Threadless. Paying a premium for participation

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Extracted from "Creative Genius: Innovation from the Future Back" by Peter Fisk, to be published 2010

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Threadless. Paying a premium for participation

  1. 1. theGeniusWorks Threadless T-Shirts Paying a premium for participation Extracted from Creative Genius by Peter Fisk Threadless began when Jake Nickell and Jacob DeHart entered an online t-shirt design competition, encouraging wild and personal designs which fellow entrants then voted on to find the winners. Soon the two friends from Chicago were thinking this is how all t-shirts should be made. In 2000, with $1000 start-up money, they developed an online store, threadless.com, which became an instant hit with online designers and everyone else who was bored with the limit ranges of t-shirts they could buy in most stores. T-shirts are an expression of yourself, people judge you by them, and they could be an artform too. Their business model focused on online networks, user-generated design and voting, low-cost production and high margins. The designs came free, except for a small number of incentive cash prizes each month, the shirts cost $4 to make, and because they were distinctive, sold for $15 or more. Every week, contestants upload their shirt designs to the site, where about 700 compete to be among the six that get printed. Any site visitors then score designs on a scale of 0 to 5, and the staff selects winners from the most popular entrants. Winning artists each get $2,000 in cash plus $500 gift voucher which they can trade in for $200 additional cash if they prefer, and the company gets a vote- winning design. Every selected design sells out within a week. Nickell and DeHart say that their skill has been to never stop thinking like users – about the experience, the products and site features which they would love to see.
  2. 2. theGeniusWorks The priority for the business is to drive growth, which keeps the pool of potential designers large and fresh, and the audience large for new and distinctive shirts. Of course, networks work by connecting customers together, so every designer gets an emailed online marketing kit by which they can recruit their family and friends to vote for their shirt, and maybe buy it too. Most site visitors are buyers not designers, curious to see the latest designers, after something quirky which isn’t worn by the masses. To keep people returning, Threadless a viral marketing programme with a range of rewards. Upload a photo of yourself wearing a Threadless t-shirt, for example, and you receive $1.50 off your next purchase. Refer a friend who buys a shirt and you get $3. The 30 man Threadless team sell around 1500 shirts every day, although sometimes it can rise to 35,000 so they need a robust site and supply chain to fulfil the ups and downs of demand. Visitors are encouraged to sign-up for newsletters, watch the regular Threadless TV vlogs, start their own blogs, upload photos, leave comments to Threadless or other visitors, which all results in a rich online community that also buys t-shirts. Special contests, known as "Loves Threadless", run in partnership with various sponsors. They set a theme for designs, with a selection of sponsor-related prizes being awarded to the chosen winner, and there is no shortage of partners who want to tap into the crowd-sourced action. In 2006 the business responded to demands from many in its community, and decided that its brand was now strong enough to establish it own proprietary brand of tee shirts, instead of printing on other branded shirts. It posted a blog saying “Imagine a tee that is less boxy than a Fruit of the Loom, but not as skinny as an American Apparel. Imagine a tee whose fabric is softer than American Apparel but not as thin." In 2007 Threadless opened their first retail store in Chicago, recognising that many people still enjoyed physical contact even in an online world. A limited selection of shirts from the website are available in the store and change every Friday. Upstairs there is a design gallery, offering design classes and showcasing the best-selling designs. Perhaps recognising that Threadless, is less about the shirts, and more about the art. Threadless began creating weekly video logs called Threadless Tee-V in 2008, streamed through its site and on YouTube. The grainy and irreverent, home-made style, with inputs from users, rapidly gained a huge following. In 2009, further exploiting the tech explosion, Threadless started working with Twitter, encouraging people to submit tweets, which were then voted on by other tweeters, and printed onto t-shirts. Winners received $400 and $140 gift vouchers. Nickell and DeHart is a shining example of a crowdsourced, user-generated participation business. People want to be part of something, to express themselves more personally. They want a piece of the action, much more than a cheap t-shirt. © Copyright GeniusWorks 2010 Peter Fisk’s new book Creative Genius: Innovation from the Future Back will be published in late 2010 by Wiley Capstone. Starting with Leonardo da Vinci it helps you stretch your imagination and sharpen your intuition, with the likes of Armani and Banksy, Gü and Guggenheim, Maeda and Miyamoto ... 50 creative tracks, 50 inspiring stories, 5 innovation zones and 15 practical toolkits. www.theGeniusWorks.com www.CreativeGeniusLive.com 

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