Hackathon: Venture Capitalists’ Fastest Way to Spot Fresh Talents and Ideas

hackathon

A hackathon is a new and fast way for venture capitalists to spot fresh talents and scout for possible ideas worth funding. Ron Conway, an American angel investor and co-founder of investment firm SV Angel, describes a hackathon as an event where “You can see the idea, see the product, and watch how quickly a team develops at the height of stress. It’s a one-stop shop.”

At a hackathon, software engineers, computer programmers, designers, and project managers collaborate intensively to produce a software output generally meant to address or provide a solution to a specific problem. A hardware hackathon can also be organized, such as last Saturday’s MakeMIT event of TechX. This event produced a robotic bartender, a sports camera that records velocity, rotation, altitude, and acceleration and a guitar-playing robot capable of strumming and fretting among others.

Organizers often give time limits before the final output is presented to the judges. The time allotted can be from 24 hours to even one week. The chosen winner is awarded cash prizes or funding to continue with the project. A hackathon can also be a venue for beta-testing new apps as well as for networking and learning.

The number of participants depends on the space available and could range from 20 people or can also reach up to 500 competitors. The participants usually bring with them their sleeping bags, toiletries, pillows, and laptops. This method of product and services innovation as well as generating new businesses has exploded in popularity over the past few years. For 2014 alone, a total of 1,500 hackathons are planned to be organized around the world.

These formal brainstorming sessions are very much different from the “hacking” which pertains to fraud and other cyber crimes. However, law enforcement authorities continue to use the term to describe criminal acts and a number of federally convicted “hackers” are now serving their time in prison.

A new, albeit positive, meaning to hacking was ascribed as early as 1999 when developers worked together to write programs. In 2005, Yahoo! was recognized for organizing the first official hackathon. It was Mark Zuckerberg, the CEO of Facebook who was credited for popularizing “hack” not as a crime but as a way of encouraging his employees to try and build something new in a fast and creative manner.

Last Thursday for example, Facebook launched an option allowing users to identify their gender beyond male and female to include other categories as well, totaling to 50. This was meant to give people more choices of identifying themselves like androgynous, transsexual, and bi-gender among others. This idea was conceived during a company hackathon four months ago.

Another product of a hackathon aimed at spotting fresh talent and ideas is GroupMe from the TechCrunch Disrupt 2010 conference. GroupMe is a mobile group messaging app developed by Steve Martocci and Jared Hecht. After a fast-paced and frenetic 12 hours of work, the duo presented a functional app aimed at providing group communication. Proving that hackathons generate output that is highly valuable not just by venture capitalists, in 2011, GroupMe was bought by Skype for $85 million.

Different purposes for hackathons are currently emerging. One such event is Hackomotive in Santa Monica, California, where competitors develop apps meant to make buying and selling of cars much easier. Another form of hackathon is that which aims to solve the problems of educators or the Education Hack Day.

Because of its growing popularity, rules are now being standardized. Teams are now allowed to work with the designs, mock-ups, and ideas in advance but the code writing should be done by the competitors at the same time during the event proper.

If there are solutions generated by these hackathons, there are also some downsides in these events. In November 2013, a hackathon was organized by Salesforce.com where a record prize of $1 million was given away to the winner. However, it was discovered that a member of the winning tandem, called the Upshot, was a former Salesforce.com employee who used a pre-existing code to write the program. Salesforce.com reviewed the rules and found no reason to forfeit the prize and instead choose a second team to also win $1 million and declared the competition a tie. According to Adam Seligman, Salesforce.com’s vice president, “We heard feedback loud and clear…We didn’t get this right. We should have been clearer.”

A hackathon is a new and fast way for venture capitalists to spot fresh talents and scout for possible ideas worth funding. Both developers and investors are in a win-win situation if their output becomes the killer app or the ultimate product it was intended to be.

By Roberto I. Belda

Sources:
The Tech
Wired Magazine
Education Hack Day
Las Vegas Review

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