Product Management Confabulation
What Product Managers are talking about.
Remote workforces have come into their own in the last several years, with companies ever more willing to tap into talent wherever it happens to be, and a vast array of low-friction tools being built to make those distributed teams work just as effectively as if they were all in the same physical space. Today, Remote, which has built a platform to hire distributed employees, and then make sure they are remunerated easily and legally — in other words, tech that helps companies with some of the trickiest aspects of managing a remote workforce — is announcing a big round of funding as it emerges as one of the bigger players to watch in the world of HR addressing global and distributed workforces.
The startup has raised $300 million, funding that it will be using to continue building out the tools that it provides to its customers and to expand its technology and services to more geographies. SoftBank Vision Fund 2 is leading the round, with previous investors Accel, Sequoia, Index Ventures, Two Sigma Ventures, General Catalyst, 9Yards, Adams Street and Base Growth also participating. This Series C values Remote at over $3 billion.
The size of the funding round and its timing — it’s been less than a year since Remote’s Series B, a $150 million round at a $1 billion+ valuation in July 2021 — underscores a couple of things. One is the focus distributed work has had particularly in the last couple years — a trend that was already in pace before Covid-19 but definitely accelerated as a result of it; two is how Remote itself has expanded in that time.
The company — based out of San Francisco but with a totally remote workforce itself, with its two co-founders based in Europe — says that the number of employees processed through the Remote platform grew by 900% in the last year, with revenues up 13x in the same period (we have asked and the company does not disclose actual revenues or other specific numbers). That pace does not appear to be slowing down, even as offices gradually reopen and many parts of the world look to return to pre-Covid routines.
At the other end of the tech world spectrum, there’s been evidence that some of the funding exuberance of the last couple of years around pandemic-spurred theses (like rising demand in categories like remote work and delivery) is getting more bearish. But that trend too appears to have passed over Remote, which raised this round in the last quarter.
“The power dynamics have completely changed between employers and employees,” Remote CEO Job van der Voort said in an interview, with people more empowered he noted to work from wherever they want, and companies needing to provide remote working facilities to secure the talent at the price they want. “We only see this accelerating. If there were a slow down in that trend, maybe we couldn’t have raised this much.”
Remote’s customers now range from small startups to large enterprises and includes GitLab, DoorDash, Hello Fresh, Loom and Paystack, with companies sometimes processing payments and more for as few as four employees through Remote, while others are processing for thousands. Services it offers today include payroll, benefits, taxes and local compliance (including Employer of Record services) for contractors and full-time employees.
As for its footprint, currently, Remote says it provides services to “over 60” countries, but Job van der Voort, the CEO who co-founded Remote with Marcelo Lebre (COO and CTO), said that the aim to expand that to 100 this year, ultimately serving 140 countries.
The challenge that Remote is addressing is longstanding in the world of work, one that has been exacerbated with globalization. Hiring and then managing the administration of contractor or employed hires — when they are not based out of a company’s main office and country, and potentially not in any office at all but at home — can be a thorny business, crossing a number of different challenges in areas like international banking, local labor regulations and human resources management. Typically, companies have addressed this by working with local employment companies who have handled various processes manually for them, which led to an expensive and fragmented approach that ultimately held companies back from wanting to embark on the process at all; or not following policies that would be more beneficial for the company and its workers in the long run.
Van der Voort, who had previously been VP of product at GitLab, where he was a supporter of remote work but also someone who understood those challenges first-hand: he helped to build that organization’s remote team to 450 employees from just five. Lebre, meanwhile, had been the VP of engineering for Unbabel, which builds tools for companies to communicate with a global customer base, where he too worked with a distributed team and also saw the opportunity of addressing this area in a better way.
There are a number of tech startups in the market today that are tackling different aspects of remote employment, including the likes of Papaya Global, Oyster, Deel, HackerRank, and Turing. Remote’s unique selling point has been to build its stack from the ground up, building and providing Employer of Record services, fully operational legal entities, payroll and benefits, visa and immigration support and employee relocation, all provided in the cloud so that an employer can manage teams in different places from a single dashboard.
The company’s pace of growth in terms of its footprint speaks not just to the complexities and challenges of building out services like these, but also that integrated approach that Remote has taken in doing so.
“The reality is that it’s very difficult to open a new country and sometimes the reasons for a delay are out of our control,” Van der Voort said.
