How does this tactic avoid missing out on a large number of potential applicants? e.g. 1) People who are employed and are prohibited from working for a second

How does this tactic avoid missing out on a large number of potential applicants? e.g. 1) People who are employed and are prohibited from working for a second company (which may (I don't know) preclude all of Amazon, Facebook, Google, Microsoft, Yahoo, etc etc). 2) People who do not have much time outside of work (because they work too much, maybe missing them is a good thing?) 3) People who do not have much free time outside of work because of non-work (e.g. family with a bunch of kids) Also how does that work for companies where 1) Source code for their projects is quite secret (unless, are you suggesting the project be some random thing unrelated to the company? In which case, that might be a lot of money down the drain) 2) Spin-up time for new employees vastly exceeds a 10-40 hour project (maybe they need a long time to ramp up) I mean I like the idea of a paid project, I just don't see it working for a lot of candidates, or a lot of the industry.