6 reasons: Why companies conduct hackathon

Over 80% of the Fortune 100 companies conduct hackathons.

There are over 1000+ hackathons conducted every year around the world and 48.5% of them are conducted by private companies. Yet, hackathon is still an underutilized tool when it comes to corporate innovation.

Global Hackathon Report-Infographic

Source: Global Hackathon Report.

When asked what a hackathon is, the common definition you get is something along these lines.

"It is an event where a bunch of programmers come together to collaborate and code on a project lasting several days, typically 48 hours.”

While it is true in the literal sense, it is like saying,

"People paying $1000 to live in the middle of a desert for a couple of days and finally burning a wooden effigy while trying to adhere to some principles is what Burning Man is about.”

There is more to hackathons than meets the eye, especially from a company’s perspective. So why exactly do companies conduct hackathons and what do they aim to get out of it?

Here are 6 different reasons why companies conduct hackathons.

Crowdsourcing ideas and solutions for your business

Let us break this down a bit.

When to conduct crowdsourcing hackathons

When you have identified the problem and don't have a well-defined solution or when you have a major insight or idea but do not have a full-fledged vision of the product, crowdsourcing is your best bet.

Let’s take blockchain, for example. It is an emerging technology and there is no denying that it is going to change the landscape of transactions as we know it. The applications range from digital identity to distributed cloud storage to cryptocurrency. However, the complete potential of blockchain is not yet realized. It is still anybody’s game to win.

Traditionally, a company would assign the responsibility of exploring this technology and the task of coming up with a killer product to a handful of people, their R&D division/Innovation departments that work in silos.

The problem here is by the time the R&D team comes up with a workable prototype or two, there could be five other similar products in the market.

Not convinced yet?

The famous and “anonymous” Satoshi Nakamoto conceptualized Blockchain in the year 2008. In the 9 years since there have been over 900 cryptocurrencies in the market and four major players.

IBM and Microsoft are two companies that leverage hackathons in this space. IBM launched Hyperledger Fabric Version 1.0 and Microsoft unveiled its open-source blockchain framework Coco. But before this, both these companies conducted or sponsored many blockchain hackathons, including the world’s biggest event— the Dutch blockchain hackathon.

Although innovation is still the key responsibility of R&D/ Innovation departments, the hackathon approach enables the entire organization to embrace innovation. With this approach, the team primarily responsible for innovation works with the entire organization to synthesize ideas, proof of concepts, and, finally, take the shortlisted ideas for development under its wing.

Why crowdsourcing hackathons

  • Shorten the innovation cycle
  • Get a diverse set of quality ideas
  • Incur lesser costs compared to traditional innovation models
  • Move ideas to prototypes in just a few days

Download the complete step by step guide to organizing a successful hackathon

Increasing API adoption

An API can be used for a number of purposes, from driving innovation to developing a new line of business. Here is a snapshot of different ways APIs are used.

6 reasons: Why companies conduct hackathons - Increasing API adoption

Source: KPIs for APIs

Whatever the purpose of your API, its success depends on one crucial factor - ADOPTION. Here is the flowchart depicting the API adoption.

6 reasons: why companies conduct hackathons - Drive API adoption

Source: KPIs for APIs

The more the active developers, the more the quality applications we can expect. More active users lead to more API calls, which could then translate into revenue. In other words, you need to get your product (API) to developers and get them to use it (say, use it to build great applications).

So, how do you acquire more quality developers and activate them? Here is a typical developer acquisition funnel.

6 reasons: Why companies conduct hackathon - API funnel

Source: KPIs for APIs

Just like you would market any other product, there are plenty of ways, such as developing SDKs, posting on GitHub, and answering developer queries, to market an API. You should be carrying out a number of these activities in parallel and an API hackathon should be on the top of your list.

Even companies with a billion API calls still conduct hackathons. For instance, to celebrate its 10-year anniversary, Google Maps took a cross-country road trip from San Francisco to New York to meet developers and creators who are building the map of today.

Here is a pretty cool video of one of their hackathon pit stops during the road trip.

Why conduct API hackathons?

A well-marketed and well-executed hackathon can get you easily 1500 developers and 3000+ for big names such as IBM, Google, etc.

Here is an interesting case study of how Flock drove API adoption using hackathons.

Flock is a collaboration tool. It is a lesser-known alternative to Slack and Microsoft Team. Flock found that vendors have been trying to layer collaboration tools on top of platforms that were designed for individual users. To facilitate that, Flock recently launched its API known as FlockOS for developers to build apps and bots using Java and node.js software development kits (SDKs).

To drive API adoption, Flock decided to organize a series of 9 hackathons over a course of 12 months. Each hackathon is hosted with a specific theme and problem statement in different cities.

So far Flock has completed 3 of the 9 hackathons. With these 3 hackathons, Flock was able to acquire 3600+ developers and build 70+ new applications. A scale of this kind of acquisition is not possible through any other approach. And, you can get anywhere between 20 and 40 decent applications. All this is done over a course of just 4 weeks.

