[pxtreme75]

I'm running a small startup with employees all around Greece (yes, Greece). We've always been this way. We work with Skype for communication, SVN to synchronize code and specific weekly targets to keep everyone on track. So far it was a very positive experience and certainly comes with less overhead.

However, as the company grows I can see that there are certain shortcomings on distant working. The previous comments did a good job describing many of them. You certainly need self-motivated, oriented people - otherwise you will spend too much time on project management. Knowing them from previous projects is a must otherwise it might be a good thing to pay them a visit for some friendly talk (and a few beers) every few months.

As a side note: isn't a unique privilege to work from wherever you want, at your own hours and without constant meetings? I really love technology...