Cam Balzer
VP, Marketing
Threadless
3/30/10
Can you clarify how the Threadless model works?
We have an open casting call for t-shirt designs. Anyone can submit. We review all submissions for copyright issues, quality standards, etc. Every approved design then goes to the site for voting. Over 7 days, the community weighs in on how well they like it.
The ratings are [on a scale of] 1-5 and there’s also a box they can check that says they’d buy [the design]. These data points give us a good read on the potential market for the design. We use that data to pick from amongst the top scoring [designs] to select tee’s that go to production.
How many designs have you produced?
Every week we produce 6-8 brand new tee’s. We’ve had over 200,000 designs submitted in the last 10 years. We’ve produced about 2,000 of them.
Designers get $2k cash and a $5k gift certificate [if their design is produced]. If we reprint, it they get another $500.
So the designs don’t stay available forever?
There’s an implied scarcity in the model. When something goes out of stock there is no guarantee it will get reprinted. The community can submit reprint requests, though, and people mount informal campaigns among friends to get more requests and we take that into consideration.
Are the community ratings generally a good predictor of how a design will sell?
Yes. All our “hits” have score pretty well. But ours is a long tail business. Like a record label, we produce new stuff every week and are subject to the market dynamics of hits, niche and mid-tail.
Chapter 2 in my book is “Tap the Wisdom of Crowds.” Is that what you’d call what Threadless is doing?
A lot of people say Threadless is the poster-child for “crowd-sourcing.” But that term implies faceless, nameless people that you build a business off of for free.
We talk about community-sourcing or friend-sourcing. We work with the community as a group of friends. In fact, many of our most passionate members have become friends.
We have a vibrant, artistic exchange on our website that people invest in and that drives our success. They want to tell others about us because we’re a good source of ideas and you can earn cash.
[With Threadless,] it’s not about random crowds, it’s a core community [we] engage deeply [with], are transparent to, and take feedback from. Transparency is one of our core values.
The community steers our business. This is expressed not just in product development but corporate strategy. We’ll ask the community forum for input when making business decisions.
Can you give me an example?
We’ve been exploring wholesale distribution. In other words, selling our designs at department stores and other retail outlets. We posed questions to a group that has had their designs printed [with Threadless]. We call them the “alumni club.” We asked how they would feel about their designs showing up in various retail settings. [By and large,] they were very open-minded about it.
Are the designs available in retail now?
We’re still exploring it. We are having active conversations.
Have you considered applying the community-sourcing model to other categories beyond t-shirts?
Our parent company, SkinnyCorp, builds community-driven websites. We’ve built extensions onto other sites like IParkLikeAnIdiot.com. We have people send in pictures of really bad parking jobs. And we sell stickers that are low-tack vinyl that you can put on a car when you see one parked like an idiot.
We also have ExtraTasty.com for drink recipes. And another experiment is NakedAndAngry.com, which sells dishware, handbags, wallets, and umbrellas all with repeated pattern designs. The designs are submitted, rated and produced [much like Threadless].
We’re also working with Griffin to launch a co-branded lined of iPod cases. And we have a design challenge up on Threadless now with Havaianas for flip flops. They’ll be on sale this summer.
What advice can you give marketers thinking through how they can apply the community-sourcing model to their businesses?
- Be open and transparent with the community.
- Build a community where they’re invested, not doing cheap labor [for you]. Show them that their ideas and insight are valued and rewarded. Our model is very generous. The $2.5k reward is higher than other t-shirt designers offer. This keeps quality high and work and participation high. I guess the point is: don’t be stingy with your community. We take a generous, magnanimous approach.
- If you’re going to open up, really open up — not just in some token fashion. We have become a company you’re friends with. If you’re not willing to be a company that someone would genuinely be friends with, then community-sourcing might not be for you.
We give the community a say. In meetings, we ask, “What would the community say?” That holds sway in our decision-making. We’ve turned down lucrative opportunities because they weren’t good for our artists [and/or] fans.
You’re giving away ownership of the brand to outside people. Brands have always been about individual experiences with products. TV ads were very prevalent because they gave brands a bigger megaphone [to showcase those experiences]. We give ownership back. People have smaller megaphones but there are a lot more of them. Threadless has grown by these voiceboxes of consumers and we empower them to use [those voiceboxes] on behalf of our brand.
What numbers can you share about the size/growth of the company?
We don’t disclose revenue. We have over 50 full time employees. We sell millions of t-shirts each year. We’ve had double digit growth the last several years (and even bigger growth before that when we were a smaller company).
We have 1.2mm registered users. We have 1.5mm Twitter followers and 100k Facebook fans.
This year is our 10th anniversary. We were founded in 2000 as a side hobby for Jake Nickell, who’s now the chief strategy office and a board member and Jacob DeHart, who has moved on.
There is a Threadless book coming out later this year and a museum exhibition that we hope will travel.
