Coronavirus is Accelerating Interest in Remote Work Startups - Here are the Categories and Companies to Watch.
Coronavirus is Accelerating Interest in Remote Work Startups - Here are the Categories and Companies to Watch.
If I was writing this article six months ago, I would begin by trying to convince you that the transition to remote work is “coming sooner than you think.” In light of the Coronavirus pandemic, this is completely unnecessary. Knowledge workers around the world are coming to grips with the joys and struggles of remote work.
By now, most of us know that working remotely is not as simple as signing up for a Zoom account. It requires a fundamentally different approach to collaborating with teammates, closing deals with clients, and providing employees with backend services.
While most of us are just catching up to this reality, some entrepreneurs have long anticipated the remote revolution and have been innovating solutions for it. They have made the almost instantaneous switchover to remote work possible. A silver lining of this whole mess is that businesses are beginning to view remote work not as convenience or novelty, but as a source of resilience and adaptability in chaotic times.
My goals here are threefold. First, I want to define the categories of technologies that make remote work possible. Second, I’ll call attention to innovative companies in each of these categories. Third, I’ll invite you to join me for Distributed Valley’s Remote Startup Expo, our second annual remote summit on remote work, where you can meet some of these innovators and join a community aiming to remake the future of work.
Horizontal Collaboration
Let’s begin with Horizontal Collaboration, the best-known category of remote work innovations. These technologies facilitate communication, teamwork, and workflows between teammates, departments, and organizations. Most teams, whether they work remotely or within the same four walls, use some horizontal collaboration tools like email, instant messengers, and cloud-based file sharing. In a true remote work setting, these base technologies are insufficient.
One major question has shaped this category: are remote workers more or less effective than their in-office peers? The jury is still out. In academic literature, there is evidence that they are more engaged, focused, and efficient. There is also evidence that they are distracted, lonely, and less collaborative. No conclusive answer has been reached because these studies cannot take into account every job function, work culture, home office, or remote work technology stack.
We could quibble over the studies sometime, but many of us intuitively know that there is a heightened energy when people are working in the same room together. In that setting, people experience synchronous communication: real-time, verbal exchanges. Video conferencing platforms like Zoom provide that same experience remotely, but there’s a difference: it’s very unusual to hook someone into an impromptu Zoom conversation. Normally, that requires planning.
With asynchronous communication, information is produced at one moment and consumed at a later time. That’s how email and Slack work. A recipient of the message chooses when (or if) to respond. It’s slow, but it gives participants freedom to engage on their own terms.
Both types of communication are valuable. Brainstorming, design, and problem-solving happen more fluidly during synchronous communication. Asynchronous communication, used appropriately, allows people to focus on their task at hand and communicate once they’re available. It’s also better for transmitting highly detailed, specific information, like business metrics.
Traveling merchants and salespeople confronted the challenges of horizontal communication long before the computing age. Now, software engineers, customer support staff, consultants, and freelancers are likely to work remotely most, if not all, of the time. And even if they do work on a Silicon Valley campus, their teammates may be located on different floors or in separate buildings, which for all intents and purposes is hardly different than if they were located in multiple countries.
On the synchronous side of things, there are a handful of companies trying to recreate that spur of the moment team collaboration that happens in physical offices. Companies like Tandem, Around, Jamm, and Pragli, enable an always-on video presence, so that teammates can virtually “tap you on the shoulder” to brainstorm or share an idea. Companies like Presence do this but focus on a voice-first solution. In some cases, these technologies display what coworkers are working on or what kind of mood they’re in.
On the asynchronous side, there are companies like Loom and Standups.io that allow users to record videos of themselves and/or their screens to share updates with teammates. According to a study by 3M, 90% of information transmitted to the brain is visual, and visuals are processed 60,000X faster in the brain than text. Thus, these companies aim to replace email updates with a faster and more easily digestible medium. For teams that prefer asynchronous voice messages, there is YAC, the voice messaging tool for remote teams (brilliantly, YAC stands for Yelling Across Cubicles). For those focused on text-based check-ins and aligning action items, there’s Humble Dot and Range.co.
