Organising and Managing Innovation

Running head: ORGANISING AND MANAGING INNOVATION
Organising and Managing Innovation
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1ORGANISING AND MANAGING INNOVATION
Threadless is a popular online community, which creates, supports and purchases great
pieces of creative or innovative artworks. The online platform allows millions of independent
artists across the world to submit their designs to be selected by popular choice. The designs
which get maximum votes are printed on t-shirts, wall art, bags, and a wide range of apparel,
home and accessories. The company was founded in 2000 by Jake Nickell and Jacob DeHart as a
t-shirt design competition and later on, the founders established the website with this innovative
idea of printing t-shirts and other products with the designs that got maximum votes
(threadless.com 2018). As highlighted by Lakhani and King (2013), the customers play a
significant role in Threadless’s business operations, such as, idea generation, marketing, sales
forecasting as well as sales. This essay critically reflects and analyses the innovation model of
Threadless in the context of organisation and management of innovation. This will highlight
various aspects of the innovation business model of the company and how it has helped to
achieve Threadless a competitive advantage in the market.
Threadless offers an innovative service that includes the clients as the business
generators. It invites people to submit their designs or artworks, and the ones that get the most
votes for popularity, are chosen to be printed on t-shirts and other items. Those items are then
sold online and in their only retail store in Chicago. The artists whose designs are selected get the
royalties and bonus prizes from Threadless. The service or the business model is termed as an
ongoing t-shirt design competition (threadless.com 2018). The target market of the company is
the wide community with an access to the internet. Mostly the young generation is the target of
Threadless, who are active users of social media, have knowledge of art and a knack for
creativity. The company provides the t-shirts at a lower price within a range between USD 10 to
USD 20 and the other accessories range from USD 5 to USD 50. Thus, the company provides a

2ORGANISING AND MANAGING INNOVATION
good value for the customized products. At the same time, it also offers limited edition products,
that is, once a design is sold out, they print a new design and if the customers want a previous
design, they have to place a request (Lim 2014). Hence, there is exclusivity in their products
which is a value proposition factor. The competitive environment of Threadless includes direct
competitions from DesignByHumans and Teespring, however, the unique selling proposition of
Threadless is that the customers are the designers and the unique voting system to pick out the
most popular design. The competitors are more profit driven than Threadless (Lim 2014).
Threadless was established as an online t-shirt design competition and from that the
founders, Jacob DeHart and Jake Nickell have moved forward to make the business into a
community engagement on an art and technology based product service. The initial idea of
Threadless was to provide an opportunity and platform to people for showcasing and selling the
works online, which had no other business plan, marketing strategies or profit motive. With
growing popularity, the website was created and the profit of Threadless jumped to $6.5 million
in 2006 from $1.5 million in 2004 (Lakhani and King 2013). Jeff Howe termed this type of
innovation as ‘crowdsourcing’ in his ‘Wired’ article in 2006 (Estellés-Arolas and González-
Ladrón-De-Guevara 2012). This type of innovation involves the customers in all the business
activities, starting from idea generation to marketing and selling of products, which helps to
grow the interest among the customers and hence, contributes in growth (Afuah and Tucci 2012).
This innovation model, that is, crowdsourcing has helped Threadless to earn a
competitive position in the market. It was established in 2000, when there was no other company
or venture that provided any such creative platform to the customers for creating and selling their
own artworks. The USP of the business innovation is that it is not profit driven and it engages the
customers to become creative and have a product printed with their designs (Chao 2012). This

3ORGANISING AND MANAGING INNOVATION
unique idea started to attract the customers. Moreover, it also started a voting option to pick a
design from the submitted collection to control the endless designs submitted and encourage
more creativity and innovations in designs and technology. The competitors of Threadless do not
have the voting system and they have a set of their own designers. Co-Creation is the marketing
strategy that is followed by Threadless, in which the customers are the product designers or
developers (Marjanovic, Fry and Chataway 2012).
As mentioned above, the innovation framework that is used in Threadless is known as
crowdsourcing. As stated by Brabham (2013), crowdsourcing refers to practice of involving the
crowd for a common goal, such as, innovation, fund raising, problem solving etc. In other words,
Doan, Ramakrishnan and Halevy (2011) highlighted that according to Howe, crowdsourcing
represents the idea of outsourcing an activity to the crowd. Some other types of innovation are
service innovation, open innovation, social innovation, user innovation, and business model
innovation. Service innovation refers to implementation of innovative ways to serve the
customers for the purpose of delivering greater value proposition to the customers and generating
more revenues (Witell et al. 2016). IT hardware, investment in marketing, human resource
development and R&D are different forms of service innovations (Lexicon.ft.com 2017). As
opined by Hippel and Euchner (2013), user innovation refers to the innovation done by the
intermediate users or the consumers without the help of the producers. In other words, the new
products or services that are developed by the individual users or firms for their own benefit,
rather than involving the producers or suppliers for assistance are known as user innovations. It
is a very common innovation type, mostly found in the industrial sector and sports. The sports
enthusiasts often develop new type of sports or equipment for their own benefit or use and then
those are produced for the mass. Another type on innovation is the social innovation. As stated