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Threadless.com Creating profit through an online design community Team C Lalit Chopra, Eliran Drucker, Geoff Gibson, Benni Lickfett, Josh Mischel, Verity Noble, Daniel Santamaria, Alessio Tixi

Threadless + crowdsourcing

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Page 1: Threadless + crowdsourcing

Threadless.comCreating profit through an online design community

Team CLalit Chopra, Eliran Drucker, Geoff Gibson, Benni Lickfett, Josh Mischel, Verity Noble, Daniel Santamaria, Alessio Tixi

Page 2: Threadless + crowdsourcing

Introduction

Hi Jeffrey – Video from 2007

Page 3: Threadless + crowdsourcing

What does threadless do?

Threadless.com

Designs 150,000+ / year

Sales$30MM+ / yr

Community(“Crowd”)

Designers100,000+

Buyers4MM+

Source: dailycrowdsource.com

~10 shirts / wk

Vote for faves

Community Contribution Direct threadless contribution

Design community participates

for recognition

Page 4: Threadless + crowdsourcing

Analysis

Inte

rnal

Exte

rnal

S W

O T

Strengths• Crowd sourcing

• Immediate feedback• Cheap price of content acquisition• Only print buzzworthy merch, Reprints

• Social network - Meetups (376 int'l & domestic communities)• Speed for new mediums ex. Twitter

Weaknesses• Shipping costs • Fickle nature of crowds• Lack of content control• Cost of blank tees/raw materials

Opportunities• Product Variety • Customer Segmentation• Concentrate on International Market

• Japan, South America as potential growth targets

• Retail Store Expansion

Threats• Intellectual property rights (China)• Launch of similar business model• Alienating the crowd

• Become too mainstream, lose their soul • Attrition from main contributors

• Limited expansion opportunities

Page 5: Threadless + crowdsourcing

Pillars of Crowdsourcing

Page 6: Threadless + crowdsourcing

• Score• Submit designs

• Share (pics, media)• Purchase tees• Recommend

• Comment• Interact with

threadless team

Participation

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Accessibility

Community Building

Blog & Forums Apps Street

TeamThread-spotting

Meetups(online to

offline)

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Attracting & Retaining Power Users

New Incentives (scholarships, grand prizes)

Recognition

User feedback

Challenges

Meetup groups

Page 9: Threadless + crowdsourcing

Limitations & Risks of crowdsourcingKey Issue Mitigation

SIZECritical mass needed but not always appreciated by core users

KEEP ENGAGEMENT HIGH• Invest in community & culture• Offer meaningful Incentives• Support and engage power users

QUALITYYou are presenting the user, need to meet expectations

QUALITY MANAGEMENT•Strictly monitor satisfaction and culture•Only promise things you can deliver•Focus on constant feedback

LEGITIMACYWhy are we the right community to present the user

DIFFERENTIATE PRODUCTS•Launch sub-brands.•Define limits and purpose•Stay focused

CENSORSHIPManage the community without taking power from the people

BE TRANSPARENT•Communicate your rules•Use communal editing when possible

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Page 11: Threadless + crowdsourcing

8 Factors for Success

Right Purpose: Call to the crowd for insight you will act on

Right Call: Tell the crowd what you want from them

Right Crowd: Crowd needs to be diverse and qualified

Right Incentives: Glory, ego, altruism, greed – feed the crowd’s needs

Right Model: Define the output needed from the crowd

Right promotion: Get people in and get them spreading the word

Right Community Management: Nurture crowd participation and know

when to chime in

Right Technology: Features vary, beware one size fits all

Page 12: Threadless + crowdsourcing

Successful Crowdsourcing

Amazon's Mechanical Turk• An on-demand, global scalable workforce• Mix of crowdsourcing and marketplace• Workers perfom “Human Intelligence Tasks”

Netflix Prize• Recommendation engine• Targeted developer community• Innovation prize: $1 million for

best algorithm

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Common Mistakes

• Overlooking daily moderation• Choosing the wrong first crowdsourcing topic• Assuming crowd recruitment is easy• Not identifying/involving power users• Not investing enough in the right incentives

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Unsuccessful Example

Pepsi refresh project:• Donates money to non profits• Consumers vote for non profits

Problems:• Cheating in grant process• False information

Moderation Mistakes:• Not enough experience in managing community• Did not attract the right community members• 3rd party assesses validity of leader board

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What should be next for threadless?•Keep focusing and expanding design focused

products and add design services

•Atrium, Platform for charity design campaigns

•Develop social editing platforms

What should not be next for threadless?• Opening a 1700 sq ft store…. Too late

• Going Big Box, compromising community

•Produce non-design products

•Going beyond production capabilities

“There was no good reason for us to open a store” – Jake Nickell

Page 16: Threadless + crowdsourcing

ConclusionsIt’s an amazing tool…. but not for everyone

• Identify a relevant community• Listen to the people, understand their motives • Identify right crowd-sourcing model• Realize limitations and need for management

It won’t go away…

• Empowered users won’t want to switch back• Expect to see more and more in government,

science, funding, forecasting …and crime• Companies will need to shift from reactive to pro-

active mind-set

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Questions?