I’m aware that I can find a quality developer for less money in another country, but I also have always preferred working in close proximity to my teammates and employees. Do I need to ignore my apprehension and make a decision that makes more sense financially for my startup, or do I pay extra believing that closer interaction will lead to a better product? Am I the only one who prefers working right next to someone even if it costs more to do so sometimes?
It's best to work with someone closer to you.
but never compromise on quality.
therefore get the best you always requir. If that extra cost is reasonable then you should go for it
If you are not a technical person remote development will be much harder for you but if you are technical as long as you et them well it should be ok. If you are not technical and cannot afford local checkout references, have a consultant vet some of their code snippets, etc. You can use the agile tools mentioned here by others and you can work quite closely with screen shares, just be sure they understand spoken English as many developers are perfect with written English but not so good with spoken English.
If you are still not convinced and you are working on the project full time budget visiting locally for at least the first month it will add to your cost but will still be cheaper than local costs. Just something to consider.
Lastly make sure to have strict control of the budget and timeliness of the tranches with penalties for being late. If they are not exclusive to the project then they can and most likely prioritize things by who is paying more and bonuses someone else may pay for putting them first, so this becomes a complication to negotiate ahead of time.
With plenty of care you should be able to do it but you must be vigilant 100 percent of the time.
Pasy, if you can afford, paying more for being able to speak to developers face to face and frequently is worth it. I have been doing outsource since 2000: it works for the businesses which has established and well-run processes. For startup, this does not apply.
Remote development is always cost effective. To have better control I suggest go Agile and use some tools like Krosswall.
I was lucky enough to find a very talented and inexpensive offshore developer to build out my prototype. I would have continued to work with this developer if not for him having to move back to his home country and taking on a full time job.
If you want to go the inexpensive route, go with a non-local/offshore developer but I suggest having them provide you with previous development work and even references from past clients. It's not impossible to get things done with a remote developer, communication is key and making sure the developer your going to work with fully understands what you need to get done.
I'm in the phase of going from prototype to MVP and this time I've decided to work with a local software development company to get it done. It's a bit more expensive but I feel more comfortable and re-assured that I am just a drive away to see how everything is going or if I need to speak with them face to face.
Plus I don't have to worry about project management and have an actual team working on my product.
Depending on what you need to get done, an offshore developer can get the job done for less. But if you feel more comfortable having someone you can talk to face to face when you need to then I suggest to shop around for local developers around your area.
Also just a quick advise. You might not want to speak with your developer everyday single day as this will cut into their development time and it'll be at your cost. Which is why communication is key and make sure they fully understand what you need to get done.
No, the price of product development services is the same regardless of were the person is - just as the price of a barrel of oil is the same regardless of were it comes out of the ground - or how much it cost to get it out of the ground. Law of free market economics - arbitrage is short lived and small. If your cost are higher than the going rate, you quickly go out of business.
However, there are a lot of people out that like to differentiate their services on price - its the easy path. They will try to get you to believe that their hourly rates are less because they have lower cost - there are lots of "tricks" they have for trying to make you believe it is true. Think about it, if it was true, how would anyone in the US ever get a job? Why would anyone pay more for the same thing?
So, if a person is charging more just because he is close, I would say no on principle. If his hourly rate is higher than what someone else is saying is an apples to apples comparison - it is likely not.
Hourly is not how to chose a product development company. The quality, cost and development time are much more dependent on:
1. Available of reference designs - they should be free if you find the right PDC
2. Team Work - the product development field is ripe with stories of doing the wrong thing really well, and unless you have a good functional team, you will do the wrong thing.
3. Processes - the sooner mistakes are caught (and you will make a lot of mistakes in product development) the less they cost. No/bad processes mean you don't find them for a long time, which increases cost.
If your project is one that the developer will be creating the heart of your project, then get to know exactly who the person is. Make sure the person adds no hooks or back doors into your system. I find it best to know who you deal with. I am a developer and work on remote projects, but I always offer full confidence that the system will not be compromised in any way.
It's not the most important criteria for choosing a vendor, but all things being equal (and they never are), the answer is yes.