Small Business Labs

The Pros and Cons of Working Remotely

Recode's How remote work is quietly remaking our lives provides a deep dive on the growing impacts of the shift towards working remotely. Key quote:

"The changes remote work has introduced have happened so gradually you may not have noticed. But its growing popularity is remaking how we work, the tools we use to work, how we communicate at work, and even the hours we work ... What was once a rarity among a select set of workers is quickly becoming a defining feature of the future of work."

The pros and cons of remote work are well known, but the article chart below nicely summarizes them. The underlying data comes from a remote worker study done by the social media marketing firm Buffer.

The big pro is, of course, flexibility.

We cover the importance of flexibility a lot (if you do a Google search on "flexibility "Small Business Labs"" you will find 3400 citations).

But it still needs reinforcing -  it's a key driver of both the shift to remote work and the rise of independent work.  

We also certainly agree remote and distributed work is a defining feature of the future of work.

And to better understand this trend, we closely follow two remote work edge groups - digital nomads and fully remote organizations.

Digital nomads can be thought of as remote workers on steroids. Because they're both remote and nomadic, they tend to have advanced methods for work remotely - including how they use technology. 

Fully remote organizations are also on the leading edge of remote work because, well, all of their employees are remote. 

While reading the Recode article we were struck that remote work is a great example of Amara's Law, which is:

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.

Back during the first Internet boom in the 1990s one of the most common forecasts was that very soon everyone would work remotely. This, obviously, didn't happen. 

But 2 decades later, it's starting to happen.

Working Remotely the Norm for independent Workers

According to data from the 2019 MBO Partners State of Independence study, 83% of full-time independent workers report working remotely at least some of the time, and 31% report working remotely full-time.

As the study chart below shows (click to enlarge), this is substantially higher than what traditional full-time job holders report. 

That full-time independent workers are more likely to work remotely than full-time traditional job holders is no surprise.

But that almost 1 in 3 three work remotely full-time is a bit surprising and illustrates the growing nomadic nature of work.

This is in large part being driven by improvements in the technology that support remote work.

Online video and chat services make it easy to connect and communicate with customers and partners, online content creation tools and cloud storage enable work to be done and delivered from remote locations, and online marketplaces provide remote access to new customers.

Another driver is the growing acceptance by hiring organizations that remote workers can be highly valuable and productive contributors. 

A 3rd driver is, of course, more people want to work remotely.

Bleisure Travel Continues to Increase

We first reported on bleisure travel, which is the the blending of business and leisure travel, back in 2015. 

AAccording to the folks at the expense reporting and management firm, SAP Concur, it continues to gain popularity. 

Key quote from their blog post Do You Bleisure? The Word We Love to Hate is Gaining Popularity Across the Globe:

... according to new SAP Concur travel and expense data gathered between January 2017 and December 2017 ... “bleisure” trips increased by 20% from 2016 to 2017. And during this time, more than 2.2 million bleisure trips were taken by business travelers around the globe, making up 10% of total business trips.

Back in 2015 bleisure travel was considered something that millennials mostly did.

But the SAP Concur data shows these days all ages are taking advantage of bleisure travel opportunities. Again from their post:

On average, millennials make up the largest share of bleisure travelers in the world, accounting for 38% of all bleisure trips in the Americas region in 2017, however Generation X (31%) and baby boomers (31%) are not far behind!

In case you're wondering where people go on their bleisure trips:  "In the Americas the top destinations are NYC, Chicago, and Los Angeles; in EMEA, Tel Aviv, London, and Paris; and in APAC, Tokyo, Singapore, and Shanghai."

These locations are not surprising. They're all major business hubs that also attract a lot of leisure travelers.

Also not surprising is Airbnb is a growing supplier of bleisure travel accommodations. 

According to Conur's data, 70% of expensed trips using Airbnb lodging include a Saturday night stay, compared to just 10% of trips with hotel bookings.

One of the most famous bleisure travelers is Marco Polo, so the the trend is not new.  But it seems to be becoming much more popular.

