Startup Ideas for the Post Covid World: Distributing the Workforce

One of the unambiguous trends of the Covid era is the success of work-from-home for certain industry sectors such as Tech, Finance, Legal, Consulting, etc.

Recode reported in May: 

Facebook CEO Mark Zuckerberg said in a livestream on his personal page on Thursday that he guesses as much as 50 percent of the company’s 45,000-person workforce could be working entirely remotely in the next five to 10 years. While Zuckerberg cautioned that the number is not necessarily a target, it’s a tangible estimate by the leader of one of the most important companies in the world about the future of work, impacting not only his company but the norms for post-pandemic office workers as a whole. The move comes shortly after Facebook’s rival Twitter announced it will allow its entire workforce to permanently work remotely, along with other tech companies like Shopify and Coinbase.

Since then, the trend has gained further momentum.

Since then, the pandemic too has gained further momentum.

Today’s idea, thus, is one to manage this transition and its associated nuances.

There are just under 400k tech workers in the San Francisco Bay Area. A large percentage of them pay princely sums to live in small apartments. $5000 for a one-bedroom apartment in San Francisco is not unheard of. There’s a very good chance that given the opportunity, many of them would opt to leave in search of higher quality of life at a more affordable price. 

There are many cities and towns in the United States where a sprawling 4-bedroom house can be bought for less than $500k.

And there are many cities from which there would be a concerted exodus if the WFH trend becomes permanent.

Companies would do well to manage this trend in a systematic way, keeping in mind the social engineering aspects of such a transition.

For example, the likes of Facebook ought to explore tax subsidies with state governments that want to become clusters of highly educated remote workers with well-paid jobs. Vermont, a leader in this thinking, has a remote worker grant program. People who love to ski may want to consider the state as home base. 

Let us say, in a given year, Facebook would facilitate the move of 2000 employees out of its Bay Area headquarters. Each employee would need to evaluate where to move, the associated salary level that they would be offered by the company, the government incentives from the state, home prices, availability, other colleagues who have moved there or are considering moving there, school options for kids, cultural and community amenities, special attractions like skiing for Vermont or fly-fishing for Montana, etc. 

There may also be constraints such as people wanting to move to places where they have friends or family members within driving distance. 

People may want to be in ethnic clusters like Indians (or sub groups like Gujaratis or Tamils), French or Italians. 

What I have in mind is a SaaS product that addresses all these needs.

In addition, the software also helps manage the remote workers’ needs on an ongoing basis after the move. This may include connecting them with others from the company who move to the same place, ongoing social events to bring people together when the Covid-related restrictions eventually lift.

What I am talking about is a massive social engineering effort that companies would need to partake in to do WFH right.

Communities would develop around the country, perhaps around the world, of remote workers. This is a drastic departure from rampant urbanization that has rendered cities around the world congested, polluted, and often unlivable.

What we’re seeing in the Bay Area in mid-2020 will be carried over to Bangalore, London and Beijing as well down the line. Later in the decade, thousands of companies would want to participate in similar social engineering exercises.

New Hires

The trend also opens up tremendous opportunities in hiring. Assuming that the daft immigration policies of the Trump era would reverse in 2021, companies can hire from around the world, and bring people into a cluster that is compatible with their needs, interests, and desires. 

A Tamil family from Chennai with two small children may want to relocate to a cluster where there are another 3-4 Tamil families with children of the same age group. Instead of being stuck in an expensive 2-bedroom apartment in Sunnyvale, California, living in a large house in Eugene, Oregon, may be far more attractive for this family.

Others may have more cosmopolitan needs, and want to be in an international cluster of ski-aficionados in Boulder, Colorado.

The Numbers

Let us say, 2000 people per company are being relocated per year for the next 10 years. If 100 large companies do this, we’re going to see 200k relocations per year, adding up to 2 million over the decade.

Two million highly educated people would thus get sprinkled in smaller cities and towns, injecting energy and vibrancy into those communities.

The SaaS company managing this transition could charge $2000 per user per year. 

Each of the 100 companies would then pay $4 million a year to manage the transition, making it a $400 million ARR company at scale. The ROI in saved salary costs, and the cultural impact of a happy, productive, distributed workforce would be immense. 

Of course, many mid-sized and smaller companies would also want to partake in this trend, and would be willing customers for such a SaaS product. The TAM, therefore, is much larger than $400 million.

In addition, the ongoing subscription revenues for managing the local clusters and their needs may be another $100 per year per employee, adding up to $200 million ARR across 2 million remote workers under management in 10 years.

Market cap for such a company would be north of $6 billion in a decade.

My point is that this is also a Unicorn idea.

And I expect that an entrepreneur or more are working on it as we speak.

If you want to work on these ideas and are looking for mentoring, start by going through our free Bootstrapping Course, especially the Bootstrapping with a Paycheck module, and then come to our Free Public Roundtables. We hold them weekly.

Photo credit: Citrix Online/Flickr.com

This segment is a part in the series : Startup Ideas for the Post Covid World