I loved Max Chafkin's story on Threadless in our June issue. The Chicago-based online t-shirt company produces garments that are designed by a community of over 700,000 registered users who function as a social network cum design team. Users submit their ideas, the online community votes for its favorites, and the winners are put into limited production. Winning designers are paid $2500; win the weekly contest several times and you just might land a job at Threadless.
The co-founder of this $30ish million company, 27-year-old Jake Nickell is a modest guy; you won't find him boasting that he's on the cutting edge of a trend. But he is, and it's one that I believe is distinctly GenY-related. I think this generation craves intimate relationships with the companies it does business with, and so the idea of having an impact on what a company produces and sells — and getting paid for your input — is very appealing. I'm willing to bet that a majority of Threadless customers are in their twenties or younger.
As Max points out, big companies like Pitney Bowes and Ford, are just beginning to experiment with user innovation, also called crowdsourcing, and they're applying it not just to product development, but also to problem-solving. I think we'll see more of this as companies get up to speed on how to create, engage, and leverage online communities. I'm also keeping an eye out for startups whose business models are similar to Threadless because I suspect we'll see an increase in those as well.
Take a look, for instance, at Knewsroom, a community-driven online daily newspaper just launched by 21-year-old Ben Kaufman, who was #1 on Inc.com's list of 30 Under 30: America's Coolest Young Entrepreneurs last year. Kaufman sold his Mophie brand of iPod accessories shortly after I wrote about him and created a new company called Kluster which he launched at TED earlier this year. His goal is to start several community-driven businesses over the next several months under the Kluster brand. Knewsroom, which has been up and running just a few days, empowers its community to suggest news topics for coverage, contribute content, and invest in favorite stories using Knewsroom's special currency called watts, which accumulate the more a user contributes to the site. Investing in stories that actually get published on the site earns you more watts, plus a cut of the ad revenue generated that day. Your take is loaded onto a Knewsroom MasterCard. "We've paid out over $5,000 in the last eight days," says Kaufman.
So what do you think of this phenomenon? Are companies that use crowdsourcing opening the door to great ideas and rich content, or are they destined to spend precious time and resources separating the wheat from the chaf? Do you know of other mature companies that have mastered the art of crowdsourcing, or startup companies that are using it as an integral part of their business model?
DONNA FENN | Inc.com Contributing Editor
Donna Fenn is the author of Upstarts! How GenY Entrepreneurs Are Rocking the World of Business and 8 Ways You Can Profit From Their Success, an exploration of the ways Gen Y is changing the entrepreneurial landscape.