Why Virtual Companies Aren’t Just For The Other Guys – with Adii of WooThemes

by Tim Jahn on February 22, 2011

WooThemes creates and sells premium WordPress themes.  It’s a multi-million dollar business run by co-founders Addi Pienaar, Magnus Jepson, and Mark Forrester.  A portion of their team is in South Africa and the remainder of the team works from around the globe.

In this interview, Addi shares why WooThemes operates as a virtual company, the advantages/disadvantages of doing so, and techniques his team uses to stay productive from day to day.

Transcript

Tim Jahn: WooThemes is a multi-million dollar in revenue company. You guys make premium WordPress themes and my site Beyond The Pedway runs on one so I’m familiar with your themes and I’ve actually had other people I know use them so I know you guys are insanely popular.

What’s cool is you guys are an entirely virtual company. Like I said you’re kind of like 37signals in the sense that you hire people you know from all over, you guys aren’t necessarily tied to one location. My first question is, why are you a virtual company? I imagine there had to be a reason.

Adii Pienaar: Yeah, well I guess you know probably it’s our roots so when Magnus, Mark and I met, we were based, I was based down here in Capetown, Mark was based in London and Magnus, he’s still based, he’s based in Slovenia and Norway. So when we kind of hooked up and started loosely collaborating you know those were the roots of the company.

The three of us took 16 months of working together, building a company, establishing a company before we actually met up and spent some time together in the same room. So you know, those were our roots and that’s just kind of perpetuated itself as we’ve grown, so we’ve never kind of distanced ourselves too far from that.

Tim Jahn: Wow, 16 months before you guys actually met in person. That’s wow. Was there, was it just kind of like due to the nature of work you guys do, you know building web related products, you didn’t necessarily need to meet and you just didn’t find the need to until that far into the relationship?

Adii Pienaar: Yeah. Well, I want to say — yeah I guess I want to say we didn’t find a need to. I mean it was something we always wanted to do. I mean we’d been working together daily for 16 months. So it was always important for us to meet. But you know kind of growing company, there was always stuff that you know seemed so priority.

So when we did meet up, we actually flew up to London for a web design conference. And you know it was a great excuse for us all to meet and spend some time together for a couple of days. But definitely before that, we never felt the need to actually meet up and be in the same office for extended periods because we’d been so successful in working together virtually.

Tim Jahn: What are some advantages you would say there are to being a virtual company in terms of actually improving productivity?

Adii Pienaar: Well, I guess first one of the biggest things about productivity is the skills involved. You know and the three of us would have never been able to work together if we were closed minded and one of our requirements were that you know we needed to be in the same office. So you know and that speaks to skills. I think we’ve got a unique blend of skills as cofounders.

And initially that unique blend was very important that is if we kind of stuck to our guns in terms of we had to work out of the same office, we would have totally missed that opportunity of working together. Certainly, I don’t know, you know. Even though we’ve got a bit of an office down in Capetown now were there’s, you know which houses half of the WooThemes team. You know sometimes it’s just more productive being able to work around your own routine, your own hours. And we still see that with the guys now. Even though we got plus, you know kind of an office there and office hours they’re basically free to come and go as they want in terms of that.

So working virtually obviously gives you that flexibility. And everyone works around their own unique schedules and they only really need to be accountable to themselves in terms of contributing you know X amount of hours.

Tim Jahn: When I’ve talked to people about the idea of virtual companies before usually what only comes up is that it only works for the right type of person in terms of, or the right team. Have you guys noticed that that when you’re, when you’re maybe hiring people you have to make sure that there the type of person that can operate productively in that way?

Adii Pienaar: Yeah, and I think there’s two things, two characteristics which you’re supposed to be looking at. One is the discipline. So if someone — if you don’t have a boss that’s going to check in you know physically every day, ask you what’s up, what you’re doing, you need to have the discipline to keep the rest of the team and your superiors — essentially you need to keep them up to date on what you’re doing and the challenges you’re facing, and obviously the delays and all those things.

And taking accountability you know exactly for that. So when you aren’t disciplined, when you aren’t contributing as much as you are, you need to be accountable for that. So there’s the characteristics of you know we tend to hire people you know that rank highly in terms of that. And if they don’t, then that’s kind of something that we reinforce and you know we help them to develop it. Because I say it’s all integral in terms of having a virtual team.

Tim Jahn: Yeah, I would imagine that you definitely have to make sure that the right kind of people are — that you’re finding the right kind of people that can handle that kind of environment. What would you say are some of the best practices to ensure high productivity in terms of maybe communication, in terms of like you said, discipline? Just from your experience, from you guys having operated this way, what are some best practices you think to keep things moving?

