Calculations in this article are based on our current team size of 6 people. Costs can vary depending on your team size, work model, and destination.
We just came back from our very first "onsite"... in Hawaii. We chose it because our co-founder, Vivek Nair, is currently based there. It was a week long trip filled with daily activities including:
- Two dinners with our +1's
- Two hikes (one to the Makapu'u Tide Pools pictured above)
- A ride on a Catamaran
- And much more!
Of course, we also did work-related things like brainstorming our new brand strategy as well as a team Hackathon!
Being a fully remote team begs an important question: how do we foster a strong team bond if we're geographically distributed? Sometimes virtual event solutions and online happy hours just aren't enough. Well, we've figured out a way - organizing these "onsites" around the country a couple times a year.
The Cost Breakdown: $14,500 total
$14,500 sounds like a lot. However, after doing the cost-benefit analysis we realized we can do this trip 5 more times this year with a team of our size (in comparison to the cost of a physical office in SF, which is roughly $78,000) 😮
How the math checks out
First, we need to know how much office space we'd need if we had gone the physical office route:
- According to this article, we would need around ~85 sq ft of open work space per person. For a team of 6, that would be 510 sq ft total
- We would also need two conference rooms that can fit a max of 3 people. A conference room provides 27.5 sq ft per person. For 3 people, that is ~82.5 sq ft per room. Multiply that by two rooms, that's 165 sq ft total
- We'd likely need one large conference room for all hands, which would be 27.5 sq ft per person x6people = also 165 sq ft total
Combined, we would require at minimum 840 sq ft of comfortable working space
Let's assume we're a SF-based startup. How much would office rent be?
- According to this article from Squarefoot.com, San Francisco's average cost (as of 2019, so pre-COVID) for office space is $92.70 per sq ft annually
- That means: $92.70 per sq ft x 840 sq ft of space = $77,868 annually for an office
- If the cost of our Hawaii trip was $14,500, that means: $77,868 / $14,500 = we can do close to ~5x Hawaii trips annually in lieu of office space in SF
But as we know, not all locations are created equal. For good measure, let's imagine we're Austin-based instead, which has much lower rental prices. How much would that cost?
- Austin's average cost (as of 2019) for office space is: $48.40 per sq ft annually
- That means: $48.40 per sq ft x 840 sq ft of space = $40,656 annually for space
- Using the same math as above, that means we can do 2x (almost 3x) Hawaii trips annually in lieu of office space in Austin
We discussed as a team and felt that at a minimum, we should meet up at least 3x a year. If we assume we went on 3 Hawaii trips a year, here's how our annual costs for a 6-person team stack up against office costs:
Other Variables to Consider
These are rough back of the envelope calculations, but of course there are so many other variables to consider, for example:
- Logistical complexities as our team grows – the more employees, the harder it is to predict trip costs, especially with regard to flights, as everyone is distributed. However, it's also just as hard to predict office costs as there are other factors to consider like minimum headcount requirements or level of density (i.e. the more you compact people in a space, the cheaper)
- Pre-COVID numbers can differ greatly from post-COVID – I've been assuming a world where CRE prices are back to the way it was in 2019. That may not be true - rent might get cheaper given how many businesses are moving towards remote or hybrid work. Or, perhaps it's becoming more expensive given the all-time high property valuations (and rent quickly following suit)
That said, there are other benefits of this "onsite" trip model that simply doesn't exist in a traditional office model, such as:
- Flexibility of variable costs – whereas owning an office is a fixed cost baked into your operating model, a trip to Hawaii is considered a variable cost we can adjust and slim down to control burn anytime. For example, Hawaii is on the higher end for travel destinations... but not all places are created equal. If we chose to visit our co-worker Sean in Boulder, CO, or Katherine in San Diego, CA, travel costs and accommodations would be meaningfully lower. We also chose to be at the Hyatt Centric Waikiki in Honolulu, whereas we could've opted for a shared Airbnb house to reduce hotel costs three folds.
- Lack of additional office expenses and amenities – companies with a physical office still do their own version of "offsites", on top of food perks, training events, happy hours, holiday parties, team bondings, etc. These add even more overhead costs to the already expensive office rent and are unaccounted for in our above calculations.
- Lasting, priceless memories – Creating a unified and strong team culture is extremely important to us. Being able to travel together and create lasting memories are intangible benefits that can't easily be quantified.
What's undeniable to us is this: making these trips as a remote team is possible. If you're curious to learn more about how we organized our Hawaii onsite, don't hesitate to reach out to [email protected] Or, if you've done something similar before, I'd love to hear about it!
Let's make remote work less lonely and more effective.