1. Which aspects of a Crowdsourcing business model are crucial for its success?

Most importantly, a large active community. There have been many new crowdsourcing Community sites recently, often very similar in function to Threadless which have been unsuccessful. In my opinion those that didn’t succeed failed to turn site visitors into Community Members. Community Members will visit most often, vote most often, get other people to visit and importantly buy most often. They’re the lifeblood of the site and drive the whole company forward.

I think people over-estimate the effect that voting has on its chance of moving through the process and getting produced (despite what most communities sponsor would tell you), but the fact that people are sticking around to vote and discuss does have a huge effect on the potential success of the company.

Secondly, and directly following the above the sites user interface, and to a certain extent the business model itself must be sticky and entertaining. Only this will allow people to develop an affinity for your brand, and to become an active Community member.

Other factors that are important are fairness and transparency, so people understand why they should take part and if they didn’t win, why.

What are the motive forces for the members of Online-Crowdsourcing-Communities to submit design proposals or to give feedback to other design proposals regularly?

2. What do you think are the major benefits of a company which runs an Online-Crowdsourcing-Community?

Well let’s start with the obvious ones, you’re outsourcing the entire product design and market research parts of your business for a very small cost. During the OLP for example we had over 1400 logo submissions. That’s such a breadth of creative input which if it was possible to find via traditional channels such as ad agencies (which it isn’t) would cost a huge amount of money and time. Secondly you get fantastic data on potential sales, which allow you to alter the number of the product you produce and lowers the chance of you sitting with stock you can’t sell without having to offer a price reduction (Estimates suggest this costs the apparel industry alone over $300bn every year (Sanders 2001)).

Marketing – End result is a product the community already knows about, so the amount of marketing required is reduced. We’re not stuck in the old days of first creating a product, then going out and creating a demand through marketing. Crowdsourced products have run the demand gauntlet; everyone who took part knows they exist so you don’t have to market that product from scratch. You’re found your potential customers, they’re the ones who voted highly for that design. Now just let them know it’s available.

I’m certain there is also a strong link between involvement in the crowdsourcing process and willingness to purchase. This area definitely needs more research. I asked the community of Threadless this when I did my Thesis their a few years back, only 22%  thought they wouldn’t be more likely to purchase a design they had voted for, than one they had not.

3. How crucial do you think are feedback on and discussions about design proposals for the quality of the designs?

Assuming we’re talking about qualitative (not votes) I would say that depends heavily on the inherent complexity of the product. If we’re talking about technical designs for a crowdsourced electronics component from Crowdspirit, it’s going to be vital. That product has to solve many different problems, for many different people, things the original designer may have never considered. Feedback and versioning will allow that. For simpler apparel products like t-shirts, it’s going to help new and inexperienced designers but I’d say its unlikely to shape the designs of experienced designers too much, unless 100 different people shout “MAKE IT GREEN”!, then they might be able to request a small change.

4. Do you think that highly creative community members of xy.com are able to attract attention in the designer-scene and gain job-related advantages?

Definitely, there are high profile examples like Threadless hiring the guy that won there 12, 13 times. We talked to various participants of the OLP about vacancies at Spreadshirt, although nothing came from it at the end. For designers submitting to these competitions allows you to expand your portfolios, getting your work in front of thousands of people everyday.

Which aspects of the business model of Online-Crowdsourcing-Communities do you think are essential for attracting potential community members?

5. How crucial for the success of an Online-Crowdsourcing-Community is the fair treatment of the community members?

I guess that depends what you mean by ‘fair’.  These systems should give everyone a fair and equal chance of winning, but there is always going to be some possibility to bias the system a little. In the same way a famous authors name being on a book spine will influence its sales, the designs of a designer who is particularly well known within a community are probably more likely to get more and possibly higher votes. Designers that network better within the community will likely find that their designs are favoured. What’s important is that the community sponsor makes the selection process as transparent and fair as possible. At the OLP we gave out what we thought was a very detailed briefing about what we were looking for, but we only actually gave a very small number of requirements. We did this to give the designers the creative freedom to surprise us and challenge our assumptions of what we wanted. But some designers will read a guide, take every word as gospel law and then submit a design based on that. Some designers gave us a hard time if they felt a design progressed which didn’t meet the suggestions in our guide, or criticised us if we ruled out a design citing a guideline from the briefing, as it was a guide, not a rule. It’s a really hard balancing act, as if you have a very clear idea what the winning design should look like before you start then you don’t need to hold a crowdsourcing contest, just call an agency.