For people who love making their point on a whiteboard, there’s Mural and Miro. Messenger options include Quill.chat and Threads, which seek to provide more structure and context around communication and knowledge sharing than conventional chat apps. There are even startups like Fireflies.ai and Grain that allow teams to transcribe virtual meetings, after which users can search the text and comment on important follow-up items.
Most of these horizontal collaboration technologies focus on internal teams. What about companies that collaborate with one another? One of the most common ways is through conferences. There are a handful of companies that are helping to take conferences online, such as Hopin and Run the World. Remo is taking this to the next level by also facilitating virtual networking sessions and ”happy hours,” where participants can interact in a way that resembles a real-life networking session. Last October, I ran Distributed Valley’s first annual Remote Summit on Remote Work in partnership with Remo (video highlights here), and the experience was unlike any run-of-mill webinar I’ve ever experienced.
To date, horizontal collaboration tools have garnered the most understanding and awareness because they closely resemble popular tools like Slack, G Suite, and Microsoft Teams. The difference is that these new tools are designed from the ground up for remote and decentralized teams, whereas the big-name options are made for digital communication in general.
Vertical Collaboration
Whereas horizontal tools seek to address the widest possible market, some users require more specialized collaboration solutions. Vertical collaboration tools facilitate communication and information sharing for one specific industry, audience, or use case.
The most popular industry for vertical tools is design. Companies like Invision, Sketch, Figma, and Marvelapp help design professionals produce, edit, and communicate about their work in real time. This vertical has garnered the most attention and funding from venture investors thus far, but other industries are catching up quickly.
In the healthcare industry, Pando is helping doctors, nurses, and administrators communicate and collaborate virtually while being compliant with industry regulations. Until Pando, Whatsapp was the most common workaround. In the media space, Arc Studio is providing collaboration for screenwriters, and SnackThis allows motion designers to collaborate in real time.
For those professionals that use and analyze data, there’s Graphy, a data collaboration platform. For team members putting together a pitch, there’s pitch.com.
Vertical collaboration tools have smaller addressable markets than horizontal systems. However, their focused abilities and features can make them more valuable and competitive than horizontal systems that try to be the solution for everyone. This category will likely expand into every industry and profession for decades to come.
Physical Infrastructure
Although we have all of these collaboration tools at our disposal, many of us have awakened to the reality that working from home isn’t all it’s cracked up to be. It’s easy to get distracted and difficult to get motivated, especially if you have a stocked fridge or espresso maker in sight (or kids who are quarantined at home). Some love it, but there is a large percentage of workers that like to have a remote workspace outside the corporate office. Physical infrastructure includes all the technologies that help remote workers find, book, or set up remote work spaces for short-term or long-term needs.
Buffer’s 2019 State of Remote report finds that 84% of remote workers primarily work from home, probably because the alternatives are flawed, expensive, or scarce.
Traditionally, remote work locations have been limited to coffee shops and coworking spaces. Coffee shops are usually loud and have few power outlets. Sometimes, guests have to pack up their computers and bring them to the restroom, otherwise their gear might be gone when they return. Coworking spaces like WeWork have increased in popularity over the years, but they can be expensive for both individuals and for companies because they require long-term contracts and significant overhead.
Several asset-light businesses, like Upflex and Croissant, have helped workers get on-demand access to the excess capacity of coworking spaces at cheaper rates. There’s also Breather, which helps teams access unused conference rooms in office buildings.
Codi solves the physical infrastructure problem by leveraging residential real estate, which is more plentiful than commercial real estate and usually closer to home. Hosts rent out their dining and living rooms to coworkers looking for a quiet, comfortable working environment in their neighborhood. It has been described as “Airbnb for coworking.” *
For jet-setters, there are companies providing coworking and coliving opportunities around the globe. Anyplace and Outsite offer beautiful destinations in dozens of countries for aspiring digital nomads who want to incorporate travel and tourism into their remote working lifestyle.
For companies that want to set up a satellite office, startups like Beyond HQ and Terminal help them get up and running in lower-cost locations like Nebraska, Wisconsin, or Canada. For companies that want to upgrade home offices for remote workers, First Base helps them lease everything an employee might need, from stand-up desks and ergonomic chairs to tech stacks and software licenses. Despite these tragic economic times, First Base’s customer waitlist is growing astronomically. While other industries struggle, many remote work startups are experiencing supercharged growth.
