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The Future of Work is Distributed, But Not Easy. One Company Shares Their Playbook.

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POST WRITTEN BY
Wade Foster
This article is more than 4 years old.

Zapier

I periodically hear VCs say that they’d never fund distributed startups. Sure, they’re typically fine with employees working remotely at the very early stages, but once the startups grow beyond a handful of employees, most VCs want those companies to pack up and move to one of a handful of tech hubs (usually to the Bay Area).

Those VCs are out of step with a simple truth: “Talent is equally distributed but opportunity is not,” as so well articulated by social entrepreneur Leila Janah. Talent deserves to be supported and unleashed, regardless of physical location. I spend a lot of time thinking about the jobs, workplaces and tools we’ll need to empower workers over the coming decades. In considering the Future of Work, the distribution of talent is one of the key recurring themes.

In the recent past, fully distributed workforces (companies whose employees all worked remotely without any corporate offices) were largely novelties confined to early stage startups and gig workers. However, today we’re seeing the undisputed rise of highly successful -- and highly valued -- companies like Zapier, Automattic, InvisionApp, and Auth0 (in which I’m an investor) that are hiring the most talented teams wherever they live and in so doing are managing to grow, scale and thrive with fully distributed workforces.

Zapier is particularly interesting to me because they took so little outside funding (only a $1.3 million seed investment from Y Combinator) that they were able to pave their own path without worrying about board members instructing them to stick to the standard startup playbook.

I recently sat down with Zapier co-founder and CEO Wade Foster to learn more about his decision to operate the company in a distributed fashion. More importantly, I wanted to know what tools and strategies they applied in order to make it work operationally and culturally as they’ve grown to hundreds of employees and tens of million in revenue. While operating in a distributed fashion is increasingly viable, it nonetheless remains very hard to get right. Most companies that try it still fail. I was eager to know how Zapier has been able to make this model work for them with such spectacular success.

KM: You founded Zapier in 2011. What was the history behind deciding to operate the company in a distributed fashion?

WF: Like most startups, Zapier began as a side project, with us working until 1 am every day after working full days at our primary (i.e. paid) jobs. Side projects don’t have offices, so by that fact alone, we started out distributed. We all came out to the Bay Area for Y Combinator in 2012. Once it was over, co-founder and CPO Mike Knoop moved back to Missouri. At that point, things were going well, and we realized we needed help. As first-time founders, we hadn’t hired before. Industry experts advised us to hire people we’d already worked with. Given the importance of early hires, bringing on people we knew to be strong and professionally compatible was a way to reduce risk. We didn’t know anyone in California, but we still followed the advice. Our first hire was in Chicago, then we hired two more people in Columbia, Missouri. Soon enough, we were shipping product, the company was growing, everything was working, and being distributed was in no way slowing us down. By the time we got to about a dozen employees, this was core to our identity. I'm an unabashed fan of distributed work. For some people having an office makes sense. For us, it didn’t.

KM: So you decided you’d hire the best people wherever they lived?

WF: Exactly. The Bay Area talent wars are tough for any company, but especially for early stage startups. And meanwhile, there are incredible people in non-tech hubs. Competing in the Bay Area at that early stage just wasn’t a worthy use of our time, especially since there were incredible people in other locations who had worked with us before and were eager to collaborate again. We had customers to serve and product to build; building a distributed team was the most effective way for us to get that work done.

KM: Did you get pushback from advisors, potential investors or other stakeholders when they found out you were running a fully distributed team?

WF: We were certainly met with skepticism. We heard whispers that, “No big company has ever been built that way.” But we have few investors, so we had the freedom to run independently and stick to our convictions. It’s been funny to see how much has changed in terms of perception. In Silicon Valley 2012, building a fully distributed company was very rare. In 2019, it’s becoming all the rage.

When you’re building a startup, it’s so easy to get caught up in “best practices.” Conventional wisdom is sometimes the right way, but not always. We carefully considered the risk and were willing to take it. We put strong management structures in place and adopted the tools and practices we needed to make it work.

