The real reason you can't hire developers....

Re: weird extra steps: the idea isn't that they're cool. The idea is that if you are willing to attempt it and solve it successfully, it says something about your problem-solving skills. It's not the be-all end-all, but it seems like a decent first-pass filter.

Re: cultural mismatch: if it's a cultural mismatch, you probably shouldn't apply anyway. The thing about a startup is, there are five or ten of you. This isn't just another job. You generally don't just come in at 9, work work work, maybe take lunch with your teammates, and trip it out at 5. You don't just attend the company Christmas party. A startup is typically very much like a family, because everything is riding on everyone. When someone quits IBM, the teammates write it off as a “whatever”. When someone quits at a startup, you spend some serious time looking around to make sure there's nothing scaring them off, because every individual counts a great deal.

In short, culture is critical, and even as a married father of two, signing up for a startup is signing up for a culture and a tight-knit group of friends as much as it is signing up for a job.

My friend who worked there (and, in fact, recommended me) told me the developer doing the interviews has never actually recommended a single candidate and is no longer allowed to do interviews.

This could still mean that I'm stupid and incompetent but it seems like they missed out on a lot of talent because of the egotism of a single dev they had hiring.

Also I did a fair amount of the interview on a rooftop, trying to quietly and safely get down without a ladder. Fun times.

    If you want to steal some of the best talent in the
    industry, open yourself up to the idea of letting them 
    telecommute or work remotely. 

    Offer up a 3 month introductory period to ensure there's
    a mutual fit and they actually do the work as promised. 
    
    Don't make them shitty offers because they aren't on
    site; there is fudge room depending on their cost of
    living. 

    If you're in the valley, get your head out of your ass.
    Talent is everywhere. We don't all need to move to the
    valley to prove anything. 

    We likely DO love your team and product; that's why
    we applied in the first place. Devs are a funny beast,
    most of us apply to things that interest us.

    Loving your team is not necessarily justification to 
    up and leave everything we've grown to know and love.
    We're not all recent college graduates with no ties to a
    community.

    Open yourselves up to change and boundary pushing.
    Consider opening satellite offices in different large
    cities for your remote devs to work at, together. 

I have lived through 2 mass exoduses, where a company started going downhill and the top 50% of developers all leave within 6 months of each other (often in groups).

There is nothing inherently special about a startup. Many established companies have make or break projects, and working on them requires the same sort of commitment.

In short, don't take shit off of potential employers. If they can't get it together enough to get back to you and treat you with whatever level of respect you expect, then that's a sign that you probably don't want to work there.

He targeted companies that claim to accommodate telecommuting. Not hire when being asked looks sneaky.