In a resource-constrained world, Glastonbury-based TopCoder has become a virtual power in a virtual world.
Its goal is to make it easier and cheaper for businesses of all sizes to get their computer programming needs met. And its secret sauce is its virtual workforce — top talent lured by a framework of global competition and lucrative rewards for solving the often complex needs of TopCoders’ diverse customer base.
From offices in a suburban office park, Top Coders commands the attention of clients as varied as the U.S. National Security Agency and the largest Internet company in Russia.
The nine-year-old TopCoder brings businesses and programmers together in an online environment akin to the “Iron Chef” cooking competition: businesses post their coding needs, and coders enter into a competition to write the best solution.
The winner gets the cash; the company gets the code. In some cases, the top competitors earn enough cash that competing and writing code via TopCoder becomes their full-time job.
Toronto-based Mike Paweska — TopCoder handle “Argolite” — is one such programmer. Paweska lost his full-time job in the aftermath of 9/11 and pieced together a series of consulting jobs until about 2005, when he began competing via TopCoder.
And he will never, ever go back to an office, he said.
Paweska, a 36-year-old systems architect and specialist in the C# (C-sharp) and JAVA programming languages, has earned more than $900,000 in Top Code prizes since 2005.
“I am basically not interested in working for someone else. I can control the amount I do and there is nobody hovering over me,” Paweska said. “I can work out of my house. I’m two feet away from my bed right now. You can’t beat that.”
TopCoder also runs an annual competition, the TopCoder Open, in which participants from around the world compete in six tracks, including algorithm, design and development. The event culminates this October in Las Vegas, when the 100 top performers compete live for a share of $150,000 in prizes.
The U.S. National Security Agency is one patron of the event, while Yandex, Russia’s largest Internet company, is the sponsor.
“The NSA was one of our earliest customers. They are focused on the algorithmic contest, and they recruit heavily from our member base,” said Rob Hughes, president and chief operating officer of TopCoder. “We know they’ve hired from our membership, but they won’t share those numbers.”
TopCoder launched in 2001 with a less than $10 million investment from founder and chairman Jack Hughes, Rob Hughes’ brother. Previously, Jack Hughes had founded Tallan Inc., a provider of web-enabled business solutions that sold in 2000 to CMGI Inc. for $920 million in cash and stock. Rob Hughes was COO at Tallan before the sale.
Rob Hughes said the brothers were fresh off of Tallan and looking back on their time there when they realized that trying to find good developers was difficult and expensive — and even more expensive if you hired someone you thought was a good candidate, but proved to lack the requisite skills.
“The question was, do they have the basic skills, the logic skills to understand the business problems and translate it into code,” Rob Hughes said. “That was one of the main things we were trying to do. We could pose the challenging problems in terms of computational thinking and require the solver to submit in terms of code.”
TopCoder refuses to discuss revenue or projected percentage growth. TopCoder has awarded more than $20 million for projects ranging from full enterprise systems to simple “bug” races.
In all, members have competed in more than 10,000 client competitions on the TopCoder platform, including more than 7,500 software development and Studio graphics competitions and 3,500 “bug races.”
TopCoder has 45 people on its Connecticut staff, with most working in sales, marketing, customer support and administration. Jim McKeown, company spokesman, said even the company’s own workforce is “highly virtual,” meaning on any given day, everyone might be at the office, or most everyone might be working from home.
The company declines to discuss revenues, but it claims to be able to save a company up to 60 percent off of the cost of a major development project. It does this because its code is “modularized.”
“We subscribe to the idea of vigorous reuse. If you need a project built, we will see what we already have in terms of the generic coding, and then we can customize it as needed,” McKeown said. “It allows a company to keep their costs down, because if we can pull in the generic code, it costs less.”
The coder who wrote the generic code, though, still benefits. Anytime a piece of code is used, the coder receives a royalty.
Ferguson Enterprises Inc., the Newport News, Va.-based supplier of plumbing and building supplies, has used Top Coder since 2005, specifically to bolster the company’s e-commerce business.
The company finds Top Coder comes in handy for those times it needs to put a lot of people on a single project, but doesn’t necessarily have enough projects to keep full-time programmers busy on a regular basis.
“We are resource constrained like most people and it’s a really good model to extend our systems without adding internal personnel,” said Darren Smith, Ferguson’s solution architect for e-business.
“From the cost perspective, we are saving money, but what we are really able to do is flex our capacity,” Smith said. “Top Coder can break down our projects and with their ability to find different developers across the globe, the work gets done.”
The only issue Ferguson has with Top Coder is integrating the Top Coder work with the company’s existing systems.
“From a pure quality perspective, we have no complaints at all,” Smith said.
Client work by members encompasses builds ranging from major business-to-business e-commerce systems and third party developer community platforms for creating new applications for Fortune 500 companies, to online lead generation products for the automobile sector to crowdsourcing and social media platforms for start up businesses.
The idea of crowdsourcing code might not seem so novel today, but when the company launched, Hughes said it took some time for prospective clients to warm to the idea.
TopCoder bridged that initial acceptance gap by offering recruiting services for their customers. It then stopped that business line when customers began to realize that TopCoder competitors gave them predictable results.
“How do you tell a pioneer? They have the arrows in their back,” Hughes said with a laugh. “But some of the value we brought to our customers was that we could quickly identify the top performers. Now you have the companies and their attention and they’re used to getting work produced through a contest.”
