Programmers for $2,000 per Month, More? Or Less?

One of the top stories on Hacker news this morning had to do with someone getting feedback on his idea to rent world-class programmers for $2,000 per month. TL;DR: He plans to set up an office in Manilla and hire locals for, I don’t know, $50 per day and rent them to companies tired of outsourcers who share “their” programmers with other clients. In this guy’s model, you get 100% of the programmer’s time for each one you pay for.

If I were setting up a consulting business, I would do it one of two ways.  My first impulse is to go even further and not hire humans at all. That would be more cost effective, but Primate Programming, Inc. stole my idea.

Given that, I might take the opposite approach: Setup shop in Manilla and pay US wages for outsourced development (not Silicon Valley wages, I’m not that crazy). I’d have no cost advantage but really good engineers. I’d also invest in infrastructure to make sure they were productive, the most important being an effective means for communicating requirements. This is a problem even Google has not solved yet, to the best of my knowledge, though their infrastructure for distributed development is simply amazing.  If I had time for a 20% project, I might take that on. 

Well Hacker News, what do you think about that? Still pretty bizarre, I guess.

One plan I like a lot is Balsamiq’s. You can work from home, anywhere in the world:

You are paid a little better than someone with your same job in your geographical area.

The goal of this policy is to remove salary as a something employees think about. Basically, people at Balsamiq should know that they are paid well compared to their peers. In other words, Balsamiq employees are not going to find a better paying job somewhere else, unless they are willing to move. And if they are, we’re open to that and we’ll adjust their salary accordingly (both up and down).

This might not disrupt an industry, but it should give you a recruiting advantage because there must be a lot of good people who need or want this kind of flexibility. And it’s fair. It make’s me think highly of Balsamiq and think it’s a good place to work.

Final answer, would be to combine the last two approaches (no monkeys).  Work from home, anywhere in the world and we pay a significant premium (30% ?) over local wages. Given enough candidates, this gives you really good programmers at a significant cost advantage. Even though the offer would extend to Silicon Valley dwellers, you’d have to be the second coming of Donald Knuth for me to hire you. Otherwise I would hire a very good programmer from Mumbai, or the one who wants to work from that little house on the lake in New Hampshire.