One thing I've always liked about my profession is that we tend not to do that in the software industry, which I think makes it more egalitarian and at least helps open up opportunities to people who actually do need to get paid for the summer. It's disappointing to see a reversal in that trend.
Much of the bootstrapped-startup culture we celebrate may thus rely on lax enforcement of these laws.
Also, the IRS doesn't enforce minimum wages and labor laws, so its definitions aren't necessarily relevant. (For example, it will tax equity compensation that doesn't count toward minimum wage calculations.)
So you may be right, but I'm not yet convinced. The strict letter of the law seems to suggest that corporations must pay even their founders minimum wages.
And if there's some 'bright-line' rule that clearly tells us when this is not the case, I've never heard it. (For example, if "5%" is traditionally enough ownership, by statute or administrative ruling, to count someone as an owner rather than employee, that would be very good to know -- you could have exactly 20 equal founders and no investors and still have founders bootstrap with their own donated labor.)
"In order to qualify as an unpaid internship, the requirement is simple: no work can be performed that is of any benefit at all to the company. That is, you can not deliver mail, sort files, file papers, organize a person’s calendar, conduct market research, write reports, watch television shows and report on them, read scripts, schedule interviews, or any other job that assists the employer in any way in running their business."
If I lived in the Valley and had an opportunity to hang out at YC dinners in exchange for a bit of free work, there was probably a time in my life when I would've taken that opportunity.
Random other note: cool that you play the banjo! I've recently begun teaching myself the fiddle.
I need to get back to practicing the banjo. Perhaps one day we can hold a jam. The fiddle is awesome; I recommend the works of Darol Anger, and if you're near the Bay Area watch out for his concerts. Get on the Freight and Salvage mailing list if they have one. (I miss that place, although they have plenty of equivalents in Massachusetts.)
Just because some people manage to make it work doesn't mean it's not hugely discriminatory.
The thing that really galls me is that most of the time the companies that do this sort of thing are perfectly capable of paying their interns, at least well enough for them to eat and pay rent, they just choose not to because they can get away with it; there are enough college students trying to get a foot in the door and who have other support systems.
Interns are for big companies, where they make only a tiny marginal contribution to the already massive political overhead. ;)
 Two levels, if absolutely necessary. But the best leaders are the ones who always manage to convey the feeling that it's really only one, that they're only the leader because somebody has to have their name on that line of the corporate charter and be forced to take tedious phone calls from big clients.
I can also attest that, if it grows, eventually your software startup will need a hierarchy. But at the beginning it's probably just unnecessary friction.
If a team is missing some key capabilities for producing a functioning prototype, then it should bring someone else in and provide some equity.
You have to ask yourself, who is their target talent here?
The real talented AND motivated developers/designers in Boulder and probably Boston (AKA "The Gurus"), who have an affinity for startups and TechStars probably applied to the program themselves and didn't get in. Either way, they know the value of their time and are hard at work on their own startups.
The other talented and motivated people are probably consultants or working full time at a company. Despite this being a poor economy, I've found that there is no shortage of work for the "right" people.
And of course, there are a fair share of those that fit a combination of the above.
This leaves us with the last two groups. The people that are either talented and unmotivated, or lack talent, but have the motivation. My suspicion is that you will get people volunteering to the HackStars program who are TechStars fanboys at best. They like the idea of doing a startup, or being a part of the "startup culture" but in truth may not want to put in the work, or worse, are benched because no one wants to work with them.
I may be totally wrong. Either way, I don't fault the TechStars team for test driving an idea like this. But if I were a founder who made it in to the program, I would be very skeptical of the value of the volunteers.
snark is never productive. it only serves to harden other people's opinions against you. if you believe techstars is in the wrong here, you're certainly not going to change their minds by mocking them.
My friend is happy, because he doesn't need to spend $2k per server to have an engineer fly out and install them. I'm happy, because I'll be traveling anyway, and I get to use a pile of machines around the world without having to pay for and install them myself.
No money is changing hands, and we both benefit in a way that we find acceptable.
An unpaid 'internship' for a 'guru'? Fifteen hours a week for no pay and no equity?
I think not.
If you can't be bothered to "sell" free dev/tech work to the companies you're most interested in, you're not going to make it as an entrepreneur anyways.
We had a discussion the other day at lunch whether this was legal/ethical. I'm still not sure how I feel about it...
I know everyone can't do this because at some point you need compensation, but the arrangement has taught me a great deal about how to program scalable applications that I will definitely use in the future.
