“Is the best product a unique product? A case study exploring alternatives to Mass Customisation with the online Virtual

Community of Threadless”.

By Adam Fletcher

e-mail: adamfletcher@gmail.com more at: http://www.thezig.co.uk

Originally June 2006 (Updated March 2008)

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Abstract

Mass Customisation has been portrayed as the ultimate form of marketing and the “business

opportunity of the next millennium”. This paper presents the results of a case study undertaken with the

online t-shirt manufacturer Threadless and its Virtual Community. The literary assumption that

consumers want unique products, following recent renewed interest in Mass Customisation has

prompted this research. The aim of this study was to look at an industry where it is technically possible

to deliver a “pure” Mass Customisation experience and then to look at businesses adopting different

approaches to see what they offer the consumer. Threadless’ business model aggregates opinions of

user submitted designs and manufacturers the most popular into limited t-shirts. This studies looks at

why this model is an attractive proposition for customers, community members and for Threadless.

The results challenge a number of assumptions which can be found in the wider MC literature.

Respondents at Threadless are willing to accept a product which they did not create and is not unique.

This is providing that the product is at least limited, and that they have had involvement in its creation.

The other key finding is that whilst Internet may offer enabling technologies which reduce the cost of

individualisation, these same technologies may also reduce the cost of aggregation. This allows

businesses to group and manufacture for ever smaller markets of customers sharing the same needs.

The author rejects the notion that a unique product created by its purchaser is the definitive product,

calling for businesses to look for ways to combine both involvement and exclusivity in product

creation utilizing these aggregation opportunities.

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1.0 Introduction

This paper will investigate consumers' attitudes to Mass Customisation (MC) and collaboration for new

product design conducted within a Virtual Community (VC).

Research in this paper is centered on the virtual community of the online t-shirt business Threadless.com.

Threadless is an ongoing design competition in which users are invited to submit a design to the Virtual

Community. Any registered members can rate the design out of five and can also provide qualitative

feedback to the designer, usually in the form of modification suggestions or positive/negative written

feedback. A number of the highest rated design are then produced as t-shirts in short production runs and

sold on the site.

To follow is a critique of available literature in this area, followed by a discussion of the findings from a

questionnaire completed by members of the Threadless VC and ethnographic research of messageboard

communication. Conclusions are followed by recommendations for further research in this area.

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2.0 Terms Definition & Context

2.1 Mass Customisation (MC)

The definition of MC adopted by this paper is Hart (1995) stating that MC was:

“The use of flexible process and organizational structures to produce varied and often individually

customized products and services at the low cost of a standardized, mass produced system.” (Pg. 1)

In short, increasing variety and involvement for every customer without losing manufacturing efficiency. It

has been suggested that MC has not had the business impact that was anticipated (Lee et al 1999), however

MC can be seen in a wide variety of products/services and industries. Spreadshirt the online 'make your

own' apparel business allows anyone to design one off clothing produced and dispatched within 48hrs.

Lego now actively engages their customer base in new product developments and allows users to design

their own Lego sets online (for more about the Lego Factory see Berger et al 2005). In the footwear

industry most of the major trainer manufacturers allow for custom designing (such as Reebok with “Rbk

CUSTOM” or Nike through “NikeID”) and some offer completely custom products exactly molded to fit

the customers foot (such as Adidas’ “miAdidas” service, see Berger et al 2005). Other MC products

include Wine (Elite Vintners), Cameras (Leica) or the extremely successful build to order model used by

Dell.

One common feature in all the examples above is that they use the Internet as the key enabler, with which

to interact with their customers. Advances in Information Technology and the Internet in recent years,

particular in e-commerce and social network (eg Facebook), has created what is now a global marketplace.

This new technologies are recognized as the key enabler for wider adoption of MC (Piller 2002, Von

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Hippel 1998, Schubert and Koch 2002, Pine et al 1993, Fuller and Hienerth 2004)

2.2 The Virtual Community (VC)

This paper will look at how a VC can support MC activity. To date there is not one definition that has been

adopted by the academic community for a VC. This paper from Schubert & Ginsburg (2000) and Sawhney

& Prandelli (2000), it is suggested that Virtual Communities are:

“The union between individuals or organizations using electronic media to communicate within a shared

semantic space on a regular basis” (Schubert & Ginsburg 2000;2). “The communities provide sociability,

support, information, a sense of belonging, and social identity. This community is usually but not

exclusively created around shared values or interests” (Sawhney & Prandelli 2000;5).

2.3 Context

MC as a concept has been discussed in academic literature with regularity since it was first articulated

some 25 years ago. The idea of a customer designing a unique product or service was not a new concept

even then, instead writings on MC were commenting on an increasing shift away from Mass Production

towards individualised products, increasingly designed with input from customers.

The Internet has the potential to change the way we buy and sell, empowering small businesses to sell on a

global platform as if they were a multinational (Collin 1999), reducing barriers of entry (Porter 2001). The

Internet facilitates direct and rich interaction with customers (Piller & Walcher 2005), allowing customers

to give feedback and collaborate on new products. Internet sites such as Facebook or Ebay have shown that

the power of the Internet lies in uniting individuals, developing a VC of loyal customers to support your

brand.

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The proposed benefit of MC is that consumers are incorporated into the design process, designing the exact

product or service they require. This will allow a business to develop a 1:1 relationship with their

customers, understanding their exact requirements, helping to build a relationship with them which is

impervious to competitors (Pine et al 1993).

