[majimojo]

I just got back from a business development trip to China. China programmers are cheap. Their monthly salary is $1,000 for the top of their graduating class programmer. Their work ethic is impeccable. Unfortunately, their english is not. This is where Indian outsourcing shines, their english language skills and eventual ability to meet spec is 10-15 years ahead of the Chinese as a society.

Although there are some other incentives to outsourcing in China. I was told that in some major cities like Xian, the Chinese government is offering free office space and subsidizes the salary of each of your employees if an american startup or company decides to hire employees there. Xian has particularly good tech schools (they would be like the UW of China), but they have 50% white collar unemployment.

engineering school ranks: http://www.asu.edu/chinainitiatives/documents/unv_rank_eng.p...

(sorry can't find the link for the government program right now... that tip was given to me by a senior partner at a private equity firm... I'll try to find it guys. although, I would much rather recruit top grads from #1 universities than save a few thousand dollars a month by setting up operations in some average place with subsidies)

So I am definitely looking into China or India for my startup. But, I would not recommend going to China unless you or one of your co-founders speaks chinese. The major problems as other people have noted, are quality control and communication. Otherwise, your outsourcing has just about as much success as saying that you plan to move to Hawaii and live off the ocean by asking dolphins to fish and pick up sunken treasure for you.

I think a great startup idea would be to help American companies utilize idling chinese programmers by providing middle management, oversight, and translators (and job training + good pay for your Chinese employees).

I've met a couple guys our age in China (25-26) who have already sold their company for $20-30 million (US dollars) and walked away with $6-10 million. All they did was copy a popular idea in the US like Pandora or Last.FM, hire some cheapass programmers for $1k a month a pop, clone the idea completely, sell it to a larger company. These guys probably sat next to you in class at Berkeley or UCLA. I also know of a few US startups that already finished a Series A ($7 mil) and have a majority of employees outsourced to China. Solo founder.

more info if you guys want it

[rms]

Moving to China is on my list of backup plans if I utterly fail in America. I met with one American working as a manager at a mid-sized software firm in Beijing and he said that he learned spoken Mandarin with one year of dedicated study at a language school and $10,000 paid his tuition and living expenses. Written Chinese, of course, will take longer. Do you think this is realistic?

[majimojo]

I've done four years Japanese. 1-2 years Chinese + 3-4 months immersive Chinese at Beijing University. My chinese is way better than my japanese, so immersive study definitely works. Chinese is very hard because it works on tones. In English and Japanese, you can put the emphasis on the wrong syllables or speak in a monotone and still make sense. In chinese, not using proper inflections makes you say something else.

1 year will get you through every day life, but trying to communicate on a business level or even listen to the news on TV will be very difficult. It's possible to be fluent enough to do business in 2 years but you'll need to get a Chinese girlfriend. After 3-4 years you'll start to lose the "accent."

[qwerty2]

'also know of a few US startups that already finished a Series A ($7 mil) and have a majority of employees outsourced to China. Solo founder.'

I would be really interested to hear more about these, please share.

[majimojo]

For one of the companies, founder is a really nice guy. It's a software startup. He's been working hard on his company for 6 years. Can't say much more.

But, I read below that you're doing a Rails idea.

It benefits you to outsource if you need a lot of C++ or Java work done cheaply. Examples of this would be if your idea requires multi-platform support or porting.

1) You're developing a game that would benefit from a wide array of desktop and hardware suppor (osx, windows, linux plus the different graphics cards and shaders languages and versions)

2) Or you needsoftware support for your new Dodgeball Cellphone app on a wide array of smartphones.

3) You need to port large existing codebase to another platform. Itunes from Mac to Windows.

4) You need a lot of artwork done to support conceptual artwork that you already have.

For a rails idea, since you're working at such a high level, you should be doing this work yourself or closely with another person that you have a good relationship with. It sounds more like you need a solid co-founder or you need to learn rails or django (it only takes a couple days to get started). Most of the time, we get stuck on little design decisions (what kind of validation should I do on my logins etc etc?). This is stuff you need to figure out yourself. It's hard to pay people to think for you.

Going to China pays big when you're looking for early stage employees or when you need to temporarily outsource a piece of your company (at 20% cost) that you see yourself replacing with a better solution later.

If you're prototyping ideas for YCombinator, and if you have a good idea, someone will join you as a partner.