In their past four years as co-founders, Taylor Matthews and Brad Genser have never shared an office–or even a time zone. Split between San Francisco and New York, they launched their wealth management advisory platform Farther in 2019 and built the business over the phone and Google Hangouts. The two entrepreneurs, now both 38, never met each other face-to-face until three months in, right before their first investor pitch meeting. When the CEO and CTO explained their bicoastal remote company to prospective investors, the spiel received mixed reactions from the late-50s venture capital crowd.
“We had one early-stage venture group who explicitly said, ‘Look, we want to write you a million-and-a-half-dollar check, but Brad has to move from New York to San Francisco,” recalls Matthews. “We turned it down.”
Matthews says refusing that amount of money was difficult, but the decision came down to one thing. Neither co-founder wanted to uproot their families and move across the country just to satisfy an arbitrary investor requirement to spend each day in the same office together. It wasn’t worth it. “I can still get the vast majority of what I need to accomplish done, even if I’m working from home, even if I’m setting up on my couch,” he says.
Like the Farther co-founders experienced first-hand, the great return-to-office debate is playing out largely across generational lines, and younger companies like theirs are far more likely to have embraced remote work or flexible office arrangements. 82 percent of companies founded after 2000 offered at least some work location flexibility, compared with only 53 percent of companies founded pre-2000. That’s according to new data compiled by the Flex Index, which tracks the in-office requirements of more than 4,000 businesses that collectively employ more than 100 million people.
The report, which was released on Tuesday, also found that this trend remained consistent even when stripping out the remote-friendly tech sector. Nearly three-quarters of non-technology businesses founded since 2010 still offered their employees some degree of hybrid or remote work.
“I’ve heard this anecdotally from lots of sources, with particularly start-ups being very remote. But this has massive sample data to show this is a big trend,” said Nicholas Bloom, a Stanford economics professor who has been studying remote work for years before the pandemic and was involved in the report. “The future looks increasingly remote.”
Bloom sees technology as the major catalyst driving this post-millennium generation of work-from-home entrepreneurs. “Younger founders are adept at using this and comfortable working hybrid or fully remote. As these folks [grow] into the future CEOs of larger firms, they will take this with them,” he said. “So the biggest firms for the next quarter century are going to be heavily remote.”
As more businesses embrace this forecasted remote future, founders are finding that work-from-home is paying off in substantial ways. With the unemployment rate stuck near historic lows, entrepreneurs–especially those with younger businesses and more limited resources–have been able to use remote and hybrid policies as a way to compete for talent. In this current environment, the approach is also becoming a cost-savings tool. Concerns about a potential recession later this year continue to swirl while investors have been forced to cut back. In their first quarter of 2023, Pitchbook found that venture capital fundraising dropped by 73 percent compared with 2022. With less money flowing in, companies are eager to trim budgets, and an office lease offers a major line item that founders can cut.
“It’s not just tech companies.”
For Scoop co-founder and CEO Rob Sadow, whose company operates the Flex Index, the findings confirmed his own instincts. His team of 25 operates on an employee choice model, which lets employees decide whether they work from home or in person. In practice, Sadow says, most people, who live near the office, generally come in two or three days a week.
“Companies thatstarted in the last 10 or 20 years are just going to be much more comfortable with the idea that not everybody is working in the same office at the same time,” says Sadow, who co-founded Scoop in 2015 as a carpooling app for co-workers before pivoting the business into an office space management software platform for hybrid workplaces in 2020. “It’s not just small companies. It’s not just tech companies. This is pretty pervasive.”
Even for large businesses with sizable workforces to manage, the openness to flexible work arrangements still came down along generational lines. When surveying companies with more than 1,000 employees, the report found two-thirds of the companies founded in the decade between 2000 and 2010 allowed flexibility, compared with only half of larger companies launched pre-2000. For larger companies founded post-2010, the number of hybrid and remote-friendly workplaces jumped to three-quarters.
“Wasting an awful lot of commuting time”
For Farther’s co-founders, building a fully-remote team has not been as challenging as they feared it could be. Instead, Matthews credits the fintech’s work-from-anywhere setup as their secret sauce for growth, especially with the lasting demand for remote jobs.
“We’re able to be a little bit pickier about the folks that we work with,” says Matthews, whose company employs more than 80 people across the country, including in Seattle, Miami, Wisconsin, and Ohio. “Saving on all of that rent,” he says, “allowed us to redistribute some of that cost back into salaries and better pay.”
Just like the co-founders’ own experience, Matthews says their team was never going to move to New York or San Francisco to work for them, but the company can meet them where they already are. That calculation has paid off. Since Matthews and Genser turned down that $1.5 million check, Farther has raised $22 million in funding and has amassed more than $375 million in assets under management. Over the past year, the CEO has watched their legacy competitors in the financial industry drag their teams back to the office, and that has only made him more confident in their approach.
“We see peers and bigger banks mandating a return to office, and I see that as often just wasting an awful lot of commuting time,” he says. “There’s very little need to be physically present when you can be intellectually and emotionally available.”
Still launching and scaling a remote-first company, does come with a few surprises, Matthews admits. When the CEO finally met his co-founder and CTO in person, he thought, “He was much taller than I expected.”
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