Hire the undervalued "hungry" people who the Googles/Facebooks of the world won't even give an interview, and they'll 1) be easier/cheaper to convince and 2) work super hard to prove themselves (especially if it's their first job out of school). If the startup does well, it's a win-win.
I also like the idea of saying 'mention (some shibboleth) in your cover letter' to prove people read the add. If I was writing an ad I'd ask someone, maybe, to provide their favorite code snippet and describe why. Anything would be okay, as long as someone has an articulate reason.
I get disappointed in an interview if the company don't want to see code. Someone in this thread discussed how school doesn't correlate to the ability to ship code; I'm good at having an executable answer to a problem in minutes. If they don't want to see what I can do it usually seems like it's because they don't know how to judge it, and thus aren't who I'd like to work with.
This doesn't even come close to scaling when your applicant pool is 100 (or more) times the size of your interviewer pool. You have to have some quick filtering method, or you'll never get anything done.