Meet the startups helping other startups go remote
Hiring employees anywhere is harder than it looks. As the coronavirus pandemic changes the workplace, investors are buying into companies offering solutions.
Job van der Voort's hiring philosophy at GitLab was simple: "Find the best person for the job and figure it out," he said. Easier said than done.
The fully remote company didn't care where employees were located, a luxury that opened the world's talent pool to the software-development toolmaker. But as van der Voort found out, hiring employees from anywhere came with a barrage of legal headaches, including how to legally onboard someone from another country, pay them in local currency and provide benefits.
In January 2019, he left his job as GitLab's VP of Product to create a new startup to solve the dilemma.
"I thought to myself, how can I make a meaningful impact in the world? And ultimately the result was me thinking, how can I create more remote jobs?" van der Voort said from his home in Braga, Portugal. "I think the only way to do this is to solve the largest problem of properly hiring remotely, and I think this is it."
Van der Voort's company, Remote, is just one among a cohort of startups helping other startups go remote. The sector is growing with companies like Atomic-backed Terminal, which helps build remote engineering teams, and has been a hot investment area thanks to the coronavirus pandemic, which forced many people to work from home.
Previously, hiring remote employees had been a luxury, and one that many startups couldn't afford. Big tech companies hired around the globe by investing in offices in foreign countries or putting an army of lawyers on the task of figuring out employment laws.
But startups, smaller and more cash-constrained, have had to approach the challenge piece by piece, figuring it out on the go. "I realized this was a problem, and I realized that there was no good solution, because we tried everything at GitLab," van der Voort said.
Investors are buying into the business opportunity. In April, Remote announced it had raised $11 million in seed funding from firms including Two Sigma Ventures, Index Ventures and General Catalyst. A month later, remote payroll provider Deel raised a $14 million series A round from Andreessen Horowitz, entirely over video.
"I think finding the person and paying them is something that can be done relatively easily, and the hard part is wrapping it all together and making sure that it's a) legal and b) the correct taxation considerations are given," said Deel COO Dan Westgarth.
So far, Deel has largely targeted contractors around the globe, though it does some full-time employee onboarding as well. It works with more than 400 companies, including startups like streaming company Pipeline and handbag maker Italic.
Remote focuses on full-time employees and is setting up corporations in each of the countries it services. That way, workers are considered to be employed locally. Remote started with a few countries including Denmark, the U.K., India and the Netherlands, and plans to soon expand to markets including Australia, Brazil and Canada.
One surprising outcome of the pandemic is an increase in interest from the big tech companies, who had previously expected to sign on employees and bring them to work at headquarters, van der Voort said. Now that the employees are stuck in their home countries, some Silicon Valley giants have started hiring them locally through Remote instead of forcing them to move to the U.S., he said.
While the COVID-19 crisis accelerated the remote work trend, startups like Terminal have been working with companies for years to help them build out teams abroad.
The company, created from incubator Atomic, built out tech hubs in cities across Canada and in Guadalajara, Mexico. "Terminal was really built to help companies solve the talent wars," CEO Clay Kellogg said. "Pre COVID-19, there were five open roles in the Bay Area and New York City for every one engineer."
Eventbrite, Hims, Earnin and other startups contracted with Terminal to help sign on engineering talent. The developers could then work in one of Terminal's hubs, providing the camaraderie of an office feel and a community for tech events. Coming out of the pandemic, Kellogg expects the office-optional, flexible work arrangement to dominate.
"COVID-19 is unfortunately the catalyst for remote, and what historically may have been a fraction of the company's talent strategy has changed significantly," Kellogg said. "What we've seen now is everyone on the leadership team and every functional group is leaning into remote."
The shift isn't just an acceptance of remote work, but a realization that far-flung employees will need support, Kellogg said. That's where he sees businesses like his stepping in.
"That's where I think there's going to be a lot of interest in the next 12 to 24 months," he said. "How do you support those teams? How do you do that in a way that makes your engineers or your remote employees in general feel that they are not making any trade-offs in their own professional development, or in their own career development, by virtue of being remote?"
Van der Voort cautioned that companies are facing more than just a logistical challenge of setting teams, but a cultural one as well.
"We're used to how offices work, it's culturally defined," he said. "That is not the case for remote work. There's not standards. There's also nothing to fall back to."
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