Building a Distributed Company: Q&A with GitLab CEO

Building a Distributed Company: Q&A with GitLab CEO

We had a conversation with Sid Sijbrandij, Cofounder and CEO of GitLab, on building a distributed company. GitLab is an all-remote software company where all 500+ members work remotely, and are distributed over 50+ countries.

Because GitLab is distributed, they can hire talent from anywhere in the world, which gives them a competitive edge. But, there are also downsides to being distributed, such as difficulty in attracting venture capital. In this Q&A, Sid shares the advantages and challenges of running a distributed company. He also gives advice useful to anyone running or maybe thinking of starting a distributed company. Read the transcript or watch the video below to find out how to build a distributed company.

Read the full transcript

Note: The transcript has been edited for clarity.

SID SIJBRANDIJ:Hi, I’m Sid. I’m the CEO and Cofounder at GitLab. Today we’re going to talk about building a distributed company. I’ll be interviewed by Sunil. Sunil, maybe you can introduce yourself.

SUNIL KOWLGI: Hi, I’m Sunil Kowlgi, the founder and CEO of Outklip. Outklip is a screen recording tool that integrates seamlessly into your workflow by connecting to 3rd party apps like YouTube and GitLab. It’s used by remote teams and the top use cases are things like video bug reports, how to videos for customer support as well as video feedback. So, we’re working on taking remote work collaboration to the next level. 

Early days of GitLab

KOWLGI: Sid, I’m an early stage startup founder and I think quite a bit about whether I want to set up my company as an all-remote company or one with a physical office. Now, looking at GitLab, you’re an all-remote company with over a 500 member organization, distributed over 50 countries. This clearly shows that all-remote companies can scale to a fairly large size. I want to focus this Q&A on building a distributed company. I want to start at the very beginning. GitLab was originally an open source project and you and your cofounder Dmitriy got together and started the company in 2012. What were your reasons for setting up GitLab as an all-remote company. 

SIJBRANDIJ: Yeah, when me and Dmitriy came together it was working together and stuff but not actually being physically together. He was in Ukraine, I was in the Netherlands, and our first team member lived in Serbia. So, it was impractical to meet up physically. We added a few Dutch team members, they came to my place, I had a spare desk for a few times but then they started working from home. We never discussed it and they kind of figured they could be effective from home too. I think most companies you colocate i.e. you keep showing up to the office because otherwise you’re missing out on information or career opportunities. As long as you make sure that’s not the case and people feel fine working from home, so that’s how we became a remote company. 

KOWLGI: How did you collaborate in the early days, if you can take us back to 2012, in terms of what did product development look like, what were the challenges in remote development as well as the advantages of working as a remote team?

SIJBRANDIJ: We used a lot of the same things we use today. I think that time it was Campfire instead of Slack, it was Google Hangouts instead of Zoom. But those two, Google Docs, and of course we were already using a bit of GitLab back in the day. 

KOWLGI: How did you hire your first few employees given that you were already a founding team that was remote?

SIJBRANDIJ: Alan, I knew from a previous company. Other people I met on a Ruby meetup. One reached out after I left a job, which I’d previously done and people in my immediate network. 

KOWLGI: How did you do sales in the early days? Did you travel a lot to your customer locations in order to close sales and so on?

SIJBRANDIJ: I traveled very little, so it was a lot of inbound. Basically we started creating an offering and a lot of people already running GitLab, so they signed themselves up. In the  beginning it was very inbound, based on the success of the open source product. 

KOWLGI: Did you ever consider colocating the team when you were starting up?

SIJBRANDIJ: Yeah, for sure. We were colocated during YCombinator, we all lived in the same house together. That was pretty intense. We weren’t against having an office, especially since the people at YCombinator said, look, it’s totally normal to have a distributed engineering team, but no know of no successful companies that are all remote. So, you probably should get an office and have sales and marketing and finance there.  We said that makes a lot of sense. So, we got an office , we put in desks. Then our sales person, he showed up the first few days and he started working from home. That’s kind of the story. Every time we hired someone they showed up a few days and then started working from home because that was possible. 

