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There’s an unspoken rule virtually every startup in the last two decades seems to have followed: If you start hiring more people, lease or build bigger offices.
Just ask commercial real estate brokers, for whom tech growth since 2010 has created an unquenchable demand for more and more space. Once tech companies grow even larger, like Google or Facebook, they build huge headquarters and then create large satellite offices around the world, almost always in the downtown business districts of already-successful global cities.
And once they become giants like Amazon — whose more than 500,000 employees make it nearly 7 times bigger than Google and 23 times the size of Facebook — they don’t just create bigger offices. They also build a second huge headquarters. Amazon HQ2, I’m talking about you.
Of course, the guiding principle driving all of this is that having a bunch of employees clustered in the same space is a great thing and creates tighter bonds between coworkers.
But it doesn’t.
And this kind of workplace clustering, to the extent big tech companies have taken it, has made our large coastal cities less and less livable while ignoring the talent that exists everywhere else, particularly in the country’s Heartland.
It’s time to discard this increasingly out-of-date workplace model and find new ways of building teams empowered by new technology.
Ironically, one person to look to is Jeff Bezos. Yes, he’s the CEO of Amazon, a company that has created the most publicized (and hyped) search for a giant office — one big enough to house 50,000 workers — of probably any company in the history of business in North America.
But take a look at how Bezos actually works himself.
The fact is that when Bezos goes to work, he likes small teams. How small? He follows what he calls the Two Pizza Rule, which posits that no team meeting should be larger than the number of people it would take to consume two pizzas.
It’s reported that Bezos’ rule doesn’t mandate pizza actually be served at meetings but that he does refuse to call or even attending meetings if they go over that size.
Smaller teams, it turns out, can be more effective for everyone involved, not just the CEO.
It’s a conclusion that finds support from another unlikely source: a British evolutionary psychologist named Robin Dunbar.
Studying a variety of communities, from hunter gatherers and 18th-century English villages to fundamentalist Christians and the modern military, Dunbar found that 150 is the maximum number of people with whom any one person can maintain a sense of real community.
The so-called Dunbar Number represents the upper limit of a network with which you can “have a personalized relationship, one that is reciprocal — I’d be willing to help you out, and I know you’d help me,” Dunbar himself wrote.
Steven Sinofsky, a board member of Andreessen Horowitz and former president of the Windows division of Microsoft, knows a thing or two about big offices. In a Medium post on the benefits of distributed versus centralized offices, Sinofsky similarly points out that there’s a limit to how many coworkers you’ll actually feel close to — even if you are all in the same space.
“[It’s] worth noting that at 20–30–50 people it is likely you are spanning floors in a building or might have space ‘across the street’ and for all practical purposes you are ‘simulating’ remote work anyway,” Sinofsky wrote. “One of the biggest surprises most startups experience is that as soon as the office expands to a second floor, even in the same building, it starts to feel ‘different’ and like there are two ‘locations’.”
If your headquarters becomes so crowded that it starts to feel like multiple offices, why not hire employees from more locations and tap into the talent the rest of the world has to offer?
Fortunately, entrepreneurs are increasingly seeing the wisdom of this idea and are intentionally scaling their companies around smaller teams. These companies are less tied to geography and the often ego-driven hype of building ever-bigger offices.
Meet Doist, a software company whose path toward becoming “remote-first” is instructive. Doist was launched six years ago in Santiago, and company CEO Amir Salihefendic quickly realized that neither he nor his cofounder knew enough people in Chile to fill all the positions. So he looked for someone to help answer support tickets online.
Salihefendic found his first remote hire in Poland. Soon enough, he found another remote employee to build the Todoist web app — a developer who lived in Belarus.
Ironically, it became clear that even when the company did hire someone locally — the head of marketing, who lived 15 minutes away from their one office — she preferred working from home.
That was only the beginning of Doist’s remote-first hiring approach. In 2012, when the company started out, it had three people working from two countries; by May of last year, the startup employed 51 people working in “20 countries and counting.” Today, it has 60 people from 27 countries.
And that’s just the way the company likes it. Doist strongly believes its products are better because they’re developed by people across different cultures and languages, which adds insight to the company’s own productivity tools.
Maintaining an effective workforce across the world isn’t without its challenges, Doist COO Allan Christensen admits, but the company has found several ways to ensure successful distributed teams. It hires self-motivated talent; uses collaborative SaaS tools, such as Adobe Creative Suite, Dropbox Paper, and ones Doist has created (Todoist and Twist); and it makes up whatever benefits it loses from not having a physical headquarters by holding an annual retreat that brings every team member together so they can get to know each other in person.
Doist isn’t the only one working this way. Web publisher Automattic, whose 520+ employees had already been working mostly remotely, closed its San Francisco office last year, asking its 30 San Francisco-based employees to work from home instead. Social media company Buffer closed its offices in 2015. And last year, Zapier told its Bay Area employees they could leave the area if they wanted to — and that the company would help them do it.
Turns out, remote work of all forms has grown in recent years. Beyond full-time telecommuters, consider that 57.3 million Americans freelanced in 2016 and that freelance workforce growth outpaced overall U.S. workforce growth by 3 times since 2014, according to the report Freelancing in America 2017. (The study was co-commissioned by Freelancers Union and Upwork, where I currently work as CEO.)
Mynd, an Oakland, California-based property management tech company and Upwork customer, followed a path similar to Doist’s. Mynd’s team is about 30 percent full-time remote, and even those based in the office work at least one day a week from home.
Founded in 2016, the company reports revenues have increased 30 percent month-to-month since it launched. Today, it’s hiring remote talent for every dimension of the company — from software development to IT and networking, writing, administrative support, customer service, and marketing.
What’s more, the company’s approach to talent means it’s reaching workers typically ignored by Big Tech. People everywhere — some from overseas places like Russia, Ukraine, and the Philippines, but also many in the Heartland and southern states, including Illinois, Michigan, Texas, and Georgia — work for a company technically based in the East Bay.
To be fair, going remote-only won’t work for every company out there, including some software companies. That said, I strongly believe Amazon’s coming HQ2 is an unnecessary, misguided move — for both Amazon and the recipient city. For many companies, including those straddling hardware and software like Bezos’s retail giant, there’s more room now than ever before to pioneer a middle ground. That means employees who need to work together in person can be organized into teams falling somewhere between the Two-Pizzas rule and Dunbar’s 150 rule.
So in the case of Amazon, forget one new HQ with 50,000 people. The company could have 100 centers with 500 people or better yet 500 centers with 100 people and put offices across the country, reaching pockets around the U.S.
Either way, no matter what Amazon does, the writing is on the wall. The days of big offices and densely clustered workers are fading, and work is finally coming to workers. Hopefully, the pizzas will follow.
Stephane Kasriel is the chief executive of Upwork, a global freelancing website, where he built and led a distributed team of more than 300 engineers located around the world as SVP of engineering before becoming CEO. He holds an MBA from INSEAD, an MSc in computer science from Stanford, and a BS from École Polytechnique in France.
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