KM: It’s amazing that you were able to open up this global talent pool, but working from home isn’t for everyone. When you recruit and hire, how do you know whether working remotely is going to work for an employee?

WF: Our retention rates have always been over 90%. People who join the company know that this is who we are. For many candidates, our distributed structure is part of the reason they’re excited to join. While some people just aren’t cut out to work this way, it’s not as common as you think. Working remotely suits most people incredibly well.

With candidates who are skeptical, we talk through the concerns around specific tasks and issues and explain our models for addressing them. I also make sure they know the few use cases where being distributed doesn’t work. The most common failure pattern is among people whose social interactions are predominantly work-driven -- those people who go to lots of happy hours and fill their weekends with co-workers, making them very addicted to the work. That’s obviously not our model.

One more common potential downside with remote work is that it reinforces your access to work. If you work from home, work becomes omnipresent. If you’re not intentional about establishing work boundaries, it can burn you out. It’s important to balance work by creating connections within your non-work community.

Many of our employees have families and therefore strong local connections. Personally, I love to work, but I also have personal priorities. I love that working in a distributed fashion allows me to optimize my schedule so that I don’t have to sacrifice my personal life and can spend quality time with my family in a meaningful way.

KM: Have you done anything to make sure those burnout situations don’t happen? And more broadly, how do you make sure distributed employees feel connected to each other, despite the physical separation?

WF: Obviously, we’ve put a lot of thought into this and have invested heavily to build a strong culture where employees feel connected, productive and engaged.

It starts with our onboarding process. People begin in cohorts every two weeks, so right off the bat they feel a sense of community and connection within the company. We also pair buddies using a bot called “Doughnut.” It matches employees (including founders) weekly with virtual coffee dates. The buddies jump on Zoom and have informal chats to share tips and best practices or just connect socially.

The first week on the job is also really important for setting the groundwork. Managers know not to expect any actual work during week one; the whole week is devoted to helping the employee get the 30,000-foot view, including not just the strategy but also an orientation to how the company operates. This allows the newcomer to adjust to the fact that this is probably different from most jobs they’ve ever had.

In terms of not working to the point of exhaustion, it’s really important that we as founders set a strong example. Our Slack channels are dead on the weekends, and we’re all very clear about being balanced in our personal and professional priorities.

KM: It’s just not talent that’s becoming more distributed. So are buyers. The best-in-class enterprise products are increasingly bought, not sold, and increasingly by employees, not large IT departments. These tools are helping companies like yours compete efficiently in a distributed fashion. Which tools do you use to keep communication strong and business practices agile?

WF: To facilitate our remote work, we rely heavily on Slack, and we have Slack channels for each city. We have a tool called Async, which we built ourselves, and we use Zoom all the time.

To streamline work getting done, we rely heavily on Google docs, Github, Figma, Airtable, and Coda, among others.

KM: Does working remotely impact how you staff and build out projects?

WF: This has been a learning process. We were very optimistic that a diversity of time zones would increase our impact. When we made our first European hire, things seemed to go so well, and then suddenly some things didn’t. We realized that there are certain functions where time zone diversity is super important and where the “follow the sun” approach is a very real strategic advantage. However, there are other teams, particularly on the product side, that benefit from time zone overlap, where collaboration is preferable to fully a-synch all the time. It’s not a universal truth, but we do generally think it’s better for people to be able to work together at least some of the time, even if it’s just a 10 percent overlap. That 10 percent may matter a lot.

KM: How do you handle brainstorming?

WF: Having some distance can help. If you want to propose an idea to a distributed team, you need to think about it, explain it in full sentences, and present it.  For example, let’s say you’re on a call and you’re riffing on a topic, saying that won’t work, and this won’t work. Our job is not to find the solution that is perfect; our job is to pick the best option among the imperfect. You can’t do it all on one call. Distance -- as well as clear individual ownership -- help with that decision-making process.

KM: Are there special roles you have created because you’re distributed?

WF: We use the decision-making mode DACI, which is similar to RACI, RAPID and DRIVE. It’s important to always know who owns, who consults, informs, and how to proceed to action.

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