Hackathons have become a standard part of the corporate innovation toolkit. But do they really work? What are the reasons for large companies to participate in hackathons? OP Lab has organized and collaborated with a number of hackathons over the years – and learned a number of lessons along the way. Why is OP Lab engaging with hackathons?
Hackathons have become increasingly popular in the last two decades. Tech giants, such as Facebook, Google and Microsoft have been actively organizing and sponsoring both internal and external hackathon events, and leading the way for innovating through hackathons. A famous example of the force of hackathons is the famous Facebook “like” -button, which originated from a hackathon held by the company. Indeed – many examples of innovative product features exist that are fruit of hackathon brainpower.
The phenomenon has also spread to universities and corporations across all industries – and now it’s just “trendy” to do hackathons. It is widely considered one ideation tool in corporate innovation. However, hackathons have also been criticized for their lack of efficiency. Statistics show that a mere 5% of ideas produced in hackathons ever make it to production. So – are hackathons essentially useful for companies? And if yes, on what terms?
We argue that in order to understand the potential value of hackathons we need to be conscious about our choices. For this, we would like to summarize our lessons learned into 5 statements.
1. Understand your goals for hackathons.
Firstly, you need to explain yourself what you are looking for. The worst mistake would be to engage in hackathons just for the sake of appearing “cool” and “innovative”. Are you truly looking for the next big product or service ideas or do you just wish to engage with talent and polish your employer image? Both objectives are completely legitimate – but you need to ask yourself what you are after.
Once you understand your objectives, you need to come up with a plan that truly contributes to these goals. Again the biggest mistake here would be investing resources into something and not making sure it delivers any outcomes. In our case, the worst failures have usually happened when we have decided to invest money in hackathons, but failed to contribute enough planning, people or work hours to come up with an impactful result.
Finally, you need to be vocal about your objectives. Who is the hackathon for? What are your expectations? How much and what kind of resources can you put into it? Identify the right stakeholders – and tell them about your thoughts. “Why are we here” -dialogue is a good start for any hackathon.
2. Discovering great ideas is hard,
but innovation is even harder.
On the way towards real innovation, the first thing you need is an idea. Or is it? Let’s take a step back. What is the problem you’re trying to solve? What is the opportunity you’re seeking to leverage? What is the underserved customer need and the added value to them?
The problem of hackathons is often that the idea generators are lacking the understanding of the pain points of their customer. That is why early validation of ideas is crucial. The best hackathon results we have seen have been based on teams with deep understanding of customer pain points. Acquiring that understanding when you start from scratch with a time constraint is challenging. Still, every team should aim at including customer validation in their hackathon journey, one way or another.
Lacking the understanding of execution challenges is a double-edged sword. On the one hand, ideation benefits from being free of constraints. However, if the objective is to produce feasible ideas, the original idea should be iterated along the way based on realities. Unfortunately hackathons are very often just able to scratch the surface.
It is important to acknowledge that ideas do not equal innovation. It is hard to come up with great ideas, but executing them is much harder. An idea doesn’t even have to be new – sometimes tweaking new angles to existing concepts or applying them in a fresh manner is the way to go. Hackathons are like lottery tickets – you never know what comes out at the end!
3. Innovation doesn’t happen in a vacuum.
How are ideas created? It is very common to see ideas being “owned” by someone. This is a far too simplistic version of the story. The truth is, the person who came up with the idea is not the only person on the Earth with the same exact idea. Ideas can’t be owned. Execution can.
What are ideas then, essentially? They are products of interaction with people, communities, the world. They are a result of questioning, understanding, solving, discovering, combining and restructuring pieces of information, forming new syntheses, and iterating – again and again. Ideas are living organisms that thrive when they are shared and exposed to new viewpoints. The worst mistake would be keeping the idea to yourself in fear of someone “stealing” it.
When it comes to ideas and innovation, we believe in the power of interaction. That is why we aim at fostering ideation dialogue with surrounding communities. Hackathons can be a great example of this. Our door is always open for a good discussion or exploring opportunities of doing something together.
4. Hackathons can be the perfect
One of the greatest things about hackathons are the people. The people joining hackathons usually have one thing common about them – they are open and curious to learn and grow. In case of external hackathons, this is a great starting point for recruiting for virtually any company. Who wouldn’t like to engage with bright talent with versatile skills and eagerness to do something meaningful?
Hackathons are amazing job interviews. There people don’t just say things, they do things. If you watch the process closely, you will see how people perform. We have recruited people directly from hackathons. People with no relevant experience, but people who were amazingly fast learners and equipped with outstanding attitude. When you see people in action, you will see a lot more than in a traditional job interview.
5. Hackathons should not be a one-way street.
Above I have explained some of the motivations for a company to join or organize hackathons. However, this is not only about getting something, but also about giving. The event should be based on a solid dialogue and mutual understanding about objectives. In case you are a sponsoring company, it is critically important to offer support to the participants all the way. “How can we help” is a question that needs to be asked.
Finally, hackathons can also be a part of corporate responsibility. In our case, we also want to help our surrounding local communities to grow and thrive. One of OP Financial Group’s core values is succeeding together. Hackathons are a part of this ideology – after all, we all are in the same journey of learning.
There are many questions about how to make hackathons the most efficient innovation tool possible. However, one thing is for sure – we will continue our exploration with hackathons next year!
Communications & Culture Lead at OP Lab
In December 2022, we participated in Hanken Quantum Hackathon powered by Ultrahack. Päivi Järvenpää and Marjaana Annala from OP Lab and Mikko Virkkunen from OP Markets were present at the hackathon kickoff and mentored the teams.
In February 2023, OP Lab is part of organizing an online hackathon that will be exploring the depths and opportunities of digital identity. Find out more and sign up to hack your way to a prize pool of 5000€ Ultrahack.org!