The Story of Threadless
At the intersection of art, technology, innovation, and business comes the quirky online retailer dubbed ‘Threadless.”
The company has had a historic rise to success that has given it the underground brand recognition that it deserves. Essentially, Threadless is a clothing company that uses designs from artists, lets the online community vote on the best designs, and then prints and sells those designs, crediting the original artist, of course. It was one of the first companies to utilize crowdsourcing, a term coined in 2005 which can roughly be described as using the internet to outsource work to individuals.
The art, much like the company itself, is largely quirky, nerdy, scientific, just plain cute, and sometimes poignant. The company began with a small base of dedicated customers, which has swelled.
Threadless was conceived in 2000 by Jake Nickell and Jacob DeHart. The origin story for Threadless usually starts with the small website (and community of sorts) for illustrators and designers called Dreamless. According to an article in the Chicago Mag, Nickell entered a design competition on the website, and won, winning no prize money. So he proposed a contest of his own: a competition of the best designs, and the winner would have their design put on a T-shirt. He invested $500 to make the contest more competitive, and was matched by another Dreamless member: Jacob DeHart. The contest and designs were posted on a Dreamless thread, and this inspired the name that would come later, ‘Threadless.’
The winners of the competition won free T-shirts with their designs in addition to the monetary prize. Nickell and DeHart then printed many more shirts with the same designs, and sold them to other dreamless members, and sold out in a short amount of time.
After many similar contests, Nickell and Dehart both dropped out of college in order to turn the idea into a company. With several years of trials and mistrials, Threadless finally hit on a winning business model as simple as this: artists would submit designs, the internet community would vote on the best, Threadless would print the shirts and sell them, and make sure the original artists received both compensation and recognition.
One secret behind their small start up: word of mouth. From the company’s inception, Nickell has not been a fan of advertising. Rather, he and DeHart would spend time online on messaging boards, forums, and blogs, raising awareness for the company, as well as communicating with Threadless followers to give the company a more intimate feel.
As the company grew, it gained more attention and naturally underwent some changes. One of the biggest was DeHart leaving the company in 2007. According to several sites, DeHart enjoyed the excitement and riskiness of start ups, and told Chicago Mag that “Threadless had lost its small-business feel.” He continues to own a stake in the company, however.
Even with the loss of one of the co-creators, Threadless was booming. In June of 2008, it made the cover of Inc. Magazine, which featured a lengthy article with interviews of Nickell and Jeffrey Kalmikoff, who was then the Chief Creative Officer at Threadless. The article highlights their unusual business model, where customers make up such an essential part of the company’s success, and defies the traditional, simple model of a business producing goods and consumers buying them. Karim Lakhani, a Harvard Business School professor, described the strategy at Threadless this way “The customers end up playing a critical role across all its operations: idea
generation, marketing, sales forecasting. All that has been distributed.”
When the article came out, it was estimated that the company had sold over $30 million in T-shirts alone. The headquarters of the company was an expansive office in downtown Chicago, and inviting to customers and curious passerby’s alike. Threadless posted videos and pictures of the office on their website, as well as behind the scenes looks at just what the company looked like on the inside. The magazine article also looks at the physical store, opened the previous September. Brick and mortar Threadless loosely resembled the website: although products were sold, the artwork was the most prominently featured aspect. The entire second story of the store was solely dedicated to art and artists.
Unfortunately, the store closed earlier this year. The company had to lay off around a quarter of their staff, and the Nickell wrote on the company blog that he had “just made one of the most difficult decisions in the 13 years since Threadless began.” He also thanked those he let go, and readers could feel the sincerity in his writing. Threadless seems to be reverting to its successful roots: an online store, competitions to get artists involved, and making sure the community as a whole is happy.
Although the company has had setbacks, it should by no means be written off. Although it is diffult to estimate just how many people exist in the Threadless community, it has around 2.1 million followers on Twitter, which is roughly the population of Qatar. After the store closed, Threadless announced some changes that would give more profits to the artists.
It will be an important company to watch in the future, from both business and artistic perspectives. What started as a submitted design on a now defunct website has grown into a million dollar company with hordes of followers, all based on crowdsourcing and a dedicated owner. Other businesses take note, Threadless is here to stay.
