The Case For Remote Work

Some of the best companies in the world, including Github, 37Signals, and Automattic, allow their employees to work from home. It’s pretty surprising to us that so few startups follow their lead. We’re a small organization ourselves (only two full-time employees), but we don’t require each other to be on site. We live in the same city, and we go to the office often enough, but there’s absolutely no obligation that we do so. It works for us. If Brad really needs to concentrate on something, he’ll stay home (or ask me to), put on the headphones, and get to work. I do the same thing. We’re actually sometimes more productive when we’re distributed.

We thought we’d share some early stats from our anonymous job matching service to help make the case for remote work as a viable and even potentially superior alternative to on site work. Since we’re not in Silicon Valley ourselves, perhaps we have a unique perspective that can be hard to see from the inside looking out. Either way, our hope is that our conclusions will convince your team to at least consider making remote work an option.

(Shameless Plug Warning) If, by chance, you do come to that conclusion, be sure to let us know. We’d be more than happy to help you fill out your team with amazing people. You can learn more about our service here. Oh, and developers can see the FAQ (and sign up) here.

Shocker No. 1: Not all great developers want to be in Silicon Valley (or other tech hubs).

There is a “talent war” in Silicon Valley right now. Have you heard about it? Some of the side effects have been quite amazing. Aqui-hire has become a word most of us understand, developer salaries are higher than they’ve ever been, and perks and benefits offered by Silicon Valley startups are unheard of elsewhere. Another side effect is that, increasingly, developers are being lured to the valley from elsewhere. Several of the best from our hometown of Memphis have moved to San Francisco over the last couple years, and the same can be said of just about every larger southern or mid-western city in the US.

Still, for some, Silicon Valley is a difficult place to be. There are a large number of individuals who, for family or other reasons, simply can’t make the move. There are even more who choose not to. This is especially true for families. According to Wolfram Alpha, you’d need to almost double (1.9x) your Memphis salary to live similarly in San Francisco (source). That may be possible for a developer moving to the area, but can the same be said for a spouse in a different field? Silicon Valley is an amazing place for a 20-something single person. Perhaps not so much for a 30-something with a young family.

Memphis to San Francisco Wage Comparison

Shocker No. 2: Not all great developers are IN Silicon Valley.

So far, nearly 200 developers have signed up for our anonymous job matching service. A fair number are in Silicon Valley and other tech hubs (primarily NY), but certainly not the majority. We use their Work for Pie scores as an approximate measure of coding chops. The score is primarily based on open source contributions and is far from perfect, but it’s better than most of the other options out there, so for now we’ll go with it.

When they sign up, we ask developers a series of questions in order to better understand what they care about and what kind of career options they’d like to entertain. We ask them if they’d prefer to work remotely, and we also ask how important their answer is, relative to their other preferences.

The average Work for Pie score for the entire community* (thousands of developers) is 38.2. Our community boasts some of the very best and most prolific open source contributors from all over the world. WFP scores in the mid-twenties and up represent significant meaningful participation in communities like Github, Bitbucket, Stack Overflow, and (to a much lesser extent) Hacker News.

Now, the average WFP score of the nearly 200 developers who have opted in to our job matching service is 37.4 with a range from 1 to 93. That’s a bit lower than the community as a whole, but probably statistically insignificant. The average WFP score of those individuals who highly prefer remote work is 37.3, so almost the same, with a range from 1 to 86. There are clearly quite a few highly skilled developers who prefer a distributed team. Finally, the average WFP score of those individuals not in Silicon Valley and to whom relocation is not an option is 41.8, with a range from 1 to 93. Clearly, there are some excellent developers who aren’t in Silicon Valley.

The whole point of this exercise isn’t to say that developers outside of Silicon Valley are better than developers who live there. That’s ridiculous and undoubtedly false. The point of this exercise is to say that there are a lot of really great developers who live outside the Valley and don’t have any desire to be there. If your goal is to build an amazing team, it might be worth your time to look elsewhere.

Shocker No. 3: The economics of remote work make it a huge win.

We ask our job seekers their desired salary, and the illogical but not surprising truth is that most list desired salary as some function of their current salary. If they’re in TN, where average salary tops out at maybe $100k, they’ll often list something in that range. If they’re in San Francisco, where average salary is considerably higher, the desired salary follows suit.

The point is this: most people know that locating from most any place to San Francisco is going to require a huge pay boost for the economics to make sense. Someone making $100k in Memphis would need to make $190k in SF to live the same way. That fact alone convinces many to remove SF from the list of cities to consider, no matter the salary. But, a Silicon Valley salary level is pretty unheard of here in Memphis. Offer that kind of money to almost anyone here, and the chances that you’ll lure them away from whatever they’re doing now are fairly high. Throw in the fact that you’ll save money on space and catered lunches and all the other Silicon Valley perks and the economics make even more sense. Money isn’t everything, but a pay boost of $20k or more is enough to make a majority of folks at least hear you out. We’ve seen it happen time and again with many an awesome developer who can’t or won’t relocate.

