Working From Home…When We’re Back in the Office

HOW THE SECTOR ENABLING REMOTE WORK STANDS TODAY AND MIGHT LOOK POST-CORONA

Introduction

This is the first of a series of content we plan on publishing into certain sectors that are seeing changes due to the current crisis. We will at times focus on the state of the vertical today, but mostly on the state of the vertical in a “new normal” and what opportunities we see emerging accordingly.

The very relevant, first vertical we will attempt to unravel is the Working From Home sector.

Our working assumptions on the sector moving forward are:

1. Many, if not all, of the core infrastructure tools (Zoom, Slack, Microsoft Teams and Google Hangouts) are already built and work quite well

2. Usage of these “infrastructure tools” will grow well beyond the tech-oriented world and at a much faster pace than pre-pandemic

3. There will be significantly more work conducted from home even when stay-at-home orders are removed

First and foremost — if you disagree with our base assumptions above, we would love to hear from you and why. But based on our assumptions, we wanted to dive into and try to understand what are the challenges and gaps of “existing tools” and where the opportunities lie for new products and companies to be built.

Industry Perspective — An Informal Survey

To begin, we spoke with industry managers to share their experiences of working from home for the first time and how they see remote work evolving post-Corona. We chose three people working in different functions in big global companies.

Senior Engineer at a top-tier financial institution:

• Believes the technical day-to-day activities of his job have not been impacted
• Only new tech adopted to-date has been Zoom, no new external communication or project management tools
• Thinks this quarantine will lead to more remote-working post-Corona and noted how he’s “actually seen some members of his global team for the first time in the last few weeks via Zoom”
• Sees the biggest gap of remote work in mentorship & training, especially for more recent hires, who often times require hand-holding in code-review and general mentorship
• Hopes to continue working from home once or twice a week moving forward

Sales & Biz Dev at one of the FAANGs:

• Believes the technical day-to-day activities of his job have not been impacted, however, the substance of his work has (i.e. less execution focused, more long-term focused)
• No new tech has been adopted, as a tech company with internal communication tools already in place, his transition to remote work was fairly seamless
• His biggest challenge of working remotely is the inability to sell face-to-face, but he’s curious to see if his sales team will feel “as obligated to always be traveling post-Corona”
• Sees the biggest gap of remote work as his inability to lead internal initiatives or add value to internal projects including mentorship, club support etc.
• Hopes to continue working from home only when he needs to, but would still prefer to go into the office as he believes internal relationship building is crucial

Sales & Trading at a top-tier financial institution:

• Believes the technical day-to-day activities of his job have not been impacted
• Only new tech adopted to-date has been Zoom, no new external communication or project management tools
• Thinks the biggest issue of working remotely in his role is Compliance, but thankfully, most of the current playbook they are using was put into place following 9/11
• Believes the biggest gap of remote work is in the social aspects of the office — being privy to information in real-time, the constant engagement and banter etc.
• He would love a tool that where they can collaborate in a space together that generates a similar energy as the office
• Hopes to continue working from home only when he needs to, but would still prefer to go into the office as he believes the energy and social aspects of the firm is crucial for career development. “That intangible would be lost.”

These views were remarkably consistent when speaking with our 20+ portfolio companies who span the early and growth stages of a company life-cycle.

Culture & Mentorship — A Hurdle of Remote Working

A key learning we derived from the above conversations is that due to years of innovation and internal tools being built, many folks’ day-to-day activities are able to be accomplished remotely. However, there is a cultural and often intangible aspect of the office that is very much missing. This finding is consistent with Mary Meeker’s latest report which cites at the margin, productivity is the same if not higher, but “maintaining engagement, culture, training” etc. is a lingering “top of mind issue with large scale remote work.”