Which is why using unpaid internships to screen your hires is unethical. It's an artfully disguised form of class discrimination.
Lots of very smart and hardworking people cannot afford to work for free. Apparently those people are at a severe disadvantage when applying to work at your company. And it's not as if unpaid internships offer financial aid, like schools do.
I think it's fine to screen prospective employees as paid interns. I also think it's fine to try them out as consultants first, or even to have them perform a few hours of work for free, as a test. But in general work should be paid for. Unless, as I've said elsewhere, it is 100% free-software work.
Of course, just because it's unethical doesn't mean it doesn't happen or that you can do anything to change it.
But that's a slightly different argument. Unpaid internships don't impose requirements that would keep you from getting paid elsewhere, so regardless of your economic situation, you can decide how much you want to work. My employer doesn't care if you work 30 hours or 2 hours...they just want to see how much you enjoy doing the work.
Any smart and hardworking individual wouldn't be at a disadvantage because they could find a way to make it work.
For the record I'm pretty poor myself. I have two jobs to pay my bills. But I don't see anyone who has significantly more money having more of an advantage than me.
Here's what I'd say to that: "I enjoy doing work that adds value. If you have something valuable for me to do for your company, pay me what it is worth. If not, I'll be happy to sit in your air-conditioned office writing free software that has value for me. And then you will be able to see how much I enjoy doing that."
But you probably shouldn't say that out loud. You're not in a very strong negotiating position, after all.
This illustrates another reason why unpaid internship is pernicious: It doesn't teach anyone how well you add value. Because your time is unmetered and unpaid, you have no incentive to spend it wisely. And your employer certainly has no incentive to track it -- at least not out loud. (Imagine the conversation: "Wow, last week you worked 10 hours for free and saved the company $100k. Have a muffin!") What, exactly, is either of you learning? I guess your employer is learning how much value you can be coerced to add, for free, without you noticing or complaining. And you're learning how to look and act like a model employee.
Onward. "You can decide how much you want to work?" Yeah, I guess. I could also "decide" to live in a cardboard box and save on expenses. If I have a family, I could "decide" to never see them because I have to work two jobs instead. If I've got elderly parents I could "decide" not to take care of them.
But, more likely, an unpaid internship requirement will tend to select for young people with no family and a lot of time to spend at work. How convenient. Especially since overtly screening your employees for these traits is against the law.
Do you see why I'm tempted to call this "unethical" yet?
Anyway, none of this is to suggest that you're doing the wrong thing. We have to live with the hands we're dealt. Congratulations for finding a way forward, and good luck with your jobs.
I guess I just don't see this practice as unethical because if I look at the whole spectrum of unethical behaviors, this seems very minor to me. Does that make it excusable? Probably not. But to me this is just about acquiring a skill which I previously did not have. It's not about recognition or compensation.
But even still, I fail to see what my employers are doing wrong. You will be compensated for the skills you bring to the company and what you produce. And if you're middle aged with a family to support you could get a paid job there if you had the skills. If not, you could apply for the unpaid internship.
But nothing bars you from getting hired, so that's why I don't view it as an injustice. At the end of the day, its a choice, and if you didn't like the terms, you are perfectly free to go somewhere else.
I went to graduate school. A Ph.D. program is like being an unpaid intern for six years.
(And, yet, in some ways it's better. There is some pay. And a Ph.D. is a regular old-fashioned apprenticeship program: The bad news is that you're a slave, but the good news is that your adviser has a fairly strong incentive to help you graduate. The commitment goes both ways.
And, of course, if you've got an apartment and a web connection you can teach yourself to be a professional programmer -- especially if you already have a CS degree -- but you can't say the same for semiconductor engineering.)
I've read one of Gladwell's other books, and I think he makes the same mistake you are making. A correlation does not necessarily imply "discrimination" or that the odds can't be overcome. For instance, women have higher GPAs than men, on average. That doesn't mean that using GPA as an indicator of performance discriminates against males. It might mean that males might need to work harder or do something a bit differently in order to get the same GPA.
In the end, my admittedly subjective take is that the biggest factor is individual motivation. We all have our setbacks and obstacles to overcome, but that's just the craps of life. I can verify, however, that it is indeed possible to go from moving out of your house at 16 with no money to graduating Phi Beta Kappa from Stanford (not me, but someone very close to me). Difficult, yes... but it shows that there is almost always a "fighting chance."
