When myself and Matt moved to the Philippines in May of 2011 we thought that opening an office would be the right path for our business to take. We thought if we could get all our staff in one place, it would have a number of benefits for our business.
- Increased Productivity – We thought by us looking over their shoulder, we would be improving the amount of work getting done. Wrong! Firstly its pretty simple to install remote monitoring software (we currently use TimeDoctor.com), which I would argue works better then physically looking over their shoulder. Secondly, if you are hiring these sort of employees then you might want to look at your hiring techniques.
- Lower Staff Turnover Rate – We thought having people working in the same area, they would develop relationships together and therefore prefer to stick around. This generally wasn’t the case, as we had multiple staff leave as soon as they were offered a position working from home.
- Improved Line of Communication – Having the ability to walk up to somebody’s desk and train them / talk to them is definitely and advantage, however we found that 95% both us and the team would talk to each other via skype anyways! So why not just meet up once a month and talk through everything?
I honestly remember thinking that opening an office would change everything, like some sort of magic bullet that would bring the money / clients flowing through the door.
In fact opening an office perhaps was the worst decision we have made since moving to the Philippines. I know there are plenty of cases of foreigners moving to the Philippines and opening offices and being huge successes, but I am strongly of the opinion that most people do not need to open an office here in order to be successful. Particularly for people who are not inclined to management, like myself and Matt. I do not want to spend my day micro-managing staff, its just not my style.
I worked for an Australian guy here in Manila, helping him manage his staff for a few months and I am still not really sure where the benefits to the office he had were. What I noticed was that all the staff would still communicate via skype, even if they sat next to each other! They would all still sneak a look at facebook, or have a little nap or sit on their phones messaging their girlfriends. So what was the purpose of this office? Why not send them all home? I could see their being a real productivity drop and I could see the entire team being a lot happier with their working situation.
Infact, I spoke to most of the staff working for them and the minimal travel time for these guys was an hour each way! Minimal! Imagine how much happier the team would be saving themselves 2 hours a day!
Examples of Businesses Succeeding Without An Office
Adsense Flippers – Joe and Justin are buddies of ours and we have seen first hand how they have built an adsense empire from the Philippines with staff that work from home. They currently run a team of around 10 I believe.
James Schramko - This guy always comes to mind when I think of someone who has built a remote staff empire! Don’t quote me on this but I believe he has a team of over 50 working for him mostly here in the Philippines! Great example of someone killing it with the work from home model. Not to mention his a fellow Aussie
Kissmetrics – A big player in the online analytics space, their entire team work from remote locations and it does not seem to have affected them in any way.
TropicalMBA – The number 1 advocate of remote location / location independent business setup. Dan & Ian have managed to start a million dollar ecommerce empire along with some other great projects.
Eben Pagan – Another guy running a multi-million dollar empire, with over 50 staff all working for home.
When Is An Office Worth It?
It depends on the amount of revenue you are generating.
If you are churning out a million dollars in revenue, then an office is a much more justifiable option. The cost of an office would be a lot smaller percentage of your revenue. When you are a small startup, then the cost associated with starting an office is a lot more of your overall revenues for something that in today’s day and age I would argue plays a very little role in helping create value for your target market.
Anyone else out there that may running successful remote teams?
PS Our Filipino job site is starting to help quite a number of entrepreneurs find and set up remote teams for themselves