Github, from what I can tell, uses this exact strategy to great effect. Find the top Rails developer in nearly every small city in the US, and the chances that he or she works for Github are pretty darn high. There is a lot of talk about great developers being 10x more productive than just average ones. I’m not sure I buy all that, but it definitely helps to have a great team. Isn’t the chance at hiring someone great worth some of the inconveniences (of which there are few) of a distributed team? Github thinks so.

Remote work is not for everyone. There are several studies that show that on site teams are more productive than distributed teams. But, if you have the chance to hire an amazing developer in Kansas for the same price as an average one in Silicon Valley, doesn’t the extra productivity from that hire make up for the potential drop due to having a distributed team? Our argument is that yes, it does. It should be something your team considers. If you’re struggling to hire, or if you can’t pay market rates with your seed money, or if you care more about building an amazing team than about having them on site, then it’s something you should consider. It’s easier than ever these days.

What do you think? Leave your comments below and check out workforpie here.

Now read: No You’re Not Better Than Silicon Valley: How To Support Your Entrepreneurial Ecosystem

No You’re Not Better Than Silicon Valley: How To Support Your Entrepreneurial EcoSystem

Cliff McKinney is the CEO and cofounder of WorkForPie and a community leader in the Memphis startup community. This post, which also appears on his personal Tumblr, can easily be applied to any town, any city, everywhere else.

I’ve been thinking a lot about Memphis lately. Where it is, where it’s been, and where it might go. What I think should be done to grow the entrepreneurial ecosystem here is perhaps a post for another day. Today though I thought I’d share a few words about how to support an entrepreneurial ecosystem. No doubt this applies in Memphis, but I’ll try to leave it general enough to apply to most any growing ecosystem. I’ll try to limit things to five general themes:

Theme One: Be Successful

Brad (my cofounder) and I talk a lot about how we might help Memphis. We do a lot of small things that we hope add up. We both serve as mentors to local entrepreneurs and lead user groups, but we always come back to the same general idea: the best thing we can do for Memphis is to become wildly successful. Doing that will bring in more investors and more interest, more jobs, and even a couple new angel investors. This goal trumps all the others, as it should. If our efforts to be successful leave us no time for all of the other stuff, then so be it.

This should be paramount for you and your company too. If you have to move to be successful, then move (but come back and invest later). If you have to put another company out of business to be successful, then do it. If taking advantage of some opportunity means others won’t have the chance, that’s okay too. It’s okay to be competitive. It’s okay to want to be better than the next guy. The success of your company is what matters most. Never forget that.

Theme Two: Give Time

I’d love to give money to my local ecosystem, but as a poor entrepreneur I just can’t afford it. What I can afford is my time, and I’d like to think that in some ways that is more valuable to local entrepreneurs. My office is always open, and my phone is always on, and I’m happy to give local entrepreneurs an earful (and often more than they bargained for) anytime they ask. Brad leads the local Python user group, and I lead the local Startup Meetup. It’s something we both do for fun, but we also do it because we feel obligated to give back to a community that has given us a bunch and that continues to support us.

Giving your time means a lot to local entrepreneurs—especially those who are just starting out. You don’t have to lead a startup meetup. Just make it a priority to attend once a month. Email startup CEOs and offer your help. It only takes a little while, and the good karma you’ll earn is totally worth it. Do what you can. Every little bit counts, and giving something, no matter how little, is always better than giving nothing.

Theme Three: Be Honest In Your Support

So here comes the first controversial part of this post. Truth is, I don’t think supporting local startups means blowing smoke up their asses. I’m a big fan of honesty, and if a local company has a terrible business model or distribution model or team then the fact that they’re local shouldn’t preclude you from saying so. In fact, I think you’re more obligated to say something if they’re local. It’s what I give, and it’s what I expect from the people I really respect.

I gave a little talk during the Seed Hatchery demo day last year. I won’t bore you with the details, but the general theme was that the companies at Demo Day weren’t competing with Memphis companies, or even Tennessee companies. They were competing with every company everywhere. If we didn’t treat them accordingly, then we were doing them a disservice. I’m hard on the local companies I mentor. I don’t call them out publicly, but in private I do as much as I can to convince them that this isn’t a mutual admiration society. You can’t build an ecosystem by calling a local company awesome when it’s clear to everyone else that it’s not. It just doesn’t work that way.

Theme Four: Pay and Get Paid

One of the biggest mistakes I’ve made as a founder was thinking that someone deserves some kind of discount or special recognition because he or she is a friend. That should never be the case. If a local company does awesome work and they charge companies $150/hr for it, then I expect to pay $150/hr. I honestly don’t care if the company is in Memphis or even if it’s run by my mother or my spouse. If the service is valuable to me, I expect to pay for it. If it’s not, and the company happens to be local, then I’ll take the time to tell them why, and if they correct the issue, I’ll pay for their service then.

