I think you've really answered your question pretty well! The common options are: 1) Deferred compensation. Find someone that will agree to take a note in lieu of payment, with an enticing arrangement to pay them for their work when you get revenue. 2) Partial cash, partial equity. Equity doesn't have to mean a share in the company today. It could take the form of options (with vesting over time), or vesting that is dependent on certain milestones (perhaps revenue) being met. 3) All equity - Again with the vesting possibilities in #2 above. Unless you have no other choice, you might want to avoid anything related to equity due to complexity, legal expense, and other reasons. A good option might be to see if you can find a good but inexperienced UX designer who needs to build a portfolio, and would see this as an opportunity to get a case study and build credibility, in exchange for a reduced compensation rate. Lastly, consider hiring a UX designer on a site like Odesk. Many offer services at low hourly rates, and some of them are probably really good.

I don't think it's illegal in any jurisdiction that I'm aware of, but it may also not be successful. Are you looking to get employment or sell something to them, or something else? The best way to approach them depends probably depends on what you're looking to accomplish.

One approach to consider is seeing if you can find a specific project type that you can replicate with many like clients. It's harder to sell 'web design' than a very specific 'great website for homeowners wanting to sell for-sale-by-owner', for example. One of the keys to profitable scale is to be able to get additional revenue at the same or increasing per-project profitability. If you're doing something different in each project, it takes longer to figure out how to make really good money at it.

You could also try to establish a group of analysts that would meet with you (virtually or in-person) that would act as an advisory group, in exchange for seeing their product inputs considered, or possibly a period of free use of the app. The best way to find out their motivations for signing up is to ask a bunch of them. If you approach them by saying you want to pick their brains as subject-matter experts, you might find they are interested in providing input, which is exactly what you're looking for. You could also look for a local or online association of analysts or researchers, and see if you can give a presentation to them on what you think the top app needs are, and see what feedback you get.

I have established off-shore development relationships with individuals and firms in India, Ukraine, Belarus, Russia and Korea going back to 1996. You might find it a lot smoother to have them work through an established firm in India that is already set up with all appropriate licenses, tax-reporting, payment systems, and so on. It can be tricky enough to communicate the software requirements and other specifics of your project without you and them also learning and implementing processes to respect domestic and foreign regulations. If you'd like more information, feel free to set up a call.