[nathanfp]

I strongly agree that the try before you buy approach is incredibly important for determining difficult to predict cultural and team fit. That being said while it is essential for early-stage companies to get this right, as pointed out in the comments, it can be difficult to scale and can be inefficient to make-up projects for potential hires, give them access to code, etc.

Some companies have found ways to bake cultural fit into their standard application process to great success. Twilio for example asks all applicants, business or engineering, to build telephony apps using the Twilio API before applying. This self-selects for people who are more willing to do research, be creative, and in general improves the likelihood that they will get along well with the team.

I am a bit biased here, but another path I would definitely advocate for is using interns. This is similar to the contractor approach but with a number of benefits in terms of price, and the fact that a hiring decision is not implicit at the end of the term. We have seen many startups build a pipeline of early hires by taking on multiple interns and seeing who is the best fit over the course of a few months.