In this blog, I'm talking with entrepreneur Jack Hughes, founder of the open-innovation platform TopCoder, which brings together specialists from around the world to work on projects that end up costing far less than if these projects were done in-house.
TopCoder is a remarkable platform that connects corporations, organizations and government agencies with a worldwide talent pool to create digital products. It hosts online contests to design, and even to build, these solutions. I and my colleagues at X PRIZE Foundation have used TopCoder, and have found, like everyone else, that TopCoder's global community of more than 450,000 technology and design specialists can find solutions to a wide range of problems at a fraction of the cost and time.
TopCoder is basically the world's biggest talent pool. It breaks projects down into atomized pieces of work, each of which is turned into a competition. Specialists within the TopCoder community deliver solutions for each piece. In effect, people who individually excel in everything from concepts to data analysis, design work on aspects of a bigger project. It's a great crowdsourcing model.
I spoke with founder Jack Hughes, who filled me in on TopCoder's humble beginnings at a picnic table, and the way the company approaches its innovative contest-driven, gamified, crowdsourcing solutions.
The impetus behind TopCoder was, as often is the case with drivers of innovation, Jack and his colleagues' inability to hire qualified people. "A great developer, a great creative person is a difficult thing to find," he said. "So we were sort of just iterating through different ideas on how to make the reach better in terms of identifying folks, and one of the concepts we came up with was if we start, we were doing a lot of ad hoc contests internally, because great developers love to compete."
This was back in 2000. Having sold their software development company, Jack and his partners, who included his brother Rob Hughes, "started to think about what to do next," he explained. "We started to think about building a community of developers online. That was the inception."
The early contests the team created offered a little bit of money, "just to make it interesting," Jack said, "but mostly they were for pride. Developers are very closely related to other intellectual disciplines, such as chess. So we fashioned a rating system around developers and to measure skill in a particular discipline. That drove a lot of the interest -- being able to get rated." This branded rating actually drove the community to TopCoder.
At first, these were predominantly problems created for non-commercial purposes. "We want whoever can optimize and schedule an algorithm, network an algorithm to pick up notes and pick up the fastest path, in a particular network of notes, edges, so things that would be applied to graphics would be applied to anything that's a complex math problem.
"It was basically a massive multiplayer game of coding. So they would all see the problem statement at the same time, they could open it, when they opened it a clock would start to ticking down, so they would get points associated with how quickly they submit it and then how accurate their code was."
The initial community was a few hundred developers. Then Sun Microsystems came on as a sponsor in 2002-2003, and TopCoder got a big spike in membership from that and began to branch out into commercial work.
Here are three things TopCoder did to build its community:
1. Make it clear up front what the aim of the company is. Stay true to your authentic vision. "Whatever you're doing it for and why you want a particular group or sets of groups of people around you, stay true to that and it will work out for you," Jack said. "I wouldn't say we had a formalized mission statement at the beginning of TopCoder, but we did have a founder's letter that every member saw. To this day I think we adhere to it and we've since expanded the definition of it," he said. "We felt that developers, people who create, are the center of everything. So how we connect those folks, how we facilitate their creativity, is what the business is always about," Jack said.
"There are plenty of mistakes we made. But a mistake we haven't made yet is to ignore the community. If you look at our early communications with community, they look very similar to today. Some of them literally say, 'Without our community we don't exist.'
"It is very difficult to live by that," Jack explained. "It's very easy to start thinking that there are other ways you can get things done, that there are mechanisms by which you sort of use the community. We would say that this isn't about using the community. It's about being part of one. If we lose that focus, I would say that's when we lose it," he said.
"I think communities may be harder to do now. We predated Facebook; we predated a lot of social networking, a lot of community-based business models. There's money in it now. You're going to have people chasing the money. I don't think there is anything wrong with people making money. But at TopCoder we hold true to that and everything else will get sorted out. I think that's little bit harder to do nowadays because building the community is going to be ramping it up to whatever size, doing whatever. The advice I would give is don't do that."
2. Competition drives commitment to the community -- it's competitive as well as collaborative. "Competition just happens to be the thing that first engaged our community," Jack said. "There are many other aspects to TopCoder in terms of collaboration, in terms of how we go about business models, in terms of what our future is and what we think is many social aspects to TopCoder," he added. "TopCoder opens the big deal with our community, not because of the money they win in it, or even because of the sponsors that are out there or the fact that they can find a job out of it. No, it's because they want to get together, because of the physical place where they can get together."
3. Validation points are important. Sun Microsystems came in as a sponsor that helped take TopCoder to the next level. "Sponsorship in our case was a validation point." Jack said. "Making sure that you're engaging the community and listening to the community and letting them help you form your business model is important. When we went to commercialize TopCoder, we didn't do it for a number of years after we had started it. We started to think about very different models in different ways to do that. We could have done a matching service, we could have done a matching developer to a customer; we didn't do that. We decided to use the competitive/collaborative regime to engage members in actually building the product," he said.
"We felt that was the right thing for this particular community. At that point the community was probably 25,000 people. So there were a lot of people to be able to talk to. What we have found, and what we live by is this: We look at TopCoder as an inverted pyramid. The company exists to support the community. The community exists to support our customers and to support each other."
In my next blog, I'm going to continue exploring the remarkable processes of TopCoder, how it works with its customers, how its process evolved and how it's able to achieve such exponential economies of time and scale for its clients.
NOTE: Over the next year, I'm embarking on a BOLD mission -- to speak to top CEOs and entrepreneurs to find out their secrets to success. My last book Abundance, which hit No. 1 on Amazon, No. 2 on the New York Times and was at the top of Bill Gates' personal reading list, shows us the technologies that empower us to create a world of Abundance over the next 20 to 30 years. BOLD, my next book, will provide you with tools you can use to make your dreams come true and help you solve the world's grand challenges to create a world of Abundance. I'm going to write this book and share it with you every week through a series of blog posts. Each step of the way, I'll ask for your input and feedback. Top contributors will be credited within the book as a special "thank you," and all contributors will be recognized on the forthcoming BOLD book website. To ensure you never miss a message, sign up for my newsletter here.