How Remote Work Is Helping This Founder Change the World

I love early-stage startups. They're exhilarating.

But they can also be exhausting–especially when you have to spend valuable time on rote compliance activities like: payroll tax registration, state agency reporting, and workforce insurance accounts.

Hari Raghavan felt this pain acutely–while he was COO at Forge (f.k.a Equidate), he was spending at least a third of his time on back office admin activities.

Instead of focusing on high leverage activities–like recruiting partnerships, business development, and product strategy–he and his executive team were spending almost half of their collective time filling out compliance, insurance, and payroll forms.

So he founded AbstractOps, an automated, back-office operating system for startups.

Hari wanted to free up founders to do what they did best, because he knew that if he could make a company more effective by changing how it worked, then he could help that company change the world.

I recently sat down with Hari to talk about his journey at AbstractOps, and how he deals with some of the tension points around remote work. We also talk about:

• How AI is going to lower the barrier to entrepreneurship.

• Why it's important to solve acute problems instead of general problems.

• How you can eliminate communication overhead by working in smaller teams.

• Why a spirit of curiosity is often what separates a good team from a great team.

• Why it's not unreasonable to think a company could do $10M in revenue per employee.

If you're an early-stage founder, or you run a remote team, you don't want to miss this conversation.

You can watch it on our YouTube channel, or you can read it below.

Enjoy.

How did you come up with the idea for AbstractOps?

I was COO at a company called Forge (f.k.a Equidate), and I was spending at least two thirds of my time on high priority things: recruiting, partnerships, business development, and product strategy. But I was spending the other third of my time on back office admin. Same with our CEO – who was spending half his time; and our Chief of Staff – who was spending two thirds of her time – on back office admin activities.

I remember this one instance where we spent 15 hours filling out an insurance form with information that should have been centralized and standardized, like: what were your last five mailing addresses? How many international employees do you have? Do you run background checks?

The fact that this information lived in dozens of systems (or in no systems at all!) drove me crazy. So really, we built AbstractOps to create a system of record for the backbone of a company – in the sense of HR, finance, and legal – and to connect the critical data objects that help a company exist and operate. We wanted to connect into the systems where HR records, financial transactions, and legal documents exist.

What made building a back-office system for startups an interesting problem to solve?

I think there are only four or five industries, or ways of working, that really move the needle for the world: government, education, healthcare, financial services... and more broadly, as a horizontal layer, corporations. If you can fundamentally make a company more effective by changing how it works, and more than anything else reduce latency, then you can change how the world works.

I've seen it happen so many times: employees, vendors, or investors were frustrated because someone didn't get around to doing something on time. That just feels like a waste. Finance should focus on setting the strategy, not on bookkeeping. And HR should focus on recruiting and culture, not on sending out an offer letter or looking up benchmarks. So that's my driving motivation: to help routine things run on autopilot in the background, so employees can focus on higher-level things.

I'd love to hear more about your personal journey and how it ties into what you do at AbstractOps.

At some point in the last three years, we at least called into question the idea that where you live is where you work. It doesn't have to be the case anymore. But when our founding team came together in March of 2020, literally a week before the lockdown started, we decided to be remote. It was kind of a decision by necessity, but now it's just the way we work.

And to be clear, it's absolutely hard to create serendipity. But I think the flexibility afforded to everyone, myself included, makes it worth it. When I'm having a crummy day, I can pull back and take a light day. And then I can work sixteen hours the next day. Remote work gives me and everyone else on the team freedom, and there's something really valuable and empowering in that.

What do you see as the biggest tension point with remote work?

I think it's the ability to create serendipity, which goes hand-in-hand with trust and bonding. I definitely think that affiliation amongst team members, especially during 2020 and 2021, was basically nonexistent. I'm best friends with some of my co-workers from Equidate / Forge, but I've kind of drifted apart from some of the early team members at AbstractOps. There hasn't really been an innate urge to stay deeply in touch.

While the sense of affiliation amongst team members definitely takes a hit now, I do think there are ways to mitigate it, like by having deep, one-on-one conversations and going through hard times together. Ironically, we've gotten a lot closer in the last six to nine months because the market is way harder and you feel united by the common enemy of time and money, in this market.

The other thing that helps is having a smaller, tight-knit team that works in closer units. One of the hard things about having a 30- or 40-person team was the coordination overhead–it was massive. But now, we're now ten people, and we move lightning-fast.

It's because of the two-pizza concept, which Jeff Bezos coined. We can get people around a table and hash things out together, and there's no "change management" or communication overhead involved. You can talk to three people and know everything that's happening.

What separates a good team from a great team?

If I had to pick one word, I'd say curiosity. Everything else stems from that. If you approach every conversation from a spirit of curiosity, then you don't assume negative things about people. You try to understand why they do what they do.

Conflict resolution becomes easier, customer discovery becomes easier, and product development becomes easier. When you have a curious mindset, you're low ego and low insecurity, as opposed to high ego and high insecurity. Curiosity is the overriding characteristic of good leadership and good employees.

Is it possible to systematize curiosity in a remote context?

Transparency helps – it encourages people to ask questions. Like what you're working on at Almanac – helping to make companies more transparent and making internal information sharing more seamless and frictionless.

And, I think psychological safety is critical, too. It's something I've actually had to learn quite a bit about, and is an area where I've had to grow as a leader. I have really strong opinions. But I've come to realize that people react strongly to anything a CEO says. I didn't think my voice was any different from anyone else's voice, or from when I was a COO... but it is.

So without knowing it, I was creating a lack of psychological safety for my team, because I didn't really have a filter. I always wear my emotions on my sleeve and say what I'm thinking, but transparency was a double-edged sword in this case. I think transparency balanced with non-distracting transparency (i.e., not oversharing) is something I've had to learn how to do better.

