#38 - How to build and manage successful remote-first companies

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How to build and manage successful remote-first companies

with Bernat Farrero, Founder & CEO at Factorial HR                                    

and Aurel Albrecht, Founder & CEO at Lano

Sandra Redlich  00:33

This is a very special episode because it's the first episode where I not only have one guest, but two guests looking at me right now. Thank you so much for joining us Aurel and Bernat. Where are you both joining us from today? Maybe Aurel starting with you.

Aurel Albrecht  01:40

Yes, well, first of all, thanks for having me. I'm calling from our office in Berlin, sitting in a very comfortable telephone booth. And looking forward to the conversation.

Bernat Farrero  01:53

Thanks for having me, too. I'm calling from the sunny Barcelona, but not so sunn, because today it's raining, and that's not so usual. But today it happens to be raining.

Sandra Redlich  02:03

Well, the reason we're speaking today is because the two of you have one thing in common, which is that you both have founded companies that focus on hybrid and global first approaches in their workforce. So maybe you could both give us some insights today into how you founded your companies, what kind of roadblocks and experiences you gained throughout that, and just tell us a little bit about your personal journey. Aurel maybe you can go first again.

Aurel Albrecht  02:27

Sure. Myself, I've been in the tech world for more than 10 years, time flies. Always been amazed by the fast pace and agility that you have always realized in this sector. I've been pretty much in every stage of a tech business from really the early beginnings of pre product to IPO. But I've also been seeing the same thing from an investor perspective, when I was working for an investment bank in London, where I was working with clients that were either public already, or that were going to prepare an IPO and launching an IPO. And for me, it was very clear from the very beginning that I wanted to do something more entrepreneurial throughout my career. And I got back to Berlin in 2015, supported the company that was serious b-stage, 130 employees, b2b, public cloud company, very experienced team. I helped them raise the funding round and join them full time as a CFO and lead the company until we sold it. And my co-founder Markus and I... So Markus just on the side... He was CTO for fast scale-up companies, for Groupon for another ecommerce business, which was sold pretty much the same time like the business that I was working for. We were looking a lot at the remote work market back then. Because he was building distributed teams already in his tech teams, in his companies. I was looking a lot at it from a finance legal perspective. And what we quickly realized that even before the pandemic, on the one hand side, it was the fast growing markets. And on the other hand side, there was no real tool in place to manage this workforce effectively. And this opportunity excited us so much that we decided to start a business by incorporating it officially in 2018. We bootstrapped it for the first year, built a product, we took up the first pilot customers and about a year later, we launched the platform.

Sandra Redlich  04:35

Exciting what's your story Bernat?

Bernat Farrero  04:38

So my story is, I started in tech, I started studying computer science. And when I was in the university, I started taking contractor work, building software products for other people. And eventually I realized it was an infinite market. There was so much demand for software. So I started taking more and more projects and being picky about the projects I was choosing, taking kind of a long term approach, and trying to understand what these products could be used for not just building code, but also trying to understand why I was doing it. So eventually, I learned a little bit about business for my company. Well, in the beginning, I was a freelancer, but then we ended up being kind of, I think, 25 or 30, engineers working, doing products. So eventually, we started focusing not just on products and code, but also on businesses. So we started creating different businesses. And in total, 12 companies. In some cases, we built the products ourselves from scratch, and the  , we accompanied entrepreneurs who were... who had the idea, and we were doing something called Tech for equity, which is a terrible idea to try because it's very hard to implement. But that was a model that we followed at that moment. And eventually, we realized that we cannot build a better builder with software and services for other people and we focused on our companies. Some of these companies actually performed and worked well, some others didn't - kind of half and half. They half that performed, we managed to sell three companies at some point. And so we decided, I decided to focus on one of these three companies remaining. And so we are now like kind of a holding company. And we have three companies that are growing, we can have more than 1000 people here in Barcelona. And I particularly focus on the last company that we started, which is Factorial, it was six years ago. It was kind of a major company, because it actually focused on managing people. So we eventually were so many people that we couldn't ensure that the teams had the right information. And I had the right information about what was going on in the teams. We were sunk in by bureaucracy, doing so much paperwork, and we couldn't focus on the most important thing, which is how people can grow in their careers. Individually, no, how can we help people perform? How can we help? How can we get feedback from people? How can we make sure that we're communicating with the whole company, and we're working in the same source of truth, and not in 1 million excels. And 1 million documents are spread around that don't match each other. So I started looking for a solution in the market. And most of the software, or most of the HR software, was quite clunky, focused on enterprise, or very verticalized. And I was thinking there has to be a solution. That is an all in one solution that focuses on all these problems from SMB. It's a one stop shop that can actually help manage the people.

