Co-creation Meets Social Media, Profits and Proft Sharing

The company is Threadless and they sell T-shirts.

Here's what Inc. Magazine had to say about them in the most recent issue:

The Customer is the Company. Threadless churns out dozens of new items a month—with no advertising, no professional designers, no sales force and no retail distribution and it has never produced a flop.

I didn't mention that Threadless has annual revenues of $30 million, a profit margin of 30% and last year revenues increased by 500%.

Threadless completely blurs that line of who is a producer and consumer, says Karim Lakhami, professor at Harvard Business School.

In November of 2000 they sponsored an online contest, inviting designers to submit their best work and to also pick their favorites amongst those submitted. The grand prize, two free shirts. The shirts went on sale in January of 2001 and sold out quickly.

Now winning design can earn the designer $2,500 and reprinting fees.

There is a viral component to the process as well. Designers typically post their submissions on their website, blogs and MySpace pages and encourage people in their network to vote and buy.

Interestingly, Threadless's own social network is relatively devoid of fancy feature but it does have purpose and does engage its constituents.

This about it? Threadless's biggest asset is its online community.