I interviewed for a very senior finance role at a public company a few days ago.

The entire group of analysts and managers is based in a southern US state, while the executive team resides in NYC. Pretty crazy, but makes sense from a business stand point.

The question is: Could the exec team haved have lived in that state?

The question is: Could you have hired that exec team if it wasn't going to be based in NYC?

The question is: Do most executives actually deliver enough value compared to their pay? (No)

Bulu Box[0] is a subscription box startup that did exactly that (headquartered in Lincoln, NE).

[0]:http://www.bulubox.com/

Wow, you have a box subscription for snake oil and diet pills? Sign me up!

Is there any precedent of a start up doing this? I'd imagine a lot of their engineer talent would be lost, but I'm happy to be proved wrong.

There's a difference between losing engineering talent and not being able to get engineering talent.

I don't think there'd be much trouble on the engineering side. Let's be honest, there's not much tech in box-o-the-month services. It's the business and marketing folks that benefit from being in the dynamic cities.

The problem is the sales order flow and fulfillment / operations at scale (which is an engineering challenge).

When you're in a growth period that's easy to discount, your challenge is (and should be!) top-line revenue. But in a crunch shaving 20-50% of order processing and fulfillment costs is mana from heaven, creating profit where one there was only red ink. That takes a hand-rolled system, and ops-eng is hard and requires very specialized knowledge.

Maybe in a conventional ecommerce company but monthly boxes are infinitely easier to manage ops-wise. You only have a dozen or so SKUs, know exactly how much you need weeks in advance and have months to plan everything out.

tl;dr: so you haven't actually implemented a scale ops system, eh?

A) Shipping pre-packed boxes is not substantially easier. Order assembly/fulfillment is not the hard part of ops. Sort of like HTML is not the hard part of web development. It's just the part laypeople experience first-hand.

B) Birchbox is investing a lot in follow-on ecommerce sales of the same products they ship monthly anyways, so they don't get to make simplifying assumptions.

C) Birchbox is substantially harder than a traditional pick&pack setup. It's unique enough that they have to build their own model, makeup is perishable (so skus aren't fungible!), they have hundreds of small providers by design, and their sku set cycles fully every month or two.

Source: I built system & ops for a company with both a subscription business and substantial real-time eCommerce ops, which is comparable in size to Birchbox USA.

Actually, I believe birchbox does heavy customization and tailoring of boxes to individuals.

cuz there's a lot of successful startups coming out of Nebraska and Idaho!