What parts of work will remain as they have been during the pandemic, and what other parts will bounce back to pre-Covid practices? At the risk of getting ahead of ourselves as new variants of Covid spread, I reached out to Elad Gil—who has been thinking about those questions, and has made some startup investments based on where he sees things heading.
Gil is a serial Silicon Valley startup founder, Google and Twitter alum, author of High Growth Handbook, and investor or advisor to companies such as Airbnb, Coinbase, Instacart, Square, and Stripe. Here is a transcript of our conversation, edited for clarity:
How do you think work will change after the pandemic?
There are two or three things that will definitely shift, and there are some things that there are bigger questions about. For example, we’re definitely going to see more out-of-office work. By that I mean, there’s a number of companies that will probably say from now on people can work out of the office two days a week and everybody’s going to be in the office on these three same days, or things like that. We’re going to see a broader mix of models than what traditionally existed.
To take a step back, we’re going to have all three extremes represented: We’re going to have companies that snap back, and largely everybody’s back in the office like they were before. There are going to be teams where it’s what I just mentioned, where it’s a little bit more of a mix. Then there’s teams where they really are going to go fully remote and distributed.
If you look at the history of companies that [went fully remote], you had a series of tech companies pre-Covid—there’s only three or four that I can think of that ever hit any real scale. By scale, I mean a few hundred people to a thousand-plus people and that’s GitLab, Zapier and Automattic, and then it kind of fell off dramatically after that.
Pre-Covid there weren’t that many companies that actually had a true remote-first model, except for very large organizations. HP, Cisco, and companies like that actually had people who were already doing remote work before it was a big trend. The old incumbent companies were the ones that actually, in some cases, had the most flexible work-from-home policies or hire-somebody-randomly-in-Texas kind of policies.
We’re going to see all three models. Part of it will also be based on the stage of the team. And part of it is going to be the stage of the project. On average, the people that I’ve talked to have said that creative, early, creation-style projects tend to suffer a lot from remote work, while projects that are already up and running and have strong momentum, and it’s more a matter of turning the crank, tend to do better with remote work. A lot of the CEOs or executives I talk to seem to differentiate between those two types of work, and therefore the cadence and structures of work that is for them.
You’ve said previously that some startups think that they’re going to start remote, and see it as a way to accelerate things. But in fact, they’re struggling without having a physical presence.
Yeah, there’s a big mix. There are a handful of startups that I know, that are on the smaller side, that have decided to form a pod or bubble—almost like a work-life situation. And they’re sort of always together. I’ve seen other teams that are getting together in a park for a few hours every Monday, just so that they have a little bit more of that interpersonal contact and building of relationships, particularly if a lot of the people that they hired are now remote. Half of a company will suddenly be remote employees that have never met each other. People are trying to compensate in different ways. Then you see other companies where they’re reopening in their offices, based on guidelines. They’re basically saying whoever wants to come back can, and whoever wants to stay remote can. Typically it’s about 20% or so of employees who end up coming back in. But many people are continuing to work remote.
So there will be these different styles of work represented—remote partially, fully, and also office-leaning. Do you think there’ll be a dominant model? And is there any read-through for offices and real estate?
I’ll tell you what my view is, and it may not be a correct view. It depends a little bit on the geography in which you’re based. We can also differentiate between what companies that already exist will do, and then what companies of the future will do. We can come back to that. But my guess at the default is that most companies will come back and have a headquarters and a physical presence, and all the rest. There’s enormous value to all the serendipity that happens in an organization, or between an organization, by having people co-located next to each other. Now, those companies may have more flexible work styles than they used to.
Like back to maybe three days a week, you’re remote, you can work wherever you want, and then everybody’s in the office on the same two days—there may be styles like that emerge. And there may also be companies that just say, we’re just snapping back 100% and that’s the way we want to run. That’s going to be the majority, if not the vast majority of companies. I do think there will be some companies that will continue to be remote-first or remote-only. Those are two important differences. Many of the remote-first companies that said that they’re going remote from now on are have two or three characteristics. One characteristic is that many of them are still maintaining some physical office where people can congregate. The second characteristic is that many of them are in the Bay Area.
