did,” notes Cortes.
Dorsey was so impressed with the progress and engineering talent up in Kitchener-Waterloo that he opened an official office in the Canadian region less than a year after Wilson and Cortes’s original team was assembled.
The success of the Waterloo team revealed other positive outcomes. It proved that the project management systems and tools could scale and allow Square to approach other talent markets. Today, Square’s engineering team spans from Waterloo to Melbourne.
Square Cash, now known as Cash App, has leapfrogged Venmo as the fastest growing peer-to-peer payment system in the world. Without Wilson and Cortes’s small, agile remote team, Cash App could be years behind or worse, squashed by the competition before it even had a chance.
It’s Not All About the Big Guys
IBM, Apple, and Square enjoy luxuries that most startups cannot afford. The big guys use remote teams to create strategic advantages, but the reality for startups is different — they often build remote teams out of necessity to secure the right talent. Yet, that doesn’t mean that the same strategic advantages don’t apply. A great example is Silicon Valley based Bluescape.
Bluescape builds virtual workspaces to help unify company content and conversations in a shared space. Up until recently, the company focused solely on enterprise clients that could use its systems to enhance their business. But it’s not just enterprise-level companies that can benefit from Bluescape’s tech. In order to build a product that could be used by small businesses and your average consumer, Bluescape partnered with Terminal to build a remote team in Vancouver. “One of our goals wasn’t to hire some engineers that could work on a product, but to build a team that could own the product,” says Bluescape’s CTO Demian Entrekin. Originally, the group consisted of five engineers, a designer, and a quality assurance specialist. Together, they took the idea for Bluescape Now and brought it to life. The product has been a huge success and acts as a vital alternate revenue stream for the business. Most importantly, Bluescape was able to launch the product without distracting lead engineers at HQ focused on the enterprise product. In other words, they didn’t have to hit pause on anything or take a step back in order to take two steps forward. The remote team was its own unit, building its own product. “Using teams in this way is critical to our business strategy — it’s how we are going to disrupt the market that we are already playing in,” notes Entrekin.
Conclusion
As companies begin to view remote offices and building remote teams as a necessity to acquiring the right talent, it’s important that they also consider the other benefits of remote teams and learn what is needed to make the most of them. With the right support and planning, remote teams can be powerful force multipliers — the creative inspiration that propels a company forward. If done right, they can be the most innovative, efficient, radically focused part of the business.
Interested in learning more about where to build remote teams? Read this article next.
