On-Premise Tribes in Shiny Caves
and the evolution of Remote as a Service
As I took her by the hand to school this morning my 6-year old daughter Kiara looked up at Google’s giant Lego project in progress and excitedly reminded me of the latest 3 numbers marking the tops of their latest 3 towers .… “11th floor, ehh … 13, umm .. I can’t see that one Daddy!”. This time she didn’t ask me when I’m going to join Google’s 8,000 people in Dublin. There’s a new flavour of the month. Recently I took her into an event close to us in Airbnb. It’s a beautiful cave and had colourful free stuff in the kitchen and the staff were friendly. Now that’s where Daddy “needs to get a job”. AirBnB has just leased another big cave for 20 years. Facebook, 40 metres from our apartment, will lease another massive space soon for another 5,000 employees etc.
After I leave Kiara to school, I wander back near our apartment and enter a wonderful co-working space called Workbench in a Bank of Ireland branch in the heart of Dublin’s Silicon Docks. I enjoy the energy of having a few other founders around. Sometimes I go to my alma mater Trinity College’s library if I need super levels of concentration. Or switch to a cafe if I need a change or a walk to contemplate an idea, or if I simply feel like a better coffee. No matter where I go I’m a headset away from a state of deep focus. Sometimes I just work out of my apartment if the kids are out. My co-founder and great friend Mike Quill works out of his home in San Diego. He prefers the weather and lifestyle there to his native Dublin. We are both free to do deep work wherever and whenever we want. We evolved away from large luminous caves a few years ago.
“Remote work has opened the door to a brave new world beyond the industrial-age belief in The Office … If you can’t let your employees work from home out of fear they’ll slack off without your supervision, you’re a babysitter, not a manager. Remote work is very likely the least of your problems … When you treat people like children, you get children’s work.”
Jason Fried & DHH
Richard Branson once said that in the future people will wonder why offices ever existed. Lots of big tech companies think otherwise. It’s 5 years since he said this, but companies are herding their people into towers punching ever bigger holes in the cloud. Arguments for enormous concrete, steel and glass caves with gorgeous interiors, filled with ever larger tribes of on-premise humans are being constructed all around me here in Dublin. And it’s happening in all the big tech hubs.
I worked in software caves in the high touch B2B SaaS world almost from the very start. One of these shiny caves eventually expanded into the 150+ on-premise people scale, with lots of free food, gorgeous furniture etc. That explosion in office numbers is one reason why I sold my allotment of Salesforce shares cheaply and left. Hyper-growth was in full gear and I believed it would become much bigger. And I had an exciting role. But I had enjoyed it so much more when they were smaller. I spent half my days abroad commuting on planes and trains and had complete control over my itinerary as the CSM covering continental Europe. Salesforce Dublin had created the first ever SaaS CSMs (evolving Vantive’s idea) and I was parachuting into companies from every industry and getting to use my languages. But for me the office in Dublin was now uncomfortably large.
More desks every month and more people and more noise and more meetings and more infernal interruptions. And all that chaotic jazz. Still loads of energy, but a slowly diminishing percentage of effective work being done as the numbers exploded. It wasn’t the fun, scrappy scale-up I had signed up for anymore. I wanted to leave before I stopped enjoying it. So that’s what I did.
Salesforce used to use high rise office blocks to explain the B2B SaaS model. We’d tell reams of sceptical prospects ad nauseam that these buildings had shared electricity, shared security, shared water etc., but tenant companies could configure their own offices any way they liked. That’s how we’d start to explain the benefits of multi-tenant architecture. We did it well enough because the utility model disrupted on-premise software far quicker than most would have predicted. The world has completely accepted that we don’t need servers in the building.
But I want to ask another question.
Do we need employees in the building?
Most SaaS giants and hyper-growth scale-ups have very few remote workers. Yet we didn’t evolve to work in huge groups huddled together in a large building. Can you imagine 1,000 people sharing a giant cave in the stone age? Humans evolve slowly. It’s difficult to design a giant shiny cave that successfully overrides our evolutionary instincts.
I gave a talk a few weeks ago to open the SaaS Monster stage in the Web Summit about 100% remote SaaS companies. 100% Remote means all employees working in separate locations — using remote technologies and methodologies to communicate and collaborate. During the talk I asked how many people in the audience (of about 1,200) had worked in an office with more than 100 to 150 people? About half the audience raised arms. I then asked them to keep their hands up if they found it really challenging in that office to get stuff done. Hardly an arm dropped.
Most of us have experienced the issues around constant interruptions, someone noisy on the phone, social pressure to chat with colleagues, impromptu meetings that take 60 minutes to get 5 minutes’ work done. And that’s after ever-lengthening commutes, especially in tech-hubs. As companies scale, just being around, making the right noises, looking attentive, making political alliances, ‘managing upwards’ and other inefficient personal strategies take up far too much time and emotional disc space. It’s not always the way, but there’s a lot of toxic bullshit in a lot of giant offices.
