Why Distributed Cultures Will Lead the Future of Startups

If the great migration out of Silicon Valley has taught us anything, it’s that the technology industry could have begun this movement a long time ago. In fact, the industry should have explored other pastures away from Silicon Valley years ago.

Early in the internet era, Silicon Valley made sense as the digital Mecca. Proximity to researchers at leading universities, ingenious startup founders, and, of course, actual silicon chip production made the former orchard an ideal place for the digital gold rush. As technology progressed, however, the idea that there could be only one place worth creating technology became antithetical to the era’s zeitgeist.

By 2000, nearly half of North Americans had internet access, and more than 440 million corporate and personal email accounts existed worldwide. The digital revolution was connecting people in disparate locations, allowing for vast information sharing beyond office walls. And yet, companies and investors alike remained married to the idea of Silicon Valley as the technology hub.

I’ve worked in technology for more than 30 years and I have never lived in Silicon Valley. The industry should have unmoored itself as soon as it was possible. Companies that moved out or at least explored distributed workforces would have reaped the benefits of that foresight, just as many in Austin, Denver, Minneapolis, Chicago, Northern Virginia, Orlando and other burgeoning technology cities are today.

While any industry can benefit from a mindset shift toward distributed cultures, I think the technology realm is especially well suited to pursue life outside the Bay Area.

The most significant benefit to a distributed model is access to talent. Yes, Silicon Valley is home to outstanding universities and still draws tech talent from every corner of the globe, but other locations have caught up in many ways. Virtually all technology companies turn to universities as a major recruiting pool, but some technology sectors, like cybersecurity, are especially suited to remote work.

For example, schools like Purdue and the University of Wisconsin pioneered cybersecurity as part of an engineering curriculum. Other universities across the Midwest followed suit, and in the South schools like the University of Central Florida and Georgia Tech implemented large and impressive security programs. However, many traditional technology universities were late to pick up on cybersecurity as a discipline, and those that did now tend to offer a more theoretical approach.

Technology companies that insist candidates move from Madison to San Francisco or Redmond will lose out on high-end talent when people elect to stay closer to home or where they went to college.

There is another boon to hiring talent no matter where they live. Companies can create new compensation models to account for disparate costs of living and pay employees commensurate with their local environment. This approach to recruitment and compensation removes self-imposed limits to hiring that competitors will experience so long as they remain grounded at one headquarters.

The biggest challenge to remote operations is human-centric. How do you create “the team” when the team hasn’t actually met in person and is never together? Calibrating the organizational psychology of a company is challenging enough when everyone is in the same office. It’s almost an entirely different discipline when everyone is in different locations.

My recommendation to technology companies is twofold. First, establish physical offices in cities or locales where many employees live. Try to hire from those areas when possible. Second, bring people together on occasion, whether it’s the entire company or smaller teams at their local offices. Encourage employees to visit other offices. It’s so much easier to read an employee over video chat once you’ve experienced their humor and expressions in person.