Digital Nomads Enter the Mainstream

MBO Partners last week released Digital Nomadism: A Rising Trend, a research brief on digital nomads. We worked with MBO Partners on this study.

Digital Nomads are wanderers who have a location-independent lifestyle that allows them to travel and work anywhere they can plug into the Internet. 

Some are short-term nomads who only travel and work for short periods of time.  Others do it for many years. And while globe trotting digital nomads get the most media attention, many never cross a border, choosing instead to live and work while exploring a single country. 

The three key study findings from our perspective are:

1. About 4.8 million Americans currently describe themselves as being digital nomads. While only about 2%-3% of U.S. adults, this is still a large number of people.

2. About 17 million Americans who aren't currently digital nomads say they will become one over the next 2-3 years. Also, 42 million say they might become one over the next 2-3 years.

The research brief points out that most of these people are unlikely to become digital nomads. Instead, they will likely continue to be "armchair digital nomads" following the exploits of digital nomads instead of becoming one themselves.

But these numbers clearly illustrate how popular the digital nomad trend has become. As the Forbes article on the study - Digital Nomadism Goes Mainstream - points out, digital nomadism has become a spectator sport followed by millions. 

3. The demographics of digital nomads are broader and more diverse than most think. While they skew male and younger, 31% are female and as the chart below shows, 54% are 39 or older. 

We closely follow the digital nomad trend for several reasons.

First, digital nomads are basically mobile workers on steroids. Because of this, they provide insights on the future of distributed work.

They've also chosen a non-traditional career path with a focus on work/life balance and integration. These themes ripple through our broader research on independent workers.

And most of them are independent workers, which, of course, is one of the main areas we study. 

We will continue to track and report on this topic. See the report for more details.

LinkedIn's Deep Dive on VanLifers and Digital Nomads

LinkedIn's From van life to careers, figure it out as you go covers a couple who have spent several years as VanLifers. 

It includes an excellent video that is the most professionally done of any VanLife video we've seen and is well worth watching.

For those not familiar with with the VanLife trend, it refers to the growing number of mostly millennials who have traded in their homes and apartments for life on the road in vans. 

Key quote from the article on the featured VanLife couple:

The couple is among other digitally savvy nomads, who have customized Volkswagen Syncros and other vans to live and work on the road rent-free. Some have parlayed their nomadic life into social media fame under the hashtag #vanlife. But Jess and Jorge aren't modern hippies abandoning capitalism. Between their Instagram posts, YouTube videos, blogging and photography, Jess and Jorge are hustling hard from inside their roughly 80-square-foot van. 

It's become a bit of a craze and there are millions of #VanLife posts on Instagram, Pinterest, Facbook and Twitter.

These posts tend to show pictures of young, adventurous, photogenic millennials - often with adorable dogs - enjoying the great outdoors in beautiful places.

For example, the picture below is from the blog of the #VanLife Hearnes family and shows them having fun while touring Utah with their dogs.

What these pictures don’t tend to show are the downsides of VanLife.

These include limited access to bathrooms and showers, breakdowns, bad weather, work problems and the wide variety of challenges associated with living in a very small space.

The LinkedIn article and video are somewhat unusual in that they cover both the pluses and minuses of VanLife.

VanLife is part of the broader digital nomad trend. Digital nomads are folks with a location-independent work and lifestyle that allows them to roam the earth working and living anywhere that has a good Internet connection.

Digital nomads have become so common that Estonia and other countries are even considering offering special digital nomad visas.

We’ve long followed the digital nomad trend. The reason is these people are mobile workers on steroids and they provide insights on the future of mobile and distributed work.

We’re just starting a project that includes more research on VanLifers and digital nomads. We’ll report our finding in the coming months.

Wireless Data Usage Continues to Explode

Wireless data consumption in North America has grown 9 fold since 2012.

This comes as no great surprise, but the numbers are still impressive.

The chart below illustrating this is from the Axios article America's insatiable wireless appetite.

According to the article: 

• In 2016, there were 291 million unique wireless subscribers in North America, representing 80% of the region's population.
• There are now more mobile subscriptions in the U.S. than people.

