Crowd Pleasers: Threadless Gives People What They Want

The headquarters of Threadless.com look like the collision of a dot-com startup and the Little Rascals' clubhouse. The main room of the offices on Chicago's northwest side holds three ping-pong tables, a set of full-size arcade games and a photo booth. Off to one side sits a '62 Airstream trailer and a couple of couches, catty-corner to a large flat-screen TV, a half dozen recliners and a panoply of videogame consoles.

But don't let the slacker decor fool you. For everyone from Inc. magazine to MIT's Sloan School of Management, these guys represent an entirely new way to create and market products: crowdsourcing, the practice of using the community outside the company to help create and then market your products.

Threadless didn't set out to be the poster child for a next-gen business model. Back in 2000, Jake Nickell and Jacob De Hart were two college students who met up in an online designer forum called Dreamless.org. Nickell had recently won a T-shirt design contest, and the pair got the idea to run similar competitions for the community. Creators could submit art; the public could come to a Web site and vote for their favorites; and the winner would receive a small cash award. The “Two Jakes,” as they were known, would print up and sell the winning designs and plow the profits back into further contests.

Almost immediately the founders began noticing a social component to Threadless.com, the name chosen for their contests. After submitting their art, designers asked their friends to come onto the Web site to add their voices in picking winners. Without intending to, the Two Jakes had successfully tapped into word of mouth marketing on the Internet.

That success continued, with the Threadless community growing from 10,000 members in 2002 to 70,000 in 2004. Today the community stands at 1 million members and counting.

As for revenue, while the privately-held company doesn't release sales figures, various sources have reported that revenues grew from about $100,000 in 2002 to $18 million in 2006 and as much as $30 million in 2008.

Managing that kind of growth requires some professionalism in the C-suite. In May 2008 Thomas Ryan, an entrepreneur from the world of online music retailing, stepped in as CEO of parent holding company SkinnyCorp., and founder Nickell became chief strategy officer. And in March of this year Cam Balzer joined the company as vice president of marketing — a post that had not existed before he arrived.

“The company has traditionally done almost no advertising,” Balzer says. “It's all been driven by word of mouth. People can't help talking about the cool T-shirt they see someone wearing. My mission here is really to find ways to amplify that buzz.”

Content Under Pressure

For both paid and unpaid marketing, that means reaching Threadless fans primarily through online social media, something they consume in large amounts and in a wide variety of channels. The company has a Facebook page (currently 95,000 fans) and a branded Twitter account (1.4 million followers), of course. But it also lets its friends connect on an array of other social platforms that would dizzy the average over-30 marketer, like sharing video on Vimeo, posting everything from T-shirt designs to ping-pong league photos on Flickr, and even maintaining music stations on Web radio platforms Last.fm and Blip, so that true believers can find out what the company's 45 employees like to listen to.

Balzer's team is the driving force behind that engaging content, always served up with an eye toward entertainment and mixing contests, discount offers and a healthy dose of anarchy. Charlie Festa, Threadless' community relations manager, serves as the bespectacled public face of the company on most of its Threadless Friday video updates and many of the 200-plus videos on Threadless Tee-V. He also designs and runs extended user competitions such as this past summer's “Threadcakes,” a contest to reproduce some of the best T-shirt designs in flour, sugar and icing, and “Threadknits,” a current competition to do the same in crochet.

Promotions manager Bob Nanna is the avowed “Twitter ninja,” watching over traffic on the brand's main account (but also taking the title role in Threadless' “Stump the Banana” trivia giveaway games, streamed live to the Facebook site). And editor in chief Colleen Wilson consults with all these channels and the Web site to make sure that all Threadless communications have the same sassy, informal but helpful tone.

Twitter serves as the connective tissue for both the Threadless community and its other outbound messaging, its e-mail and newsletters, which Nanna also has charge of. E-mail and newsletters — even those users have subscribed to — can choke a mailbox, and when you're promoting several different things in each one, the details can get lost, Nanna says. With Twitter, each contest or observation gets its own 140-character mention.

“Users are going to Twitter in the expectation that they'll receive many different messages from all the people they follow,” he says. “Whereas we would only be able to send a newsletter once or twice a week with 10 items in it at once, our people are expecting us to tweet five to 10 times a day.”

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