Written by Alex Iskold and edited by Richard MacManus

It’s 2007 and no longer do startup employees, or even those of medium-size and large
companies, need to be located in the same place. Instead, more and more companies are
going virtual. The answer to long commutes, inner city traffic, tapping into
creative minds in other geographies and combating global warming is: a ‘work from home’

But in order for working from home to be effective, certain things need to be in
place. The most critical is technology – a set of tools, along with the
infrastructure, that can replace the traditional office. Using these tools it is possible
for team members to connect, communicate and execute as effectively as a traditional
company. So in this post, we look at software that makes virtual companies possible.

Communication Tools

Pick: Skype; cost: free. Alternatives: Gizmo, Jajah,
Google Talk, more…

The first tool for a virtual company has to be one that
replaces face-to-face communication. This is not an easy task, but Skype gets close. This popular software bundles the
phone, traditional chat, conferencing and video conferenecing and works on Windows, Mac
and Linux. It is powerful to be able to chat and, when necessary, call a team mate. All
Skype PC-to-PC calls are free and there are options such as SkypeOut (calling normal
telephone numbers) and SkypeIn (gives you a phone number for anywhere in the world).

The next useful feature is the ability to transfer files. If you need to send a
document or a screenshot, Skype can be faster than email and it is right there. Skype can
also be used to conduct meetings. Typically, it would be used in conjunction with screen
sharing software (more on that below). Finally, Skype supports video and works with any
camera attached to your computer. This is neat, but think twice about what you are
wearing before flipping that switch 🙂


Pick: GotoMeeting; $49 per month,
Alternatives: WebEx, BudgetConferencing

Skype facilitates communication, but it does not allow sharing
of screens. It is helpful to complement meetings with real-time screens, particularly if
you are brainstorming, talking about design (for example) or simply want to get on the
same page faster. 

Our recommendation is a simple desktop sharing solution like GotoMeeting, because the features of the higher end
services are rarely used and tend to be buggy. GoToMeeting has been around for a while
and offers instant desktop sharing which ‘just works’. It is written in Java and can run
on many platforms. It takes a few minutes to learn the UI, but after that starting new
meetings and inviting people is straightforward.

There are quite a few other companies that enable online meetings. One of the ‘high
end’ solutions is WebEx, which has three core
offerings – a meeting center, MeetMeNow plan, and pay per use. The meeting center is a
comprehensive solution that supports various forms of sharing and interaction between
participants. You can share presentations or a full screen, draw on a scratch pad, and
chat with the meeting participants. The plans depend on the number of concurrent meeting
participants and start at $75. Another alternative is MeetMeNow, which facilitates
instant desktop sharing. The cost is $49 per month or $39 if you commit to a full year.
Finally the pay per use solution offers exactly that, for 33c per minute per user.
However in my experience, WebEx has not been as reliable as GoToMeeting.

Project Management

Pick: Basecamp; $29 per month.
Alternatives: CentralDesktop, ActiveCollab (free, but you need to host it), TeamWorkLive, QuickBase

Project management is essential to the success of any project,
let alone a virtual one. Execution requires planning, scheduling, division of tasks and
tracking. Basecamp from 37signals is an excellent tool that encapsulates the
essential elements of project management.

The Basecamp main screen presents a dashboard view of the upcoming milestones and
latest activity. Each person can also get a view of his/her milestones and tasks. The
tasks are modeled as todo lists and can be attached to the milestones, which are tied to
a date. This is basically it in terms of tracking, but no one familiar with Microsoft
Project is going to miss the Gantt charts here.

In addition, Basecamp offers storage of files (unfortunately there is no way to tag
files, which would be a great addition) and an interesting variation of a scratch pad
called writeboard. The writeboard allows people to create text documents using very basic
markup. You can bold things, create links and include images – without needing to learn
HTML. The writeboards can be versioned, which is handy, but not essential.