We often point out that every time we make a mobile computing forecast we think it's too high. And so far every time we've made a mobile computing forecast, it's turned out to be too low.

We don't forecast smartphone data usage. Just as good. No way we would have forecast data usage to grow so quickly.

Tech Jobs Moving to the Midwest

U.S. companies have long moved work overseas to save money. But a long emerging trend of moving work to lower cost areas of the U.S. instead of overseas appears to be gaining steam.

The New York Times article Hot Spot for Tech Outsourcing: The United States looks at the outsourcing of software development tasks to lower cost U.S. cities, mostly in the Midwest.

Although lower cost U.S. cities are more expensive than outsourcing overseas, rising salaries and costs overseas is making outsourcing there less of a bargain.

Meanwhile, locating in the U.S. has a number of advantages.

Having work done in the U.S. greatly reduces issues and problems associated with  navigating time zones, cultures and languages that are common with international outsourcing. 

The nature of software development and product design has also changed in ways that make domestic outsourcing more attractive. Key quote from NY Times article:

... companies in every industry need mobile apps and appealing websites, which can be made smarter with data and constantly updated. That software is best created by small, nimble teams, working closely with businesses and customers — not shipped to programmers half a world away.

Regular readers know one of our favorite trends is the paradox of place. 

The paradox is even though the Internet and connective technologies has made working remotely easier than ever, people and companies are increasingly clustering together in fewer, more valuable locations.

But despite the paradox, there are a growing number of signals indicating that companies - and workers - are becoming more distributed. 

The talent marketplace Upwork, for example, released a study earlier this year showing that work conducted via their site is increasingly moving from high cost areas of the U.S. to lower cost areas. 

Another example is the growing trend towards "near-shoring" - locating manufacturing in the U.S. to be closer to customers and supply chain partners.

Also driving this shift is cities like San Francisco and New York have become so expensive, it's simply become hard for companies and their employees to locate there,

LinkedIn's Labor Arbitrage Comes To Silicon Valley covers the shift to lower cost locations by many Silicon Valley firms. Key quote:

The advantages of these remote locations include lower salary costs, higher standards of living for employees, greater ability to retain employees, less competition and consequently higher retention.

A number of domestic outsourcing firms have sprung up to tap into this trend. The New York Times article covers the Midwest-based Nexient, whose tagline is "100% U.S. based software partner". 

Technology is, of course, the other driver of this shift. Next-generation chat, video calling, and project management software make it easier to coordinate work with and manage remote teams.

But paradox of place continues to be, well, paradoxical.

IBM and other major corporations are reducing telecommuting and ordering more people back to the office. 

And according to NewCo Shift, Co-located Outsourcing is The Newest Trend In Tech Outsourcing. Key quote:

In person, face-to-face, co-location is the most effective form of communication, especially when you are faced with brainstorming and solving complex issues. Software development is often complex. And, the more that companies rely on technology to be a differentiator, the more complex it becomes.

So the trends indicate there will be both more distributed work and more co-located work. We believe both will continue to happen, at least for the next 5-10 years. 

But we also think in the long run distributed work will become more common as technology reduces the problems associated with distance.

The short video below (less than 1 minute) give a quick overview of the Midwest's Silicon Prairie.  

Big Smartphones Driving Online Video

No matter how much we cover mobile computing, it seems in many ways we continue to underestimate its impact.

Recode's Big Smartphones Ate the Tablet Market big phones are defined as those with screens "between 5 inches and 6 inches in diagonal (an iPhone 7 Plus measures 5.5 inches diagonally)." 

They report that in India and China almost 2/3rds of all smartphones are big. And while only In the U.S. only 33% of smartphones are big, they are rapidly gaining share.

The net result, as the Recode chart below shows, is tablet sales have slowed and are projected to decline about 1% per year over the next 5 years. Meanwhile, smartphone sales are forecast to continue to grow at about 7% per year.

This makes perfectly sense. Why buy a tablet if your phone is also effectively a tablet.