Sandra Redlich  08:04

For anyone listening who wants to check out the websites and learn more about both Lano and Factorial, we can link you to the website in our show notes. We will make sure to have the referring links in there so you can look it up and see what's been talked about here in action. I've thrown some buzzwords around before that I would ask you guys to kindly help me solve a little bit. So I mentioned global first and I mentioned hybrid when I talked about both of your businesses. Can you explain to our listeners what these two concepts are and why you chose to make your businesses that model?

Aurel Albrecht  08:42

I mean, given that our mission statement is to unlock global talent, obviously for us, it was very clear from the beginning onwards that we wanted to be a global first company. Actually, our first hire was already remote or not within Germany. And what we believe is that you do need, I would say 99% plus of the businesses an office or headquarter, from where you can build strategy, culture, where you can get the team together from time to time. But having the opportunity and the possibility to tap into a global talent pool of not restricting your hiring efforts and finding the best talent in your local jurisdiction gives you a competitive advantage of really focusing on attracting the best talent and obviously building a product that enables companies to build global teams. We used our platform and helped our growing team, of one to 80 employees now in four years, to be global. So 70% plus of our employees are outside of Germany. And I think what the pandemic has shown us is - all of us have been forced into kind of a remote work setup or work from home setup - is that remote work works. But you need to have some elements in place to make it really effective and satisfying for everyone. And I think especially in a hybrid setup, there are certain elements that you need to be very cautious about. And I think one particular thing that we learned when building a hybrid company is really much aligning even more than in being in an office on strategy, mission and vision. I think, for us, what we implemented from the very beginning onwards was a dedicated OKR structure. So where we really could align all the different stakeholders on where we stand, what lies ahead, what's the big picture moving forward? Where are we aiming for? And I think these were the most important things that we from Lano learned.

Sandra Redlich  11:11

What were the reasons behind you choosing I believe a hybrid model for your company Bernat?

Bernat Farrero  11:17

We didn't choose like a hybrid model. So at some point, we were all in office, most of the people were in office, so we started with being office first, and then the pandemic hit and things changed for each area. So for a while, we were only remote, everyone in the company. But then we cannot resort how the next day after the pandemic should look like. And we actually thought of all the functions that we have at Factorial, we've always been very flexible in terms of time and location, people can move if somebody needs to stay at home, they can stay at home. That has been since day one the case at Factorial. But with a pandemic, we cannot restart every function. And we realized that our go-to-market function and our product development function were actually kind of different in nature, and also different in market. So the market was very demanding for remote in terms of the product development. Whereas in go-to-market with a slightly different, we also have more technical, more senior people in product development. Whereas in sales, and marketing, we have invested in a school model. So we can have a school, we train a lot of people. So we have many people who start their first job at Factorial. And this is very hard to manage in remote. So we kind of try to make people listen to the other people with role plays, with a lot of activities that help people learn. And that's why we decided that the go-to-market would be office first. Whereas a product development would be remote first. But there are developers who work in the office and the people in sales working at home. So we're still flexible. But in one part we're remote first and the other we're officers.

Sandra Redlich  13:16

Yeah, you did mention that... Obviously, the pandemic has influenced your structure as well as I believe it did for a lot of companies all over the world. You mentioned also the approaches you took for trying to onboard talent and to have that knowledge transfer, which is very hard to do when you don't have a proper remote onboarding strategy for that in place. And you have to do it overnight to accommodate home office because of the pandemic. What were the measures that you took to make sure that you can accommodate this new structure? And what were the challenges that you saw in that as well?

Bernat Farrero  13:50

So we were fortunate to have a product that actually tackles this problem. And so we put a lot of effort in how do we build the workflows to onboard people. And so part of our product is actually focused on the onboarding. So since we send an offer to somebody, all the things that happen afterwards, so we send certain emails, certain communication, we have some trainings, or some tasks for different people, we're sending material. So all those things actually happen in our platform. And this is also what we offered to the market. So we didn't know that the pandemic was happening, like most people. But we were on the lucky side because we were actually working in tools that made the pandemic affordable. I mean, if you were completely digitized in the moment of the pandemic, you could continue working as usual. Whereas if you didn't have any kind of process digitized, you would have like real trouble. So even in the pandemic, we disposed... We put that forward, helping companies actually for free to digitize everything, all the processes, try to find the information that was spread around and bring them everything so lots of people could keep working.

