Shirt Woot and User Innovation

The Question:

What other types of products could incorporate the Shirt.Woot business model?

The Background:

A friend of mine introduced me to the website Woot. The general premise of Woot is to sell one product and only one product everyday at a bargain basement price. If the product sells out or midnight strikes before you click “buy”, tough luck. There are actually a range of Woot sites that include electronics, wine, and t-shirts. Although the one product per day business model is interesting for all three product types, I’m most interested in Shirt.Woot.

Unlike the other Woot sites that buy their daily product in bulk from a major company, many of the t-shirt designs on Shirt.Woot are created by their own customers. Shirt.Woot runs a weekly “derby” in which loyal Woot followers can design their own t-shirts in an effort to best capture that derby’s “theme”. Recent derby themes include: “Pets“, “Halloween Costumes“, and “Art as Text“.

The Woot community then votes on which designs are the best, and the top 3 vote-getters are turned into real t-shirts produced for the mass public. In return for allowing their design to be used, the winning designer wins a $1000 prize and a share of the profits from all shirts sold after the first day.

The Discussion:

Although the “one product per day” business model is interesting in its own right, I am far more interested in the business model implications associated with the t-shirt design and voting process. Shirt.Woot has found a way to tap into their customer market in a uniquely direct way. The business essentially let’s the customer create the product FOR THEM by letting them design the shirt. They have to spend exactly zero dollars for graphic design when a community member designs a shirt for them.

After some quick googling I’ve realized this business model already goes by the name user innovation in Biz School circles and has been copied in the t-shirt design industry by a couple other competitors (the most popular being Threadless).

So what other types of products can be sold while emphasizing the “user innovation” business model? The key factors to look for are:

1. Completely designed by a loyal community with minimal compensation who is also the main customer base
2. Voting community that vets selections for us and establishes a vested interest by the customers
3. Baseline commodity product that can be easily customized on a regular basis
4. Product can be used by a mass audience

The list below is really just a brainstorm with pros and cons to the ideas I’ve considered.

Other clothing apparel: Shoes and hats

Pros: Easily customizable and lots of design options

Cons: Shoes more expensive than shirts, hat relatively cheap though

Food, prepackaged meals

Pros: Easy customization, consumable product that will bring consistent customer base

Cons: Prep time too difficult, shipping problems, can’t necessarily sell at same cost everyday, people can’t actually vote on actual product over Internet

Ties, cufflinks

Pros: Easy customization, lots of design options, and a high net worth market

Cons: Too niche market to build self-sustaining community

Computer wallpaper

Pros: Easy to distribute, market size is good

Cons: Too many free alternatives with just as good quality

Music downloads

Pros: Very easy to distribute, extremely low cost base, very passionate community of emerging artists

Cons: Difficult to have “themed” weeks with differentiated products. Could get boring very quickly and not sustain community, People voting on product will already have access to the product

Cellphone wallpapers and ringtones

Pros: Easy distribution, high margins

Cons: Too many free alternatives, saturated market

Home furnishings:

Pros: “Themed” weeks could be different furnishings; products can be “IKEA-cheap” but still be unique

Cons: Shipping costs very high, tough to manufacture different furnishings each week, would need to outsource

The Conclusion:

The most feasible options on the list are likely other clothing/accessory design options such as the hats, ties, or cufflinks. They can use a commoditized product as a base and allow easy customization for a unique product every time. In addition, customers alternate them frequent enough that a community can still be made from repeat buyers. Personally I think the most feasible would actually be the ties. The community would not need to be nearly as large as t-shirts because the competitive price could be much higher. In addition, ties are rotated through a “white collar” wardrobe just as often as the shirts they accessorize.

I’m not sure at this point how feasible any of the non-clothing options really are as a pure “user innovation” business model. Perhaps some hybrid system could be implemented in these cases. One example of this: on Wine.Woot they are starting a “tester” system where existing customers can sign up to receive a bottle of the following week’s wine for free. In return they taste and review the wine in the community forums so others can receive feedback before they purchase.

This testing system could be modified so that instead of sending the same bottle to each tester, they could send different bottles from a list of 4 or 5 to different testers. These testers would sample the wine and provide reviews, and then Wine.Woot could put the one with the best reviews on sale for the mass public. It’s basically market research. But instead of testing a random group of strangers in a 1-way-mirrored room, you’re testing actual customers who have already shown a willingness to purchase your product. And with free samples, they will continue to do so.

The Nutshell:

The “user innovation” model in its purest form is very tough to convert outside of clothing and accessories. However, a hybrid model using market research amongst loyal customers could be successfully expanded into other product genres.