Creating a Global Company Without Ever Signing a Lease
The summer after I graduated high school in 2004, I was sitting in a branch office of a Morgan Stanley SVP working away at my computer building a model to calculate average exponential interest rates over time. It was simple enough: I remembered the equation from sophomore year, and it was just a matter of solving a few lines of algebra, writing a little code, and making it foolproof enough that a banker could enter the inputs on his computer while pacing around his office on a conference call with clients.
It was fun.
And there were big bonus points when I did it in only a few minutes. I shot it over to the SVP, and a minute later, he called his colleague into his office exclaiming, "You won't believe what Breanden just did!"
It's a nice memory.
Unfortunately, it's not what comes to mind when I look back on my time at Morgan Stanley. As a 16-year-old overachiever, I spent my senior-year-summer in a suit on the top floor of a downtown corporate office doing what was then exhilarating stuff like learning about investing, coding little apps and building client presentations.
And... staring at a clock.
I had my own little mahogany office space, and across the room, there was a circular wall clock with a white face and black trim. A week into my employment, the novelty had worn off, and I found myself checking that clock more and more frequently, yearning for the EOD. I was learning/doing cool stuff, and I always went above and beyond, but I felt trapped being there. I was at my desk by 9 a.m. Check email. Check clock: 9:10. I soon figured out that if I got a cup of coffee, I could get rid of three minutes. Check clock: 9:13. Nice. Log back into my computer and bang out whatever work I had to do. Check clock: 9:45. I knew if I went to the bathroom, I could get rid of 4 minutes. Check clock: 9:49. Okay. Soon it will be lunch time. Go shadow a conference call with a VP. 9:50. Check clock seven times during the call to see: 9:55, 10:10, 10:16, 10:20, 10:22, 10:23, 10:23.
Proceed to slowly go insane.
My life quickly became a mechanized routine of self-torture as I tried my hardest to pass the day so I could get the hell out and go read about investment vehicles from home or a Starbucks. I hated being in an office. I hated staring at that clock. Even when I had cool stuff to do, I was 10x more efficient doing it on my own time without sitting in uncomfortable clothes in a fancy space.
Three months later, I was done, and went off to university. My crash course at Morgan Stanley taught me a lot -- it was a solid learning experience filled with very generous and very smart people -- but the most important thing I learned was that I was never going to be exhilarated staring at a clock in an office.
Six years later, we started Toptal from my dorm room.
In November 2010, Taso Du Val and I created Toptal. Previously neighbors in Palo Alto, I was now an engineer enrolled at Princeton University, paying my way through school by working as a freelance developer. Taso was a developer as well, and we were both working on startups and building our own engineering teams.
But hiring extremely good engineers was extremely difficult.
Like all founders, we needed extremely good engineers on our core teams, yet the ones from our personal networks were all taken by Googles, by Facebooks, sometimes by their own companies. Virtually everyone I knew (including me) had gotten burned trying to outsource work to India. I wasn't going to do that again. So the other alternative was to create a job post and prepare to drown in resumes from unqualified people. Ugh. Even if we did get some good applications, it was hard to notice them through all the noise, and because the best engineers are often the least aggressive self-marketers. We each had the pleasure of spending two to three months interviewing and testing everyone with a hit rate of sub 5%. The end result of this process was months wasted, risky hires made, and tens of thousands of dollars lost directly (with potentially millions of dollars lost indirectly).
So what does one do?
Taso showed me the answer. He introduced me to Ignacio Freiberg, a developer in Buenos Aires, who in a matter of weeks convinced me it was possible to build great software, and therefore great companies -- with a remote team. Ignacio was awesome: scary smart and impossibly proactive. We communicated non-stop. We worked non-stop. We pushed non-stop. From 5,000 miles away, he became an irreplaceable core team member almost instantly. If only there were more Ignacios!
Good news: there are more Ignacios. And we figured out how to find them.
