Threadless.com was founded in 2000 by Jake Nickell and Jacob DeHart after winning a t-shirt design contest. When their website was created there were no social networks to promote their site, they did not exist. In order to get their new store out to the people they created their own social network where they run design competitions that allow artists to submit designs to be printed on a t-shirt and sold on their website. The website itself was a social network where people blogged, chatted about designs, and socialized with fellow artists.
Artists from all around the world jumped at the opportunity to have their design printed on a shirt then sold on the website. Each week there are about 1,500 designs submitted that compete against one another. During the duration of that week the public is able to vote on their favorite designs. At the end of the week a team from Threadless finds the 10 designs with the most votes and prints them to be sold.
The lucky artists that win the most votes receive a cash prize of $2,500 and a $500 gift certificate for Threadless. Each time a design is asked to be reprinted, that artist receives another $500.
Despite the fact the company has never advertised, employs no professional designers, uses no modeling agencies or professional photographers, has no sales force or retail distribution, they have never produced a flop. Annual sales are up to $5 million. They keep their costs low and because the community chooses which shirts are to be made, every product is eventually sold out, the customers are the company.
“Threadless completely blurs that line of who is a producer and who is a consumer,” says Karim Lakhani, a professor at the Harvard Business School. “The customers end up playing a critical role across all its operations: idea generation, marketing, sales forecasting. All that has been distributed.”
Once social networks started to form, Threadless would also use those to gain even more customers. They started to come up with themes for the artists to design. Earlier this year in February Threadless ran The Zombie Rights Campaign, where artists could compete in designing the best zombie picture they could. Also when Twitter started to become more popular, Threadless ran a competition having designers come up with the best tweets to put on a t-shirt.
Due to the success of the design campaigns, Threadless was able to open up a retail store located in Chicago in 2007. Sold from the store are the same designs that are submitted on their website. Because new designs are submitted weekly, the online store and the retail store products change every Friday. As the products are always changing to something new, this keeps customers coming back each week to check out all the new designs.
The idea of running these design campaigns created sudden success for Threadless. Jake Nickell has built this entire business around the idea that an online community can drive innovation.