Programming Contests, Community, and Business

Attending the TopCoder Open, the final in-person rounds of an intense programming competition, in support of the TopCoder Cookbook, showed me possibilities that go way beyond programming or books into business models and community I came expecting to see a competition, but found a much more inclusive (and compelling) business model which builds and applies an international community of dedicated developers.

TopCoder runs programming contests designed to produce results for paying customers. The programming contests I joined as a kid were extremely abstract, put on by adults hoping to inspire us to learn. This approach turns competitive energy toward real problems, provided by companies who are even willing to pay for solutions. Competitors may not do well their first few times out, but as they learn the ropes, they can earn cash, not just understanding.

TopCoder rented a ballroom at the Mirage and flew its finalists there. They had two stages with a dozen booths each, and monitors in the middle that let you watch what competitors are doing. And yes, people studied those screens!

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Why Arrington is Wrong about Yahoo!-Google Deal

I was inspired by Fred Wilson's excellent piece on the subject to add my own two cents to Mike Arrington's rant about how Yahoo!'s deal with Google is bad for the industry. I wrote the following in Arrington's comment stream, and will reproduce it here:

Let me weigh in as well on why I don't think Google's dominance in search is going to cause the problems you imagine.

1. Search is only one way to find things. It's the most easily monetizable, so it gets the lion's share of the attention. But take a look at (and report on) what percentage of techcrunch's traffic comes from search. For the O'Reilly Radar blog, it's about 35%. Significant, sure, but hardly a sign of lack of competition. If Google absorbed both Yahoo! and Microsoft, the share of our visits coming from search would still be below 40%. (That tells you what a small share of our search traffic comes from the other guys today.) And that's just the web traffic. Count in RSS (which is much bigger than web for most blogs, including ours) and the Search share of traffic goes down to a much smaller amount. So there's not much worry about people not being able to find information.

2. You specifically raise the specter of Google taking a bigger share of the search dollar absent competition. I'd be interested to know if you have concrete case studies of better deals because of competitive pressure. Seems to me that if Google does this, they will undermine the virtuous circle that drives their success. Maybe they will do this, but if they do, attention and value will migrate elsewhere, as eventually happened with Microsoft.

At O'Reilly, we always say "Create more value than you capture." All successful companies do this. Once they start capturing more value than they create, their market position erodes, and someone displaces them. It may take a while but it happens eventually. If Google takes too much of the pie, it will be a great opening for a new competitor. Right now, because Google is creating the most value for the ecosystem, competitors continue to lose share. If they started taking a lot more of the revenue, Microsoft's share would go up, plus new startups would have an opening that they don't have now.

3. The real source of my argument for this position, which you linked to in your piece, but I'll point to again here, is that Web 2.0, the internet operating system we're building, is much bigger than search. Search is an incredibly powerful subsystem of that OS, but it is just a subsystem. There is lots of competition across the system as a whole, and we're a LONG way from the concentration of power that represents monopoly when we take that into consideration.

4. The landscape is changing so fast. To take only one axis, consider mobile. Google doesn't dominate mobile/local search. That's a whole new game.... Again, there's lots of competition.