As Remote Work Increases, Entrepreneurship Skyrockets
In spring of 2020, I thought I had retired.
But friends kept calling for help. Can you connect me with someone who can build a building? Raise some money? Solve this issue?
I was doing what I loved – helping people solve problems. But I didn’t realize I was back in business until a friend asked the name of my new startup.
After being told I could not call it, “I answer the phone,” Tompkins Ventures was born in June 2020.
Other people had different stories. But they were creating businesses as well.
In fact, data from the U.S. Census Bureau and the WFH Research group support the idea that remote work helped skyrocket U.S. business creation in the last few years.
Others, like me, love being unleashed from finding office space. And I prefer paying people for performing instead of for how many hours they sit on a chair in an office.
I call the move to remote and hybrid options the reinvention of work. Business leaders who learn to navigate these waves of changes will succeed. Those who don’t will fare worse and even create competitors.
Business Applications Have Exploded Since 2020
The U.S. Census Bureau has recorded an explosion in business applications the last few years – particularly compared to pre-2020 numbers:
- 2017 Census Bureau business applications: 3,181,896
- 2018 Census Bureau business application: 3,487,171
- 2019 Census Bureau business applications: 3,498,833
- 2020 Census Bureau business applications: 3,991,189
- 2021 Census Bureau business applications: 4,885,935
- 2022 Census Bureau business applications: 4,606,338
Those applications are all in a bucket the Census Bureau labels NAICS business formation statistics. NAICS stands for the North American Industry Classification System. Federal agencies developed this standard for the purpose of collecting, analyzing and publishing U.S. economic statistical data.
The U.S. Commerce Institute dices the data to come up with even more jaw-dropping numbers: 5.38 million businesses created in 2022, 5.04 million in 2023. That compares to 3.5 million new businesses in 2019, 4.35 million in 2020.
No matter how you look at the numbers, more people have started their own businesses in the last few years.
More Time with Family, Fewer Flights to South America
I know remote work has changed my life for the better.
My “retirement” has led to three successful startups: Tompkins Ventures, Tompkins Leadership and Task4Pros.
Remote working arrangements have been a boon to all three. I’m having the time of my life. Without being in airports and hotels four or five days a week.
I’m no longer dead tired from all that travel. I can see my grandkids play soccer. I can bring family to more Carolina Hurricanes hockey games. I can have dinner with my wife every night, not just a couple of times a week.
Employees of Tompkins Ventures and Tompkins Leadership meet in person once a year.
I have met in person with Task4Pros CEO Chuck Moyer. Both of us have traveled to Sao Paulo to visit colleagues with MeuChapa, our Brazilian subsidiary.
But all of us have yet to meet in person in the same country, much less the same room.
That is truly reinventing work. And let me tell you, Zoom is quicker, cheaper and less taxing on the body and soul than flying back and forth to South America.
Your Workers Don’t Like the Office Like You Do
I wrote a lot about this in my latest book, Insightful Leadership. If you get a chance, check out Chapter 10 – “Paradigm Shift: Sorry Boss, Your Office Is Dead To Me.”
Before 2020, less than 10% of paid full days in the U.S. were worked from home, according to WFH Research’s Survey of Working Arrangements and Attitudes (SWAA). Since 2022, that number has hovered around 30%, plus or minus a few points.
That is a massive paradigm shift.
From the employee perspective, the pandemic helped so many discover what life really meant. Like me, they love seeing their children play sports and perform in recitals. Eating breakfast and dinner with the family brings more pleasure (and health) than a bacon, egg and cheese biscuit on the commute.
After all, most people work for their family, not shareholders.
From the employer perspective, back then I wrote about how reinventing work opened up opportunities and challenges.
Companies and nonprofits can hire talent outside their geographic location. More employees were preferring some type of hybrid option.
Business leadership must deal with an entirely new set of parameters – strategic decisions involving workforce geography and composition, office space investment, whether or when to return to the office, the fact that so many of your best workers might just up and take another job or start their own company.
Either way, your competition benefits.
Entrepreneurs Find More Benefits from Remote Work
The latest information backs much of that contention, with a few adjustments. Researchers from the University of Chicago, ITAM, MIT and Stanford University started the WFH Research group in 2020 to examine changing working relationships.
Now, three years later, three-fourths of business owners said work from home matters. But their reasoning has changed. (This is no surprise. One major theme of Insightful Leadership was that disruption is the new normal.)
In the December 2023 survey, a solid plurality, 38.2%, said working from home helped them reach remote customers. That’s fantastic, because a limited customer base can kill a startup.
Another 36.5% said remote work helped them reduce office costs.
A quarter, 25.9%, said remote work allows them to keep another job. I’m sure that has helped many who wanted to start their own business but feared giving up their day job. They can test the waters and see if entrepreneurship works before diving in.
Geography Does Not Matter As Much
Surprising to me, only 16.1% cited recruiting talent. I put that remote work benefit near the top of my ventures.
I would encourage most business leaders to look beyond commuting distance, like I have. Beyond Raleigh, N.C., Tompkins Ventures and Tompkins Leadership have employees in other North Carolina cities, Tennessee and Georgia.
And our 100s of Business Partners span the globe, from the European Union to South and Central America to Southeast Asia to Africa.
That gives us a global reach of the largest international conglomerates without opening expensive international offices.
Creating Your Own Competitors
The WFH Research confirms my experience that society is more comfortable with remote business meetings and contacts. Before 2020, many might have looked askance at dealing with remote businesses.
There’s a silver lining in every darkness, even a pandemic. I’m glad that my preference – remote or hybrid work – is fueling business creation.
New businesses create jobs. They innovate with new products and services. They generate wealth for creators, investors and employees.
Nearly four years into the new era, employers continue trying to force workers to return to the office. Your return-to-office policies could, paradoxically, fuel even more entrepreneurship.
Don’t be surprised if those employees decide to become your competition instead.
Related Reading
- 3 Buckets to Help You Reinvent Work
- Flexibility Keeps Staff Happy – Especially Underrepresented Populations
- Return-to-Office: Employees Should Choose Their Hybrid Work Schedule
- Gig Work Hits the Executive Set – aka the Evolution to 3FE
Jim Tompkins, Chairman of Tompkins Ventures, is an international authority on designing and implementing end-to-end supply chains. Over five decades, he has designed countless industrial facilities and supply chain solutions, enhancing the growth of numerous companies. He previously built Tompkins International from a backyard startup into an international consulting and implementation firm. Jim earned his B.S., M.S. and Ph.D. in Industrial Engineering from Purdue University.