I think the best you can do is just ask be open, honest and invite plenty of feedback from them so you can adapt as the contest continues. You have to evolve with the contest and be flexible. You’re never going to make everyone happy, so all you can do is listen and make sure the majority of people understand why you made the decision you made, even if for a minority it may not seem that they were ‘fair’.

6. How do you think, the members of an Online-Crowdsourcing-Community will react, if they perceive, that they are treated unfair?

Best case scenario they’ll kick, scream, punch, boycott, sabotage, fill up your day and inbox with insults. These people care and you can work with them on the problems. Worst case scenario they’ll just slip away and join a new community, never to be heard from again, unless they are saying negative things about their experiences with your community externally. Then you’re in big trouble.

7. What do you think is crucial that members of Online-Crowdsourcing-Communities stay loyal to their community?

I don’t think it’s crucial that members stay loyal to their Online-Crowdsourcing-Community. There will always be a natural coming and going of members within a community and that’s perfectly normal. So is being a member of multiple community sites and submitting a specific design that you think will do well to a specific contest, as each community with have its own particular style. I personally don’t see any problem with unsuccessful drafts from one contest being resubmitted in another. But designers should stick to the design brief of that competition, and doesn’t just resubmit anything from their profile even though it doesn’t match the creative brief of that contest as often happened during the OLP.

If Community Hosts want people to be loyal, get them invested in the community. The easier you make it for them to build friendships with other members and build their own profile the more loyal they will be. I’d say it’s the depth of the relationship they have with other community members that will decide their loyalty. Otherwise they are most likely to go where the prize money is best, or where they are most likely to win.

8. Which risks and problems will companies, that run Crowdsourcing business models, face in the future?

Well with more and more crowdsourcing contest opening up you’d think at some point we will run out of community members to take part. People only have time to be active in a few communities and with the rapid growth of social networking sites like Facebook, that free time is only decreasing.  I don’t think it’s an issue for designers, as where there is a contest to be won (with the possibility of money and fame) they’ll always be people queuing up to take part. I’m talking instead of the people who lack the design talent to submit, but instead rate, give feedback and connect with other members to keep the message boards and blogs interesting places to go while you wait for new products to buy, or designs to vote on. These guys are the lifeblood of the company, the ambassadors without them you’re only ever going to be struggling to stay afloat.

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The original post from last year is here.

The main summary of the problems I saw were:

1. The Community is getting messy
2. Shipping times
3. Bad tee quality
4. Artists should be better compensated
5. Printing too many of each design
6. Too popular
7. Er, I cant think of anymore

I’d say they’ve had a pretty good stab at tackling at least 2 of those.

1. The community is getting messy
The blog forum got a nice facelift with an attempt to seperate out the topics, so you can see product, critique, and sub’d design. While this doesnt completely work, its a good start. The critique feature is really great. Threadless is a good place to learn design, as much as it is to appreciate it. Giving users the chance to co-create and collaborate was something that came out of the research from my dissertation. Now they can work on a design and get feedback before submitting it. Its also an example of delegating tasks back to users, so now rather than trawling through a weight of submission’s you have to reject, you let the community gently nudge the designer in the right direction. You get better submissions, and a clue what the community thinks of a design before it makes it into a contest. The artist gets support, a chance to learn new skills and less frustrated if users say his idea than threadless (I would suggest). This education will keep designers on the platform longer and brings back some of the more serious discussion.

