Excellent article, and better than I could do at generalizing the larger problem of outsourcing. From the IT perspective, companies pay far more to outsource than they would by keeping permanent employees on staff and decently compensated (as in, enough for a modest home, a car every decade, a vacation every year, and all necessary medical/dental/vision care, plus some retirement compensation of some form). Outsourci…
Might be such startups are unstable, because once the lunch starts getting eaten, the founders are instantly offered "F-you money" to sell their company, at which point it gets rolled into a disaster company. Or it loses its incentives past a certain size.
Rare indeed is a company whose founder(s) both (a) refuses to sell for a generous valuation and (b) actively put the brakes on aggressive growth out of wariness it will destroy the company yet (c) still sees the company to success.