The offshore vs onshore debate isn't about which is "better"—it's about which is right for your startup's stage, needs, and risk tolerance. Here's an honest comparison to help you decide.
| Offshore Teams | Onshore / US-Based |
|---|---|
| 50-70% lower hourly rates | Higher rates but faster delivery |
| 8-12+ hour timezone gap | Same timezone collaboration |
| Communication delays and async-heavy | Real-time pair programming |
| Cultural/language barriers | Native English, shared business culture |
| High turnover, hard to retain | Stable, long-term partnerships |
| Requires heavy project management | Self-directed, low management overhead |
| Hidden costs: rework, delays, QA | Predictable output and timelines |
Offshore hourly rates look attractive, but the total cost of ownership often surprises founders. Here's what the rate card doesn't show:
You'll need detailed specs, daily standups across timezones, and someone to manage the relationship. Budget 20-30% of savings for PM.
Subtle requirement misunderstandings compound. A "simple" feature takes 3 iterations instead of 1. Expect 15-25% rework overhead.
Questions that take 2 minutes in Slack take 24 hours async. Decision velocity drops, slowing your entire product cycle.
You'll need more QA cycles and code review time. Junior offshore teams need more oversight than senior onshore engineers.
If offshore costs $50/hr vs onshore at $150/hr, offshore looks 3x cheaper. But with 30% PM overhead, 20% rework, and 15% slower velocity, your effective rate is closer to $80-100/hr—with lower quality and more management burden.
We're not an offshore agency, and we're not a traditional consultancy. We provide embedded founding engineers and fractional CTOs who become part of your team.
“After wasting 6 months with an offshore team, we switched to HyperNest. They shipped in 3 weeks what the offshore team couldn't in 6 months. The cost difference wasn't even close when you factor in the time lost.”
Offshore works best for: well-defined projects with clear specs, cost-sensitive non-critical features, staff augmentation under strong technical leadership, and companies with established dev processes. It's less ideal for early-stage startups without technical leadership or ambiguous product requirements.
While hourly rates are 50-70% lower, hidden costs include: project management overhead (20-30% of savings), rework due to miscommunication (15-25%), timezone-related delays (10-20% slower), and quality assurance overhead. Many startups find total cost of ownership similar to onshore when accounting for these factors.
Nearshore (Latin America, Eastern Europe) offers timezone overlap with moderate cost savings. It can work well if you have strong technical leadership in-house. However, you still face management overhead and cultural differences, just less extreme than far-offshore options.
We're US-based embedded engineers, not offshore staff augmentation. Our engineers take outcome ownership, work in your timezone, and operate as founding engineers—not managed contractors. We cost more per hour but typically deliver faster with less overhead.
Hybrid models can work with: onshore technical leadership (fractional CTO), offshore execution teams, and clear handoff processes. This requires strong project management and documentation. We can provide the onshore leadership layer while you use offshore for execution.
Minimum 4 hours of overlap is needed for real-time collaboration. Less than that forces purely async workflows, which slow decision-making and increase miscommunication risk. This is why Eastern Europe and Latin America work better than Asia for US companies.
Former engineering leader who helped scale Rupa Health from $100K to $5M ARR. Passionate about helping startups build great engineering teams.
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