What’s that on Your Shirt? A Sign of the Future…

Posted by Bill - April 5th, 2008

It’s a rainy Saturday morning in Boston, and I’m sitting around the house in my ratty blue jeans and a new T-shirt, which fits great and looks, if I say so myself, pretty darn cool. I bought it from Threadless, a small company whose rapid growth offers big lessons for the future of product development, marketing, and connecting with customers.

Threadless is in a pretty old-fashioned business—selling T-shirts. But the company, which has become an Internet sensation, does it in a completely new-fangled way. The designs in its huge online catalog all come from its customers, who submit their original artwork to the site. Threadless has 600,000 registered members and adds more than 20,000 members per month. It receives an average of 150 new designs per day—that’s a thousand designs a week. Members rate the submissions on a one-to-five scale, and the highest vote-getters win. (Well, that’s oversimplifying a bit, but it’s basically right.) The company selects seven new designs each week and sells the shirts for $15-$17 each.

What an awesome business it’s become! Threadless sells 90,000 shirts per month—that’s more than a million shirts this year alone. Total revenues will be nearly $20 million—with just 35 full-time employees. And the brand is hot as can be—young people around the world know and embrace Threadless as a company, a sensibility, and an online community.

So what are the lessons of this fashion phenomenon? First, you don’t need a huge staff to do big things—particularly if you create a community of deeply engaged fans who are willing and eager to do a lot of the work for you. What traditional design department could possibly match the creativity and energy of thousands, even tens of thousands, of talented young designers competing against one another.

And these designers love to strut their stuff. Winners of the competition receive $2,500 in cash and merchandise. A few of the designers are so good, and have won so many times, that they’be become mini-celebrities. Glenn Jones, a young designer in Auckland, New Zealand, is the all-time Threadless champion. He’s won 20 times, he’s been the subject of profiles in all sorts of newspapers, and he recently started his own shirt-design company by virtue of his talent and visibility.

Second, Threadless makes sure that this collective brainpower gets applied to more than just design. Members don’t just get rewarded for their art. Their votes determine what shirts get made. And they earn points — good for store credit — for referring new buyers and for submitting photos of themselves wearing Threadless shirts—a sign of viral marketing.

Finally, grassroots participation isn’t just about the Internet. Last September, Threadless opened its first-ever physical store in downtown Chicago. It stocks just 20 different T-shirt designs at a time, and no shirt stays on sale for more than two weeks—excellent ways to create a sense of scarcity and excitement.

But the real value of the store is not as a 21st-century version of the Gap. It’s as a hangout, a community center. The company and its members host art exhibits, run Photoshop seminars, and, in general, socialize with and teach each other. They interact in the real world in the same spirit that they interact online.

Who ever imagined that the lowly T-shirt could become such a source of creative energy and business innovation? But don’t take my word for it. Go to threadless.com and see how it works. You may even come away with a cool shirt—or the urge to design one yourself!

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