The integrated approach speaks to the tech chops of the company and how it will scale. Notably, Papaya Global made an acquisition of Azimo the other week specifically to bring money transfer services into its own fold — a feature that Van der Voort noted Remote already had in its stack.
“The way people work has permanently changed and the shift to remote and hybrid work has enabled companies to hire from anywhere in the world, but this can be an intensive, costly and risky process”, said Brett Rochkind, managing partner at SoftBank Investment Advisers, in a statement. “Remote has built a full-stack, global platform that creates a fast, seamless experience to hire and onboard new employees regardless of where they are. We are excited to partner with Job, Marcelo and the team to support their mission to open up the vast potential of the world for every person, business and country.”
Last week, Apple announced it wanted employees to return to the Cupertino campus starting in September for three days a week. Some employees who had grown used to the flexibility of working at home pushed back.
Prior to the pandemic with few exceptions, most employees went into an office most days, but when COVID hit in March 2020 and workers were forced home, employers quickly learned that their staff could be productive even when they weren’t sitting in the same building. Now it seems it will be difficult to put the genie back in the bottle.
Finding that right balance between fully remote and however a given company defines hybrid — like Apple some days in the office and some days at home — is never going to be easy and there will never be a one size fits all answer. In fact, it’s probably going to be fluid moving forward.
Just to show how different companies are approaching this, we asked five other large technology companies besides Apple to see how they were treating the return to the office, and each was looking at some form of hybrid work:
The larger tech companies are offering most employees some level of flexibility to decide when to come into the office, but how do startups look at work as we move toward post-pandemic? Most startups I speak to don’t foresee an office-centric approach with many taking a remote-first approach. Andreessen Horowitz recently surveyed 226 startups in its portfolio and found that two-thirds of portfolio companies are looking at a similar hybrid approach as their larger counterparts. In fact, 87 were thinking about 1-2 days a week with 64 looking at no office at all, only gathering for company offsites. By contrast just 18 said that they wouldn’t allow any work from home.
Dion Hinchcliffe, an analyst at Constellation Research, who has been studying distributed work for many years says that tech companies will be more likely to embrace flexible work models now that they have seen how it works during the pandemic.
“Most tech companies will maintain some degree of flexibility when returning to the office, especially since it is popular with many of their workers. Plus the worries about productivity loss have turned out to be largely unfounded,” he said. But he emphasized that this would not be true for every company.
“Certain companies, especially ones that believe they have a lot of IP to protect or operate in other sensitive types of work will be more reluctant to allow work to continue from home,” he said. This in spite of the fact that many of these companies have been doing just that for the last 15 months. Going hybrid as Apple has only muddles that argument further.
“It definitely includes Apple, which has long been well known for discouraging work from home. Their new policy of three days a week in-office probably makes them feel a bit more secure, but does not really accomplish it,” Hinchcliffe said.
Of course companies can set policies, but it doesn’t mean they won’t run into employee objections. Apple certainly learned that. Workers appear to want to be the ones choosing where to work, not their employers, and it could very well be a competitive advantage to offer work from home options, especially in a tight labor market where the power appears to be shifting to employees.
It should be interesting to see where this all goes, and how much power employees have to push their companies to their more flexible working ideal. For now, most companies will have a far larger degree of flexibility than existed pre-pandemic, but certainly not everyone wants people working from home all the time forever, and companies will need to decide what works best for them and their employees.
In 1998, Sun Microsystems piloted its “Open Work” program, letting roughly half of their workforce work flexibly from wherever they wanted. The project required new hardware, software and telecommunications solutions, and took about 24 months to implement.
Results were very positive, with a reduction in costs and the company’s carbon footprint. Despite this outcome, long-term remote work never really caught on more broadly. In fact, the 2010s were focused on going the other direction, as open offices, on-site perks and co-working spaces sprung up around the idea that in-person community is an essential component of innovation.
In 2020, companies of all sizes, in all corners of the world, were forced to shift to remote work with the onset of COVID-19. While some companies were better positioned than others — whether it be due to a previously distributed workforce, a reliance on cloud apps and services, or already-established flexible work policies — the adjustment to a fully remote workforce has been challenging for everyone. The truth is that even the largest companies have had to rely on the heroics of employees making sacrifices and persevering through numerous challenges to get through this time.
