The irony I keep seeing is that at a small startup, everyone's output is severely visible.. regardless of where you're at. I was the first technical hire at the startup I'm with now (details in profile), working remotely from San Diego while the cofounders were based in SF. There's definitely never been any question about what's getting done and by whom. In a lot of ways I understand the challenge that being a larger shop who's grown locally and is considering adding remote working might face much more than the "We're so small we have to be in the same room" argument.
The benefits of hiring remote workers early on are numerous. The fact that it leads to working more asynchronously, and makes you available to talent anywhere are worth the price of admission alone, IMHO.
We've considered moving, sure. For us though the cost of moving houses in this market, and my wife's local reputation-based business (wedding photographer) would make it an extremely expensive proposition in the short term. I think getting left behind is definitely a risk. So far I'm the only employee outside of the bay, but the culture has remained pretty asynchronous and conducive. If we continue to find talent local to SF I imagine there's a solid chance that'll change, if we happen upon more awesome remote talent it might not. I think it'll just depend on who we end up hiring over time.
Early on though, getting big enough to have that issue sounded like a very high class problem so we decided not to care much where people were and focus on getting things built.
[Aside: That's awesome that you're in SD! Drop me a line and I'd be happy to pass your details along to some of my SD developer friends]
The benefits of hiring remote workers early on are numerous. The fact that it leads to working more asynchronously, and makes you available to talent anywhere are worth the price of admission alone, IMHO.
[EDIT: oh also: we're hiring]