Virtual Companies Also Unfocused Companies?

One of the hot new trends in Silicon Valley is the “virtual” company: a firm where everyone works from home, only coming together for the occasional meeting at Starbucks. This can be a great thing, part of the lean startup trend. Obviously, saving money on rent and furniture and the like allows a company to get farther along before it needs to raise capital.

However there are also special challenges for virtual companies. I am consulting for two of them now, and I’m seeing some of these challenges first hand. These challenges primarily stem from the difficulty in communicating at a virtual company. With employees spread out, communication is usually via email or IM. These are mediums that tend to promote brief, sometimes inconsistent, communications.

Sometimes when “discussing” an issue with my clients there will be 15 or 20 emails, each only 1 or 2 lines long, with multiple people chiming in, often with their missives crossing each other, and thus not incorporating other thoughts and comments. It can be difficult in this environment to drive toward a conclusion, particularly if you want any kind of consensus. Ideas and concepts are more likely to fall through the cracks. Email can be super efficient, don’t get me wrong, but it can also make group communication less effective than it would be if everyone were together in same space.

A possible consequence of this sort of fragmented communication is that it makes solving difficult problems more difficult. A virtual company is likely to be better at solving problems a single person can tackle than at solving problems requiring cohesive group effort. Based on my consulting experiences, this is true whether the problem is technical or business oriented.

Technology can help mitigate these communications challenges. Skype and other services provide free conference calls, so you can at least communicate in real time. Web conferencing and virtual whiteboards can replicate meetings, and project management software can help ensure that everything gets done on schedule. But if the management of the virtual company isn’t aware of the communication difficulties and does nothing to address them, the company is likely to generate fragmented products or strategies.

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2 responses to “Virtual Companies Also Unfocused Companies?

  1. The problem you describe with e-mail communication stems from conversations not being threaded. Perhaps these virtual companies would do better with a discussion board, which is self organizing and easy to search.

  2. I’ve been consulting at large and small concerns for many years. My father too was a consultant who actually did close the office and go virtual before it was even a trend, and his firm did work all over the East Coast. The problems you describe are real enough.

    Skype meetings at designated times make sense. Shocks’ discussion boards are good tools too. Clearly defining what is done at Skype time and what is appropriate for the boards is also critical. One managing partner who is looking at project charts and keeping track of progress (or warning of potentially missed deadlines) is a must.

    Another issue that is important is the budget. Since the idea of going virtual was to save all sorts of money that would be wasted on office space, and parking fees, a virtual firm needs to make sure that money isn’t going out the window trying to support expenses of doing virtual business — i.e. phone and Internet related expenses. Travel expenses, local or long distance will still be there too.

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