Technology like high-quality video conferencing and the cloud have been integral in making remote work possible. But we don’t yet have a complete substitute for in-person work because we continue to lack tooling in one critical area: passive collaboration. While active collaboration (which is the lion’s share) can happen over virtual meetings and emails, we haven’t fully solved for enabling the types of serendipitous conversations and chance connections that often power our biggest innovations and serve as the cornerstone of passive collaboration.
Those outside of the tech industry may think that software engineers only need a computer and a secure internet connection to do their work. But the stereotype of the lone engineer coding away in solitude has long been shattered. The best engineering work isn’t done in isolation, but in collaboration, as teams discuss, wrangle and brainstorm through problems. Video conference platforms and chat applications help us collaborate actively, and tools like Microsoft Visual Studio Code and Google Docs allow for dedicated asynchronous collaboration, too.
But what we currently lack are the moments of spontaneous engagement that energize us and invite new ideas that otherwise wouldn’t have been part of the conversation. The long-term impact of not having access to this has not yet been measured, but it’s my belief that it will have a negative effect on innovation because passive collaboration plays such a critical role in fostering creativity.
The best way to think about the differences between passive and active collaboration is to look at a whiteboard. Someone recently asked me, “What is it with people in tech and whiteboards? Why are they such a big deal?” Whiteboards are simple and “low-tech,” yet have become quintessential in our industry. That’s because they represent a source of multi-modal collaboration for engineers. Let’s think back to before COVID. How many times have you walked by (or been a part of) a scrum meeting of engineers huddled around a whiteboard?
Have you ever stopped by because you overheard a snippet of a conversation and wanted to learn more or share your perspective? Or maybe something on a whiteboard caught your eye and caused you to start a conversation with another colleague, leading to a breakthrough. These are all moments of passive collaboration, which whiteboards so excellently enable (in addition to being a tool for real-time, active collaboration). They’re low-friction ways to invite new ideas and perspectives to the conversation that otherwise wouldn’t have been considered.
While whiteboards are one mode of facilitating passive collaboration, they aren’t the only option. Serendipitous meetings in the break room, overhearing a conversation from the next cubicle over, or spotting someone across the room who’s free for a quick gut-check are also examples of passive collaboration. These interactions are a critical piece of how we work together and the hardest to recreate in a world of remote work. Just as silos in the development process are detrimental to software quality, so too is a lack of passive collaboration.
We need tools that will help us peek over at what other people are working on without the pressure of a dedicated meeting time or update email. The free and open exchange of ideas is a birthplace for innovation, but we haven’t yet figured out how to create a good virtual space for this.
The future of work is one in which teams are more distributed than ever before, meaning we need new tools for passive collaboration not just for this year, but for the future, too. Our own internal survey results tell us that while some employees prefer the option to be fully remote once the pandemic is behind us, the majority want a more flexible solution in the future.
Crucially, the answer is not to create more meetings or email threads, but instead to reimagine virtual spaces that can function like the classic whiteboard and other serendipitous modes of collaboration. As we all still look for ways to solve this challenge, we at LinkedIn have been thinking about how to encourage cross-team conversations and open Q&As to share resources, as a start.
For decades, the tech industry has paved the way for innovations in employee experience, creating spaces and benefits that reduced friction in collaboration and productivity. Now, as we look ahead to a hybrid work world, we must find new ways to continue supporting employee productivity and creativity. It’s only when we’re able to fully realize passive collaboration virtually that we’ll have unlocked the full potential of remote and hybrid work situations.
The growth of remote working and managing workforces that are distributed well beyond the confines of a centralized physical office — or even a single country — have put a spotlight on the human resources technology that organizations use to help manage those people. Today, one of the HR startups that’s been seeing a surge of growth is announcing a round of funding to double down on its business.
Oyster, a startup and platform that helps companies through the process of hiring, onboarding and then providing contractors and full-time employees in the area of “knowledge work” with HR services like payroll, benefits and salary management, has closed a Series A round of $20 million.
The company is already working in 100 countries, and CEO and Tony Jamous (who co-founded the company with Jack Mardack) said in an interview that the plan is to expand that list of markets, and also bring in new services, particularly to address the opportunity in emerging markets to hire more people.
