In the practice known as crowdsourcing, a company obtains ideas and content from a large group of people—a practice that has gained considerable traction with the available crowds on the Internet. Threadless is a “platform for artists” by its founder, this online social network invites designs from users, all of whom vote to choose their favorites, which Threadless then produces for sale. Threadless provides exactly what customers want exactly when and where they want it. In so doing, it established a new business model, for which

“Despite the fact that the company had never advertised, employed no professional designers, used no modeling agency or fashion photographers, had no sales force, and enjoyed no retail distribution. Costs were low, margins were above 30 percent, and—because community members told them precisely which shirts to make—every product eventually sold out.

Clearly this innovative model was not limited to t-shirts, so Threadless has partnered with Griffin, a producer of accessories for electronic devices. Using the same crowdsourcing methods, community members can review designs for iPhone and iPod covers and vote for their favorites.  They also can—and already have—request that Threadless transform their favorite t-shirt designs into mobile device covers. To ensure recognition of the artists, for whom Threadless remains a platform, the accessories provide the graphic designer’s name on the inside of the cover.

Internet-based crowd-sourcing can also be applied to high-end fashion. Fashion designers like Nina Ricci, and Alexander Wang present their designs on the runway each year, but these runway designs do not appear in stores for at least 9 months.  An online retailer called Moda Operandi allows their customers to buy these runway looks from the designers immediately after the runway show.  Not only does Moda Operandi provide an additional sales outlet for designers, but it also gives them an indication of which designs customers want. Many times the designs on the runway are changed when they are actually produced, and some designs are never produced. By including customers in the product selection process, companies can forecast their demand for the products their customers may want to buy.

Why is crowdsourcing different from the way traditional companies create new products?

Max Chafkin, “The Customer Is the Company,” Inc. Magazine, June 1, 2008; Chris Hall, “Griffin Threadless Covers Add Class to Your iDevice,” www.pocketlint.com, May 4, 2011; Georgina Safe, “The Power of the Crowd,” The Sydney Morning Herald, April  21, 2011.

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