Let me first make a general comment, and then I will address each of your reservations individually. The question isn't whether there are some virtues to a bounty system that will be lost by hiring full-time employees, but whether on the whole having full-time employees is better than having exclusively bounties. I don't see why we can't have a mix of bounties and full-time employees. It seems to me that if the full-time employees act in concert, then they could decide, with the approval of the board, what specifically . I can't emphasize enough that we have millions of dollars at our disposal, and we ought to use it intelligently and effectively.
I really don't know. I'm split on this issue, honestly, as you can tell from my posts. I have favored full-time employees before because I know the talent is excellent and I know they will get the job done, but at the same time, I now realize this subtle difference in mechanism of motivation could mean a lot down the road, on a systems level. It also forces those developers to become an authority and would probably burden them with managerial responsibilities than they normally have to. I know at least one developer that does not want to deal with that kind of stuff. I asked for their input in the Dev Thread to come in here in order to voice their side, but I like to think these guys simply wish to stay out of the politics and just do what they do best by solving problems when presented clear cut objectives with a very clear cut reward. But I don't know, I wish they spoke more on this topic.
On that note, I think it is important that the board members explicitly answer rbdrbd's question: "Do we have anyone on the board that has "boot on the ground" operational experience growing profitable software/tech startups with more than 5-10 employees?"
I do not. The quieter board members like Brock Pierce and Jonathan Yantis I do believe so. I will let the others who have accounts here speak for themselves. Anyway, looking into it some more, I found this interesting article that involves both Brock and Jonathan.
http://en.wikipedia.org/wiki/IGE