We’ve seen big companies like Automattic, Toptal, and GitHub employ large remote workforces, but we’re starting to see smaller companies like GitLab and Zapier start remote, and stay remote.

But why are more startups choosing a distributed model now more than in years past? It comes down to this: more startup founders are going remote because it’s a necessity rather than a luxury.

In an increasingly competitive landscape, both funded and bootstrapped startups are looking for ways to be more productive at lower cost. When growth and efficiency hacks are more highly sought after than ever, remote work presents some pretty enticing upside for startups.

Here are a few reasons why founders are going with a distributed work model:

1. It makes business sense to go remote

First off, founders are kissing the office overhead goodbye because almost every job at a company can be done remotely. For example:

Ask any developer that commutes to work each day, and they’ll tell you that they probably wouldn’t work from an office if it was not required.

When it comes to hiring salespeople, most salespeople are considered to be “inside sales.” As someone who has sold software (inside sales), from both a traditional and remote office, there’s almost no difference other than swapping out my loud coworkers for mostly quiet dogs.

Customer support? They’re monitoring a dashboard on a piece of cloud based software and responding to issues by chat or other cloud based meeting tools.

In general, companies are contributing to, selling, and servicing a product that’s not usually housed where it’s employees work anyway. The product is almost always cloud based, and the employees do most of their work on other 3rd party cloud based products. It isn’t hard to fathom why an office might not be needed to work effectively.

2. Advances in enterprise software

Knowing that everyone theoretically could work from home at a startup has always been intriguing, but arguable not possible in the past. Communication technology from even a few years ago was not good enough to support a fully distributed team. New technology and better iterations of old technology have made workflow and communication faster, and in general, much more feasible in a remote work environment.

Remote teams communicate with each other asynchronously for the most part, meaning the time gap between communications can be quite large at times. In the past, remote companies were maybe a bit too asynchronous…possibly to the point of inefficiency.

Today, tools like Slack, Zoom, and Trello are bridging the gap between synchronous and asynchronous communication. They’re re-creating the office experience in a virtual environment. Slack, with all of its channels, GIFs, and sharing features is like a virtual office, and Zoom.us enables teams to meet face to face.

The Product Hunt team found out about their own acquisition by AngelList on a Zoom call

The days of communication inefficiencies on remote teams are gone, and all of the “water cooler moments” at offices can be replicated virtually. In fact, according to this report, remote workers in 2018 perform the same if not better than their onsite counterparts.

3. Access to a global talent pool

The third, and maybe most important reason that startups are going remote is access the global talent pool.

For software companies, the norm has been to put down roots near a local pool of tech talent. Niche skill-sets are highly sought after within local talent pools, so why limit the company to one local talent pool?

The market for highly skilled workers in San Francisco is so competitive that founders are looking for talent elsewhere. It’s hard to compete with what Facebook and Google are offering.

Now, if a small startup finds an incredible senior engineer in Fargo, North Dakota, then signing up and retaining that person becomes a whole new ballgame. The cost of employment is lower, and companies like Zapier have found that remote employees tend to stick around longer (less attrition).

The same concept goes for finding a cofounder. Non-technical people with dreams of starting a software company are going to be hard pressed to find a CTO in saturated areas. Instead of going head to head with well known software companies, non-technical founders might seek a technical cofounder outside of big tech markets. There are many reasons (family, and others) why a highly skilled person may not be in a position to move to Silicon Valley to join a small team. Remote is a viable solution for many people.

Closing thoughts

I worked for a tech company in the bay area about 3 years ago, and one day I found myself having in depth conversations with my manager over Slack…while he stood across from me at our bank of standup desks.

I remember thinking… Every person in this room could be doing these exact things from their house. Turns out I wasn’t the only person thinking that offices are not completely necessary for startups. People like working from home. According to this report, remote work went up by 115% from 2005–2015 and continues to climb today.

Today, communication tools have gotten to a high enough level and the talent pool is so competitive in certain areas, that it doesn’t make sense to start a company with one physical location. From what I’ve learned working at a few remote software startups, if I were to start a company tomorrow, it would be a no-brainer to go remote.