What is a Distributed Company?

Virtual? Remote? Telework? Nope. We're distributed.


Since 2006, Lullabot has existed as a company without a central office. Early on we called ourselves a "virtual company". We also toyed with other terms like "officeless" or "remote", but none of these terms ever felt right. The term "virtual" always felt ephemeral – like the business itself was made up and the company could evaporate at any time.

Even the term "office optional" feels a bit wrong to me. With the rise of the home office, I would argue that just about all of our employees have an office – they have a space from which they do professional work. It's not too far off though.

electronic equipment

"Telework" is accurate. But it feels very technical and mechanical – more focused on the technology than the people. And the word seems to dominate any mental imagery around the work. Saying I run a "telework company" invokes images of people in hard hats hanging from telephone poles. Admittedly, those red lineman's handsets with the dial pad on the back are pretty badass. But that's not what we do.

"Remote" is very common. But it uses the same latin roots as "removed" and, to me, implies that our employees were separated from the center of the action; an exception to the rule. And while this might be an accurate description for workers at some companies, Lullabot doesn't work like this.

Our employees are exactly where they should be. Most of them work from home. Several work from shared offices or co-working spaces. But none of them feel like they're missing out on the company culture, idea spaces, casual "water cooler" conversation, or fun activities happening in our central office. We don't have a central office – at least not a physical space where these types of activities happen.

Distributed Company

I believe it was Toni Schneider, then CEO of Automattic, from whom I first heard this term. It just felt right. Our people are distributed. They're spread out. No negative connotations. They're not removed or separate from anything.

Lullabot quickly adopted this term and we haven't gone back. We're a distributed company.

What is the definition of a distributed company?

Okay, so we're different than a company with remote employees. But let's draft up a definition and see if we can build some consensus.

Picture a conventional company in a conventional office – cubicles and everything. Everyone is an employee. Everyone has benefits and job security. Everyone knows each other and works together and communicates in a tightly-knit environment. Now get rid of the office. Now spread those people out and allow them to live and work from wherever they'd like. This is a distributed company. Communication and culture need to adapt to accommodate this new modality.

A distributed company is one in which the vast majority of employees work from wherever they are comfortable and productive. Perhaps most importantly, communication and culture are moved outside the boundaries of a physical location so that everyone is able to be included wherever they live.

Although these companies may have a hub for in-person activities, this is not the office. Folks may gather at this location for specific events, but care is made that use of this space doesn't result in anyone being out of the loop.

A distributed company is not:

  • One with a prominent central office where the majority of people work most of the time
  • A corporation with multiple locations
  • A company where people are often allowed to work from home
  • A company that takes advantage of outsourcing, freelancers, or subcontractors
  • A co-working space where people freelance on similar projects
  • A single freelancer
  • A department within a large company where most people work from home (for instance, the customer service branch of an airline) – though this may qualify as a distributed team

How is a distributed company different from one with remote employees?

The truth is that in-person communication and activities will always trump virtual/tele/digital communications. After all, humans have been communicating in-person since the beginning of time. It is our default setting. So a company with remote employees begins with the deck stacked against them. It's not an even playing field. It's really going to be a challenge to make remote employees feel like they're part of the team. Resentment and imbalance can build up between those who "get to stay at home" and those who "get to have lunch with the boss every day".

A distributed company doesn't have these problems. Most of its communications happen online and are available for everyone in the company to participate. Whether these are phone conferences, email threads, or message-board and issue-queue posts, it's very easy to be inclusive despite geographical separation.

Too exclusive?

It may seem like I'm being exclusive with this definition. Remote work is on the rise and there are so many companies that want to jump on this bandwagon. However, I feel like Lullabot has been so unique – especially in the way that we handle our communication and culture – that I'm actually trying to to be more inclusive. I really want to find and connect with other companies who run the way we do. This is why we started the Yonder Conference for leaders of distributed companies and teams.

I feel like the challenges faced by distributed companies and those with remote employees are different. There are different dynamics. These are different types of companies. So while I think we've got a lot in common, we should have different terms and different definitions for these different types of companies.

Lullabot is a distributed company. Our employees are distributed. They are not remote. They're well connected. And they are exactly where they should be.

Published in:

Get in touch with us

Tell us about your project or drop us a line. We'd love to hear from you!