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3.0 Literature Review & Conceptual Framework

3.1 Literature Review

What follows is a critical re-examination of the underlying assumptions behind MC. This aims to show

that the current academic thinking regarding MC may be incorrect. This is followed by the presentation of

an alternative approach to MC adopted by the online retailer Threadless and discussion of how this model

might better support MC & innovative activities such as NPD.

This paper takes the view of Hart (1995) who suggests that there are two different ways of defining and

conceptualising Mass Customisation. The first visionary definition is

“the ability to provide your customers with anything they want profitably, any time they want it, anywhere

they want it, any way they want.” (Hart 1995:1)

While this is only meant as a “transcendent, absolute idea that exists solely in the ideal” (Hart 1995:1), it

best describes the basic principal and inherent complexity of MC. The key difference between MC and the

traditional one size fits all, 'any colour as long as its black' approach of Mass Production made famous by

Fordism is the unique, tailored experience that the customer receives. You aim to reach large numbers of

customers but simultaneously treat them as individuals (Davis 1996), whilst aiming to maintain the

efficiency of mass production (Pine et al 1993; Piller 2003). The other perhaps more realistic and practical

definition offered by Hart is

“The use of flexible process and organizational structures to produce varied and often individually

customized products and services at the low cost of a standardized, mass produced system.” (Hart

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1995:1)

The key difference in this second definition is the idea of not promising to produce anything a

customer may desire but introducing flexibility, variety and where possible individualisation into the

experience. Note that this definition does suggest the possibility to “maintain the efficiency of mass

production” (Pine et al 1993; Piller 2003). Research suggests that in most industries this is at present

still unrealistic, even with advances in manufacturing (such as CAD) and telecommunications (e-

commerce etc) technologies. Reducing the trade-off between variants and production cost (Piller 2003)

at present adding variety still results in additional operational costs (Brabazon and McCarthy 2004) and

lost economies of scale.

Definitions of MC in the academic literature have tended to overplay the need for MC to create a

unique product or service. This paper rejects this notion and suggests that customer involvement is the

fundamental principal of MC (Piller et al 2004). The experience itself, more than what is created,

provides the unique value for each individual (Prahalad and Ramaswamy 2004).

The literature tends to draw a picture of two opposing and distinct strategies and mindsets (Lampel &

Mintzberg 1996). In reality as suggested by the framework from this paper there is a continuum of

strategies and it is the task of industry to decide which approach best compliments the needs of their

customers and the capabilities of their business.

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3.2 Why MC?

If there really is nothing simple about MC (Hart 1995) then why is this topic worthy of such academic and

business interest? Teresko (1994:46) believes “If you can sell everything you make, mass customisation is

irrelevant”. This like Harts visionary definition may be correct in an absolute, transcendent and idealistic

way, however in reality, it is flawed. While today a business may sell everything that it produces, only in a

monopolised market are sales liable to be static and not subject to competition from rival businesses. While

today you may sell everything you make, a competitor moving to MC and offering the customer increased

choice may irreversibly change this. Just because sales are currently high, you may not be satisfying

customers or selling profitably and fast enough to reduce potential revenue left sitting in stock. It also does

not address the fact that by utilising MC you are co-designing with the consumer which will allow you to

“always sell everything that you make”, but as suggested by empirical research (see Piller et al 2004 for an

overview), to sell it at a premium price.

3.3 MC & the Manufacturer

For the manufacturer MC offers cost saving potential through better forecasting and reduced wastage.

Estimates suggest the apparel industry alone loses over $300bn every year due to erroneous forecasting,

heavy inventory and lost profits as a result of necessary discounting to reduce stock levels (Sanders 2001).

The key difference with MC is that consumers are incorporated into the design process, and design the

exact product or service they require. As manufacturers no longer have to predict demand for a product

they may theoretically be able to keep smaller inventories of finished goods. Heavy discounts and

promotions to move less popular products out of warehouses may become a thing of the past, achieving

both manufacturer and consumer satisfaction (Lee & Chen 1999). Whilst potentially lowering stocks of

finished goods, MC may have a negative effect on other areas of the manufacturing process. Large

quantities and varieties of raw materials will need to be held to help support uncertain, fluctuating demand

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which could send inventory costs out of control (Lee et al 1999).

Some research has suggested that customers want and are willing to pay more for customized or non-

standard products (Piller and Berger 2003; Piller and Muller 2004; Franke and Von Hippel 2003, see Piller

and Muller 2004 for an overview of research conducted). The problem with this research is that it is often

undertaken using a questionnaire. Measuring WTP using a questionnaire may leads to unrealistic results as

consumers have an imagination about customisation, but no experience of it (Piller & Muller 2004). It is

worth noting that a large number of respondents in these studies had no previous experience customising

products.

Pine (1994; 14) suggests that “Customers don’t want choice. They want exactly, what they want”. Leaving

aside the idea that any of us actually know what we want, it is unsurprising that many consumers would

say they would be prepared to pay a premium for this experience. However, without experience in

designing products (on or offline) customers may not be aware of the challenges in articulating what they

want, a number of sources suggest on the whole consumers find it almost impossible to do this (Berger et

al 2005; Zipkin 2001; Von Hippel 2005). They may also be unaware of the amount of time and

involvement required in this process (Piller & Muller 2003). There is no guarantee that even with

additional help provided by the manufacturer to provide the technical information in a format

understandable to the customer (sticky information, see Von Hippel 1998 for an overview), the consumer

is able to produce something that meets their desires. As Expectation Disconfirmation theory suggests this

is only made harder as increased customers involvement will incrementally increase customer expectations

of the final product.

