We get a lot of requests at Go BIG by companies looking for interns, college students, and part-time work-for-equity types.  It's the golden resource - free labor - and it's what startup companies are best known for, since they usually have very little money to spend.

But "free labor" ain't free at all.  It costs you in more ways than one.

As much as it may sound great to have a pack of interns working around the clock trying to get work done, that theory doesn't usually hold up well in practice.

The theory goes like this:

You'll pick a bunch of MIT gurus that are just dying to work for a startup, will give you the balance of their brainpower, and hope to get paid later on (if at all).

But that theory breaks down on a few points:

1.  You didn't pick them.  This isn't Studio 54 - you're not standing outside your lobby picking from a raucous crowd of partygoers dying to get in your doors.  You're more likely begging anyone who will work for free to put in hours. 

2. They aren't from MIT.  Chances are the talent you're attracting aren't MIT brainiacs that can make up for their total lack of experience by sheer brainpower (and even then it's a stretch!)  You're probably getting reasonably intelligent people who are making up for their lack of experience and capabilities by putting some time into your company.

3.  They aren't dying to work for a startup.  They may be working with you because they couldn't find work at a more established company where the barriers to entry are much higher.  Even if they start with you, the ones that "drop off" will most likely do so because they belong in a big company.

4.  They need to get paid.  Aside from trust fund babies and computer geeks that still live with their parents (see slashdot.org, j/k) the average person needs to get paid at some point, probably sooner than later.

The reality is that you're not going to get the best people, they probably won't be the top picks of the industry, they'd be working somewhere else if they could, and they'd rather get paid.

Does this apply to every last person? No.  Is it the most common scenario?  Pretty much.

What this leaves you with are some good people that may be excited about working for your startup, but aren't necessarily super experienced or able to stick around forever.  These people can be great resources, but you have to know what you're signing up for.

The biggest mistake I've seen entrepreneurs make is assuming too much from labor that isn't on par with what you typically pay for.

What follows is the challenge of how to manage a labor pool like this effectively, without costing more than they can produce.  It's a bit of an art, and I'll walk you through some of the strategies.

(to be continued)