Conclusion: Big improvement

2. Shipping times
Still to long. Made to order sites can produce from scratch and ship in 48hrs, so should threadless. Now its showing as 0-3days extra procesing time due to high demand? There’s a big difference between 0 & 3 days, and no mention of the standard time, all a bit vague. I’ve seen less complaining in the forums though, so things seem to be improving.

Conclusion: Slight improvement

3. Bad tee quality
I havent actually brought a Threadless shirt since they launched their own line, I have too many already. So I’ll open this one up? Are the new ones better? I’ve heard some positive and some negative things.

Conclusion: you tell me

4. Artists should be better compensated
My feelings on this havent changed. Re-payment on reprint is a must for me, its not necessary but in my eyes the right thing to do for the artists. As I said last time if something is popular enough to make it financially viable to reprint it, knowing its already sold out and the risk is 0.1% then why not share the love. Competitively it would do no harm at all.

Conclusion: Same

5. Printing too many of each design
Print less, of more was my main message last time. Thats not happened, but at least they are printing more which helps. Now that i’ve moved to germany I can’t really comment on this one, Leipzig isnt Cambridge or London so the only Threadless I see are at Spreadshirt HQ (oh and randomly a barmaid at a depeche mode night at the weekend).

Conclusion: Same

6. Too popular
My main gripe, somepeople might dis-agree with me that when something gets too popular you’re less likely to wear it, but for me its a big problem. The reason you go online and buy internationally is because you dont want to shop on your highstreet. Well threadless could become the h&m of the e-highstreet in the not too distant future. Two Boing Boing posts this week, a webby’s nomination (alongside cafepress). Should Threadless care? Probably not, its certainly wont hurt sales per se, but it will hurt sales to certain demographics eg elitist, snobby people like me.

My personal theory is that those demographics carry an under-appreciated amount of weight in the trends of all other consumers (something I talked about in my original post) lets call it reverse-tipping point effect – those consumers get you big by starting the party, those consumer’s tell you when you’ve jumped the shark by moving on.

Conclusion: Same

What else has been going on:

Kids platform? I’m lukewarm on this one, I know its aimed at parents but theres something about it that leaves a sour taste in my mouth. For one it opens the door to some horrific matching parents and child outfit synchorisation crimes, but also because I like the idea kids are left to get dirty, terrorise old people, put things up their nose and generally be totally oblivious to what they wear until they’re at least 15. Maybe i’m an old-fashioned idealist, or I need kids to get this one.

What does everyone else think about the ways things are developing over at Threadless?

My Disclaimer’s re-cap:

1) I love Theadless
I owe Threadless a lot, I’ve been collecting tshirts for years but it was my introduction to Threadless from a messageboard link a few years ago that kick started this blog, helped me get an excellent degree classification, my current job. They are like a website version of The Simpsons, absolutely everyone loves them and if you don’t you should rightly be outcast by society like some kind of social leper.

2) I work for a competitor in Spreadshirt
I can see why people would think I’m biased, I’d think that too. All I can say is I wear a Threadless tshirt at least two days a week into work and see at least 5 others during the working day, we are pro Threadless, this is a big marketplace!

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The Threadless guys kindly agreed for me to add my dissertation to HipHipUK entitled

“Do consumers want to design unique products on the internet?”
A study of the online Virtual Community of Threadless.com and their attitudes to Mass Customisation, Mass Production and Collaborative Design.

It will go up later today but the page is ready here http://www.hiphipuk.co.uk/research/

I surveyed over 200 hundred people from the Threadless Community and the result is 85 fun packed pages of research, pretty graphs, bad spelling and grammar all about Virtual Communities, Involvement vs Uniqueness, Manufacturing Approaches, Design Contests, oh and tshirts.

I didnt want it to sit gathering dust with the ideas going out of date, so hopefully somebody might find it useful.

I’ll also use some of the content on future posts here in the next few weeks/months.

