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The end of the office Add to ...

"The whole relationship with your employer has changed, so that it's more of a relationship with contractors, even when you're an employee," he argues. "So that changes the culture. People think, 'How do the objectives of the company fit my objective?' It's like, 'I'm independent anyway, so I want to work where I want to work.' "

And perhaps the most interesting shift is in what makes a company feel like, well, a company. Offices used to have totemic import: Entrepreneurs didn't feel "real" until they'd moved out of their kitchens and into a formal office. Even 15 years ago during the dot-com boom, the young entrepreneurs of the time - who were of Generation X - famously blew millions of their venture-capital money constructing expensive, elaborately detailed workspaces.

In contrast, the new generation of entrepreneurs regard their firms as "real" from the moment they start building a product or service and selling it. (Indeed, many of today's start-up founders marvel and chuckle at the sums that dot-com firms spent on their offices. "I could do an entire start-up for the amount those guys spent on Aeron chairs," as one told me recently.) They have decoupled the importance of an office not only as a tactical necessity but as a psychological one.

Other experts argue that officeless firms are following the lead of other just-in-time sectors, like Hollywood. "One of the industries that always worked that way was Hollywood," says Fabio Rosati, the CEO of Elance, a Web service that helps companies hire and manage professionals online. "Today's small businesses, the mini-multinationals, are mini-versions of Hollywood. They're assembling the talent, they're managing the projects, and they're disbanding the talent when it's no longer needed. It's much more efficient."

Granted, there are some obvious limits to officeless work. Industries with big capital-intensive stakes - like pharmaceutical labs or aerospace engineering firms - probably aren't going to be able to shed space or allow virtualization the way that small high-tech start-ups can. And some of those in the high-tech world argue that even they have faced problems - creative limits that come when people aren't face-to-face enough.

"Any high-level product questions are best done when you're in the room together," says Ali Davar, the founder of Zite.com, a search-engine-technology firm based in Vancouver. Davar managed the firm virtually for a year, because he had to; his full-time job moved him from Vancouver to Barbados, so while developing Zite.com in his spare time, he managed a team of programmers and designers around the world, using Skype and Chat. But he found it incredibly difficult to make deep, profound decisions about the shape of their software when they weren't all in the same place. When - after two years working remotely - he finally got a chance to set up an office with his core team in Vancouver, he jumped.

"You can't beat a whiteboard," he says. "The nature of software is that it's iterative in nature. The product seldom ends up where it starts. So no matter how clear you are at the start, you're going to revisit and revisit it - probably when you're all under one roof."

Another big worry with officeless work is managing discipline. If you can't see your employees, can you even know when they're slacking off? Most CEOs of virtual firms say they have to be careful when they hire, to make sure the corporate "fit" is good, and that the employee or contractor has good self-management skills. At Mercury Grove, Annan usually starts new employees on "smaller jobs" to see what their work patterns are like, before entrusting them with "high-level work." But several other entrepreneurs argued that being officeless usefully pares an employee-employer relationship down to the most crucial element: Is the work getting done?

If that's all you care about - because you're not worried, say, about whether they're arriving at the office on time or not - it becomes easy to measure whether the employee is working out. Annan argues that remote employees enjoy a flexibility that makes them more productive.

"I've never had an employee, contractor or partner tell me that they didn't complete a project because their wife was sick (or they were sick), that they had to go to a doctor's appointment, or that they would be late for work one day," Annan tells me. "You have a relationship based on performance." Though, as he points out, the flexibility cuts both ways: "I regularly receive e-mails from them at 3 a.m. and on weekends." Mirzaee told me that his firm's online collaboration software auto-reports what everyone is doing, so it's essentially impossible for an employee to slack off without him instantly knowing.

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