3.4 Mass Customisation & the Virtual Community.

It is suggested that recent renewed interest in MC is because of the introduction of new technologies in

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particular the Internet. These technologies often cited as key enablers of MC (Piller 2002, Von Hippel

1998, Schubert & Koch 2002, Pine et al 1993, Fuller & Hienerth 2004). The Internet provides an efficient

platform to reduce the often difficult and costly process of transferring a customers wants or needs to a

manufacturer (Piller & Walcher 2005). As well as facilitating the efficient production of customized

goods, Internet technology facilitates the personalisation of customer relationships (Piller 2002). Amazons

sophisticated recommendation system is an excellent example of this. Offering a tailored user experience

to every customer based on their interest areas and previous purchasing behaviour. One area that has

received less focus in the literature is how encouraging collaboration amongst mass customising customers

can improve their MC experience. One Internet technology which can facilitate this collaboration amongst

consumers is a Virtual Community.

Despite that lack of consensus in what exactly constitutes a VC, they have existed online in various forms

for approximately 30 years (Ridings et al 2002). A recent report found that 79% of Internet users identified

at least one community with which they maintained regular online contact (Rainie & Packel, 2001). They

are expected to have a significant impact on commercial companies fundamentally changing how they

develop, price and promote their products (Hagel & Armstrong 1997).

It is suggested in the literature that VCs are attractive to businesses as they provide a mechanism to:

- Facilitate a stronger relationship between the firm and its customers (Brown et al 2002; Hagel and

Armstrong 1997).

- Generate rapid-response and instantaneous feedback concerning different innovation projects

throughout the entire innovation process (Ernst and Gulati 2003).

- Access a communities’ publicly available knowledge base containing information detailing their likes,

dislikes or demographics (Ridings et al 2002).

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Online communities have been found to be highly innovative and can be found for almost every product or

service (Fuller & Hienerth 2004), with research suggesting that many innovations originate in the user

rather than the manufacturer domain (Von Hippel 1986; Piller & Walcher 2005).

Collaborative design is of interest as it may support MC using a community to encourage creativity and

assist customers in making better choices than if they are left to design in isolation, selecting from a large

variety of choices (Von Hippel & Tyre, 1995; Franke & Shah, 2003; Piller et al 2005).

Sawhney & Prandelli (2000) concluded that a business model that combined communities into product

development empowers peripheral players, giving them the right to contribute their own experience and

individual knowledge to the final output. Each consumer can add to the collective knowledge of the

community adding knowledge from their individual experiences. Jeppesen & Molin (2003) believe that

this user creation and development results in a longer product life and greater sales of the basic product.

Some studies have proven that without conscious effort from the community sponsor, collaborative

activity is already taking place. Franke & Shahs (2003) research concluded that

“Without exception, the innovating community members we surveyed do not innovate in isolation or

secrecy; they receive important advice and assistance from other community members” (Pg. 158).

3.5 Threadless – A more effective model of user lead manufacturing?

Instead of thinking of opposites, this paper suggests that it is towards the centre of the continuum between

MP & MC or Standardisation & Individualisation that may offer the best fit for consumers and

manufacturers. It’s suggested that conceptual polarization has lead management thinkers to ignore

strategies which combine these logics (Lampel & Mintzberg 1996). One company which on the surface

seems to combine these two strategies well and will be the focus of this papers research is the online t-shirt

retailer Threadless.com. Threadless’ business model cannot be categorised under Lampel & Mintzbergs

framework as it has one fundamental difference from all the approaches, the customisation & customer

input occurs at the earliest possible point in the value chain, at the conception stage. Threadless’ business

model is outlined below in Figure 1.

Figure 1: “The Threadless Business Model”

In this approach the customer is in almost complete control over designing the product and determining

what is to be manufactured. Every customer has an equal say and input but collectively they decide

which product moves down the activity chain where the manufacturer handles the fabrication,

assembly and distribution. In Threadless’ case members of the community submit t-shirt designs which

the rest can comment and score from 1-5. The top scoring designs are usually then manufactured

(Threadless have the final say) and sold in limited quantities on the site. The winning designer receives

$2000 in exchange for the rights to the design (and an additional $500 payment each time their design

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is turned into a print run of t-shirts).

This research aims to look more closely at why the Threadless model is successful and what motivates

consumers to participate in this VC.

3.6 Conceptual Framework

It is believed that there has been an over emphasis in promoting MC as the future of manufacturing,

jumping from one extreme to the other and ignoring strategies combining both these logics (Lampel &

Mintzberg 1996). The fundamental assumption of MC is that with no obstacles, challenges or

inconveniences, customers would rather create a unique product or service. Predictably today’s business

does not offer this hypothetical ideal for any but a handful of businesses. As a result it is suggested that

there is a disconnect between the customers desire for involvement and individualization, and the

manufacturers desire for economies of scale and predictable, manageable demand. The framework below

outlines this perceived disconnect and recaps some points from the literature which encapsulate this.

Figure 2: “Conceptual framework showing a MC disconnect between Customers and

Manufacturers”

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4.0 Research Questions, Methodology and Approach

This section will outline the primary research methods, philosophy and strategy that underpin their use.

The aim of this research is to try and answer the following research questions in relation to Threadless and

its VC.

1. What aspects of the Threadless business model do its community members consider the most

important?

1.1 Do all community members submit designs? If not, what factors stop members

submitting designs?