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The Draw from spreadshirt looks intruiging and hints at a wider push towards design contests in the future. This is also the first venture I’ve seen under both the spreadshirt and la fraise banners. I thought that spreadshirt might rebrand La Fraise but I think it’s a smart move that they haven’t, after all the have different target markets and La Fraise has a great rep in its market space. I think this design contest (and I dont know how its going to run so I could be way off the mark with this) could be an evolution in the format because of spreadshirts one-off production capabilities. The design contest is an attractive format because:

1. It attracts community by offering involvement and discussion (you know my thoughts on community, if not read the community is king series here)

2. It reduces the risk for the host company, the voting allows you to see the popularity of a product before you’ve gone to the trouble of printed a thousand examples of it that you now have to try and offload. Threadless from years of experience and sales data can probably forecast better than anyone the likely interest in a design and configure production to match. Its a much safer investment to spend thousands of $’s on a run of t-shirts if hundreds of people have said its great.

Spreadshirts model is different, they own now own not only the format in La Fraise but the production as well (in spreadshirt) providing them with profit from producing one-off t-shirts.

Wheres the part where this gets interesting? Now…

Spreadshirts design contests can follow a different format. Take Threadless’ for example – like a design that was submitted? It didnt win? Oh dear, better wait for it to come to Yabbos or something. Â

Spreadshirt on the other hand could build a store around every competition and although there are winning designs and the winner gets the £ and kudos why not offer every design for purchase? Write into the TOCs that every design submitted will be offered for sale (probably after the competition is closed) and that the creator will recieve x £’s per sale. The competition is still an interesting format, everyone that submits a design stand a chance to win but also make some £ in the process even if they dont win.

The only potential problem would be in deciding ownership of the rights to that design with it creator. The Threadless approach might work, by submitting a design you grant us the rights to sell it on La Fraise/Spreadshirt for 90days (with the creator receiving % of sale) after that period you have the right to request the removal of the design, at which time full copyright is returned to the creator.

Oh well I guess we’ll see soon enough…

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The new rules state that

“The participant may display or archive the design in a portfolio or personal collection, but may not sell or reproduce the design for commercial purposes for 90 days after the design has completed scoring.

In addition, during this period, the participant cannot submit the design to another company to be potentially produced.

Once this time frame has passed, the participant is free to use the design for commercial purposes, however the participant must email Threadless to notify where and when it will be produced so that it can be removed from the Threadless.com website.

Also, if the design is printed elsewhere, the participant cannot use the Threadless blogs to promote the product or another company.”

There has been a mini backlash at this, you can read some of it here

Personally I think this is an extremely reasonable submission policy and designed to help Threadless remain competitive, being fair to both the artist and Threadless. The 90 day window seems a little longer than necessary but will most likely only deter people who submit in multiple places.

Yabbos and Shirtstain have also taken some flack for selling ex-threadless submission. I’m not really sure why, Threadless have some great designs gathering dust so why not put them to use. Just because it might have made economic sense for Threadless to produce 5,000 tee’s (or however many they do make) doesnt mean that it won’t for make economic sense for somone like Go Ape! (who have also used ex-threadless designs) to do a run of 500 or whatever.
We benefit from greater choice and the artist from greater exposure and £. The obvious criticism of these businesses is that they piggy back off of Threadless and reduce some of originality or risk involved in selling these designs. I can see the point in that but really successful businesses will always attract micro businesses “exploiting” their model, its more a compliment than serious threat to Threadless. Yeah it removes some of the risk of production, but that has always been what Threadless was about. While they probably didnt plan on that benefitting their competitors I guess it was almost inevitable. If they really wanted to stop it happening (and it would definetely detract from their business model) they could never reveal the average score even after scoring is complete, but I don’t think theres too much here to worry about.

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Anyway over to Miles now (I probably won’t do a pt4 and the last argument always sounds the most convincing, which is probably why you might think I’ve got my ass kicked! For a re-cap on my points you can read pt 2 here)….

I’ve enjoyed your ‘Community is King’ series but wanted to add a few things that I think you might be overlooking. More specifically the cons to mass-customization (ugly term really) that you list out in part 2.

