Zoom is in a bit of a post-pandemic slump, describing its own Q2FY23 results as "disappointing and below our expectations". This is quite a drop for a company that at one point was more valuable than ExxonMobil. Zoom does not disclose the total number of users, only "enterprise users", of which there are 204,100. "Enterprise users" are defined in a footnote to the slides from those Q2FY23 results as "customers who have been engaged by Zoom’s direct sales team, channel partners, or independent software vendor (ISV) partners." Given that Zoom only claims 3,116 customers contributing >$100k in revenue over the previous year, that is hardly a favourable comparison with Cisco's claim of six million users of WebEx Calling in March 2022.

As I wrote in The Thing With Zoom, Zoom's original USP was similar to WebEx's, namely the lowest time-to-meeting with people outside company. As a sales person, how quickly can I get my prospect in the meeting and looking at my presentation? Zoom excelled at this metric, although they did cut a number of corners to get there. In particular, their software would stick around even after users thought they had uninstalled it, just in case they ever needed it again in the future.

Over the past year or two, though, Teams usage has absolutely taken off. At the beginning the user experience was very rough, even by Microsoft standards, confusing users with the transition from its previous bandwagon-jumping branding as Skype for Business. Joining a Teams meeting as an outsider to the Teams-using organisation was (and largely still is) a mess, with the client failing to connect as often as not, or leaving meeting invitees in a loop of failed authentication, stuck between a web client and a native client, neither of which is working.

And yet, Teams is still winning in the market. Why?

There is more to this situation than just Microsoft's strength in enterprise sales. Certainly, Microsoft did not get distracted trying to cater to Zoom cocktails or whatever, not least because nobody in their right mind would ever try to party over Teams, but also for the very pragmatic and Microsoftian move that those users don't pay.

Teams is not trying to play Zoom and WebEx at their own game. Microsoft doesn't care about people outside their client organisations. Instead, Microsoft Teams focuses on offering the richest possible meeting experience to people inside those organisations.

I didn't fully appreciate this distinction, since throughout this transition I was working for companies that used the standard hipster tech stack of Slack, Google Docs, and Zoom. What changed my understanding was doing some work with a couple of organisations that had standardised on Teams. Having the text chat, video call, and documents all in one place was wonderfully seamless, and felt native in a way that Google's inevitable attempt to shoehorn Hangouts into a Google Docs sidebar or comment thread never could.

This all-in-one approach was already calculated to appeal to enterprises who like simplicity in their tech stack — and in the associated procurement processes. Pay for an Office 365 license for everybody, done. Teams would probably have won out anyway just on that basis, but the trend was enormously accelerated by the very factor everyone assumed would favour Zoom: remote work.

While everyone was focusing on Zoom dating, Zoom board games, Zoom play dates, and whatever else, something different was happening. Sales people were continuing to meet with their customers over Zoom/WebEx/whatever, but in addition to that, all of the intra-company meetings were also flipping online. This transition lead to an explosion in the ratio of internal video meetings to outside-facing ones, changing the priority from "how quickly can I get the other people in here, especially if they haven't got the meeting client installed" to "everyone has the client installed, how productive can we be in the meeting".

As the ratio of outside video meetings to inside meetings flips, Zoom's moat gets filled in

Zoom could not compete on that metric. All Zoom could do was facilitate someone sharing their screen, just like twenty years ago. Maybe what was being shared was a Google Doc, and the other people in the meeting were collaborating in the doc — but then what was Zoom's contribution? Attempts to get people to use built-in chat features or whiteboarding never took off; people used their Slack for chatting, and I never saw anyone use the whiteboard feature in anger.

Once an organisation had more internal remote video meetings than outside-facing ones, these differences became glaring deficiencies in Zoom compared to Teams.¹

Zoom squandered the boost that the pandemic gave them. Ultimately, video chat is a feature, not a product, and Zoom will either wither away, or get bought and folded into an actual product.

🖼️ Photos by Chris Montgomery and Christina @wocintech.chat on Unsplash

A reliable way for companies to be seen as villains these days is to try to roll back concessions to remote work that were made during the pandemic¹. Apple is of course a perennial scapegoat here, and while it seems reasonable that people working on next year's iPhone hardware might have to be in locked-down secure labs with all the specialised equipment they need, there is a lurking suspicion that much of the pressure on other Apple employees to return to work is driven by the need to justify the massive expense of Apple Park. Jony Ive's last project for Apple supposedly cost over $4B, after all. Even for a company with Apple's revenues, that sort of spending needs to be justified. It's not a great look if your massive new vanity building is empty most of the time.

The same mechanisms are playing out in downtown business districts around the world, with commercial landlords worried about the long-term value of their holdings, and massive impacts on the services sector businesses (cafes, restaurants, bars, dry-cleaners, etc etc) that cluster around those office towers.

