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ProofHQ CEO: Remote work is bad for startups? Oh, please!

Jessica Stillman — Wed, 16 May 2012 15:54:39 +0000

Remote work may be going increasingly mainstream with more and more companies letting staff work flexibly, but as with any major shift in how we work, there are bound to be holdouts. And the start-up scene is home to its fair share. Early-stage companies, particularly in the tech sector, have a long-standing mythology of (usually young and personally unencumbered) teams sleeping under their desks to get products to launch, with many wearing the hothouse atmosphere and extreme hours as a badge of honor. Remote working still raises eyebrows among some.

Zaarly exec Shane Mac, for example, recently published a piece in VentureBeat, which we highlighted here on GigaOM, arguing that a remote set-up stinks for startups who need their staff in close proximity to form a company culture and generate the maximum number of ideas by sparking their thinking off each other. Mac makes a compelling case for the usefulness of physically close teams, but not everyone in startups is buying it.

ProofHQ, a British company that sells tools to help review design work, for example, has been remote from day one. “The company has literally never had an office with employees in it,” founder and CEO Mat Atkinson told GigaOM, explaining that having had an earlier experience starting a company with VC backing, he opted to bootstrap ProofHQ and avoid venture money, necessitating he skip the office as a budget-saving measure. Plus, he found a development team in distant Poland and wanted to be able to serve customers globally right from the outset. The result is a team spread from the west coast of America to the Middle Eastern country of Qatar.

So did he experience the squeeze on ideas and the less binding company culture that Mac predicts? “From our experience it just simply wasn’t the case,” says Atkinson, who uses constant Skype chats, regular video calls and daily scrums for each area of the business to keep his team collaborating and innovating. He also insists on regular face-to-face meet-ups for the team.

“I do understand when people say face to face matters and I agree with that. We make an effort to do things face to face both virtually by video conferencing, as well getting together in person, but I disagree when people say it’s the only way to make it happen,” he says, though he concedes that working at a distance is tougher on managers. “Remote working works really well for the team, but if you’re managing people, you have to put more effort into it. I would say it takes probably 20 percent more effort.”

Besides admitting that a distributed setup is tougher on managers, Atkinson also acknowledges that those looking for venture money might have a reason to shy away from a remote set-up. “If you’re looking to go down the venture capital route then your VCs will probably want you to be co-located and co-located close to them,” he says. “I know that’s breaking down more and more but I think VCs are still skeptical of companies that work remotely.”

But it’s not just VCs who Atkinson sees changing their minds about remote work. According to him, skeptics like Shane Mac are slowly going to the way of the dinosaurs. “There has been a real transition in the perception that people have of working remotely. In the early days it was seen as kind of odd — it’s never going to work. Now customers that we talk to about it are very interested. I have quite a lot of other early-stage technology companies wanting to talk about how we’ve managed the business, and it’s just not seen as weird. When we recruit now, people see it as a positive rather than a negative or a neutral, so I think there’s a massive change in people’s perceptions at all levels.”

Within five years, Atkinson feels, remote work will be as unremarkable as cubicles and laptops seem now – even for startups — and its posts like this, discussing the issue as contentious, rather than the practice itself, that will seem odd.

Do you agree?

Image courtesy of Flickr user dierken.

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Freelancer.com CEO: The future is bright for online outsourcing (but not niche sites)

Jessica Stillman — Mon, 14 May 2012 15:14:22 +0000

Australian Matt Barrie, CEO of Freelancer.com, has been racking up the frequent flyer miles lately, traveling to pick up a second Webby award for his company and speak at The Next Web Conference in Amsterdam among other appearances. GigaOM caught up with him in London to chat about his company and his views on the future of the sector. In a word, he’s optimistic.

Why? Barrie explained that as hard as it is for perpetually plugged-in Europeans and Americans to imagine, only about 30 percent of the world’s seven billion inhabitants are online, leaving billions of potential Freelancer.com customers out there yet to get online. In Asia, for instance, internet penetration is still at a modest 21 percent, leaving some 825 million people yet to get connected.

Getting those folks onto the internet will be great for them (we’ve already seen scattered cases of “million dollar freelancers” who have built seven-figure incomes off platforms like Freelancer.com in the developing world) but it will be pretty awesome for Barrie’s business as well, he believes. The flood of newly wired workers will provide a huge and growing customer base of hungry and driven potential freelancers for his site, which already has about 3.5 million users around the world. Barrie’s company charges them and job posters a hefty but variable commission to connect on the site.

