eh, I have done this... contracting paid for prgmr.com. And really, I've had a /whole lot/ more luck renting myself out and paying people to work on my product than renting out my underlings. So yeah, I think he has many good points.
On the other hand, some of the problems of being a contracting company and being a product company cancel themselves out. You have time you can't sell to other people? work on developing new features for the product. Hiring someone new who you aren't sure about or who needs training? Pay them trainee wages while training them up as they work on the product, then as you know their capabilities, rent them out.
But overall, I agree with the "renting yourself out at exorbitant rates is easier than renting out your underlings" advice, though this is at least partially due to a lack of sales skills on my part; but yeah, there are a lot of less obvious costs to renting out an employee.
On the other hand, some of the problems of being a contracting company and being a product company cancel themselves out. You have time you can't sell to other people? work on developing new features for the product. Hiring someone new who you aren't sure about or who needs training? Pay them trainee wages while training them up as they work on the product, then as you know their capabilities, rent them out.
But overall, I agree with the "renting yourself out at exorbitant rates is easier than renting out your underlings" advice, though this is at least partially due to a lack of sales skills on my part; but yeah, there are a lot of less obvious costs to renting out an employee.