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Comment by Sleepful

1 year ago

That's not bigoted or racist. There are two forces when it comes to pricing labor:

1. The forces that dictate the lowest price.

2. The forces that dictate the highest price.

These are completely orthogonal to each other.

Lowest price is based on cost of living, you can hire the cheapest person as long as you pay them enough for them to keep on eating. That's it. Notably this lower-end is going to have a lot of variance based on location.

Highest price is based on how much value a worker creates for a business, the highest price that you can pay that worker is somewhere that leaves the business with a margin profit. Of course it is in the businesses best interest to increase the margin for themselves, but as talent becomes harder to find, fat margins become less of a necessity and more of a nice-to-have. The job needs to get done or their golden-egg machine will die.

So!

You go to the lowest price at a another country, that's what you get in quality. Execs think that people are replaceable so they believe that the average X is the same here as it is anywhere else, the only difference to them is cost.

So yeah. You are not racist for pointing out that quality suffers due to cost cutting through offshoring. The lower cost-of-living countries (such as India) still have top tier talent, but that talent is priced similarly across the world, they are smart and they price themselves according to the value they bring.

very nice reply. Along these lines, one problem many founders face is when professional management (new investors, board members) focus mono-maniacally on repeatability, unit economics, and generally ultimate fungible staffing. One way this is achieved (sometimes even deliberately) is to buy the cheapest, most easily replaceable inputs and do anything necessary to make the new configuration work. Staffing is a key tactic come hell or high water. This can cause obvious cultural issues.