Management of remote staff increases management overhead, which distracts from finding product/market fit, growing the business, and other critical tasks. It's about focus.
Management of subcontractors is another form of management that increases overhead. As with management of remote staff, this too increases overhead.
Rapid change is the norm in the early days of a business. Rapid change when the developer is sitting next to you is difficult enough. Doing this with with time differences and across long distances makes it extremely difficult.
Specification is important when working with remote developers. Most startups don't want to invest in detailed spec writing as it adds overhead, slows progress, and may be a total waste if the feature being spec'd ends up not resonating with customers.
Cost. Yes, outsourcing to remote locations is not a savings of 80% during the startup phase. Once you factor in increases in management costs, increases in spec writing costs, increases in integration costs, increases in quality control costs, etc. the cost difference largely fades or even turns negative.
Of course, all of the factors above flip in the other direction once a company has a repeatable business model. Once repeatable, a business' operations can be standardized and process driven. At this point, outsourcing to low cost destinations becomes very attractive.
Management of subcontractors is another form of management that increases overhead. As with management of remote staff, this too increases overhead.
Rapid change is the norm in the early days of a business. Rapid change when the developer is sitting next to you is difficult enough. Doing this with with time differences and across long distances makes it extremely difficult.
Specification is important when working with remote developers. Most startups don't want to invest in detailed spec writing as it adds overhead, slows progress, and may be a total waste if the feature being spec'd ends up not resonating with customers.
Cost. Yes, outsourcing to remote locations is not a savings of 80% during the startup phase. Once you factor in increases in management costs, increases in spec writing costs, increases in integration costs, increases in quality control costs, etc. the cost difference largely fades or even turns negative.
Of course, all of the factors above flip in the other direction once a company has a repeatable business model. Once repeatable, a business' operations can be standardized and process driven. At this point, outsourcing to low cost destinations becomes very attractive.