3 reasons that, in early stages, startups have customer service at their HQs (IMO), and why it makes (financial) sense to move them to lower cost areas when a s

3 reasons that, in early stages, startups have customer service at their HQs (IMO), and why it makes (financial) sense to move them to lower cost areas when a startup reaches a certain size: (1) at the early stage basically everyone is part of customer support in that they are addressing/solving a slew of new/unanticipated problems together in real time and therefore its beneficial/valuable to have everyone in the same place. they also (usually) don't know how to run a customer service organization and are learning how it goes on the fly, esp. for the new product. Later, the product matures and the majority of customer issues and their solutions are known and the process for addressing them can be (mostly) crystallized into a pre-determined set of responses, meaning that the customer service team can be separated from the rest of the organization. This is usually identified (or forced) by a more experienced customer service manager trained at a larger organization. (2) at an early stage, costs associated with customer service are still relatively low vs. other investments (ie. product development, customer acquisition, technical hiring) so it seems relatively cheap to grow (you can hire 3-4 CS people for the price of one eng. in SF) Later, as the organization grows, customer service can quickly balloon into a massive, expensive organization that grows in a more linear relationship with business/customer growth vs. product or dev teams, which (ideally) can be more leveraged. (3) at the early stage, they are focused more on growth than profitability, so they aren't looking to optimize for lowering customer support costs and are more focused on the speed at which they are solving customer problems, aka. resolving impediments to growth. Later, when it comes time to pay the piper (which is what appears to be happening with many, many on-demand startups..), customer service is a very easy place to try and cut costs, esp. when up until this point they had been run very inefficiently. conclusion: Once a company realizes that their support teams don't need to be at the HQ anymore, that the teams are inefficient and (oh shit!) they want to (try and) be profitable, it makes a lot of sense to move the customer service team to a lower cost location, or outsource it entirely. there's a reason most large, mature corporations do it.