Backoffice
To quote Laurel Farrer, the CEO of Distribute Consulting, and one of the world’s leading experts on remote work:
If I die from this #coronavirus chaos, please let my tombstone read: "Skills are the key to #remotework success, not tools.”
Skills and processes are necessary to enable a remote work culture. Oftentimes, though, the backend processes (or as I call it, the "plumbing”) are just as important as the frontend tools. Backoffice technologies cover the HR, finance, and compliance solutions required to hire, retain, and pay a remote team.
Human Resources has a big role to play in ensuring that remote employees are onboarded, trained, paid, provided benefits, and engaged in the corporate culture. Not an easy job. Luckily, many startups are stepping up to make it easier for them.
Five years ago, a startup with an engineering team abroad was a red flag for VCs. Now it’s practically a requirement, but paying those remote workers isn’t as easy as it sounds. Employers must ensure they are complying with all international labor regulations and tax laws. When hiring employees in dozens of countries, this can get complicated quickly. Papaya Global, Deel, Pilot.co, Remote.com, and RemoteTeam.com are stepping up to help corporations navigate these difficult payroll and benefits management processes. There’s a race to see who will become the “Gusto for remote work." **
Beyond payroll, many companies want to help employers with health insurance (SafetyWing), employee engagement (Elin.ai), and professional perks and benefits (Mistro).
It’s not all about serving giant companies, which are only now catching on to remote work. Some startups are focused on setting up the back-office for independent freelancers (the OGs of remote work). LifeWork helps freelancers set up scheduled payment plans with their clients and holds payment in escrow to ensure freelancers get paid when they’ve completed work. Xolo helps single-person companies set up their banking, tax, and compliance systems in a fraction of the time it would take to do it on their own. Lance provides a financial navigation platform designed to help freelancers with money management. Contra is developing trust-based communities for the new independent workforce, offering access to freelance opportunities, contract services, and payment options.
Some might underestimate Backoffice and deem it the least sexy category of remote work technology; however, a lack of investment in this area can make remote workers feel like they’re not real employees. Don’t sleep on this category.
Conclusion & Call to Action
Some people say that this Coronavirus will speed up the transition to remote work by up to five years. Others say that it will spur a backlash against remote work and set it back until who knows when. I won’t speculate myself, but I will say that this unfortunate circumstance has forced many of us to experiment with remote work and recognize its shortcomings. The benefits are many but as long as the challenges persist, there will be entrepreneurs striving to solve them. And those are the founders I want to back.
I view the remote work trend as a grand macro arc that will continue for the next several decades. Those of us who envision a future where people can work wherever and whenever they want, skip the commute, spend more time with their families, and increase their productivity - we need to stick together. My goal is to support this effort and help build a community of leaders who share this vision.
To this end, I’m publicly announcing Distributed Valley’s Remote Startup Expo to be held on April 23rd at 10AM PST, sponsored by Cota Capital, Remo, Distribute Consulting, and Remote First Capital. The purpose of the event is to feature the entrepreneurs innovating in this space. We want to listen to and learn from them directly about what they’re building and why.
In addition to founders, venture investors, and HR professionals, we welcome anyone else who is passionate or curious about the remote work space. Come to listen but also to participate and share your views. This is not a webinar. You will be expected to turn your video and audio on, and there will be ample time for networking via Remo. If you’re interested in joining us, sign up here.
Disclaimers & Notes:
I may not know or include every company innovating in this space. If you know of others, please email me at joe@cotacapital.com.
I may not summarize or categorize these companies perfectly. This is just my interpretation based on what I know and what is publicly available about these companies.
I’ve decided to focus on remote-focused, venture-backed startups in this piece instead of incumbents. I realize Slack, Microsoft, Google, Zoom, WeWork, and others all have overlapping solutions. I’m focused on the next generation technologies being developed by early-stage founders.
* For full transparency, I am an angel investor in Codi.
** For full transparency, Cota Capital is an investor in Gusto.