Sandra Redlich  15:09

I believe it was kind of the same for you Aurel, because you had a lot of workflows in place already. But I can imagine that there probably were certain things that you also had to adjust. How did you manage to make that transition a bit more smoothly?

Aurel Albrecht  15:22

I mean, Bernat made a very good point, if you are digitized, and you have a lot of tools, softwares or things in place, the transition can be pretty smooth. Because in the end, how do we onboard new employees? We don't make a difference now, if the person is joining in the office, or remote, so we have onboarding days, where we do get the team together that meet, I mean, go through the typical onboarding. I mean, some where everybody then goes in, and then they go into their separate teams where they have additional trainings. But I think at the end, the term digitization and having tools in place is the most effective thing. And for us, I mean, having a good knowledge center, having clear documentation tools, I mean, going into... I mean, product, and tech, I think are the most digitized departments anyhow, but also in sales having a very well set up CRM system. Having additional tools. We, for instance, use chorus AI, where we kind of do recordings of specific client calls with our sales or customer success team, where we can use this data in these recordings to do additional feedback training sessions. So I mean, we were fortunate of being prepared for this already. But I believe that those companies that were digitized already and wanted to improve some of the processes that were either using Factorial HR for those things, were pretty smooth in terms of transitioning into the forced remote work set up coming through the pandemic.

Sandra Redlich  17:05

So if you were talking to a founder who is not as digitized as your two businesses are, but is looking into building a more remote, global first or hybrid model. So currently, everyone works in an office, but they want to move to a more flexible setup, what would be your tips, from your personal experience, of what to do first and what to focus on?

Bernat Farrero  17:45

My first thing would be that it doesn't matter if they are remote or hybrid, or in office - if they are not digitized, they're out. I'm pretty radical on that. I mean, especially small and medium businesses, they are pressured by the big corporations that have everything digitized, that they have a lot of automations, they have machine learning, they have lots of lots of tools helping them. And they are the company that have all the knowledge or the experience, people are specialists in and have the leverage of the market. So if they want to be competitive, they need to start learning faster, and using the information they produce, to make decisions, and try to automate and reduce waste. Because without digitalization, there's a lot of waste in the bureaucracy, in the paperwork, that can be actually automated. And it's not different. It's no different for enterpreneurs who want to start a company in an office or hybrid or remote. Of course, if they want to go remote, they cannot do it if they have still things in paper, or they have branches moving around. But I wouldn't make the difference. I would apply this to all of them.

Aurel Albrecht  19:00

I totally agree. Maybe just one or two additional things: What we've been seeing with companies that switch to a hybrid model is that sometimes those people that are remote or not in the office sometimes feel that they have kind of a disadvantage, say meaning that meetings sometimes taking place only offline or etc. I think this is something where, again, it comes back to the tools you use, but for us I think every meeting is taking place online, even if people are sitting in the same office, but some people are always calling in remotely. So I think having a clear setup in place to have everything online is important. And again, maybe on one edition, just on that what I was mentioning before, I think it's even more important for those people that join a company remotely that they feel taken well care of. I think onboarding days, we try to get everybody in for onboarding, if possible. But at least what we also do is we have kind of team gatherings. So at least twice per year, for instance, now in just two weeks time, we have our summer party, where we pretty much bring all the employees from all around the world together. So I think this is... Nothing has to be in person, but if you have something in person, this can have an additional emotional angle, which you would never get remote. I think having these kinds of routine meetings where you bring the team together is important.

Sandra Redlich  20:45

I see you're nodding Bernat, you're agreeing with that?

Bernat Farrero  20:48

Yeah, I agree completely. And I think it's a good opportunity to create meetings for certain projects, for certain functions in hubs, and headquarters, but somebody needs to be thinking on putting the physical element in place. And because it's purely remote, it's very hard to build relationships, it's very hard to go beyond the everyday task. So there has to be a deliberate effort to put in like this physical experience, even if it's not every day, but every now and then. And so all the savings that you get from not having to pay an office, like every month, maybe you can put it in travel, and meeting and I think it's a very good idea, it works quite well.

