Remote Work, Cognitive Dissonance, and Market Size 🥧

What the remote work haters miss

Hey everyone,

Maybe it’s just me, but it seems like there has been a lot of chatter about remote work, hybrid work, “the new normal”, “workplace of the future”, “rising interest rates will kill remote work”, etc. over the past few weeks.

Here’s my view in a nutshell:

1. For many reasons, remote work represents a tremendous opportunity.

2. Remote work requires different management skills. The idea of obtaining and practicing these skills is attractive to some leaders and repulsive to others.

3. Remote work isn’t perfect. It’s different and it certainly isn’t for everyone or every organization.

For the next few weeks, I’m going to write about remote work and specifically the arguments supporting or criticizing it.

As always, I’d love to hear your thoughts,

Ben

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Remote Work, Cognitive Dissonance, and Market Size 🥧

Here’s a wild conversation:

Entrepreneur: I have a great, disruptive idea that will change the world!

Investor: Great, tell me more!

Entrepreneur: OK, I have this fantastic, scalable, high-margin product that people love! And I’m going to sell it in Fremont, California.

Investor: Um, why Fremont?

Entrepreneur: It’s where I have an office so I can see my customers face-to-face silly! Personal connections are essential, and it’s how our customers will know we aren’t phoning it in.

Investor: So your total addressable market is Fremont?

Entrepreneur: Yes! You get it! And don’t forget there will always be customers willing to move here to experience my genius - your upside is limitless!

You don’t have to be a Wharton MBA to know that the Entrepreneur in the above example is a moron. What are they thinking?! Are they needlessly limiting their addressable market to Fremont, California?

And yet The World’s Richest Man wrote a couple of emails about remote work. They got leaked. To summarize, he’s not supportive of the practice.

Tesla has and will create and actually manufacture the most exciting and meaningful products of any company on Earth. This will not happen by phoning it in [AKA working remotely].

In this post, I’ll explain why Elon Musk, or any leader, will have a hard time “manufacturing the most exciting and meaningful products of any company on Earth” with an anti-remote attitude. I won’t get into his assumption that remote work is “phoning it in”.¹ Instead, I’ll make my point using something he surely understands: market size.

Talent is Limited

People have different strengths and weaknesses; they have different motivations, different abilities, and different skills and traits that influence shareholder value. Said another way, talent is not infinite. As such, employers always benefit by having a larger pool of potential candidates.

I realize that the above statement may be obvious, but maybe it isn’t? If it is painfully apparent, why would so many CEOs get upset about the prospect of a remote workforce?

To illustrate my point, let’s look at how limiting Musk’s view is by looking at a specific role at his company that’s challenged by his remote work strategy: Recruiters. There are, according to LinkedIn:

• 2,200 recruiters in Fremont, CA 

• 922,000 recruiters in the US

• 2,130,000 recruiters globally

That’s a massive difference in scale. Meanwhile, there are 17 openings for “Recruiters” at Tesla in Fremont. If Musk is after the top 1% of recruiters he’ll find 22 of them in Fremont. Good luck to him.²

Hiring is Sales Now

Hiring is sales now. Sourcing and recruiting employees is no different than the total addressable market, so why wouldn’t you have the largest talent pool available? 

This is a concept that Musk has to understand. The entire premise of Tesla is that there is worldwide demand for well-designed electric vehicles. The operative word there is “worldwide” - if Tesla’s only customers were where it had offices, it wouldn’t be able to attract the investment required to produce an electric vehicle, much less produce them at scale.

The Answer

Brian Chesky, CEO of Airbnb, is one of the few leaders openly supportive of remote work because he’s willing to accept and exploit the opportunity it provides. Here’s what he had to say on MSNBC earlier this month:

And all the CEOs hauling employees back to the office, that’s their prerogative. But here’s what I would say. The companies with the best talent usually win and if you’re limiting your talent to a commuting radius, you’re not going to have the best people, because the best people will live everywhere.

@msnbc#Airbnb CEO Brian Chesky talks to #StephanieRuhle about why he’s decided to institute a permanent work from home policy and companies who don’t will suffer. #WFH #futureofwork #remotework

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Yes, Chesky has a direct business interest in supporting remote work, but that doesn’t make him wrong.

Currently, Tesla has 65 openings across all of their locations for recruiters. How quickly could they fill those roles by adapting to the new normal rather than fighting against it? More importantly, how much better of a company could Tesla be?

As always, thank you for reading. Next week we’ll talk about the moral case for remote work.

1. He’s wrong by the way.

2. Some of you may be saying “But people will relocate!” I’m skeptical. US migration has been in steady decline for a while, and any recruiter who owns a home with a sub 3.5% mortgage or relatively cheaper rent isn’t going to jump at the chance to move to the Bay Area.