I don't think it really does reduce risk. I've worked with more than a few terrible developers who have exemplary-looking college and startup pedigrees. One of

I don't think it really does reduce risk. I've worked with more than a few terrible developers who have exemplary-looking college and startup pedigrees. One of the worst developers I ever worked with graduated from a top school and left Y! (back when they were neat) to join my (very much former) employer. This guy thought the height of programming was using PHP's raise error function as GOTO. Gag. And I never said a thing about Malaysia. I am highly skeptical about wage/currency arbitrage. I'm talking about the smart people who'd prefer to live in their hometowns/states, or with their spouses/mates who need to move for their job, etc., around the US, Canada, and some other Westernized countries. A dirty, crowded, expensive city isn't everyone's cup of tea. Not everyone gets a nerd-on about being surrounded by other "ambitious" 22yos in what is essentially a monoculture. Not a thing on earth could lure me to live in San Francisco, for example. There are a lot of people out there who agree with me, and those people can't be hired for $15k, but they can be hired for $85-120k, and in most cases, if you are savvy about managing, they can produce great work remotely.