Firing people is ridiculously hard in France. I would say quite an important point in case startup experiences anything else but ideal logarithmic growth, actually even in that case (realizing somebody wasn't a great hire after trial period)
Short sighted / Incomplete. The odds are you'll be a service co, hence, "high" salaries. There will be up and downs in your sales, and you will find yourself in a cash crunch at some point - especially when you are "small" with just few projects at a time - and you will have to fire. If you do that by the book, you wont be allowed to hire for 2 years. It just makes it incredibly hard to manage, hence, the reluctance to hire quickly, and ... the thrive of consulting services (often more than 50% of the dev team are consultants ... ;-) ). It's a mess, for everyone.
Have been working in San Francisco for 6 years. Actually, contrary to what you believe, there are approximately the same rules. You cannot fire people in the US without reason too.
This is what I would expect, but in some places state tries hard to force self-employed consultants into permanent positions (not sure how France works in this regard). And if you mean external company consultants, they are not much cheaper.
I was thinking about external company consultant, since I have more experience with that type than self-employed (I'm a consultant, working for a big French consulting firm (Alten)). Also I think there's more available company consultant than self-employed consultants in France.
I agree that external company consultant are more expensive than employees, but on the other hand it's much more flexible than employees.
> in some places state tries hard to force self-employed consultants into permanent positions
I don't think that France is trying to do that, but it's from talking to a half-dozen of self-employed consultant, so anecdote, not checking the legislation. Still in France, regarding consultants, there's a limit on how long a consultant can stay in the same mission, I think that beyond three years, the law state that they should become employee where they are really working. But I don't know how much it is applied.