Adii Pienaar: I think you know again too which comes to mind first time is real time communication. I think it’s important for the team to be able to stay in touch with each other. And everyone knows where they are individually on the realistic road map which is, which is wootheme. So you know that I need to finish x, y and zed because the other guy on the team is going to finish what he’s doing in a day or two and he’s going to need what I’m working on. So kind of making sure that everyone where they are, you know where their position is and what their progress needs to be.

And secondly, and I think most importantly is managing expectations both ways. And that works for me if I’m in charge of a project within WooThemes and I need to make sure that it rolls out, I need to make sure that the guys working on it need to know that we need do this by that date and this is what’s required.

And same thing for them is they need to keep me updated and manage my expectations so that if there are delays, they give me as much flexibility to adapt the strategy and the kind of expectations, especially when users are involved, you know third party you know collaborators or what not. Those expectations are absolutely integral.

Tim Jahn: Have you ever had a situation where someone wasn’t working too well in a virtual team with you guys? Have you ever hired someone and after a while you started to notice it wasn’t working out?

Adii Pienaar: No. We’ve actually never let someone go. We’ve only added — we’ve been lucky, I must admit, we’ve been lucky in terms of only adding to the team. We have had, you know internally we’ve had some wise experiencing a bit of drop off in productivity and we’ve addressed those personally.

And I say personally because business and especially teamwork is not supposed to be black and white. And there isn’t, there’s no policy or guidelines to help you in those situations. So we’ve had that but I mean, that’s probably the worse that we’ve had. We’ve been really lucky not to have to change the team due to someone not being productive.

Tim Jahn: I think that’s a great point that you bring up that’s it’s not black and white when it comes to the way people work. What are some ways — because I can imagine someone watching this might you know be, they might be a virtual company and they might be just having just started this idea and they might find someone that’s not quite — they don’t want to let them go but they’re just not quite you know figuring out how to be productive virtually. What — how do you address that in terms of you say you know being personal or not, there’s no black and white, there’s no set rules here? How do you address that from your experience?

Adii Pienaar: Really difficulty. You know ultimately because there’s no black and white, means that every case needs to be handled on merit and with the specific details involved. So if a guy on the team is going through a bit of a tough period personally, and you find — because this is really what happens, right.

I mean, it’s not a case of them not knowing how to do the job efficiently or not having the skills to do a job efficiently. It’s normally stuff outside of the company, outside of the team, outside of the work itself that kind of influences that.

So what we tend to try and do is help everyone solve those issues so that the bad stuff doesn’t get carried into, carried into work. So again, it’s a communication thing, it’s about being honest and open and enabling them and empowering the guys on the team to be able to speak to us. You know even though we are supposed to be their boss, we don’t act that way, we don’t, we’re definitely not going to punish anyone for making a mistake or not being as productive or you know coming to us and telling us that, “Geez, I’ve really had a tough few weeks and that’s why my productivity is down.”

Instead we’d love for them to come to us and say, “Well guys x,y, and zed has happened in my personal life, its been tough, can you guys help me figure it out so that I can get back on par?” Which we found is just much, much better in terms of forming a really good bond, and loyalty and trust within the team.

Tim Jahn: That’s a great point that most of the problems might not even be work related but elsewhere in life. You mentioned a little bit about communication. And I think for virtual teams, communication from my experience is the almost the number one key to success. I mean, if you can’t effectively communicate when you’re not in the same town, in the same state, you’re kind of screwed in a sense.

How do you guys really make sure that you have a stable communication network in place? Are there any specific kinds of tools? Like you mentioned real time communication. Are there any specific — do you guys have daily calls or how do you guys handle that?

Adii Pienaar: We — generally there’s you know three tools, four tools we use. So in terms of real time we’re always on Skype. So during the times we’re actually working so our individual office hours we’d be on Skype and we’d be able to have one on one or you know little group conversations with the guys too; you know something that needs to happen. Then we also use the P2 theme which is built on WordPress which basically for those that don’t know it’s some kind of a bit of an internal twitter that’s hosted on our domain, private obviously. And that we use just as a little tool to keep everyone up to date in a less demanding way.

So obviously Skype and finding to pop someone to ask them a question, you’re going to interrupt them. With P2 is just a passive update. You know I update the team on what I’m doing, I can pose a question if I don’t need an answer immediately, that kind of thing. And then beyond that we use Basecamp for our bigger stuff, our bigger discussions, something that we feel needs to be documented more properly, an archive that you know so we can go back on.

So what normally what happens is a conversation from Skype or from P2 would be elaborated up unto a point where we move it up to Basecamp. And then finally there’s email because we work with so many different people, customers, collaborative designers and what not, we still use email because people outside the Woo team obviously don’t have access to our P2, or to our Basecamp. And it’s not always efficient setting up with accounts if they’re only going to need to interact once or twice.