Aurel Albrecht  21:32

Exactly. And having kind of routines. So I mean, for us, I think alignment, alignment alignment. But I mean, in the end, it's the same if you have all office or fully remote for us. I mean, if I would give an advice to a founder, even if you have already five to 10 employees, start to make regular meetings. So we do for instance, we have our monthly all hands meeting, which is kind of a quick check in, bringing the team together, giving a quick overview of the company. We have more, let's say, broader quarterly all hands meeting where we do reflect on and share OKRs. And we do have then these big gatherings for summer and Christmas party. And in between also the departments that are meeting not necessarily in Berlin, but bringing the team together. I think these kinds of routines are so important and so rewarding. Even more than you would be constantly seeing each other in the office.

Sandra Redlich  22:29

We're speaking about the successful measures that you guys took, but we do want to get some spicy information from the both of you while I have you here. I know that a lot of, especially in younger companies, is learning by doing. Is there anything that you tried out when it comes to your remote or hybrid employees that looking back, you maybe wouldn't do again, anything that didn't work out? Or, you know, you mentioned meetings right away, making sure that everyone has this initial onboarding experience as well. Is there anything that you tried out and it just didn't work as you expected it?

Bernat Farrero  23:09

I know we screw up most of the time. So most of the things we do, sometimes don't work and that's fine, we change them, we stop them. And then we start something new and when something works, then we try to do that by ten. So like making mistakes is our everyday. Actually our company has evolved a lot. We went in the last three years from a little bit less than 100 people to more than 750 people. So many of the dynamics that work one year ago, they don't work anymore now. That on top of the remote versus office problems that I agree with Aurel, that having hybrid environments sometimes makes the people remote feel a little bit isolated. So we have a big team in Barcelona, in office in Barcelona. So this is something that we learned as well. How to tackle, for example, we have buddy programs now to onboard the new employees and sometimes your buddies that are in the office with a buddy that are remote don't kind of match. So we kind of build different tracks for this for them. For the people in remote. We have systems like random conversation and meetups that the algorithm put them together so they can get to know each other or discuss. We have groups who have so many activities. I think they try to engage with the people that are spread. We have people in Nigeria, we have people everywhere in the world in remote and we try to get them as together as it is possible. But I don't know, I couldn't know now, we have tried so many things. Some worked, some didn't.

Aurel Albrecht  24:56

Yeah, fail fast. I mean, I agree. So I think this is also one thing that we do, we do take risks and decisions, we try something if it doesn't work, I mean, it hurts. But you learn, always. You always learn and that those things that work, focus on. I think, one learning, curious to get also your thoughts on this Bernat, because I mean, in the space that we are operating in, there's so many opportunities that you can go into or follow. And for us, what we identified as coming back a little bit to aligning on the mission, the vision, and in the direction of the companies we're going. We were, throughout especially 2021, we were putting a lot of things on to the product, the commercial team and all the departments, they were a little bit overwhelmed with. Okay, where to focus on? I mean, I think, yes, we built dedicated teams, but I think that was one learning for us is that we kind of were throwing too many projects or initiatives on them. But on the other hand side, I mean, by doing this, I'm throwing people into the cold water, sometimes we fail faster. And we learned faster, and we were much better able now to really shape our long term vision of where the company is heading.

Bernat Farrero  26:28

Yeah, well, we had different experiences from doing like many projects at once in parallel and not kind of delivering ever any of these projects. And then we went to the other side, focusing a lot on less projects with a different methodology, different OKR systems. So we're kind of experimenting with a meta, with methodologies, with the tools, with everything that we have available, and sometimes we just make it up ourselves. But we tried to focus a lot on our culture. So in the end it's the only process that really truly scales. If you have managers and directors who are very driven and they understand why we are here and know what makes us wake up every day. And when you have all this noise, a growing company has a lot of noise. And people saying nothing works, or I don't know, there's people leaving or this even that. But you have someone who can actually understand and see the value that we're generating, the things that the business that we're bringing in and can explain, look, we're here for that, we're moving forward. If this doesn't work, which is going to stop it, we're going to screw up, it's okay. We're here to find out a way. A way that probably has not been done before. So we need to work it and find out along the way. I think we have a very strong culture. We have people who really love what they do. And we managed to promote those people. So they're now leading the company. And the founders are now just some of the people, because we have incredible great leaders at Factorial who are actually defining and helping find signal between the noise.

