Remote work will revolutionize the communities that embrace it

'Remote work' is a term you will hear more and more in the coming decade. The global pandemic of 2019-2022 and the macroeconomic turmoil of 2022 are shaking up the calculus that workers and families use to determine where to live and work. Fundamental assumptions about how to plan your adult life and career, assumptions that have been around since the beginning of the post-World War II era, are starting to break down.

To illustrate a point on how local communities can actually benefit from this shift, I want to:

• Give you some short autobiographical context
• Touch on some ripple effects of the pandemic, and
• Ultimately, talk about local communities.

I hope you'll come along for the ride.

To avoid leaving you in suspense, I'll tell you the thesis, straight-up:

Every region, whether they know it or not, has a once-in-a-century opportunity to revitalize its economy by attracting remote workers.

But first, A brief autobiographical memoir-lite on remote work

I have been an entrepreneur for over a decade now.

When you're an entrepreneur just getting started, you make a lot of mistakes. A crucial mistake that I made over ten years ago at one of my first businesses was getting an office too soon.

You see, this business was a fledgling app agency (back when developing and designing iOS and Android apps was an exciting new specialty service) and I assumed that having a real office (especially for providing services to clients) was a symbol of professionalism and clout.

So with minimal revenue, my young co-founders and I found a local office park and went — like 'professional businesspeople', we thought — and opened up an office in a suburban area of the city we lived in.

Hey — it's what Michael Ovitz did when he started the famous Creative Artists Agency (CAA) in Los Angeles — he leased an office (and some fancy cars) and faked it till he made it representing famous clients in Hollywood. "You gotta spend money to make money".

What I learned was that what might have been the right choice for a mythical Hollywood agency back in the '70s, might not have been the best move for a little software agency in the '10s.

I was new to almost everything in business back then, and I didn't understand why commercial landlords insisted on a one- or even a three-year lease. We were just a little startup agency — couldn't they see that didn't make sense? The room was empty anyway, why couldn't we just go month by month? Weren't they getting zero dollars per month when it was empty? Why did this feel like a commitment on par with getting married?

Long story short, I learned a lot running that agency — including the pain of having to pay rent every month, like clockwork, regardless of how the business was doing.

A thought crossed my mind many times that will be familiar to almost all business owners: "Is this lease really worth it? Could this be done a different way?"

We did find a different way — by moving into a cheaper space. We downsized and literally just took over the corner of a bigger startup's open-plan office, in a more casual arrangement. The more informal method of just making a quick deal with another startup CEO to share some space was what we actually needed, and I never forgot how much better it felt for our startup to shift gears and ditch formal landlords.

Manhattan, 2017

Fast forward five-ish years. I'm now building a VC-backed health startup called Blue Mesa Health (a different company from the agency). It would eventually sell in 2020. We were making more money — but burning more money — than the bootstrapped agency.

Our market was in the US, and some of our first partners and customers (and my co-founder) were based in New York, so I had gotten a work visa, and moved to NYC from Canada.

We still had a monthly rent expense, but it was a fraction of what we would have paid if we actually housed every single one of our dozens of employees at a desk in an office.

Many of our employees worked remotely. We had some shared office space in Vancouver and New York that people could use from time to time — but in retrospect, given how important it is to conserve cash during startup growth — maybe we didn't even need that.

We operated then in a fashion that is now called the "hybrid company". People could come into the office however many hours or days they wanted if it helped them work better, but full-time attendance was not expected. For important brainstorming and problem-solving sessions, we did gather in person. As cash allowed, we made attempts to bring people together across cities for short in-person retreats.

We were now using 'co-working spaces', and in Manhattan that meant a one-room Midtown WeWork office. I had been extremely paranoid about traditional commercial real estate leases and never felt like our seed-stage startup should enter into one. The month-to-month nature of WeWork (plus all the amenities and "better vibes") seemed to resonate. The team members based in New York really liked it. Coffee (and beer !) were free at the time.

This was the era when WeWork was growing inappropriately fast in New York and around the world — and often extending discounts and perks to tenants to help feed their growth. We took advantage of that. There was a certain boom-times zeitgeist in the air during those years.

We never called ourselves a "remote-first" company or a "hybrid company", but by the very nature of being frugal, agile, and needing to employ people in several different countries, we had to learn remote-first skills naturally.

