Contents
- Building production software traditionally requires a team.
- Levels.fyi compensation data for 2024-2025 shows the following fully loaded costs (salary + bonus + equity + benefits) for US-based software engineers:
- The operator model is not "one person doing five jobs badly." It is a structural redesign of how software gets built, enabled by two shifts that did not exist five years ago.
- The $960K annual team cost is not wrong — it is the real price of building software through the traditional organizational model.
Published: February 2026 | Stealth Labz — CEM Validation Portfolio Keywords: engineering team cost, reduce software team cost, AI operator vs engineering team
The Setup
Building production software traditionally requires a team. A technical architect designs the system. Engineers write the code. A QA engineer tests it. A project manager keeps the schedule. A DevOps engineer handles deployment and infrastructure. Each of these roles commands market-rate compensation, and each one represents a fixed cost that persists whether code is shipping or not.
The conventional wisdom is that this team structure is non-negotiable. You need the architect because the system is too complex for one person to hold in their head. You need QA because developers introduce bugs. You need the PM because coordination across five or six people requires its own discipline. Every role exists to solve a problem created by the previous role.
This structure fails on two dimensions. First, it is expensive — fully loaded costs for a mid-level engineering team start at $960,000 per year before equity, office space, or SaaS tooling. Second, it is slow — coordination overhead, meeting load, and handoff friction mean that a five-person team does not produce five times the output of one person. The mythical man-month is real. Adding people to a software project often makes it later, not faster.
What the Data Shows
External: What Engineering Teams Actually Cost
Levels.fyi compensation data for 2024-2025 shows the following fully loaded costs (salary + bonus + equity + benefits) for US-based software engineers:
| Role | Annual Fully Loaded Cost |
|---|---|
| Technical Architect / Staff Engineer | $250,000–$350,000 |
| Senior Software Engineer (x2) | $180,000–$260,000 each |
| QA Engineer | $120,000–$160,000 |
| Project Manager | $140,000–$180,000 |
| DevOps / Infrastructure | $150,000–$200,000 |
Robert Half's 2025 Technology Salary Guide corroborates these ranges, noting that fully loaded costs (including benefits, payroll taxes, and overhead) typically run 1.25x to 1.4x base salary. Carta's startup compensation benchmarks add that equity grants for engineering hires at Series A through Series C companies add 15-25% to total compensation value.
A minimal 5-person engineering team — architect, two engineers, QA, and PM — costs between $960,000 and $1,440,000 per year. That is the floor. It does not include DevOps, design, or the overhead of managing the team itself (HR, recruiting, performance reviews, retention bonuses).
Internal: What the Operator Model Actually Cost
The PRJ-02 portfolio — 10 production systems, 596,903 lines of code, 2,561 commits — was built for a total of $67,895 over a 28-month period (February 2024 through January 2026).
| Category | Amount | % of Total |
|---|---|---|
| CON-02 (primary contractor) | $40,700 | 59.9% |
| CON-03 (secondary contractor) | $21,854 | 32.2% |
| Initial website build | $2,500 | 3.7% |
| AI tools (Anthropic, OpenAI) | $2,634 | 3.9% |
| Other software | $207 | 0.3% |
| Total | $67,895 | 100% |
The operator — Michael George Keating — was the architect, PM, QA lead, and primary developer. Contractors handled specific deliverables during focused sweep phases, not ongoing employment. AI tools (Claude, ChatGPT) provided scaffolding, debugging, and code generation.
The Comparison
| Metric | Traditional 5-Person Team | CEM Solo Operator + AI |
|---|---|---|
| Annual cost | $960,000–$1,440,000 | $67,895 total (28 months) |
| Annualized cost | $960,000–$1,440,000 | ~$29,098/year |
| Monthly burn | $80,000–$120,000 | $2,425 avg / $825 current |
| Output (28 months) | Unknown — estimate 1-3 products | 10 production systems |
| Lines of code | Varies | 596,903 |
| Equity required | Typically yes (for key hires) | 0% |
| Ramp-up time | 3-6 months (hiring + onboarding) | Immediate |
| Bench cost when not shipping | Full salary continues | $0 — contractors exit after sweep |
The annualized cost of the operator model ($29,098) represents 3.0% of the low-end traditional team cost ($960,000). Put differently: the traditional model costs 33x more per year than the operator model cost in total.
