There’s no doubt about it. Distributed teams build better products.
As the founder and CEO of a remote-first distributed company, I’ve seen it first hand. We have 16 different nationalities, working across 10 countries, with 26 languages spoken, and the benefits have been enormous.
Not only are we able to access unbelievable talent that would have been hard for us to find in the UK where we are headquartered, but we also have a rich diversity of perspective that has given us a real competitive advantage.
A new paradigm for building teams
Three years ago, distributed teams were still relatively rare. However, as with so many things, the pandemic has changed all of that.
With the enforced and rapid shift to remote working, suddenly everyone realized that it didn’t actually matter where you worked, or even when you worked. Because this change happened so quickly, in the midst of a global health crisis, it’s easy to overlook quite how significant it is.
For millennia, most businesses have organized themselves in the same physical locations, typically working together in factories, offices, and markets.
In modern times, only once a company reaches a significant size would it become feasible to expand abroad and make hires in other countries or continents. Even then, those people would be working in the same physical space, typically an office, with other colleagues.
In today’s new reality of distributed teams, it’s now possible, and arguably advantageous, for a company of twenty people to hire an engineer in India, a marketing manager in Denmark, and a sales lead in the US, as we did in early 2020.
This way of building teams simply wouldn’t have been possible twenty, or perhaps even ten years ago. But we now have the technology to work and collaborate across multiple geographies and time zones, albeit that there are still significant problems still to solve here too.
However, the main reason distributed teams have become commonplace over the last two years is because there are two significant advantages to building a company in this way.
Cherry-picking from the world’s best
The one we tend to focus on is access to talent. With no requirement for people to be physically present in the same place, you can cherry-pick the very best people, wherever in the world they happen to be.
For early-stage tech companies in particular, which would likely struggle to compete locally with the hundreds of companies fighting for the same handful of talent, this is transformative. It suddenly becomes feasible to hire the top 1% of software engineers, even if they’re halfway around the world. But it’s not just startups.
Some of the world’s biggest tech companies, such as Stripe and Coinbase are doing the same. Coinbase said that in March 2020, 69% of its employees were based in San Francisco. 18 months later, only 30% of its employees lived there, even though its total headcount had more than doubled in that time.
Distributed teams also mean you can seek out those people with a shared passion, despite the fact they might be scattered across the globe. For example, our lead product designer is based in Izmir, Turkey. We found him because he was working on a productivity tool at the time, which helped teams track their goals. After getting to know each other, we realized there was a strong overlap in interests and ambitions, and he joined the team.
The value of global perspectives
The benefits of building a globally distributed team extend beyond the ability to hire the most talented people, however. Over time it’s become ever clearer to me that there is an inherent and very significant commercial advantage to working alongside people with different experiences and perspectives.
I began my career as a trained architect under the mentorship of the late Charles Correa, who is credited with the creation of modern architecture in post-Independent India. One of our big projects was the Champalimaud Centre in Lisbon.
We worked with an international team comprised of Portuguese contractors, American consultants, and German engineers. Each of us brought something to the table that the other did not, and could not; ultimately resulting in a timeless building for the city of Lisbon.
A few years later, I spent time at Amazon as a product manager. The teams were on a different scale altogether, often made up of hundreds if not thousands of people. All of them were globally distributed and diverse, which was critical in enabling them to empathize with the needs of their equally diverse customer base.
It meant we understood that Japanese customers prefer busy websites and graphics to minimal ones, or how German customers rely more on TV guides for what to watch than, say, Brazilians, who prefer word of mouth recommendations.
Now, as a founder and CEO, I’m seeing this play out again. A number of our engineering team are based in India. The dominance of mobile applications in India means that the country’s software engineers are intensely aware of the importance of making sure everything is mobile friendly, and they know how to do it brilliantly. Not only that, but their experience also gave them the conviction that it’s something that we needed to think more about.
Another of our engineering recruits is based in Lagos, Nigeria. Its status as the fintech capital of Africa means its engineers bring a deep focus on APIs, which allow for integrations with other software.
Getting this right is critical for us, and it was immediately apparent that he thought about this in a more meaningful way than others in the team.
All of this allows us to build a better product. This applies both on a fundamental level, in that it just works better, but we also have a much greater awareness of what we need to break into new global markets, because we have people on the ground with a lived experience in these places.
Are distributed teams for everyone?
We happen to be a software company, but there are countless studies that prove diverse teams deliver better outcomes in all sorts of scenarios, whether it’s stock market investing, a jury panel deliberation, or product innovation.
The challenge for most businesses, however, is that it’s not always easy to build truly diverse teams if you are all based in the same location. By default, there is a bias towards people with fairly similar experiences, owing to the fact everyone lives and works in the same place.
Yes, diversity comes in all different forms, but as the examples above illustrate, globally distributed teams add another, very valuable dimension.
Nevertheless, the decision to build a distributed team shouldn’t be taken lightly. It requires a very intentional shift of mindset to create an async working culture, alongside strong leadership to spearhead this change.
You’ll also need to invest in technology that gives team members more visibility and access to key information, so they are empowered to work on their own terms at a time that suits them.
It’s not for the faint-hearted, but if you’re willing to make the transition work, the pay off should be well worth it.