We used Zoom consistently for years before it became more famous during the pandemic.

I didn't think we were running our company in any kind of strange way. We had the trappings of "Silicon Valley-style culture" rather than "old school culture" but I never once thought about "remote work as a trend". I was the proverbial goldfish who doesn't know he's in water.

I was too deep in the act of trying to grow the damn business to think of myself as an office culture philosopher. Remote-first and hybrid-first values just kind of flourished because the war on the field forced them to flourish. Big offices were expensive and we couldn't afford them. Being quasi-remote was not a controversial or political act.

Running Remote, 2020 to 2022

The pandemic came along and changed the world. At the time of this writing, in mid-2022, the world is still undergoing economic and societal shockwaves as a result of the onset of our post-March 2020 existence.

And during these pandemic years, this little thing that was completely normal to all of us in WeWork-world and Silicon Valley-land — "remote work" — suddenly became international news.

"People are working from home on their laptops! People are using this new program called "Zoom" to have meetings... from their bedrooms! People are trying to manage decision-making when they aren't all literally in the same room!"

For some of us, it just seemed like... "Yeah... so? this is what work had been like for a long time. Everybody's acting like Slack and Zoom haven't been around since 2014..."

But as these things go, there are niche underground subcultures. Somebody is playing punk music in underground clubs for a decade before you hear that same punk music on adult contemporary radio ten years later.

The coronavirus lockdowns brought the underground punk rock world of remote work onto the airwaves of mainstream radio. And hundreds of millions of people got an earful.

After WeWork

In 2020, all the WeWorks in all the commercial office buildings around the world went quiet, and the world begin to change. WeWork had already been crashing and burning in achieving its grand vision by 2019 when it failed to IPO and fired its CEO.

The next phase was beginning.

If the en vogue, mind-expanding, psychedelic, far-out concept of the 2010s was this: "You don't have to work at Dunder Mifflin! You can just... work in a coworking space, where the other people in the office building aren't even from the same company!"

The 2020s are taking this notion a step further: every knowledge worker can (theoretically) just work from literally anywhere.

I wish I had internalized the true concept of remote work when I was burning money on rent and office space at previous ventures. We might have survived and thrived with less pain by embracing remote work and dropping office costs.

Anyways, the world collectively ran a series of society-wide remote work experiments for a few years, starting in March 2020. Some of the experiments only lasted a few months, as people got called back in. Some experiments with working from home are still going on, and have turned permanent.

We learned a few things from these forced experiments. Some people had life-changing revelations about freedom and autonomy. Some people got lonely. Some people realized they don't know why they live where they live.

Not all people in leadership positions embraced remote work. Some major companies took a particular hardline stance but then had to walk back their stance under pressure.

I remember in 2009 standing beside someone with a Blackberry device. A professional undergraduate business student (like me, at the time).

They uttered one of those fateful "wrong-side-of-history" statements: "I don't see the need for a touchscreen. People want the physical keyboard a Blackberry provides. They want the BBM network — and no one can come close to the enterprise-level security of a Blackberry device. The iPhone is just a toy."

If you don't know what a Blackberry is or what BBM was, that's kind of the point. The status quo seems obvious because it's how we've always been doing it.

Company leaders who insist on a centralized headquarters building that everyone must commute to en masse are, in a way, hanging on to their Blackberrys.

(Of course for car factories, barbers, spas, hospitals, repair shops, and many other categories, being there really does matter. We'll come back to this point.)

What companies are getting wrong about remote work

With the world experiencing a bear market, a crypto crash, a period of mass layoffs, cost-of-living inflation, and a recession simultaneously, some business leaders argue that the "spoiled brats" who don't want to come into the office like real grown-ups will now get fearful again and come crawling back. Others, like Starbucks CEO Howard Schulz, are somewhat conciliatory but still wish their employees just come in, dammit.

There will indeed be employers who feel the pendulum of leverage has swung back to them, after over a decade of labor conditions that were very favorable to skilled knowledge workers.

By forcing a return to the office, employers may win a battle and lose a war.

It's basic economics. So long as there is a supply of remote-friendly jobs and inelastic demand from the top minds of a generation to fill those remote-friendly jobs, the free hand of the market will push these willing parties together.

