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On Your Mark, Get Set, Hack!

The Wall Street Journal
Sept 13, 2011

During a "hackathon" last year, GroupMe co-founders Steve Martocci and Jared Hecht built a group text-messaging service in one 24-hour stretch. In August, the co-founders sold GroupMe to Skype for around $80 million.

Hackathons, once an obscure corner of the computer-programming world, are becoming more mainstream. The contests, which bring together computer programmers for a few days to cook up applications on the fly, are being used by entrepreneurs as a launchpad for their start-ups. Companies and other organizations also see them as a fun and cheap tool to spur innovation.

On Your Mark, Get Set, Hack!

"It's almost like the Battle of the Bands where you get to show off your talents and an up-and-coming developer could come into one of these and really get everyone's attention," says Evan Korth, a professor in New York University's computer-science department.

The winners of a widely followed hackathon hosted by TechCrunch will be noted at its Disrupt conference this week in San Francisco. About 700 people registered for the hackathon, which took place last weekend. That's up from more than 300 at the TechCrunch hackathon in New York last year, where the GroupMe founders developed their software.

Hackathons, which first appeared in the late 1990s as a vehicle for open-source software developers to organize their collective computer-coding efforts, started to get more notice when Yahoo Inc. launched its Hack Day in December 2005.

"Whether you had started at the company yesterday or been there 10 years... it allowed new talent to be recognized really quickly," says Chad Dickerson, co-founder of Yahoo's Hack Day and now chief executive of online handicraft marketplace Etsy.

The concept caught on. Pedram Keyani, an engineering manager at Facebook Inc., says the social network's "like" button and other important product features grew out of hackathons the company hosts to foster creativity.

Held about every four to eight weeks, about 300 Facebook employees attend the typically eight-hour-long hackathons, and about 50 projects are demonstrated at the end, ranging from back-end engineering projects to small features that can be quickly rolled out.

Still, it can be hard to get noticed. TechCrunch editor Erick Schonfeld says that out of 100 projects demonstrated on stage, he expects about 70 to go nowhere and about 30 to move forward. Of those 30, about 10 could become a working product, and—at most—five could turn into companies.

Still, past winners of the TechCrunch hackathon, such as legal-document-sharing website Docracy and file-sharing service have begun to make names for themselves, which attracts more developers to the contests.

Abe Stanway, a senior at Rutgers University studying philosophy and computer science, and Misha Ponizil, a sophomore studying physics and electrical engineering at NYU, created their project, Honey Badger, at the New York Photo Hack Day in August. The 18-hour contest is aimed at building new online-photography applications.

Honey Badger, which uses motion-detecting and face-matching technologies to monitor who uses a computer and texts the information to the computer's owner, took second place overall and won the people's choice award, earning the duo $4,000 in prize money.

Governments are also getting in on the game. In July, New York hosted a "Reinvent" hackathon, where participants were encouraged to help redesign the city's official website, which hasn't been redesigned for about five years.

While the city didn't commit to using any of the winners' results, Rachel Sterne, the city's chief digital officer, said it plans to use several ideas and features that came out of the competition to guide its redesign, including greater use of search capability, location data and question-and-answer style elements.

Investors also see hackathons as a place to spot opportunities.

When GroupMe debuted its private text-messaging application, Mr. Martocci said the company was besieged by investors. "It was right time, right place," says Mr. Martocci.

GroupMe didn't win the contest, but by the middle of July, one of those investors, Charlie O'Donnell, a principal at seed-stage venture firm First Round Capital, helped put together an $850,000 funding round for the start-up.

"I don't think you can build a business in a weekend, but you can certainly convince a small team that something they've got is potentially an interesting idea," says Mr. O'Donnell.

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