Work no longer has to take place in a single office. We are lucky enough to live in a time where there are enough tools to help us expand locations and still feel closely connected to our peers. But, even though company expansion is easier than ever, it’s vital to implement the right strategy. This is even more important at a startup where resources and time are both significant constraints. Implementing an incorrect expansion method has been an underlying point of failure for many companies in the past.
There are 5 ways to grow your company. All with their pros and cons. These methods are:
- Grow one office
- Outsource a team
- Open a satellite office
- Hire remote workers
- Build a fully remote organization
grow one office
The tried and true method of starting a company is opening a single location (in someone’s garage) and grinding it all out together. The initial team bumps shoulders with one another countlessly, everyone feels the ups and downs of working with one another, and the camaraderie which is formed can help push the company to do incredible things.
This method is fantastic for a company that is headed by founders and initial employees but occasionally gets out of hand. Staying in one location can hinder hiring opportunities, give a team group think, and limit potential sales leads.
Pros
- The whole team is together and can grind through problems
- Drives the founding team to think about company culture
- Allows for tighter control on the team
Cons
- Greatly affected by local economy shifts
- Hiring in competitive tech hubs (SF, NYC, etc.) can be time-consuming
- Higher employee turnover
- Most expensive option when based in high-cost locations
- Susceptible to groupthink
Outsource a Team
The typical outsourced tech team resides over in regions of India, mainly Bangalore. But more and more we see outsourced work head to areas like Eastern Europe, Ireland, and across Latin America.
Building an outsourced team is almost always done for the cost benefits. A typical engineer in India can cost 75% less than the same quality engineer in San Francisco. But, the cost is typically the only benefit. Work is always slower and lower in quality. Not because engineers in other regions of the world are low quality, but simply because there are communication struggles between the outsourced workers and the home office.
Pros
- Cost
- Cost
- Cost
- Cost
Cons
- Time zone challenges
- Communication gaps
- Slower speed of implementationÂ
- Lower quality of work
Open a satellite office
If a company is big enough, it will open up a second office at some point or another. The most talked about example of this in recent history was Amazon’s selection process for HQ2. It’s important to note, however, that Amazon had hundreds of satellite locations before this process.
Satellite offices remove many of the pitfalls of hiring an outsourced team while being much more affordable than maintaining one location. Other benefits occur because of the region you are located in. A robotics company setting up an office in Pittsburgh will give you better access to Carnegie Mellon’s research and Uber’s self-driving division.
Setting up a satellite office can be super time-consuming. Amazon has the time and resources to find the perfect location for HQ2 and decide not to make a move. But startups don’t have the resources to do the same.
Pros
- Regional benefits
- Cost
- Diversification of thought
- Ease of sales to local companies
Cons
- Hard to decide on a location
- Time consuming
- Requires deliberate actions to maintain a company culture
Hire remote employees
Remote work has been growing exponentially over the past few years. A majority of knowledge workers spend a considerable portion of their day sitting on their computer, making phone calls and… that’s it! With the rise of collaborative apps like Google Docs and communication platforms like Slack, it’s quite easy to operate a fully distributed company where employees can work from anywhere.
It’s not all perfect. If you have an HQ with remote employees, those remote workers often feel left out. Decisions typically are made at HQ. So these remote employees are told what to do and feel left out of the creative decision-making process. Also, remote workers can often feel alone and burn out faster than those who have a specific location for work vs. pleasure.
Pros
- Limitless hiring opportunities
- Typically lower cost, though some remote employees can command high salaries
- Can support a very diverse workforce
Cons
- A ton of time has to be spent with these workers to make sure they are on the same page
- Remote workers can feel isolated
- Regional benefits are limited
Build a fully remote organization
Remote companies are a relatively new trend, but one which has been picking up steam recently. Focusing on being fully remote helps ensure that everyone is on equal footing – as opposed to just saving some remote employees. Employees can be hired from anywhere, can build their schedules, and make a company where people work simply because they want to. A compelling concept.
These companies require a ton of time, effort, and deliberate thinking. They typically move a little slower since communication can be challenging, but are incredibly resilient to change. The biggest struggle with these companies, however, is their speed of innovation. Innovation often occurs due to casual conversation. Without it, you ensure that there are fewer options to spitball random ideas.
Pros
- Resilient to external economic shifts
- Reduces groupthink
- Grants flexible schedules to all employees
Cons
- Innovation suffers greatly from a lack of casual chat
- Still a new innovation and rough around the edges
Sooooo… what’s the best move for me?
There is no perfect model. There are pros and cons of each model, and some models work better for specific industries than other ones. One America Works can help! If you want to figure out which model will be best for you, feel free to reach out to hello@oneamericaworks.org, and we can set up a call to chat 🙂
