It a Great Time to Start a Business -- In an Office
Costs are lower and opportunities greater. But you can't build a
culture WFH.
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Whether you're doing it by chance,
happenstance or choice, now seems like an interesting and attractive time to
start a new business. Many of the best tech businesses around today were
started in tough and lean times, rather than in the rosy and flush days of the
recent past. And, unless you're thinking about competing with the FAANG Five
(or Microsoft), the barriers to entry into thousands of different markets for
products and services have never been lower.
As for the prospects for success, that's
a different question. The answer there is very much dependent on what talents
and skills you have (or can hire) and what you're willing to commit in blood,
sweat and tears to the effort. But, make no mistake, it's never been
cheaper or easier to try. Infrastructure is inexpensive and readily available.
The cloud (AWS and Azure in particular) has made it possible to build your new
business almost "by the bit" - renting virtually everything and
bootstrapping your operation until it begins to scale.
Importantly, significant early stage
capital is almost irrelevant in this new world, where code and quickness are
king. The old VC gatekeepers who controlled the dollars you previously needed
to launch so many ventures, and their often foolish and insurmountable requirements
and obstacles, no longer matter in the early startup stages.
In fact, raising too much money too soon
at too modest a valuation can mortgage your own financial future and cap your
upside in very painful ways. Substantial war chests are certainly nice to have,
but the VC-skewed distribution waterfalls usually accompanying them - and which
most entrepreneurs neither pay attention to nor frankly understand - are an
expensive curse that keeps on taking for years to come. Distribution waterfalls
often come as a complete surprise to the management team when payday finally
arrives. So, in a sense, money's really no object at the outset.
As far as facilities and real estate go,
the WFH (working from home) story is also pretty attractive. While it's difficult
to see how Covid-19 virus did anyone any real favors - other than maybe helping
us get rid of the worst President in history - the pandemic certainly
accelerated the waves of digital transformation in major parts of our
lives. But it has legitimized and basically mandated levels of
remote workforces which, while never really super successful in past
experiments, are now absolutely an acceptable and long-term part of every
business's strategy and future. WFH is here to stay. Having a largely
virtual workforce and thereby eliminating the major fixed and relatively
expensive costs of maintaining sizable physical offices looks like and, in
fact, is a godsend to many established businesses.
But here's where things can get tricky:
Working from home simply doesn't work if you're a startup. It's a seductive
idea - and clearly a time and money saver. And also, the best and quickest way
to kill your new enterprise. Every startup's success ultimately depends in
large part on the entrepreneur's ability to attract and bring together diverse
and talented people and to weave them into an effective and viable unit bound
by a single compelling vision and a complementary culture which supports and
powers the vision. You just can't get close at a distance.
For a startup, as important as clever
code and quickness clearly are, nothing is more important than effective
interpersonal communication. And the culture of the company is the most
essential thing to communicate. We communicate culture through stories, through
confrontations and commentary, through rituals that help us translate and
transmit otherwise awkward or uncomfortable emotions, and through the
development of close individual relationships over time and through repeatedly
shared experiences. Every successful startup has its history, war stories, and
near-death experiences, which everyone is happy to share. These anecdotes bind
the business together.
The best startups develop a compelling
culture with a single, and most critical, component: a powerful and contagious
work ethic that infects (in a good way) not only the existing team, but every
newbie who enters the environment as well. Consistently and continuously communicating the company's culture is the most important
job of the founders and it's a non-stop and full-time job
especially in the first few years.
It's really all about authentic passion. Something
that's missing in boring, painful and sterile Zoom calls, where you lose every
drop of emotion and attachment in the process. Zoom fatigue is real and it's
not just a matter of tired eyes and sore butts. We all sense that there's no
real communication or connection between the participants, which is what is
draining all the interest and energy away. You simply can't phone it in, no
matter how good the technology. The best new companies make many things, but
the most important product is a palpable and enthusiastic excitement that
powers the team. That excitement, driven by tension, desire and fear, spurs
performance and innovation.
Anyone who's ever been there and built
an exciting business from scratch will tell you the same things: (1) there's an
electricity to a winning startup that you sense the minute you step in the
door. You can smell success; (2) there's a tension in the air that's driven by
physical proximity, which can't be replicated elsewhere and that's shared by
everyone in the company; and (3) there's an immediacy and serendipity enabled
by unplanned and unstructured collisions of people and thoughts that generates
the best ideas and solutions.
None of this energy and passion is
present or even possible to communicate in any kind of effective manner in a
multi-person, remote video conference. Zoom conferences simply suck all the
life, all the juice, and, most importantly, all the spontaneity and
give-and-take out of any call, conference, presentation, or webinar. There's no
cure now or on the horizon for this sense-dulling, painful and dehumanizing
technology because there's no way to replace, replicate or restore the
emotional resonance that face-to-face communication creates and sustains. To be
fair, it's not Zoom's fault. There's no substitute for being there and there
never will be.
But it will be your fault, as the
founder/CEO, if you're foolish enough to think that you can save money on an
office/team space and still get your messages through and build the company's
culture remotely or occasionally or with gig workers. It just doesn't work.
When you're starting a new venture, everyone in the place needs to be in
place. They're looking for immediate leadership and guidance, they
need to see the vision being built out, to learn the path forward, and to see
how you'll get them to the finish line. It's just not something you can
schedule a few times a week or structure in advance.
The opportunity, the technology, the
competition, and the customers' expectations and demands are all moving too
quickly these days to have serious latency in your ability to react and respond
in real-time. The world won't wait for Wednesday's call. And, by the
way, just because your coders and other techies have to commit their new code
on a regular basis, and have it peer reviewed, doesn't mean that they get to
operate in their own little vacuum either. Culture is a two-way street - output
without input and direction is an easy way to lose your way.
The early-stage risks to a new business by a
failed or piecemeal attempt to infuse and embed a concrete culture are
existential. It's great to have a clear view and an aspiration about your
culture, but these things don't get built by themselves. If you get the culture
wrong at the outset, you don't get a second chance. Culture isn't part of the
game - it is the whole game.
Work from home may be great for other folks,
but it won't work for you.