There are a number of monthly plans, with various tradeoffs in the number of projects
and storage space. For $24 per month you can create 15 projects and store 400MB of files.
The maximum plan allows you to have unlimited number of projects and store 20GB of stuff
for $149 per month. There are also a number of plans in between, for all tastes and


Pick: Google Calendar; Free.
Alternatives: Yahoo! Calendar, 30Boxes, Kiko

Noticibly missing from
Basecamp is the calendaring feature. Personally, I would like to see that as part of the
project management solution – particularly a view of events and milestones. Fortunately,
there are quite a few calendaring solutions that do a good job. The one that stands out
from the crowd is Google Calendar.

The product has an intuitive Ajax-based UI that does a very good job of managing
events. Two features that are essential for teams are shared calendars and support for
multiple calendars. Multiple people can see and book events into the same calendar. Also,
the user is able to maintain a set of calendars that is then merged into a single,
aggregated view. So it is easy to combine business and personal events. Google calendar
also integrates nicely with GMail and sends out email alerts for upcoming events.

Code Repository

Pick: CVSDude; $22 per month. Alternatives: SourceHosting, Version Host

If you are running a software development business, you need
to have a source code version control system. While you could run such repository on your
corporate computers or have your web hosting do it for you, it is even better to use one
of the specialist online services – to make sure that things are done right.

Typically, you would use either CVS or Subversion version control systems. Each offer
powerful ways to manage your code in a concurrent development environment. Hosting
companies provide the turn key solutions which, in addition to the code management
server, include a dashboard for managing developer accounts, and bug tracking systems.
The setup is easy, particularly because most modern IDE have support for version control.
The pricing varies based on the storage space and number of concurrent users.


Pick: ElephantDrive; $34.95 per month
per person – discount. Alternatives: JungleDisk,

Whether it’s our personal data or corporate
information, it is always better to be safe than sorry. In our day and age no one can
afford to waste even a single day due to data loss. Luckily there are now online backup
solutions that can be deployed quickly and on a budget. ElephantDrive is one of the newcomers that offers
a backup solution based on Amazon S3 storage. It comes with an intuitive user interface,
that allows you to specify files and directories that you want to backup. After that it
just works, quietly backing up your files to S3.

Since in a virtual company, computers are not likely to be networked – backup
solutions need to be implemented for each computer. To support this use case,
ElephantDrive offers special corporate discounts which can be obtained via email. There
is however no common corporate directory view, something we are all used to. It would be
nice to see this feature in the future, as it would be great for virtual teams.

Accounting / Payroll

Pick: QuickBooks; Cost Varies, $50 per
month+, extra per employee. Alternatives: IntAcct, Keep More

Last, but certainly not least, is the category of accounting
and payroll software. The problem is that financial matters are rather complicated. In
addition to complex federal laws and regulations, there are state (and country!) specific
nuances that can drive you crazy for hours. This is one area where getting a specialist –
a bookkeeper – is definitely a good idea. The good news is that online services like QuickBooks are working hard to make things

The packages range in price and functionality, depending on your needs. The basic
package does not include payroll and direct deposit, which most people want. The full
package has everything for around $90 per month, plus additional costs per employee.
QuickBooks is complex, but it’s comprehensive software. The online version seems to be
easier to use then the offline one. It allows you to easily connect to all your bank and
credit card accounts, issue invoices, make payments and keep track of consultants and


It is truly amazing how far and how quickly virtual team technology has evolved. Just
a few years ago virtual companies were very difficult to run, because of logistics and
costs. However the tools that we have covered in this post, collectively, have opened the
door to a new breed of companies – small, agile, virtual businesses. These companies
exist because of this new wave of communication tools and substantially lower
infrastructural costs.

In addition, virtual companies consist of happier employees. These are people who do
not need to spend time in traffic, people who save money on gas, people who conserve
resources and, perhaps most significantly, people who spend more time with their family.
So perhaps this simple, yet very profound, application of technology is the beginning of
a new trend and the way we will mostly work and communicate in the future. Let us know
what you think and please tell us what virtual office tools you use – and indeed whether
you work from home or in a corporate environment.