2. What is it that keeps community members visiting and interacting with Threadless and its

VC?

2.1 Does this business model support aggregation of user requirements? If so, how?

2.2 Sawhney and Prandelli (2000) believe that “a business model that combines

communities into product development empowers peripheral players”, how much evidence of this

can be seen at Threadless?

To research Threadless a case study approach was adopted. While only focusing on one

community a case study approach offers an opportunity to gain a deeper insight into a relatively

unexplored phenomenon (Jeppesen & Frederiksen 2004).

It is suggested that Threadless is a unique community of co-design, and it is proposed that adopting an

idiographic approach may help to highlight as many of the unique features of this community as

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possible (Bryman & Bell 2003). The research approach was essentially constructivist. While critics

may argue that participant observation lacks reliability and may lead to bias, this is accepted, the

Threadless VC is not an absolute reality where scientific measurement may occur. It is not disputed

that research in this manner may lead to results which are not generalisable. Instead an interpretivist

approach may suggest the existence of some key motivators or enablers which may exist in a number

of different Virtual Communities. The goal is purely to seek a degree of theoretical generalisability

from the results.

The research comprised of a questionnaire completed online amongst community members and a

participant observation of community communication. A questionnaire was used as it allows for further

exploration of the emergent themes but allows for the drawing of a broader consensus from the

community in general. It can help to understand the meanings they attribute to their acts and to the acts

of others (Bryman and Bell 2003). It can also be tailored to gather data on a specific topic (to help

answer the Research Questions), whilst having questions which are more open in nature,

complimenting the exploratory nature of this study.

A link to the questionnaire was posted on the Threadless “Blog Forum”

(http://www.threadless.com/blogs) which is a public messageboard (the two names will be used

interchangeably). Prior agreement had been received from Threadless to post the message and link. It

was felt that this would encourage respondents to complete the questionnaire and raise its profile

amongst the community.

The second piece of research was a participant observation, monitoring and classifying all

communication on Threadless’ messageboard called the “Blog Forum”. This observation lasted for

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seven days from the 1st to 8th of March 2006. Further analysis and classification of the comments

posted below the first ten design submissions mentioned on the “blog forum” during this time was also

completed. Participant Observation in this unobtrusive manner does raise a question of ethics

(Paccagnella 1997). In this case all the data analysed is considered as public discourse and viewable by

all. To respect the privacy of the community members no names of community members or links back

to the text were recorded. Only communication deemed relevant to this research was viewed &

categorized.

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5.0 Results, Findings and Discussion

In total the questionnaire was completed by 204 visitors to the Threadless “Blog Forum”. As all site

visitors regardless of whether they are guests or community members have the ability to view the

Threadless“Blog Forum”, the total population is impossible to quantify. The “Blog Forum” is separate

from the more common activities of rating, submitting or purchasing so is unlikely to be viewed by a

majority of site visitors. In total 191 of these responses were deemed usable for this survey, the other

13 contained incomplete information. In total 219 users started the questionnaire giving an 88%

(approx) started/completed rate.

Over the seven day participant observation, a total of 422 messageboard threads (threads begin with a

single member posting a title and message which other members may reply to) were viewed and had

their topic category logged. Table 3 shows the different categories and the total number of individual

threads in each. Thread types 3a-3e were deemed relevant to this study and likely to return data which

would help answer the research questions.

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Table 1: Number of Threads by Topic observed on the “Blog Forum”

Thread Classification Thread Type N. of Threads

1. Social - not T-shirt related 197

2. T-shirt related - not Threadless 6

3a Design help 8

3b Request by designer for feedback on an Initial design (before the submission stage)

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3c Discussion of t-shirt undergoing/completed scoring 10

3d Discussion of t-shirt undergoing/completed scoring (by the designer)

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3e Vote request for T-shirt undergoing scoring (by the designer)

8

4. Discussing of a winning (printed) T-shirt 59

5. Discussing Threadless/Talking to Threadless 28

6. Requesting a reprint of a sold out design 9

7. Suggestions of what Threadless should do next 5

8. Request for help (general not Threadless related) 20

9. Street Team (a Threadless loyalty scheme) 16

10. Sponsor Post (Post from Threadless) 2

11. Discussion of recent Purchase/What to Purchase 15

Total 424

Although all threads were viewed and categorised, only type’s 3a-e (67 in total) were considered of

interest to this research and also had their replies recorded and categorized to get a picture of the

collaborative communication used on the Blog Forum. In total 6751 replies occurred in all threads over

the seven days. Of these 794 (11.6%) were in the threads categorized as 3a-3e on Table 3 and therefore

the type of each reply was also recorded and categorised using a similar classification scale. It was a

surprise to the researcher just how social the Blog Forum was, with the vast majority of topics started

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(over 80%) having nothing to do with Threadless or design in general, yet the frequency with which

people returned to the forum was very high with more than 45% returning several times a day (see

Appendix A, Q.4).

5.1 What aspects of the Threadless business model do its community members consider the most important?

When asked to prioritise from 1-7 the most important reasons why they purchased from Threadless, the

top four variables (cited 1-3 in importance) are shown below in Table 2.

