Virtual Startups: Generation V Has Arrived

by Joseph Bien-Kahn in March 5th, 2021

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“We need to understand that what we’re going through is truly a generational change,” early stage technology investor Zach Coelius explained on Jason Calacanis’ “This Week in Startups” podcast on April 7, 2020. He and the other guest, Head of Bloomberg Beta Roy Bahat, both agreed that this was a moment for a new type of startup; the ones that would win the next few years would be completely different from the ones that would have thrived 12 months earlier. The moment COVID-19 arrived, the future of work and the future of startups completely changed. As we’re starting to see the light at the end of the Covid tunnel, we can start to consider how the world has changed

The next day, Coelius posted “Thus begins Gen V, Generation Virtual” on his LinkedIn. In it he wrote: “By forcing everyone to instantly adapt to a virtual existence we are dramatically accelerating the long term trend and instantly advantaging those individuals and organizations who adapt to a world through a screen and leaving behind those who can’t. Moreover, the behaviors of yesterday have become obsolete overnight. When we emerge from this, the pre-virus normal will seem as archaic and stupid as all of our other replaced cultural, technological and political normative behaviors now seem.”

Now 10 months farther into the pandemic, it’s clear that Coelius and Bahat were right about Gen V. We have all spent a year in front of a computer (or a phone) and the idea of a full return to office-bound 9-5s seems as distant as ever. So, what does it mean to be a manager in the era of the virtual workforce? What changes has that brought to the way we work? And what opportunities and hurdles do operations teams face in this next generation of work: Gen V?

Managing the Virtual Workplace

woman using black VR headset beside computer
It’s easy to extol the perks of working from home: no commute, more flexibility throughout the day, and, of course, sweatpants. But this year has also demonstrated the difficulties of WFH Culture. To be a successful manager during Generation V, you have to understand and work to alleviate those challenges.

The first is the variability of your employees’ new offices. Sure, some people had corner offices and others worked along with the big shared open-air desk, but in general, there was an equitability to the office working experience. Everyone had the same access to the same-speed internet and to (relatively) uninterrupted time. These days, WFH offices can vary greatly. Any of your workers with roommates or children will be experiencing Gen V differently than your childless employees and those with dedicated, distraction-free workspaces. 

In April, Lynda Gratton, a professor of management practice at London Business School, wrote a piece for MIT Sloan Management Review about how executives should adapt to the new WFH reality. The big takeaways were to empathize with each employee’s specific new reality and to embrace flexibility when it comes to scheduling. Is it really essential to have everyone at their computer from 9-5? Or can you create a structure with meetings and deadlines but the flexibility to set your own schedule? “For example, executives from one global technology company are working with employees to identify blocks of time when they will be ‘on’ and blocks when they will be 'off’,” Gratton wrote. “These schedules are then being shared with team members to manage expectations about when to expect timely responses to communications.”

As AbstractOps, we embrace that flexibility with one caveat: when our customers or teammates need us, within reason, we have to be available. Otherwise, go work out in the middle of the day. Take a long lunch break. Work late at night. 

The other big factor of the new Generation V that managers must balance is that losing the office means losing the serendipitous moments of bonding and community. While the sense of loneliness is most acute during the pandemic, the need to create non-work space within your virtual office will remain an essential part of managing during Gen V. Gratton writes of the need to “convene like-minded communities” in the WFH era. Create a “Home Schooling” channel in the company Slack for parents to commiserate and share strategies. Though the softball team is off the table, create a community where employees feel comfortable talking about hobbies — it’s valuable to have your team meeting after hours, even if it is to virtually watch a basketball game or to play Minecraft or Fortnight. “One global professional company, for instance, found that over 60% of its employees were single and either living on their own or with a parent or partner and feeling the pain of social isolation.” Gratton wrote. “An immediate quick win was to create daily virtual coffee breaks at 11:30 a.m.”

So, as a manager, the key is to understand what was valuable about the old office and what is not. In his Gen V LinkedIn post, Coelius explains that it takes these massive paradigm shifts to see that the way we did things was antiquated. He wrote about the way founders and investors would need to go after the Gen V market, but the same can be said of managers and the Gen V workspace. This is a blank slate moment — the way we work is forever changed. So, think critically about what was valuable and what was simply “the way things were done” in your old office. How can you bring valuable things along to this new world? And just as importantly, how can you put the antiquated vestiges of the old world out to pasture?

We constantly hear from friends and colleagues that they miss the office, that creativity has slowed, that productivity, for some teams, is down. We ask them: can you show us the data? The truth is that the benefits of the office were hard to quantify whereas the benefits of WFH virtual work are easy to quantify: no more commutes, all of your own comforts, no getting sick from colleagues, finding the best global teammates (since your business is no longer forced into a single geographic location), and the ability to work from anywhere. 

At AbstractOps, we are providing our teammates with a subsidy to get a WeWork or other coworking office space. We recognize that loneliness is a powerful thing, that many homes and home offices are small and that distractions are real. However, we believe that the virtual team done right can meld with your real-life colleagues in a shared office and provide much of the same benefit as a company office. 

The Opportunities and Challenges for Operations in Gen V

black and silver laptop computer beside yellow ceramic mug
It’s not surprising that it’s difficult to port your physical office into the new era of Gen V. But what the reality of a perma-WFH culture means going forward is far more fascinating. How do your operating costs change? How about your talent pool? What is still done by your team and what can be outsourced?

In a recent interview with the neobank Unifimoney for their Braintrust series, Nium CEO Prajit Nanu spoke of what it means for the future of work to be “location-agnostic.” He explained: “In the late 90s, globalization was the fact that somebody contacts a utility service in the US and the call is picked up in India or the Philippines. Now, the definition of globalization is that you can have somebody in Sweden, somebody in the US, somebody in India, and somebody in Australia all collaborating on the same call. All four are congregated together. That's the reality of today.”

In a Gen V workplace, where hours are more malleable and the only location qualification is "Can you get on Zoom for the All-Hands meeting?", the talent pool widens substantially. But the fact of a team working together on four continents creates unexpected challenges. It’s not just scheduling but payments that become difficult. As operations, it becomes your responsibility to make sure everyone is paid on time all across the world.

There are a few companies working to make international payment rails more fluid — Nanu’s Nium and the global open banking platform Railsbank — so cross-border payments very well may soon be much more affordable and closer to instant. But even when that happens, the challenge of exchange rates, timing the payment to arrive on the 1st and the 15th, and the compliance and tax implications still fall on operations. To solve that headache, we recommend using Deel, a service built to streamline onboarding and paying employees and contractors in more than 150 countries around the world.

As the move toward virtual workplaces becomes more commonplace, there will be more and more innovative startups that arrive to fill the gaps. Zoom has made international coworking simple and streamlined; Deel can help with the headache of onboarding; the mmhmm app can turn your video presentations into impressive productions. For a manager, to hire the best person for the job, regardless of location, is a massive opportunity; for the operations side, it can be a massive headache. But with tools like Deel and AbstractOps, the backend minutia can be simplified and outsourced. Generation V has pushed us towards the new kind of globalization Prajit Nanu spoke of — now, it’s the job of the manager and operations team to keep pace with this generational change!

At the end of his LinkedIn piece, Coelius explains that the founders who will define Generation V will be the ones who throw out the old playbook and start from scratch in this new reality. It’ll be the ones who understand the new needs of this new moment. “What new opportunities emerge if everyone is on video chat all day? How can you surprise and delight?” he writes. “We are in a brave new world and the entrepreneurs who discover its secrets will define a new generation. It is in these moments of cataclysmic change the greatest opportunities emerge to those who can see through the fog of chaos.”