From Remote to Riches

Usually I share stories and insights from building beehiiv, and I’ll continue to do that. But this week I’m going to try something totally different.

I think people in the industry call this an essay or think piece. Whatever they call it — here are my thoughts on the acceleration of global wealth distribution due to adoption of remote work.

beehiiv today is made up of over 70 employees spanning nearly a dozen different countries across the world. That is entirely intentional. I don’t think we would be experiencing a fraction of the success if it weren’t for being a remote company.

Why?

• Access to global talent. When we open a new role, we hire the absolute best person for the job, regardless of where they live. In a world of over 8 billion people, it’s naive to think the best hire happens to live conveniently near your headquarters.

• Increased productivity. On an individual level, people can work in a comfortable environment, during their most productive hours, and oftentimes without distractions that are commonplace in the office. On a company level, we have engineers and support staff online and available around the clock… producing greater overall output and providing greater overall availability for our users.

• Cost savings. Office leases are one of the largest expenses for most companies, let alone all of the ancillary costs like utilities, furniture, security, staff, insurance, supplies, and amenities. As a remote company we don’t spend a dollar on any of that.

• Talent retention. All things being equal, we’ve found that most people would choose to work remotely on their preferred schedule at their preferred location vs having to spend valuable time and money commuting to an office.

• Flexibility. At beehiiv there’s a very high bar for the pace and quality of work, but I couldn’t care less about where it’s getting done. Want to spend a month living and working from Europe? The world is your oyster, as long as you can deliver.

The money our competitors are spending each month on their lease, we are spending on paid acquisition to grow the business. The same roles our competitors are restricting to their Indianapolis office, we are recruiting for globally.

When you really start to think about it, the alternative begins to look more and more like a remarkably archaic model for work. Old habits die hard — people have been gathering in person to perform labor for millennia. But the internet and globalization are here, and they’re here to stay.

I’ve been working remotely since they sent us home from the Morning Brew offices in March 2020. Since then, my work from home setup has evolved from a beer pong table in my Brooklyn apartment to a standing desk with a window overlooking my neighborhood in Santa Monica.

I guess that’s what they call growing up.

While Los Angeles is home for me, I’ve spent some time over the past few years living and working from Mexico, Costa Rica, Colombia, and Spain.

I wouldn't consider myself a digital nomad by any means. The thought of living out of a suitcase and jumping from city to city is nauseating. Rather, I pick up and settle down for at least a month or two — gym membership, grocery shopping, dedicated office space… the whole nine yards.

The past two winters in particular, I’ve lived in Medellin, Colombia. It’s a remarkable city — the perfect year-round climate, the food and culture and people, the nightlife, breathtaking nature, and modern architecture. Oh, and it costs significantly less than living in Topeka, Kansas. No offense Topeka.

Here's a view from the rooftop of my penthouse apartment where I lived last winter. My rent here was half of what I pay today in Los Angeles, and the lifestyle was second to none.

The secrets out.

Medellin has a vibrant community of entrepreneurs, startup founders, and remote employees from all across the world. I’m in multiple WhatsApp groups alongside hundreds of expats and have personally made dozens of friends from the US, Canada, Venezuela, the Netherlands, and Germany who all call Medellin home.

But it’s not just Medellin — it’s Mexico City, Bali, Buenos Aires, Santiago, Panama City, Montevideo, Tamarindo, etc.

Tourism is usually a leading indicator of wealth distribution and economic prosperity. When people from around the world choose to travel and spend their money in a particular city or region, it benefits everything from local businesses, to infrastructure, to wages.

I’d argue that having tens of thousands of remote tech employees live in a city actually amplifies that even further. The higher purchasing power leads to increased demand, which leads to higher rent, which leads to more development, which leads to more jobs and opportunities for everyone.

The economic activity of Medellin today is absolutely bursting relative to what it was when I first visited there in 2018. There is construction everywhere, new luxury buildings and restaurants, a thriving nightlife with bars and concert venues, and everything in between.

