Outsourcing

The Art of Running a Virtual Company

I wrote this article many years ago when I ran a few virtual companies. It was great when it worked, but, on many occasions, I wished I wasn't virtual.

I run what are called virtual organizations.

For me, it's a means to an end. I don't want to necessarily be virtual forever, although I must say I've toyed with that idea.

When it's working for me, on the good days, I think maybe that's the way everything will work in the future -- most people will be independent contractors and we will live in a "free agent nation" as they say -- there won't be jobs per se as we know them now and we'll just come together in virtual form when needed. We'll get the job done, whatever it is, and we'll do it well.

That's on the good days, when things are working.

What does being virtual mean?

Being virtual means I bring talented people to bear on problems on a just-in-time basis.

I don't pay them to work for me on a full-time basis. They only work for me and I only pay them when there are revenues coming in from customers. This allows me to keep my "burn rate" down. It greatly increases my chances of surviving as a going concern.

Being virtual carries a bit of negative baggage. People think you are not real.

If you don't have a big fancy office and you don't have tons of full-time business, maybe you aren't real, they say. Maybe I shouldn't risk doing business with you. Are you sure you are going to be around for very long?

Right now, my businesses are early-stage. My competitors aren't staying up all night worrying about me. But that will change over time as I quietly acquire new customers and build my reputation for actually delivering results to my customers.

At some point, they will start to tell my prospective clients that my organization is just "virtual" -- with the implication that it won't be around for too long.

If you are virtual, you've got to be able to overcome that. There's a fine line to walk to avoid being consumed by the demons of negative baggage.

For starters, I never misrepresent myself. I candidly explain that I leverage talented people on a just-in-time basis. I let my prospective clients meet my affiliated consultants so they get a feel for their capabilities. Because I've hand-picked the best of the best, my prospective customers are usually impressed.

I share my dream with my prospective customers, letting them know that my goal is to bring more and more affiliated consultants onto my full-time staff as my business grows. I drive home the fact that this is a means to an end.

I let them talk to satisfied, happy customers who've worked with me already. It's amazing how their faith in my company increases after they talked to a happy customer of ours for whom they have great respect.

I walk them through the systems we've put in place to make our virtual workforce effective. We may not all share a fancy office but we've figured out the right processes to communicate well and surpass our clients' expectations.

Finally, I talk price with them. It's amazing how much less we can charge than our competitors in the fancy offices. That usually closes the deal.

Mind you, it's not as perfect as I make it sound. Affiliates have less loyalty and drive than people who work for you on a full-time basis where everyone goes to the office.

Without a doubt, it's tougher to manage and motivate people when you rarely see them. And the worst part about it is that it's lonely. There was a time when I never bothered with small talk and tried to discourage it in the office but now, working virtually, I miss it.

To make up for that, we get together every so often for lunch, in part to engage in the small talk that we all miss so much.

When we're done talking sports and politics, we talk about how we can do things better. We all recognize that our virtual team is a work-in-progress. To succeed, we need to get better and better over time.

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