What Was NOT Spent
The CS08 case study documents the traditional cost line items that did not exist in the CEM model:
| Traditional Role | Typical Annual Cost | CEM Equivalent | CEM Cost |
|---|---|---|---|
| Technical architect | $240,000/year | Operator (Michael George Keating) | $0 salary |
| QA engineer | $120,000/year | Operator + AI-assisted testing | $0 |
| Project manager | $144,000/year | Operator | $0 |
| DevOps engineer | $96,000/year | Operator + managed hosting | $0 |
| SaaS platforms | $18,780/year ($1,565/mo) | PRJ-01 (replaced 6 vendors) | $0 after displacement |
| Total eliminated | $618,780+/year |
How It Works
The operator model is not "one person doing five jobs badly." It is a structural redesign of how software gets built, enabled by two shifts that did not exist five years ago.
AI as force multiplier, not assistant. Claude and ChatGPT do not write code and hand it off for review. The operator uses them as real-time execution partners — generating scaffolding from templates, debugging against known patterns, and accelerating the implementation of repetitive components (authentication, CRUD operations, payment integrations, admin dashboards). The AI tooling cost was $2,634 over 28 months — $94 per month. At that price, the operator gets the equivalent output of multiple junior engineers for the cost of a streaming subscription.
Sweep-based contractor deployment eliminates bench cost. Traditional teams cost money when they are not shipping. Engineers on salary do not stop drawing paychecks between projects. In the CEM model, CON-02 and CON-03 worked during defined sweep phases — focused bursts of external support on specific deliverables. When the sweep ended, so did the cost. There is no bench. No retention risk. No performance management overhead.
Compounding eliminates ramp-up cost. The ninth product in the portfolio cost $0 to build because template reuse exceeded 95%. A traditional team starting a new project must re-architect, re-estimate, and re-scope every time. The CEM operator carries the full context and the full codebase forward. There is no knowledge transfer, no documentation sprint, no onboarding period.
What This Means for Founders and Budget Holders
The $960K annual team cost is not wrong — it is the real price of building software through the traditional organizational model. Levels.fyi, Robert Half, and Carta all converge on this range. The question is whether that organizational model is the only way to get production software built.
The PRJ-02 portfolio demonstrates that it is not. Ten production systems. 596,903 lines of code. $67,895 total cost. 100% ownership retained. The operator did not find cheaper engineers or negotiate better rates. The operator eliminated the need for most of the roles entirely. The architect, PM, QA, and DevOps functions collapsed into a single operator augmented by AI tools that cost $94 per month.
For decision-makers evaluating build-versus-buy or planning engineering headcount: the relevant comparison is not "$960K team versus $67K operator" as a binary choice. It is understanding that the $960K figure includes $600K+ in coordination overhead, bench cost, and role duplication that CEM eliminates structurally. If your problem is building production infrastructure — not managing a team — the cost model has changed.
Related: C3_S61: ROI on AI-Assisted Development | C3_S63: Enterprise Platform Build Cost Breakdown | C3_S66: Monthly Burn Collapse
References
- Levels.fyi (2024–2025). Engineering compensation data for US-based software engineers.
- Robert Half (2025). "Technology Salary Guide." Fully loaded cost benchmarks for technology roles.
- Carta (2024). "Startup Compensation Benchmarks." Equity grant data for engineering hires at venture-backed companies.
- Keating, M.G. (2026). "Case Study: The Cost Inversion." Stealth Labz. Read case study