Aurel Albrecht  28:28

Yeah, that's, I mean, I couldn't agree more here. And I think, culture and values. I mean, if you go to our About Us page, you will see them right away. But I think having this in place is so crucial to hit the real growth stage. And I mean, especially if you have 20 employees, and you have 50 employees, it's a different culture right away. 50 to 100 is another extreme, but 100 to 800 is also something. And I think you need to have pretty much a lot of this in place to really become a successful scale up or grown up. Going from 100 to 800 employees with dedicated values and culture will most likely succeed. And I've seen it in many other scale ups where this was not in place. And it worked. Yes, they were scaling. But at some point, they were inflating again, because of culture being the worst, people leaving, demotivation. And I think this is really important to say that, I mean, the success of Lano is defined by its people. The people make Lano the success in the future. We're building something for the long term and I think this also for us was very important from the beginning onwards when we started our company, is you can bootstrap a company or you can go the extreme VC route, and being fully funded and just going for another valuation looking at top line growth, and we wanted to do something in between. Bootstrap has the problem, you overvalue time over money. So this can hinder growth. VC you are not in control of your own company. But if you kind of do initial good work upfront, until you have kind of a solid foundation of culture, scalable business model, then you can scale as fast and efficient and successful as you want.

Sandra Redlich  30:34

Final question to both of you. Looking at what you've created now and where you are, and everything you've learned, is there a way back for you? Do you think you're ever going to go back fully in office? Are you going to go full remote? Are you happy with the way you're set up at the moment? And what do you think the future is for other businesses who might still be lagging a bit behind?

Bernat Farrero  30:55

When COVID was a little bit more relaxed, I made an announcement to the company that we were going back. The problem is that then there was more waves of COVID, we had to go back home and then back to the office. It was very schizophrenic. But eventually, all the go-to-market team went back to the office, with flexibility and everything. So with many good things that we bring from the COVID times with learnings, but we are back in the office in the go-to-market team, which is what I happen to manage. I actually really like having people around, having discussions, you know, having conversations that they haven't planned in a calendar and usual meeting. So I think that in one way or another, there has to be an office element or physical gathering element. I think there's no substitute for them. And if a company is fully remote, and they can find an alternative, a completely digital alternative, it's fine. I don't say it doesn't work. But it's probably a little bit handicapped compared to people who actually meet and can develop like longer, long term relationships, like stronger relationships, by physical contact. But I don't think there's a way back in the sense of coming back to the rigidity that used to be before. Many companies that didn't even consider that the company could go remote. So now everybody in the world considered by force that they can undertake, they can perfectly work remotely or hybrid. So this changed a lot, this changed many, many perspectives. And it actually broadened and opened the minds of many people. And that's a great thing. So I don't think there will be more rigidity in the sense of nobody can leave the office, we're gonna count the time that you arrive, and you go back. I mean, especially mother companies. But I don't say that there will be fully remote for most of the companies, it will be kind of in between.

Sandra Redlich  33:00

Aurel, what's next for Lano? Do you think you're going to be changing your internal structure anytime soon? And what do you think the future holds for companies in terms of remote or not remote?

Aurel Albrecht  33:11

Maybe I'll start with general first, and then I'll talk about Lano. We believe that, I mean, let's assume the pandemic is over at some point, that 80% of overall company's workforce will be in the country, at least where you do have a legal entity or where you are present. 20% will most likely be remote. But the vast majority will be, let's say more locally. And companies will be more global in terms of they have to be more global to find talent. I think that's for sure. But I mean, coming now to Lano, for us, I mean, we've been hybrid, we will stay hybrid. We do, similar like Bernat, believe in an office where you get the team together from time to time. What most likely will happen is that we build additional hubs, so that you can say we will, let's say, we will be focusing now on the Latin American market, or somewhere in the APAC region, that you create kind of some hubs. But for us, we will be hybrid, or global first, all the time. So if an employee decides I want to work from the beautiful, sunny Barcelona, and he's more than happy to do that for Lano, and come visit us from time to time. I mean, as one of our sales people. He's living in Mallorca and he says 'I'm working from the most beautiful place in the world'. And we are completely flexible here. But we do always believe and always have an office, potentially even additional hubs.

Sandra Redlich  34:50

Well thank you so much for taking the time to talk to me and to our listeners today and share your experiences. I wish you all the best in your future endeavors and I'm sure we'll have other topics we need your experience and expertise on. We'll be back here, right at the same spot, and grill you again for your knowledge. Thank you for your time.

Aurel Albrecht  35:10

Thank you very much.

Bernat Farrero  35:13

Thank you both.