There is a statistic that says 40% of the work force is going to be freelance by 2020. Or something like that. Today on the show we discuss the pros and cons of remote teams. Steli says he is slowly easing into this culture shift, but Hiten has some experience with it.  We share our opinions on this style of working and how we’ve made it work for our companies.

There are businesses that have embraced the whole remote team model. And some of those companies are big names like Buffer and Automattic. With any remote team the issue of business culture is going to be a problem. There are ways to build a positive remote culture through retreats and meetups. But no matter what the hack for the dynamic issues, team culture does suffer when you choose the remote style.

We outline the pros and cons of remote teams with these points:

  • Our backgrounds in remote teams
  • How Skype changed remote team culture
  • Why remote teams are becoming more commonplace
  • The positives of remote teams
  • The negatives of remote teams

Have you worked with remote teams? Do you work as part of a remote team? We’d love to hear about your experience.

We invite you to join our Facebook group.  It’s great to have such an incredible group of entrepreneurs out there making it happen every day.  We’d love to hear from you; please feel free to join our Facebook group and share your experiences, challenges, and motivation with us and the rest of Startup Chat community.

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As always, you can hit us up on Twitter @Steli or @hnshah, #thestartupchat.


Hiten Shah:  Hi, this is Hiten Shah on The Startup Chat.


Steli Efti:  And this is Steli Efti. And in today’s episode, we’re going to talk about remote teams, how to manage remote teams, how to build a remote company. The reason I want to talk about this today, Hiten, is that today is kind of a semi-remote company in the sense that we do have an office in Palo Alto and most of our employees are in the Bay Area. But, we do have a few employees that are fully remote. We have an increasing amount of employees—the next 4 offers that we’re putting out there are all remote, and even the people that are currently in the Bay Area, half of them are planning to move somewhere else in the next 12 months. So we are kind of making a transition to becoming more and more remote.


Even before having any remote employees, I would say that, you know, two-thirds of the time a large number of people would not be in the office. So people would work from home or travel like so we are kind—we’ve always been used to being semi-remote. So we enjoy working from wherever. We enjoy traveling. We like people that are talented from all around the world, but we also kind of still like to be around once in a while with each other. We do a lot of team retreats and things of that nature.


And now we’re in this phase where we’re starting to hire more and more remote. I see some people that have worked for the last 4 years very closely with planning to leave and this is both an excitement and an anxiety about how we’re going to make this transition to being better at remote especially when it comes to like the fun stuff, the cultural stuff, the you know trust, the relationship building because we were able to do a lot of that because we knew each other already. So, if you fuck off and travel and only work with me in chat, I already know who you are.


But now we’re starting to hire people that I don’t know well and I only communicate through chat, so how do we do this? We’re also now having people that are in totally different time zones so team meetings and things like that started becoming more challenging. And I know that you have a shit ton of experience both building remote teams but also advising some of the more like “famous” companies for being remote. So, I want to learn from you. I want to hear some of your thoughts on this.


Well, first, let’s talk about your businesses and are they remote or not and how and some of your core things that you’ve observed and like how to build the great remote team, when you should or when you shouldn’t.


Hiten Shah:  Since 2003, I’ve probably employed at some point over now 4 companies 100 people remote or semi-remote. So, our consulting company was mostly remote but we did have an office for some folks. CrazyEgg, the first SAAS business was always remote, never has changed, anywhere from 5 to 10 people depending on when we were working on it. And then we have a lot of other stuff with contractors and a lot of outsourcing and insourcing and Americans, stuff like that too. And then KISSmetrics got up to about 70 people at one point and it was at least half remote if not more. And then latest company is about 8 to 9 people and it’s a little bit less and it’s remote.


What I like to say now is like I don’t wish remote upon anybody. I mean it’s been, what, like 13 years of just remote and I think—the biggest thing is I think culture is much harder, right? And you have to develop it digitally, right? Like you can’t walk in an office and understand how everyone feels right away, right? That’s so priceless because you can do that every day if you have an office. And so I think those aspects of it make it a little tough. I also was constantly inspired early on like 2003, 2004, 2005 even 2006 onward—up to probably 2006, 2007 by 37signals, now Basecamp because they were always a remote culture.