What about equity? Most stock options end up being valueless. I'd say that a free summer at TechStars (or YC for that matter) would have a greater chance of tracing to some monetary reward than equity in most startups.
So your (somewhat strange) questions, broken down:
"Apply for and get a job" --- Check.
"Work however many hours they want" --- You need to make a commitment; you can't just come in Wednesday this week and Friday the next week. But if "however many hours you want" means "I'll give you days X, Y, and Z of every week", then, Check.
"Wouldn't be expected to produce work we could charge for" --- I have no idea what this even means. Who produces work for no reason at all? Of course we're going to want you to do real work.
"And still get paid" --- Check.
At my unpaid internship, I came in with no programming experience. They basically paired me with sr. programmers so I could learn how to program efficiently, but was still too inexperienced to give me actual client work they could charge for. Believe me, I wouldn't want to charge the client either for the crap that I put out initially. But their investment will eventually pay off because when my skills strengthen enough to meet their standards, they'll hire me.
(Timur works for us full-time now, of course).
I don't have to compromise the work we deliver for our clients to put interns on useful projects. And we're a special case: we do hard core programming work on a billable basis. Most of the companies people talk about on HN don't have that problem. There's a million useful things an intern can do without jeopardizing product quality.
Just think how much you'd love it if you were getting paid!
That said, unpaid internships are justified and common here. However, as a general best-practice I always advise companies to pay their interns if they are working on billable / revenue-generating work. If they are just doing mindless work, then I feel they are compensated with 3 hours of school credit and the cost/time sink.
Having worked with a lot of interns from the school, you get a lot of fickle results and often it's really more of a waste of time than beneficial situation for the company. And I damn sure would not trust an intern to work on mission-critical projects until they proved themselves, which often takes longer than their internship requirement. To any UT students, I was able to get out of mine and get 3 hours credit because I was self-employed w/ 2 companies. :)
I think that some of the variables will likely need to be adjusted (for example, 15 hours per week seems high to me), but I think the fundamental idea is interesting, although it's clearly not for everyone.
At 15 hours a week, it's clear that a volunteer developer is not going to come close to replacing a technical founder or a full-time employee. Any team that tries to primarily rely on volunteer developers will suffer for it.
I can imagine this appealing to developers (including those in college) who are strongly considering doing a startup or working for a startup, but want to learn more about the process and want to make great contacts (both technical and business).
There may very well be problems with the quality of some applicants, but assuming the application process doesn't filter them out, I would guess things will work themselves out during the summer. That is, the so-so devs will be a net drain and teams won't ask for their help, while any talented hackers won't be donating their time for long - they'll quickly get snapped up by the companies they help out (either during the summer for all equity or after a funding round for salary + equity).
Of course, this is all speculative. Maybe it won't work at all. But I suspect that connecting a group of hackers with teams that will, either immediately or in the near future, want to hire hackers could work out for everyone involved.
I think that they should at least mention what the benefits of such an arrangement would be. Just hanging out with cool people doing work for free people isn’t really that beneficial.
Everyone also knows, once a developer starts working on something like this it will be more than 15 hours of work; they will work all night and day to get things done. It should be more formal and give the developers something in return. The companies will be looking to sign up "real advisers" during this time but they will get something in return. Also this will need to be very carefully orchestrated because if people are working on things that are patentable; the volunteers will need to be listed on the patents.
Jeff's answer: "You can teach a hacker business, but you can't teach a businessman how to hack".
Give me a break.
Actually, rather than repeat myself, here's my comment from a couple weeks ago:
The subset of hackers who can learn "business" is greater than the subset of business people who can be hackers because the particular style of thinking needed to succeed as a hacker has a unique rigor and need for persistence, and is comparatively rare.
This is true for comparing any less common skill to a more common one. The subset of NFL quarterbacks who could be good programmers is surely proportionally greater than the subset of programmers who could be NFL quarterbacks.
It isn't all about arrogance (although I don't deny arrogance is a factor).
