Taking my startup completely remote has saved us over $250,000 this year. Here's how we were able to grow more quickly while keeping our culture strong.
- Tom Sagi is the CEO of Hourly, an insurtech startup that connects the dots between payroll and workers' compensation insurance.
- When the pandemic caused the company's move to a new office to be put on hold, Sagi was skeptical about how his company would run with a fully remote team.
- Seven months in, he says he now appreciates the increased flexibility and productivity that comes with remote work, as well as the decreased overhead costs on renting office space and increased access to remote talent.
- Although the transition was rocky at times, Sagi says his team has formed a special camaraderie while working from home that makes their work culture feel even more connected.
This year has delivered many surprises, and few of them good. However, for me, one of the biggest surprises was my company's sudden shift to a fully distributed team due to COVID-19 — and the realization that this dramatic change could accelerate my startup's success.
The remote work transition was a complete 180 from where we were just months before COVID-19 turned the world upside down. Back in January, I'd surveyed our two dozen employees about their ideal office, and everyone wanted not only an office but an inspiring place to work. Up until this point, we'd been calling a small office in Palo Alto home, and now we needed more space to grow.
We hired an architect and spent months designing a space to include open areas for collaboration, cozy nooks for independent work, and glass-walled conference rooms for meetings.
I saw this new office as the essential next phase for Hourly, the insurtech startup I cofounded in Palo Alto in 2018. We raised $7.2 million from investors, and our team had been growing at a rapid pace.
The new office would be the foundation of a healthy, vibrant work culture that helped us attract and keep the best talent.
Then COVID-19 happened.
In short order, our team became 100% remote. Fortunately, our business continued to expand as a large number of our customers were in construction and less affected by COVID-19. And as we settled into this new way of work, I discovered that a fully dispersed team offered distinct advantages that helped us grow much faster.
Like many CEOs, I was initially skeptical about an all-remote workforce.
How would we know if people were really working? Would working from home be a distraction for employees? And most importantly, how would we maintain our culture if we didn't see each other in person?
Several months into our remote work reality, these concerns have mostly fallen away. Sure, being remote raises some challenges, which I'll touch on in a moment. But the big takeaways have been all the benefits my company and team have experienced, including:
Increased productivity
I was surprised to learn that remote workers actually work approximately 10 hours more per month than their office-bound counterparts. They no longer have to deal with commutes or unplanned interruptions from coworkers or bosses. In fact, the team exceeded my expectations — meeting deadlines, taking on extra work as necessary, and never missing a beat.
Improved flexibility
Even as productivity increased, our team found ways to work more of their life into their days. As many have noted, remote work's real risk is more about employees getting burned out versus slacking off. I want employees to create a schedule that meets their work and family needs. How they do so is up to them. For instance, some of our employees want to spend time with their kids or workout during the day. Then, they get back to work in the evening. For managers, the key is linking employee performance to deliverables, instead of time spent at a desk during prescribed work hours. That said, there are some cases in which set hours make sense, such as for customer success and customer service teams.
Increased access to talent
Amid the pandemic, we made several hires, including a high-level executive with significant industry experience. If we'd required this executive to work in our Palo Alto office, which is an hour away from his home, I doubt he'd have taken the job.
Remote work has infinitely expanded our talent pool, allowing us to consider talent from around the country and world. What's more, it's made talent more affordable. Depending on the position, we can pay a competitive rate without being beholden to Bay Area salaries, which are often significantly higher than other geographic areas.
Lower overhead costs
Depending on the location of your startup, office space can be a substantial cost. That's especially the case for companies in the Bay Area, which pre-COVID-19 had one of the strongest markets for office real estate in the country.
While I was looking for office space, the inventory was mostly limited to spaces that were either super ugly, super expensive, or a combination of the two. I finalized our lease back in January and luckily incorporated an exit option with minimal penalty. At the time I thought that we might outgrow an office for 30 people faster than anticipated.
Little did I know that within two short months this exit clause would allow me to elegantly exit the lease for a very different reason. The shift to 100% remote saved us around $250,0000 a year, which we can now use to support employees working from home or even pay for coworking spaces.
Accelerated business opportunities
In a pre-COVID world, finalizing deals often meant coordinating in-person meetings with multiple executives around the country. Just finding a time that worked for everyone could push a deal out for weeks. And the time it took to travel to these meetings took away from the time we could spend on other deals. Now that we're remote and so many of our customers are too, finding time to connect via Zoom is much easier. We've been able to get the right people to the virtual table within days, no matter where they're located.
During the peak of COVID-19, we inked our most significant deal ever, which we plan on announcing the first quarter of 2021 — 100% via Zoom. My executive team and I presented to a large publicly-traded insurance conglomerate and in less than two weeks we had a signed deal. Pre-COVID-19, a deal like this would take months. Remote interactions allowed us to be extremely efficient, which led to an incredible outcome.
Keeping the culture
Even with the benefits, a fully distributed workforce still presents challenges. One of the biggest I've encountered is staying up-to-date with my team and ensuring they're communicating with me as often as possible. To remedy this, I've implemented regular one-on-one meetings and virtual office hours so that employees can ask me questions as they come up. This has helped me stay connected with my staff and fostered the casual conversations we enjoy having. We've also implemented monthly company updates. My cofounder and I use these to ensure everyone is on the same page and to detect issues before they become problems.
I've always loved seeing my team in person, watching them form bonds, sharing experiences, and even jokes. That camaraderie is part of what makes work fulfilling. Even though we can't be together (yet), we're still exploring creative ways to have fun and build our relationships. For instance, our team is doing a virtual cooking class together, and we have regular virtual gaming activities and happy hours.
I still have the blueprints for our "dream office," but more and more, they feel like a relic of the past. Our remote work shift may have been completely unplanned, but now we're strategically taking advantage of all the benefits that remote work offers.
Tom Sagi is the CEO of Hourly, an insurtech platform that seamlessly connects the dots between payroll and workers' compensation insurance.