And then more recently I’m an adviser to Automattic that makes and then also Buffer amongst others that are also remote, but those are the two that everyone would instantly say, “Hey, they’re remote,” right? They do retreats. They do meet-ups. They do all sorts of things like that just to make sure that people get face time, right? And our companies, we’re actually—KISSmetrics we started doing a bunch of that one to hit a certain number of people, but we’ve managed to keep the other remote teams very small in terms of the full-time team members internally and that’s been my hack, which is just keep the teams really small internally and we don’t even do retreats or anything, although I think we’re going to do one. But anyway—yeah.


Steli Efti:  Okay. So, you said “I don’t wish remote up on anybody because culture is difficult or much more challenging” because you don’t have—you don’t have natural face-to-face time or an easy way to read the pulse of the team kind of as someone walk into the room, right? There’s no room—


Hiten Shah:  You don’t get those early indicators in the same way. You just don’t get them. You basically don’t get them. So you have to—I believe to have a healthy remote team. You have to find your work around that, right? I think Buffer has a lot of public stuff about the things they’ve done. Automattic has a very digital culture so there’s a lot of things happen internally on internal WordPress instances called P2s. They’ve shared about all these too.


And so I think you’re doing a lot of—a culture gets set in a different way and when culture set digitally like it’s different, right? Like I remember, you know, scouring the BBS when I was a kid. These are bulletin board systems like the old school IRC, even pre-IRC. You’d have to dial up and then you talk but like you are essentially building culture without ever having to meet somebody in person and it was all over like the messages they sent and stuff like that. So I think I’m used to it, right? But it’s really hard like some of the team members on our team for like a year or two or three never met in person. Didn’t even do too much video. This was in the time when video was not popular, so you just be on the phone, right?


Now, with Hangouts and all that, it gets a little easier because you can see someone’s face and reaction, right? When you say something, and I say a lot of messed up sometimes especially internally, just to see what people think. But like—yeah, so I would say it’s super challenging. I have to admit it’s super challenging from someone who’s done it too much, I would say, and watching all these other companies do it as well. The amount of process and rigor, it requires I think at least a couple levels faster.


So, for example, I’ll be tactical here. If you have—think about 4 people remote, 4 or 5, once you start getting past 3. You start needing to document stuff, like in a way that—like if I was in an office, probably like 15 or 20 pushing it and you still would need the same type of document because we’re just talking. Things are just happening all around you, not that that’s healthy at that scale not to have it, but I’m talking about like roadmaps, process, specs like all the way to sales collateral and processes around sales documented in just a way that isn’t usually likely any other way because otherwise how someone else can ramp up. They can’t sit next to someone else and ramp up. It’s just a different problem.


Steli Efti:  Yeah. So that’s interesting because it rings true and makes a lot of sense. The funny thing that I’m observing being reflective of the kind of transition we are making is that we are still relying on some hacks kind of along the way where if we hire you even if you’re remote, we’ll have you travel here onboard the first 2 weeks in person. We do 2 large retreats and 2 small ones a year. There’s a lot of like face time. We have a Monday and a Friday meeting which are both 30 minutes, fairly quick. They’re all always on Skype with video and we record them and upload them in Dropbox. So, we do have—especially the amount of face time we’re creating although people are remote is kind of a nice cop out, a nice way of like avoiding some of the challenges.


Hiten Shah:  I don’t think you’re avoiding them. I think you’re—I don’t even think you’re preventing them. I think it’s the way you onboard people onto your team and your team happens to be remote.


Steli Efti:  Yeah.


Hiten Shah:  Right? I don’t know if I would—here’s the weird thing. By what you’re saying, I’m not sure if I do it any differently than you, right? You are solving problems. I don’t think you’re hacking at it, right?


Steli Efti:  Okay. Okay. Because I’m always—I’m like somewhat critical asking myself, “are we avoiding to do the long-term thing that it needs to be a healthy remote team by doing some of the short-term things of bringing people together to just make our lives easier?”


Hiten Shah:  Are they in productive meetings? Are these things when the team is here, do they enjoy it?


Steli Efti:  Yes.


Hiten Shah:  Like is the feedback good?


Steli Efti:  Yes.


Hiten Shah:  Like, you know, when you on board someone in the first 2 weeks like is it better for the company that way?


Steli Efti:  Yes.


