Most startups work remote, this is why

Hey,

I'm Sergio Pereira, and this is the Remote Work newsletter 👋

Last week I replied to the common question "Is remote work just a fad?". It's certainly is not a fad! Remote work is growing on the back of these strong cohort effects.

Today I'll tell you why most startups and SMBs decide to nurture a remote culture since day 1.

These are 5 main reasons why a remote culture is key competitive advantage for startups:

1/ Founders are already remote themselves

These days, many startup Founders are people who have worked remote for a few years. As they create their own company culture from scratch, they decide to double down on remote work.

As a Fractional CTO, I've actually been meeting more and more startup founding teams where Founders live in different countries from each other. Deciding for an office culture would come a very high personal cost for them, as they'd need to move to a common city just to start their new company.

2/ Hire skilled employees at affordable rates

In the early days, budget is very tight. If you want to build your startup MVP you'll likely be better off hiring a in a low cost of living (LCOL) country like India, Pakistan, Nigeria, Argentina, etc.

For the same cost of a senior software engineer in San Francisco or New York, you'll be able to hire a team of 3-5 senior software engineers in such countries. If managed properly, this small team can take your early stage startup a long way, and build the product you need to get to product-market-fit.

3/ Escape age-old regulatory constraints

Startups hate overhead costs that make their runway shorter and shorter. That's why an office-based culture at an early stage comes at a very high cost. It's way beyond the cost of the office space itself. When hiring locally, there are several regulatory requirements to respect, such as opening a local entity that can hire employees on a contract abiding by local labor laws, and several other compliance requirements.

Hiring internationally is usually done via contractor agreements or through agencies or employers-of-record. This detaches the startup from the labor laws and regulatory requirements of the countries where their employees live.

4/ Scalable talent pool and adaptive cost structure

Hiring all around the world means the ability to hire for any possible skill set a startup might require as it grows. A remote company will have hundreds of applicants for each open job position, and massively reduce the time to hire.

Hiring globally also means that a company can gauge their hiring budget, from hiring in LCOL locations to hiring in expensive metro cities. A company is not tied to either option, it can hire across geographies and even change the approach as it grows and budget increases.

5/ It's a new level of freedom for Founders

I an office culture, many meetings are in-person with people who live in that city. It involves commuting for meetings and traveling to cities where important people and events are located. Those constraints have historically tied startup Founders to expensive and hectic metro cities.

In a remote culture, this isn't the case anymore. Meetings are usually virtual via Zoom or Google Meet, and even industry events are increasingly remote. Also, having a team spread across the globe means all internal communications happen remotely too.

This means Founders can move to where they want, including places that lower their cost of living and extend their personal runway. I've recently met startup Founders who moved to such places in time zones that increase the overlap with their teams. That's smart!

In case you're launching your remote Startup and need help with your remote team, drop me a DM on Twitter with your questions. Mention this newsletter edition, and I promise I'll try to help you.

In case you're actively looking for a remote job, I'm launching soon my first ever cohort based course and private community, where I'll be breaking down my knowledge into modules, and will help a batch of remote job seekers find a remote job. The launch will be private, join the waitlist and stay tuned. In the meantime, check this list of 1000+ remote companies hiring right now, and apply to the ones that fit your skills.

Thanks for reading this newsletter until the end. You can read all past editions here. Make sure to share the link with your friends and colleagues so they can read it too.

See you next Friday,

Sergio Pereira,
Startup CTO & Remote Work Lover