With all of this going on, it was probably inevitable that companies would try to jump on the bandwagon of being remote-work friendly — some with greater plausibility than others. I already mentioned Airbnb in a past post; they have an obvious incentive to facilitate remote work.

Other claims are, let's say, more far-fetched.

In a recent example of the latter genre, it seems that Citi is opening a hub in Málaga for junior bankers:

• Over 3,000 Málaga hopefuls applied for just 27 slots in the two-year program, which promises eight-hour days and work-free weekends -- practically unheard of in the traditional banking hubs in Manhattan and London. In exchange, Málaga analysts will earn roughly half the starting salaries of their peers.
• The new Spain office will represent just a minuscule number of the 160 analysts Citi hired in Europe, the Middle East, and Africa, on top of another 300+ in New York.

This is… a lot less than meets the eye. 27 people, out of a worldwide intake of ~500 — call it 5% — will be hired on a two-year contract in one admittedly attractive location, and in exchange for reasonable working hours, will take a 50% hit on their starting salary. In fairness the difference in cost of living between Málaga and London will make up a chunk of that difference, and having the weekends free to enjoy the place is not nothing, but apart from that, what is the upside here?

After the two years are up, the people who have been busy brown-nosing and visibly burning the midnight oil at head office will be on the promotion track. That is how banking works; if you can make it through the first few years, you have a) no social life any more, and b) a very remunerative career track in front of you. Meanwhile, it is a foregone conclusion that the people from the Málaga office will either not have their contract renewed after the two years are up, or will have to start their career track all over again in a more central location.

In other words, what this story boils down to is some short-term PR for Citi, a bunch of cheap(er) labour with a built-in termination date, and not much more.

Then again, it could be worse (it can always be worse). Goldman Sachs opted for the stick instead of the carrot with its own return to the office² mandate, ending the free coffee that had been a perk of its offices.

Even after all these years in the corporate world, I am amazed by these utterly obvious PR own goals. The value of the coffee cart would have been infinitesimal, completely lost in Goldman's facilities budget. But what is the negative PR impact to them of this move? At one stroke they have hollowed out all the rhetoric of teamwork and empowerment that is the nominal justification for the return to office.

Truly committing to a remote work model would look rather different. I love the idea of Citi opening a Málaga hub. The difference is that in a truly remote-friendly organisation, that office would not have teams permanently based in it (apart from some local support staff). Instead, it would be a destination hub for teams that are truly remote to assemble on a regular basis for planning sessions. The rest of the time, everyone would work remotely wherever they currently live.

Some teams do need physical proximity to work well, some customer-facing roles benefit from having access to meeting space at a moment's notice — but a lot of the work of modern companies does not fall into these categories. Knowledge workers can do their work anywhere — trust me, I've been working this way for more than fifteen years. Some of my most productive work has been done in airport lounges, not even in my fully equipped home office! With instant messaging, video calls, and collaboration tools, there is no real downside to working this way. Meanwhile, the upside is access to a global and distributed talent pool. When I did have to go into an office, it was so painful to be in an open-space with colleagues that were not on my actual team that I wore noise-cancelling headphones. If that's the situation, what's the point of commuting to an office?

This sort of reorganisation would admittedly not be great for the businesses that currently cluster around Citi offices and cater to the Citi employees working in those offices — but the flip side would be the massive benefits to businesses in those Citi employees' own home neighbourhoods. If you're not spending all your waking hours in Canary Wharf or Wall Street, you can do your dry cleaning at your local place, you can buy lunch around the corner instead of eating some over-priced plastic sandwich hunched over your desk, and you can get a better quality of life that way — maybe even in Málaga!

The only downside of working from home is that you have to pay for your own coffee and can't just get Goldman to foot the bill.

🖼️ Photos by Carles Rabada, Jonas Denil, and Tim Mossholder on Unsplash

More reflections on remote work

Well, I'm back to travelling, and in a pretty big way — as in, I'm already to the point of having to back out of one trip because I was getting overloaded! I've been on the road for the past couple of weeks, in London and New York, and in fact I will be back in New York in a month.

It has honestly been great to see people, and so productive too. Even though I was mostly meeting the same people I speak to week in, week out via Zoom, it was different to all be in the same room together. This was also the first time I was able to get my whole team together since its inception: I hired everyone remotely, and while I have managed to meet up with each of them individually, none of the people on the team had actually met each other in person… We had an amazingly productive whiteboarding session, where we knocked out some planning in a couple of hours that might otherwise have taken weeks, and probably justified a chunk of the cost of the trip on its own.

This mechanism also showed up in an interesting study in Nature, entitled Virtual communication curbs creative idea generation. The study shows that remote meetings are better for some things and worse for others. Basically, if the meeting has a fixed agenda and clear outcomes, a remote meeting is a more efficient way of banging through those items. However, when it comes to ideation and creativity, in-person meetings are better than remote ones.

