TopCoder A Developing Software Through Crowdsourcing Case Solution

1. Case Summary

Jack Hughes is the CEO and founder of TopCoder Inc in 2001. Jack Hughes previously owned a traditional software firm known as Tallan. However, Tallan was not a very successful business venture for Jack Hughes because of the problems taking place at the operational level activities of the business, such as:

• Recruitment was very time consuming and expensive process.

• Due to advancement in technology and software development, Tallan had a very high turnover rate and employee retention was very low.

• Outdated technology and software did not allow the use of existing components. For every new development, processes were started from scratch.

• More could be done to save the time of clients time and money.

TopCoder Inc was functioning on entirely unique competition based business model. This business model of TopCoder Inc was catering the needs of both clients and the participants at the same time. On the client side, TopCoder Inc management would undergo deep and thorough understanding of the client’s software requirements and generate programming challenges based on it. On the other side; TopCoder Inc would arrange different programming competitions to develop new solutions to the challenges for money and skill ratings of the developer’s community. The competitions were designed such that the participants would develop the software required by the clients. After the competition is over, TopCoder Inc would sell the software to the client. Over the years, TopCoder Inc has successfully developed an international community which consisted of more than 25000 programmers from all over the world. TopCoder Inc provided the platform for mainly two different types of contests. 

1. Algorithmic competitions were organized for creating solutions for standard testing difficulties.

2. The other types of competitions were conducted to develop software resolutions pertaining to client’s specific requirements and needs.

With these two types of competitions, TopCoder Inc was able to design contests which allowed participants from different technological know-how and backgrounds. Instead of targeting a specific niche market of programmers, TopCoder Inc successfully managed to provide a platform for every kind of programmer coming from different educational and professional backgrounds.

Initially TopCoder Inc implemented a model which would help the company to come up with solutions for clients by contracting with community members. These operations consisted of:

• Conceptualization

• Specification

• Architecture

• Component production

• Application assembly

• Certification

• Deployment

However, recently, TopCoder Inc had switched its business model to a hybrid business model of organizing software development competitions and providing consulting services to clients. These operations included assessing resolutions of the community via bug testing and reviews of community peer, designing unique and innovative software development competitions, providing an interacting and professional platform to the programmers to connect with the companies in the industry, designing competitions that will fulfill the clients’ requirements etc. The main source of attracting participants is giving out high rewards and skill ratings to the community developers. Furthermore, TopCoder Inc ascertains reusable workings from community software developers for clients and save it in a company catalog for future help and easiness. TopCoder Inc also provided professional opportunities to the winners of their community by interacting them with their clients. Learning from the experience of Tallan, Jack Hughes came up with a unique kind of business model for TopCoder Inc, which is known as “crowdsourcing”. 

Crowdsourcing is the back bone of the TopCoder Inc business model. Crowdsourcing is the new software development methodology. Crowdsourcing is defined as the practice of obtaining required services, ideas or content by imploring offerings from a large group of people and particularly from  the online community rather than from traditional employees and suppliers. To make Crowdsourcing more attractive and generating interest to the community developers by paying out incentives including money, prizes, skill ratings for the contest winners. The final result is judged by evaluating performances through various standard procedures such as bug tests, peer review and generating scorecards to motivate participants. The best created software solution is integrated with other components to meet the demands of the clients. Furthermore, when the software requirements are complex and challenging, TopCoder Inc would request the clients to be the judge of that competition, so that developed software is catering to the requirements of the clients. This helps TopCoder Inc to maximize the competitions success rate. 

TopCoder Inc community has evolved very strongly and successfully over the years ever since the company was founded in 2001. As far as growth of TopCoder Inc community is concerned, more than 25000 programmers were added every year on average during the years 2001-2009. TopCoder Inc has further divided the community by three different types of coders such as normal, latent pool and long tail. The community has mainly composed of single competitive males from all over the world, and some coders were full time members of the developers’ community who participated in more or less every contest organized by TopCoder Inc.

Programmers of the developers’ community preserved their publicly available profile which consisted of all information related to programmer such as personal details and top coder ratings. The ratings were based on level of work achieved and performance in various contests. Ratings were categorized in three different colors: red, yellow and green. Each programmer was assigned a particular color band which reflected the rating group of that participant. High rating levels assigned define the rating color and success of the programmer. Moreover, programmer’s profile also included the success rate of competitions and consistency for the members of the community. TopCoder Inc motivated its members by conducting frequent contests and paying out high monetary rewards, as well as, the top coders ratings were considered to an important evaluation for recruitment perspective. These competitions also provided the platform for work flexibility and very high level learning to the participating programmers. Community also proved to be very helpful source of strong bonding among top coders. The coders of the community were more than willing to help other coders grow and overcome each other’s weaknesses.