[slumpt_]

I disagree. Colocation isn't the competitive advantage for startups. Strong communication is.

You can get part of this for 'free' if you shove everyone in a room.

You can also get this if you invest in strong remote culture that encourages lots of remote collaboration.

Source: I've been at a remote-first startup that is kicking ass over the last two years. In-office is available but remains entirely optional.

[gonehome]

I'll concede this point - it is primarily about communication.

In theory you can resolve this (I'm at a remote company now and think gathertown is a great tool for this), but the lift is high and I suspect the majority of remote companies are operating at a net negative vs. colocation because of this.

Even with these tools, some natural amount of human communication/interaction is lost. It mostly hurts spontaneous collaboration and junior engineers - the threshold for these (comms/collab) is higher than in the office even in ideal remote conditions. Normal human team bonding/relationship building stuff is also lost (and useful for building a high performance culture).

This is also assuming you're at least within mostly the same or close timezones, add that into the mix and it gets even worse.

Other people replying don't understand what I mean by the market solving this. If remote is truly advantageous then startups that are remote first should out compete those that aren't. Empirically this appears to not be true and at least in SF and AI (the sector with the largest return likely in the next decade) people are going back to being colocated because of its advantages (primarily around communication and cycle times).

Mostly I see motivated reasoning primarily as the argument in favor of remote being better. I get it, I work remotely - there are nice quality of life advantages, but I still think it's competitively worse for companies in almost all cases.

[slumpt_]

The competitive disadvantage RTO companies have is trying to hire locally.

We have the pick of the best engineers from around the country (in some cases, world) because we pay bay area (startup adjusted) salaries regardless of where you live. The team is top notch - probably the best I’ve ever worked with.

So yeah - a cost to maintaining comms culture, but the payoff can be pretty nonlinear.

[gonehome]

My counter argument would be that a lot of the world’s best people move to hubs anyway to intentionally be around other great people.

So being located in the Bay Area gets you the world’s best people without the negative tradeoffs of remote.

That said, I think your point is valid for startups located outside of hubs. If your company would otherwise be located in rural South Dakota (or even a decent sized non-hub city), then yes - remote is more compelling for the reasons you state. Whether that’s a competitive advantage on net given the downsides is not clear to me.