Dismissing fears that the trends his site is banking on will mean fewer jobs in the West, Barrie is even optimistic that this explosion in online outsourcing will be good for those of us in developed countries –provided we develop an entrepreneurial mindset and start putting the huge pool of cheap talent across the world to work realizing our ideas and supporting our businesses for, essentially, peanuts. While this inexpensive labor pool may be good news for someone hoping to get a business off the ground on a shoestring, the ability to get stuff done at low cost may be cold comfort for those who are less entrepreneurial by education or character and would like to remain employed. But Barrie seems less than moved by these worries.

Is there anything Barrie isn’t bullish on? In short, online labor platforms that look to compete by serving a specialized sector or targeted geographic location. The likes of Zaarly and ExpertBids “are all going to fail,” according to Barrie because of their inability to scale sufficiently to make enough to be attractive business opportunities. Want to take in a million dollars? Then ten million in business needs to go through the site – the equivalent of something like $100 million in U.S. labor costs if you’re dealing in lower wages overseas – and Barrie just doesn’t see the market being there for niche sites. Those that aim for geographic specificity in the style of TaskRabbit will struggle to reproduce their success in one city in another a bit down the highway, making expanding the business a gigantic money sink, in Barrie’s opinion.

Do you think Barrie’s optimism is well founded?

Image courtesy of Freelancer.com.

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Zaarly exec: Remote work stinks for startups

Jessica Stillman — Fri, 20 Apr 2012 13:14:02 +0000

Technology is certainly enabling the ability to work from anywhere, and both the media and a certain segment of freedom (or surf) loving business people have jumped on the trend, boosting remote work as the way of the future. In all this cheering for new ways of working it can be hard to remember that there are still dissenters – and that their case is far from totally crazy.

One such remote work doubter just proclaimed his skepticism loudly on VentureBeat. In the post, Shane Mac, the director of product at local jobs marketplace Zaarly, announces that he has been converted from his earlier belief in remote work and argues strongly for co-located teams for startups. He offers seven reasons for his change of heart, ranging from the logistical (remote communication slows down the speed of decision making and takes extra work) to the more nebulous, including:

Hallway conversations are priceless. You can’t create true serendipity over instant message. It’s crazy to think that one discussion can make, break or change the path of a company, but sometimes, those “accidental conversations” do turn into some magical idea, approach or direction.

Passion in person is contagious. I’d argue that it’s almost impossible to convey passion accurately to someone at a remote location. If you think back to times when you’ve been convinced to do something, it usually results from face-to-face interaction. It’s harder to influence and create change through the digital highway. Also, in-person passion helps to create a social pressure that makes people work better. If the person next to you is working late, it’s much easier to ignore if you can’t physically see staying in the office longer.

Company culture is key. Culture binds a company early on, so maintaining that culture in multiple locations requires extra effort and even a separate “culture team” — members of management who ensure that the culture is universal across the company…. it’s hard to live and breathe something if you aren’t actually breathing the same air.

Also, in a gripe that may be of particular interest to the many companies peddling online meeting platforms, Mac isn’t buying the effectiveness of the virtual whiteboard. “I haven’t once seen a collaboration session for a critical decision happen successfully from sending files back and forth,” he writes. When it comes to whiteboards, the real deal, he feels, is key.

None of Mac’s issues with remote work are completely out of left field – even the most ardent of location independents suspect from time to time that they’re less bonded to their team and less able to generate and act on serendipitous ideas or encounters when they’re at a distance. And it’s easy to see how these concerns would be most relevant in a start-up atmosphere. After all, the autonomy and life-work balance that remote work can bring are mostly of benefit to those that are trying to maintain a career that won’t drive them crazy over the long haul, rather than founders in the startup scene where it’s pretty much par for the course to work like a lunatic short-term in hopes of an eventual payoff and easing up of your schedule.

So perhaps the truth about remote work isn’t that it’s a binary yes-no choice, but rather a sliding scale with workers you’ve never met a world away on one end and teams that fall asleep under their desks together on the other. One side offers an engaged but not obsessive worldwide pool of talent and the ability to sustain a career without driving yourself batty with office politics, repetition and horrid commutes, the other a short-term burst of productivity in a hothouse of ideas with a high potentiality for interpersonal conflict, burnout and stunted personal lives if you try to keep it up for too long. Viewed that way, varying degrees of remote work make sense for different teams, with the only true mistake being misjudging exactly what sort of structure your team needs.

