Still more data on in-person vs. remote
This week, we're taking a final look at the 180 startups I met in the first half of 2024 to see how they're performing 6-12 months later. So far, we've covered:
- Episode 1: Most startups hire their VP of Sales too early, and their VP of People too late
- Episode 2: Team sizes around 5 look ideal for company performance; when you're >$5M ARR, it helps to hire an outside COO, but if you're only at $1M, hiring the outside COO hurts more than it helps
- Episode 3: Bootstrapped companies show fewer negative growth signals than VC-backed companies; if you don't hire women right away, you may never manage to
For this final installment in this series, I took a look whether in-person or remote startups have seen more positive growth this year. (You can see what I counted as positive and negative growth signals here.)
Bringing data to a religious debate
Earlier this year, I published some data showing that, despite what I'd hoped, in-person meetings are both more inclusive and more likely to drive productive disagreement. I believe (but haven't yet tried to prove) that both of those factors change a team's long-term performance. To that end, I wanted to know whether the in-person, hybrid, or remote startups in my cohort performed better this year.
For startups with fewer than 10 people, in-person settings perform a little bit better
Some startups in my cohort had fewer than 10 people on their teams when we met. Whether startups allow their early team to work remotely is a significant cultural choice. Because early team members often become essential to company execution, it can be hard to backtrack on this decision later on, especially if you've hired essential team members far from your HQ.
Among these very small startups, those that worked in person performed a little bit better. The difference was small, but significant. 58% of the in-person teams showed positive growth signals 6-12 months later, compared with 44% of the remote and hybrid teams.
I was a little surprised to discover that hybrid environments perform so similarly to remote ones. As we'll see just below, this is true for larger startups too, not just tiny ones.
Of course, hybrid companies vary quite a bit; there's a difference between an environment where people routinely show up at the office from Monday-Thursday and one where people go to the office whenever they want. This data suggests that, on the ground, "hybrid" is usually more similar to remote and means more like "show up whenever you want."
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For startups with more than 10 people, in-person environments win decisively
Here's where the data gets really interesting. Once startups include more than 10 people, in-person settings significantly outperform both hybrid and remote environments.
68% of the in-person companies show positive growth signals 6-12 months later, contrasted with just 40% of the hybrid and remote teams. In other words, as teams get bigger, work climate seems to matter more.
For startups with more than 50 people, in-person environments win yet more decisively
What about the startups that had already hired 50 or more people when I met them? When I restrict the data to just these companies, the performance of in-person teams remains about the same, with 67% of companies showing positive growth signals 6-12 months after we met. (What can I say, I pick winners.)
But the performance of hybrid and remote teams rapidly declines among startups with 50+ employees; only 28% of these companies show positive growth signals. This is a big drop from the 44% of hybrid and remote companies that show positive growth signals when there are fewer than 10 team members in total.
Interestingly, these numbers held as I raised the team size threshold higher to 100 or 200 people. Once you pass some tipping point, the relative impact of in-person, hybrid, and remote environments on startup growth signals does not seem to change.
6-12 months is not a lot of time
As with this whole series, I only looked at the growth signals that occurred in the first 6-12 months after I first met a startup team. It typically takes much longer to see how a startup will develop. Who knows what we'll find at the end of 2025?
Thanks to every startup that has shared their journey with me this year!
If you're new to nerd processor and you loved this article, here's where you can get all the back issues and subscribe. And you want to build your own team with this kind of data, I'm building my coaching and advisory wait list for 2025 now. Here's to a great end of year!
Kieran
Are you serious about building exceptional teams? I wrote down three of my tried-and-true prompts for team meetings and offsites that drive team connection and performance. Ready for your next team meeting, no big budget required.
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