Why do many venture capitalists and technology executives feel that teams need to be geographically concentrated? As Cote’ pointed out, open source movements function quite well with internationally dispersed workforces, with team members who rarely if ever meet face to face. But open source efforts hew to an entirely different model of operations than typical businesses, a starfish model (from The Starfish and The Spider, recommended to me by Tara Hunt). In typical command and control, top down environments, the leaders and investors want to do things the old way.
This reminds me of Max Planck’s comment about scientific progress: “A new scientific truth does not establish itself by its enemies being convinced and expressing their change of opinion, but rather by its enemies gradually dying out and the younger generation being taught the truth from the beginning.” The current generation of technology execs and VCs have not “been taught the truth from the beginning.” That’s not to say they don’t find anything attractive in new ways of doing things… they wouldn’t be in technology if they didn’t. But they don’t fully get the new possibilities.
You can’t just pick and choose the new things you want either: they fit together and work together. You can’t be half-starfish and half-spider, using a hierarchical management approach with decentralized workers. Now I’m reminded of Thomas Kuhn, who proposed that different scientific paradigms are incommensurable. That is, you can’t make sense across them. You can’t take a piece of knowledge that works and makes sense within one scientific theory and plug it into another one. Is this the case in revolutionizing work? Do decentralized management and decentralized geography stand or fall together? I think that might be the case, though I hope not, because it’d be a lot easier for everyone if we could develop hybrid ways of working.
It’s odd that when people are faced with difficulties in working without physical proximity, the answer seems often to be “lease an office” or “don’t invest in companies more than a twenty-minute drive away.” Why not use the technological tools that are being pumped out by entrepreneurs around the world? How about trying web-based video conferencing? What about meeting in Second Life? Why not use next-generation collaboration tools and features built into new web services? If we can’t work without being within a quick drive from each other, is this revolution for real?
I say: the revolution’s for real. But older generations don’t get it. And when I say “older generations” I’m not so much referring to age as to mindset. If you still think that the old ways of doing things–massive VC funding, centralized and topdown operations, locating the heart of your work in Silicon Valley because you’ve seen others succeed that way, looking for supernormal profit–you’re part of the older generation.

2 Comments
Anne - I think this also overlaps with the sort of thing that JP discusses, and it seems to come down to trust. The underlying paradigm of command and control structures is a lack of trust in your employees/colleagues, so you NEED physical proximity to exercise oversight. The open-source movement is characterised by mutual respect and trust (AFTER you’ve earned your stripes of course!) so there is less perceived need for oversight/control, so remote is possible. I believe it is possible to have a hybrid arrangement - you just have to trust the people you work with. Cote’ is a prime example - he works for a three-person firm spread halfway around the globe, who, IIRC, all only got face-to-face for the first (and only) time earlier this year!
Ric - right, trust is huge. And it’s also about being able to work on what you want to work on. If you work on some open source software, you decide what you do. If you work for a company, management tells you what to work on, usually. I gather at places like Google the developers decide what projects and teams they work on.
RedMonk is an interesting case study… I don’t know how their management works, seems to me they are fairly decentralized in deciding how to spend their time. Perhaps their closest to a decentralized starfish–decentralized in both management and in geography. Or maybe they do represent a hybrid.