Unlike companies with offices -- which often have servers, a telephone switchboard, and a bunch of enterprise software licenses -- virtual companies usually take advantage of the same free and low-cost services that consumers have been using for years. This is no sacrifice. Not only are consumer services, such as Gmail, Skype, and Dropbox, generally cheaper than their business counterparts, they are just as good. Except when they are better. "Enterprise software companies invest all of their money in sales and very little of their money in actually improving their products," says Paul Graham, who co-founded a business software company before starting Y Combinator, a small-scale venture capital fund that has invested in numerous virtual companies. "One of the advantages of going virtual is that you escape crappy enterprise software and get to use the cheap consumer stuff."
Case in point: Skype. Our staff loved Skype, which put us in the company of some 500 million people who use it to make free and low-cost long distance calls through their computers. But most businesses have ignored Skype. That includes Inc., which spends a hefty chunk of change -- roughly $770 per person per year -- on traditional telephone service. Our phones work fine; there's a very satisfying dial tone when you pick up the handset. But Skype makes and receives calls perfectly well, and then throws in free video calling, instant messaging, and superior sound quality. Our annual phone bill from Skype would be around $80 per person.
Not only are consumer technologies generally cheap, easy to use, and reliable, but the pace of improvement is breathtaking. Because there's brutal competition between the big tech companies and upstarts, virtual companies are constantly getting more for less. Just as we were preparing to leave the office, Skype announced that it would support high-definition video calling for free. Companies like Cisco charge tens of thousands of dollars for similar services. Around the same time, Google announced that it would begin allowing people to upload and share any file on its servers -- also for free.
The only real technological hang-up for us involved our existing IT infrastructure. Virtual companies don't own servers; instead, they rent storage space from the likes of Amazon and Rackspace. The approach is generally a lot cheaper than buying and maintaining hardware. But Inc., partly because it's part of a larger company and partly because our systems were designed before the explosion in popularity of cloud computing, relies on a room with dozens of physical servers that handle our e-mail and allow us to collaborate on magazine pages. The system works fine when we are all in the office, but connecting remotely during our virtual experiment was another story. Downloading a magazine layout, which normally takes a few seconds, took as long as 10 minutes. That gave our designers a chance to tune in to the Olympics as they waited for a file to load, but it also slowed things down.
Step 3: Settle In
This step sounds easy -- what could be more comfortable than working in your own home? -- but it's deceptively hard. During the first week of our experiment, many of us were very nearly losing our minds. Some forgot to eat lunch; others ate way too much. Our feet were cold; our backs ached; and, in a few dire cases, our relationships suffered. "The hardest aspect was just getting my family to accept that while I am now physically at home, I am not really available," says Rick Schine, a senior editor. "There were moments of sheer joy -- like overhearing my son practice his piano downstairs -- but there were also unexpected tensions."
It turns out that spending your entire adult life working in an office causes you to develop habits -- taking a walk to buy lunch, for instance, or leaving the office at 6:30 every night -- that are an effective buffer against stress, frustration, and all other manner of emotional instability. But these habits didn't immediately take at home. "In a strange way, I felt more tied to my computer than I felt before," says Kasey Wehrum, an Inc. writer. "I was spending all day in my tiny apartment, not talking to anyone. I felt weird." He had expected to use his lunch hour during the virtual month to go to the gym or take care of chores. Instead, he rarely took a lunch break at all.
This is all to say that proximity to home doesn't automatically lead to harmony there. "My work-life balance sucks," says Matt Trifiro, the CEO of 1000 Markets, a virtual company that he directs from his Orcas Island, Washington, home. "But if I had to go to the office, I'd see my family even less." Trifiro says home-based workers will probably need to establish the meaning of a closed door. "My 2-and-a-half-year-old son knows that if he comes into my office, it has to be a special occasion," he says. The routine of going to a private, dedicated workspace in your home -- or even getting dressed as if to go to the office before sitting down to work -- is a good way to emotionally prepare yourself, or your family, for the workday.
Meanwhile, getting comfortable at home means designing your workspace with the same care with which you would plan a traditional office. In the first week of our experiment, we IM'ed constantly about how much we missed our office chairs. Working from bed may sound like a dream, but, in practice, trading an ergonomic chair for a mattress will give most people back pain within a few days.
Of course, the beauty of running a virtual company is that you don't need to confine yourself to one place. After a few days of working alone -- and feeling starved for human contact -- I found myself splitting my days between coffee shops and my living room. Meanwhile, co-working centers, which are communal workplaces that charge by the day, can serve as a laptop-friendly alternative to the coffee shop. Another ridiculously underrated place to get work done: the public library.
Step 4: Master Your Emoticons (And Everything Else About Communicating Online)
For many companies this isn't easy -- and it wasn't for us. Making a magazine, like other creative endeavors, involves a certain amount of controlled chaos. We pop in, eavesdrop, and generally express ourselves at will, which can feel a little bit chaotic to outsiders but which also happens to work.
These characteristics make us a particularly hard case for going completely virtual. "The virtual approach can be especially destructive for companies where decisions are made in the hallways," says Batia Wiesenfeld, a professor at New York University's Stern School of Business. "What happens is that decisions start getting made independently without discussion." That can be a good thing when the decisions are small, but when they get to the heart of what you do, you are in trouble.
