A Five-Part Series –Part One: Topcoder Methodology
Crowdsourcing has become a rocket ship in the business world. NASA crowdsources some of its most complex work, including initiatives aimed at issues related to the International Space Station. DARPA, Harvard Medical School, eBay, Honeywell, HP, and Comcast all crowdsource with Topcoder. Each of these enterprises needs superior algorithms, development, and global design talent in a timely manner with world-class results.
Crowdsourcing is the most effective way to leverage global expertise at scale. According to Eric Knipp of Gartner Group, “[c]rowdsourcing is the process for sourcing a task or challenge to a broad, distributed set of contributors using the Web as social collaboration techniques.”Eric Knipp, Use Crowdsourcing as a Force Multiplier in Application Development (Gartner Mar. 2014). At its core, crowdsourcing acknowledges the role of communities outside of the boundaries of firms in creating, shaping, and disseminating technological and social innovation. Topcoder’s industry-leading platform brings to the table 630,000 of the global experts defined above, each with his or her respective core competencies. I wrote about this in greater detail in this Forbes piece.
This is the first in a five-part series that details why Topcoder is the world’s premier crowdsourcing partner. We will also examine:
- the importance of Topcoder’s understanding of its Community;
- recurring benefits of Topcoder loyalty;
- intellectual property and security questions; and
If you would like to explore in advance numbers 3-4, please see our newest White Paper, How To Drive Open Innovation Without Risking Your Intellectual Property and Security (June 2014).
Topcoder’s Methodology Over the past 13 years, Topcoder has developed the knowledge, processes, and resources to keep 82% of its customers returning for follow-up programs. That retention rate would turn heads in any industry. Here’s how Topcoder does it.
Topcoder is an active, hands-on partner. We work with clients to identify the software solutions that will address their business needs. We then convert those requirements into programs and detailed contests to be solved by our international community of data scientists, developers, and designers. This is critical. Harvard Business School Professor Karim Lakhani writes that “the main reason companies resist crowdsourcing is that managers don’t clearly understand what kinds of problems a crowd really can handle better and how to manage the process.”See Karim R. Lakhani, Using the Crowd as an Innovation Partner (Harvard Business Review, Apr. 2013). Topcoder guides every client through each step of the process. Target-specific programming tasks like conceptualization, specification, architecture, component design, component development, assembly and testing are all undertaken by Topcoder with our clients.
Topcoder serves as an intermediary between two synergistic populations. Clients need complex algorithms written and thus work with Topcoder to delineate precise programming challenges. Clients also need the development of mobile- and Web-based applications, as well as design. On the other side, Topcoder’s community members compete in challenges to meet the clients’ needs and to satisfy their own unique motivations. Topcoder’s success stems in part from
- its ability to discern what clients truly want and need to achieve, which is often not obvious;
- its 13-year relationship with the 630,000 uniquely incentivized members of the Community, including $60 million in prize money awarded since 2001;
- its development, maintenance, and promotion of formal, structural, verifiable, and quantitative contests that produce “extreme value outcomes”; and
- robust confidentiality, intellectual, and security provisions, each of which will be addressed in future posts in this Series.
According to one NASA official with a close relationship with Topcoder: “You need someone who does this for a living.”
Topcoder employs a two-pronged approach when evaluating how its customers can best structure a challenge.
First, short innovation contests generally offer thousands of dollars to procure innovation solutions. These contests can yield amazing results and efficiencies. Based primarily on developing algorithms, short innovation contests are effective both at attracting new developers and retaining an existing base.
Second, grand innovation prize contests, which are often designed to stimulate a new industry and market, may take several years and involve millions of dollars in prize money. Short innovation contests are employed liberally to attract a growing number of community developers for granular solutions needed along the way.
All contests feature evaluation by a peer-review of three expert members, and assessment by an automatic test suite that checks for accuracy and computation speed or both.
The community’s scale is invaluable when it comes to crafting challenges. Topcoder has found that the middle of its contests’ bell curves generally produces solutions that are 30% or more better than a client’s existing solution or relevant benchmark. However, to the right of the curve, star developers submit “extreme value outcomes” – novel approaches that fundamentally alter the way clients conceive of their initial pain points and needs and provide numerous results from which to choose and develop best practices.
Topcoder’s methodology is highly client-focused. Over a decade of experience mastering crowdsourcing processes and working closely with clients has resulted in a retention rate of 82%. Our combination of working hand-in-hand with clients to define both programs and their specific challenges is the first ingredient in our secret sauce.
Until next week, when will we discuss Topcoder’s unique relationship with its Community — the data scientists, developers, and designers who make this magic happen.