Five Things Your Company Can Learn From Threadless

Last Updated Aug 30, 2010 6:25 PM EDT

It's been ten years since Jake Nickell started the little online t-shirt design contest that would explode into the $20 million+ brand called Threadless, subject of a Harvard Business School case study, and beloved by a community of nearly 900,000 members as the poster child of crowdsourcing. Community members submit original t-shirt designs, which are then voted upon.Threadless puts the winners into production, and rewards the designers $2,000 cash and a $500 Threadless gift certificate. I recently spoke to Nickell, who reflected upon the company's success and offered some retrospective wisdom that's relevant to all entrepreneurs. Here are five things your company can learn from Threadless:
Be scrappy. "When I started Threadless, we didn't even have a screen printer lined up," recalls Nickell. What? No business plan? Nope, not for Nickell. "You have to be willing to jump into things while not knowing what the outcome will be; don't be afraid of not knowing how to do something." Bottom line: it's entirely possible to over think and over plan a good idea; sometimes it's better to take a seat of your pants approach and figure out what works as you go along.

Be malleable. The first Threadless competition was a simple online forum where people posted their t-shirt designs. "Then we realized that people wanted to vote on the designs rather than just post them and have me pick the winner," says Nickell. So he developed an online rating system. Several years later, he noticed that designers would post their designs in forums on Threadless in order to get feedback from fellow members before the actual contest. "So we built a critique site on our website where designers can get pre-voting feedback," he says. More often than not, it's the Threadless community that gives the company its best ideas for new features.

Know when to call in reinforcements. Two years ago, Nickell hired music industry executive Tom Ryan as CEO of Threadless. But, he concedes, "we waited too long to do that. We weren't hiring enough for the size of our operation. There weren't a lot of clear roles and people were just filling needs and we weren't being proactive." Four months after Ryan was hired, a vice president of operations came on board as well, which helped professionalize the company. That could have been dicey at a company with a freewheeling company culture where employees can ride go-carts in the office. So Nickell insisted that Ryan do nothing the first three months except "make friends" at the company. "So he went to lunch and went out for beers, then he worked in the warehouse for a month. so it wasn't like we were bringing in a suit."

Value negative feedback. Who doesn't crave customer love? Problem is, you learn far more from your angry customers than from the ones who think you can do no wrong. Case in point: Threadless recently ran a sale on Gilt.com, a highly popular website that partners with designers brands to offer their goods at a discount. "We did an exclusive sale on Gilt of a limited line of super high quality shirts," says Nickell. The good news: they all sold out. The bad news: customers were angry that they could not get the shirts shipped internationally and that Threadless only offered men's shirts. Lesson learned. Threadless will do another sale on Gilt.com with women's t-shirts, and will offer the high-end shirts to the international market via sample sales.

Keep it fresh, online and offline. You can never take your customers for granted or rest on your laurels. Nickell and his chief creative officer Jeffrey Kalmikoff are constantly looking for new ways to engage customers with the Threadless brand both on and offline. For instance, when Twitter began heating up last year, Threadless introduced Twitter Tees, a contest that allowed its Twitter followers to submit tweets to be printed on t-shirts. And to keep Threadless top of mind in the non-digital world, the Threadless team is hitting the road this summer in a 25-foot Airstream trailer. "We're going to make it into a mobile art show," Nickell. "We'll go to events and show work from all the artists who participate on Threadless, and we'll also have doodle walls."

Do you think that Nickell's advice is valuable to your company? Do you have success strategies to share with your fellow entrepreneurs? Let's hear them!

Threadless t-shirts image from Flickr user BargainMoose, CC 2.0