Small Business: Virtual office, or real? That is the question

As a teenager doing freelance web design, Chris Nagele was a workplace free spirit. His office was wherever he could plug in a computer.

That's precisely how his company, Wildbit, would continue to function for 11 years as it evolved from consulting to now exclusively building software.

"We were doing the virtual company thing," recalled Nagele, now 32.

Then, about a year ago, came a dramatic philosophical shift. He and his business partner and wife, Natalie, wanted to be with their employees, not just communicate with them via the phone or computer. Bringing Wildbit employees to a centralized work address had become a more practical option because the Nageles had started hiring locally, adding to a staff of software designers largely scattered throughout the world.

In September, the Nageles and their first full-time U.S. employee, a customer support manager, moved into a 2,200-square-foot stunner with soaring ceilings, vast windows and hardwood floors, located on the seventh floor of an office building in Old City built in 1960 and converted to condos.

Since April, the couple that long eschewed the concept of office has been locked in a national battle to win, of all things, a $25,000 office makeover.

"We'd have everyone under the same roof if we could," Natalie Nagele said. Among the reasons she and her husband cited: Spontaneous brainstorming sessions on the couch in front of the white board or over their "family lunches" prepared by a chef the Nageles bring in daily to feed their Philadelphia workforce of six.

Take that all you virtual-office dwellers who now spend your days alone behind a computer in your den, lunching on warmed-up leftovers from last night's dinner. For many of you, "meetings" are conversations with a face on a screen compliments of Skype or WebEx. Collaborating with colleagues likely involves instant messaging.

Then again, along with the Wildbits are companies like Dolphin Enterprise Solutions Corp., another software firm that has trended toward a virtual setup after a conventional office start. With 51 employees in 14 states and four countries, Dolphin considers itself locally based because one of the three offices it has — the biggest, with five employees — is in West Chester.

But unlike Wildbit, when Dolphin, a partner of business solutions-systems giant SAP in Newtown Square, started what has been a consistent expansion since 2004, the decision to evolve into a 90 percent virtual company "was driven by the key employees," said one of them, president and CEO Werner Hopf, who works from his home in West Chester rather than the office there.

Chief financial officer Art Smithson moved from this region to Evergreen, Colo., where he now gets "to watch elk and deer wander through my yard" during a work day, he bragged last week.

Dolphin's evolution to a largely virtual company was also a matter of hiring practicality, Smithson said.

"It was hard to find the talent pool to serve our customers," he said. "We were forced to look outside and look for people who didn't want to move to West Chester."

It was also a matter of practicality from the customer-service perspective, Hopf said, noting that Dolphin's 120 customers "are spread across the globe."

To counteract any sense of loneliness its employees experience, Dolphin holds annual employee meetings, and vacation-like gatherings for employees, their spouses and children every two years. This year it was in Puerto Rico in January.

"That gives us a chance to tie those bonds a little closer between the different individuals who don't have a lot of opportunity to have face-to-face interactions," Hopf said.

With about half his workforce of 13 located outside the United States, Wildbit's Chris Nagele acknowledged the benefits of virtual-office arrangements — mostly for his employees.

"You can't easily distract someone," he said. "I can't walk over to someone's desk and say, 'What are you working on?' On the other hand, you can't replace our in-person meetings with Skype."

Sitting right smack in the middle of the virtual vs. real-office debate is Michael Howard, president of American Executive Centers, operators of seven fully-equipped office facilities in the Philadelphia region. They even come with receptionists.

American Executive has begun renovating its existing centers and building new ones to better accommodate those who want to report to an office each day and those who have virtual companies but occasionally need to hold a meeting in a more formal business setting. The new look at American Executive features bigger kitchens/break rooms to encourage more networking between clients, and small private workstations for people who don't need a full office but a place to check mail or make calls.

"That's a reaction to what people are asking for," Howard said.

Alas, for Wildbit, what they were asking for — a free office makeover — was not to be. Event sponsor Turnstone, a Michigan-based office furniture company focused on the small business market, announced the five winners Thursday and Wildbit was not among them. It did finish in the top 25 of 200 entrants, said Ken Neil, Turnstone's manager of advertising and brand communications.

The Nageles insist all the time involved in putting together their video entry was not wasted. It got them focused on what they love about being a small business with a sense of place, and why they think it has made them a better company.

But for the two short rows of desks topped with 27-inch Macs and Dells, Wildbit's office at 20 N. Third St. feels more like a home. There's a full kitchen, two bathrooms with showers, a washer and dryer, a couch and the Nagele's ever-present yorkie, Boss. Wildbit had entered the Turnstone contest as much for advice on how to achieve the delicate balance of providing both quiet work stations and collaboration areas as they did for the free furniture, Chris Nagele said.

As word has spread about the new office — especially the lunches — to Wildbit employees abroad "more people are interested in moving to the U.S.," Natalie Nagele said.

For now, Wildbit will continue to bring its employees together for a retreat twice a year, usually held at a rented villa in a foreign locale. July's destination: Turkey. Or possibly Mallorca.