I've contracted with a dozen startups and small businesses. Most of these companies will find a young developer charging between $20/hr and $50/hr and have them start coding on their new app/website idea and feel wildly optimistic when they see the first 80% of the project come together.
Then it's time for the edge cases, and because there aren't any senior devs on the project, handling those edge cases introduces bugs. Weeks and months pass, and the project that looked like it was a surefire success descends into development hell.
But the company never fires the developer. The developer actually quits from being over stressed. Then the company goes looking for a new developer, who tells them they'd be happy to build their software for $20/hr-$50/hr. The new developer comes on, looks at the codebase, decides all of it is crap, and recommends they start over.
The new developer finishes 80% of the project in the first week.... rinse and repeat.
The company should have hired a developer or firm with a record of success, with actual, running software out in the wild. How they achieved that may or may not line up with the ideas in the OP, but at least the company would know exactly what they're paying for.