Tim Jahn: Yeah, I think a really important point you made is that as you were listing your four different tools, each one had its own specific purpose that you weren’t just piling on these tools for the hell of it, you actually had specific needs to use real time, to use Skype, to use Basecamp. That’s a, that’s a really good point.

Adii Pienaar: Yeah, well I mean considering all the tools that out there and I mean all the tools coming out daily, I mean, I think it’s the easiest thing browsing to a new homepage and, “Oh, this looks really great” and signing up and just having another account on what we find. I mean, for example we tried out Campfire in addition to Basecamp and that just kind of never fit.

We were still finding ourselves going back to P2 or back to Skype. So I think you know it’s always a case of try tools out and if it doesn’t fit into the natural flow of the team, they should, don’t just use it because other people are using it or because it’s a great tool. I’m not saying for example Campfire isn’t a great tool, I think it is. It just didn’t fit us for example.

Tim Jahn: Yeah, I’ve run into that too oddly enough with 37 singles products. I signed up for a Backpack account, and it just wasn’t — I need Basecamp not Backpack. And like you said you got to use what works for you.

Adii Pienaar: Exactly.

Tim Jahn: Is it ever in your experience, is it ever a bad idea to be a virtual company or from your experience, are there any situations where it’s just not the best idea to go that route?

Adii Pienaar: No. I mean, I guess we get the best of both worlds. I mean, obviously with half the team being based in an office in Capetown, and then half the office you know being based virtually, I think sometimes it’s great just being able to walk over to a guys desk and say, “Just help me with this quickly.” You know so there’s definitely the benefit of having an office. And you’d find that most startups tend to have an office. But I don’t know, you know, do — I guess I come back to the initial story of how Magnus, Mark and I met.

If, if you can set up a virtual company, it’s, it’s more cost efficient, it’s easier to bootstrap that way and it’s most definitely possible. So you know I think it’s a great way to start a company if you’re working with the right people. And that’s a big “if” and an if that’s you probably won’t be able to answer before hand. You know I got really lucky with Magnus and Mark, I mean, they’ve turned out to be incredible cofounders. And I’m sure that every story won’t be that way. But as I said, going forward I mean it’s — if I start a new company, I’ve got the opportunity to do so virtually. I mean, it’s definitely something that I’ll consider and probably go for.

Tim Jahn: That’s definitely at this point a large part of what you know in terms of, in terms of working.

Adii Pienaar: Yeah, and I mean it’s been very freeing. I mean, it’s liberating to be able to work with people and be in that mindset. I mean, I’ve, we’ve worked with tons of people who are hesitant working virtually and remotely purely because they’re not that used to it.

By now, we, I kind of know that you know that if you outsource work and you work remotely, then the shit may hit the fan and that’s okay; there’s always remedies to that. And you just kind of need to have contingences in place for those. So I guess I’ve been experienced in terms of that and having it such an integral part of the team has definitely helped us on that front as well.

Tim Jahn: What would be your piece of advice — if someone is just tuning in right now, what’s your one piece of advice for someone who wants to create a virtual company for their business?

Adii Pienaar: Probably you know I don’t know get the best, absolute best person for the job regardless of where they stay. You know if they’re a hard worker, they’re going to be a hard worker whether they’re in the office or out of the office. You know those — there are more important characteristics and requirements to hiring them, the one which is you need to be based in my office wherever that office is. I think that’s a really crappy reason for not hiring someone that’s incredibly talented.

Tim Jahn: Yeah, that brings up a good point actually. I wonder, I wonder if there’s people who have trouble shifting a mindset. Because I think of companies that have an office and have a good sized company but then they — certain jobs there’s just really no reason to be in the office whether it’s web development or you know maybe even customer service depending on your product. And I think some companies have trouble shifting the mindset from letting these people be virtual.

Like you said, it’s better to hire someone that’s you know the best person in the world literally wherever they are in the world for this job than to require them to be someone in your local area that has to come to the office everyday. Do you have any advice for how people can shift that mindset or try to open their minds a little bit more, that idea?

Adii Pienaar: You know I guess ultimately to I mean, it’s occasional that people that don’t do that, they do so because there’s this perceivness and it’s an actualist. I mean not having someone in the office does mean you have less physical control over that person. If you get to see someone everyday, you can exert more control than you can over Skype or by email. So there is that risk involved.

I think that as with anything in business, it’s a case of if you don’t take the odd risk; you’re not going to get the proportionate rewards for that. And I think that companies that actually embrace that within their teams and hire actually the best people will reap the rewards and do so exponentially. So changing the mindset should let me gear towards getting exponential growth and exponential impact, positive impact and influence within the team. And that’s, that’s I think the only rationale I said. The risk doesn’t go away at all. It’s just embrace that and turn into potential competitive advantage.

(photo credit)

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