Hiten Shah:  I know I’m asking really basic questions but like to me it’s like I’m looking at a world where I—I probably have the weirdest company at CrazyEgg. It’s 11 years old, lots of customers, no sales team, 8 team members and—it’s my co-founder. Sorry for the call. Anyways—I wanted to talk about what I’m talking about right now anyways. 8 people and we probably have another support of 20, easy, right? Like around—well, not easy but around 20 amongst dev shops, design and all these other resources and like we don’t—our onboarding is like “Here you go. Here’s the keys. Just watch out for some of the doors that are a little stuck. You know, it’s cool. You can open it up, but I don’t know what’s going to pop out.” That’s how we on board. But we’ve only on boarded 8 people. We haven’t onboarded that many. We onboarded 3 recently and like, yeah, there’s a lot of weird stuff.


But like what I noticed is that—and this applies to an office culture and other cultures, so—I was talking to a friend and I’ve done this since. It was pretty funny but like she was basically saying that she randomly just went to some team member at a company and said, “Why are you, you know, watching that World of Warcraft video right there?” And this is like a younger team member, right? And he basically said, “This is what they did at my last company. Everyone did that.” Understand? And since then, I’ve started doing this and just asking like if I see something interesting about somebody working, I just ask them why, right? And just try to understand.


And one thing that I find fascinating I’ve watched this is like especially recently is like the behavior in the company gets mimicked and I don’t—I think—and the reason I’m bringing this up is I think that applies to remote teams too. So if they come here and watch how everyone works remotely in a setting that’s sort of, you know, more structured and they’re onboarded into the company like that, they might understand the norms. They might even understand you better and any of the other parts of the business depending on where their responsibilities are.


And, you know, I’ve debated this recently. I’m like, you know, if it’s a remote team and they actually at this point—I know this might sound a little weird, but at this point, they don’t know me or my co-founder, right? Or even someone on the team and we got to get them to know us, otherwise—and that’s really hard remote. So your hack might not be a hack; it might be necessary to keep the culture.


Steli Efti:  It’s interesting. We might talk in the future episode about like onboarding new people into your company because that’s kind of such a big topic. But one thing we’ve done this retreat for the very first time and it kind of—it blew my mind and I thought, “That’s something we should have always done in one way or another,” is that we had a meeting with a bunch of new people and we also brought in the people that were kind of newer even if they have been with the company for 3, 4, 5 months or so and I basically both gave them a history lesson on the business, but also I gave them like an introduction to every single person that works at this company from like why they joined and how to what makes them who they are into ways I found to work productively with them and their quirks.


And by the end of it, like 8 people were just like—there were so many stories that I told where people were like “Oh, that makes sense. That guy is this way.” Or where people were like, “Well, I have this chance with this person.” And I was like, “Okay, here’s how you deal with him,’ and everybody was like, “Oh my God, I’m so glad I heard that as well because that kind of explains everything.”


Hiten Shah:  [0:13:06][Indiscernible] so good. I really like that.


Steli Efti:  So I was like, “Okay, well—” like that inspired me to think that as we move forward, we’re going to make this in a bit more scalable way where there’s like a “Here’s who I am for every team member, why I joined and here’s the ways to work with me and the ways to understand me better.” My co-founder when he walks into the office, he doesn’t say “hello.” When he leaves, he doesn’t say “goodbye.” We had an intern 2 years ago that interpreted that as “this guy is hating me and thinks I’m not—I’m so unimportant as an intern. I’m not worthy of a hello.” And was really angry until I realized that that was going on and kind of explained it to him.


So there’s all these quirks and interesting things and if new people come on board, it takes them so much time to understand who’s who and how to deal with people that—


Hiten Shah:  That’s really good. It’s like a cheat sheet.


Steli Efti:  Exactly, a cheat sheet for your—


Hiten Shah:  The people.


Steli Efti:  –team members and for the people in the company, right? So—but then, you know, one thing that I’m struggling with is, you know, we are using chat a lot. We’ve been using chat from day 1 a lot. Even if everybody is in the office, we might communicate predominantly in chat. But we’re not doing—like all the fun, crazy culture, we’re having a great time, that was predominantly in person and chat is predominantly like work discussions. And as I’m thinking of some people that are not around like always more people not being around, I’m thinking how do you replicate some of the fun personal stuff in kind of chat and meetings and things like that.


