I recently met with the head of business development for a pretty big and wildly successful company. He was their 10^th hire, and he started off as an unpaid college intern.  That got me thinking.

I’ll eventually write a post about what startups look for when we interview potential interns, but for now I’m just going to tell the story about how we discovered and hired our first (unpaid) intern, and how we converted him into our second full time (paid) employee.

About six months after Bill and I founded WePay, we were invited to attend Olin College’s Meet the Startups Day.  Olin College is basically a school of 300 or so brilliant hacker-types (Olin actually offered full tuition scholarships to every undergraduate in attendance… until the economy crapped the bed).

Meet the Startups Day is a career fair for Olin students interested in working for startups.  Bill and I were pretty excited to attend because at that point we had not made much progress actually building our product, and although Bill is technically oriented, we needed all the horsepower we could get.  Luckily, we had the arrogance and naiveté to think we had something to offer in return.

So we show up with a laptop and a bunch of business cards. We used the laptop to loop a screen cast of our “prototype” (which, in retrospect, was a piece of crap), and we used our business cards to look, well, business-like.

The business cards didn’t do the trick; every other company had a pretty impressive exhibit, and the people representing those companies looked far less…childlike.

We attracted the fewest number of students, but the students we did attract were particularly enthusiastic.  I think there was a small group of students that genuinely wanted to work for an early-stage startup, and they knew exactly what that entailed.

Olin gave every company that participated in the event a USB stick that contained the resumes of all the students in attendance.  Now that I think about it, that was pretty ingenious…

Three months later, when we were accepted into YCombinator, I looked through the resumes and found Karl Schults, the one name that I remembered from Meet the Startups Day.   Karl was pretty young and earnest, but he was also crazy smart (as far as I could tell).

I gave Karl a call and I said: “Hey Karl, you might not remember me, but I was at Meet the Startups a few months ago. We just got accepted to YC, and we’re about to move out to Silicon Valley. Do you want to intern for us? We can’t pay you, but we’ll buy your plane ticket, give you a place to stay, pay for your food, and provide you with a great experience.”

Karl definitely had the choice to take a paid internship (and if he didn’t, Google and Facebook dropped the ball).  He decided to work unpaid for WePay because he knew he would have the opportunity to write production code and own large parts of the application.

Before the summer, Karl’s only experience with php was a 2 week project in one of his programming classes at school. By the time the summer was over, he was a pro, and had committed as many lines of production code as anybody else. He worked long hours with the rest of us, and his programming skills improved dramatically.

When the summer ended, Karl went back to school… for one semester.  Immediately after we closed our first round, we made Karl an offer. He became our first post-financing hire.  He postponed school, and he now works with us full time in Palo Alto.

Lessons learned:

1. If Karl hadn’t started networking with startups early, we never would have found him (and he never would have found us).
2. If Karl hadn’t made a solid impression, and found a way to keep his name in the back of my mind (USB stick….brilliant), I wouldn’t have even thought to reach out to him again.  A monthly “lets-keep-in-touch” email would probably accomplish the same thing.
3. Karl could have taken a paid internship at a big company. His resume would get a boost, and he would have gotten a ton of “awesome” experience doing QA, writing documentation, and playing Farmville.  Taking an unpaid internship is a bit like early-stage investing: you risk your resources now in the hopes that it pays off in the future. The amount you invest is equivalent to the opportunity cost of working there. Karl bet on us early, and it turned out to be a good choice.
4. Karl crushed it over the summer. Bill and I never questioned whether we should hire him. It was an obvious decision: once we raise money, we’ll hire him full time.

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