Innovation for Jobs

Innovation for Jobs

Office Extinction: The Rise of Fully Distributed Teams

Esko Kilpi wrote:

For most of the developed world, firms, as much as markets, make up the dominant economic pattern. The Internet is nothing less than an extinction-level event for the traditional firm. The Internet, together with technological intelligence, makes it possible to create totally new forms of economic entities… Also very small firms can do things that in the past required very large organizations.

This is true. But for certain small firms that are run as fully distributed teams (as mine, Parse.ly, is) the Internet is an extinction-level event for the physical manifestation of the firm — the office.

Already, companies such as Github and Automattic have minimized the importance of co-location in work collaboration. Successful massive creative projects are delivered not just by distributed teams, but also by volunteer teams. For example: the Linux kernel and Wikipedia. I wrote about this in my essay, “Fully Distributed Teams: Are They Viable?”

The disruption of the physical office for creative fields such as writing, design and programming (in particular) has some interesting (unemployment-affecting) conclusions, when played out on a 10-year scale. People in these fields can separate their decision to live in a place from the decision to work at a place. This not only makes labor more fluid, but it also turns certain certain locales, once considered economically disadvantaged, into ones ideal for creative labor.

Here’s my personal anecdote: I currently live in a small college town of 100,000 people: Charlottesville, Virginia. I moved there from New York about four years ago. Yet, from this town, I run a 26 employee company whose creative workers are spread all over the US and whose seed/venture financing came from New York, Washington DC, and Silicon Valley.

Though there are not many high-tech software startups in Charlottesville, there is a growing group of creative software engineers and designers who work for high-tech firms remotely, yet live in that town. I see them at local technology conferences, and I have seen more and more of them over the last few years. There is also a growing group of startup founders who are having a global impact with their companies thanks to the Internet. Alexis Ohanian, the co-founder of Reddit, has helped bring awareness to this trend through the recent film “Silicon Prairie”, and his book, “Without Their Permission”. This stance makes sense: he co-founded Reddit from a dorm room in Charlottesville at the University of Virginia, when he was 21 years old. He suggests that the 21st century will be “made, not managed”.

The old adage, “Think Global, Act Local” can have a new interpretation with fully distributed teams: employees can think globally about their work, but act locally about their family and community relations. Entrepreneurs can start businesses from anywhere, with consumers using their products from anywhere, and they can also recruit the best talent to work in a fully distributed team managed by web-based tools.

Creative employees will choose places to live not based on the availability of local jobs, but instead on quality-of-living factors — with the only core requirement being fast broadband Internet access. These employees will also agglomerate in new creative hubs, attracted not by major corporate employers, but by other office-freed creative workers. Comfortable with distributed work in these fields, they will also be able to pick from a slew of employers, and weigh the opportunity cost of remote employment against their own willingness to pursue small web-enabled creative businesses of their own.

Paul Graham wrote in “How to Be Silicon Valley”:

You could make a great city anywhere, if you could get the right people to move there. So the question of how to make a Silicon Valley becomes: who are the right people, and how do you get them to move?

What I’d posit is that perhaps “the next Silicon Valley” is not a place, but an attitude toward work and life. It is an attitude that says, “I will live where I can be creative and happy, and I will work remotely on the projects that matter to me.” The question is, how do we bring other professions beyond programming, writing, and design into this fold? And in 10 years time, how will the economy react to a rising distributed workforce and a declining office workforce?


Andrew Montalenti (@amontalenti on Twitter) is co-founder & CTO of Parse.ly, a premium content & audience analytics provider for major media companies & digital publishers. Parse.ly’s programmers & designers are part of a Fully Distributed Team.

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