What’s you reaction to Mac’s take down of remote work for start-ups – amen, absolute disagreement or something in the middle?

Image courtesy of Flickr user vlauria.

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Zaarly goes big: $14.1M funding, Meg Whitman joins board

Colleen Taylor — Tue, 25 Oct 2011 04:00:27 +0000

Updated. Zaarly, the online marketplace that allows people to buy and sell things with their neighbors, has secured some major support — from some of the tech industry’s biggest names.

Zaarly has closed on $14.1 million in a series A funding round co-led by Silicon Valley venture capital giant Kleiner Perkins, the company announced on Tuesday. In addition, new Hewlett-Packard CEO and former eBay CEO Meg Whitman has joined Zaarly’s board of directors.

It’s a big move for Zaarly, the San Francisco–based startup that was founded in February of this year. In the five months since its official public launch, in May, growth has been quite robust: Zaarly says nearly $6.5 million in requests have been posted on the service to date, and the company now has operations in cities including New York, San Francisco, Kansas City, Atlanta, Austin, Boston, Los Angeles, Chicago, Charlotte, Seattle and Washington, D.C. My colleague Ryan Kim described Zaarly in a post earlier this year:

Zaarly is looking to be a sort of Craigslist for local mobile users, helping buyers find a quick way to obtain what they’re looking for from neighbors and local merchants. This is not unlike what Craigslist or eBay offers, but Zaarly is built from the ground up to be mobile, local and real-time, accelerating the speed with which deals can done.

It bears mention that San Francisco startup TaskRabbit has been doing a similar thing since it was founded back in 2008, although there are very notable differences between the two startups: TaskRabbit is focused single-mindedly on brokering human tasks, while Zaarly allows people to buy and sell physical items as well. Also, Zaarly is much more focused on the mobile space and has been expanding nationwide more rapidly, while TaskRabbit has said it is doing its geographic expansion at a slower pace to ensure that its reputation for providing well-vetted task runners stays intact.

To be sure, the first mover in an industry isn’t always the ultimate winner — and of course, this burgeoning space could well have room for more than one player in the future. One thing is certainly clear: It’s an exciting time to be a startup in the new peer-to-peer economy.

Zaarly’s new funding round was led by Kleiner Perkins Caufield & Byers along with Sands Capital Partners; CMEA, Venture51, CrunchFund, Mark Ecko and Artists and Instigators participated as well.

Updated: An earlier version of this story mistakenly reported the amount Zaarly raised as $14.5 million. This has been corrected.

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Hamburg’s Gigalocal tries to get your to-do list done

Bobbie Johnson — Thu, 18 Aug 2011 07:01:10 +0000

Hamburg-based Gigalocal, which has just launched its website and apps for iOS and Android, calls itself a “virtual wish list” — a place where users can get help, “no matter what you need, when you need it, where you need it.”

The reality is that it’s entering the increasingly hot business of service marketplaces — a busy space full of companies offering platforms that match buyers and sellers of low-value jobs and errands.

Gigalocal allows users to post up the tasks that they need to be completed (the “gigs” that its name riffs off) and lets others bid for them. Want somebody to pick you up from the store later on? Need someone to pick up your dry cleaning or drop off a parcel? What about getting a dog walker to fill in when you can’t?

Even if you don’t understand German, you can get an idea of their pitch from this promo video, in which the user has forgotten his anniversary and uses the service to pull together things at the last minute.

After a fitful start, the company’s been greeted with some interest at home — not least because of its team. The founders include Sebastian Diemer and Alexander Graubner-Müller, who worked together in the past on Gaopeng.com, a Chinese Groupon variant which was bought by Groupon itself. Investors, meanwhile, include Heiko Hubertz of gaming portal Bigpoint and Edgar Berger, the head of Sony Music International.

In addition, the company is building on work it has done already with another website, Gigalo, which is based around a very similar concept. Gigalo allows people to offer jobs at a fixed rate (rather than auctioning), and is available in German and Spanish, with local versions across six countries in central and South America. It’s gained little traction so far, but the suggestion appears to be that its struggles will inform the team behind Gigalocal.