After backpacking the planet with my better half Alicia Tejero and then doing photography for a couple of years, I went back to Salesforce.com to learn how to sell. I had decided I wanted to be an entrepreneur and this was a hole in my skillset. And in a high touch B2B SaaS world, Salesforce is a school of excellence. By then the numbers had multiplied again and it was a very different company, but I thought I could block that out with single-minded purpose — despite the big open office and a role that demanded less travel.
To circumnavigate the noisy open floor, I ended each day by booking up time in various quiet offices for the following day, making sure I had at least one scheduled call in each 2-hour slot — to justify escaping the large open-office distractions. I’d vary the offices across the whole building so people wouldn’t notice and complain. I’d head outside for a walk a few minutes before ‘town-halls’ so I could dodge the herding process and sneak back into my small nested cave. So much wasted energy in the service of rewiring my interaction with a traditional on-premise-people system to get effective work done.
“Everything evades you, everything hides, even your thoughts escape you, when you walk in a crowd.”
Edwin Way Teale
In an interview with David Darmanin on my podcast, he told me the story of how he rejected a big expanding office and left to found a 100% remote SaaS company called Hotjar (web session replay and feedback software). 4 of the 5 founders live in Malta, but David insists they do not socialise or meet with any regularity. They use their remote methodologies and technologies to communicate even though they are located close to each other. Hence they empathise with, and understand the working lives of non-founder colleagues.
David believes that one doesn’t create a company culture. Instead one devises shared values, develops ways to build alignment … and from there the culture will evolve as the company grows. Hotjar employees are deeply engaged in a culture that has evolved from shared values they helped craft. The employees have stayed and the company is approaching $20M annual recurring revenue (ARR) after just 4 years.
“The thing is, once you have a framework and a model like this which is very much built around trust and empowering people, they need to be able to have the drive to do that. We haven’t set up a company where we spoon-feed people. If they want to be spoon-fed, then it’s not going to work out.”
Dr David Darmanin, CEO and Founder of Hotjar
I also interviewed YouCanBook.Me’s Bridget Harris for14 Minutes of SaaS. Her company does online scheduling software. They built their success story with no sales, no marketing, and no funding. They eliminated marketing & sales by solving a big problem in blood red competitive water with a product that’s easy to use and easy to share. Product led marketing to produce a viral solution. They are now close to $3 million ARR and facilitate 1 million bookings a month. Profitable for the last 3 years too.
Bridget says that if on-boarding needs support, the product is broken. Now that’s not true for every business model, but that philosophy and that aim are fantastic. And in the future, when they do add on sales and marketing, Bridget maintains that the big challenges will have been worked out and they’ll be accelerating the acquisition of customers they know they’ll help make successful. The right customers. That is, of course, way better than boosting market position artificially with money and signing up quick-churn-customers they’ll piss off because they haven’t worked their stuff out properly. Bridget advises self-awareness, or understanding your own personal culture and wiring, is a key foundation for building a successful company.
“Culture eats hiring for breakfast and if you start with your culture, knowing who you are, you learn how that has to work through your processes and procedures.”
Bridget Harris, CEO and Co-founder of YouCanBook.me
A big part of many of the companies successfully adopting remote-working is about working in a better way and allowing people to have more meaningful and balanced lives, as opposed to chasing SaaS monster lottery tickets. It’s not about old-world carrot and stick nonsense. People who choose to tolerate being a slave to stress can easily become wired to only care about the money. That’s not good for anybody. Money is one very important part of the pie of course. Hiring in non-expensive places allows companies to reward employees generously. Hotjar gives employees 40 days planned vacation a year and YouCanBook.me pay their Spanish engineers double the local rates. And that’s the tip of a beautiful iceberg of rewards. As Bridget Harris says, it’s about jam today in some of your best years, rather than putting your life on hold.
“You don’t need to live in San Francisco to be a tech genius, or New York, or Austin. So why should you live anywhere if you don’t want to?”
Wade Foster, Co-founder and CEO at Zapier
A modest, but growing fleet of remote SaaS companies like Hotjar, YouCanBook.Me, Basecamp (project management), Zapier (iPaaS), Balsamiq (wireframing), Automattic (Wordpress ), InVision (software prototyping), Buffer (social media management), GitLab (version control hosting), Doist (task management & internal communications), Wildbit (several SaaS products) etc. are quietly landing on the shores of our business landscape.
And here’s the thing. These companies produce best in category SaaS solutions. If you don’t believe me, check their software against the X axis on G2 Crowd’s crowd sourced quadrants, the bit that’s labelled ‘Satisfaction’. G2 Crowd really needs to rename that ‘Customer Success’. These companies absolutely excel at customer success — many are number 1 in their competitive categories. The signs are that 100% remote SaaS companies consistently produce world class solutions. And unsurprisingly Glassdoor says they excel at employee success too.
