The Original Community Pioneer – Threadless – Part 2
Last week Outside In covered the background and model insights in a Part 1 piece on “Threadless – The Original Community Pioneer” here at:
The Part 2 piece continues to deep-dive into understanding the big Innovation Model Canvas, the KSFs and Takeaways that the Threadless journey has for other players in the Retail and Consumer space. Without much ado, we jump right in…
Base Model Canvas for Innovation
Illustrated below is the Base Innovation Model Canvas that can be compiled for the Threadless business, spanning from Ideas Generation to Product Development to (Sales) Results
Key Success Factors (KSFs)
Low Barriers for Community Membership: Threadless users are not required to join the social network or vote in order to buy shirts, but many users have offered their opinions on thousands of designs. There's something enjoyable and empowering about playing critic in a never-ending gallery of popular art. Employees have long served as the models for the company's shirts; this puts community members on a first-name basis with them
No Sales Push: Participation on Threadless is not just about voting for designs one really wanted to buy. It's an exploration of new designs, and it is fun. For a paper he published in the Sloan Management Review, it was found that only 5% customers were buying shirts without first voting on designs. Almost no one was simply consuming. They were all participating. – Frank Piller, a management professor at Germany's Aachen University and a researcher at MIT
User-Entrepreneurship: "Why wouldn't you want to make the products that people want you to make?" – The idea that the users of products are often best equipped to innovate is something many entrepreneurs know intuitively. And it is supported by a growing body of research – a study in the Strategic Entrepreneurship Journal has suggested that the vast majority of companies are founded by people who went into business to improve a product they used. Other studies have shown that in industries as diverse as scientific instruments and snowboard equipment, more than half the innovations generally come from users, not from research labs
Hiring Metric – Trust: It's pretty much the only thing they talk about when they interview. The goal is to find people who can work independently. Those who do not display an ability to figure things out on their own are quickly dispatched. Trustworthiness is especially important at Threadless because the company's most important asset -- its vast online community -- is managed collectively. It employs no moderators, and no single person or group is charged with keeping the community happy. Nor, technologically speaking, is the social network itself especially advanced. It lacks many of the features found on, say, a Facebook. There are no virtual friends, no messaging features, and no status messages. Users' profiles are made up of their blog postings and their submissions
Staying (Really) Close to Its Customers: What Threadless lacks in flashy features, it makes up for in steadfast dedication to staying close to its customers. Their Leadership team spends much of their time cruising Threadless.com -- posting comments on blogs, inspecting designs, and tweaking the website. They publish their instant-message addresses and regularly query the public about changes to design or contest policies. On Threadless, if people see something they don't like and want to talk to Jake (the Founder), they get Jake
Establishing a Physical Community Connect: The 1st signature Threadless Chicago store stocked just 20 different T-shirt designs at a time, and no shirt stayed on sale for more than two weeks –as a way to evoke the sense of creative excitement and fast-changing selection that infused the online catalog. But the real value of the store is not as a 21st-century version of the Gap. It is as a hangout, a community center, a social scene. The company and its members host art exhibits, run Photoshop seminars, and, in general, engage with and teach each other. They interact in the real world in the same spirit that they interact online–with a clear sense of grassroots participation and a commitment to distributed leadership. This store, however, was shut down in 2014 as part of a revised strategy, which saw them partner with Gap for Store Sales in 2012
Impactful Community-driven Tools: Check one of their community member-driven tools to convert one’s Artwork into a Product and Selling It Online: https://pickandtip.com/money/threadless-artworks-product-shop-sale/ (I actually have bookmarked this link for my personal future reference and work on community L&D initiatives)
Limited Inventory Only: One neat feature of the site is the constantly updated inventory bar, which shows how many shirts remain available in each size for each design – a warning for indecisive buyers to place an order before the supply runs out. Members can also vote to reprint a shirt that has gone out of stock as a Threadless classic. But, the company does not sell unlimited quantities of its most popular offerings! They are not like a traditional company that says, ‘Oh this is selling really well, let’s make it our meal ticket until people don’t want to buy it anymore,” according to founder Jake Nickell. He explains that it doesn’t do anything for the artist, and it doesn’t do anything for our community. They have set the guidelines for how the company is going to run, and by staying within those guidelines, they foster and maintain trust with the people who participate
Evolution of Artist Shops: Threadless announced Artist Shops in 2015 and rolled them out to Threadless’s general community in early 2016. Artist Shops, still in existence, allows designers to sell items printed with any design (allowed by Threadless’s T&Cs) directly to customers and receive royalties on each sale. More than 100,000 white-label Artist Shops have opened since 2015. (However, there is a flipside to this: The shift to a more equitable royalties and rights model has removed the gamification elements of Threadless that made the site so addictive to some designers and users. While per-shirt royalties from the start would have massively benefitted the most successful artists, many designers say that the windfall $2,500 prize for winning the weekly design competition was preferable to them and they lost the motivation to submit designs due to the change)
