You're correct in that the "top 3%" represents the top 3% of the developers who actually applied to Toptal (about 11,000 from all over the world in the last couple months).
However, it's also important to know that the 3% was not arbitrary. We didn’t start by saying, “wow, we should set the acceptance rate at 3%, because that sounds nice” or we somehow knew that the bottom 97% were bad. 3% (and every value you see on our screening process) is simply the result of a numerator and a denominator (successful_applicants over all_applicants). We designed the process to be the bare minimum criteria for us to be extremely confident that we are admitting someone into the network who will thrive here.
However, it's also important to know that the 3% was not arbitrary. We didn’t start by saying, “wow, we should set the acceptance rate at 3%, because that sounds nice” or we somehow knew that the bottom 97% were bad. 3% (and every value you see on our screening process) is simply the result of a numerator and a denominator (successful_applicants over all_applicants). We designed the process to be the bare minimum criteria for us to be extremely confident that we are admitting someone into the network who will thrive here.