The interesting 2nd order impact of this shift is related to online video. 

Also from Recode, Ad spending on mobile video will reach $18 billion next year, surpassing desktop shows the stunning growth of mobile video viewing. This, of course, is mostly done on smartphones.

This shift is verified by the mobile usage growth Netflix is experiencing. Recode's Netflix is getting a big boost in subscribers from mobile (and yes, it is Recode day here) nicely covers this. Key quote:

Americans spent about 7.5 billion minutes watching Netflix on their phones in June of 2017, according to data from media measurement company ComScore, up 73 percent since 2014.

As we reported last year, it's a mobile world and will continue to become even more so.

How the iPhone Changed the World

The iPhone was released on June 29, 2007. It wasn't the first smartphone - smartphones have been in existence since the 1990's - but it's clearly the smartphone that truly launched the mobile revolution. 

Recode's How Apple’s iPhone changed the world: 10 years in 10 charts covers some of the amazing changes that the iPhone has brought with it. 

It has charts and data on things like the growth of data traffic, phones replacing cameras, its impact on advertising, etc. 

But our favorite is it's impact on chewing gum sales.

As the article chart below shows, gum sales have declined substantially since the release of the iPhone. 

The reason, according to the article, is we're now too busy looking at our phones in check-out lines to buy gum. Key article quote:

Supermarket checkout lines — strategically stocked with magazines and candy — were for a long time a major point of sale for gum. Consumers waiting on line to pay would look around and make impulse buys. Now, however, we’re so consumed with our phones that we’re not reaching for a pack of gum to stave off our boredom. 

This is a great example of secondary effects and unintended consequences (we assume Steve Jobs was not targeting gum sales with the iPhone).

As the article points out there must be many more examples:

"Have drug dealing and other illegal activities become more efficient thanks to the smartphone’s discreet payment model? Has English become more prominent as English-language-based mobile apps connect the developing world? Have smartphones and the omnipresent connectedness they provide enabled the rise of helicopter parents, niche communities or better literacy."

One example we've spotted is walkers distracted by cellphones are leading to increasing rates of pedestrian accidents, injuries and fatalities. This is resulting in cities deploying new types of in ground traffic lights so folks looking down at their cellphones can see them. 

The picture below is of a new traffic light in the Dutch town of Bodegraven.

There are no doubt many more examples. 

Facebook Releases Marketplace to Compete with Craigslist

Less than a month ago we wrote about the startup OfferUp raising $119 million to compete with Craigslist. 

Today Facebook released their Craigslist competitor, called Marketplace. Like OfferUp, it's a mobile first app designed to let you to discover, buy and sell new and used items - mostly with people in your local area.

Marketplace is purely a matching service.  The buyer send the seller a direct message from Marketplace to make an offer.

From that point on, the buyer and the seller can work out the details in any way they choose.

Like Craigslist, Facebook does not facilitate the payment or delivery of items listed or sold in Marketplace.

While it had a rough first day due to a "technical issue", Marketplace could easily become a major Craigslist competitor. 

As we pointed out in our article on OfferUp, Craigslist hasn't changed much in the past decade.

Nor does it have a very compelling mobile experience. Key quote from one of the investors in OfferUp:

Hans Tung from GGV Capital said that he invested in OfferUp because “Craigslist hasn’t innovated for a long time and there is unmet, pent up demand for classified on mobile.”

While Marketplace doesn't facilitate payments today, don't expect that to be the case for long.

Facebook's Messenger product recently acquired the ability to process payments natively, so expect this feature to be incorporated into Marketplace likely fairly soon. It's simply too big a monetization opportunity not to do this.

Facebook first launched a Marketplace type product in 2007, but it wasn't successful. After a couple of retries, they shut it down in 2014.

But is seems likely this effort will be much more successful. Facebook has about 1.7 billion users, 450 million of which visit their buy and sell pages each month. Moving even a minority of these folks to Marketplace still results in a lot of commerce potential.

The move by Facebook validates the growing peer-to-peer commerce trend, which shows no sign of slowing down.