And as you said, there’s companies—there’s a lot of blog posts about this, a lot of new startups that write about it and there’s companies that have a distinct culture where there’s maybe little of that and they’re like, “We want people that like to work and be alone and like to predominantly just talk and chat with people.” So that’s how we hire and that’s how we build our culture.


But, do you think—so people can go out and research a lot about like how to build remote teams but let me ask you this just because I’m curious. There’s companies that say remote is the future and remote is where kind of work is going. There’s people that— companies that tried remote and then they write big blog posts on like this isn’t working and it’s horrible. You’ve done a bunch of companies. You seem both a somebody that has a lot of experience but maybe also because of that is slightly critical or cynical on it. How do you think about kind of the—as a business owner thinking long-term about remote. Do you think that’s going to be a trend that’s going to be more and more prevalent or do you think it’s just a fluke or do you think it depends and it will always depend?


Hiten Shah:  Yeah. A couple things and then we’ll get into that. You might need to remind me. One, let me give you the data problem or data—sorry, data solution to your introducing people to people in the company. We started doing— a gentleman from Intuit worked with us at KISSmetrics and he introduced something called personal—PII. I think it was PII. Yeah. Basically, it’s a personality test that basically is designed for work, so it’ll tell you how to work with somebody and from a personality basis. So we had everyone start taking it at KISSmetrics once they joined, right? And it gave us a lot more clarity even folks I’ve worked with again, it gave me even more clarity on how to help them be successful in the new company. So that’s like a more—not factual but like baseline between one person and another across the company. So I would actually suggest stuff like that.


And the second thing I was going to say—actually, we can get to your question about the future. I think that’s a great question. I mean there’s only one trend and the trend is that like people want more flexibility. Life, work. I mean you just look at the trend in life right now, right? Like there’s even like things like nomadic, the nomadism and I don’t what they—you know. I met a few people that are, you know, really into that. And it’s just the idea that you carry whatever you got on you like your backpack, your duffel bag, that’s it, whatever, and you roll wherever you want and you find a place to stay and there’s a lot of versions of it, right? Have you even heard certain areas like where there’s a lot of nomadic people just hanging out and rolling through, right? Like there’s like 5 or 6 areas across the world like that.


And so I think the trend is definitely towards more flexible work. Let’s not even try to—we’ll define that, but like flexible work is definitely the clear picture, right? Just like you said, some people want to travel. They don’t want to be stuck in one place. Well, what’s happening? Like we just want more variety all of a sudden and more importantly, it’s easier to travel than ever. I think it’s hard for people to imagine it was harder than it is today, right? Even airline tickets are commoditized and they’re super cheap. You can go on a train. It’s super cheat. Like things are actually cheaper in those ways and we’re just getting more—


As we’re getting more digitally connected, it’s also becoming cheaper to physically travel, right? Which adds another layer to it. And the connectedness makes it so that you actually are connected with people across the world and then maybe you want to go see them in person, right? Even if it’s like friends that you haven’t seen in a long time or your friends go move somewhere. And then you want to go travel. So I think there’s all these trends that show that people do not want to sit in an office all day, you know. It doesn’t a lot of people yet, right? But there’s at least a double digit percentage I bet of the workforce that if you really dug in and try to figure out, you know, why they might not be as productive as they are is because they’re actually stuck in office and they’re not the type of people that are most effective being stuck in an office. Whatever that means, right? Some of those folks are doing field sales and traveling on planes all the time, but what about the people that aren’t in sales and can’t have a job like that. They have to stay at a desk. I think that’s the trend.


The other thing is they say like I think it’s by 2020, 40% of the workforce will be freelancers, something ridiculous like that. I might be misquoting it but I’m pretty sure I’m right. I’ve been looking at some of those things. So, it’s inevitable. We were early yet, you know, my companies but I think there were a lot of precursors to that too and now you’re—I think you’re going to see more hybrid teams for sure, you know, where like they might have an office but then there’s a lot of other work, even if you look at like the rise of contractors.


Contractors can be remote. Contractors are more commonly remote than, you know, in-house. But I think it’s going to change slowly in terms of change, but I think what you’re going to see is proliferation and new companies coming in that are more remote like ours.