It’s way easier to run a whole remote company than a hybrid company.

KOWLGI: Did you ever consider running it in hybrid mode, where part of the team is colocated? Maybe not where you are located but a different city where a lot of your team members are. Or did you always want to keep it going as an all-remote company.

SIJBRANDIJ: We saw hybrid as a risk because what you get when those people are adopting a colocated office culture, where there’s less recordings of things, there’s less digital artifacts, it’s going to be hard for the rest of the company to figure out what’s there. I’ve seen that in hybrid companies, the remote people have less access to information. They didn’t know a decision was made. How was it made? Oh well, we met in the hallway, we got the people that were around. We talked to them and we figured it out and we didn’t document it anywhere, and there’s no video of the recording. It’s way easier to run a whole remote company than a hybrid company. There are some hybrid companies that say we’re going to stop with remote work, and I can imagine, because if your primary process is colocated that is it is very hard to be effective remotely. I think even a few people colocated already make it harder to institute the best practices. Now, we do have some people colocated, because there’s some people in Denver, and on the days that they get together, there’s a few people in the office. But it’s not a specific team or anything. Even for us it’s pretty hard to enforce all the things that are important. We’re all remote and still it’s hard to do the right thing. I don’t envy people that run a hybrid company with a mix because it will be even harder. 

Growing the team

Especially for managers, it’s important that they don’t focus on the input of people — how long did you work or things like that. I don’t that’s healthy in any company, but especially remote, you have to let that go.

KOWLGI: Now, once you’ve founded a startup and it’s getting traction, you’re going to scale it. I want to next talk about growing a team in an all remote company.

Remote work requires quite a different attitude to work, because you have to be communicative and productive without the luxury of in person interaction. What is the right personality type for remote work and how do you screen for that when you’re hiring people. 

SIJBRANDIJ: I don’t think remote work requires a different personality type. We hire all kinds of people. A few things are important: one is a focus on results. Especially for managers, it’s important that they don’t focus on the input of people — how long did you work or things like that. I don’t that’s healthy in any company, but especially remote, you have to let that go. You have to focus on the output of someone not on the input. The other thing is we like people who are managers of one. We don’t need someone to prompt them to finish a task. When they say they’re going to do something, they deliver. I think that’s healthy in any company, but it’s especially great if you’re remote. No one’s going to look over your shoulder whether you’re on Facebook or not, and it’s fine if you’re on Facebook as long as you deliver the work to a reasonable degree.

KOWLGI: How do you go about finding potential hries? Is there a secret recipe for an all-remote company?

SIJBRANDIJ: The superpower and it’s not secret, is that you can hire in a lot more places. You can hire 90% of the world’s population and that’s a superpower because it makes hiring way easier. Because we’re an open source project and transparent, people all over the world sometimes say hey this is an interesting company to work for. I looked at their handbook and was amazed at what I saw. This is a better fit with my values than the company I’m currently at and it’s great that wherever they are, they don’t have to move to make that happen. They can be where they are and join us. 

KOWLGI: How do you conduct interviews with employees, who are probably based internationally? 

SIJBRANDIJ: Just like we’re sitting here now. I’m on video calls more than 6 hours every day. 

KOWLGI: Do you ever do in person interviews?

Yeah, if the person is local we tend to do in person.

Most interviews I do, we spend more time on their questions than on mine. I get a lot of information on what they ask about and what their follow on questions are.

KOWLGI: Is there any difference to how you were interviewing in the early days vs now. I’m sure you’ve evolved a lot of practices for interviewing and so on. What kind of traits help in early days hires vs today? 

SIJBRANDIJ: I did all of our interviews up until 140 hires, until Dunbar’s number. Back then we didn’t always get everything right, so I had people fill out a huge sheet with all kinds of questions beforehand. I got all those questions, I read through those and I asked questions if the answers weren’t clear to me. Pretty intense, high volt and velocity interview. But we’ve improved a lot, we have way better interviewers now. I don’t do interviews like that any more. Most of my interviews are now with executives and most of the time it’s a broader range of conversation and it’s also a lot like figuring out what they want. Whether the job is a good fit at some point in any interview but for executive interviews it’s a bigger part of the conversation. I have them ask way more questions. Most interviews I do, we spend more time on their questions than on mine. I get a lot of information on what they ask about and what their follow on questions are.