In short, an API hackathon:

  • Gives you maximum air time to pitch your API to the developers
  • Gives you the opportunity to put your product (API) in the hands of passionate developers and get them to use it
  • Gets valuable feedback from the developers to improve your product

Drive innovation internally

Hackathons are one of the best ways to drive innovation internally by engaging with your employees. It provides a platform for your employees to collaborate with other business functions and showcase their talent.

In an interview with New York Times, CEO of Shutterstock, Jon Oringer explains the significance of internal hackathons for his company: 

"We have hackathons, which are pretty fun. A lot of people get really excited about them, and they can build whatever they want for the company — it could be crazy, practical, whatever. We actually wind up implementing a lot of those things throughout the year. It pushes a lot of thinking. It’s pretty amazing what people can get done in 24 hours. Sometimes we talk about a new product feature and it can take three months to build. Then someone will prototype it overnight."

And no topic about hackathons is complete without the Facebook hackathons. When it comes to using these events to drive innovation and employee engagement internally, there are not many companies who can do it better than Facebook.

Facebook organizes one hackathon per quarter and has done 50 major hackathons and 80+ small events around the world.

Many of the Facebook products created at the hackathons end up being rolled out to customers or they become internal tools within weeks. The Like button, Timeline, and Chat were all created at FB's internal hackathons. Talk about sustained innovation!

Read more about Facebook's internal hackathons.

Putting your data to better use

It is estimated that by 2020 we will have produced 40 zettabytes of data. To put this in perspective, that’s 5.2 Terabytes of data for every person on this planet. But as of now, only 0.5% of this data is being analyzed and used by companies.

One of the recent emerging trends is Big Data/Machine Learning hackathons. Over 6% of the hackathons conducted worldwide are Big Data/ML hackathons.

Global Hackathon Report: Domain specific hackathons

Source: Global hackathon Report

A lot of companies are opening up their data sets to developers to build effective predictive models. Especially, BFSI companies, which produce massive amounts of data every day, use this data to gain insights and better understand their customers by building predictive models.

Societe Generale, the French multinational bank, built predictive models from its data by conducting a Machine Learning hackathon, which saw over 1800+ developers and data scientists participate.

Read more about Societe Generale Machine Learning hackathon.

Not just banks, Exotel, a cloud-based telephony platform, is one of Southeast Asia’s largest companies. With over 1300 customers, Exotel powers more than 3 million customer conversations every day and has processed 1.2 billion calls in the past 5 years.

For Exotel, emotion detection from audio was an unsolved problem. The company decided to conduct a Machine Learning hackathon. It provided developers with large volumes of voice samples to decipher the sentiment.

In just 18 days, the company got some impressive models, built by 2000+ developers using ML and Natural language processing (NLP), which could detect emotion from audio and flags conversations based on sentiments, such as, happiness, sadness, anger, etc.

Read more about Exotel hackathon.

Community creation

If you are wondering what a powerful developer community can do for your business, listen to what Eric Migicovsky, Pebble’s founder, and CEO, says.

Eric Migicovsky, Pebble’s founder and CEO

“Our developer community rivals any of the competition since we came from the community itself, with over 27,000 developers building apps and watchfaces for Pebble. We’ve demonstrated that even a small group of committed individuals can launch an entirely new computing platform from scratch.”

Hackathons can be a great tool to create brand advocates from a developer community. Once you successfully host or sponsor hackathons, you build a community of developers who are a simple marketing channel that is cost effective; these developers/designers/thinkers help in ideation for the future, review of beta products, and creation of revenue or brand awareness by API adoption.

“Developers engage in community in an effort to discover tools, exchange knowledge, and solve problems,” said Sarah Jane Morris, former Developer Community Manager at Mashery (Intel).

Putting together a vibrant hacker community is easy with these innovation-focused events that provide amazing networking opportunities. Remember to keep them engaged. It is nothing but some give and take!

Employer branding and Identifying tech talent

An employer branding hackathon is a highly targeted branding activity. It allows a company to let potential employees know what the company stands for, the challenging projects it works on and communicates its values to them.

For instance, say your company uses a Django/ Python framework. By conducting a targeted hackathon for Django and Python developers, you will be able to let the developer community know about your company and the technology stack you use. It also allows companies to build a talent pipeline.

Another case would be companies conducting women-only hackathons to attract female talent by positioning themselves as an attractive brand to the female workforce.

Hackathon, a tool for sustained innovation

Novelty + Commercialization = Innovation

Hackathon is the only tool that covers 70% of the innovation journey. It starts with discovery, idea generation, and ends with idea conceptualization.

6 reasons: Why companies conduct hackathons - Role of hackathon in the process of innovation

And best of all, it is cost-effective and can be done on a regular basis to create a culture of sustained innovation. The stronger the insight and problem statement, the better the outcome of the hackathon.

Hackathon is to innovation what 3D printing is to manufacturing.

It allows you to rapidly prototype an idea, determine the quality of the idea, spot flaws, reiterate, scale it, and roll it out to the masses.

About the Author

Vivek Siva
Learned what not to do as an entrepreneur. An optimist with a love for business, the outdoors, and movies. Superpower: Ability to smile even when all hell breaks loose. Affiliation: World of witchcraft & wizardry
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