Table 2: Responses most voted 1-3

Voted 1 Voted 2 Voted 3

Total 1-3 votes for that

category. Ranking

Innovative designs 52% 15% 6% 73% 1

Exclusivity of designs (short run production cycles)

9% 29% 15% 53% 2

Involvement in the design process

7% 17% 21% 45% 3

Price 10% 10% 21% 42% 4

The Threadless ethos and

brand 6% 12% 14% 31% 5

Sizing and colour ranges 4% 12% 15% 31% 6

Delivery times 12% 5% 7% 24% 7

Surprisingly and contradictory to the wider MC literature it was not involvement which scored highest,

instead it was “Innovative designs”. In fact the results showed that involvement only ranked 3rd in

importance. Customers liked the exclusivity offered by Threadless’ limited batch production. Perhaps

in a market dominated by large multinational brands Threadless’ offer of a limited (although not

exclusive) item is compelling enough. Verbatim feedback also supported this, respondent n.146 said

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“Uniqueness, that’s all I want and search (sic) from these shirts, it makes me feel as a single individual

that doesn’t follow the clothing trends that are made popular today.” Respondent n.164 agreed and said

“I feel the greatest reason people buy from Threadless.com is the short runs of unique, clever designs.”

In this case the quality of the design might be far higher than they feel they can have produced which is

perhaps why 60% (see Appendix A, Q.15) of the community have never submitted a design. So it is

suggested that the community is being asked to make a trade off between the losses in uniqueness

(compared to pure MC) for the increase in the design quality of what is produced.

5.2 Does this business model support aggregation of user requirements? If so, how?

The strength of this type of NPD is in how it uses technology to simplify the cost of aggregating users'

requirements. The ratings system acts as a form of market research gauging demand for an as yet un-

manufactured product. During the research other examples of this aggregation were also observed. The

participant observation of the Blog Forum highlighted several examples of small groups being formed

around certain designs which were not popular enough to be put into manufacturing but were liked by a

subset of the community. Thread ID:422 and a comment on Submission ID:10 are an example of this

“The design was very popular here on the blogs, but threadless has told us they don't want to print it.

Do we want to print it ourselves? if enough people are interested, i'll have the shirt printed up on my

buck and sell it for cost here on the site...” (Reply on Thread ID:422)

“Thanks for all the positive feedback everyone! (sic) and if this doesn't get picked, I will be printing it

for my own company.” (Comment on Submission ID:10)

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While not authorised by Threadless this shows that even sub-groups of community members can use the

functionality provided by Threadless to find other users with similar design tastes. These groups may not

be large enough to make them financially viable for manufacture by Threadless, but this showcases user

lead aggregation which may lead to t-shirts being manufactured in smaller quantities for groups of users

who meet on Threadless..

5.3 Sawhney and Prandelli (2000) state that “a business model that combines

communities into product development empowers peripheral players”, how much

evidence of this can be found within the community of Threadless?

The answer to this question is dependent on who is judged to be the “peripheral players” within the

Threadless community. If we consider that essentially Threadless is running a non stop competition

then the key actors are Threadless and the people that submit designs. Without these there is no

competition, nothing to rate or manufacture. With over 60% of respondents having never submitted a

design this leaves the majority of our sample as so called “peripheral players”. If we compare their

behaviour to those that have actually submitted a design to the competition, the results are surprising.

Non-designers reported higher overall satisfaction, rated more designs, were more likely to post or

reply to messages on the Blog Forum and had also brought more t-shirts in the past year. They have the

same voting rights as everyone else and although they may be lacking the technical skills to submit a

design they are needed by the designers to improve the ratings of their designs. The result of this is that

in the observation period 17 different threads asked for their (and the community in generals) feedback

on designs before submission and 24 during the ratings process. This supports Sawhney and Prandelli

(2000) showing that a strength in the Threadless business model seems to be in the way that it offers

different ways for peripheral players to become involved, as one questionnaire respondent said “we get

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to become a part of the t-shirt design we are helping somebody with… Involvement is a big factor.

(Respondent n. 58)

If we compare the Threadless business model against the original aim definition of MC from the

Literature review which was “Aim to reach large numbers of customers but simultaneously treat them

as individuals (Davis 1996)”, the Threadless model seems to achieve this. The experience is different

for every person visiting the site as they decide what to rate, how to rate it and what feedback to leave,

this experience offers the unique value which Prahalad and Ramaswamy (2004) suggested MC

provides. The actual t-shirt purchased is not unique but because designs are limited, distribution

worldwide the likelihood of seeing somebody else in the design is small. Small batch production over

one off items should help the manufacturer towards another MC goal - maintaining the efficiency of

mass production (Pine et al 1993; Piller 2003).

Hart (1995) suggested that the homogeneous market was a thing of the past. The Threadless model

contradicts this, the Internet represents a global marketplace which increases the likelihood whilst

reducing the cost of finding multiple consumers with the same, homogeneous needs. It is believed that

this highlights a potential gap in the MC literature which has over emphasised the value consumer

place on uniqueness. Instead of thinking that MC “is the capability to offer individually tailored

products or services” (Zipkin 2001), instead the ideal as suggested from the Threadless research maybe

closer to a limited (but not unique) product with the usual high customer involvement. While the

homogeneous market may be in decline the Internet offers an opportunity to find customers with

homogeneous requirements. Piller and Walcher (2005:7) said that “The Internet provides an efficient

platform to reduce the often difficult and costly process of transferring need information from

customers to a manufacturer.” Threadless shows that it also provides an efficient platform for

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customers to transfer need information to other customers supporting an aggregation of users

requirements.