I’m not naive to the controversy against gentrification, but I’d argue that’s a losing argument. Compare Medellin today to the Medellin of 20 years ago when the norm was exorbitant crime and unemployment, coupled with unreliable infrastructure and little-to-no tourism.

The arc of the world bends toward progress and prosperity.

And no, I’m not painting remote tech workers as the saviors of the developing world. But as more “normal” people like myself choose to spend more of their time and dollars outside of America, these developing communities will continue to thrive.

Mexico City and Medellin will soon become too expensive and mainstream, and another lesser-known locale will emerge. Keep an eye on Oaxaca, San Salvador, Santa Teresa, and the hundreds of soon to be popularized beach towns along the coasts of Nicaragua, Panama, Belize, and Ecuador.

Some locals will resist it, others will embrace it. But the incentives are too high to ignore.

Ultimately the shift to remote work will accelerate the transfer of wealth from the developed world to the developing world.

But it’s not solely because people are willing to work remotely and live in these regions. The prevalence of offshoring and nearshoring talent has exploded with the rise of remote work.

• Offshoring: hiring overseas to take advantage of lower labor costs.

• Nearshoring: hiring in a country with lower labor costs while maintaining closer proximity and time zone alignment.

Think hiring a virtual assistant from Sri Lanka, support agents from the Philippines, software engineers in Brazil.

You might argue — “hey this isn’t new, this has always been a thing” … and you’d be correct.

But the adoption of remote work has certainly made it more prevalent. It’s much easier to hire someone remotely to do customer support in the Philippines when you already have a globally distributed team.

Again, I’d argue that this is good.

These opportunities provide better wages and exposure to the next generation of tech companies. All of which further incentivizes people in these communities to develop new skills and invest more into their education.

Better education, higher wages, and burgeoning connective tissue with the rest of the developed world will bring more people out of poverty and accelerate the economic prosperity in these regions. Many of which are conveniently located in some of the most beautiful places on the planet. The combination of the above should eventually galvanize demand in tourism, which only compounds this cycle of prosperity.

And while today there are a few early winners, regions with dense pools of cheap labor hungry for opportunity — I’d argue that this is only the beginning. Just as Mexico City and Medellin will soon become too expensive and mainstream, talent in Sri Lanka and São Paulo will also become more expensive, which creates opportunities for Vietnam, Cambodia, and Guatemala.

Anecdotally — I personally know a handful of people who have either started or invested in companies that do this. Just a few years ago, I wasn’t familiar with anyone doing this.

As more companies are built to supply global talent, their marketing efforts will expand the overall addressable market. Simultaneously, more companies will adopt remote work and leverage this supply, driving up demand.

Ultimately, the higher demand leads to two things:

• Higher wages in these regions.

• Expansion into new regions in search of lower wages.

My friend Josh, who I actually met in Medellin, started NeoWork which helps companies find talent in South America and Asia. He travels to the Philippines a few times per year to meet with his team there on the ground.

I asked him if he’s noticed any changes in the area since first traveling there several years ago when he started the business.

Totally unprompted, he sort of stated my overall thesis up front.

Of course, none of this happens overnight. It took decades for Medellin to transform into what it is today. It’ll take many more decades for the next generation of remote hotspots and regions of nascent talent pools to develop and flourish.

The rising tide of remote work lifts all boats, it’s only a matter of time.

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Some of my favorite content I found on the internet this week…

• Driverless Waymo was pulled over by the Phoenix police for driving on the wrong side of the road (YouTube)

• Professor Scott Galloway argues that we should be ageist and that it’s time for Biden to step down (No Mercy, No Malice)

• Coldplay performs Fix You with Michael J. Fox at Glastonbury (YouTube)

• 2 million meals will be prepared for athletes at the Paris Summer Olympics… and lots of baguettes (New York Post)

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