It’s not just previous experience that seems to inform Gigalocal, though. To get ahead, it’s not just learning from its own past, but also from rivals elsewhere. And this whole idea — the errand marketplace — is certainly one that’s starting to warm up right now. We’ve given some coverage to TaskRabbit, and there are a number of other companies also eying up the same area: Zaarly, Thumbtack and more. Looking around Gigalocal suggests that it is keen to find out what it can from those businesses wherever possible.

Perhaps that’s no surprise, given that the team behind Gigalocal also has connections with the famous (or perhaps infamous) Samwer brothers — a trio of German siblings who have become known for making millions by cloning foreign startups. Their roster has proven pretty successful in stealing a march on American companies before they can get to the German market, often resulting in selling their local service back to the “parent” company. That includes eBay clone Alando and Groupon clone Citydeal (bought by eBay and Groupon respectively) as well as still-independent services such as Facebook clone studiVZ, Groupon clone Citydeal and YouTube clone MyVideo.

Right now Gigalocal is definitely following the pattern by focusing first on Berlin and then, later, on other German cities. However, I think its chances of success are more intimately linked to whether the entire service marketplace model is a good long-term bet… and that’s where I have questions.

Personally I’m not sure if there’s enough in this whole business for it to succeed without some serious evolution. After all, it’s starting out with a proposition that actually aims at not one but two audiences simultaneously: buyers who need to be both time-starved and affluent enough to use the service, and sellers who need to be time-rich and financially to take up the job offers. That leaves it open to a lot of issues depending on the friction between the two groups.

And there’s also a lot of issues around the trust levels involved, which need to be high enough to overcome the fears of adoption. Is the system open to abuse? What happens if it goes wrong? TaskRabbit, for example, vets all its runners — but doing that properly is a tough business at scale. These are the crinkles that all need working out if any of the companies (let alone all of them) are to succeed in the long run. It’s not hard to imagine that every company offering an errand marketplace is only a few steps away from an AirBnB-like disaster that dramatically erodes trust.

But who knows? The crucial requirement for success is to become a platform for other people. And if, like eBay, these companies can build up their business to the point where some people can earn a significant livelihood, we may see a breakthrough.

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Zaarly Looks To Be a Real Time Mobile Craigslist

Ryan Kim — Wed, 18 May 2011 20:00:13 +0000

Smartphones have a way of shortening the loop on certain actions, like consuming and sharing news. Now, a new start-up called Zaarly is hoping that it can have a similar effect on local commerce, with a new mobile application that helps bring buyers of services and goods together with local sellers and providers in real time.

Zaarly is looking to be a sort of Craigslist for local mobile users, helping buyers find a quick way to obtain what they’re looking for from neighbors and local merchants. This is not unlike what what Craigslist or eBay offers, but Zaarly is built from the ground up to be mobile, local and real-time, accelerating the speed with which deals can done. It was supposed to go live today on iOS, Android and the mobile web though it doesn’t appear than an Android version is up right now.

Here’s how it works: After creating an account on the Zaarly app or through a mobile HTML5 website, a buyer can send out a request for a service like dry cleaning or a car wash, or they can look to buy product a rent something. Need someone to bring you some coffee? You can put that out there. Buyers can set a price for how much they’ll pay and when they need it by. The post goes out to people nearby who can browse all the listings through the app and filter by location, time and price. Zaarly can also pull in help from your Facebook and Twitter friends. The idea is that the requests are all meant to be very local, though for me, I saw some that were clear across town and probably too far to be relevant.

When a buyer decides on the best bid to choose from, they can establish an anonymous communications channel with the other party by text or voice. Zaarly doesn’t follow up to ensure the deals are completed, but it does monitor requests to identify illegal activity. There’s always a danger we could see some sketchy services being offered and requested, but I think that risk is outweighed by Zaarly’s value in addressing really urgent needs that arise quickly and are best met by people nearby. True value will depend on getting a good mix of buyers and sellers, and making this a go-to place for these types of local transactions. But I like the refined bulletin-board nature of Zaarly.

Zaarly has an impressive list of backers, including SV Angel, Gmail founder Paul Bucheit, Ashton Kutcher, Felicis Ventures, Bill Lee, Naval Ravikant, Lightbank and Thrive Capital. The San Francisco-based company got rolling at the Startup Weekend Los Angeles event in February, and had a prototype up for South by Southwest, where it did $10,000 worth of business in about two days in Austin. The company isn’t taking a cut of cash transactions but it is offering an integrated credit card payment system and will take a portion of the sales made using the system.

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