TopCoder is a company which administers contests in computer programming. TopCoder hosts weekly online algorithm competitions — known as SRMs or "single round matches" — as well as weekly competitions in design and development. The work in design and development produces useful software which is licensed for profit by TopCoder. Competitors involved in the creation of these components are paid royalties based on these sales. The software resulting from algorithm competitions — and the less-frequent marathon matches — is not usually directly useful, but sponsor companies sometimes provide money to pay the victors. Statistics (including an overall "rating" for each developer) are tracked over time for competitors in each category.
TopCoder has been hosting algorithm competitions since 2001. Each SRM consists of four phases:
At the end of the contest, ratings are updated to incorporate each participating coder's performance.
TopCoder hosts design and development competitions in which coders can compete to create components and applications that are either generally useful, or that third parties have contracted for.
TopCoder design and development competitions are week-long competitions. New components are posted every Thursday, and coders can choose a component from a list of Java and .NET components, and they have a week to design or develop their chosen component. Each week new components are posted. Development components are generally components that have been designed in a previous component design contest.
Larger problems than are asked during a traditional TopCoder algorithm round are posted. They provide a more flexible competition format with an extended timeline.
TopCoder initially awarded money every week to coders who did well in the weekly competitions, or Single Round Matches (SRMs). For a while, prize money was only awarded twice a year to winners and finalists of the TopCoder Collegiate Challenge (TCCC, which is in the spring) and the TopCoder Open (formerly the Invitational, which is in the fall). As of June 2005, some weekly SRMs began to once again award prize money, being sponsored by outside companies such as Google and Yahoo!.
Although 100,000 people[3] have registered as members at TopCoder website as of December 14, 2006 - less than 18% of them have participated in at least one algorithm competition with only 5% were active (participated during last 6 months). Even less have participated in component design (0.3%) and development (0.6%)[4].
In the early days, the Iron Man system was set up under which coders were grouped into rooms of ten according to skill level (determined by rating, similar to ELO chess rating), in order to encourage newcomers (who would have little hope of beating out the best coders for prize money) to stay and compete. After the contest, the 3 highest scoring coders in each room were paid according to the skill level of the room (winners in the room of contestants with the top 10 ratings were paid more than those in the room with coders 11-20, and so on). This created some paradoxical situations such as the possibility of coming fourth in the whole contest and getting no money, while the 111th placed contestant got paid, and gave rise to ratings diving. Ratings diving, or taking a ratings dive was accomplished simply by doing very poorly on purpose in a particular contest (by opening and not submitting any problems or submitting incorrect challenges). As a result, a contestant would, in their next contest, be placed in a room with 9 coders among whom they had a good chance of winning some money. The idea was that the dramatically increased chance of winning money made up for the fact that the money to be won was a lesser amount given the lower average rating of the room.
Coders have since been divided into two divisions, Division I and Division II. Division I consists of all coders with a rating of at least 1200, and Division II consists of all coders with a rating of 1199 or less. Coders are grouped in rooms with other members of their division, in groups of up to 20 coders in such a way that within each division, the average coder ratings in each of the rooms are roughly equal.
The business plan behind TopCoder comprises several objectives. One goal is to be a recruitment center where companies can come to find programmers who are proven to be highly skilled, and where talented programmers can display their skills to a worldwide audience. Large companies sponsor TopCoder events to gain credibility with and exposure to talented developers. TopCoder also sells software licenses to use the growing body of components that have been developed in competition. Finally, TopCoder acts as an outsourcing center, allowing companies to farm out custom design and development tasks to TopCoder competitors.