My chief of staff actually looked at this a few months ago. This is two or three months old now, but of the hundred, most valuable private tech companies by market cap, five or six of them announced that they’re going to remote-first. And all of them are in the Bay Area, even though only about half of the unicorn market cap in the US is in the Bay Area or half of those companies are in the Bay Area. So you’re basically selecting for companies that are in a region where governance is bad, where you’re worried about taxes and other things, and your employees may just not be happy to still live there. That’s part of the reason that we’re seeing that as well.
You made a distinction between existing companies and companies in the future. What do you expect for companies of the future in terms of approaching this?
There are some companies that have now been established as remote-first organizations, and they’re going to continue to try to scale that way. If you look at the amount of work that’s required to build a remote-first team early, you’re basically accelerating a large number of processes that usually come later in the life of a company, which can be very cumbersome processes. GitLab has documented these things extremely well. They have an open corpus of information about how they run a remote company that’s been an incredibly valuable resource for everybody. If you talk to some of the leadership over there, they’ll often talk about how they’ve had to adopt OKRs earlier, have different types of goal setting at a very early stage of a company when normally it may come later.
You have to really focus on asynchronous communication. You have to focus on all these shifts. They usually don’t come until you have a few hundred people. Really what you’re doing is you’re asking a 10-person startup or a 20-person startup to increasingly act more like a three-, four-, or 500-person company. If you’re willing to adopt those processes, which come with their own overhead and their own friction and issues, it makes it dramatically easier to scale up. So it’s basically a tradeoff, and different founders will make different decisions about where they want to fall in terms of that tradeoff.
Do you think people realize there’s a trade-off?
It’s unclear. Because if you’re three people it’s not too bad, but once you hit 10, 20 people, coordination costs go up, and then once you’re at a hundred people, it’s really hard. And the other thing that people often do is they try to optimize for time zones and if possible keep people in the same time zone or close time zones, because if you start having around-the-clock groups of people working on the same project, that can become really hard as well.
What is the future of Silicon Valley, given the departure of prominent members of the tech community for Texas, Southern California, and Florida?
If you look at every industry on the planet, there are geographic clusters associated with that industry. And in most cases, when you ask people where you should go to be a practitioner of that industry, the same set of cities crop up. So for example, if you want to go into finance people say, ‘Oh, you should go to New York plus Connecticut.’ Or if you’re in Europe, go to London, or if you’re in Asia, go to Hong Kong or Shanghai. For movies, it’s going to Hollywood. If you’re in Africa, go to Lagos. It’s very clear places. And if you think about those industries, you could do those jobs virtually from anywhere, right? You can write a movie script from anywhere. You can recruit actors from anywhere.
You can shoot anywhere in the world, you can digitally edit it. You can add a music score virtually. You can do all these things virtually now, and you could do those things for years, but nobody ever tells you, ‘Oh, you want to go into movies—you should really move to the Bay Area.’ Or same with finance, right? You can raise money anywhere. You can trade anywhere. You can come up with your trading strategies from anywhere, but everybody clusters. There’s a reason that people cluster, and we can get into all the different aspects of why, but the reality is geographic clusters exist for basically everything. So the question is, does Covid/the remote work that we’ve been thrust into, change that.
I think it will impact things somewhat. But the reality is ambitious people will continue to want to be amongst other driven, ambitious people working in the same industry. There are real effects to that in terms of information, sharing relationships, and all the rest of that. There’s a kind of serendipity that exists when lots and lots of people are in a cluster. If you’re online, maybe you reproduce that by having some online group, Twitter, or something else. But those ties are not as strong. If you can’t find an offline cluster, you have to find an online one, but eventually the offline ones will continue to dominate.