What makes this gap even more of a concern is that its gravity will be less felt in the day-to-day and more as a potential hurdle in long-term career development. For example — Does a new hire receive the same level of training or mentorship when working remotely? Does someone working remotely get the same promotions as one who works in the office? These are important questions not only for Corona-induced quarantine life, but also for the future of globalization and remote working in general.

But how do you grow a global and remote workforce yet empower your employees to collaborate and feel like they’re not “missing out” when not in the office? We believe this dichotomy will lead to innovative solutions that bridge that gap and develop into mainstream solutions for the evolving job landscape following record high unemployment.

Thankfully, there are some startups already attempting to address this problem…

On one side of the spectrum is Spacial, a VR/AR teleportation company. While a very cool concept, and could be laying the foundation for a “Minority Report’’-like long-term solution, we do not believe this is an investable solution for the next 3+ years. First, we view the price point as a major hurdle for mass adoption, and we don’t see that changing meaningfully in the near-term. Second, it is difficult to foresee this sort of potentially friction-filled experience generating the fluid office-like energy, culture and environment that we are seeking to solve.

On the other side of the spectrum are companies like Pragli and Remotion. Both companies have developed what appear to be collaborative, business-friendly versions of AOL Instant Messenger (AIM) and differ from Slack in their use of video chat / screen share. As these solutions are more native to us and do not have the friction points associated with AR/VR, the opportunity for mass-market adoption will be easier. This is likely why Pragli has notched some early customers including Facebook, GoDaddy, VMware and others. However, we view these companies as more short-term / interim solutions unless they are to evolve and tackle the main challenges of mentorship, career development and office culture.

Two young companies to keep an eye on who appear to be a little more correctly focused on the co-working and career development shortcomings of remote work are Tandem and Teemly. For example, Tandem offers the ability to hangout during the day through a minimal voice/video call feature “to feel connected — like you’re working at the same table.” While that particular feature is likely not for everyone, we believe this sort of feature is a step in the right direction to mimicking the office energy and atmosphere we now lack.

Three Quick Predictions

1. Training/Mentorship Solutions Will Differ by Role: Solutions will be developed to help guide the A-Z process of employee onboarding, training and long-term mentorship of the distributed workforce. We believe these solutions will not be one size fits all. Instead, we believe that sales and business development roles will have a solution which will look & feel very different from the onboarding, training and hand-holding required for a technical engineering role with activities like code review. We would love to chat with any founders building A-Z remote employee solutions — especially with a niche focus.
2. Multi-Modal Video Collaboration Will Shine: In a platform like Zoom, we have found two key limitations 1) video collaboration happens only in real-time 2) the meetings themselves are scheduled and structured by nature. As such, we believe a company like Loom has positioned itself well in the asynchronous workflow of video collaboration but that there is also room for improvement in making synchronous video tools more fluid and flexible. However, whether new solutions will be successful in addressing these limitations directly or an existing platform like Zoom merely integrates these as new features is yet to be seen.
3. Israel Will Emerge as a Solution Leader: We believe the Israeli ecosystem is well prepared to build meaningful solutions to address these gaps. In a culture that has had to maintain office culture, career development and constant collaboration through multiple offices and geographies for over 20 years, the core understanding of the challenges is inherent in the Israeli founder DNA. We have already seen Israeli companies like Empirical, Eloops and Hibob try and address aspects of remote hiring, training or culture, but we would love to see more.

In Summary

We believe this pandemic will likely serve as an inflection point for a further distributed and remote workforce. This belief was only validated through our portfolio and industry research which demonstrated high levels of productivity despite the global circumstances. However, we also believe that a more distributed workforce will only be sustainable in the long-term if progress is achieved in making remote work a little less like working on an island, and a little more collaborative, mentorship-friendly and career-development driven. This is a current gap whose solutions will be not only pertinent in times of Corona-induced quarantine life, but as we continue forward into an evolving job landscape post-Corona. Considering the nascency of the companies addressing this gap today, we believe this is a subcategory that has yet to truly take shape and will now become a focus of our investment team.