Case WriteUp MIS 585 Topcoder
To: Prof. Dr. Mark W. Patton Date: Nov 19th, 2014
From: Ralph Oberhuber, Student ID 23233258
Subject: Case-Write-up Topcoder
Problem statement: The TopCoder case study reveals two key issues with the IT strategy of “crowdsourcing” introduced by the Software company TopCoder: 1) How can TopCoder maintain its leadership position even if a competitor enters the market by using the same crowdsourcing approach? 2) What can TopCoder do to grow their revenue and profit to a much larger scale?
Recommendations: Regarding question 1), my recommendation is to implement an advanced compensation system for the programmers based on equity or restricted stocks with long term vesting periods to build a retention incentive. Regarding problem 2), one of largest challenges TopCoder has is how to grow the network of Platform Manager to a larger scale. My recommendation is to implement multiple levels of Platform Managers, e.g. a group which only assembles new projects and another one which only helps maintain existing implementation and answers questions from clients for existing products (some kind of sustaining support team).
Relevant facts that support the recommendations: Problem 1): In case of a competitive situation, one key challenge for TopCoder is how to retain their most skilled programmers even if the competing firm offers them higher prizes. The fact that out of 200,000 members only 35,000 actually contributed to contest suggests that loyalty amongst the members is quite weak. Only 0.5% of the members represent the best in the world class with elite skill set. TopCoder needs to find ways to grow the pool of those top performers and retain them in a competitive threat. Traditional corporations have found a good scheme to retain top-performers even against strong competition: They give long-term bonuses or equity grants which only vest over time, e.g. 25% each year, so an employee needs to stay with the company for at least 4 more years from the approval
From: Ralph Oberhuber, Student ID 23233258
Subject: Case-Write-up Topcoder
Problem statement: The TopCoder case study reveals two key issues with the IT strategy of “crowdsourcing” introduced by the Software company TopCoder: 1) How can TopCoder maintain its leadership position even if a competitor enters the market by using the same crowdsourcing approach? 2) What can TopCoder do to grow their revenue and profit to a much larger scale?
Recommendations: Regarding question 1), my recommendation is to implement an advanced compensation system for the programmers based on equity or restricted stocks with long term vesting periods to build a retention incentive. Regarding problem 2), one of largest challenges TopCoder has is how to grow the network of Platform Manager to a larger scale. My recommendation is to implement multiple levels of Platform Managers, e.g. a group which only assembles new projects and another one which only helps maintain existing implementation and answers questions from clients for existing products (some kind of sustaining support team).
Relevant facts that support the recommendations: Problem 1): In case of a competitive situation, one key challenge for TopCoder is how to retain their most skilled programmers even if the competing firm offers them higher prizes. The fact that out of 200,000 members only 35,000 actually contributed to contest suggests that loyalty amongst the members is quite weak. Only 0.5% of the members represent the best in the world class with elite skill set. TopCoder needs to find ways to grow the pool of those top performers and retain them in a competitive threat. Traditional corporations have found a good scheme to retain top-performers even against strong competition: They give long-term bonuses or equity grants which only vest over time, e.g. 25% each year, so an employee needs to stay with the company for at least 4 more years from the approval