TopCoder

Developing software through crowdsourcing

How TopCoder came about? Jack Hughes

Tallan Inc. (Business Data Services) Sold for $920M

Lessons learnt from Tallan?

Not happy with the operations of Tallan
Expensive and time consuming recruitment process Evolving technologies results in high employee turnover rate More can be done to save clients time and money

Crowdsourcing was the solution!

TopCoder v1.0 Consulting Business Model

Host competitions with monetary rewards from sponsors
Build community strength Gain popularity

Winner gets a job with the sponsor

HR firm
Looking to hire

TopCoder
Held Competitions

Winner got hired

Client

Crowd

TopCoder v2.0 Competition Based Model

Crowd sourcing Software Development Tasks of Software Development Process
Task
v.2.0 Conceptual Specificatio ization n PM PM Architec ture PM Component Production COM Application Assembly PM Certific ation PM Deploy ment PM

Looking for software application

TopCoder
Held Competitions

Winner got rewarded

Client

Crowd

TopCoder v2.1 Competition Based Model

Dissatisfied with $20 mil in revenue Platform Managers costs too high Tasks of Software Development Process
Task v.2.0 Conceptual Specificatio ization n PM
PM & COM

Architec ture

Component Production COM

Application Assembly PM TopCoder

Certific ation

Deploy ment

v2.1

PM Looking for PM & COM software COM application

PM

COM Held COM Competitions

PM PM Winner got PM & rewarded PM COM

Client

Crowd

No. of Clients vs. No. of PMs

60 50 40

30
20 10 0 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

No. Clients No. PM

Total Revenue vs. PM Cost

7 6 5 4 3 2 1 0 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Total Revenue PM Cost

Why was there a decrease in revenue?

Switched from hourly based consultation to monthly fee
Distributed revenue over months instead of concentrated billing

Increase of prize money

Because of more contests

0.3 0.25 0.2 0.15 0.1 0.05

Revenue/PM vs. Revenue/client

Revenue/PM Revenue/client

Types of Competition
Algorithm Competition
Attract new members Retain existing members

Software Development Competition

Provide clients with specific solutions Expand TopCoders catalog

Algorithm Competitions
Timed competitions Available in Java, C#, C++ & VB.Net Single Round Match consists:
Coding Phase Challenging Phase System Testing Phase

Example of an Algorithm Competition

Example of Algorithm Competition

Input - 123210122 Output - 011100011 Encrypt by adding to each digit to the sum of the adjacent digits

[0+1], [0+1+1], [1+1+1] etc.

How does it attract & retain the TopCoder Community

Think about your lab practices/tests
Challenging Prove your worth Self improvement

Motivating members
Money is the most attractive thing TopCoder ratings Peer reviews

Community
TopCoder Community Activeness & Earning Distribution
Active Pool Latent Pool Other Earners Top Earners

82.5% 17.5%

95% 5%

How to motivate the latent pool?

Monetary Award
$50 for successful compilation of code by latent pool (for 5 rounds) 1.5 times prize money if they are the winner

Prospective Jobs

Advantages
TopCoder
Increase Profit Higher Product Quality Happier Customers Increased Catalogue Size

Community(Crowd)
Better Feedback for their work Enrichment Flexible time Flexible Income

Advantages contd
Clients
Reduced cost Increase efficiency More ideas Better quality

Economy
Cost savings of the client will be passed on to the consumers

Disadvantages
TopCoder
Higher cost incurred for evaluation Possibility of lost of community Higher cost incurred to manage projects

Community(Crowd)
Reduced prize money Possible little or no credit

Disadvantages contd
Clients
Possible lost of IP Possible lost of security Possible lost of control of project

Economies
What happens to companies using the conventional model of sourcing?

Examples

Future Of Crowdsourcing
The increasing complexity of problems has caused a rise in mass collaboration
Big problem broken into small problems for a huge group of participants to solve

Supplying a way for companies to engage with and harness the crowd for help
More ideas More efficient More creative

De facto standard for prospective employee evaluation

Musician Pete Seeger: Participation is the only thing that is going to save us from global warming