Now there’s a separate question, which is what share of that offline clustering will Silicon Valley continue to capture in the Bay Area? I do think that post Covid, the Bay area will be weaker than it was. I don’t think it’s going to be 80% weaker, but I could see it being 10% or 20% weaker because I know a lot of founders who are in LA, who are in New York, who are realizing there are these great other places to be with some density of other founders. Then I see people going to Utah for some tech stuff, and Colorado for a variety of other company types. So organically, that’s where the best founders are going. There are some people going to Miami and Austin and things like that. And on an average, I feel like those are more investors or people who have already seen success. Of course there are a lot of young founders going to those places too. But I probably know more people in LA who have migrated from the Bay Area than some of those other areas.
What about satellite offices? Some companies expect to have clusters of people in the headquarters, maybe in Seattle or San Francisco or somewhere, but then they’ll create a little office space wherever people are remotely. Does that seem like a trend that will take off?
That’s already been happening pre-Covid. I don’t think that’s anything new. I think before Covid, people would set up offices all over the place and they’d usually start with a second office, then a third office. Google actually really famously experimented with this like 10 or 15 years ago, when Larry Page said he wanted the best engineers, no matter where they are. They ended up with a very large number of people in onesy, twosies all over the world, and that failed miserably. And then they reconsolidated it. Now, the tooling is different now and there’s better ways to communicate and collaborate online, but the flip of it is, I do think there’s importance in face-to-face communications.
If you look at companies, when they had newer remote offices, you’d still find that many of the most ambitious people in the organization—that doesn’t mean the best, it just means the most ambitious—tended to cluster wherever the executive team and CEO were, because that gave them more face time with them. That gave them more ability to interact with them—you show up in person to a meeting, and you can chit chat after and pitch your favorite idea that you’re hoping to work on in the context of the company. It’s much harder to do that if you’re a thousand miles away. You just can’t walk that person back to their office and talk while you’re doing that. People tend to underweight the value of some of those interactions. And that happens already when you’re a thousand person company with 10 offices.
Is there anything that you feel like people are getting wrong, especially in terms of underestimating what things will be like after?
I do think things will be more flexible after, I just don’t think they will be the extreme of ‘everybody’s remote from now on.’ It’s interesting because early on in the pandemic I would talk to different people running companies and they’d say, wow, our company survey data is amazing. Our employees are super motivated. They’ve never been more productive. The thing that somehow wasn’t incorporated as strongly was the fact that every other aspect of that person’s life had roughly dissipated. You couldn’t go to the gym at six, you couldn’t meet your friends, you couldn’t go to your ceramics class or whatever hobby you have. Everything except for work and family went away. So that’s what people focused on. And if people are more productive, it could be because they have shorter commutes and they save time that way.
But I think part of it too is just a lot of the rest of their life went away. Now when people do surveys, they tell me that one of the big shifts is people want more interaction in-person with their peers again. That’s the thing that they hear a lot of. And that’s why we may end up with people experimenting with these more—you’re in the office three days a week and everybody’s in Monday, Wednesday, Friday, but Tuesday, Thursday, you can do whatever you want. We’re more likely to land there than remote only.
The shift to remote work was fairly ad hoc at many companies, with Zoom and Slack and these other tools grafted onto the workflows for our teams. Do we need different tools than we have to make this scenario that you’re talking about work?
There are a lot of tools that are coming together trying to address different aspects of remote work. And in a subset of them are things like, what is a remote virtual space that you can go into and collaborate on? There were really early attempts at that years ago, but I think there’s the next versions of those. Huddle would be an example. I just built kind of a fun side project called Pluto. The name may change, but it’s basically a way for people to have serendipitous group events or company happy hours. There’s a variety of other people trying to do things like that.
How does one find your Pluto project?
It’s at Pluto.video. The name may change, but you should feel free to check it out. And if you do, my suggestion is just grab a bunch of friends and try it with them because it’s more interesting as a thing where—I’ve had like a hundred people on it at once and you fragment into different spaces, so it works pretty well for bigger groups. It’s just a side project right now. There’s stuff like that. But I think there’s a lot of different types of tooling.