For another indicator that an armada of these companies will slowly rise, look at the apparently shocking valuations for WeWork. Between 3 and 40 Billion USD depending on who you believe. Crunchbase did a meta-analysis of these disparate valuations and its guess is that the value is closer to $9B. Co-working spaces are a big enabler of remote. Hence the rise of remote is directly related to such stratospheric valuations.
Sophisticated companies like Plantronics have been producing hardware for enabling remote since long before big software enablers like Slack were born. It has known for decades that large shared work spaces are sub-optimal for effective work. And Plantronics has vast data to back that up. A Plantronics headset enabled the world to hear Neil Armstrong’s immortal words as he stepped on the moon for the first time in 1969. They’ve been doing this a long time and know a thing or two. And it was their customer, NASA engineer Jack Nilles, that coined the word telecommuting. Today about 60% of NASA’s staff work remotely.
So the next time you go to one of those open-office ‘we want to hire you’ events in a big SaaS company, and you see all those enormous cool spaces to collaborate & play, please don’t assume this is an efficient way. You might love being part of that scene. If you do, go for it. And actually, many of these companies are great places to start off in — especially if you can find a way to change role a couple of times early on.
Plantronics is a global enabler of all sorts of communication from executives on the move to remote workers to large call centres. It measures the effectiveness of workspaces across 4 ‘C’s; Communication, Collaboration, Contemplation and Concentration. And it does a lot more than headsets — it’s also a significant player in cloud software and works on solutions for many common issues with large spaces e.g. with habitat soundscaping.
Plantronics considers well designed office spaces to be optimal for collaboration. And there’s strong evidence to support that. when it comes to innovation, it’s obviously difficult to beat the likes of ServiceNow, Workday and Salesforce — the #1, #2, and #3 ranked companies for innovation according to Forbes World’s most Innovative Companies list. These are also the 3 largest pure-play B2B SaaS companies in the world. So innovation should not be underestimated. Even though some strong proponents of remote would say otherwise, I agree there’s a hit in 100% remote companies regarding face-to-face brainstorming.
However Plantronics also sees the strength of quieter, remote working spaces in the other three Cs, particularly concentration and contemplation, but also communication. Even in the most innovative successful companies, 99% of the work done is executing off stuff they already know. It has to be that way. Remote companies gain much more in terms of deep work with less interruptions. Otherwise it’s employees would fly around like a parliament of magpies in spring, chasing shiny ideas until they crash into some high rise windows. The vast majority of a company’s time, once a strong product-market fit and initial happy shiny paying customers have been established, is rinse and repeat. It keeps listening, learning and innovating obviously, but the ability to deliver effectively is almost everything. Deep, effective work gets done when one can concentrate and focus without fear of excessive interruptions, negatively multiplied by switch-tasking.
And even for innovation, remote can work well for some companies. It gives people time to think in advance and dismiss most shiny possibilities that don’t work before a web-enabled meeting. People who genuinely have something to say about the specific topic tend to pipe-up, rather than those who are simply good at speaking. And when communicating in asynchronous threads, team members tend to think carefully about input. They learn to value their colleagues’ time and that brings in a very positive dimension to collaboration.
“What I want inside my company is a sustainable culture where you can work for 20 years and be happy and have a life outside of work.”
Amir Salihefendic, Founder & CEO of Doist
Nicholas Bloom, Eberle Professor in the Department of Economics at Stanford, ran an excellent study and gave a tremendous talk on remote working with Trip (formerly Ctrip), China’s largest travel agency. The company has 20,000 employees and agreed to a comparative study of remote versus in in-office employees. The teams were divided with a random selection method based on whether their date of birth was an even or odd number. The results were staggering. Remote workers tended to do their full hours (which the in-office employees tended not to do for various reasons) and remote workers showed a better ability to concentrate on the task in hand. This resulted in an increase of 13% in work effectiveness and halved the annual rate at which people left the company. The upshot was that Trip made $2,000 more profit per person working from home.
100% Remote SaaS companies develop and constantly evolve effective ways of hiring. They find employees that have a grown-up attitude to work, and that embrace transparency and trust. They are forced to focus on values and culture from day 1, and to a degree that office based companies will not feel compelled to do. The employees can live wherever they want and remote companies can often afford to reward them generously by hiring outside expensive locations like San Francisco, London, New York and Dublin. 100% remote SaaS companies tend to really value the work-life balance of their employees. I suspect they don’t agree with Jason M. Lemkin’s pinned tweet.
“Once or twice in life, someone will give you a shot you don’t quite deserve.
Work 100 hours.