A month after "meeting" Ignacio virtually, Taso came and visited me at Princeton. We sat in my two-room single on the top floor of Princeton's Brown Hall for weeks, and Toptal was springboarded. Taso aptly called my room the "pressure cooker". Sharing about 400 square feet between us, we set our vision, debated the intricacies of scalable intelligence testing, mapped out V1 of Toptal's screening process, and hired our first employees. A few weeks later, Taso went back to Palo Alto, and we've hardly worked in the same location for more than a few days at a time ever since.
And yet, Toptal will hit just over $80,000,000 in annual sales this year. Taso and I speak every day mostly via Skype, there are now hundreds of core team members working from more than 25 different countries, and together we support thousands of engineers working with more than 2,000 clients across 93 countries -- all in real-time.
And Toptal still doesn't have an office.
We turned down Silicon Valley.
Everyone at Toptal works 100 percent remotely, and almost none of us live in the Bay Area. I personally have lived and worked in more than 30 countries in the last few years, but, at any given time, there are Toptal employees touring Europe, playing polo in Argentina, taking month-long jaunts in Asia, spending quality time in their home countries cherishing their families, and everything in between--all while working full-time at an aggressively growth-minded, VC-backed company. We have conference calls via Skype from beaches, mountains, cities, campuses, boats, planes, etc. across the globe, and many of Toptal's team members who speak to each other on a daily basis have never actually met face-to-face. Yet we are extremely tight-knit as a company. I know people with Toptal tattoos.
With just a laptop, phone and maybe a tablet, we work together to build a real culture, a thriving community, and, of course, great software.
We could have gone to San Francisco, set up shop, raised many rounds, and pursued Toptal in the typical Valley way. But of course when Taso and I started all this, I was still in class, and everything had to happen virtually. Taso didn't live in Princeton, and I didn't have time to commute to NYC or SF for meetings every day. So, using Skype as our office, we said from day one we would be distributed (meaning we would be working from anywhere but a central office), and we proceeded to "meet" people and companies all over the world using our computers. And instead of having two or three in-person meetings a day, we could do ten or twenty virtually with people who were located anywhere. We didn't lose any time for commutes, and we avoided all of the costs associated with them. No one stared at clocks, and no one wore a suit.
While working like this, we realized that we didn't need to physically be in Silicon Valley for Toptal to take off, and this opened up a world of possibilities--literally. Taso and I are adventurous people, so we began talking about cool places we could go that were also economically strategic so we could reinvest as much as possible back into growing the business and skip funding rounds in the meantime. We quickly set our sights on Budapest, as one does. It was significantly cheaper than San Francisco, and, to us, it was significantly more fun.
As we grew in Budapest, we further embraced the freedom of not having a physical office. We traveled to dozens of nearby countries and met hundreds of incredible people--from Topcoders to Prime Ministers to CERN researchers to infamous hackers--often in the places we'd least expect. Soon our core team members were operating from Russia, Brazil, and Argentina, and with our team's coverage map widening every day, Toptal began to grow organically in that same way. We were able to practice what we preached--working remotely--and because we were entirely distributed and that was never a question, we figured out how to have our cake and eat it too. We had the freedom to hire talent wherever we went and build local Toptal communities in every country we visited.
As a result, we've built Toptal into an elite global network, and not just another freelancing site. If a company is just looking to freelance or contract out a cheap project, there are already plenty of sites for that. The world doesn't need more fluff, and by embracing remoteness and merit over proximity and tradition, we've built a revenue-based hypergrowth company with very little outside funding in just under five years. We're creating something new, something different -- a network, a culture, of empowered top talent.
You don't need an office.
It works. This isn't just numbers on a page or a study performed in a certain way to achieve desired findings. Even though we have yet to come across another 100 percent distributed, hypergrowth company (the famous examples of distributed teams like GitHub, Automattic, Basecamp, Stack Exchange, etc. all have leases for some kind of space), you can build big without an office. What's most important is that you do not restrict yourself to local talent -- hire the best, no matter where they are. If you don't, you're going to fall behind the companies who do. It won't be easy, and you'll make mistakes, but you will get great people, intense drive, and real, self-motivated determination across your remote team. As you get better and better at being remote, the lines between business and pleasure will blur, and you'll feel things start to take off.
And you won't have to stare at any clocks, or wear a suit, if you don't want to.