Threadless Founders Jake Nickell and Jeffrey Kalmikoff Crowdsource Their Way Into Our Hearts
With recent the election of a former "community organizer" to presidency, community organizing or "crowdsourcing" has become the buzzword for the great shift in our culture from "top down" (Bush) to "bottom up" (Obama) everything. In this vein, the Threadless.com co-founders Jeffrey Kalmikoff and Jake Nickell -- touted as the Harvard business school example of crowdsourcing -- took the Web 2.0 Expo stage on Friday for a keynote focused on harnessing the power of using your community as your greatest evangelist. For those of you who have never had the pleasure of submitting a shirt design and then hitting "reload" in hopes your score will improve, Threadless is a massive ongoing Internet design contest where the community can vote on their favorite. The most popular get the IRL /online mashup and are actually made into shirts. (Indicative of the site's popularity, several people in the audience at Web 2.0 were wearing Threadless shirts.)
What is unique about the Threadless business model is that Nickell and Kalmikoff don't own the designs submitted and they don't own copyright on the shirt (are you listening Facebook?). In return for their creativity and their contributions, winning designers receive $2000 in cash and a $500 gift certificate, compensation 4-5 times that of the T-shirt design industry standard. When asked about this seeming generosity, Nickell and Kalmikoff said that they originally set out to create a super beneficial environment: "A lot of the Web 2.0 principles we were doing as a function of our company before Web 2.0 as a name existed, and before Web 2.0 as a technology existed."
Crucial to this intention is the site's critique section and the concept that the "user generated content" involved here is not just the T-shirts produced, but hundreds of blog posts and thousands of comments in community forums on the site itself.
Although Threadless might register as the "scrappy new startup on the scene," the site (which started as a hobby) is actually 10 years old. Today it has 1 million users, 800,000 people on the newsletter list and receives over 800 design submissions per day, producing nine new shirts a week.
Banking on the principle that "nobody can have too many T-shirts," Nickell and Kalmikoff bootstrapped at first and kept their day jobs. As Nickell put it, "Every penny that came in was to print more shirts." In his opinion, they succeeded because "it's not a contest and designers are not competing against anyone except time.. the curators are not looking for anything in particular, i.e. not looking for a blue duck with one wing up eating another duck."
While we've seen the pitfalls of not using the community principle well (Facebook), according to Jake the best use of crowdsourcing is when it maintains "openness of content" and he brings up the exemplary Lego design kit contest, where Lego saw that kids industriously used Lego sets in different ways and basically gave them carte blanche to create interesting spin-offs on the Lego concept. Kalmikoff underscores the importance of keeping communication open: "It's super important to stay really involved because it's not easy to jump into a conversation that's been going on for three days. When you've got 1500 posts, you really need to be a part of the conversation."
When asked by an audience member for advice the would give to start-ups vying to be the "Threadless" of their respective industry, Kamikoff parlayed this sage piece of wisdom: "You are no longer in charge, your community is in charge... the misconception about crowd sourcing is that it's this easy way to shortcut spending money and being able to get things for free."
While a Threadless type "bottom up" structure does not make sense for every company (i.e. "it's hard [to get] passionate about toilet cleaning products"), aspiring entrepreneurs can take a hint from the Kalmikoff and Nickell and focus more on personal relationships as currency. This shift from customer to community is a result of many factors including the sagging economy, and as moderator Jen Pahlka pointed out, "emblematic of a movement connecting consumers with the creator of a product in a way that feels fundamentally different from going to the Gap."
In these times of transition, business owners must use their passion as fuel; as Kalmikoff says, you can be successful "as long as you have the determination to just figure it out" or when dealing with the deluge of blog posts and comments, all you have to do is start somewhere.