When HP was founded in 1947 by Bill Hewlett and David Packard, it made logical and financial sense to have all of its employees under one roof. Ditto for Apple.
It also penciled in for Google in 1998, and it still worked well enough that Facebook chose to set up its headquarters in Palo Alto, Calif., in 2004. Standout startups like Stripe, InVision, and Github enjoy a competitive edge that every startup should take advantage of. Timeless era, time of distributed teams.
In the past, it made sense to create companies where everyone worked in one place.
But the world has changed. Companies are relying on engineering talent provided by remote, distributed, or as we call them, borderless teams.
There are solid reasons for your company to adopt a remote-first mindset. Attractive trends are driving the borderless revolution, presenting opportunities for positive disruption. Influential business ideas are accelerating the limitless space in the education sector to further this change.
Remote-Distributed (aka Boundaryless) Teams
For some time now it has become possible to outsource engineering labor to other countries. There are many companies ready to meet your needs in Bangalore, Philippines and Eastern Europe. They are low cost and capable of providing specialized – but mostly basic – engineering services.
But this is outsourcing development – it doesn’t mean a borderless team.
For companies like Automattic, one of the first unicorns to be 100% remote, a borderless team consists of elite-level programmers who live almost anywhere.
These are highly skilled people who are important parts of your software development teams. These people may be permanent employees, or they may work on a project-by-project basis, but they are managed very as if they were working alongside you.
According to Tony Schneider, a partner at True Ventures and a team-lead at Automattic, borderless teams offer a real advantage;
“You can hire great people anywhere: Once your company moves from one physical location to untethered, your pool of available job applicants becomes a whole world. Hire someone who works for your company.” be consistent with their culture and mission, regardless of where they live.
Plus, you can better protect yourself from the competition and ups and downs of a particular local job market, and you’ll automatically get better coverage of multiple time zones and languages when your team is more distributed.
The impressive thing about Tony’s quote is that he wrote it back in 2010. At the time, Automattic had only 50 employees in 12 US states and ten countries. As of this August, the company employed approximately 940 people who call more than sixty different countries and 47 US states home.
And they just announced a new round of funding; $300 million from Salesforce Ventures, pegging the company’s post-funding valuation at over $3 billion.
So what’s changed? Why has remote, distributed teams suddenly become the smart way for software companies to build? More importantly, if you are building a company yourself, why should you pay attention to this trend? Why should you consider – and perhaps employ – a remote-first mindset when building your tech team?
“Historically, the challenges associated with remote teams have outweighed the benefits. But today, the balance is shifting for many founders. Distributed teams are more common, and companies know what to expect when managing remote offices needed.
Collaboration tools have been improved. Next-generation chat, video calling and project management software help keep teams in sync. Perhaps most importantly, there are now many examples of very successful businesses with distributed teams.” Tom Tunguz, Redpoint Ventures
Reason one: software is eating the world
More and more industries are becoming software industries. And as they do so, the demand for high-quality engineering talent is growing rapidly. Toyota is a software company. Johnson & Johnson is a software company. Many more companies have realized that they need to become software companies; Otherwise, they risk becoming an old-fashioned Nokia or Blackberry. And because of this the demand for Silicon Valley caliber talent is growing rapidly. Local supply may not continue. Today, the smartest CEOs are focusing on building boundaryless distributed teams.
Fred Wilson of Union Square Ventures says:
“I think the ability to spin up and then successfully operate remote engineering locations is a skill that technology companies need to develop earlier in their development.”
The best way to win the talent war? Do not participate
In the race to build a great software product, engineering genius is oxygen. Even the most well funded startups have limited resources.
Hiring people who live within twenty miles of your headquarters may seem advantageous. But if your company is located somewhere like Silicon Valley, Seattle,