Beyond related experience: Upstream vs. downstream experience in innovation contest platforms with interdependent problem domains

Problem definition: Innovation contest platforms are often organized around specific fields and host contests that span a variety of interdependent problem domains. Whereas contestants may benefit from related experience in contests whose problem domains share an interdependency with the focal problem domain, it is unclear whether the benefits of related experience arise symmetrically from upstream experience (i.e., experience in problem domains that provide input information to the focal problem domain) and downstream experience (i.e., experience in problem domains that use output information from the focal problem domain) or differ among them. Academic/practical relevance: Given that innovation contest platforms serve to effectively match contest problem requirements with contestants’ skills, it is important to understand how a contestant’s prior experience on a platform contributes to her problem-solving performance. Our research provides a more granular examination of the benefits of related experience than what has been examined in prior studies on individual learning or innovation contests. Methodology: We collected detailed archival data from TopCoder, a leading innovation contest platform that hosts contests across multiple interdependent software development problem domains, from its launch in 2001 to September 2013. Our data set comprises detailed participation histories of 821 contestants in 3,274 contests across eight interdependent problem domains involving 8,985 observations. Results: Whereas a contestant’s related experience on the innovation contest platform is more positively associated with her focal contest performance compared with unrelated experience, the benefits of related experience arise only from downstream experience. That is, there are no significant performance benefits of upstream experience. Furthermore, the performance benefits of downstream experience are greater when the contest duration is shorter, highlighting its role in enabling more efficient search and problem solving in innovation contest platforms with interdependent problem domains. Managerial implications: Contrary to the notion of “hyperspecialization,” our findings suggest that contestants can reap benefits from diversifying their experience into downstream problem domains on innovation contest platforms. Furthermore, innovation contest platforms could facilitate such targeted diversification of contestant experience by developing more granular metrics of contestant experience across problem domains. Our findings also have implications for resource allocation and job rotation decisions in software development projects within firms.