Now (but not always) I feel the same way about the services I provide. I trade value for value. I have something valuable, and I expect companies to pay for it. It’s nothing personal, it’s just business. The only time we consider offering some discount for our services is when working with some company at a discounted rate is somehow highly valuable to us through the association. Despite the fact that they have millions more dollars than all of my local startups combined, I’m more likely to work with some company like Facebook at a discount than I am to discount our rate for a local company. I want to establish my value, and one of the most important places to do that is in my own hometown.

Theme Five: Talking Shit Hurts You More

It’s important to be proud of your city. The best way to show that pride is to talk about all the wonderful things your city is doing to support entrepreneurship. The worst way is to talk trash about other cities or other ecosystems. I’ve heard people say things along the lines of “our city is better than Silicon Valley because….” When I hear that, I almost immediately assume the person saying it is an idiot. Your city is not better than Silicon Valley. That’s why you’re comparing it to Silicon Valley. If your city was better than Silicon Valley, in any way whatsoever, then they would be comparing themselves to you. Honestly, the same goes for any criticism of another ecosystem. If you’re talking shit about them, then you’re wasting time you could be spending making your city better.

On the other hand, I happen to think that it’s completely okay to criticize your own ecosystem, and even startups or leaders within it. But, if you do, make sure you’re actually talking directly to the person or company in question. If they can’t take it then they probably need to hear it even more. And nothing sucks worse than hearing criticism secondhand. I’ve had more than my fair share of secondhand criticism and it sucks way worse than hearing it from the source.

See this guest post by McKinney’s co-founder Brad Montgomery, on “Minimum Working Thing”

Are Accelerators from “Everywhere Else” Better at Producing Groundbreaking Innovation? Maybe. Here’s Why GUEST POST

There’s been a lot of press lately about the lack of true, groundbreaking innovation in Silicon Valley. I don’t think that’s completely true, but reading about it made me think a bit about the nature of innovation and whether the current system is built to foster it.

I live in this little city called Memphis and we have a small but growing tech community and a great little startup accelerator called Seed Hatchery that is currently taking applications for its third class.

Now the thing about Seed Hatchery is that it doesn’t get near the number of applicants as a Y Combinator or a TechStars or even some of the less well-known accelerators. They’re okay with that and they’re okay with plugging along and making improvements year after year and meeting goals and milestones that are at a somewhat smaller scale. And there are a lot of accelerators just like Seed Hatchery, all over the world.

There have been arguments made that these accelerators will die out. That may be true for some. But I happen to think that before they do they will have trained and produced more innovative entrepreneurs than some of their larger counterparts. Why? Because, generally, the enrollees in these programs have a high appetite for risk to begin with, and because they won’t have that appetite beaten out of them by the time they finish.

True innovation typically happens at the knife’s edge between failure and success. It doesn’t come from the safer and satisfied middle. That’s good news for tiny accelerators, and may be bad news for some of the more successful ones.

A program that gives me a ton of money, a good to great chance of raising more, and an almost 100% chance of landing softly even if I fail tends to convince even big risk takers to play things a bit more safe. It seems like the opposite should be true, right? I have all these benefits with virtually zero chance of absolute failure, so why shouldn’t I give it a go? But, as we see time and time again, that kind of thinking just doesn’t happen very often.

For these programs, getting in is the big challenge, and once you’ve achieved that you’re granted superstar status. Your success rate jumps to 70% or more. And if the success rate is 70% or more, then beating everyone else isn’t as important as not being in the bottom 30%. So, often enough at least, you don’t build something that has a 10% chance of glorious success. You play it safe. You try not to f$%k it up.

For other programs, by contrast, getting in is potentially easier, but success after graduation is much much harder. A lot of smaller accelerators have one or two companies out of ten successfully raise follow-on funding. When the success rate is that low, the companies tend to take bigger chances in the hopes of finding themselves among those one or two success stories. Except in extraordinary cases, it doesn’t matter what kind of human being you are. The company you build will be different based on whether you’re motivated to succeed above all others or motivated to not screw things up.

Now, before you jump all over me, I will say that there are things that continue to make Y Combinator and TechStars amazing programs, and you would be a fool not to join them if invited. The mentor networks, and the advice participants receive from those mentors, are probably by themselves worth the price of admission. But, imagine for a moment the kinds of companies that might be produced by a Y Combinator should, say, only five to ten of the 80 companies receive follow-on funding. Might that look different? My bet is yes, and that they would be much more groundbreaking.

I’m also betting that the smaller accelerators—so long as they don’t measure success by Y Combinator standards—can produce these kinds of companies. There will be more failures, sure, but that’s okay by me. The near certainty of failure is one the most compelling features.

Author Biography:

Cliff McKinney is CEO of Work for Pie, a company that is changing the way software developers get recruited and hired by changing the way they communicate with

Here’s another take on accelerators “everywhere else” from nibletz.com