Previously, getting this kind of need information through traditional market research would have been

time consuming and laborious. By utilizing the Internet and reviewing community data Threadless can

look at the number of maximum ratings or average rating and from previous experience make an

estimate of the number of sales that interest level will equate to. The Threadless approach delivers

customer involvement but minimises some of the challenges that reduce manufacturer satisfaction with

MC. Lee et al (1999) said that for the manufacturer keeping large quantities and varieties of raw

materials with uncertain, fluctuating demand could send inventory costs out of control. The community

provides data to help gauge demand. Yet the consumer does not have to pick from a range of uniform,

“average” products (Lee et al 1999). Production complexity is reduced somewhat as you’re not

producing one off items.

The research also seems to suggest that this business model helps overcome some of the other MC

challenges cited in the literature review, this is represented by Figure 3 below which adapts the original

conceptual framework in light of these new findings.

Figure 3: Adapted Conceptual Framework

The most relevant findings from this section are now summarized below in bullet form:

• The majority of users did not submit designs but still showed high involvement and higher

satisfaction scores than designers.

• Supporting the idea that consumer have difficulty articulating what they want, the most popular

reason for not submitting a design was “Lack of Artistic Ability”.

• The primary reason for purchasing from Threadless was “Innovative Designs”. Exclusivity was

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considered more important in the purchasing decision than involvement.

• A large amount of support was available to designers and they showed a willingness to

collaborate. Users provided feedback and suggestions to designers at every design stage.

Community members who felt they lack the artistic ability to design could perform other

functions in the design process (commenting, reviewing and rating).

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6.0 Research Conclusions & Limitations

Results showed that Threadless offers an interesting balance of MC and niche production, giving

customers a unique experience but asking them to agree collectively on which product best suits their

needs. This aggregation allows the manufacturer to produce in small batches instead of producing one off

unique items. This approach is further supported by the results of the questionnaire in which respondents

placed “innovative designs” over involvement in the design process as the key reason they buy from

Threadless.

The first key finding was that consumers in this case seemed willing to make the trade off between

creating a unique product as long as the received product was of a higher standard that they would have

been able to produce. This has potential impact for those businesses considering MC and offering a fully

customised product.

The second key finding observed in the participant observation was the willingness of the VC to support

each other and offer help and advice throughout the design process. This support can help overcome the

problems that customers have during the MC process and reduce the support the manufacturer has to

provide.

The final conclusion drawn from this research is that while technology is cited as removing

communication barriers between manufacturers and customers, making it easier to receive want

information, it is also suggested that this same technology facilitated the sharing of want information

amongst customers. Threadless has developed a mechanism to aggregate this information and let its

customers decide collaboratively the products which best meet their aggregated needs. It is proposed that

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this reduces the current disconnect between a manufacturers desire for production efficiency and reliable

demand and a customers desire for involvement and unique (or at least limited) products. This may have

implications for manufacturers trying with difficulty to offer the uniqueness that the MC literature

proclaims customers want, when an equally effective albeit less radical approach may be available.

7.0 Recommendations for future research

The research hinted at a potential link between involvement and purchase intention. A majority of

respondents felt that simply rating a design regardless of the rating given increased the chance that they

would purchase it. Respondent 11 said that they felt they got “Way better scores when people feel they

helped decide the final product...” This could have important implications as it may mean that

regardless of the quality of the output simply being involved in the process might strengthen the

likelihood of purchase.

Contrastingly Expectation Disconfirmation theory “predicts that unrealistically high expectations will

result in lower levels of perceived benefit than those associated with realistic expectations” (Staples et

al 2001;1) may suggest that increased involvement in the product creation process would only raises

consumer’s expectations of that final product, which is an interesting potential paradox which would

benefit from further research.

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8.0 References Berger, C. Moslein, K. Piller, F. & Reichwald, R. (2005) “Designing modes of co-operation at the customer interface: learning from exploratory research.” European Management Review (2005) 2, 70-87. Brown, S.L., Tilton, A. & Woodside, D (2002) “The case for on-line communities.” The Mckinsey Quarterly, 1. Collin, S (1999) “Doing Business on the Internet”. 3rd Edition, Kogan Page; London Davis, S. (1996) “Future Perfect” Addison-Wesley;Reading Ernst, H. & Gulati, R. (2003) “Virtual Customer Integration – Bringing the Customer back into the Organisation”. In Fuller et al (2004) Franke, N. & Shah, S. (2002) “How communities support innovative activities: an exploration of assistance and sharing among end-users.” Research Policy 32; 157-178 Franke, N. & Von Hippel, E. (2003) “Satisfying Heterogeneous User Needs via Innovation Toolkits: The case of the Apache Security Software” Research Policy 32, no.7: 1199-1215 Fuller, J. & Hienerth, C. (2004) “Engaging the creative consumer.” European Business Forum (EBF); issue 19, autumn 2004. Fuller, J. Bartl, M. Holger, E. & Muhlbacher, H. (2004) “Community Based Innovation: A Method to Utilize the Innovative Potential of Online Communities” Proceedings from the 37th Hawaii International Conference on Systems Sciences 2004. Available at http://csdl.computer.org/comp/proceedings/hicss/2004/2056/07/205670195c.pdf [last accessed 10th Sept 2005] Hagel & Armstrong (1997) “Net Gain: Expanding markets through virtual communities.” Boston, MA: Harvard Business School Press Hart, C. (1995) “Mass customization: conceptual underpinnings, opportunities and limits” International Journal of Service Industry Management Vol. 6, Issue 2, pp. 36-45 Jeppesen, L. & Frederiksen, L. (2004) “Why firm-established user communities work for innovation: The personal attributes of innovative users in the case of computer-controlled music instruments” Working paper available at http://ideas.repec.org/p/ivs/iivswp/04-02.html [Accessed 10th March 2006] Lampel, J. & Mintzberg, H. (1996) “Customizing Customization” Sloan Management Review, Fall 1996, pp. 21-30 Lee, S.E. & Chen, J. (1999) “Mass-customization Methodology for an Apparel Industry with a Future” Journal of Industrial Technology, vol.16, n.1 Nov 1999 – Jan 2000 Lee, S. Barua, A. Whinston, B. (1999) “The complementary of Mass Customization and Electronic

