Companies around the world, large and small and in every sector, have one thing in common right now: the majority of their employees are working from home. After the COVID-19 pandemic forced shutdowns of offices worldwide in March, companies everywhere were suddenly thrust into managing fully-remote workforces. Now, as the weeks of work-from-home stretch into months with no end-date in sight, some companies, including Twitter and Square, have announced that employees may choose to work remotely forever if they so choose.
This cataclysmic, unexpected shift to remote work may rewrite the very nature of corporate life for employees. It is also challenging company leaders who have firmly believed, until now, that having offices in urban centers is critical for achieving growth. A hip (expensive) headquarters in San Francisco, New York, or Beijing, plus satellite offices in core markets, used to be the ultimate marker of success, helping attract top talent and cement brand notoriety. But now that no one is using those fully-equipped offices, some companies have realized what really matters: the right team members. The best employees and managers have risen to the challenge of remote work, creating cohesion even amid isolation. They have helped their companies continue to grow, thrive, and succeed from their living rooms, basements, and kitchens.
For companies suddenly managing remote workforces, or for startups just beginning the journey toward growth, how can you scale and succeed far into the future with a fully distributed team? I recently sat down with Mitchell Hashimoto, co-founder and CTO of HashiCorp, to ask him all about how he and co-founder Armon Dadgar built HashiCorp into a 1000-person company valued at over $5B—all with a very distributed team since day one. HashiCorp’s experiences scaling into a global enterprise software powerhouse without opening the usual array of offices are especially valuable today, now that so many companies have gone remote almost overnight. Here are some excerpts from our recent conversation.
Why did you decide to start and grow HashiCorp with a fully-remote workforce?
Armon and I began working on some open source projects in 2010 and we spent two years interacting with developers all over the world on GitHub and other platforms, so when we started HashiCorp in 2012, it just made sense to continue working that way. There was really no grand plan to be a remote-workforce company, but it just happened that way because it was most convenient for the founders and the first team members. When we hired our first manager, that’s when we realized we were a remote company, because we had to ask ourselves, how does management work in a remote setting? We decided right then to go all-in on a remote workforce and to be thoughtful about how to build cohesiveness and collaboration across our expanding team. Since then, we’ve hired over 1000 people, almost all remotely, so we’ve created a set of practices around remote hiring, management, collaboration, employee engagement, performance reviews, and more.
What type of person is best suited to remote work?
We’ve learned a lot over time and, now, with a fairly large workforce, we have data and can track our performance on things like hiring pipelines, promotions, and company outcomes. The main lesson we’ve learned is that there are certain types of people who are cut out for remote work. The people who do best in this environment have established social circles. We always tell new hires, if you choose to work here, don’t expect to make close friends. It’s not that team members don’t become friendly and enjoy working together, but when teams are spread out across many states and even countries, it’s not usually possible to get together outside of work for BBQs, parties, camping, or what have you. For many people, this is just fine, especially people who are married, have kids, or just don’t particularly enjoy the social side of office life. Our employees value the freedom we provide since we don’t expect any certain work hours; they like being able to take breaks to go to the gym, pick up their kids, or throw in a load of laundry. We explain our remote-work culture right away in the first interview, which, like all our interviews, are conducted over Zoom, and it’s fine if our culture isn’t a fit for some people.
What is one unexpected advantage of having a remote team?
For us, one surprise is how it has helped us work toward our goal of having a diverse and inclusive workforce, which is one of our core values. We can hire from many different regional universities across the US and we have employees all over the country, in big cities and rural towns, blue states and red states, and from all walks of life. And we also have team members working in 13 countries, both local hires and expats. Many Silicon Valley tech companies hire the majority of their employees from Stanford and UC Berkeley, with most employees sharing similar worldviews, so their teams may look diverse, but they are generally pretty uniform. Our employees really are diverse in their backgrounds, mindsets, beliefs, etc. Our diversity is our greatest strength, but also a challenge because we want to make sure everyone feels included and that is not easy when your team really is diverse in every way. We tell every employee that if for any reason they are feeling disconnected from their teammates or the company as a whole, just go head and email our CEO or Armon or me directly. It’s our job to ensure underrepresented groups feel comfortable, supported, and included.
What has been an unexpected challenge of being a fully-remote company?
The biggest challenge is ensuring we comply with legal structures. We had to create entities in 13 different countries in order to hire people, even though we don’t have physical offices in these countries. This is especially true in Europe where labor laws are very complex. We also had to create a separate tax ID for each US state we are in, and each state has different labor regulations that we must meet. We established separate entities because that is the only way to ensure that all employees get the same benefits, vacation, and holidays. We want to provide equitable treatment to everyone, but it’s not easy because we must also follow the labor laws in all of the countries we operate in. We’ve realized the world is not flat; there are specific rules and laws in each country. For example, in France, a manager cannot legally send an employee an email after the official work day ends, so we had to build that into our IT systems to ensure employees based in France don’t inadvertently get emails after 6pm local Paris time. To set all this up takes many lawyers and staff members, but it has been worth the effort
What is one thing a founder considering building a remote-only company should consider before taking the plunge?
Don’t underestimate the need for in-person human connection. We bring everyone together once a year for an all-company offsite and, even though that’s getting logistically challenging with over 1000 employees and of course is impacted right now due to the pandemic, it’s absolutely critical for our company’s long-term growth. We also give all teams, from marketing to sales to development, an annual budget to meet in person at least once a year. The team can pick the location, within reason, and sets their own agenda for their own offsite. Seeing colleagues in-person twice a year is so important to build empathy and connection and to give every employee a sense of self worth. Working from home, you can feel like you’re on a hamster wheel and may feel your work isn’t contributing to the success of the wider company. When you meet other people in person, you see that your work does have an impact and does have value. Spending time with your teammates just talking, eating, and connecting, you feel part of the bigger picture. I think I speak for every employee at HashiCorp when I say we can’t wait until we’ll be able to meet again in person very soon.