fbpx

The World Is Working From Home & Distributed Companies Are The Future

If you have read my thoughts before, you may have known that I’m a big supporter of distributed companies and remote work mentality. My favorite part of the remote work is the ability to have a higher quality of life for a much lower cost.

Many tech entrepreneurs and investors feel that remote is not the way to go. That the physical presence within the Silicon Valley is a very important pre-requisite to success. They back this with statistics that over 70% unicorns are born in the bay area, and that less than 10% are born in NYC or LA. With only 3% or so coming out of India or China and 5% from rest of the world.

Their case is strong as far as the statistics are concerned. I’m the numbers guy so there’s no basis for me to refute what they are saying. Despite that, I believe remote work is the way to go. Silicon Valley could be the present, but remote is the future. The statistics that are thrown around only reflect what is happening today, and not what could be happening in the future.

As with the COVID-19 emergency, many tech companies have decided to go remote. The list is a bit too long but here are the ones I’m aware of; Amazon, Facebook, Google, Linkedin, FourSquare, Twitter, Uber, Lyft, Zillow, Bitly, Digital Currency Group, IBM, MongoDB, Airbnb, Grammarly, PostMates, SalesForce, ShutterStock, KickStarter, Silicon Valley Bank, WeWork, Yelp etc. I think when all of this is over, some of these companies, and many other companies will have a part of their work force hired to work remotely.

Remote work is to HR what CloudFlare is to the internet. Remote employees ensure higher uptime, load balancing, no single point of failure. Remote employment means you can hire better talent for cheaper costs. Forget cheaper costs, remote employment ensures you can hire better talent from the talent pool that was previously unavailable to you, even if you want to pay identical salaries as you pay in the SV. For the employees, it’s the ability to get a serious bang for the buck by being in a high quality low cost area.

After the COVID19 is over, the world will retrospect. The world will question the ability of the US to handle health crisis. The world will question if China should be the sole manufacturer of the global goods. The world will question the open borders of the EU and the lack of systems in place to protect against a pandemic. And a small part of the world will also question how can we leverage remote work to build more durable companies.

Achieving Gender Equality In Tech

It is often statistically reported that women are paid lesser than men in most lines of work. In tech, specifically, it is said that women are paid 5-40% lesser than their male counterparts.

Another striking statistic that is often highlighted is that women make up only about 25% of the tech workers. This particular statistic doesn’t bother me because in comparison, healthcare industry employees 77% women. One gender could be more inclined towards working in a particular industry than the other and there shouldn’t be anything wrong with that.

Coming back to salaries, Fiverr, a freelance platform reported that on their platform women at average earn $96 against their male counterparts who earn $100. This represents a 4% difference and is by far one of the best reported figures I’ve read regarding the gender equality.

I’ve often written on this blog that freelancing, remote jobs or distributed companies have many advantages. I’ve often highlighted the location and time independence as the most major advantages. You could be anywhere at any time living the millionaire lifestyle.

But the data published by Fiverr has given me new reasons to celebrate the digital nomad lifestyle. You could be a man or a women. You could be a Muslim or Jew. You could be in Syria or Romania. You’ll get the equal opportunities and wages as everyone else on the platform.

Distributed companies, remote employment and freelancing is the answer to gender inequality. Not just gender inequality, it is also the answer to racial inequality or any other kind of inequality. Obviously in addition to granting you freedom and wealth.

Distributed Companies

I love distributed companies. It hasn’t been a tough challenge for me running one thus far since I’ve never had more than 10 employees at any point in the lifetime of my business. Although we’ve worked with over 200 collaborators and partners concurrently but we were able to manage that just fine.

One of the companies that has proven how far a distributed company can go is Automattic. They are the team behind WordPress, WooCommerce, Jetpack, Simplenote, Longreads, VaultPress, Akismet, Gravatar, Crowdsignal, Cloudup, Tumblr, and more. They have more than a thousand employees. It’s a remarkable company to say the least.

I’d list below the top 3 reasons why I love and believe in distributed companies.

Better Talent Pool

You are not restricted by country while trying to find talent for your company. Most companies are restricted by cities. You’re often missing out on better talent pool, sometimes even paying a higher wage to lesser talented workforce since a better alternate lives in Vietnam or Ukraine. Not only would they cost less, the quality of work will be way superior.

Lower Costs

On top of money saved in wages, there are much bigger costs that you can avoid. You wouldn’t need to rent office space, spend on furnishing, security and many other associated costs of maintaining a workspace. Although, setting up a workplace can be cheaper in Pakistan compared to many other parts of the world, it can still cause a significant damage to the company’s finances. For example, we have saved over $120,000 USD ($1000 x 12 x 10) over the period of 10 years only in rentals by running a distributed company.

No Ties

Both the founders and the employees have the freedom to move around, be anywhere in the world at any point in time with no ties to any geolocation. This has a huge impact on a work-life balance as well as happiness index of the team.

Please let me know in the comments if you think traditional companies are still a better choice than distributed companies.