Takeaways
Some major corporations have experimented with these ideas – Pitney Bowes has an online social network for direct marketers who use its mail machines, and Ford allows drivers of its Focus sedan to add third-party hardware and software to their vehicles' navigation and entertainment systems. But most companies still prefer the "find-a-need-and-fill-it" paradigm -- which involves market research, focus groups, testing, reworking, and retesting. Not only is this method extremely costly, but it fails to capitalize on a company's most dedicated customers -- who often are already improving existing products to fit their needs
Companies are very good at creating platforms for external input, but they're very bad at using this input. No matter how much technology goes into prettying up the suggestion box, the suggestions tend to get dumped in the trash at the end of the week. Instead of corporations, if the assessment process made by users themselves, it would create a competitive field for designers. Willing to get appreciation always leads to design the better
The very triviality of Threadless's product – something as low tech and as commoditized as a T-shirt – proves that vibrant online communities can drive all sorts of nontechnical businesses. This should be encouraging news to entrepreneurs. Customer communities have become exceedingly inexpensive to build and manage; blogging software and social network platforms, for example, are now available for free from a handful of start-ups
With Twitter and Instagram, established in 2006 and 2010, consumers and producers are closer to each other than ever before. Consumers, the ones who believe that it mirrors their social status, are now getting more loyal, sharing their ideas and experiences about brands. With the integration of the consumer in the process from the idea to the marketing of a product, the applicability of the co-creation model has become much higher
Without enough people, the chances of co-creation success drop. When Starbucks launched its My Starbucks Idea co-creation platform for customers, it understood from the start that it was critical to lure big numbers of participants — between 1,000 and 7,000 is an ideal number for one product. It is all about taking attention and targeting true co-creators. It is important to attract the attention of people who are prone to the co-creation model and find out what these people are interested in on social media. Companies can start by reaching people who actively mentions about brands on social media. Loyal customers generate a high customer base in the long term, helps to reduce marketing costs and lead to a greater market share
Power of (deeply engaged) Fans is bigger than a (traditional) Design Department: Organizations don’t need a huge staff to do big things – particularly if they can create a community of deeply engaged fans and allies who are willing and eager to do a lot of the work for them. What traditional design department could possibly match the creativity and energy of thousands, even tens of thousands, of talented young designers submitting their best work, and of visitors casting millions of votes to react to those designs? And these designers, it should be said, love to strut their stuff
Different People Bring Different Talents: At Threadless, individual members don’t just get rewarded for their artistic prowess. The company offers a collection of Type Tees (a forerunner to Twitter Tees) in which members who are clever with words submit pithy slogans (“Rock is Dead, and Paper Killed It” or “To Err is Human, to Arr is Pirate”) that get voted on and made into shirts. Meanwhile, members with a flair for marketing earn points (good for store credit) for referring new buyers and for submitting photos of themselves wearing Threadless shirts, evidence of their commitment to viral promotion. And since Threadless produces fixed amounts of each shirt, and does not add to the print run even if a particular design or slogan surges in popularity, members as a whole conduct a form of shared inventory control
Additional Reading Resource: Check out their 10th Anniversary book on “10 Years of Insights and Inspiration” for deep study, in case this Outside In post has impressed you. But yes, we do have a quick flavor from the founder himself here at: https://www.convinceandconvert.com/social-media/threadless-shares-10-years-of-insights-and-inspiration/
In Conclusion
“You are Threadless. You make the ideas, you pick what we sell, you’re why we exist.”
The lesson of Threadless is really basic. Its success demonstrates what happens when you allow a company to become what their customers want it to be, when they make something as basic and quaint as "trust" a core competency. Threadless succeeds by asking more than any modern retail company has ever asked of its customers -- to design the products, to serve as the sales force, to become the employees. They have pioneered a new kind of innovation. It doesn't require huge research budgets or creative brilliance -- just a willingness to keep looking outward…
References and Sources
1) HBS Case Study – Threadless – The Business of Community
2) Inc Magazine – The Customer is the Company
3) Medium Case Study: https://medium.com/@b_filizlibay/threadless-a-case-study-65a019575579
4) LinkedIn Case Study Analysis by Saloni Garg: https://www.linkedin.com/pulse/threadless-case-analysis-saloni-garg
5) LinkedIn Case Analysis by Sina Rezaei: https://www.linkedin.com/pulse/threadless-success-failure-sina-rezaei
6) Threadless Innovation Model Canvas: https://www.researchgate.net/figure/Base-Canvas-for-Threadless_fig1_226522290
7) 10 Years of Insights & Inspiration by Jay Baer: https://www.convinceandconvert.com/social-media/threadless-shares-10-years-of-insights-and-inspiration/
8) Convert your Artwork into a Product and Sell It Online: https://pickandtip.com/money/threadless-artworks-product-shop-sale/
9) Threadless Puts Everyone in Charge: https://www.fastcompany.com/1714561/company-community-threadless-puts-everyone-charge
10) Threadless in GAP Stores: http://www.jeremygibney.com/gap-threadless
11) What Happened to Threadless: https://www.racked.com/2017/11/6/16551468/threadless-t-shirts-ecommerce