Threadless is a very interesting company because of how it has “community-sourced” its product design. If you had told me that a company could succeed by running weekly tshirt design contests and then selling the winning designs, I would have told you that you’re nuts. I met Jeffrey during my tour of the Threadless offices a few weeks ago and posed these questions to him after my most enjoyable visit.
Question: What is your business model?
Answer: In a nutshell, our business is based upon the idea of “customer co-creation” or “user innovation” or “crowdsourcing” or whatever the next buzzword for it is. Truth be told, when Threadless first began, we did what we did because it seemed logical to us.
As entrepreneurs with no formal business training, you go with your gut. It wasn’t until 2004 when Jake, Jacob and I were invited to speak at MIT for Eric Von Hippel that we found out that what we were doing had a name: user innovation.
Threadless is an ongoing, online tee shirt design competition. Designers download a template and upload a design. Each design is scored on its own for seven days. The designs are voted on from 0-5 by our community of registered users. Currently, we have a little over 500,000 of them. There’s not real set “end date” for a contest as each design is available for scoring for seven days from the time it was submitted. However, each week we release seven new designs and two reprints to sale on our site.
The designer of each winning tee receives $2000 in cash and prizes: $1500 cash, $300 gift certificate to Threadless and a membership to the 12-club, a monthly subscription-based line of tees. We receive about 150 submissions per day and have printed a little over 900 designs. We currently sell about 80-90 thousand tees per month and ship them from our Chicago office/warehouse.
Question: What do you tell your parents that you do?
Answer: I’m pretty up-front with my parents about the whole thing. I made sure from the beginning that they understood well enough to tell other people. Threadless is a viral community—who’s going talk about something you’re doing more than your mother? Besides, if you can’t clearly and effectively convey to your parents what exactly you do, you’ll have no chance of explaining it to anyone else. It’s really easy with my Dad though, as he’s a very accomplished and well-respected businessman.
Question: How old is the oldest employee in Threadless?
Answer: I think our oldest employee is thirty three. Regardless of recorded, legal age – you’d never guess how old anyone in our office is. Most people tend to guess about 5 years too young.
Question: Do you look at Threadless as a “user-generated, long-tail, Web 2.0 company” or a “retailer of cool tshirts”?
Answer: Threadless is certainly user generated. It’s certainly long-tail. I hesitate to call ourselves a “web 2.0” company because I really hate that term. I don’t understand why people feel the need to categorize the web into versions. It’s easier to think of it as what’s new. Innovation doesn’t happen in planned, organized, measured steps that you can attach segmented numbering systems to. It just happens.
Nobody called automobiles “car 2.0” when the automatic transmission was invented. It was simply easier to use. Anyway, to answer the question directly, I’d say we’re both. Threadless is a skinnyCorp project that is a retailer of cool tees, and also a company that relies on users to create content, make decisions, and ultimately shape its own future.
Question: Who is your venture capital investor?
Answer: We took on a minority investment for the purposes of resources and not because we needed money to build the business. Our investor, Insight Venture Partners, is unique in that they invest in companies who are already successful and are looking for guidance, and not just needing seed money. They’re a spectacular group of people and have helped us immensely in our desire to blanket the globe with 30-single ring spun cotton slathered in fabric ink.
Question: Does Threadless’s effort in forums, podcasting, etc really increase sales or are they just fun/cool things to do?
Answer: Both, most likely. Honestly, we’ve never really measured their effects because it’d be really boring to do so. Participating in the forums, definitely helps to people understand that the owners and employees of the company really are part of the community and don’t sit up on high looking down onto our business. Most everyone who works for us was part of the Threadless community before they were employed, so it’s a pretty natural thing. The podcast—who knows—but it’s really fun!
Question: What’s the story with the Airstream podcasting trailer?
Answer: When we originally began doing the podcast, Charlie’s “office” went through many iterations. First, he was at a desk—deep in the warehouse where the tees helped to drown out the sound of the work. That was short lived.
The second version or, Studio 2.0, was a converted workspace in our office around which we built walls, a ceiling, and a door. We covered the walls in foam and carpet to try to insulate it from the sound. During the summer, Charlie would sit in there in his underwear because it was so hot. That place smelled awful.
When we moved into our new space, we planned on building Charlie a proper recording studio. I have a friend who builds them professionally, so we were going to have him do that. It never panned out, and at some point someone said, “We should buy an Airstream and gut it and turn it into Charlie’s studio.” That was pretty much the end of that discussion and next thing you know, we have a 1962 Airstream Bambi in our office that Charlie records out of.
Question: What do you want to be when Threadless grows up: Amazon, Wal-Mart, FaceBook, Crazy Shirts, QuickSilver, IDEO?
Answer: I wouldn’t want Threadless to be anything else besides Threadless when it grows up. When Amazon started, I’m sure Jeff had no idea it would become the giant that it is today. I’d like to think that he just kept his mind in his business and concentrated on making it the best Amazon it could be, rather than striving to make it “another whatever.”When Threadless grows up, I’d want it be inspiration for the next innovative new thing, not a new version of an existing thing.
Question: How much do you think you’ve spent decorating your offices?
Answer: Good god, I have no idea! On your blog about your visit to our office, one person made a comment to the effect of “I can’t wait to buy all their furniture at a discount when the go out of business.” I can assure that dude that the amount that we’ve spent on our office is safely within the not-going-to-make-us-go-out-of-business-because-of-a-few-Eames-chairs realm.
Question: Who are your business heroes?
Answer: I don’t really tend to look up to people in that sense unless I know them. There’s certainly people who I know who have really great businesses that they built from scratch who are worthy of praise, and therefore I draw inspiration from these people. Tim O’Reilly from O’Reilly Media, Jason Fried from 37signals, Sean Suhl from Suicide Girls, Zach Klein and Jakob Lodwick from Connected Ventures, Richard Moross from Moo—all these people have really inspiring stories to tell.
My dad, Alan, is a huge business inspiration for me. While he represents the more traditional way of doing business, I feel lucky that I have that level of business expertise so close to me…even if he does give me grief for not dressing up when I speak publicly.
Question: As an entrepreneur, what keeps you up at night?
Answer: We have this ethos at skinnyCorp: “Your project is not good enough.” We’re constantly striving to make all our projects as great as they can be – constantly evolving, constantly refining, etc. I never go to sleep satisfied that what we’ve been working on is done. It’s never done—it’s just “as far as you can take it today”. That—mixed in with thinking about new projects, new ideas, new everything—keeps me up at night. My three cats aren’t any help either.