Let's Talk About the Pros and Cons of Working for Free
A Recap of This Week's Teaching Startup Q&A Newsletter
There’s been a recent spike in the trend of (mostly) tech companies asking prospective employees to complete what amounts to an exercise or test during the interview process. Sometimes this exercise is an affair meant to stretch over multiple hours, even days.
And while the exercise in question is often a throwaway skills test, in this week’s issue of the Teaching Startup Q&A Newsletter, a member wrote in who happens to be a talented developer who wants to work for a startup. One problem. They want him/her to do some free work for them first. Why? Because they need to make progress to get traction to get the funds to pay the developer.
They have asked me to spend a few days helping create a prototype that they would then take to [a prospect or two] and it feels like my employment would be contingent on at least some traction being made, not only as proof of my own skills, but proof of viability for the company.
Should I move forward with this? To be honest, I like the company and the founders. But it feels like both the need for my contribution and the need for that contribution to help get customers seem like red flags.
Make no mistake, this is “free work” for the company.
Not the first time I’ve seen something like this. This is actually two separate issues, one I like, one I don’t.
Let’s start with the latter. I’m not a fan of testing prospective hiring candidates, especially when it comes to startups. Not that I think it’s unethical, but to me it says a lot of things I don’t like about both the position and the employer. They’re looking for an automaton, and they don’t have a lot of trust in people, nor in assessing skills they probably don’t understand.
But on the flip side, I can totally understand the need for a startup to squeeze precious runway-extending labor from anyone who walks in the door. We did something like this at Automated Insights when we were trying to figure out who could develop Gen AI back in 2010 before Gen AI was a thing.
But while we didn’t hire everyone who came through the door, we paid all those folks for their labor.
Free Work Part 2
The second Q&A in this week’s newsletter is an older question, one about taking on a lot of business — maybe even at a discount — before you’ve fully developed a go-to-market strategy.
The drawback is that you can spend a lot of time and waste a lot of “free labor” for a potential big customer while trying to land a “cash cow” who ultimately might not be right for the type of business you’re trying to build.
I set a friend up with an account to our app and he loves it. He shows our app to a business contact. There is some back and forth and now the business contact wants to demo for his CEO — they are a national, multi-location company.
I always thought, and our beta interviews suggested, that we’d be SMB first and then go up market as it was practical. What do we do?
This is also not uncommon and falls into the “good problem to have” category but it is still a problem. It takes some keen skill to negotiate the deal and a lot of sharp execution to fulfill it.
The Poll is Back!
After a few issues without, we’re bringing back the member poll to get the pulse on startup hiring expectations for the remainder of the year. This is in preparation for an answer we’ll publish next week — along with the results from this poll — about whether or not to hire maybe prematurely but while talent in cheap.
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