Topcoder: An Original Platform for Crowdsourcing Solutions
Topcoder is a platform that host the world’s largest community of competitive designers, developers, and data scientists to offer on-demand crowdsourcing solutions to its clients.
Topcoder is a platform that host the world’s largest community of competitive designers, developers, and data scientists to offer on-demand crowdsourcing solutions to its clients. Founded in 2001, Topcoder remained private until it was acquired in 2013 by Appirio, which was then acquired by international IT consultancy firm Wipro in 2016. Topcoder continues to operate as an independent subsidiary, but in a rapidly evolving IT consultancy environment, how will Wipro – who partly acquired Appirio and therefore Topcoder for synergistic access to the crowd – harness the delicate developer community that defines Topcoder?
Value Proposition
With over 1 million developers in the crowd community, Topcoder believes that combining competition with experts – whom you only need to employ for a specific project – produces the most affordable access and solution to a client’s app or data science problem. Topcoder harnesses the combined capabilities of the crowd to specialize in three core offerings: Design and Rapid Prototyping – the crowd can create and test mobile and web applications quickly; Application Development – offers improved app development using the latest technologies; Algorithms and Analytics – the crowd can optimize, analyze, and assess a client’s needs through data science solutions. Among its clients, Topcoder has produced results for Booz Allen Hamilton, eBay, Harvard Medical School, Honeywell, IBM, NASA, and the U.S. Department of Energy.
Challenge Process
The client begins with a Topcoder “copilot” – the crowdsourcing expert – who manages all aspects of the process for the client, including timelines and communications. The copilot creates a game plan for the client’s project and breaks the project down into a series of small challenges for the community. Details, rules, and prizes regarding each challenge are presented to the community, and the challenge is received by “hyper-specialized” experts within the field of the challenge to tackle the assignment. Throughout the challenge, the client may provide feedback to the crowd, and the community receives the feedback and can further refine their solutions. The client only pays for satisfactory results from the crowd. Through its copilot/challenge system, Topcoder maintains a 92% success rate in delivering high quality results to satisfied clients.
Competition
The ingenuity of Topcoder is in the competition and challenges for the community. There are always competitions in progress at Topcoder, and new developers are motivated not just by the cash prizes for winning, but by the respect earned by submitting exceptional work to the client, the passion to learn from one another, and opportunity to solve powerful corporation’s tech trials. Most of the challenges have a time limit associated with the task, from a few hours to two weeks. In this time, the community members can choose to compete in whichever competition they believe match best with their skills. An interesting review with clients suggests that a key component of the Topcoder value proposition is not just the community, but how quickly the community can come up with a solution – it’s a speed play and the community can produce results remarkably faster than the firm could with in-house resources.
Enterprise Business Model
Besides competitions though, Topcoder generates most of its revenue through an Enterprise Business Model, where large corporations partner with Topcoder to produce results for a range of projects, from prototypes to complex, integrated apps, to developing new algorithms. This model involves large contracts with the corporations – values >$200,000 – and includes both a fixed monthly platform fee to use the crowd network and the resources associated with the copilots, and payment-per-project fee structure. The copilots and Topcoder expert services team work with the client to determine how to use the crowd to accomplish all of the client’s projects.
Future
In an interview, Topcoder Jack Hughes spoke of the fragile relationship with the developers who make up the crowd and efforts to maintain that relationship going forward, “Be authentic, and always involve the community…Communities are good at everything. They’re good at solving a particular problem. They’re also really good at sniffing out authenticity. So if you’re unauthentic, you figure that out fast.” Jack Hughes created Topcoder with the community at the forefront. The platform has changed ownership twice since the interview. How delicate is the crowd and what happens if post-merger integration efforts disrupt the community? The crowd is large, powerful, and capable, but should it be looked at as another asset on an acquired balance sheet?
Sources
https://www.huffingtonpost.com/peter-diamandis/topcoders-5-steps-to-buil_b_2916499.html
https://techcrunch.com/2016/10/20/indias-wipro-buys-cloud-services-consultancy-appirio-for-500m/
MCAFEE, ANDREW. MACHINE, PLATFORM, CROWD: Harnessing Our Digital Future. W W NORTON, 2018, pg 253.