I frequently visit incubator workspaces where I see teams earnestly working on their products in a fairly busy environment with lots of people coming and going, and I ask myself whether they would be more productive if they were not co-located in an environment with potentially many distractions. The energy and buzz of an incubator workspace can provide the appearance of great productivity and energy, yet one has to wonder how productive these environments really are.

But I realized I was asking myself the wrong question.

The question is not really about whether teams should be physically co-located. Today’s entrepreneurs belong to a generation that’s more comfortable communicating through IM or Facebook, even with someone sitting next to them, as opposed to actually talking to them, face-to-face.  The co-located teams that I refer to are all staring at their laptop screens while sitting around a table.  So the question has to be reframed in terms of what makes this group of people productive. What does physical co-location have to do with it? Is there a different kind of productivity indicator we should be looking at?

Different Types of Distance

Recent research has begun to look seriously at the way technology impacts the way we think, feel, and relate to ourselves and to others, as well as how we contemplate. The research being done at Stonybrook University also explores the concept of virtual distance, which is measured in terms of physical (geographic separation), operational (type and frequency of communication), and affinity distance (culture and background differences)– the last one being the most impactful in determining team productivity.

Simply put, affinity distance is a reflection of differences in factors like: ethnicity, educational background, past familiarity, shared vision, and commitment – factors that ultimately determine how cohesive a team is and decide the fate of a startup. We often refer to it as “chemistry” – that elusive attribute of high-performing teams in every industry – from music to sports to finance.

I worked for a large multi-national consulting firm where my team members were scattered across four countries in three continents. Everyone spoke English – but with very different accents. Each country specialized in a certain aspect of the project, and my job was to integrate their work into a client-ready deliverable. I never met any of them; not even the ones in Chicago where I was based. There was simply no need.  In fact, none of the firm’s offices across the world had assigned offices or cubes to any associate. Instead, they operated a concept called “hoteling,” where anyone could go into an online office space reservation system and book an office or meeting room for an hour or a day or several days. It was an accepted model in the firm. The firm is highly respected and one of the most successful global consulting firms today.

The Benefits of Working Remotely

Now, I’m not advocating that we do away with co-location. I think there are merits to working together to spark creative juices in one another. However, stop to think for a minute about the following:

  • What task are you working on? Is it something you can achieve only with real-time, face-to-face interaction? Or, is it a task that would best be accomplished in a quiet environment with no distraction?
  • Do you have to commute to get to the work space? How much time do you lose every day in the commute? Would you be better off working from home to get the job done faster?
  • Is there any aspect of the office infrastructure that you cannot get at home (or a Starbucks?). In today’s world, all you usually need is wi-fi connectivity; your place of work is wherever you happen to be.

Even if the answers to the questions above suggest that you may not actually need to be co-located with your team, there may be an intangible benefit to working together in terms of the psychic energy and the psychological well-being associated with being around and interacting in person with other humans. You have to carefully assess the trade-offs between the emotional benefits of working with other people around you and getting your tasks done with minimum distraction.

Back to the question of affinity distances. I believe affinity distances are a bigger issue in larger corporations than in startup environments. However, being in each other’s pockets all the time can be stressful at startups, too – especially if there are little things that annoy you about your teammates and distract you from doing work. A little bit of distance may not be a bad idea.

Now, let’s turn around and look at the possibilities that open up when you no longer need to be co-located:

  • You get more quality time to complete your piece of the work – you meet with the rest of your team when you need to.
  • You can enroll team members from other cities, or even countries – imagine the talent pool that opens up for you!
  • You can save money – no commute, and no office rent.

Having said all this, there’s no one-size-fits-all answer to the question of whether co-location is necessary or even a good idea. The best solution for you totally depends on what you do, or what stage of product development you’re in, and so on.

Here’s a brief checklist to go over when you consider virtual vs. co-located teams:

  • Do you know each other well? 
  • Have you either worked together or gone to school together before?
  • Do you have a shared set of rules that everyone understands and respects?
  • What stage of product development are you in? 
  • Are you in design phase or coding phase? (You probably need a lot of face time during design, less so during coding.)
  • Do your team members like being together or do they like working solo? Depending on your team composition, you may want to use a hybrid approach of remote and co-location to ensure that everyone gets some personal space, and yet, the project doesn’t go off the rails.

Working remotely requires a huge amount of self-discipline, and a level of comfort with working alone. If your team doesn’t have either of these, opt for co-location, regardless of its downsides. Great teams have always spent intense periods of time working very closely in physical proximity. But, that was before there were hundreds of tools to make working remotely not only possible, but productive. Just make sure your team is emotionally in close proximity as well. Nothing can stop you from success if you have both.