For startups, a remote workforce is an attractive way to stretch a dollar.
In major cities, the chances are slim that quality talent and office space are affordable for the bootstrapped or seed-stage startup. Simultaneously, employees, especially millennials in tech, are demanding more flexibility in work schedules and environments. And with the rise of workplace productivity apps such as Slack, Asana, Quip, and others, onboarding and managing a productive remote workforce is more than accomplishable.
All of this has contributed to a remote work trend that only appears to be growing, even as some startups experience remote work failure.
According to Global Workplace Analytics, the number of remote workers who are not self-employed has increased by 103% since 2005. And startups, which are inherently risk-oriented, often espouse remote works’ values the most. To startups, the benefits are clear: real estate costs diminish, employee turnover is decreased, and worker productivity goes up.
As part of our ongoing coverage into how startups are changing and adapting to the Future of Work, we’re taking a closer look at the startups that have embraced the remote work trend.
First up, how many tech companies are remote work-oriented? Let’s find out.
There Are Dozens of Us, Dozens
To get a handle on startups and companies that have majority-remote workforces, we reached out to Remote.co, who maintains a database of such firms. According to Remote’s information, there are at least 112 global startups who operate on a majority-decentralized basis. Startups with at least ten remote employees make up 87 of those on the list.
Aside from Automattic and Github, two unicorns that are known for employing remote workers, there are a number of notable startups and companies in the remote workforce mix. Canonical is the largest remote workforce employer, with approximately 520 remote workers out of 700 total employees. And for Canonical, a distributed team is working: Ubuntu, a Linux operating system developed by the company, is one of the most popular and user-friendly Linux distros available today.
Trello, a kanban-style project management app that recently sold to Atlassian for a tidy $425 million, employs approximately 25 remote workers, amounting to 50% of its workforce. Headquartered in New York City, Trello credits its remote workforce with its ability to recruit top talent.
“Talent is not geographically focused,” Stella Garber, Trello’s VP of Marketing, told Crunchbase News. “You can hire the best people for the job without worrying about having people together in a physical space. That means the whole world is your recruiting oyster, so to speak.”
Trello isn’t the only project management app that has hired a remote workforce. Headquartered out of Portugal, Doist, makers of the project management app Todoist, has a workforce that is 80 percent remote. In Remote.co’s interview with Doist’s founder Amir Salihefendic, the reasoning was similar to Trello’s: remote work gives companies the ability to choose from a global pool of talent.
“Remote work makes it possible to find and attract amazing people around the world — without forcing them to relocate, to deal with visa issues, etc.,” said Salihefendic to Remote.co. “It also makes it possible to provide great benefits to all of our employees, such as flexible work hours.”
But these startups don’t just have talent acquisition incentives in common. Startups, remote or co-located, hire a number developers. Developers, of course, are tech-savvy by definition, making them more amenable to app-managed remote work than your average company employee.
Remote Workers Are Working, But Not At Scale (Yet)
At minimum, startups ran by remote workers have demonstrated they can, up to 500 or so employees, operate at a unicorn valuation. Still, small wins don’t paint a clear picture. For instance, there is no company with a 100% remote workforce that operates at the scale of a Google or Microsoft.
Combined, Automattic and GitHub employ a mere 1,000 employees. That is a paltry number when compared to fellow unicorn Uber, which has nearly 7,000 employees as of April 2016. For now, at least, the size of remote workforces has a potentially low ceiling, putting a damper on hopes that remote work can solve rural unemployment. And while remote workers are less costly, it is not a cost-savings measure that will make up for lack of financial discipline. As Bloomberg reported, GitHub lost over $66 million in the first nine months of 2016.
Regardless, remote work as an idea has sparked the interest of startups who are looking to hire talent outside the Bay area. Assuming remote workforces continue to drive unicorns like Github and Automattic, and high-priced talent continues to demand flexible work options, “Must be willing to move to San Francisco” on resumes may no longer be necessary.