KOWLGI: Are there any challenges you run into when you’re interviewing remotely, trying to ascertain whether a candidate is right for the company?

SIJBRANDIJ: Not a lot of problems. Sometimes some small technical difficulties, but you spend a few minutes on other things so I don’t think it’s less efficient. Some people don’t have a proper audio setup, I have a proper one, so we can deal with one person being on speakerphone. Nothing really that bothers me. I think it’s actually more convenient because I’m on a screen so I can quickly take notes. I have a keyboard and I’ve got their resume if I want to check out the company I can do so. If I’m in person I have to make sure all my materials are pre-loaded on an iPad beforehand because it’s hard to navigate during the interview. Taking notes, they tend to be analog so afterwards I have to scan them or do something. Although I think it’s good to see someone in person, I think that efficiency wise the remote ones are really great. 

Extent of travel in an all-remote company

KOWLGI: Next, I want to talk about travel. I think you mentioned previously that you do not actually travel that much on work. Could you tell us about how much travel is generally involved in running an all-remote company?

SIJBRANDIJ: I travel about once a month, about two thirds is for company, one third is pleasure. Well travelling for the company’s pleasure too, as you say paid time off. And, it’s maybe visiting customers in New York, I go there for a couple of days. Most of the time we try to combine it with a conference. So, conferences, and of course every 9 months we’ve got our own GitLab Contribute Summit, where everyone from the company gets together. 

How to move fast as an all-remote company

I don’t miss whiteboards that much, I really prefer a Google doc…it’s there for people to view afterwards. Everyone can type, there’s not one person standing there but everyone has their own cursor.

KOWLGI: Any company, especially in startup mode, needs to operate really quickly. They need to move fast. How do you move fast as an all-remote company? There’s always a challenge because if you’re in the same room you can whiteboard things to hash things out quickly, whereas in remote you might have somebody working in a different timezone. How do you maintain that momentum as an all-remote company?

SIJBRANDIJ: The synchronous communication where you’re all looking at the same thing is important. So, we do have meetings. It’s hard to involve people from Asia Pacific in those, so that’s a problem. There’s enough overlap between Europe and US to make those meetings happen. I don’t miss whiteboards that much, I really prefer a Google doc. Nowadays, Google Docs, the nice thing is we use numbered lists, we use indentation a lot, there’s always space, you never run out of space. It’s there for people to view afterwards. Everyone can type, there’s not one person standing there but everyone has their own cursor. So, I actually think Google Docs is superior to a whiteboard. If I had to give one up, I’d keep Google Docs and we’re using that very effectively. Every meeting has an agenda upfront and then we fill in all those things as we go along and we’ve gotten really good at that. 

KOWLGI: Another challenge with any company is alignment, where you want every team member to be aligned with the company’s direction. Often things are misunderstood and that happens even in colocated companies. I’m curious how you solve that problem at GitLab where you try to align everybody and have their compasses pointing in a particular direction so you can all march forward ?

SIJBRANDIJ: I think it’s really important to write things down. People are very efficient at reading things. So, if you wrote it down you can refer to it, so you don’t have to say everything again, you can just drop a link. So, we write down a lot, in our handbook, on our OKRs page, you’ll find all our goals and strategy, etc. And at some point you keep repeating that, keep dropping those links and you keep answering questions. So, repetition is still needed, repetition is easier if you have one writeup and most people have already found it even during onboarding.

KOWLGI: GitLab is a very international company. There are team members spread across 50+ countries. How do you manage the specifics of every location? Things like international income tax, payroll, healthcare, benefits. How did you do it in the early days and how do you do it now? I’m sure you have a lot more resources to manage it now, if you can throw some light on it. 

