How Hacking Is Helping Businesses Beyond the Tech Sector

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12 min read

This story appears in the November 2014 issue of Entrepreneur. Subscribe »

When entrepreneur Jeff Raider wanted to solve a problem for a nonprofit in need, he found a perfect resource: his own employees. Each year his company, Harry’s, a New York-based purveyor of shaving gear, donates 1 percent of its sales and time to nonprofit organizations, in partnership with City Year, an AmeriCorps program. City Year was struggling to convince young men to commit a year of their lives to volunteering, and Raider believed his staff could help come up with a solution.

“We were trying to solve a big, out-of-the-box problem that required a diverse set of skills across our organization,” Raider says. “We needed everyone to focus on it at the same time and work together to come up with something special, unique and different than what City Year had thought of.”

Cue the hackathon. Part jam session, part competition, these loosely structured marathon events once evoked images of caffeine-fueled computer programmers cranking away on their laptops, pumping out code to build websites, services or apps. But applied beyond the engineering department, companywide hackathons can sort out all manner of issues, from small daily headaches around workflow or the mailroom to large-scale customer-service problems—even the creation of new product lines.

Warby Parker, a New York City-based eyewear brand, holds hack events to address specific company issues. “Giving some direction or at least some boundaries on the types of problems that [employees] should be working to solve can help tremendously,” says co-founder and CEO Dave Gilboa. “People tend to come up with more creative solutions once you put constraints around the problem.” 

Most recently, a Warby Parker hackathon resulted in Bookmark, a service that lets customers flag eyeglass frames on the website or in the company’s stores, for purchasing later either online or in person.

Des Moines, Iowa-based online payment processor Dwolla started holding internal hackathons in 2012 after finding success through external events, in which outside programmers were invited to build the company’s APIs. The internal hack sessions are loose and casual. 

“It’s this creative free time to pursue something that’s going to make your life better, make the company’s life better and make our users’ lives better,” a Dwolla spokesperson says.

Mike Swift has organized hundreds of events as co-founder of two companies: San Francisco-based Hacker League (acquired last year by Intel), which provides infrastructure for hackathons, and New York City-based Major League Hacking, which runs the official student hackathon league.

“They get people to step outside the normal box of what they do on a day-to-day basis and actually experiment and try new things that can benefit the whole company,” Swift says. “That’s the value of the hackathon.”

Hack events typically kick off with a motivating talk by a chief executive or the session’s organizer. In companywide hackathons, this talk lays out how everyone—including employees in nontechnical or noncreative departments, like finance—will engage.

“At first, they do not understand what role they play,” Swift says. “But the fact is that most successful internal hackathons are about solving problems for other people and departments in the company, people who are not necessarily engineers or designers.” 

Swift’s all-inclusive push gets to the heart of why hackathons work: They put people from different departments together, solving a common problem in a way that wouldn’t necessarily be possible during regular business hours. For this reason, the logistics of the event have to make sense for as many people as possible, from salaried staff to hourly workers. 

Harry’s and Warby Parker host their hackathons during business hours, breaking up the sessions into multiple days. At Dwolla, where hackathons have sometimes lasted more than 24 hours, employees are given flexibility in terms of participation. Some will go home at 5 p.m., some will check in from home, some will stay and work into the night—it all happens organically, according to Dwolla’s spokesperson. “We’re not forcing this kind of workload, it just kind of happens,” he says. 

That said, Swift advises organizers to focus on getting as many people to participate as possible, and not to worry about those who can’t.

At the beginning of the event, it’s important that organizers set specific goals. When Harry’s kicked off the City Year hackathon, staffers from the nonprofit came in to present their problem and to participate in a question-and-answer session with the teams to thoroughly brief them on the issue at hand. 

“You should come up with why you’re doing something before you figure out what you’re doing,” Swift advises. “You can always iterate on how you’re solving a problem, but it’s really hard to iterate on the problem that you’re trying to solve.”

After the goals are spelled out, the staffers take over. At Dwolla, people stand up and explain their plans, and company managers talk through each, examining them from all angles. 

“It’s like this free market of ideas, where the best ones naturally rise to the top,” the Dwolla spokesperson says. “It’s also a great way to do some soul-searching internally, to recognize where the gaps in our operations are and what we need to concentrate on in the future.” 

As a result, Dwolla’s internal hack days have generated a variety of workplace improvements, from better manuals for new employees that explain the company’s values to an online resource center of vital information for customers.

Once the pitches have been made, participants either form teams naturally or assemble into groups preselected by the organizers. At Dwolla, people can work on multiple teams if they feel strongly about more than one project. At Harry’s, many teams will start a weeklong hack, but they are winnowed down to three as the best concepts are identified. (The eliminated teammates get redistributed among the surviving projects.) 

SmallBox, an Indianapolis-based creative marketing agency, builds its teams in advance of the hack week, allowing employees to sign up for projects connected to their interests. Then people are moved around to “load balance,” says co-founder and CEO Jeb Banner, so that every project is given equal resources. “Those teams start to meet ahead of the hackathon and generate a little bit of momentum before the week starts,” he says.

