Outsourcing works if you're able to define the requirements of new features in extreme detail, covering every nuance and edge case. This is the opposite of what start ups are all about: incremental steps and iterations.

The result of outsourcing in start ups frequently ends up with a most of misunderstanding and back and forth. Code not written with potential business needs in mind, and everything that goes with that.

It would be cheaper if it took the same time as doing locally and provided same level of quality. This usually doesn't happen. So what's saved in developer salaries is spent in founder/product manager time and delay of release.