Read my new book, An Enlightened Entrepreneur:
57 Meditations on Kicking @$$ in Business and Life"4.8/5 stars" on Amazon
Monday, August 24th, 2009

10 Inside Tips Of Leading A Virtual Business (From The CEO of #1 Purely Virtual Co.)


I work on the management team of a purely virtual company — as in, we don’t have any physical office.

At about 70 people, we are the largest purely virtual company I know of.

Note: see a recent update on 2 other virtual businesses at the bottom of this article.

Sure you may know larger teams of telecommuters out there — but they are typically part of a larger organization that has a physical office…we have none!

In fact, part of me sharing this posting is to find out if you know of any other sizable purely virtual teams out there!

In the meantime, I thought I’d share with you some of the pros and cons of a virtual business:

Virtual Team’s Pros & Cons

Benefits of a Virtual Business

  1. You Can Hire Best of Breed — Arguably the most valuable benefit of working remotely is that you can hire THE best person for a role (as opposed to settling on hiring in a specific region).
  2. Potentially Physically Healthier — Your team has the potential to lead a more healthy lifestyle if they work virtually as they’ll have more opportunity to exercise and they will also likely eat more meals made by themselves (which are typically smaller/healthier portions) — I recommend that you emphasize to your team to take advantage of this opportunity!
  3. Lower Overhead — You save the cost of renting, leasing or owning physical property.
  4. More Flexible Scheduling for Your Team — Your team can have a little more flexibility for determining their working hours; for example, if a team member wants to take off a half-day of work on Friday and then make up for the work on a Saturday afternoon, that becomes easier.
  5. No Commute Time — Your virtual team has the potential to work more hours than they would in an office since they won’t be commuting…this will also save them commuting costs (car, bus, train, etc.).
  6. Lighter Carbon Footprint — Your virtual team will be producing fewer greenhouse gas emissions per person.
  7. More Time With Children — Your team can see their children (or pets) more often.
  8. Metrics Become Dominant — My experience is that a virtual environment has an interesting positive bi-product: you will need to utilize metrics even more than usual (since you won’t be able to see as much in-person proof of results)…this is a good thing.
  9. Increased Travel Opportunity — Allowing your team to work virtually means that if they have the proper setup, they can work from different locations (allowing them to travel to new and exciting places that will help them grow)
  10. The Team Saves Money on Food — Your team will likely spend less on food when they work from home.

Challenges of a Virtual Business

  1. Difficult to Express Emotions — It’s way more difficult to read emotions in a virtual work environment — for example, if a person is about to cry, you can not as easily tell that over the phone that you can in person.
  2. Difficult to Visually Represent Thoughts — It is tougher to represent information virtually than in person. A giant white-board is way more efficient for communicating than any Web application I know of.
  3. Tougher to Post Job Listings — Many job posting sites — including Craigslist and LinkedIn — do not let you do a job posting to the whole world (they force you to name a geographic area)
  4. People Can Hide Things More Easily: More Difficult to Hold Accountable — In general, you will have to work harder to hold people accountable when you’re working virtually — it’s just much easier for someone to “drop the ball” virtually than it is for them to do so in person.
  5. Physical Dormancy — Watch out for your sitting posture. Working from home typically means that your body will be in a static seated position longer than if you were going into an office (since going into an office means you’ll typically be taking more walks to conference rooms, restrooms, outdoor breaks).
  6. Street Noise — You may find more street noise working at home. For instance, I work in my home which is one-story up on a relatively quiet street yet I still have construction work outside, yard work by neighbors and couriers buzzing my doorbell.
  7. Time Zone Management — You will typically have more your people spread across multiple time zones which means some creative scheduling. In the case of our management team, for instance, we have three of us in the Pacific Standard Zone (PST) and two others in the Eastern Standard Zone (PST); which is three hours apart.
  8. Lack of Physical Touch — I have learned that physically connecting with a team member — whether through a hug or a high-five — is helpful to team bonding…you have much less of that with a virtual environment.
  9. Fewer Opportunities to Bond Away From Work — When your team is working remotely, you will have fewer opportunities to bond outside of work because: A) There may be more of a physical distance between your homes and B) You won’t have a mutual office in which you can say: “Let’s go grab a drink together after work” or “take a jog together during lunch break.”
  10. Communication Becomes Even More Important — Effective communication in business is always vital; as you work in virtual environment, you will want to err on the side of over-communication to make sure your team is as much on the same page as feasible.

Bonus Tips for Virtual Environments

  • Virtual Team Communication Tools
    • Skype — Effective for two-person video conferencing calls
    • ooVoo — Interesting application we’ve been testing for video conferencing beyond two people (we’re only on the free trial so far so we’ve just dabbled with three-person video conferencing so far)
    • Google Docs/Apps — We use the Enterprise Version of Google Apps/Docs and are pleased with the collaboration abilities
    • Live Meeting — We use Microsoft’s Live Meeting to show our desktops to each other
    • — We use this Web site to set up free conference calls
  • Managing Virtual Teams
    • Daily Huddle — Just about every person on the team is involved in some type of daily huddle with their team (ideally 7 or fewer people) (see The Daily Huddle article I wrote.
    • Team Calls — We do a conference call with the entire company on a bi-weekly (every two weeks) basis (we cover general updates and training)
    • Ask “How do you feel?” more often — I find it useful to ask our team how they feel more often than I would in an in-person work environment. This is especially important for the “Feelers” on your team (check out my article on Top Types: 16 Myers Briggs Personality Types (8 of the personality types are feelers). Go to the same Introverts — For the more quiet introverted people on our team, I try to get them more involved by asking them their opinion on conference calls (for more on introverts, check out TopTypes for more on introverts.
    • Regular in-person get-togethers (including for Strategic Planning) — I’ve found it useful to get our smaller teams (e.g. our Management Team) together in person on a regular basis (quarterly or monthly is ideal if you can afford it) — in person meetings are most effective for Strategic Planning meetings (such as setting 3 year plans, 2-year plans, 1-year plans, etc.) where you need to do exercises such as a SWOT Analysis.

Another important lesson I found is that working in a virtual workplace tends to be really easy when your business is performing well and super-difficult when your business is having performance challenges.

That means that you’re really going to have to be at the top of your game during the tough times.

If you know of any purely virtual companies larger than 70 people, please comment below.

And you may enjoy this 5 Tips For Managing Your Virtual Team article I wrote.

Update On Other Larger Virtual Companies (Sept. 5, 2012)

There was an article in today’s Wall Street Journal that identified 2 other large virtual businesses: 1) Automattic has having 123 employees working in 26 countries  with most everyone working from homes (though they do have a small San Francisco office for occasional use)); the article also mentioned Kalypso LP which claimed they have 150 employees around the U.S. and in Europe with no corporate offices.

5 comments so far (is that a lot?) | Continue Reading »