Currently, Oyster does not cover candidate sourcing or any of the interviewing and evaluation process: those could be areas where it might build its own tech or partner to provide them as part of its one-stop shop. It has dabbled in virtual job fairs, as a pointer to one potential product that it might explore.
“There 1.5 billion knowledge workers coming into the workforce in next 10 years, mostly from emerging economies, while in developed economies there are some 90 million jobs unfilled,” Jamous said. “There are super powers you can gain from being globally distributed, but it poses a major challenge around HR and payroll.”
Emergence Capital, the B2B VC that has backed the likes of Zoom, Salesforce, Bill.com and our former sister site Crunchbase, is leading the funding. The Slack Fund (Slack’s strategic investment vehicle), and London firm Connect Ventures (which has previously backed the company at seed stage) are also participating. The investment will accelerate Oyster’s rapid growth, and support its mission of enabling people to work from anywhere.
Oyster’s valuation is not being disclosed. The startup has raised about $24 million to date.
One of the great ironies of the global health pandemic is that while our worlds have become much smaller — travel and even local activities have been drastically curtailed and many of us spend day in, day out at home — the employment opportunity and scope of how organizations are expected to operate has become significantly bigger.
Public health-enforced remote working has led to companies de-coupling workers from offices, and that has opened the door to seeking out and working with the best talent, regardless of location.
This predicament may have become more acute in the last year, but it’s been one that has been gradually coming into focus for years, helped by trends in cloud computing and globalization. Jamous said that the idea for Oyster came to him was something that he’s been thinking about for years, but became more apparent when he was still at his previous startup, Nexmo — the cloud communications provider that was acquired by Vonage for $230 million in in 2016.
At Nexmo we wanted to be a great local employer. We were headquartered in two countries but wanted to have people everywhere,” he said. “We spent millions building employment infrastructure to do that, becoming knowledgable about local laws in France, Korea and more countries.” He realized quickly that this was a highly inefficient way to work. “We weren’t ready for the complexity and diversity of issues that would come up.”
After he moved on from Nexmo and did some angel investing (he backs other distributed work juggernauts like Hopin, among others), he decided that he would try to tackle the workforce challenge as the focus of his next venture.
That was in mid-2019, pre-pandemic. It turned out that the timing was spot on, with every organization looking in the next year at ways to address their own distributed workforce challenges.
The emerging market focus, meanwhile, also has a direct link to Jamous himself: he left his home country of Lebanon to study in France when he was 17, and has essentially lived abroad since then. But as with many people who move into developed from emerging markets, he knew that the base of technical talent in his home country was something that was worth tapping and nurturing to help residents and the countries themselves improve their lots in life; and he thought he could use tech to help there, too.
Related to that wider social mission, Oyster has a pending application to become a B-Corporation.
Jamous is not the only one that has founded an HR company based on his personal experience: Turing’s founders have cited their own backgrounds growing up in India and working with people remotely from there as part of their own impetus for building Turing; and Remote’s founder hails from Europe but built Gitlab (where he had been head of product) based on a similar premise of tapping into the talent he knew existed all around the world.
And indeed, Oyster is not alone in tackling this opportunity. The list of HR startups looking to be the ADP’s of the world of distributed work include Deel, Remote, Hibob, Papaya Global, Personio, Factorial, Lattice, Turing and Rippling. And these are just some of the HR startups that have raised money in the last year; there are many, many more.
The attraction of Oyster seems to come in the simplicity of how the services are provided — you have options for contractors, and full-timers, and full, larger staff deployments in other countries. You have options to add on benefits for employees if you choose. And you have some tools to work out how hires fit into your bigger budgets, and also to guide you on remuneration in each local market. Pricing starts at $29 per person, per month for contractors, to $399 for working with full employees, to other packages for larger deployments.
Oyster works with local partners to provide some aspects of these services, but it has built the technology to make the process seamless for the customer. As with other services, it essentially handles the employment and payroll as a local provider on behalf of its customers, but can do so under contract terms that reconcile both a company’s own policies and those of the local jurisdictions (which can differ widely between each other in areas like vacation time, redundancy terms, maternity leave and more).
“It has a few well funded competitors, but that’s usually a good signal,” said Jason Green, the Emergence partner who led on its investment. “But you want to bet on the horse that will lead the race, and that comes down to execution. Here, we are betting on a team that’s done it before, an entrepreneur experienced in building a company and selling it. Tony’s made money and knows how to build a business. But more than that, he’s mission driven and that will matter in the space, and to employees.”
