The major flaw I spot in this is the so-called "intern-overwork". Have you seen how interns slog their lives away on Wall Street? You'll face the same situatio

The major flaw I spot in this is the so-called "intern-overwork". Have you seen how interns slog their lives away on Wall Street? You'll face the same situation in your company as the interns will burn more hours and try to deliver a lot more than the regular team, with the simple goal of displacing the regular team (to either take up their jobs, gain rapid exposure and experience, use the success of the internship to promote themselves, etc.). You should investigate the reason for stagnation. Sometimes laws and restrictions prevent existing companies from innovation, which an incumbent startup uses to his advantage and manipulates the interpretation of the laws (ie. Uber and other taxi service companies). Your idea does have merit though. I remember reading about how FogCreek let their interns build a new product for them during Summer. The product was a success and they all got jobs (or most of them). If you are a software-product firm, it definitely is worth attempting. Just work out the kinks/flaws.