Why virtual teams are crucial to success for SaaS startups

Zachary Rosenberg President at MBMG

I’m regularly amazed when fellow business people express surprise about my global virtual team and how effectively we all work together. Seeing that it’s now 2018, I just take it for granted that remote teams are common and everyone knows how effective they can be, but apparently that’s not the case. Nearly every week I have people inquiring about how virtual teams work, why I use that model and how it benefits my company. Let me take you through the process I have used for close to 10 years.

It seems that many people who are starting businesses still believe that you need to raise a ton of capital so you can rent an office space and hire a team, but it’s those high overhead costs that kill a lot of young companies before they get a chance to flourish.

Using a remote team allows you to keep your overheads to a minimum, establish your company and give it a chance to be successful even if you start with a small budget. It’s not a matter of “should” use freelancers, it’s a fact that you “must” use the global freelance talent bank.

For those who don’t yet know about the advantages of employing a remote workforce or don’t know how to do it, I’ve compiled this information on the benefits of using a remote team.

To clarify, a remote team is a group of freelancers who you hire to perform tasks on a contract basis, commonly referred to as outsourcing. These freelancers can be located virtually anywhere in the world. If you want to stay local, you can of course seek freelancers in your city or country. Or, you can open up to hiring internationally, which allows you to hunt around for the best available skills at the best possible price.

Advantages

Particularly for businesses just starting out, hiring freelancers for your non-core functions allows you maximum flexibility for minimum overhead and gives you valuable leverage.

Currently, my outsourced functions are: graphic design, trademarks and patents, bookkeeping, UI design, front-end web development, (some) Javascript development, social media management, market research and one-off projects like Zendesk setup.

Those are positions that:

● I don’t have to find room for in an office.

● I can cut if necessary and immediately reduce that overhead to zero without feeling like I’m taking a job away from someone because the freelancers all have multiple other clients that provide them with work.

● I don’t have to pay top dollar for because freelance pricing is extremely competitive, allowing me to stretch my budget as the company continues to grow.

For a startup, hiring freelancers is an ideal way to grow because you only pay for the work they perform. If you only require a single task performed, you can hire the freelancer for that task and once it’s done, you don’t have to worry about giving them more work to keep them busy. They move onto their other clients and if you need them for more work, you simply re-book them.

This allows your business to mature while keeping costs in check. More importantly, it keeps your cash flow fluid and your overheads down. Once you are ready to move some of these functions in-house, you can then hire full-time employees.

If you choose to work with people internationally, you also get the benefit of bringing in more diverse viewpoints. There’s a plethora of studies about the benefits of a diverse workforce and I can speak from experience when I say it’s been fascinating to have all the different perspectives that we get from having an international workforce.

We have people from Spain, India, The Ukraine, Poland, South Africa, Philippines and New Zealand working for us and they all bring their unique take on business to the table that’s been influenced by their respective cultures.

But, you don’t need to go international if you don’t want to. If you prefer to work with people closer to home, it’s still an advantage to outsource functions to people within your home country or even in the same city as you. You’ll still be saving time and money regardless of where the freelancers are stationed.

You may think that outsourcing only works for companies who are primarily internet-based, but all kinds of companies use freelancers to help ease overhead costs. If you run a more physical business like landscaping, for example, you could still outsource your bookkeeping, marketing, social media or web design work and save money.

The Process

First, draw up an organizational chart of your company and identify what functions absolutely need to be in-house. This is normally anything that pertains to your core IP and functions like data security. Also, identify any functions that can be done in-house thanks to the skills of your founding team. For example, if someone on your founding team has decent article writing skills, you wouldn’t need to hire a freelancer for that.

For my own company, since we’re an SaaS business, it is critical that management of our cloud instance and all associated data security be in-house, but many other functions and tasks can be outsourced for the time being.

Secondly, choose a freelancing service. I personally have years of experience with Upwork and I like it because the hirer and freelancer are bound by legal contracts, and the management of the contract is transparent.

You can choose to go with a per-piece contract or an hourly contract. All freelancer profiles have ratings and feedback from prior clients so you can see who is top rated. It’s super fast to become familiar with the setup.

The Upwork filtering process allows me to home in on precisely the type of talent and skills I need in a freelancer, whether it’s design, accounting, writing or any other skill that I feel comfortable outsourcing.

If you prefer, there are other services like Freelancer or Fiverr. You could also try to contact freelancers directly, but the beauty about using a freelancing service like Upwork is that the hiring and vetting legalities are completely set up and rock-solid.

I’d be remiss if I didn’t talk about the associated risks with freelancers. It’s true that you are bound to work with some that don’t deliver to your standards, but you tend to figure out quickly when you’ve connected with one of these people. If that happens, you simply stop the contract with them and find someone else.

Throughout nearly a decade of working with freelancers, I have only lost a negligible amount of time and money on working with the wrong people. I’ve become alert to the warning signs and terminate the contract immediately if the freelancer is not responsive or not delivering my desired outcomes.

Startups and small companies need to do whatever it takes to help ensure they grow and mature to the point where they can employ local full-time staff. My goal is to have the flexibility of on-demand resources that aren’t part of my fixed overheads. This is an incredibly valuable aspect of outsourcing when a business is at an early stage and the revenue run-rate is fluctuating. As CEO I want to have the ability at any time to reduce overheads within 24 hours if I have the need to.