(CNN Business) Starting any business is full of challenges. Starting one in the middle of a global pandemic is on another level. That reality didn’t stop serial entrepreneur Rami Essaid from starting Finmark last June, but it did force him to take a different approach.
Essaid, who said he “believed very strongly” in the value of being together in an office at his two previous companies, immediately knew it was not an option for his new financial modeling startup.
“That changed my mindset from day one. It allowed me to hire people that I wouldn’t necessarily have hired before because they’re, you know, in Utah or somewhere we’d never have an office,” he said. Finmark is now a remote-only company, with 33 employees in the United States, England, and Pakistan.
The pandemic has disrupted the number of US companies it operates, particularly large tech companies that were among the first to close their physical offices and send employees home. But it’s also transforming younger, smaller companies that hope to eventually become tech giants in their own right, changing the way they grow and innovate with potential implications for the future of the industry as a whole.
Iconic tech companies generally follow a family origin story: A couple of co-founders meet in their bedroom or parent’s garage, start working on an idea, hire employees as it gains traction, move into a space. office space that becomes larger and more profitable, ultimately expanding to multiple offices in multiple cities, countries, and continents.
But thanks to the pandemic, that process is starting to look quite different. Multiple polls earlier this year, including recent ones from employee research firm TINYPulse and Gallup, indicate that tech workers are more inclined than those in other industries to avoid a return to the office.
For startups like Finmark, the decision to move away from the office can create new opportunities, including reducing real estate costs and expanding the pool of locations from which to hire. But depending on how far you go on the spectrum from part-time to fully remote work, having a distributed workforce can add to the challenges of building a product and creating a company culture. Gone are the all-night coding sessions and team hackathons about pizza and beer, and in their place, more Zoom calls and Slack groups.
“The earlier in the company, the more creative you have to be, the more problem solving you are doing,” said Alexander Kvamme, CEO of employee management software startup Pathlight. “And putting people in the same room to solve problems, there is no substitute.”
More than that, startups face unique problems as the pandemic drags on. While Google (GOOGL), Facebook (FB), Uber (UBER), and Apple (AAPL) have invested heavily in building sprawling campuses, they can also afford to switch between remote and in-person work as needed. . Some startups, on the other hand, may have to decide whether or not to allocate their comparatively smaller budgets to an expensive office lease.
“For startups, they have an uphill battle because they are competing against large organizations that are able to offer more flexible policies, they have more of that power to say … get in the office or stay home,” said Elora Voyles, scientist people in TINYPulse.
But some startup founders say they are in fact at an advantage now, as large companies play with (and in some cases backtrack on) various office return policies. Unlike their larger peers, which carry physical spaces and decades of history, these startups can come up with new policies and a workplace culture from scratch.
Creating a new office culture without an office
Rema Matevosyan co-founded Near Space Labs, an aerial imaging company, in 2017, but it wasn’t until last year that the company began rolling out its core product – the specially equipped weather balloons it uses to capture images.
As with some other tech companies, building and shipping physical hardware during the pandemic added an obstacle that software companies did not have to deal with.
“Before the pandemic, the assumption was that you could have engineers, develop the hardware, fly on site and provide training and support,” he said. “That’s just one of the examples where we really had to start doing everything remotely. … Today, we essentially have a standardized solution that ships in a box with like a few training videos.”
The company doubled in size to 17 employees (including six part-time workers) during the pandemic. Although the company has two locations, in New York and Barcelona, it has moved to a flexible work arrangement “where people can work essentially from anywhere” and entering the office remains optional.
But he acknowledges that establishing a company culture from scratch in a remote work environment can be challenging. Matevosyan has instituted certain video conferencing rituals to try and bring the company together, including a daily meeting where each team talks about their work, specific meetings for what she calls “water cooler pranks”, and periodic updates between her and each other. employee.
“It has to be more intentional, especially when teams are spread out,” she said. “Those are the things that worry me a bit and that I am actively working on.”
Essaid has taken a slightly different approach to making sure everyone in the company is on an equal footing. He opted for no physical office at all due to what he considered the challenges of having only a portion of the employees in the office.
“I started to realize that there is no way to create democracy in all employees, to make everyone the same, unless everyone is away or everyone is in an office,” he said.
Commissioning differently
It’s not just about companies and their founders. Some startup investors are also rethinking their long-standing views on the right way to build new products.
“The product build, the sales, these are all very collaborative endeavors,” said Siri Srinivas, director of venture capital firm Draper Associates. “If there was a strange startup that told us, for example, that they were distributed, that was a little concerning. We would recommend that they work in one place or that they spend that money and bring the team together as much as possible.”
The pandemic changed all that, in large part because Draper – an investor in both Finmark and Near Space Labs – has had to rethink his own office-centric culture.
“We were forced to work without being in the office together, we were forced to do a lot of things without being in the office,” Srinivas said. “We realized … we really can work efficiently and do 85% of our work while we are remotely.”
However, not everyone is completely convinced.
Like most of the other founders, Kvamme, the CEO of Pathlight, took his company completely remote during the pandemic, even as it grew from 12 to 30 employees. He said that going remote was a big change, but that it was necessary “to support our growth, but also to make sure that we are hiring great people.”
Pathlight is now looking for a return to the office, especially for the 50% of its Silicon Valley workforce. Kvamme said remote work will continue to be an option for those who want it. But he worries that for startups like his, remote working has its limitations, and having “one foot in every world” is not sustainable in the long term.
“I think there is a very good chance that we will be three days a week in the office this year, four days a week in the office next year and we will be back to normal in two years,” he said.