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Commerce.” Economics of Innovation and New Technology, Vol. 9, No. 2, March 2000, pp. 81-109 Paccagnella, Luciano. (1997). “Getting the Seat of Your Pants Dirty: Strategies for Ethnographic Research on Virtual Communities”. Journal of Computer-Mediated Communication, Vol. 3, Issue 1. Piller, F. (2002) “Customer interaction and digizability - a structured approach to mass customization.” Working Paper, Available at http://www.mass-customisation.de/download/pil2002-2.pdf [Accessed 05th October 2005.] Piller, F. & Berger, C. (2003) “Customers as Co-Designers.” IEE Manufacturing Engineer. August/Sept 2003 Piller, F. Moeslein, K. & Stotko, C. (2004) “Does mass customization pay? An economic approach to evaluate customer integration.” Production Planning & Control. Vol. 15, N.4, June 2004, 435-444 Piller, F. & Muller, M. (2004) “A New Marketing Approach to Mass Customisation.” Int J. of Computer Integrated manufacturing. Oct/Nov 2004, Vol. 17, N.7, 583-593. Available at http://www.mass-customization.de/download/ijcim04.pdf. [last accessed 1st October 2005] Piller, F. Schubert, P. Koch, M. Moslein, K. (2005) “Overcoming Mass Confusion: Collaborative customer co-design in online communities.” Journal of Computer-Mediated Communication, 10 (2005) 4. Available from http://jcmc.indiana.edu/vol10/issue4/piller.html [last accessed 10th October 2005] Piller, F. Walcher, D. (2006): “Toolkits for Idea Competitions: A Novel Method to Integrate Users in New Product Development”, Journal of R&D Management. Pine, J. (1993) “Mass Customization: The new frontier in business competition.” Harvard Business School Press; Boston Pine, J. Victor, B and Boynton, C. (1993) "Making Mass Customization Work" Harvard Business Review, Vol. 71, September-October, 1 1993, pp. 108-111. Pine, J. (1994) “Customers don’t want choice”, Managers Journal, Wall Street Journal, 18th April, p.A14 Pine, J. (1998) “Welcome to the Experience Economy.” Harvard Business Review, Jul/Aug98, Vol. 76 Issue 4. Porter, M. (2001) “Strategy and the Internet” Harvard Business Review, Vol.79, Iss.3, pp. 62 -79. Prahalad, C. Ramaswamy, V (2004) “The Future of Competition: Co-Creating Unique Value with Customers” Massachusetts:Harvard Business School Press Rainie, L., & Packel, D. (2001) “More online, doing more.” Pew Internet & American Life Project. [online] Available from http://www.pewtrusts.com/pdf/vf_pew_internet_community.pdf [last accessed 14th December 2005]

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Ridings, M. Gefen, D & Arinze, B. (2002) “Some antecedents and effects of trust in virtual communities.” Journal of Strategic Information Systems 11; 271-295 Sanders, H. (2001) “Financial rewards of mass customization.” MCPC 2001, Proceedings of the 2001 World Congress on Mass Customization and Personalization, Hong Kong University of Science and Technology. [online] available at http://www.sanders.ch/2000-02-23,%20Mass%20Customization%20(New%20York%20speech).pdf [last accessed 15th March] Sawhney, M. & Prandelli, E. (2000)“Managing Distributed Innovation in Turbulent Markets.” California Management Review, Summer 2000; Vol. 42, Issue 4. Schubert, P. & Ginsburg, M. (2000) “Virtual Communities of Transaction: The Role of Personalization in Electronic Commerce.” Electronic Markets Schubert, P. & Koch, M. (2002) “The Power Of Personalization: Customer Collaboration and Virtual Communities.” Eighth Americas Conference on Information Systems Teresko, J. (1994) “Mass Customization or Mass Confusion.” Industry Week, June 20, 1994 Staples, S. Wong, I. & Seddon, P. (2002) “Having expectations of information systems benefits that match received benefits: does it really matter?” Information and Management, 40 (2), pp. 115-131. Von Hippel, E. (1986) “Lead users: a source of novel product concepts.” Management Sciences 32 (7), 791-805 Von Hippel E. & Tyre, M. (1995) "How "Learning by Doing" is Done: Problem Identification in Novel Process Equipment." Research Policy, (January) p. 1-12. Von Hippel, E. (1998) “Economics of Product Development by Users: Impact of "Sticky" Local Information.” Management Science, vol 44, n.5 (May) p. 629-644 Von Hippel, E. (2005) “Democratizing Innovation.” MIT Press accessed. Available at http://web.mit.edu/evhippel/www/books/DI/ [Accessed 1st Oct] Zipkin, P. (2001) “The Limits of Mass Customization.” MIT Sloan Management Review; Spring 2001, Vol. 42 Issue 3, p81-87

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Appendix A – Basic Questionnaire Results

What follows is the raw response data from the messageboard questionnaire. No question was compulsory,

and branching was used which explains the variable response level. The full top-level results of the

ethnographic research are on pg.21

Q.1 How old are you?

