All Startups Should Consider Expanding In Multiple Geographies
My post The Future Of Work Is Distributed received some good comments. More interesting was the number of direct emails I received back with detailed information about “remote-first” companies and how they did things.
There was a distinction in some of these emails between “remote-first” and “multiple geographies.” It’s an important nuance, as there is a big difference between a fully distributed workforce (which the blockchain kids refer to as a “decentralized workforce”) and a multi-location workforce.
Almost every company in our portfolio with more than 50 employees either has or is looking at a second (or third, or fourth) location. This is especially true for companies headquartered in Silicon Valley, Seattle, and New York.
While I’ve observed (and experienced) mixed success with second locations being implemented too early, I’ve concluded that this is mostly a function of the company not having a handle on how to deal with a distributed workforce. When the CEO prioritized either distributed or remote work and makes it part of the wiring of how the company operates, it’s effective. When it’s an afterthought, a lifestyle choice, or a reaction to something, it fails.
I’ve found that secondary/tertiary US cities work better than international locations, with the exception of software/hardware engineering locations. Several of our companies have had great success in Eastern Europe and Russia with technical teams. China and India work, but seem to be harder and more hit or miss. Cities in the US that have concentrations of technical, sales, or operational talent, usually because of one specific employer or a highly motivated university nearby, have been surprisingly effective.
The biggest magic trick seems to be the “direct flight.” When it’s a two hour or less direct flight to the second location, people move easily between places. I knew this instinctively from all of my time traveling between the east coast and the west coast from Denver. When I went west, it was easy. When I went east, it was hard.
Magic trick number two is well-implemented video conferencing. I learned an approach many years ago from my now-partner Chris Moody that he used at Aquent when he was COO. He set up video conferencing in a cubical at each location at left it on all the time. Today, we have the equivalent on our desktops, so the cubical trick isn’t needed, but easy ways to immediately start video conferences at any time, as a substitute for in-person meetings, without having to go into separate rooms in the office, makes a huge difference in interpersonal interactions.
It seems pretty clear that a very large, single location company in Silicon Valley, New York, Seattle, and several other cities (e.g. LA, Boston) is getting much more challenging. Sure, it’s possible, but is it advisable?