[clesoine]

The first assumption "$30 to produce and you sell it for $99" is bad. That's not a high enough profit margin. Second, obviously don't hire people at full salary. Make something that people are excited to work on and give them equity to do it.

[donkeyd]

Equity doesn't pay for a house or feed children. 90% of the time, they will never bring in any money.[1]

You won't always be able to hire whoever you want/need if you offer them equity. An inexperienced, younger person who's willing to work for equity might cause delays in delivering which will also cost money.

1. http://www.forbes.com/sites/neilpatel/2015/01/16/90-of-start...

[clesoine]

True many people won't be able to work for equity full time. I've been lucky enough to find people willing to work with me for equity in their spare time. I'm not a connected or wealthy person. For many people like me it's the only option. I've been able to get people really excited about the product, but I also have had to accept that I have to be flexible with deadlines for people I'm not yet paying. Things take longer when you don't have money. Sometimes it's better to go slow.