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Secret Sauce: Most Innovative Company in America
What’s the secret sauce of Threadless.com — one of the country’s most innovative small companies? Read on! Inc. Magazine says it best: The Customer Is the Company. Congratulations to my Chicago brothers in customer empowerment!
If affiliate and search marketing is NOT enough then what must marketers be doing? What is it that Jake and Jeffrey are doing “so right?”
Multi-channel marketers need to engage in more experiential-based tactics to woo new customers and increase sales (or leads). But what does that mean? I’ll go further this week. It means a complete re-thinking of the term “marketing.” It means being willing to embrace a bold, new mindset. Why would they? Because they must. Marketing decision-makers and creative strategy developers at the highest level must address new market dynamics that hyper-connectivity is creating.
Specifically, consumers don’t care anymore. They’re busy either tuning out marketing messages or entertaining themselves. Not much else!
The Mindset
Before all else, the key to success in today’s digital, multichannel shopping world is the mindset that Threadless has embraced and run like blazes with. The essence of this mindset is rooted in new, non-traditional concepts. No it’s not some kind of slick voo-doo from a social marketing “expert” but it IS radical. It IS, some say, not marketing at all.
Bottom line: This customer-centric framework is being forced by a hyper-connected, always-on interactive digital ecosystem. Success in this brave new world is about recognizing and acting on this shift. Sooner or later we ALL need to get in the game… at some level.
The Doctor is In
“Advertising is about supply finding and ‘creating’ demand,” notes Doc Searles, co-author of The Cluetrain Manifesto, and a Fellow at Harvard’s Berkman Center for Internet and Society. “[There is] nothing wrong with that. At its best, it’s good and necessary stuff. But think about what will happen when demand can find and create supply.”
Searles wrote about this concept years ago (that makes him rather smart!). Today, the vision is becoming reality. Search engines, described as “databases of human intentions,” quickly birthed search engine marketing (SEM) to capitalize on human gestures communicating commercial intentions. Masses of customers created and articulated their demand in the form of search queries. What did affiliates do? I don’t think I need to really discuss that… they, obviously, monetized the livin’ daylights out of the situation by getting in between customers (demand) and marketers (supply).
SEM quickly was followed by reverse online auctions such as Hotwire, Priceline and LendingTree. Here, customers create demand and go further: they actively negotiate pricing. Marketers compete for their business. When taken to an extreme the idea of allowing customers to create demand and bring it toward supply can be… well, scary. It’s called “crowdsourcing”, and it’s not for the faint-hearted. (sssh… here’s a cool, Canadian crowdsourcing company flying under the radar with big dreams)
Art Project Gone Wild: Community Style
Just the same, Threadless customers are communicating their demand… yet the company is going even further. Jake and Jeffrey are allowing the community at large to create supply (highly artistic tee shirts) and then “voting up” that supply (creating true demand) based on the uniqueness of the product. It’s totally market driven.
“Threadless was built as an art project,” says founder Jake Nickell. “It was really just a hobby for us. We were just two members in the community trying to help people find a way to express themselves and get their work shown to a large audience.”
Again, supply creation — namely, product design and production — is driven entirely by customer/artists. For example, customers of Threadless.com band together (create demand) and design their own clothing (supply/inventory). Product is then sold to the group of buyers.
Most marketers, for now, aren’t quite as experimental. Yet elements of crowdsourcing’s power are catching on and should be kept in mind by marketers. Why? How? More on that next week 
but what about YOUR thoughts, fair readers? Is crowdsourcing just too much for most marketers to contemplate? It IS more of a business model, after all. Am I crazy to think that the elements within crowdsourcing are EXTREMELY valuable to “traditional marketers” running traditional businesses? (that may never use a crowdsourcing biz model)
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Jeff,
Somewhere in the past Sam Harrelson and I rattled metaphorical sabers over the precept of labels http://www.wayneporter.com/2007/08/05/metrics-never-birthed-and-understanding-incentives/ . and I lobbed in a very bad Crowley pun to boot.
I think labels e.g. people as targets or consumers create negative “behaviors”. I realize some will see this as sort of “pinko marketing” but I think it really is about conversations and developing relationships. How relationships are formed from the onset are impacted by a label. One of the problems with “consumerism” perhaps?
If you disagree I proffer up the much maligned term “affiliate” and the connotations of the label Am I remiss?
In regards to Threadless’ customers I think Ken Evoy (remember him) tried something along the vein about 8 or 10 years ago with a form of demand driven price curve- except I think he forgot the key ingredient- community interaction. I think Glenn Sobel took him apart for the record.
There was another site that operated using “flash mobs” to affect pricing years ago but the name evades me…I know it was covered at Revenews…somewhere under the eons.
Good reading. Thanks…yes it is vital for business’ of the future and a good demonstration of where “Web 2.0″ meets the proverbial road… just give it more time. We are only seeing the very beginning of a titanic and long overdue shift.
-Wayne
Hey, Wayne. Thanks for the comments. I think we all need to bow to Kevin Ryan on the titanic shift going on. You’ll be particularly interested in his words…
“… Human communities are coming together in a very limited capacity. Interest communities are coming together on a large scale, but that’s not moving us toward the Gene Roddenberry Utopian society. This paradoxical effect was caused by text communication technology moving faster than video communications.
If connected video conversations were as easy as connected text communications, the next generation of humans would perhaps be in less of a pickle. Sure, you can argue the evil characteristics of humanity always existed, but it’s never been easier to connect with millions and seek affirmation from likeminded, erroneously self-inflated and largely misguided morons.
Nine of 10 dehumanizing ‘text conversations’ wouldn’t exist if digital social predators were forced to meet and interact with their online prey. Video communication on a large scale may have slowed the spread of dehumanizing interaction but it certainly would not have stopped it.”
Kevin Ryan
http://searchenginewatch.com/showPage.html?page=3629624
I particularly enjoy his rant on what amounts to a core value set of the “affiliate marketing culture/lifestyle” (my words)
“… it seems the latest group coming into the world is extremely adept at sending e-mails, blogging about every minuscule detail of their lives and, in general, communicating — as long as they aren’t asked to speak to anyone.
They run from spoken communication. They fear any interaction that can’t be clicked or typed in some way. They don’t know how to interact, and when they do, they don’t understand civil interaction.”
I have no idea what he’s talking about!!
Jeff great post. thank you very much. We are always looking at ways to innovate not only in technology but culture. Love to see more on innovation on Revenews. The performance marketing/affiliate marketing industry needs some good old fashioned innovation!