Tech CEO on the merits of virtual work: ‘To think we should work in the exact same way as our industrial forefathers just seems odd to me’

Marco Zappacosta doesn’t need to see his people to trust them. That’s why Thumbtack, the online directory geared at matching homeowners with service professionals that Zappacosta leads as CEO, has committed to being fully virtual-first.

In early April, Zappacosta, who founded Thumbtack in 2009 shortly after graduating from college, explained his company’s virtual-first decision to Fortune—and why he thinks pro-office stalwarts are only hurting themselves.

“There’s a shift happening,” Zappacosta said, shortly after the company announced a major redesign to its mobile app—its largest and most successful launch since its founding. “I do think that this launch was aided by being a virtual-first company, not hindered.”

Prior to the pandemic, like most of its peers, Thumbtack was enmeshed in office culture. At the time, the company maintained offices in San Francisco, Salt Lake City, and Manila. “There was a lot of emphasis placed on time together in the office, and I thought we did it very well,” Zappacosta recalled.

He wasn’t the only one; before the pandemic, three-quarters of Americans never worked remotely at all, and just 6% were primarily remote.

“I almost rolled my eyes at people who said they worked better at home,” Zappacosta said.

In-person work is a vestige of the 18th century

Many companies jumped aboard the remote-work train when it was all the rage, and now they’re jumping off, Zappacosta has noticed. “That shows a lack of reasoning and principles,” he said, adding that he anticipates the world will “change forever” as a result of distributed work.

“Going to work, as a concept, is a modern convention; it started during the Industrial Revolution,” he noted. Before that, people worked from home—that’s why they were called “cottage industries.” But soon, people needed to assemble in order to build items, which is why collaborative workplaces like factories and assembly lines rose to prominence. For most white-collar jobs, those are vestiges of the past, Zappacosta believes.

“We’re creating something purely digital; the work we do is pure knowledge work,” he said. “To think we should work in the exact same way as our industrial forefathers just seems odd to me.”

Why remote work is a value-add

Unlike many of his contemporaries, Zappacosta hasn’t considered mandating any amount of in-office days. For Thumbtack, a shift to remote work highlighted a handful of unignorable business propositions. The first: the “immense leverage” Thumbtack got from being able to hire talent from everywhere.

“The fact that we can hire all across North America is enormously valuable to our business, because it’s everywhere, too,” he said. “Sixty or 70% of our technical talent is in the Bay Area; being able to recruit from South, East, and North Bay would’ve been impossible if we needed them in the office every day.”

Of note, the wide hiring base didn’t quite protect Thumbtack from the industrywide headwinds in tech. The company enacted a round of layoffs—30% of its staff—in March 2020, and cut another 14% of its global staff in December 2022. “There’s been an exogenous event that has placed a tax on human contact,” Zappacosta said in 2020, adding that he slashed his salary altogether, and that of top company executives by 25%.

As the company recovers from two rounds of layoffs in four years, offering flexibility has been an “enormous” boon for Thumbtack, and Zappacosta says it’s helped motivate his talent to bring about the early April product launch. Plus—and this wasn’t obvious to Zappacosta at first, he noted—the more geographically diverse his employee base was, the more they mirrored the customer base.

“When we hired across the country, more of our people were homeowners, and they were more in tune with our customers and what they needed,” he said. “That’s been a huge benefit.”

Distributed work forces managers “to make the implicit explicit.” It’s only when you move to a virtual context that you can actually assess how good you are at giving directives. Virtual work, he said, “exposes whether or not you’re managing well.”

In a culture that values ownership and accountability, “you can’t rely on looking over someone’s shoulder to ensure they’re doing the work they should be doing,” Zappacosta said. “You should have motivated them more intrinsically, making them want to accomplish more and feel more committed.”

Virtual work exposes management gaps, he went on, “and I think the default reaction has been, ‘bring everyone back, and we won’t have those gaps’. But those gaps exist in the real world, too; they’re just being masked.”

Everyone’s in or no one’s in

Thumbtack employs over 1,100 people by Zappacosta’s count—a number so big, it would make full in-office work impossible. “We’re never getting all 1,100 people in an office,” he said. “You can’t get everyone in one building or one floor; they’re all spread out, and that, too, creates power dynamics.”

Indeed, proximity bias is a scarily powerful force, and as Zappacosta pointed out, the divide between workers showing up at company headquarters versus those who dial in from satellite offices creates an unfair power dynamic. As such, being entirely remote “actually makes Thumbtack more cohesive,” he said. “We truly feel like one team.”

The same line of thinking wouldn’t necessarily follow if Thumbtack didn’t number in the thousands. “If we were 50 people, I’d want us all in the same room,” Zappacosta said, arguing that a tiny remote firm would create “too much overhead” to manage effectively. “But once you’re hundreds, and certainly thousands, of people, my view is that those CEOs and leadership teams [who insist upon in-person work] are solving for themselves,” Zappacosta said. “They’ve gotten used to working in a certain way, and managing in-person—they’re less in control in a virtual office.”

That doesn’t mean Zappacosta crusades against in-person gatherings altogether. “We save in-person work for big moments, when we reaffirm culture and values,” he said. “You can’t build an organization without them, but you can do all of that in a couple days a month, and the rest of the time, you can get s--t done at home.” Smaller and newer companies skew this way much more naturally than the older cohort, Zappacosta added, “which speaks to the fact that this is where things are headed.”

Office rent is comparable to ‘renting wedding venues each week’

At Thumbtack, Zappacosta has funneled the budget it once allotted for office real estate into events. “Employee experience creates a great ROI, which I’m glad doesn’t go to a corporate boss in San Francisco.” Maintaining thousands of square feet of cubicles, he said, is equivalent to renting wedding venues each week.

All Thumbtack has left is a 20,000-square-foot library in San Francisco for offsites or small work groups. The workers who show up at that space, Zappacosta said, tend to be the younger, early-career San Francisco residents eager for the chance to “get out of their cramped apartment, meet friends, and get mentorship.”

For all the inarguable benefits remote work has brought Thumbtack, Zappacosta nonetheless empathizes with bosses who are hesitant to make the shift.

“I wouldn’t have been brave enough to try this if not for COVID,” he said. “But my initial skepticism was very quickly proven wrong, and we never wavered.”

This story was originally featured on Fortune.com