The other piece of it is that already because of WebRTC and WebGL, the world was moving in a direction where every vertical enterprise application, up to a point, was having a collaborative version invented. Figma was one of the first, and it was built on a WebGL for collaborative design tools. But there’s people trying to do different forms of collaboration for financial planning tools. Github is a collaborative engineering tool. We’re going to eventually see this emergence of collaboration in almost everything. One of the really interesting things is 10 years ago, when the first wave of social was happening, everybody was talking about the social enterprise and social products and every enterprise product would have social features. And I feel like now it’s finally happening, but we’re calling it collaboration. This is the right direction for a lot of the way people work. There’ll be a really interesting new wave of SaaS software that’s coming and that already has been existing.
Do you think people will be traveling more or less?
I recently invested in a company called TripActions, and they’re the sort of key breakout, 10-times better company in the corporate travel space. My opinion is that, number one, corporate travel is a massive TAM [Total Addressable Market] to begin with. It’s like a trillion-dollar TAM. Literally, I Googled it like three times, because I couldn’t believe it was so big. And there’s a few scenarios. Scenario one is corporate travel drops to some proportion of where it was and then takes time to recover from that baseline. I don’t think if that happens, it goes to 20%—maybe it goes to 70 or 80% of where it was and then it comes back. Before the fall wave of Covid I was asking friends of mine who were running large sales teams—1,000- or 2,000-person sales team—what proportion of their sales reps were traveling again. They said about 20%. The reason was their competitors’ reps were starting to show up places. So they felt like they had to go compete. It was just completely self-directed. They weren’t asking these people to go travel in the middle of it all. A chunk of the workforce will want to get back to it. Certain types of meetings may go away or the first meeting for something may decrease. But the flip of it is that if your competitor is showing up, you’re going to show up.
The second thing is there may be scenarios where certain teams who traditionally didn’t travel in a company travel much more now after Covid, because if you’re a remote team, you tend to get together more frequently in person. So your product team gets together. Your special functional team gets together every quarter. The entire company gets together every quarter. And people who normally wouldn’t travel, because they were all at HQ, are suddenly traveling potentially multiple times a quarter for the various off-sites with the various teams they’re part of. So corporate group travel may actually increase. It’s possible we’re in a world where baseline travel decreases because of Zoom, and group travel increases, and we net out to zero. It’s possible it’s down a bit, it’s possible it’s up. It’s uncertain exactly where it lands, but I don’t believe the scenarios where it’s going to be a third of what it used to be. That just doesn’t strike me as realistic.
Professional life for many people involved going to some number of events and conferences every year. Will that change?
We’re going to see many more corporate events that stay remote and I think platforms like Hopin or Welcome will really benefit from that. And the side project that I mentioned is actually being used by some companies for the networking side of their events. Not for the event side, but more like, ‘Hey, we want to get people together to talk after.’ And that’s the thing that is really the hard part to recreate online, is that serendipity again of—hey, you’re at the Figma developer conference and you run into somebody and you have a really interesting conversation and then you suddenly have a job interview. You’re just sitting there consuming content. You don’t have that experience. These platforms will eventually add tooling that will help with that. But I do think that half of the value of an event tends to be that side of it, the corporate networking or professional networking, and then the other half is the content and stuff. If the only thing that matters is content, that’s just going to be online because you can reach way more people. You can reach 10 times the audience by hosting an event online versus offline. If the offline networking and deal-making component is important, then you’ll still see those events happening. So I think it will be mixed.
My guess is that if people went to eight events a year, they go to two or three in person. But they’re in a nice location. They go for a few days. And the single day Midtown Manhattan hotel conference room, where people are presenting stuff the whole time, might slip away.
And if a company can get away not doing a road show for an IPO and they can just do Zoom all day, maybe that’s way better to do. Then you just saved a bunch of travel time. I do think some things will permanently shift or at least a chunk of them, a subset of that use case will permanently shift. But there are situations where that in-person interaction really does matter.