SMU week 10 facilitation

1. TopCoder
Developing software through crowdsourcing

2. How TopCoder came
about?Jack Hughes
Tallan Inc. (Business
Data Services)
Sold for $920M

3. 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!

4. 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
Client
• Held
Competitions
TopCoder • Winner got
hired
Crowd

5. TopCoder v2.0
Competition Based Model
Crowd sourcing Software Development
Tasks of Software Development Process
Task
Conceptual
ization
Specificatio
n
Architec
ture
Component
Production
Application
Assembly
Certific
ation
Deploy
ment
v.2.0 PM PM PM COM PM PM PM
• Looking for
software
application
Client
• Held
Competitions
TopCoder • Winner got
rewarded
Crowd

6. TopCoder v2.1
Competition Based Model
Dissatisfied with $20 mil in revenue
Platform Managers costs too high
Tasks of Software Development Process
• Looking for
software
application
Client
• Held
Competitions
TopCoder • Winner got
rewarded
Crowd
Task
Conceptual
ization
Specificatio
n
Architec
ture
Component
Production
Application
Assembly
Certific
ation
Deploy
ment
v.2.0 PM PM PM COM PM PM PM
v2.1 PM & COM PM & COM COM COM COM PM
PM &
COM

7. No. of Clients vs. No. of
PMs
0
10
20
30
40
50
60
2007
Q1
2007
Q2
2007
Q3
2007
Q4
2008
Q1
2008
Q2
2008
Q3
2008
Q4
2009
Q1
2009
Q2
2009
Q3
2009
Q4
No. Clients
No. PM

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

9. 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

10. Revenue/PM vs.
Revenue/client
0
0.05
0.1
0.15
0.2
0.25
0.3
Revenue/PM
Revenue/client

11. Types of Competition
Algorithm Competition
Attract new members
Retain existing members
Software Development Competition
Provide clients with specific solutions
Expand TopCoder’s catalog

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

15. Example of an Algorithm
Competition

16. 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.

17. How does it attract & retain the
TopCoder Community
Think about your lab practices/tests
Challenging
Prove your worth
Self improvement

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

19. Community
TopCoder Community Activeness & Earning
Distribution
Latent
Pool
Other
Earners
Top
Earners
Active
Pool
82.5%
17.5%
95%
5%

20. 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

21. Advantages
TopCoder
Increase Profit
Higher Product Quality
Happier Customers
Increased Catalogue Size
Community(Crowd)
Better Feedback for their work
Enrichment
Flexible time
Flexible Income

22. Advantages cont’d
Clients
Reduced cost
Increase efficiency
More ideas
Better quality
Economy
Cost savings of the client will be passed on to the
consumers

23. 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

24. Disadvantages cont’d
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?

25. Examples

26. 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