Do whatever it takes…”
My perspective on this tweet? To hell with that. I’m not going to mortgage my life and my relationship with my family. Long hours are rarely an efficient or sustainable way to work. In fact the Basecamp founders do a great job in deconstructing the ‘Do whatever it takes’ narrative in their new book ‘It doesn’t have to be Crazy at Work’. I highly recommend it, even if you are not interested in remote. And if you are interested in this, read all their books. Especially ‘Remote’. Unless we’re unlucky or desperate or lost, we should work to live. I know I’ve lost myself before. Never again.
Loneliness is another challenge for remote. We are social animals. The evolution of our brains depended on interpersonal contact with other humans. To reduce the negative impact of loneliness, hire for employees that are resilient and resourceful. People who get up in the morning with a clear ikigai, and who can access coping mechanisms if they feel down. Hiring people proximate to co-working spaces or good cafes can help.
Hiring the wrong person is the most expensive thing that can happen to your company so you work hard to avoid that.”
Bridget Harris, CEO and Co-founder of YouCanBook.me
Can you imagine Serena Williams or Rafael Nadal making wholesale changes to their game every month? Re-engineering the serve one week, switching to a one-handed backhand the next. They practise what they know well and reserve a small amount of time to evolve their games and innovate. And can you imagine them being interrupted mid-match constantly? How would that influence the effectiveness of their games? The rest of the human race is no different. When we focus, we are effective.
“Gitlab started as a remote company from day one. I didn’t meet my co-founder until a year after we started this company. We are now 300 remote people across 40 countries.”
Dmitriy Zaporozhets, Co-founder & CTO at GitLab
Of course, remote is not the only way. I also interviewed Nicolas Dessaigne in Algolia for 14 Minutes of SaaS and he’s seeded hyper-growth and amazing office based culture in Paris & San Francisco. Algolia’s culture is one where customer problems are viewed as opportunities rather than reasons to panic. Nicolas cares deeply about a culture of transparency and honesty. Intercom have also achieved big growth with offices in Dublin & San Francisco. Intercom’s culture is so cool, it makes a personal comic book to celebrate the work anniversary of every employee. Every year, every employee receives a copy of a beautifully illustrated ‘intercomic’ with themselves as protagonist and hero. This forces the company to really know it’s employees very well. And amongst the giants Salesforce is still a growth and innovation machine, and generally stands for strong values around equality and social responsibility.
So I’m not saying 100% Remote companies have a monopoly on values and employee success. And I’m not saying there’s no place for beautifully constructed caves with focussed on-premise humans. I’m saying that we seriously underestimate how big and valuable and liberating the ever-improving possibilities for remote-working will become. Even if your company is not interested in having a significant percentage of remote employees, a huge amount can be learned from the various cultures and methodologies that have evolved in remote companies. The focus on effective work, clarity of values, efficient communication, and on empowering people to live great lives are amongst the most compelling.
But there’s one other big challenge with 100% remote companies.
Scale.
100% remote companies are often bootstrapped and sacrifice hyper-growth for slower, more sustainable growth. They hire extremely carefully and typically don’t artificially accelerate their growth with huge marketing and sales spend. Hence I doubt there will be a 100% remote SaaS company as big as a Salesforce, or even a Workday or ServiceNow within the next 5 years. I do believe it will happen eventually though.
However, as DHH, the creator of Ruby on Rails and co-founder of Basecamp says …. if you set out to create a unicorn, the odds are stacked against you from the start. Why not make a highly lucrative dent in the universe rather than trying to own the fucking universe.
There’s room for thousands of SaaS companies to succeed. Not just a few dozen. These companies can massively improve the lives of their employees, and by extension their employees’ families. It’s a philosophy that favours the quality of the work and rewards us when we are effective adults. And that’s good news.
So if you’re a founder that tends to be more of an author than a reader in the narrative of your own life, why not consider building a company that attracts other women and men who tend to take control of their own lives too.
Live long and prosper!
Stephen Cummins, 17th November, 2018
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“There’s a crazy thing that happens as you’re growing a business … It tries to be real. It starts asking for things …The business isn’t real. We’ve invented it. We created it. It does not exist in and of itself … Our biggest challenge as founders is to tame the beast. To keep the beast from becoming the voice in your head. The beast is directly responsible for when it’s not fun anymore … It belongs to us and it needs to serve us.”
Natalie Nagele, Co-founder & CEO, Wildbit
“All that glistens is not gold —
Often have you heard that told.
Many a man his life hath sold…
Had you been as wise as bold,
Young in limbs, in judgment old,…
Fare you well. Your suit is cold —
Cold, indeed, and labour lost.”
William Shakespeare (The Merchant of Venice)
“My name is Ozymandias, king of kings;
Look on my works, ye Mighty, and despair!’
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare”
Percy Bysshe Shelley
This article is from my AppSelekt blog:
On-Premise People in Shiny Caves
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