Lets start with the basics, First, Threadless has been around since 2000. They have a 5 year head-start and a rabid core community. Three years ago they were doing under $400k in sales and now this year are projected to do over $20 million in sales. That is amazing growth and I don’t know of anyone that doesn’t love the guys behind Threadless as well as their other projects. That being said, they didn’t just show up one day and declare themselves the winner, they’ve worked at it for years and used their community to make their business stronger.

On to your list of problems with mass customization…

1. You state that most of the ‘design your own’ companies are interchangeable, possibly, but I think you are confusing their business models (which may or may no work long term) with the overall potential for the market. Threadless didn’t invent user voting, they just did it right and never wavered on their commitment to their core community. 5 years from now it will be interesting to see how many design your own sites there are and who is doing it right.

2. I totally agree with you here on people buying a brand. But there is a major change in branding. People don’t like being told what to buy – they want to feel like they are a part of the brand. I think MC gives them the opportunity to do this like never before.

3. As for t-shirts being art, I agree but that is really up to each person. I think a bigger issue here is quality. Screenprinting is the standard and digital transfers as well as CAD cut materials are still trying to catch up. Again, its early in the MC game and there is a mass market that is happy with this level of quality. Think of regular retail – WalMart sells a lot of everything at super low prices but Urban Outfitters sells ‘cool’ at a much higher price. So far there is a market for both and I don’t think that will change.

4. Looking at your comments on shared community I think there’s one thing missing – Threadless is a consumer business. The MC companies you mention are not, most of their customers are small businesses, artists, designers, etc. trying to sell to consumers. Those companies enable the small guy to use their production capabilities to create their own brand, they are not selling themselves as the brand.

Overall I agree that community is king but comparing consumer brands (Threadless) to MC merchant/ecommerce brands isn’t really apples to apples. I think the trend of ‘peer production’ (sounds better than MC to me) is just getting started and has tons of potential to build community at a new level. I’ll also throw out some stats from PIP. Their 2004 report on teen content creation notes that over 50% (roughly 12 million) teens aged 12-17 are creating content online. I think that points the way for t-shirt and apparel companies of the future using a peer production model.

Now if only I could find such a company… hmmmmm 

Thanks alot Miles, I look forward to posting alot more about Innertee when it launches!Â

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Intro

To begin with and I wasn’t one so I’m making assumptions, the early Threadless community were probably hard-core t-shirt junkies, designers etc people most likely considered as early adopters by marketers. I’m not one of these but when I think of how many people just I’ve promoted Threadless to, its a large amount. Threadless attracts this kind of loyalty because it offers it back to its community – by finding ways to involve its users..

Â

.

Involvement & Mass Customisation

The Spreadshirt model on paper offers an even higher level of customisation (see the Mass Customisation literature for more on this) and I find the contrast between the two really fascinating (I’m trying to schedule an interview with Miles from Innertee whose model is a sort of hybrid between Threadless and Spreadshirt). I want to talk about the make your own model because I’m not really brought into yet and hopefully what they are proposing will overcome some of what I consider to be the problems teh Spreadshirt model which I’ve outlined below:

1. They are largely interchangable, when you’ve seen one you’ve probably seen them all with the exception of a few features. This again lowers that stickyness and loyalty I’ve been harping on about.

2. People like buying into a brand

Ant said it in our Split the Atom interview (link) and I think its a key point, our economy is built on the brands, repeated trade through companies that we build up trust and associate with. I like it when very occasionally someone in the street says is that a Threadless T? It doesnt happen often and I wouldn’t wear them if it did but when it does its like meeting someone else with similar ideals or interests whose brought into the brand like I have. I don’t see how Make Your Own sites offer that sort of experience or have that buy-in potential.
A key point here is that they don’t have to, I’m just one type of consumers and its a huge marketplace. There will always be people who want to easily make a T-shirt for themselves or club etc. I just think that the really influential consumers, those early adopters and connectors (for Tipping Point fans) will be less attracted to this model of production. Selecting from pre-set design elements or uploading a jpg is not the printing your own tee. If anything it actually offers less customisation and involvement that the old days when we brought those kits and made embarrassing Turtles or whatever the fad was at the time t-shirts on canon printers.

