Business life will never return to the way it was before COVID. 2020 kicked off a radical social experiment where we were collectively forced to work from home, and it changed the world for good. 26% of Americans now work from home and 16% of US companies are already fully remote.
Many of us learned we could be highly productive as remote workers, and in many cases, more productive. However, for others it was hard going and isolating. I think we can agree that for school children distance learning was tough. Speaking for my own family, this was the case.
For certain industries, including venture capital, remote work was a welcome change. Not that long ago, Storm had three conference rooms booked from morning until night with first meetings. Like most Bay Area firms, we meet with hundreds of companies a year, but are only able to invest in a few. In retrospect, committing such a large chunk of our productive hours to meetings that didn’t result in an investment did not make much sense. I doubt those meetings ultimately generated more interest. And while I thoroughly enjoy meeting with founders, it was a real slog at times and, admittedly, quite inefficient.
What we’ve found makes sense for Storm is to transition those first meetings online. This allows us to pre-qualify prospective companies before committing to in-person logistics. More importantly, this is great news for founders since in-person matching with a venture firm can sometimes be long odds and incredibly time consuming. When we decide that a particular company could fit our investment strategy, we value and enjoy taking those second and third meetings face-to-face. Often this is a good opportunity to invite founders to a high-value activity or event, like a shared meal. At that stage of getting to know a company, the human connection is incredibly important and trust begins to build. That is a priority for us.
Flexibility Over Cost Savings
Remote work offers a different kind of flexibility. Since Storm conducts a lot of business in Europe, I’m often up very early in the morning to take calls. Before COVID, I’d arrive at the office early and usually end up staying the whole day. Now, I can attend those early calls from home and reassess before continuing my day. I take advantage of pockets of time that seemingly didn’t exist before to go to the gym, walk the dog, or support my kids if anything comes up at school.
Many of our portfolio companies were remote long before COVID. Interestingly, we used to consider that a risk factor when we’d invest. That is not the case anymore. Today, roughly a third of our portfolio has a remote-first culture — perhaps even half.
Some fascinating breakthroughs have emerged under the pressure to get remote work right. While many people think the primary draw of a remote-first culture is cost reduction, I’d argue that this is not the case. A work-from-home solution shouldn’t be viewed as a simple exercise in saving on office expenses.
Culture and Trust
Many companies with brick-and-mortar offices have opted to transition to a hybrid working model. The rise of remote work is a hard trend not to follow. However, the main stumbling block with a remote-first, or even hybrid culture, is that, unlike with in-person environments, the culture doesn’t naturally develop.
In an office environment, a strong company identity – whether good or bad – will organically emerge from everyone being present in one physical location. Operating together, people feel like they’re part of something. They are more readily influenced by and contributors to that group culture.
However, building a cohesive culture for a remote-first team is challenging. It requires one to be very purposeful when it comes to creating opportunities that foster camaraderie and belonging within the company. If the team is not all in the office, the company should resolve to meet once or twice a year to ignite that in-person human connection. For larger organizations, that will probably involve spending on more frequent team travel. It’s not cheap but it’s worth it to create a harmonious and more connected team.
The rise of remote work has reinforced the importance of clear written communication, at least for us at Storm. Getting details down in writing is an essential habit to develop within a distributed team. By doing this, you can drive a process where you’re able to clarify critical details in writing, eliminate confusion, and allow your team to know exactly where they stand.
Remote work demands a culture of trust; It’s imperative to build that strong foundation for distributed teams to be successful. Working remotely, staff are left to their own devices, and it can be hard to know if people are actually working. It’s difficult to measure productive output. We can set goals and try to understand what our output is supposed to be, but ultimately there must be trust between the parties involved that the work is going to get done. Trust is an emergent phenomenon in remote and in-person offices alike, but its presence will have an impact on the success of the company no matter what.
AT&T predicts that the hybrid work model will surge to 81% by 2024. Companies will be challenged and tested to create the optimal conditions for work, whether remote, hybrid, or in-person. We can expect to see a lot more innovation in this space.
Context is Everything
We’ve seen blowback when companies like Goldman Sachs, JP Morgan, Apple, and Twitter insist that employees return to the office. For Tesla CEO Elon Musk, remote work trends just aren’t convincing due to the company’s strong hardware and R&D orientation. That’s understandable.
It’s not a one-size-fits-all scenario. For Storm, in-person meetings remain important, but are not necessary all the time. Remote work surely has its conveniences and we enjoy taking advantage of them. However, we’ve tried a fully remote approach and it’s simply not as effective. After a while, we missed that off-the-cuff interaction that happens in an office.
Storm used to have office space on Sand Hill Road, which was a beautiful setting but ultimately was isolated and didn’t make it easy to have a casual coffee or lunch. As Storm’s own experiment with remote work has run its course, we’re on the hunt for office space again. We have our eyes on a few locations and are still figuring out what exactly we need given the new way we work. For us, remote work was a rich learning experience – but not a revolution. We are excited to be together again.
What about your own experiences with remote work? I’d love to hear your main takeaways over the past few years. Was it a revolution after all?
About Ryan Floyd: Ryan is a founding Managing Director of Storm Ventures, where he invests in and works with early-stage enterprise SaaS startups.