Every Friday, the Localogy analyst team (myself, Mike Boland, and Neal Polachek) hop on a zoom with Bill and just talk about what’s going on in the industry. It’s a great way to wrap up the week. And it helps us decide on the emphasis of our coverage on Localogy Insider for the coming week.
Last week, on a whim, we hit record during one of these gabfests. We decided to share the result with you today.
Our analyst team, guided and prodded by Bill, used Mark Andreessen’s recent comments on the impact of remote work as a starting point to riff on what we thought the immediate post-pandemic world would look like.
So one of Andreessen’s key points is that remote work has decoupled employment from geography. The implications of this make remote work in Andreessen’s view one of the biggest culture-shifting developments since, well, the Internet.
We covered a few subtopics under the broad category of how business life will be different after COVID. For example, will one-off business trips ever come back? Also, now that VCs are used to Zoom board meetings, why do companies need to locate in the Bay Area? And finally, we look at some of the unintended consequences of the globalization of talent.
What follows are some highlights.
Work from Home: A View from Marc Andreessen
No. 1: Goodbye Sand Hill Road
Andreessen made the point that remote work obliterates the “geographic lottery” that awards the best tech jobs to people who live in employment hubs like the Bay Area.
Charles: “The whole notion of the geographic lottery is a really interesting idea. Take that to its logical extent, I mean, talk about the globalization of talent. You can find the best talent all over the world and pay well under Silicon Valley rates, but well above local rates.”
Mike: “Why handicap yourself by limiting your own recruiting pool to those that are within 50 miles?”
But as with all things, this notion has winners and losers. While engineers can find higher-paying employment regardless of where they live, startups in emerging markets, for example, suddenly are competing with Silicon Valley companies for the best talent.
Charles: “When I talk to startups in Africa they say one of the things they’re facing now is that the best talent has gotten way more expensive. Silicon Valley or New York is hiring them, sometimes on a freelance basis, sometimes as employees, to do development work. That means that local startups are having a hard time finding developer talent that they can afford.”
Closer to home, Mike noted this trend could spur the creation of more new tech hubs in unlikely places and have the same shot at sourcing talent as Silicon Valley companies. At least in theory.
Mike: “Well, that helps startups too. Because you can now start a company in Montana.”
Another factor impacting this dispersion of talent is the fact that a golden rule of startup life was obliterated by the pandemic. The notion that you must locate your business in proximity to your investors.
Mike: “Since things are remote, you no longer need to be near Sand Hill Road and the whole business development ecosystem.”
Charles: “I think Mike hit it on the head. Sand Hill Road. That is what really breaks that seal, right? That notion that you have to be close to your investors. That’s gone. So when you take that away, then it’s like, ‘Okay, why do I need to be here where everybody wants at least $100,000? And my taxes are through the roof. And the cost of living is crazy. My rent’s crazy. Why do I do this? If I don’t have to be within a 20-minute drive of my VC?'”
New Localogy Report Outlines a Hybrid Workplace Future
No. 2: Has Covid Helped Companies Paper Over Flaws?
The conversation shifted to whether companies will extend cost-cutting measures under the guise of the Covid-era “new normal” as a way of compensating for poor business results.
Bill: “Here’s the thing do companies use what’s happened in the pandemic as an excuse to cut costs to compensate for the bottom line that they are not achieving this year?”
“Normally, we were talking about this potentially being a quiet summer. But I don’t think it’s going to be a quiet summer. I think you will see more and more of these acquisitions going on because of those companies are missing revenue targets. And some of them can go out and acquire. Others are going to use this as an excuse, at least for now, to continue to focus on cost management.”
Neal: “Bill, I would argue that for a lot of these companies, the pandemic only shed light on their problems. It was not the cause of their problems.”
Local Industry Weighs in on the Pros and Cons of Remote Work
No. 3: Is the Business Trip Really Dead?
We ended the discussion with a debate over how much business travel will return. We generally agreed that industry events, at least the best ones, will come back. The business development community is looking forward to filling their sales pipelines once shows pivot back from virtual to IRL.
There was more debate around how other forms of business travel will fare now that the masks are coming off.
Neal: “United Airlines seems pretty bullish that things are going to come back. They are hiring people. And so I think there’s going to be travel.”
Charles: “So I think that trip where the boss says, ‘Hey, go shake hands with Bob at the plant. You’ve really got to look him in the eye to make this deal.’ I think that kind of business trip is gone. Or at least it’s diminished.”
Bill: “I’ve seen this time and time again. There were different companies I’ve been at where we got beat by the company that was physically there. And it’s the age-old question. If you’re doing enterprise-level deals, the question is, do I do business with a ‘company’? Or do I do business with someone I know?”
You can listen to the conversation here. Going forward, we’ll share the best of these conversations with you.
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