The losers will be companies who insist on return-to-office. They may find a comforting equilibrium by increasing salaries and benefits as a perk to attract in-office workers. Indeed, some subset of society has no desire to work remotely and can't wait to settle in one place and go to an office every day and hang out with their peers. It's how it's been done for so long. It's what people know.

But the total pool of recruitable talent at office-only companies will be, at best, people who live within fifty miles of the office(s).

The talent pool for location-independent companies is everywhere in the world.

The remote-first companies will have a massive, one-sided advantage in talent recruitment that the office-only companies will have to combat with a "great in-person culture".

There is a great migration, a great re-sorting, a great reshuffling, that is already underway. If millions are traveling domestically and internationally to work wherever they want today, it will be hundreds of millions by 2030. By the end of the decade, perhaps a billion people who were tethered to an office building, simply won't be tethered anymore. But it's not just about companies and their employees. There are other stakeholders.

Companies and employees are not the only stakeholders

Business thinkers, CEOs, and board members like to use fancy jargon and talk about "second-order and third-order effects". (Sometimes they do use these terms earnestly and with intent, and sometimes they are just trying to signal that they are smart 😄.)

Second- and third-order effects are not the effects that happen directly as a result of a change, but the cascading domino effects that happen downstream. The effects of the effects.

For example, a second-order effect of remote work might be that major commercial real estate companies plan more major "coworking hub" buildings in Montana, Sedona, and Austin instead of new skyscrapers in Chicago and Manhattan. This didn't happen immediately in 2020, but as the permanence of the old way of the "downtown office" sinks in, second-order effects like construction planning changes begin to ripple outward.

So: commercial real estate companies, airlines, travel companies, municipal engineers, public school systems, ministries of tourism, hedge funds, and a long, long list of stakeholders are grappling with unintended second- and third-order effects of the pandemic, inflation, war... and employees are demanding remote work.

In all of this chaotic change, there is a particular underrated stakeholder I want to focus on: "the local community".

Moving beyond "The Next Silicon Valley"

There has been an easy-parodied trope in the last few decades where regional leaders try and attract technology companies and venture capital investment partially through via hokily branding their region as 'Silicon _____", with some local topographical feature in place of the word 'Valley'.

There have been multiple contenders for the moniker 'Silicon Prairie' to the point where it was hard to keep track of them.

But high-growth tech companies are not so hot right now. Public and private companies are getting valuation haircuts that are more like decapitations.

Most of the locations that tried to rebrand themselves as "the next Silicon Valley" had no chance of actually doing so.

Smaller regions, in particular, had no chance of going back in time and changing history to somehow retroactively build on seventy years of U.S. Department of Defence spending, semiconductor research, venture capital concentration, hardware and software company creation, and century-long partnerships with Stanford University. The moment in space and time that Silicon Valley occupied in the late-20th and early-21st century was as unique as fifth-century BC Athens or Florence during the Renaissance.

But smaller regions have a new opportunity with remote work — now — that is much more powerful (and realistic) than "becoming the next Silicon Valley".

The old (soon-to-be-outdated) game of regional economic outreach to high-tech communities

Communities that want to play a different game — a game whose rules are yet to be defined — have a chance to drop the "next Silicon Valley" schtick, which included the following elements:

• Attempts to attract 'corporate headquarters to relocate to [our region]. These HQs aren't going to matter as much anymore. It's the old game.
• Trying to attract founders to "start your company in [our region]. This used to be like planting a seed that would grow into an orchard as the founder hired employees for their high-growth company. When the employees can work anywhere — this cause-and-effect isn't so simple.
• Promoting real-estate developments and anchor tenants as flagships of future jobs growth in the region
• A personal favorite of mine: leaders trying to pretend that [our region] has a vibrant community of angel investors. Angel investors are not just "any rich person". They are a specific type of wealthy person who is skilled in high-risk technology bets. Most communities never had any actual angel investors. A true high-growth high-tech sector was always dead in the water without real angel investors and venture capital firms.

These were the tactics of the old game. There's a new game.

The new game: winning the hearts and minds of remote workers

If I was the mayor of a town of 500,000 people or 50,000 people (in Colorado or Ireland or Albania or Queensland... wherever!), I would call up my team at the local economic office and give them a new directive:

"Drop everything and focus on remote work".

