Remote vs. non-remote each have advantages. Remote gets fewer distractions (I find working in offices/near others very challenging when try to do focused work vs. home office), access to bigger pool of people, 2x "people coverage" for B2B sales/fundraising/partnership discussions, and more emphasis on results vs. ass-in-chair syndrome. Whereas local will have better and more frequent communication, less potential for misunderstanding, easier to bring the whole team to meetings, etc.
Bottom line: it can work, but you have to have the right people. I actually enjoyed it a lot.
The best ideas are born of spontaneity, and the hardest work of camaraderie. Despite the best intentions on all sides, remote hires don't feel either.
I remember staying up all night drinking and eating pizza hunched over a conference table, or slouching back after a brainstorming session that literally covered 3 walls of a room in marker, basking in an afterglow that can only be described as "post coital".
Remote hires don't feel that. I've felt it - I know what it's like, I know why it's good, and I know what it takes to cultivate it - but try as I might, it can't be replicated over a google hangout.
There's no agility. You can't see the light in the other guy's eyes, where you both pause for a moment and let the breakthrough sink in before passionately attacking it.
Startups are able to pull such great work from so few people because they're intense. They're hugely intimate. It can't be faked online.
I know there are ample exceptions to this. Whatsapp comes to mind. But, in the same way, there were those couples in high school who managed to make it work despite 4 years of distance, to the surprise of everyone around them. It's anomalous to the same degree. A lucky few pull it off, but most fail and slink away to try again.
If given the choice between a 9/10 employee across the country, or a 6/10 employee that's in the same suite with me, I'll take the 6 every time. Proximity matters.
Steps to increase odds of success:
a) Honest/open conversation & agreement on expectations upfront. No topic can be taboo from the first moment onwards. If you can't even get this far just forget it. This applies whether the person is your lifelong friend or not. A business relationship if not a friendship.
b) Written agreement on those expectations - including everything from vesting upto what can lead to either one of you getting fired
c) Clear definition of roles/responsibilities, including who has the final say on specific tasks
d) Someone needs to be CEO and have 51% of the company so that when it comes to difficult decisions/disagreements on major strategic decisions, the CEO has the final say and that's that.
e) Have weekly calls (audio/video doesnt matter) to check in and catch up. More calls as needed.
f) Manage tasks/responsibilities using a tool like Trello so that at all times there is complete transparency on who is doing what and by when.
Bottom line communication & transparency is key - and you cannot have enough of both.
Hope that helps
Too many guys wanting to build shitty things out there (uber for food, airbnb for trailer-parks, etc.) ...
Where are you located?
We sure do have a lot of problems ;)