[brudgers]

To me, practical uncertainties, managerial overhead, and logistical complexity seem likely to swamp the only obvious upside of potentially reducing personnel costs.

Even more concerning is personnel cost reduction tends toward squeezing blood from stones. Business is premised on getting what you pay for. As costs are reduced toward zero, goods and services trend toward a corresponding quality.

Except in recession, time spent reducing costs can often be better spent raising revenue.

[s1artibartfast]

Strong disagree. Costs open a lot of possibilities, especially when bootstrapping.

A bay area full stack developer is easily $1-200/hour. You can find one on internationally for $10-20/hr.

If you have funding, maybe that doesn't matter. If you are paying out of pocket, that is the difference between executing or not.

[brudgers]

When the root cause is under-capitalization, that’s a better problem to spend energy on.

Because it has compounding returns.

Cost reduction has diminishing returns.

Starting out under-capitalized means the business is default-dead. Odds are no amount of hard work will change that (that’s the nature of diminishing returns).

Of course all this is in the abstract. Actual businesses need different amounts of capitalization.

[s1artibartfast]

I agree, it DEPENDS, but wanted to give my counterpoint.

You can waste a lot of time chasing capital when you should be building a product. I have seen founders spend years chasing capital, to get 500k and support 2 developers for a year.

Offshore talent allows you to shortcut this issue entirely if you so choose.

40k out of pocket can save you that time plus 15% of your company, and get you the same product.

You eventually will need funding, but this let's you get a working product and customers when you go looking for it.

I think more founders should consider it, especially if they don't have VCs on speed dial or a product VCs don't readily understand.

[s1artibartfast]

Funny addendum: I was just talking to a friend who had one of his developers poached by another bay area firm and wants to get them back.

EE with 10years web dev experience, willing to grind 48 hours without sleep on tough problems. He was paying 2k/month