If I could stay awake long enough, that MBA spiel is ELEMENTARY
Here is one you can understand:
Successfully represented myself in US Federal Court as a plaintiff in a civil rights case, and won! no legal training at all, just read a couple of books, went at it, won, no help, nothing, just me and a couple of books, oh, and I did most of this over the US Postal service, while locked up in a US immigration jail, with a barracks full of neanderthals around me whom I didn't get along with (but I held my own, no one fd with me), and neanderthals in uniforms on my case . . . want a docket number? 98-0711-CV-W-2-P Roman v. Conard, US District Court for the Western District of Missouri, Kansas City, Missouri . . . Law is at least a somewhat interesting topic that I can respect, it can at least be intellectually challenging (for some time anyway) at times . . . but MBA crap? PUUUHLLLLEEEEEZZZZZ PUHLEEZZ
This is a common notion but after years of working in the software business I'm not convinced it is true at all. The successful biz guys I've known could easily learn some subset of programming. Most of the programmers I've known could not be a successful business person if their lives depended on it. YMMV.
Sure, some MBA can click on menus or slap whatever together.
That's not hacking.
So I speak the truth, and that makes me a non "team player"
...the problem, as always, is that the words have different connotations depending on the community.
As you probably know, the word "hacker" means "computer criminal" to the majority of the English-speaking world. As a result, calling yourself a "hacker" only works if (a) you only care about your reputation with other hackers, or (b) you are trying to cultivate an ambiguously dangerous persona. It is not a word I would put on my resume if I were applying at SAP, unless I were already well known for being Steve Wozniak.
So you're down to "programmer", "developer", or "coder". My impression is that most people use "developer" as a highfalutin synonym for "programmer"... but in some environments it connotes "a person who spends a lot of time talking about software but never uses the computer except for Outlook, Office, and Twitter". So, if you want to emphasize that you actually spend the majority of your day in emacs, lean towards the other words.
Sometimes "programmer" carries too strong a connotation of "code monkey". I find it best to just avoid places where this is true.
I don't like the word "coder" -- it doesn't offend me, but it's ugly. So I use the other words at random as whimsy strikes me.
Most successful start ups I know of were spending that much time in a single day.
but then you'd have to seriously compare with Open Source contribution - a faster way to learn, smarter people to work with and more social benefit...
OSS work likely has even more commercial potential...
It seems like an interesting way to become involved and learn a ton about the start up process.
(disclosure I was part of Techstars 08)
I would have changed the way they presented this but the idea of opening up these sort of programs to the wider community is a good one. TechStars offers a _lot_ of benefits to its members, this is another door to getting involved.
namely, Impedance matching between -
a) investors with too much cash and too little time for small startups
b) startups who don't need or want large amounts of cash
Students looking to learn new skills are not "gurus". And gurus do not work for free.
Considering all the hurdles that a 3 month startup has to overcome, is it really prudent to be taking on greenhorn 2nd year students looking for internships? They've got 3 months to get a finished product out the door, they need rockstars to make it happen, not unpaid interns.
The point of these programs is to trade mentorship and money to technically competent teams in exchange for equity. If the startups are then turning around needing technical assistance from the get go, what exactly are they bringing to the table other than an MBA and an idea?
Seems like a similar thing but specifically orientated around startups. They should get (a slither) of equity, maybe..
You can always do your own things and "get experience", fuck these pricks man. That shows more initiative to real entrepreneurs who want to hire you later. IMO, internship just tells me you did your time being someone's in-house rookie.
There's a big difference between working for no money and working for any amount of money (or for equity). Even if they agree to pay you minimum wage you at least have a job to point to -- and a starting point for future negotiations. There is no raise so difficult as the one from "free" to "$x".
Another point I'd make is that working cheap like this is a deal that might make sense for a few hours, but which will make exponentially less sense as you do more and more work. And you'll know it, too. The first three hours of free work you do for someone can feel great, but eventually it will rankle.
[ I've moved the rest of this post to a separate comment. ]
A. This has been tried before, many times
B. There are many who have seen this, and can see right through it
Never fails to amaze me, the room temperature IQ crowd. The crowd that really thinks that someone who is bright enough to do what we can do will - at the same time - be dumb enough to fall for a 7th grade level scam.
find programmers dumb enough to work for free.
The people that would get into that, are EXACTLY the kind of people that they need least.
out of all 4 strawmen you posted, you hiring me was the funniest . . .
"self-proclaimed technical prowess"
Ok buddy, please quote me proclaiming my technical prowess or do STFU
"You're using PHP! That doesn't scale! You'll need Java. I'll show you how."
"You're using Java! Performance will grind to a halt! You'll need PHP. Lemme see that keyboard."
An infamous HackStar, indeed.
You are talking as if making a "successful company" is the be all end all and the ultimate objective of hacking.
Hacking is about Hacking, it is not about money, companies, meetings, sub 90 IQ's in suits, etc etc etc