What's unique about your remote team's approach to transparency?

Our calendars are all completely open. Almost all of our Slack channels are open (the only ones that aren't are ones with the exec team, or some where we discuss more sensitive topics). Compensation is completely open. It's funny, because pay transparency is becoming more of a thing. We've actually listed the base and equity (to a point) for every role we have ever published, and we began doing that three and a half years ago. So people don't have to wonder: am I getting paid the same as my peers? They are by definition. We don't even have ranges.

What predictions do you have for what the world might look like in a couple of years?

More and more things are being productized and automated. AI is on everyone's lips right now, and it's certainly made me feel existentially at risk. At one point I was trying to figure out what skills I needed to have, so that my skills are not obsolete in five years. So AI is certainly posing some really big questions, but I think one of the things that it will do is lower the barrier to entry for entrepreneurship.

I think you're going to see single person companies doing millions of dollars in ARR. I've been toying with this idea of a Dunbar company, where we throw all of our assumptions for the ratio between revenue and headcount out the window. If you look at some of the most successful companies out there – Apple, Google, and Facebook – you'll see that their revenue per employee reaches a ceiling of around $1.5 million to $2 million per employee. That ceiling hasn't been broken yet, but I think we're going to start seeing it broken a lot more in the coming years.

Which then poses the question: is there any reason you can't be doing $10 million per employee in revenue, or in gross profit? And then, if you reach that milestone, what does that mean for the design of your company? Personally, I love small teams that run really fast. Like many companies out there, went through a round or two of layoffs, and while those processes were really painful – and we did everything we could to help people out and land on their feet – the team that remained actually started to move faster.

During the peak of the free-money era in 2021, headcount became a vanity metric. Now, I think you're going to see that become an anti-vanity metric, where revenue per headcount is actually the new vanity metric. And if that becomes the case, then you can throw all those assumptions around headcount out the door. Then the question becomes: what can you actually do with a team of twenty, fifty, or one hundred people that you previously thought you couldn't do? We all have this concept of the Dunbar number... but what if you could max out your company's target headcount at 150 people and run a billion dollar revenue business based on that? I think we're going to discover some really interesting things in this dimension in the next five to ten years.

How can you maximize revenue by improving how your team works together?

In two ways: the first way is more practical, and the second way is more pie-in-the-sky.

The first way is the agency and contractor model, which we use ourselves. Because of remote work, this model has exploded. In regards to our engineering team, we have an in-house team that sets the direction and strategy, vets the tools we use, ensures the specs are well written, and orchestrates the work being done, but then the flex capacity comes from an external agency. We use a terrific agency out of Eastern Europe, by the way, and they've helped us contract out half of our engineering team.

We do the same thing with our sales team – we use an SDR outsourcing firm – and our design team. So three of our core functions – sales, engineering, design – are partially contracted out. The ability to flex up and down, with agencies balancing the load, is working really well for us. It's actually a very efficient model. So I have no doubt that with 150 people doing a billion dollars in annual revenue, you'll actually have a ton of contractors on your team (maybe even 300 contractors). And that's fine, because it's more flexible work.

The second way is more of a pie-in-the-sky idea. We invested in a company called Wispr that's building a brain-computer interface, so I can't help but wonder if there will be higher-bandwidth ways of communicating in the future. Like the ability to plug into someone else's brain to exchange ideas. I know that's kind of sci-fi, but things like that might be possible in the next five to ten years.

Drawing from your own practical experience, what advice do you have for other founders out there?

So far, we have yet to hit product-market fit, so take everything I say with a grain of salt.

One: humility goes a long way. I've encountered too many founders who think they are special, or meant to be the leader, so they use their voice as the CEO a little too much. I've been on both sides of the table, and it's hard, but it's really important to balance low-ego and low-insecurity when you're the CEO.

Two: Realize your opportunity cost. In the last few years, a lot of companies were funded that shouldn't have been funded. They weren't addressing painful enough problems and didn't have sustainable unit economics or business models, which includes many public companies today. A friend of mine, who's also one of our investors, asked me, "if this company were taken away from you today, and you had no obligations anymore, what would you do?" I said that I would do the same thing over again, but just do it better this time around. So if that's your answer, then keep working on what you're doing. Otherwise, if you don't have product-market fit, you don't feel that drive or passion anymore, and it doesn't feel like this is the only thing you could be doing with your life... then maybe it's time to shut down your company and cut your losses. As an angel investor myself, I'd way rather people get their time back than me get my money back. There's nothing more precious than a founder's time or an employee's time, because time is the one thing that cannot be bought. At least until ASI (Artificial Super Intelligence) invents immortality.

Three: Instead of trying to solve too many general problems, try to solve fewer, more acute problems. The biggest mistake we made was trying to build this whole operating system for how companies work, and as a result, nobody knew what the hell we did. The moment things actually started working for us was when we could describe what we did with two or three words, like: "payroll tax compliance", and "compensation planning". These were very acute things that people could latch onto. They could point to them and say, "I need that!" as opposed to looking at an operating system for a company and saying, "what the hell is that?" It's really important that you can describe your company in two to three words.

Next Week on The Big Bet: Kai Han, Co-Founder and CEO of Pallet

Kai Han is the Co-Founder and CEO of Pallet, a hiring platform that helps startups hire from an elite audience of technical builders.

Prior to starting Pallet, Kai was a Venture Investor at Galaxy Interactive, an industry leading VC fund that backs founders in the video game, game development, and digital media spaces.

Before that, he studied at The University of Oxford, where he graduated with a bachelor's degree in Economics and Management.

You’ll get my full conversation with Kai next Thursday.