SIJBRANDIJ: In the beginning we had a Netherlands and a US entity, everyone else was a contractor. Right now we have more entities, we’re up to 6 countries now, that cover the majority of the team. We’re working with other organizations where they’re the employer on record. Sometimes working with people that are resellers and distributors. So, there’s more solutions now in place and we got a way bigger part of the team where they have a traditional employer relationship.

We don’t do cross-functional teams. Your team is composed of people that perform a similar role. Your manager is someone who has experience with that role. So, they’ll be able to assess your results. They’ll be able to coach you, they’ll be able to get you career advice and I think that’s a very important thing.

KOWLGI: Being in an international organization, there are people from different cultures participating. How do you deal with performance problems and what are some of the red flags to look out for?

SIJBRANDIJ: Underperformance is a hard thing for any company. You can google GitLab underperformance and you’ll find some of our materials. One of the things we do is we give everyone a boss who understand what they do. We don’t do cross-functional teams. Your team is composed of people that perform a similar role. Your manager is someone who has experience with that role. So, they’ll be able to assess your results. They’ll be able to coach you, they’ll be able to get you career advice and I think that’s a very important thing. Other than that we stress to everyone that if someone’s underperforming, to identify it, have the conversation, and take remedial action. Luckily we have great retention at the company, we retain 90% of the people year over year. You cannot be a manger at GitLab if you’re not willing to identify and remedy underperformance.

Company culture

KOWLGI: I’ve heard about GitLab’s annual team retreats where you fly all your members to a resort location. When did you start this practice, how important is it and what do you do at these retreats?

SIJBRANDIJ: We started it pretty early. Remember, our first employee was from Serbia. He invited us over. We were two cars. It was 5 team members and 2 or 3 SOs at the time. It was great, we went to Novisok, Serbia, we went to the capital. We had a great time and 9 months later we did it again at another location and we just kept that thing going every 9 months. I look forward to the next one. In May, we’re going to New Orleans and I’m super looking forward to it. 

KOWLGI: How do you give your employees recognition? If you’re colocated, you can always give someone a pat on the back, go give them a gift card. But you have somebody sitting internationally, how do you  give recognition in your company? 

SIJBRANDIJ: Giving recognition is really important. We have a Leader group at GitLab, which we’ve given the assignment now — how can we get even better at this. But some of the things we do — a thank you channel. Last year we had more than 4000 thank yous in that channel where people got mentioned. 90% of people in the company got at least one thank you through that channel. This morning we just instituted Values icon and emojis. So, we’ll have emojis for each one of our values. Normally there’s a number of emojis under the thank yous and we’ll add that. Another thing we do is discretionary bonuses. This morning we had more than three discretionary bonuses awarded. During the company call, everyone is present and we state who’s getting the bonus and for what reason. So we tend to be very high velocity with those and those people get a thousand dollars and the recognition that this implies. 

Fundraising

KOWLGI: Next, I want to talk about getting capital investment in your company and fundraising. Were there any challenges you ran into, because it’s an atypical company, since you’re running it as all-remote?

SIJBRANDIJ: Yes, investors don’t like it. We had one of the best VC firms in the world say we like everything about this except the remote thing. We don’t say it won’t work, but it’s different than other companies and we see every deal, and they do, they’re one of the best and we can just pick a company that fits all the boxes instead of this one. That makes sense for them for it was a big bummer for us as we would like to work with them. Other investors said the same thing, if you’re going to get acquired we’re going to get half the price because you’re remote and not all the people will transfer to the new organization. So, if it gets acquired it’s a worse investment. We said, look, you’re going to be aligned with us because we want to stay independent and try to go for an IPO. But, it did make fundraising harder. 

Competing with colocated companies

KOWLGI: What are some of the particular advantages or disadvantages when competing with  other companies that are working in colocated mode?

SIJBRANDIJ: Yeah, I think talent is the biggest advantage. Where other companies are restricted to a few metro areas, we can hire people that move back to be close to their family. So, they may be working in a metro area for a while, they move back, they’re now in a rural area. They have the opportunity to work with a fast growing unicorn startup where remote people are first class. That is a super good deal for them and we attract our above average share of very talented people.

