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I wish I had a cat at work sometimes.
I find it interesting to watch the telecommuting life style emerge and how people cope with the feelings of isolation and the unusual schedule. For instance: some of the telecommuters I know end up spending more time at bars and stuff like that to get that social interaction they're missing back in their life and use up their excess energy. As things evolve I'm curious to see where this leads.
I started working from home about five months ago. I lived alone. It took a couple of months for the social isolation to take effect, but it was severe. I didn't realize at the time how much of my drive at work came from collaboration, both cooperative and competitive. I like the joy of achieving things as part of a team, and I like the challenge of trying to be the best. (Yeah, that's not always great for team dynamics.) With nothing to prove and no one to help or to help me, my productivity tanked.

Three things really turned it around. First was moving in with a roommate. It provides some of the community at home that I used to get from the office. Second was doing volunteer work. In a way it's a huge waste of time, but the feeling of accomplishment is irreplaceable. (Lot of women there too... just saying.) Third is releasing code, parts of my project, as open source libraries. Never mind that nobody uses or even looks at it--just the concept of making code public drives me to raise the quality bar, to keep it modular, and to get parts finished. Instead of toiling away in preparation for one huge launch date, each module becomes a mini launch.

The conclusion I take from my experience is that telecommuting will foster communities, not scatter them. There will be less demand for one-bedroom apartments and more for houses to be split by roommates. We'll see more involvement in community activities and OSS.

One thing that's not mentioned is the type of work the author does - which I do think is very relevant. I'm usually a developer and telecommuting has been working out well, but there was a situation where I ended up helping out tech support, and not being in the office has been trying.
I'm a tech blogger and co-founder of a small start-up. I have a background in Electrical and Computer Engineering.
@Redgirlsays, you mentioned Campfire, but I'm curious if you and your co-founders use other tools to try to make things seem "closer?"
Lots of emailing and instant messaging, occasional Skype chats, and sharing photos and videos (generally work related, occasionally random or just for fun). Dropbox accounts also make it easy to share larger files, but that's less a 'closer' feeling than just making things more accessible and connected.
In my case, it's rather extreme. I develop a Java webapp in Santiago de Chile for an Australian business. I've travelled to Australia twice (4 months in total), but I've been able to manage the last 2 years so far interacting with them via email/chat/Phone/Skype dialy.

It's been very challenging but it's been an interesting experience overall. In my case take breaks to be with my family several times a day and walk a lot to ease the anxiety.

It's way too easy to lose focus on your tasks unless you can keep at least some discipline, but in the end I think I've learnt a lot, not only technology-wise.

Unlike the author, when I was telecommuting I was never able to be effective while working in my pajamas.

When I would wake up I'd go down the hall to the office and read the first 5-10 new mails in my inbox to give me something to ponder while in the shower (that's where I get my best thinking done anyway).

I did the whole morning routine and put on clothes I could be seen outside in, and then back to the desk to work. For some reason, I would be more prone to goof off on the Internet instead of work if I had just fallen out of bed and parked myself at the desk for the day in my pajamas.

I actually do tend to change out of my pajamas, just into a clean pair of pajamas (or similarly comfy clothes).

What I absolutely cannot do is work in bed, under the covers--I'll doze off. Laying top of the covers, sitting on the couch, or at a desk or table works just fine though, for me.

I transitioned from an office environment at a big corporation to telecommuting for a small startup recently. Working from home has been great so far and I'm loving it.

One thing I have observed is that my home life is slowly merging with my work life. While I am at home, I am working almost 90% of the time. This has been great for my productivity but I'm worried that it might be detrimental in the long run. As it is, I'm starting to feel slightly guilty when I'm at home and not working. (especially since my co-workers seem to work 24/7!). This doesn't concern me so much now as we have too much work to complete, but at some stage I think I'd need to figure out how to stop work and home life from merging completely.

I've been telecommuting for about a year and a half now. If there's one piece of advice I have, it's to keep a clear distinction between work and home.

For about the first 8 months, I would be logged in to work for about 14 hours/day (not necessarily working, but logged in and checking/responding to emails and IMs) and even found myself quickly logging in before going to bed - just to make sure nothing new popped up (which it rarely, if ever, did).

Eventually, I had to force myself to keep "normal" hours - no more sleeping in until 10 and then working till 1. "Clock out" at 6 and leave it at that - everything will still be waiting for you tomorrow, I promise. =)

Thanks for the advice. Were the first 8 months of 14 hour days in a start up environment? And, if you don't mind sharing, what changed to prompt you to transition to 'normal' hours?
Yes and no. About a year before I started this job, I founded a digital publishing company with a friend, so I was working this 40 hr/week job AND on my startup whenever I "got done" for the day.

It got to the point where I finally took a step back and realized that I was killing myself. My crappy work schedule mixed with late, late nights on my startup was a recipe for disaster. I also started having some RSI issues, which I'm still dealing with today (not being physically able to work another minute is a pretty strong motivator to stop for the day... <g>).

Just let go - I know it's hard to do if you're working for a startup, particularly if it's your startup. But you need to draw the line somewhere - work a set number of hours a day, or work until a set time and then clock out. Work hard/smart during those hours, and you'll get the satisfaction of knowing you did what you could that day and it's enough.

Co-workers/founders are a terrific source of motivation - especially if they're constantly committing quality code. But don't let that drive turn into something bad, or the guilt will get to you and destroy whatever motivation you had for the project. Programming because you feel you have to is no fun and is not sustainable - you will burn out.

I've been on a telecommuting project for the past several months or so. At some point we realized that we weren't really functioning as cohesively as possible, and the solution ended up being in finding a group chat tool. The author here uses Campfire, but we went with Hipchat (http://www.hipchat.com/). It certainly helped us with the sense of being isolated from the team.

Now as to dealing with being in my apartment for what can be huge swaths of time...