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Where are these guys located? I'm interested in knowing more please.
This: http://defyent.com/#profile (via footer link) might answer your question:

"...Design, out sourced coding to india."

LOL that was one project as a pilot... but the team will currently be in the Philippines.
The pilot program will be located in Philippines.
A $12.50 per hour wage for skilled programmers for 1-12 months?

First of all, the wage is ridiculous. Second of all, the wage is ridiculous.

How do you do your sourcing? Vetting? Matching? I'm skeptical and don't believe this would work. Many startups would pay $10,000-30,000 just as a referral fee and double that as a signing bonus.

Keep in mind that's what the company is being paid. The developer isn't making this. I would think you would have to make twice what the developer is being paid to cover overhead and make a profit.
It's true the programmer isn't getting the full amount, as there are cost for keeping the developers at a desk with electricity and high speed internet. As well as managing to make sure they are working on your project and not slacking off :D
I've basically dropped everything I was doing in Canada, flew over to Asia for the next few months to try to get this going. Currently the first set of programmers will be in the Philippines. Be sure to signup as we will be contacting people who are interested in giving this a go.
Here in Latvia best of the breed coders usually receive about 2000$ per month (after tax deduction, for a full-time job) + various benefits. With all the taxes and benefits it's about 4000-5000 USD per month.

Mind, that 2000$ here is a very, very good salary. Normally people earn here about 500-800$ per month.

That said, if you want to get in touch with local PHP, HTML/CSS and JS freelancers, feel free to drop me a line at spiritus.emortus@gmail.com.

Sorry for the spammy note. :)

$2000 per month is very low. Even when I take the most basic freelance jobs (from elance/odesk etc.) I get paid at least $30 per hour (on more serious projects, the sort where the client came to me, I get paid at least double that). Where are you sourcing the programmers from? Programmers just starting out can get paid more than you are offering.
We have an established team in the Philippine that do projects for around this much a month. I created this concept as I was getting tired of sharing my coders with other companies.
Perhaps "lowpaidinterns.com" might have been a better domain. No adequately skilled coder that I've worked with would work for McJob rates.

$4k might get you some young and hungry coders keen to get some work on the CV, but is the job market really that oversupplied?

Haha great name, need to squat that :P Though in our case, the developers have been trained to used GIT, Bugzilla, and good software engineering practices. They have completed multiple large scale projects each. Not quite novice.

Though your comment about CV is a good idea. We will likely have a section with CV for each program you can hire monthly.

don't vote this scam up, please. This seems to be an ad thinly disguised as a "review my idea".
Not an ad. Really starting to source in the Philippines, have a team here already. Add your email to the site if your interested. Still working out the details.
the reason I said it looked like an ad (I did say "seems") is that there are really no details about how it works. Just a sales pitch-ey page. So there isn't anything there to "review" (your post reads "Review my idea").

That said,If you can get "battle hardened" ( to use a phrase from your landing page) developers to work at these pittance rates, more power to you.

The picture of the woman is pretty awful, looks like a plastic surgery / barbie doll.
Cool idea, dislike the stock photo though :P.

Even at South African rates, that's low considering risk and other factors towards the programmer.

Furthermore, freelance is generally by billable hour or fixed rate. By billable hour, I mean something built of worth for that hour - that's usually around 80% of actual time spent.

Unfortunately at that rate, the only programmers I can see that will find this offer attractive is: 1. Those who did crash courses and have no real world experience. 2. Programmers who lost their jobs and need something for the interim. 3. Freelancers trying to get into the market (or get clients).

My standard freelance rate at the moment is about $40/hour and I consider myself a pretty good developer with 4 years commercial development experience and have done quite a few freelance gigs (I have been coding for 6 years prior as a hobbyist). I consider this money as my 'spending' money.

The team is currently located in the Philippines. I've done projects with them before.

They are quality programmers, but you have to understand that the cost of living is much lower here, looking at 2 dollars a meal, and an apartment for $100 USD a month.

LOL you are the 3rd person who said the stock photo needs to go. Too busy trying to get logistics down atm to redo the site. Done is better then perfect as I have to keep reminding myself.

"Done us better then perfect..."

And this is why you will fail. Nobody was asking for perfect just appropriate, but you still chose done.

(comment deleted)
For 2K you aren't getting world class developers. World class developers won't work for that, let alone what you are actually paying them. I assume you would have to make twice what you are paying the developers to pay overhead and make a profit. So, I'm betting these developers are making somewhere around 5 - 7 dollars per hour.

I live in the Philippines and I know how hard it is to find good talent here. I know of a number of startups and dev agencies which have tried. The Philippines isn't exactly the tech hub of Asia. I'm assuming this is located in Manila, because you wouldn't be able to find people anywhere else. Unfortunately, the wages that these guys are making is barely enough to scrape by, even in the Philippines.

Working a straight 8 hours doing dev through the night (working on U.S. time zones) is too much to ask for what you are likely paying these guys. I have done that shift many times and it's hard. By the time the sun comes up you are a zombie and it only works if you are single and living in a man cave (block out all the windows.) If you have a family and want a somewhat normal life then forget it. Your developer would quickly burned out. Better to give them more flexible working hours.

The cost of the development is just one of many factors (code quality, time to market, etc) so cheap development isn't really a selling point. I get a lot of work cleaning up after crap developers. In the end, your ROI is likely far better with strong developers.

However, the average Joe with a low budget who knows nothing about development probably doesn't think about these points. So, you are probably asking the wrong crowd.

He's probably using the batch of people Motorola is about to lay off... If my experience with the Motorola Phillipines "developers" is any indicator, I'd run very far away.
Trust me when I say this, you don't want the kind of customer that pays $12.50 an hour for writing code. There is a large chance they will turn out to be an idiot.
bad customers for a cheap programming service seems like a good match to me. That would be the market working efficiently - and cosmic revenge.
I used to pay 995$ a month US for a fulltime programer in Manila through a contracting firm.... completely good code for the basic project proof of concept stuff we were doing at the time (1999-2004'ish).... This seems no different, just adjusted to reflect cost.