Response Choices N. Respondents Response Percentage

Under 10 years 1 0,50%

10-19 years 111 55,78%

20-29 years 78 39,20%

30-39 years 8 4,02%

40+ years 1 0,50%

Total 199 100%

Q.2 How many t-shirts have you purchased from Threadless in the past year?

Response Choices N. Respondents Response Percentage

0 18 9%

1 15 8%

2-5 56 28%

6-10 50 25%

10-15 36 18%

15+ 24 2%

Total 199

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Q.3 Since your first purchase from Threadless, what percentage of ALL your t-shirt purchases (including purchases from both online retailers and traditional offline stores) have come from Threadless. For example, Paul has brought 10 t-shirts since his first purchase, 5 of which were from Threadless so he would answer 50%.

Response Choices N. Respondents Response Percentage

10% 12 7%

20% 9 5%

30% 9 5%

40% 12 7%

50% 14 8%

60% 12 7%

70% 18 10%

80% 30 17%

90% 19 11%

100% 38 21%

Not sure 5 3%

Total 178

4. How many times a week do you visit the Threadless website?

Response Choices N. Respondents Response Percentage

Less than once a week 2 1%

Once or twice a week 15 8%

Every other day 22 11%

Every day 57 29%

Several times a day 100 51%

35

Total 196

5. Do you rate potential designs at Threadless?

Response Choices N. Respondents Response Percentage

Never 5 3%

Once or Twice 1 1%

Occasionally 53 27%

Often 54 28%

Most times I go on the site. 83 42%

Total 196

6. Do you think it is more likely that you will buy a t-shirt that you have rated?

Response Choices N. Respondents Response Percentage

Yes 104 53%

No 45 23%

Not Sure 47 24%

Total 196

7. Do you think it is more likely that you will buy a t-shirt that you have rated highly (given a

rating of 3 or more), than one you have rated 2 or less?

36

Response Choices N. Respondents Response Percentage

Yes 136 91%

No 5 3%

Not Sure 8 5%

Total 149

8. Have you ever looked at the Threadless Blog Forum?

Response Choices N. Respondents Response Percentage

Yes 191 98%

No 4 2%

Not Sure 0 0%

Total 195

9. How often do you view it?

Response Choices N. Respondents Response Percentage

Less than once a month 3 2%

Once or twice a month 7 4%

Once or twice a week 19 10%

Every other day 23 12%

Every day 52 27%

Several times a day 87 46%

Total 191

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10. How often do you post or reply to messages?

Response Choices N. Respondents Response Percentage

Never 12 6%

Once or Twice 31 16%

Occasionally 69 36%

Often 79 41%

Total 191

11. Have you ever posted requesting design assistance on the blog forum?

Response Choices N. Respondents Response Percentage

Yes 63 33%

No 124 65%

Not Sure 4 2%

Total 191

12. Did you receive a response from other members offering to help?

Response Choices N. Respondents Response Percentage

Yes 61 97%

No 2 3%

38

Not Sure 0 0%

Total 63

13. Have you ever responded to anyone posting, asking for design assistance?

Response Choices N. Respondents Response Percentage

Yes 114 60%

No 72 38%

Not Sure 5 3%

Total 191

14. Approximately how many times have you responded offering assistance?

Response Choices N. Respondents Response Percentage

1 9 8%

2-3 28 25%

4-5 18 16%

5-10 18 16%

10+ 32 28%

Not Sure 8 7%

Total 113

15. How many designs have you submitted to Threadless?

Response Choices N. Respondents Response Percentage

0 119 61%

1 14 7%

39

2-3 16 8%

4-5 16 8%

6-7 4 2%

8-9 8 4%

10+ 17 9%

Total 194

16. If you haven't submitted a design, why not? (Tick as many of the below as you agree with)

Response Choices N. Respondents Response Percentage

No interest in designing 12 6%

Lack of artistic ability 71 34%

Complexity of submission requirements

14 7%

Shortage of free time to produce designs

53 26%

Other, please specify (not shown here)

56 27%

Total 206

17. How many of these have been selected for production?

Response Choices N. Respondents Response Percentage

0 155 91%

1 10 6%

2-3 5 3%

4-5 0 0%

6-7 1 1%

40

8-9 0 0%

10+ 0 0%

Total 171

18. What do you consider to be the most important reason why you buy t-shirts from Threadless? Rate each option below in a scale of 1 (most important) to 7 (least important)

(Only 1-3 votes are shown below to save space)

Voted 1 Voted 2 Voted 3

Total 1-3 votes for that

category. Ranking

Innovative designs 52% 15% 6.% 73% 1

Exclusivity of designs (short run production cycles)

9% 29% 15% 53% 2

Involvement in the design process

7% 17% 21% 45% 3

Price 10% 10% 21% 42% 4

The Threadless ethos and

brand 6% 12% 14% 31% 5

Sizing and colour ranges 4% 12% 15% 31% 6

Delivery times 12% 5% 7% 24% 7

Q.19 Do you feel that you are part of a wider Threadless Virtual Community?

Response Choices N. Respondents Response Percentage

Yes 155 91%

No 10 6%

41

Not Sure 5 3%

Total 179

Q.20 If Yes, do you feel a sense of attachment to this community?

Response Choices N. Respondents Response Percentage

Yes 137 77%

No 22 12%

Not Sure 20 11%

Total 179