Choosing Success
By: Kristen Anderson
Tags: Startup, VC, Boston, Remote Working, NYC

As the world reopens and Catch takes its next steps towards building an iconic brand and lasting company, we realize working remotely from Boston is not our future. It’s time to stop fighting the undertow.

Catch is moving to New York City!

After a year of (yes, unprecedented) uncertainty, founders and CEOs have been making more decisions than usual in totally ambiguous environments. One of the most critical has been: what’s our policy on remote work?

What is Remote Work?

Now, before I go any further I want to define what I mean by “remote” work. I’m not talking about working from home one or two days a week (or even four). To me, remote work explicitly refers to an environment where employees are not within commuting distance to the office. I’m talking about three teammates all over California, two in Texas, one in Maine and a handful of others smattered across the US — or even the world.

It’s important to call out what I mean by remote, because I’m seeing articles published every day that dramatically misdirect worker preference by disguising the meaning of “remote.” Like this piece whose headline asserts more Americans want to keep working remotely. What that really means, once you read the article, is that people don’t want to be in an office 5 days/week. In fact, the percentage of people who would prefer to spend their entire week working from home is just 19%. Maybe that sounds high to you, but 14% answered they’d rather not work at all.

Wait, not working at all is an option? And only 14% of people picked it!?

Ok, so what a majority of people want then is to be in the office a few days a week, and to be able to work from somewhere else (probably home) a day or two a week. That’s a far cry from the fully-distributed, digital nomad vision that many in tech have acted is the new normal.

Flexible Work is the Future

Let’s define the other type of work too. I like to call it “flexible work” because there’s some recognition that people may not want to sit in the same chair in an office 40+ hours a week. At Catch, we’ve always had a flexible workplace. Since our inception in 2017, we’ve offered “Work from Home Wednesdays” (WFHW). Every member of the team has been encouraged to work outside of the office one day a week, and it helped a lot of things:

Deep flow work, especially in engineering and design, got done faster

Team members with longer commutes were refreshed after a mid-week break from traffic

Personal appointments and errands were easier to fit in from home and with no meetings

To the last point: when we would do a quick morning stand up on Wednesdays, some of our team members would start the day by saying, “Happy Laundry Day to those who celebrate.” The ability to get things like laundry done throughout the work day meant the team could spend the weekend on the stuff they wanted to be doing — not chores. Our team got autonomy, we got productivity.

When COVID hit and we went into shelter in place (which we started on a WFHW, March 11, 2020), we weren’t worried about people not knowing what to do or how to work. We figured two weeks at home and we’d be right back on schedule. We implemented a daily standup just so we could see each other’s faces while we were apart, but we didn’t think it would last even until May.

Unfortunately, that’s not what 2020 had in store, and we spent the vast majority of the year completely remote. And where one day a week at home can break up the grind, EVERY day at home creates an entirely new type of monotony that many of us are too familiar with right now.

The Catch Team in 2020

Our job as founders has always been to look at imperfect and limited information and make decisions that we believe will position us to succeed. But something about designing a medium-term strategy around remote work felt harder than normal. Are we going to get things under control in the next month? Well, definitely by the next quarter, right? Do we, as a small business, operationally know how to handle the paperwork for a dozen employees working in different states all year? Do we even WANT to have people plan to come back?

To their credit, I think bigger companies did a better job about messaging their plans in Spring 2020 about remote work. Many, like Square, said, “We’ll see you Summer 2021.” But the big drawback for us at Catch was that we still fundamentally believed in the value of being able to problem-solve real time. If we could safely be together, we wanted to do so.

One Year Later

Catch is in a fantastic position heading into summer. We’re well-capitalized, we’ve found product/market fit among a core contingent of customers, we finally got the regulatory approval we’d started working towards in 2018, and we are starting to shift from “do what works” to “create a scalable process” to enable consistent and repeatable growth.

And yet…

The first quarter of year showed us the terrible effects of a year remote.

The team is more burned out than they’ve ever been

Churn (which we’ve proudly kept very low in our first three years) has started to climb

Communication isn’t great across all levels and all teams

Product releases seem to have slowed — in no small part because communication isn’t great

As a leader, it’s tough to write these things down because I know it was my responsibility to keep them from happening (but they did), and now it’s my job to fix (or else). And I know there are plenty of founders out there who claim to have seamlessly shifted to remote and found they can execute better than ever. Congrats to them.

But that’s not us.

I’m admitting our weaknesses because these vulnerabilities are an important part of the thought process for how we’re coming back from the pandemic and moving forward.