As with all the best studies, this result tallies with my experience and reinforces my prejudices. I have been remote for a long time, way before the recent unpleasantness, but I always combined remote work with regular in-person catch-up meetings. You do the ideation and planning when you can all gather together around the whiteboard — not to mention reinforcing personal ties by gathering around a table in a restaurant or a bar! Then that planning and those personal ties take you through the rest of the quarter, with regular check-ins for tactical day-to-day actions to implement the strategic goals decided at the in-person meeting.

Leaving London

Something else that was interesting about my recent trips was meeting a whole lot of people who were curious about my living situation in Italy — how I came to be there, and what it was like to work a global role from provincial Italy, rather than from one of the usual global nerve centres. Telling the story in New York, coming fresh from my trip to London, led me to reflect back on how come I left London and whether it was the right call (spoiler: it totally was).

The London connection also showed up in a pair of articles by Marie Le Conte, who recently spent a couple of months in Venice before returning to London. It has been long enough since I left London that I no longer worry about whether prices in my favourite haunts will be different, but whether any of them are still there or still recognisable — and sadly, most of them are not. But then again, this is London we are talking about, so I have new favourites, and find a new one almost every trip.

Leaving London was a wrench: it was the first place I lived after university, and I enjoyed it to the hilt. Of course I had to share a flat, and I drove ancient unreliable cars¹. But we were out and about all the time, in bars and theatres, eating out and meeting up and just enjoying the place.

However, over the following years most of my London friends moved away in turn, either leaving the UK outright or moving out to the commuter belt. The latter choice never quite made sense to me: why live somewhere nearly as expensive as London (especially when you factor in the cost of that commute), which offers none of the benefits of being in actual London, and still has awful traffic and so on? But as my friends started to settle down and want to raise families and so on, they could no longer afford London prices. Those prices get especially hard to justify once you could no longer balance them out by enjoying everything London has to offer — because you're at home with the kids, who also need to be near a decent school, and get back and forth from sports and activities, and so on and so forth.

My friends and I experienced the same London in our twenties that Marie Le Conte did: it didn't matter if you "rent half a shoebox in a block of flats where nothing really worked", because "there was always something to do". But if you're not out doing all the things, and you need more than half a shoebox to put kids in, London requires a serious financial commitment for not much return.

But why commute to the office at all?

Even before the pandemic, remote work allowed many of us to square that circle. We could live in places that were congenial to us, way outside commuting range of any office we might nominally be attached to, but travel regularly for those all-important ideation sessions that guided and drove the regular day-to-day work.

The pandemic has opened the eyes of many more people and companies to the possibilities of remote work. Airbnb notably committed to a full remote-work approach, which of course makes particular sense to Airbnb, expecially the bit about "flexibility to live and work in 170 countries for up to 90 days a year in each location". I admit they are an extreme case, but other companies have an opportunity to implement the parts of that model that make sense for them.

Certain functions benefit from being in the office all the time, so they require permanent space. This means both individual desks and meeting rooms. Meanwhile, remote workers will need to come in regularly, but when they do, they will have different needs. They will absolutely require meeting rooms, and large, well-equipped ones at that, and those are on top of whatever the baseline needs are for the in-office teams. On the other hand, the out-of-towners will spend most of their time in meetings (or, frankly, out socialising), and so they do not need huge numbers of hot desks — just a few for catching up with emails in gaps between meetings.

If you rotate the in-office meetings so you don't have the place bursting at the seams one week and empty the rest of the time, this starts to look like a rather different office setup than what most companies have now. You can even start thinking of cloud-computing analogies, no longer provisioning office space for peak utilisation, but instead spreading work to take advantage of unused capacity, and maybe bursting by renting external capacity as needed (WeWork² et al).

If you go further down the Airbnb route and go fully remote, you might even start thinking more about where you put that office. Does it need to be in a downtown office core, or can it be in a more fun part of town — or in a different city entirely? Maybe it can even be in a resort-type location, as long as it has good transport links. Hey, a guy can dream…

But in the mean time, remote work unlocks the ability for many more people to make better choices about where to live. Raising a family is hard enough; doing it when both parents work is basically impossible without a strong local support network. Maybe the model should be something like the Amish Rumspringa, where young Amish go spend time out in the world before going back home and committing to the Amish way of life. Enjoy your twenties in the big city, get started on your career with the sort of hands-on guidance that is hard to get remotely, and then move back home near parents and friends when it's time to settle down, switching to remote working models — with careful scheduling to avoid both parents being away at once.

Once you start looking at it like that, provincial Italy is hard to beat. Quality of life is top-notch, with the sort of lifestyle that would require an extra zero on the salary in London or NYC. If you combine that with regular visits to the big cities, it's honestly pretty great.

🖼️ Photos by Kaleidico and Jason Goodman on Unsplash; London photograph author’s own (the view from my hotel room on my most recent London trip).