So when we hired them (just after the start of the project) they worked remotely. They were a small agency who we essentially block-booked for large chunks of time. They would occasionally come to the shared office but not regularly enough to close all the gaps on the project. I estimate that to keep things running reasonably smoothly (and there were still major problems which led to me firing them and hiring brilliant software engineers), I probably spent north of £1k on travel to and from their location to manage them, which was painful both financially (I could be spending that money on almost anything else and it would be better-spent) and emotionally (it's a lot of energy).
Now everyone is in the same room and on the same page. I'm sure there are occasional productivity hits (conversations, phone calls, stand up meetings), but it's a quick "Hey I just deployed this" instead of Email > New Message > everyone@startup.com > I just deployed the XYZ feature we talked about > Send.
It's also more helpful for me to work this way because I am a hands on product manager. We can iterate things very quickly, I can break them and suggest improvements, and we can then iterate them again. Irrespective of whether my benevolent dictatorship is a good way of working, the fact is that I will always work like this and to do that over any kind of distance greater than 5 metres is inefficient and frustrating.
Now everyone is in the same room and on the same page. I'm sure there are occasional productivity hits (conversations, phone calls, stand up meetings), but it's a quick "Hey I just deployed this" instead of Email > New Message > everyone@startup.com > I just deployed the XYZ feature we talked about > Send.
It's also more helpful for me to work this way because I am a hands on product manager. We can iterate things very quickly, I can break them and suggest improvements, and we can then iterate them again. Irrespective of whether my benevolent dictatorship is a good way of working, the fact is that I will always work like this and to do that over any kind of distance greater than 5 metres is inefficient and frustrating.