A growing number of tech companies is telling their employees they can work from anywhere, even after this pandemic has passed. A looming question, however, is how.
Last week, Facebook CEO Mark Zuckerberg told employees that Facebook will adjust the pay of those who choose to move out of the Bay Area and work in different, presumably less expensive, geographies. But others figuring out their own remote-work strategies might also look to Automattic, the now 15-year-old, heavily venture-backed company that is parent to the publishing platform WordPress; the platform for discovering long-form writing content, Longreads; the comment-filtering service Akismet; and, as of last year, the former social media giant Tumblr; among other businesses.
Automattic, which now employs more than 1,000 employees, has been nearly fully distributed from its founding days and became entirely so in 2017, when the company shut its San Francisco office and told employees they could work from wherever they choose. At the time, founder and CEO Matt Mullenweg told Quartz that most employees were already opting not to come into the coworking space it was providing, so it reasoned its money could be better spent elsewhere.
Because Automattic has always proudly shared its remote-work playbook — including giving employees a stipend to set up their home officesnand paying for travel — we couldn’t help but wonder how it pays its those employees and whether there might be lessons for companies now moving toward a more dispersed future, too. Here’s what we learned from Mullenweg, who answered our related questions via email over the weekend.
The biggest question, of course, is whether Automattic pays employees based on their geography and its related cost of living. In answering, Mullenweg didn’t give a blanket “yes” or “no, ” explaining that at Automattic, “[W]e aim to pay the same rates for the same roles, regardless of geography. Automattic currently has folks in over 75 countries. Sometimes this puts us above or below what may be the market rate for a role in a given area.”
He said it’s not so easy in practice. Among the biggest obstacles to keeping pay in sync is paying employees’ compensation in their local currency, which “can have wide swings, which creates imbalances,” said Mullenweg. Automattic also “generally only adjusts salaries up, so a positive currency swing may bring someone above a global norm for a year or two.”
He thinks that as more companies move in the direction of encouraging — or, at least, allowing — employees to work from anywhere, it may be difficult for them to “immediately switch to normalize salaries.” He says when Automattic started down its path, it “took several years to narrow the ranges people were in,” and that, even today, it’s never “perfectly even — more a direction you’re always heading in.”
We were also interested in Mullenweg’s thoughts about those companies that do adopt localized compensation. Specifically — based on what he has learned over time about employment regulations around the world — we wondered if tech companies that pay people different amounts for the same work might face consequences, legal or otherwise.
“Long term,” said Mullenweg, “I think market forces and the mobility of talent will force employers to stop discriminating on the basis of geography for geographically agnostic roles.” He also said that while he isn’t aware of location or geography currently being a protected class for pay discrimination suits — at least in the U.S. — he thinks that for “moral and competitive reasons, companies will move toward globally fair compensation over time with roles that can be done from anywhere.”
Indeed, Mullenweg suggested that companies have been paying based on local market norms in the past probably can’t get away with that much longer, even while it’s “difficult to fix that immediately” and may be something that needs to be adjusted “over several years, using more frequent or higher raises for the employees that are below your global market norm.” (Conversely, he added, “If you have people significantly above what the norm is across your company, I don’t think it’s fair to ask them to take a salary reduction because it’s a mistake the company made, but it may be unsustainable to bring everyone to that higher level.”)
In fact, the broader takeaway for companies that are moving toward this new future is largely to recognize that it takes time, along with an understanding of a whole lot of factors that don’t come into play with geographically homogenous groups of employees. Think “currency controls, geo-political instability, protectionism, security concerns, and even the impact of someone making 5 to 10 times what their friends and family may make in salary,” said Mullenweg.
It’s all worth it, suggested Mullenweg. Like Zuckerberg — who last week emphasized to employees that a dispersed workforce could “potentially spread more economic opportunity around the country more and potentially around the world more,” and, in turn, “hopefully a more sustainable social and political climate if opportunity can be shared more broadly” — Mullenweg seems to view more remote work as a kind of equalizing force.
As he told us over the weekend, “You get a lot of richness, access to a global talent pool, and I think a positive impact on the world by spreading economic opportunity more widely than it has been in the past.”