Threadless: Weaving a Community at Profit

December 8th, 2008 in News, by Head Honcho

Knowing the customer’s psyche is a premium in every business.

Many companies spend much money, time and manpower to know what the customers really want. In this way, they can implement the information as quickly as possible - and to earn money from it in the process.

If there is a machine which tells businesses exactly how the customers think, it would have been sold out long ago. Unfortunately for companies, such a machine does not exist yet.

Threadless.com, a community-centered online apparel store, also does not have such a machine. But its business model yields the next best thing. It is implementing a system which takes advantage of crowdsourcing to know which shirt designs meet the standards of its members.

Here is how Threadless works in a nutshell: Its members can send in t-shirt designs. Other members then vote on the best designs. A design that garners enough votes is then produced and later sold through the Threadless website.

It is a win-win situation for everyone involved. Members get to submit a shirt design which they think is good enough for mass production. An approved design can mean instant fame for the designer. But for members, it isn’t just a place to design and buy shirts. Threadless members feel a sense of belongingness to a community - they can rate the shirts that they like, they can write blogs, and they can even post photos of themselves wearing the shirts that they bought.

For Threadless, this translates to higher profits at lower overhead costs. It doesn’t have to invest too much capital on advertisements, professional designers, models, fashion photographers, sales, brick-and-mortar stores, and market research

Threadless’ success speaks for itself. It is named as America’s most innovative small company by Inc.com.

To see how loyal members of Threadless can be, just check out this clip: