[Edited to add the burnrate reduction topic]
One tip from my startup: I think a lot of people think getting employees and office space should happen at around the same time. I don't think office space is worth the premium you pay for it until you have more than a couple employees. We have one already and will probably only move after we have employed at least three more. Obviously a caveat here is that the house must be sufficiently pleasant for work and living and that your work is not something that requires client facing offices.
Don't sign any long-term leases (over 6 months), and keep it month-to-month. If you start to take off, your damn lease will come back to haunt you... this is a burnt-out economy - grind those leasing agents down, get them to throw in free furniture, free rent, renovations, etc. with the promise that you'll expand out in a couple months with a larger space in the same building. When you get office space - you'll likely need insurance, phone setup, internet, etc... so get the landlord or phone company to throw all these things in for free.
REPEAT: no long-term lease, nothing more than 6 months, and better month-to-month. And nothing beats the kitchen table with a few guys around it.
http://www.expatsoftware.com/articles/2006/12/chamonix-branc...
If you're going to spend money on a building with room for developers and a fast internet connection, there are much cheaper places to find that building than an office park in the suburbs.
Kalymnos, for instance, has apartments you can rent for $20/day in the off season, which is why you'll find me there this fall.
As for business expenses, I average ~$1,000 in recurring charges per month, which pays for servers, payment processing, web app subscriptions, and international calls. I usually spend another thousand a month on books, courses, and other continuing education, since that's my market.
He could also save on the rent by just overthrowing the government and giving the house he lives in to himself.
Why didn't I think of this before!?
What about Skype or a VOIP phone for international calls? (I don't recommend Vonage. I've had run ins with their service after some billing errors and it was very unpleasant, to the point where I would NEVER recommend them.
I use Skype for some calls if the connection is good. For others, hard line is still best. I have a landline in the event the electricity goes out, so it's not a huge deal.
Their virtual office plans are rather pricy but for $30 / month, you can buy their business gold card. This gives you unlimited access to their business lounge, free coffee and internet. It's a quiet place to work and you sometimes meet other interesting people.
If you are in Japan, the one in Shibuya Mark City is really nice and I currently work out of the one on Castro & El Camino in Mountain View.
Edit: forgot to mention my burn rate. Rent is about $1100, other monthly expenses about $2000 (married with kids). Servers / operating expenses ~$600. We tend to be pretty frugal in general so I don't actively look for ways to reduce it and I'm usually never good when I try.
Then there are occasional costs like international plane tickets, conferences, etc that I don't bother counting on a monthly basis. (Paid for by consulting, mostly. It is a convenient way to get back to the US to visit family.)
What kind of developers are you able to hire for that paltry sum?
In SF -- We spend $30k/month on salary/benefits/taxes for 4 people (not including rent and other expenses), and even then we're paying below market rate. Our other expenses, including rent, add up to $4k, and we try to sock away at least another $10-15k every month.
Of course, this also isn't a "burn" rate. We've worked hard to build a business the old-fashioned way -- by making money with which to pay ourselves.
Office space is $1,700 - this is up in Vancouver, BC. Again, a bombed-out economy lends itself to finding deals.
I cannot go into the level of developers, but I can say some are presenters at tech conferences, attend the tech conferences, and have built startups before. Again, we manage costs by bringing on people at the right time, for the right amount of time.
It's hard (and unnecessary) to reduce our burn rate any further because that would be cutting into bone.
I had that down to ~$1000 total when I was living on the beach in Thailand and hadn't yet built anything big enough to require a fast machine at a collocation facility.
Biggest single expense: 1.5Gbps of bandwidth, runner up a half rack with a bunch of machines in it and on the private side the mortgage.
$100 for rent at a co-working space $9 for unfuddle $0 for heroku
I see that you're still maintaining other full-time employment (which is a good idea, IMO), but let's be serious. True burn rate is more than just hosting costs.