When people can work from anywhere, they will make choices. And cities and towns are now in a subtle but powerful war for residents and workers.

A massive shift has changed the rules of the game. The game is what the French call attractivité — getting people to choose you and your region, economically speaking.

Cities used to have to depend on the power of their cherished local employers, local jobs, and local industries when promoting their region as a place to live and work.

Now, the source of jobs and income has been radically uncoupled from literal physical proximity. Any town or region can promote itself as a great place to live — on its own merits. The remote worker money flows in from everywhere and anywhere in the world

So the focus of attractivité can be the cost of living, community vibes, local hobbies, weather, nightlife, family-friendliness, safety, etc. in addition to the local darling aerospace engineering or pharmaceutical company that everybody loves, that creates thousands of jobs.

Yes, local towns, I'm speaking directly to you now. It's great to have a prestigious anchor employer that you can pump up as a source of jobs — but the jobs are everywhere now and decoupled from the locations of the headquarters. Think about the location-independent workers!

Some regions are indeed already way ahead in thinking about this.

Case study: Dubrovnik, Croatia

On the Adriatic sea, at a latitude between Rome and Florence, lies a city called Dubrovnik, at the southeastern tip of Croatia's long coastline.

In May 2022, public and private stakeholders came together in Dubrovnik to host the Work.Place.Culture conference. This conference was specifically aimed at bringing together thinkers and doers to discuss destination marketing and policy-making in the age of remote work. In short: How can cities like Dubrovnik make themselves world-class destinations for remote workers?

The case of Dubrovnik is a great example of local private organizations (in this case, Saltwater Nomads) working in tandem with an open-minded local government, which has the public authority to shape policy and direct marketing and operational efforts to implement remote-work friendly recommendations.

Ultimately cities do need to work hand-in-hand with national governments to ensure the right visas are in place for people to legally come and work in the country.

What are the actual key performance indicators ("KPIs") of how well a country is doing in attracting remote workers? Could it be the number of visas issued?

Or could it be an economist's financial model of the number of dollars spent, jobs created, or tax dollars levied?

The playing field of competition is so early. It's hard to determine exactly what exactly to measure, to keep score in the local and regional battle to attract remote workers.

Think global, act local

I would argue that "digital nomad visas issued" is a poor measure of success for how well a region is doing in terms of attracting remote work because that statistic leaves out a crucial measure of success: domestic migration.

If some Australian worker beginning their career decides they don't actually need to live in Sydney and takes a short bus trip back to their nice New South Wales town of Mullumbimby — they don't need to apply for a visa. Their passage is not marked in the records. They just left the big city to work somewhere else.

Their economic choice to support Mullumbimby will not be measured in an "aggregate remote work visas issued" statistic that the civil servants report to the politicians, so the politicians can tout the quantifiable success of their remote work strategy.

My point is, that remote work is not just about individuals switching countries in a whirlwind act of international emigration. It's not just about leaving Calgary for Costa Rica, Manchester for Madeira, or Boston for Bali.

It will happen quietly all around the world, as people leave Dublin for Dingle, London for St. Ives, Paris for Toulouse, and Chicago for Idaho.

Anywhere someone can live and work with an Internet connection is now a potential "remote work hub". And becoming a remote work hub doesn't have to be as grandiose as becoming the next Silicon Valley. It might even be as simple as reminding people they can come back home after university or college. It could be as simple as repurposing the local library to support coworking. It will be a lot of things, working in tandem.

For local communities who are looking to revitalize a declining tax base/population/economy, the next step can start with something as simple as a mindset shift to embrace remote work — and to be an attractive place for international emigrés as well as people from two towns over.

Because hundreds of millions of people will be choosing where they live with more autonomy in the next decade. What will regions do to be a destination of choice for remote work?

Post-Script:

Remember how I mentioned the barbers, the car repair shops, and all that? All the people in those industries that are reading this and thinking — well, this doesn't apply to me? Well, remember the point about second- and third-order effects...

If remote knowledge workers move in the thousands from Dublin to Drogheda, well, Drogheda is probably going to need more barbers — and maybe even more nurses, teachers, and police!

It's all connected.