The most likely explanation is that it doesn't work. Bootstrapped companies are very strapped for cash. They often use a distributed team early on. if a distributed team worked, at least some startups would continue on the model - after all it's in the company culture and muscle memory. And we would hear about them. (especially when they succeed really big.)

We do, sometimes hear from them:

https://news.ycombinator.com/item?id=7134592

   I currently work at bootstrapped, distributed and profitable startup.
   This year we did appx $15mm in rev.
   http://www.inc.com/profile/buysellads (member of the Inc. 500)

So the question is: does this distributed model work for others? Others don't often report in. (And does it work for succeeding really big?)

Maybe it's the term I'm looking, but look through this: https://hn.algolia.com/?query=distributed%20bootstrapped&sor...

As you scroll down try to piece together the story you're seeing. Click through to the companies. As I read it, hiring seems to be one of their biggest challenges. They're just not growing as much as they would like.

18 people in an office can build a $1 billion company with 10 million+ users in 18 months. (instagram.)

What's the closest a distributed team has come to that?