How TopCoder Atomizes InnovationIn this blog, I'm continuing my conversation with +TopCoder founder Jack Hughes, who takes us through the steps of how clients work with this innovative company -- to arrive at software, design and analytical solutions far faster and cheaper than traditional methods generally provide.
When a company uses software-solutions company TopCoder, it will find that a project can be completed in a third of the time for a third of the money than if it hired its own consultants or worked on a similar project internally. That can mean millions.
• A consulting company saved $4 million a year in costs over its traditional methods of working internally by outsourcing application-building to TopCoder;
• An insurance company saved 30% of the cost of creating a new system for its pharmacies, by working with TopCoder;
• A biotechnology company was able to compress genetic data 41 times more efficiently than before, to make genome sequencing much more affordable;
• A security company working with TopCoder on a mobile application found it was 50% cheaper and 30% faster than if the project had been done in-house.
These results are so startling because of the way TopCoder works: It "atomizes" projects and sends each little piece out to the community, through contests. In this way, TopCoder members can work efficiently on one particular challenge that interests them, rather than become overwhelmed by the enormity of a grand-scale project assigned to them.
TopCoder founder Jack Hughes led me through the steps a customer will take in order to get a TopCoder project going. At this point, most customers are large organizations that are looking to save costs and improve efficiency.
"Clients are looking for how to connect with their customers better, how to do product design better, how to do analytics better, how to look at other products that are being absorbed, how the products are being used, how the products are being designed. They're looking at all of those things and they're employing TopCoder to help do them," he said. "With TopCoder they would be able to do them with very little onsite [or internal] presence in accessing a large community."
At TopCoder, Jack explained, "We feel like communities are going to be the organizational model going forward because of the Internet's ability to pull so many people to get this up quickly."
"The reason is that those teams are better in self-forming than my saying, 'We're going to assign this work to this team,' even though when I have the right skill sets internally, they might not have the right availability. They might be working on something else; they just may not be able to put the focus on it. In terms of measuring results, which we do, they're huge; these are a fraction of the cost that it would cost to do it traditionally," Jack said.
Jack went though four steps a customer would take to work with TopCoder, whether for creating an app, improving an algorithm, calling for a design or figuring out how to analyze data.
1. Create an innovation platform.
"We put processes in place, so there is a platform between TopCoder and the customer -- a platform that happens to have been built by our community," Jack said. "That's how the customer engages the community to build whatever they're building or to analyze whatever they're analyzing. We can bring hundreds of people -- in some cases, thousands of people -- to a particular problem."
2. Find a "copilot," using a competition based on a description of your project, to interest an expert in working with you.
TopCoder began its co-pilot program a couple of years ago, and now it's the fastest-growing part of the community. "In a community-based innovation model, the co-pilot will find you," Jack said. "A co-pilot is a high-level manager. Think of it as a virtual project manager who's got the skills necessary to run the entire TopCoder platform for the creation of these assets that we're building to these customers. Customers go through a variety of dialogues with all of these folks at the same time they go through a forum-based setting and then they would get various plans from each co-pilot for different aspects of it." There's not much money in the co-pilot stage, per se -- copilots are paid around $300 to $500 for the plans they send in. "But they also get a piece of everything that's run to the platform from them, everything that's run through the platform successfully from them," explained Jack. "So, the co-pilot is very much on a results-oriented payment schedule. It could be substantial when they run. It could be as much as a quarter of a million dollars, half a million dollars. Relative to hiring 20 people or 30 people, putting them on that project for a year, it's much less money."
3. Work on a game plan.
"The game plan will go through all of the different things TopCoder does to create that digital asset," Jack said. "The game plan will say, it's going to take this long to run, it's going to cost this much money," he said. "They're going to make sure they're aligned with you in terms of what you're thinking, in terms of what needs to get created," Jack said. "The interesting thing is," he added, "this is not a resource base. It's not going to say, 'This person is going to do this.'" People choose what work they want to do. A copilot can run anywhere from a few to hundreds of competitions for a particular project, whether each competition involves software creation, analytics, bug-testing, design. "They lay it out in terms of competition," Jack said. "Because we have all sorts of heuristics in analytical data, we know exactly how long something is going to take."
4. Evaluate the competition results.
"We review it or assign automatically through the platform," Jack said. "Copilots will review incoming things, they will score them, they will look at all those interfaces and see whether they did things right. And then a winner will be decided. That piece of work will be taken in, a number of members will be paid," he said. "TopCoder is not a winner-take-all environment; it's very nuanced. We're big believers in people contributing value, when they bring value they need to get paid or compensated in some way.
"It's the nature of an open innovation platform, to get large numbers of people who have a specific skill tackle a specific problem right now," Jack said. "TopCoder is really just bringing on-demand teams together to do a particular function. So, rather than having to single thread, single feed one project to the next to a particular team, TopCoder lets that team come together around the project. We're seeing this more and more across all sorts of different disciplines," he said.
"To me, TopCoder represents the journey of when I began," Jack said. "I started programming for small companies by walking around my hometown, knocking on doors. What I found was it was very difficult to give them everything they needed. TopCoder represents a way to get back to the smaller companies, a way to get back to entrepreneurs, creators. I look at entrepreneurs as creators."In my next blog,
I'm going to continue exploring how TopCoder's competitions work for its network, in terms of keeping people engaged and in fostering the community spirit.NOTE: As always, I would love your help in co-creating BOLD, and will happily acknowledge you as a "contributing author" for your input. Please share with me (and the community) in the comments below what you specifically found most interesting, what you disagree with and any similar stories or examples that reinforce this blog that I might use as examples in writing BOLD. Thank you!