Comment by strebler | Hacker News Reader

Comment by strebler | Hacker News Reader

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Why is it so surprising? From both the designer and shopper perspectives, the Old Way does seem better.

With the Old Way:

Designer: does N work to create a design and has X% chance of winning $2500. They focus on what they love (i.e. design) and can get a nice quick payout if they're good. This is even better than a lottery, because it has the same excitement, but talent is also a factor which is very motivating. The marketing is done for them. Competing head to head is also kind of fun.

Shopper: look at the top / winning shirts and buy one if they like it. Paradox of Choice is not a problem.

With the New Way:

Designer: needs to setup a shop, do N work to create a design, then M work to market the shirt, and needs to sell nearly 400 t-shirts to get to that payout. For the winners to achieve the same outcome, it's a lot more work. For most designers, I think it's safe to assume that the marketing part is nowhere near as fun as the design part. The excitement factor is totally gone.

Shopper: has to wade through tons of shirts to figure out which one they like. Paradox of Choice is signifcant.

I totally agree, but I bet it changed because the Old Way is worse from the perspective of Threadless. Specifically, each contest needs to result in a shirt that they can sell more and more of in order to maintain growth. That pushes you toward a bland, inoffensive, mass-market design. They think they can ultimately maximize profits by doing the etsy/cafepress model, where it's loads of vendors on the ground doing their own thing, and the marketplace supplier just floats above the fray collecting a slice every time money changes hands.

Yeah, but why did Threadless possibly need to "maintain growth"?

They had a sustainable small business model. They could have consciously leveled off when they hit their natural equilibrium and remained a profitable niche vendor in perpetuity. Instead, it appears they threw out their existing succesful business model and a good chunk of their reputation trying to scale beyond their natural limits.

What's wrong with being small if you're good at it?

>Yeah, but why did Threadless possibly need to "maintain growth"?

MBA disease: Every MBA learns their reason for existing is to grow the business and extract maximum value for shareholders.

I completely agree with you, and there's nothing wrong with a successful cottage/lifestyle business. But it takes a certain maturity to see it that way, and they might have caught the startup bug and thought they could turn custom t-shirts into a billion dollar business... who knows?

I think you're right. It was probably a good bootstrapping strategy at the start to get good designs into the system and also some marketing benefits from promoting top designs from contests. The more I think about it, contest-driven marketing is likely not sustainable - contests are more of a novelty and very hard to keep fresh.

Great analysis. Altough i'm not sure that about the shopper side - since t-shirts are a self-expressive medium and not just a commodity like wine, probably there's value in offering a large selection.

And if we'd change the old model to something like this:

No prize. N designers competing. Top 1/3 win, and take all of the royalties of all the shirts in the competition, forever.

How would you analyze that ? would it be a good model ?

Yes, having a store with selection is good for shopping. The contest is part merchandising and part marketing to show the "top hot new" SKU.

For any contest to work, you need good entries. The prize is the payout that motivates those entries.

I think a hybrid approach could likely work, where everyone's entry is buyable by default (and they get royalties). I'm not sure people would like if the winner(s) get royalties of other entries, but it might work.

One factor I'm realizing (which may have motivated the change) is that contests are a more of a "novelty" from a marketing perspective, so it may have sustainability issues. People easily get bored, especially if it's the same experience repeated over and over.

Well, recreate the old Threadless idea for your own startup and make the millions!

Yeah, because every criticism is justified only if the critic can replicate the same work better... /s

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