On Remote Work

We’ve been closely watching over the last year: ourselves as founders, our team, and the talent markets here and abroad. We’ve used these observations to create a set of assumptions. These aren’t inherently true or universal, but we have enough evidence to make decisions for our company based on the following:

One size does not fit all

Large companies (say, 500+) may have a greater need to offer remote or hybrid work arrangements because they’re competing for talent in large numbers; small companies don’t have the same pressure because they’re hiring fewer people

Big company/small company advantages are typically inverse; in a big company, excellence is process and execution that can be scaled and communicated many times over vs. in a small company, excellence is speed and agility where lessons are learned through fast iteration

No one knows what works well in remote and hybrid work structures; the last 6–12 months were not representative of the future when people will have more choices about the type of work environment they’d prefer

Just because some companies can do remote work well does not mean that all companies can; the type of work, company size, leadership, and existing culture may not fit in a distributed model

Not everyone wants to work remotely, nor does everyone want Zoom culture as the primary way to get to know colleagues; in fact, we believe a majority do NOT want that

Remote work has a lot of gaps (especially in early stage companies)

Ambiguous and complex problems are harder to solve with time pressure; remote work collaboration over video calls puts natural pressure on having an agenda, deciding next steps, and not meandering through issues until you stumble on a solution

Asynchronous, and to a large extent written, communication is not appropriate for all situations; it can slow down decision-making because of the time it takes to articulate, the process of clarification, and the lack of contextual body language (we’ve all seen that one Slack ping expand into 27 minutes of back and forth for what was really a 30-second question)

Deep flow work, while easier when working from home, can lead people to spend too much time on the wrong things; priority guardrails and quick check ins are less likely in a distributed, asynchronous environment

Spontaneous collisions make early stage magic; roadmaps aren’t planned 6–12 months in advance, they’re built from customer insights seeping into conversations, and engineers and designers problem-solving over coffee

Culture and communication are harder remote, so churn will always be higher; loyalty, love, and relationships just can’t form as strongly over a video screen

Ultimately, given that we are an early stage company, and one of our only built-in advantages is being able to move fast, anything that distracts from speed of execution should be avoided.

Catch, for the foreseeable future, will be an in-person company. We strongly believe that we are better together.

We’ll continue to offer flexibility and ask that team members be in the office Monday, Tuesday, and Friday.

On Growth

As I mentioned, Catch is in a great position. We’re extremely fortunate that our biggest bottleneck to growth hasn’t been finding customers, convincing them of the value prop, or keeping them around. Our biggest bottleneck has been an overly-lean team. The size and scope of taking on banking, investment, and insurance in a single product requires people. We’re a neobank, a roboadvisor, and a digital health insurance broker all at once, and our team is 3% the size of Varo (a single neobank). Of course, in our early days, the goal was not to explode headcount until we had proven product/market fit. But rarely is there one day where you say, “Aha! We’ve proven it today. QED.”

Slowly, your lightly staffed and agile team becomes a huge cross that the company bears when things are working but you can’t do any more because there just aren’t enough hands to pick up the work. Customer support. New roadmap builds. Embedding partnerships. Oh yeah, does someone do social media? PR? Content? QA? Oh the SEC wants to do an audit THIS WEEK?

It’s a good problem to have, but it’s a problem nonetheless. When your customer growth outpaces your team’s capacity, it is painful.

Accelerating our customer and revenue growth is still the company objective, so relieving the pressure on team bandwidth has become my top priority.

On Boston

Catch needs to hire 10 people in four months. My Series B and beyond friends will look at that number and think nothing of it. So? Go do that. But when your small team is already over-extended, and you obviously don’t have a People Team built out, growing by 66% in just over a quarter can be daunting.

My cofounder and I have spent months trying to grow our team during the tail end of the pandemic in Boston. I’ve been here for a decade, and he’s lived here his entire life. We know all that the city has to offer, but real talk, Boston is not an easy place to start or run a venture-backed business:

High cost of living and salary expectations (not NYC or SF, but still very high)

Opinions, opinions, but nevertheless…

A cynical and unfriendly tech environment

Conservative and traditionalist venture investors

I’m not doing this for take home pay. I’m doing it to scale my mission. Founder B, every time.

Gatekeeper “startup” organizations that are more aligned with enterprise than founders (a distinct article could be written on this one)

KPMG and Smuckers are the first two companies I think of when I think “innovative”

A lack of peer startups by industry and stage

All the Series A Consumer FinTech Companies in Boston at a Meetup

Insufficient peer startups (Series A Consumer Fintech) makes hiring the most challenging in the short term. You’ve got limited players to source from and you’re more likely than not going to have to import talent — especially in consumer go-to-market and product design. All of these characteristics combined, though, have led us to the conclusion that Boston is not a city that will enable a $100B outcome.

Writing that down, saying it out loud to our team and investors, feels like acknowledging you’re with someone you don’t see a future with. Our future is to aim for that $100B outcome: to absolutely annihilate existing preconceptions about how benefits are delivered, who owns them, and what those products can do in the 21st century. We aim for scale not because of our egos or greed, but because we believe in our mission reaching the 80M people who don’t have benefits.

By itself, that is going to be hard. With the endorsement and good faith our investors put in us to make that happen, we can’t in good conscience make decisions that are going to make that even harder.