# Solution vs. Staff Augmentation

#comparison #positioning #pricing

## Summary

The two business models a development shop can sell, and the claim that you must pick exactly one. Primary source is now [[2026-06-15-rodenko-selling-development-expensively]] (which lays out the full table and the one valid combination); [[2026-06-15-selling-development-services-in-the-ai-era]] condenses it. The [[2026-07-17-design-the-perfect-offer]] method doesn't discuss the choice but presupposes the Solution side.

## Side-by-Side

| | **Solution** | **Staff Augmentation** |
|---|---|---|
| What's sold | An outcome and accountability for it | Bodies/hours slotted into the client's process |
| Margin | **30–50%** | Race to the bottom on rate |
| Replaceability | Hard to replace | **Replaced within a week** |
| Priced against | Value of the result | Competitors' hourly rates |
| Direction under AI pressure | Defensible — the buyer needs judgment | Directly substituted by the ~$200/mo alternative |
| Compatible with | [[productized-service]], [[outcome-based-selling]], [[pricing-from-value]] | Hourly billing, commodity positioning |

## The Core Claim

**Choose one — running both under a single brand collapses everything into staff augmentation.**

*"Solution vs Staff Augmentation: выбирай одно… Одновременно под одним брендом = всё скатится в staff aug."* ([[2026-06-15-selling-development-services-in-the-ai-era]])

The anti-patterns table restates it as: Solution or Staff Aug **under separate brands** — never both models on one site. So the claim isn't that staff aug is illegitimate; it's that the two can't share a brand, because the cheaper, more legible offer wins every comparison a prospect makes. A buyer who can see an hourly rate will anchor on it, and no outcome pitch survives contact with a visible cheaper unit price.

**The one valid combination** ([[2026-06-15-rodenko-selling-development-expensively]]): sell and deploy a **solution first**, *then* leave a person on support afterward. That gives long cash flow and continued contact — the sequence matters (solution → staff), because the relationship is anchored on the outcome before any hourly work appears.

**Worked example — the Squad-model.** A former outstaffing shop whose seniors sat "on the shelf" next to $25/hr Indian devs stopped selling people entirely; assembled 4-person squads (2 engineers + QA + PM); chose an ICP of *startups that just raised a round*; and offered "Start in 7 days, price of two US programmers, something to show investors by month 6, or we finish at our expense." Result claimed: ~19 squads × $15–18k/mo ≈ **$7M/yr**, 90 people. It's the Solution model in one case — outcome + accountability + narrow ICP + productized package — and evidence that "you need a big T&M team" is a dogma ([[future-of-engineering-work]]: team size is no longer a signal).

## Why It Matters Here

This is the structural precondition for most of the vault:

- [[pricing-from-value]] is unavailable to a staff-aug brand — rate comparison is the buyer's default frame.
- [[methodology-as-moat]] can't develop when you're supplying bodies to someone else's method.
- [[ai-market-shift]] makes the choice urgent rather than academic: staff aug is precisely the undifferentiated execution the ~$200/mo substitute attacks, while Solution work is the "$6 spent per $1 of AI" side of the same shift.

## Evidence

- **Primary:** the full Solution vs Staff-Aug table, the "collapses into staff aug" claim, the one valid combination (solution → support), and the Squad-model example — [[2026-06-15-rodenko-selling-development-expensively]]
- Condensed: "выбирай одно… Solution — маржа 30-50%… Одновременно под одним брендом = всё скатится в staff aug" — [[2026-06-15-selling-development-services-in-the-ai-era]]
- Implicit: the entire offer-design method assumes Solution — [[2026-07-17-design-the-perfect-offer]]

## Related Pages

- [[productized-service]] — the Solution model's delivery form
- [[pricing-from-value]] — the margin consequence
- [[ai-market-shift]] — why staff aug is the exposed side
- [[outcome-based-selling]] — what Solution actually sells
- [[overview]]

## Contradictions / Uncertainty

- **Stated as a law, with no counter-example examined.** `Status: tentative`. Firms plausibly do run both under separate brands or business units — the source allows this — but the claim that a single brand *always* collapses is asserted from experience, not demonstrated.
- The 30–50% margin figure and the $7M Squad-model numbers are the speaker's ([[dmitry-rodenko]]) own anecdotes — attributable now, still uncorroborated.
- **The transition is partly addressed after all:** the "solution → then leave a person on support" combination is exactly a staged path, but the source doesn't cover a shop currently *living on* staff-aug revenue funding the switch to Solution — where the choice actually bites for a small operator.

## Next Questions

- Is there a documented case of both models coexisting under one brand successfully?
- What's the sequence for a shop currently living on staff-aug revenue — how do you fund the switch?
- Does the collapse mechanism depend on the two offers being visible to the *same* buyers?