Customer perception of all-remote companies

KOWLGI: The general advice from YCombinator is be where your customers are. Does it matter where the founder is based ?

SIJBRANDIJ: I think it’s really important to be where your customers are. Our customers are on the internet, so we’re on the internet. I might sound a bit lame, but our issue trackers don’t distinguish whether someone is a user or a customer or a team member. If we have people at GitLab working on a new feature and they say “Look, who’s this team member? I couldn’t find their name in our directory.”  We’re like it’s totally not a team member, it’s probably a user or customer that cares a lot about what you’re building. So, every feature request, everything we’re working on is out there in the open on a level playing field. I think we have a lot more interaction with our customers than other companies. I’m located in San Francisco and I think that’s important too. There’s a lot of events here. This week I was going to a financial conference, those are organized here. There’s press is here. There’s a lot of people I need to interact with. Events are here in the city, so I feel that it’s useful to be here and I think San Francisco is more and more going to be a city of headquarters of the startups with more of the work being done elsewhere.

KOWLGI: Was there any resistance from customers in the early days about buying product from a company that doesn’t have an office?  

SIJBRANDIJ: Remarkably little. That wasn’t a problem. They want to see your business listing, they want an address and things like that. But, if you can provide that there’s no problem. 

KOWLGI: I imagine now that you’ve grown to a much larger you probably have bigger enterprises that are buying your product. How receptive are they to buying something from an all-remote company? I’m talking about the really big companies and enterprises. 

SIJBRANDIJ: They don’t see a big problem with it. Think in general, if it’s a really large enterprise, most of the meetings you’re going to have are at their location. In general you’re going to meet up there.

Advice for running a remote company

KOWLGI: My last couple of questions are focused on the founder. So, what are the good personal habits to be an effective remote company founder, that have served you well? 

SIJBRANDIJ: Write things down and make sure that’s enforced throughout the company. We have that Thank you channel, and there’s a thing, if you thank a person for something, make sure there’s a link to what they did. People might be interested, hey you’re celebrating their work, make sure that people are able to see their work. It’s remarkably hard to do. Today, I said, hey please can you add a link to that. So, keep consistent reinforcing of hey we write things down,  we make sure things are cross linked, we make sure that we make things public by default, we use the public channel and mention someone there instead of sending someone a direct message. So, all these things that require constant repeating from the top, that is important.

KOWLGI: Do you have any advice you would give to founders about starting an all-remote company? Would you advise them to go ahead and start it as all remote, what are some of the pitfalls to watch out for as well as some of the benefits, if you could summarize all of that?

SIJBRANDIJ: I think another benefit is that if you start a company in San Francisco the compensation is going to be way higher than if you spread people around the globe. The pitfall is you should spend time with the founding team to really get to know and trust each other. So, you probably want to go off together. The YCombinator experience really helped. I hear in some companies meeting up for a week every month where they get together and work from the same office. There’s something to being in person that generates trust, so I wouldn’t underestimate that in the beginning.

KOWLGI: So that completes all the questions I have. Did I miss anything out, are there any important areas about running an all-remote company which we didn’t touch upon, but something that people should know about?

SIJBRANDIJ: We have a breakout call everyday with the same group, four times a week. Someone thanked me, he had his baby on his lap. He said it was so awesome he was able to do that and he sees people around him not being able to do that. I think there’s huge benefits for employees and for society. We talked about my perspective as a CEO but it’s just great to see that people have more time because they don’t need to commute, have more time to spend with people that are important in their lives. Think for society,  there’s a lot too. We spread wealth more across the globe. San Francisco already has enough high paying jobs, it’s very important that this wealth is spread across the globe. Traffic is already bad enough as it is. The less people commuting the better. The environment benefits too — it’s saves building the office and it saves the commute. I think there’s a lot to like about remote work for society at large. 

KOWLGI: Thank you so much for sharing your perspective and answering all my questions about starting an all remote company. 

SIJBRANDIJ: Yeah, thanks for the interview. 

Watch the recorded conversation