Building Bolligen Tower

Uncategorized

Why Stitch Fix style curation can help make distributed work actually work.

In an era of endless choice, curation reigns supreme.

Almost a decade ago, I tried Trunk Club on the recommendation of a friend and loved the experience. In the years since, the market for trusted personal style support has exploded, highlighted by Stitch Fix who has paired data science with expert human curation to build a publicly traded company worth almost $2b.

There is an powerful “always on” feedback loop to the Stitch Fix experience. With each successful match, the client spends more time in Stitch Fix curated clothing and is constantly generating positive associations with the service — each glance in the mirror or comment from a friend. Pair that client-side feedback loop with the data loops Stitch Fix benefits from by combining client provided preference and size information with merchandise data and the service becomes highly personalized and more successful over time.

This graphic from the company’s S-1 conveys this value loop nicely.

This type of curated experience, enabled by empowering trusted experts with data and technical tools to amplify their impact, has spread effectively to other areas.

Future.fit, who raised its Series A round from Kleiner Perkins, Khosla Ventures, and other top firms is providing a similar experience for health and wellness — giving each member a dedicated trainer who is able to leverage the data and content provided by the user (via videos, chat, and an Apple Watch) along with trainer-facing tools provided by Future to maximize effectiveness.

While both fashion and fitness represent large areas of consumer spend from a time, attention, and money perspecive, many important parts of life remain unimpacted by this form of curated empowerment.

One area that stands out is work — specifically distributed work, where the millions of people who are now spending at least a part of their time away from a co-located office are vastly underequipped to deal with the different emotional and physical requirements posed by working in a remote setup.


Building Bollingen Tower

When Karl Jung, the Swiss psychologist, needed to get deep work done, he would go out to Bollingen Tower, a stone house without electricity or running water he built by the lakeside outside of a small village in the countryside beyond Zurich.

For J.K. Rowling, it was the Balmoral Hotel. And for Mark Twain, it was a physically isolated cabin on the other side of his large property.

This is according to author Cal Newport, who talked about the value specific physical spaces have as enablers of deep work in this great podcast from NPR — but the lessons about the impact of physical space on our effectiveness goes well beyond deep work.

A well-designed co-located office (of which there also seem to be exceedlingly few…but that’s for a different post) offers workers spaces to get all sorts of work done — collaborative space, deep work space, task focused space.

Distributed work takes this to the next level and creates the opportunity for individuals to curate a set of physical environments perfectly tailored to maximize their own effectiveness.

In Stitch Fix terms, it can be like going from shopping at a lowest common denominator department store to having the perfect outfit pressed and ready every day of the week.

Of course, this is not the case.

The current distributed work paradigm assumes that everyone is their own Stitch Fix expert and is able to decide for themselves how they work best — when, where, how they should be working in order to cope with the entirely different set of emotional and physical challenges posed by remote work.

It requires us to be part psychologist, part real estate agent, part architect, and part personal assistant. I’m certainly not all of those things and I’d wager most other people aren’t either.


StitchFix for Distributed Work

One partially valid criticism that the distributed work trend often receives is that there are too many companies focused on the “easy” stuff — building a new collaboration product, for example — and not enough time laying down the difficult infrastructure needed to make it situation for a significant enough number of people.

Designing personalized plans for how we access and utilize physical spaces to make ourselves happier and more productive workers is a foundational piece of the distributed work puzzle that has the potential to accelerate adoption and drive real business value for companies who will be much better equipped to attract and retain talented people.


How might it work?

This is the Stitch Fix client journey as described in a recent investor presentation…

..and this is how they visualize their personalization model.

It is reasonable to think that the journey and model employed in the distributed work context would look similar.

Workers provide a broad set of data points that help their “Distributed Designer” understand their personality, how they like to work, and how different work related habits and environments have helped or hindered them in the past. Also taken into account would be the person’s role at the company. Are they a developer mostly focused in indvidiual work or a sales person who is often on the phone?

That data would then be paired with a local database of partners — coworking spaces, libraries, cafes, parks — to help the worker understand the options available to them. As someone who went through the process of doing this myself after moving to a new city a year or so ago, I can confirm how time consuming it can be.

Another element to this would be recommendations on optimizing a worker’s home office environment since that likely serves as at least a part time workplace for most remote workers.

And to wrap up the experience — similar to Stitch Fix — a worker would have the ability to test out multiple options before selecting a final setup that may include some combination of different spaces around a city that the “Distributed Designer” has a relationship with.

Is the idea VC Scale?

Automattic is, perhaps, the best known company with a 100% distributed work force. According to this source, the company offers a $250 monthly stipend towards co-working space. Basecamp offers its employees a $100 monthly stipend as well as a broader commitment to support employees with the tools and services they need to succeed.

To contrast, Stitch Fix customers spend about $500 during their first 52 weeks on the service (and about $700 over their first two years) and Future Fit charges $150/mo for its service.

If a company were simply serve as a data driven broker between workers and potential places to work, charging a percentage or a one-time fee for each consultation, they might be able to capture something like 10% of the annual spend per employee on remote physical space. At 10,000 workers (basically 10 Automattics), that’s a $1.2m net revenue business if we assume a $100 per month stipend.

If the company were to expand to offer its own spaces similar to how StitchFix now has its own house brands, generate pricing power and desire to increase spend by proving out a major impact on employee happiness and retention, or find its way into other adjacent daily curation and community focused areas the numbers start to get much larger.

There are also a ton of challenges inherent in the model that might make it a non-starter — for example, how could you credibly cover all of the geographies around the world you would need to actually acquire “enterprise” accounts and serve a global customer? Would you quickly obviate the need for your service and cut off recurring revenue opportunities by doing a good job the first time around?

This is, of course, very back of the envelope and just to illustrate at a high level that there is probably a business of some sort to be built around the concept.


Backing Bien-Être

As someone has now spent around half of my career in remote work settings or in companies with distributed teams, I have first hand experience with the challenges of finding the right physical environment for success and managing one’s own productivity (and that of a team) without the benefit of in-person context and feedback loops.

Collaboration and communication tools help some of this and products like Alan in France and Catch in the US are tackling some of the very difficult administrative challenges standing in the way of the broader adoption of more flexible and distributed companies.

As an investor focused largely on what I call the “wellness driven consumer“, I would love to see more companies built to serve the emotional, psychological, and physical needs of the millions of people who have or will soon be faced with adjusting to work outside of the traditional office setting.