Steli Efti:  So, what do you think of—we don’t have to touch on this too much but it just popped in my mind. A company like Yahoo! and Marissa Mayer when she famously said there’s no more basically remote workers. Either you come into the office or you don’t have the job anymore. There was a lot of criticism especially from the 37 single guys, right? They jumped on that obviously because they were launching also the remote book. But also they truly believe and there’s a lot of criticism. There’s a lot of back and forth. Do you think—so, I don’t even know if I want to ask you that question because I would assume you believe it depends on the company folk. If a company doesn’t want to do remote, that’s totally fine. Hiten has got a really charming, really sexy smile at me and he’s like “Yes, you got it, what you said.” Okay, so let’s talk about something else.


Hiten Shah:  Maybe she could have been right with that. Maybe it didn’t matter. It looks like it didn’t matter. She was going to have a horrible time trying to make that company work anyways, right? So, I can’t open it on that.


Steli Efti:  All right. So, let’s maybe wrap up with just a few tactical things because you’ve seen so much and these things will not and don’t have to work for everybody. But for people that think about remote, what are some of the things you’ve seen that seems successful for companies or people that try to work remotely? Tactics, ideas, philosophies, whatever.


Hiten Shah:  I think the one word I have for part of this is like rituals. So like it just reminds me that, you know, one of my friends joined Netflix and he said they made him do a skit with the cohort of people that joined, right? And that was their onboarding. That’s their ritual. If you think about it, it makes a lot of sense for Netflix, right? We sell content, make some content here and make it entertaining and fun and they did it. This was a serious thing and it was like a thing they present to the whole company and stuff like that in front of the whole company and all that, and they dress up everything, right? That was impressive, right?


So I’d say that if you’re remote, there’s rituals whether you see them or not. Then the other—and so like remote like one thing we did is at one point at KISSmetrics and then I think they still do it is there was a happy hour every Thursday that was virtual on a Google Hangout, people drink beers together, right? That was cool. Really cool. That was on the engineering team. So that’s a ritual, right? So like find your rituals like that that are not just only work-related, right? Like even the skit thing is, you know, pretty close to work-related, right? But not. The happy hour was just like hanging out because there’s no other time or whatever.


So I think that’s really important and had been really an interesting thing that I’ve noticed. And then the other thing I would say is like—you just have to work harder at making sure you understand how everyone is doing in the company, right? And whether it’s one-on-ones that are virtual or, you know, I’ve done weird stuff like the other person is walking and I’m walking because we both like to walk but we’re not in the same place. It’s kind of interesting, right?


So I think there’s a bunch of stuff like that that I’ve used, but at the end of the day, like it’s a reality that even if you’re an office culture, you’re going to have work that’s remote whether you understand that or not. Even if it’s like some software you’re hiring and their teams are remote. Well, you know, that impacts you to some extent possibly, right? Hopefully in a positive way like you can get support anytime, right? Because there’s advantages to remote. So, yeah, I think those are the couple things that I think about. I don’t know. You’re still trying to get people to work together well regardless of whether it’s remote or not and I think it’s easier than ever with all the digital stuff.


So, yeah, I really don’t wish it upon anybody because I think much easier to understand people and keep a team, you know, very healthy in person. There’s a lot of bad things about that too like if you hire somebody and their own personal things that they’re bringing to the table and to the company are kind of off or bad or not aligned with the culture and say it more PC. I think that can really proliferate really fast in an office culture and that’s way more compartmentalized in a remote culture. Something to think about.


So then you can have—I think in one way you’re like—you can have more easier diversity of you if you value that inside of a remote culture than an office culture because people can be very different and work together still. Much easier.


Steli Efti:  I love it. That was definitely more than one tip.


Hiten Shah:  Sorry.


Steli Efti:  No. No, no. I’m not going to—I’m just going to relax and rely on that and go you got more than one tip from Hiten so I’m going to skip my tips today. Actually, I want to hear from our audience because as you can tell this is something that’s kind of very current for us and something I think about. So, as we post this episode in the Facebook group, if you’re not part of the Facebook group yet, join us. It’s for Facebook. I want to hear who has a remote company, who’s trying to build one, who’s working remotely for people, who’s read something that was really inspiring, anything and everything as a discussion would be super-interesting. I want to definitely learn more about that. And, yeah, that’s it from us. We’ll hear you very soon.


Hiten Shah:  See yah.


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