internationalI know this question is a bit specific, but hear me out!
I’m a software developer in NYC. It’s really expensive to hire engineers in America, and I’m wondering why startups just start off by hiring foreign (Russian, Chinese, Indian) labor or even moving to Russia, China, or India to start their startup, while doing business in the US? Lets say the language barrier and assimilation was not an issue for the person trying to found this company, wouldn’t this save so much money / risk? You could pay foreign labor costs while making American money.
I ask this because I’m bilingual in Chinese and English, and I want to venture off into my own business (probably a tech startup) eventually. Given that I don’t mind living in China or Taiwan, couldn’t I minimize so much risk (paying $500 per engineer per month instead of $6,000-$10,000) by just moving there and paying for labor there while targeting American customers? I could hire like a team of engineers there for the price of one American engineer. Essentially if I’m going to start a Whatsapp, it’s not like I have to be the US to publish my app in America and get American customers, right?
What’s the deal? Or is this a history issue, that 2nd generation bilingual Americans haven’t caught up to this idea yet and I’m ahead of my time? I’m sure many people have done this (My coworker is Russian American and her sister is starting her own business. Her only engineer right now is in Russia), but it doesn’t seem to come up as often as I would expect.
Many startups do outsource the work to third party off shore development centers or setup an offshore development center of their own. Here are a few reasons why startups may not doing this more frequently
Setting up shop, recruiting in a different culture dealing with the taxes and laws in another in a foreign country may not be very appealing to an entrepreneur who may already has his hands full figuring out the nuances of running a business on his own
A startup needs to develop the product and sell it. If you move your whole office to a location where the developers are cheap then could be moving away from your market. Coordinating the developers or business and market development from across time zones and language barriers is not easy.
If you have your sales office/hq in the country where your target market is and your development office in another taking advantage of labor or raw materials you now have to man and operate two offices. You have to have managers in both locations and you have to be paying utility and rent etc on two locations not to mention the setup cost for the two offices. Most startups are too small to have the startup capital to fund this.
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