3. I consider a t-shirt to be a piece of art. I’m not an artist, some designers are incredibly talented and buy purchasing one of their tee’s I’m buying into that and rewarding them

4. Shared identity promotes community, if every experience is unique how do you have that shared base with which to form bonds with other people to create the sort of community that builds spin-off sites like
- http://www.threadies.org/
-http://www.lovesthreadless.com/

Without exception, the innovating community members we surveyed do not innovate in isolation or secrecy; they receive important advice and assistance from other community members.” (Franke & Shah 2002:158)

Go and look at the Spreadshirt or Cafepress forums, you’ll see the majority of posts are by store owners not customers. Store
Owners are the only people who have that shared experience on Spreadshirt, they can share tips and advice on running and promoting a store.

A 2001 study found that 79% of Internet users identified at least one community with which they maintained regular online contact (Rainie & Packel, 2001 – well before Myspace!). I think that sites that aren’t trying to build this community or encourage interaction between customers aswell as between the store and customer are missing out.

I’d welcome your comments and I’ll definitely invite Miles from Innertee and anyone that wants to offer their input, feel free.

Sources

Franke, N. & Shah, S. (2002) How communities support innovative activities: an exploration of assistance and sharing among end-users. Research Policy 32; 157-178

Rainie, L., & Packel, D. (2001) “More online, doing more. Pew Internet & American Life Project.

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Take Threadless for example, most people assume their success is largely because they were one the first out the blocks and pioneered the design contest approach. This neglects to mention just how intelligently they have developed a community of like minded individuals around their brand. Some ways they’ve done this are:

- Blog Forum – its way way more than a messageboard. These stats are from a questionnaire I posted on the Blog Forum in Oct, how many t-shirt sites could say that 51% of their customers (or a small sub-section in this case) check their site “several times a day”

Other Threadless Community Features:
- Tee-rrrific photo’s
- Birthday messages (its a little thing but makes a difference)
- Street Team (great for promoting loyalty)
- Interaction with their community of messageboards
- Obviously the design contest itself
- Promotion tools for designers and bloggers

Online communities have been found to be highly innovative and can be found for almost every product or service (Fuller & Hienerth 2004), with research suggesting that many innovations originate in the user rather than the manufacturer domain (Von Hippel 1988; Piller & Walcher 2005).

If you go and have a look at the Threadless Blog Forum you’ll see nearly a hundred posts a day (I know I’ve counted and categorised 450 posts here). Oddica I might visit occasionally, maybe when they e-mail an update or something and its filed away in my “good” t-shirt bookmark section. Even though the designs are incredibly good its difficult for it to stand out amongst the all the other sites also in that bookmark folder.

Threadless for its legions of fans (particularly those who use the blog forum) is way more than a cool site in a bookmark folder its 90% of their online experience, blogging, rating, designing, posting pictures its their google, myspace etc all in one. Its the first site they check when they go online and its comprises the majority of their online experience (stats from diso). Once your hooked these features make the site incredibly sticky and you’ll come back again and again, can other sites really say they promote that sort of stickyness and why don’t some even try. These results are from a questionnaire I posted on the Blog Forum and highlight this loyalty

Part 2 of this feature will look more at communities and in particular at design-your-own sites like Spreadshirt, it will be up in a few days…

Sources -

Fuller, J. & Hienerth, C. (2004) Engaging the creative consumer. European Business Forum (EBF); issue 19, autumn 2004.

Piller, F. Walcher, D. (2006): Toolkits for Idea Competitions: A Novel Method to Integrate Users in New Product Development, Journal of R&D Management.

Von Hippel, E. (1998) Economics of Product Development by Users: Impact of “Sticky” Local Information. Management Science, vol 44, n.5 (May) p. 629-644

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