After projects are greenlighted and teams are assembled, the hacking begins. Laura Zax, director of social innovation at Harry’s, says she has never seen her peers more motivated than during a hackathon. “It’s the natural, friendly competition element of a hackathon and that ticking clock that keeps people on their toes,” she says.

As the predetermined hack time winds down, the organizers spring back into action, setting the stage for teams to present their projects and pick a winner. Like everything else in this process, the criteria for judging projects can vary. 

For the Harry’s event, Raider and four representatives from City Year selected the best presentations. But the panel might also include key stakeholders in the business, important partners or even employees picked at random and given the honor of choosing the winners.

Prizes for winners can also vary. Foursquare, a Hacker League client that runs hackathons every year, gives its winners a boxing champ’s belt, in addition to lavishing them with opportunities like ringing the NASDAQ closing bell. For one external hackathon, Dwolla gave a cow to the first-place winner, a sheep to the runner-up and a pig for third place (with the caveat that the company would donate the livestock on behalf of the winners). 

Keeping with the social mission at Harry’s, its champs were rewarded with the knowledge that they helped a charitable organization in need. But that’s only part of the pleasure: The ultimate prize for employees is seeing their ideas come to fruition. “People really wanted to win, because they wanted to build their idea,” Zax says.

But every hackathon organizer and company manager agrees that the companies themselves are the biggest winners. “In the following days, weeks and months, participants tend to be much more engaged and excited in everything that they’re doing,” says Warby Parker’s Gilboa, “even if it’s not related to what they were working on during the hackathon.” 

Hack is the new black

How to host your own session

There’s no single way to run a hackathon. Every variable can (and should) be tailored to your company’s specific needs. Still, anyone who has conducted one of these affairs will agree that planning and organization are vital. 

“The one mistake that I see is not planning enough,” says Jeb Banner, CEO of Indianapolis-based SmallBox, which has run hack events every six months since 2011. “You’ve really got to spend some time getting it set up.” 

Here are some expert tips on how to organize your own event.

1. Determine the duration. Hack events can be a day long, or they can stretch an entire week, during which the office otherwise shuts down. The latter is how Banner prefers to do it, remarking that the more unwieldy and undefined the topic, the more time needed for the hackathon. 

2. Pick an off-site location. The key to a successful hackathon is to remove your staff from the mindset of the company’s daily operations. Getting off-site will do that and, depending on the space, make it easier to reorganize workers into teams, feed them without making a mess and even host them overnight if necessary.

Some companies rent conference or meeting spaces to run their hacks, but an off-site location can also be had on the cheap. SmallBox’s most recent hack week was held at a client’s office, a local public radio station that had plenty of space to loan. Staying at the SmallBox offices would have kept people in their professional comfort zones, according to Banner. “When we disrupt that, it immediately changes behavioral patterns.”

3. Prioritize safety. Talk to your insurance broker to make sure you’re covered for any mishap that may occur. “Lots of companies sell event insurance,” says Mike Swift of Hacker League and Major League Hacking. “It’s cheap and easy to get. Always err on the side of caution when it comes to any hackathon.” 

That includes making sure to have security arrangements for all-night events, monitoring who’s coming and going. 

4. Create a collaborative environment. Tech engineer Zac Bowling has participated in more than 140 hackathons and is a big fan of rolling tables that help people break off into teams, providing space to spread out and a modicum of privacy. Multiple rooms also work well.

5. Beef up the Wi-Fi. Being able to set up and work anywhere is the name of the hackathon game, so make sure your wireless internet network is working before you begin. According to Bowling, that means testing it out in the farthest corners of your hack space, as well as ensuring that the network can handle the load of everyone connecting to the web at the same time.

6. Create rest areas and serve smart foods. For all-night events, make sure there are quiet rooms or corners for napping. Encourage staffers to bring sleeping bags, and provide comfortable furniture like giant beanbag chairs or couches. 

Stock up on coffee, soda and energy drinks. Carb-packed snacks will carry teams to the finish line. “Very bready kinds of things (muffins, rolls, bagels) in the morning really help,” Bowling says. “They also help if you’re going all night.”

Avoid garlicky foods, and keep in mind that people will take meals and snacks back to their workstations, so steer clear of sloppy items. “There’s one incident I remember from Music Hack Day. They brought in chili, and it was just a disaster,” Bowling says. “A horrible, horrible disaster.”

7. Get in there yourself. Organizers and company leaders should roll up their sleeves and take part. “At Facebook’s hackathons, Mark Zuckerberg was there all weekend,” Bowling says. “It really reinforces the importance of what everyone’s doing and ramps up the tenor of how the event’s going to go.”

If not directly involved in problem-solving, organizers can stay busy by doing everything from bussing food and ferrying garbage to offering insight and spurring teams on. “The best organizers are the ones who are constantly walking around, talking to people and figuring out how to make the experience better,” Swift says.

8. Limit the pitches. At the end of the hackathon, give each team no more than five minutes to present its solutions via PowerPoint deck, a product demonstration or even sketched out on a whiteboard or giant notepad. 

Make sure to time each presentation, ruthlessly cutting off those that go over the limit. According to Swift, this will force teams to focus on their message and prevent them from devoting too much time to their presentations instead of their hacks.

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