There’s a fantastic story on TechRadar today about “The Secret behind Threadless’ Success“. Like many other Web 2.0 success stories, the whole thing started as a hobby and almost accidently turned into a thriving business – with crowdsourcing shifting from something they were “unknowingly” doing to the center of their entire strategy. As co-founder Jake explained while taking a break from selling 100,000 shirts a month:

“We learned that what we were doing was called crowdsourcing about three years into the project,” Jake chuckles, “and ended up being the prime example for it. We just started Threadless as a hobby, not to be a business. Not only did we not know the business model was crowdsourcing but we didn’t know there was a business model. Today it’s the core of our business. It affects every department: the way we market, the way we do our customer service.”

But what I found most interesting from this article was his perspective on advertising – or perhaps I should say distaste for it:

“We’ve experimented with advertising pretty recently and have had mostly negative reactions to it,” Jake explains. “It’s always been something that we’ve felt is not right for us. Me and Jeffrey [Kalmikoff, Threadless' chief creative officer] used to work at four ad agencies, so we have a pretty strong understanding of what advertising means and how evil it is.” He chuckles.

“With our company it’s all about trust and honesty and we just don’t like the idea of pushing our brand on people who otherwise wouldn’t hear about it. We like the idea of it spreading via word of mouth, organically, naturally. It’s not that we don’t market, we just don’t advertise. I’d rather somebody hears about Threadless through an article in a magazine than an advertisement in a magazine.”

It’s a perspective that seems to be fairly pervasive in this space – direct advertising is some mixture of evil, inauthentic, and a waste of time. But as he notes, it’s not like they don’t market – they just don’t advertise. In other words, they like to tell their story in a genuine way, and hope the community helps them share the message – which they’ve been doing in spades. And the beauty of that model – if you have a compelling story to tell – can be mostly clearly seen when the direct marcom budget line is trending towards zero…

The HP Social Computing Lab has taken an interesting look at the dynamics of crowdsourcing in relation to content consumption. Noting that we are in the midst of an inversion from the traditional model where relatively few people produce content and the majority simply consume it, the authors seek to explore an apparent paradox – why growth in content provision continues to persist, given that the structure of crowdsourcing would predict a tragedy of the commons situation. More simply, given that we can all just sit back and free ride off of what everyone else is doing, why aren’t we all sitting back and taking the free ride?

In order to explore the problem, the authors look at a dataset of almost 10 million videos on YouTube, submitted by 579,471 people, as of April 30 2008. The key finding is that while one might look at a “digital commons” as a traditional public good, the individuals contributing to the digital commons may perceive their activity as a private good. In this mindset, they’re not necessarily getting money, but rather attention, which can essentially be looked at as a “currency” they are collecting. I would personally call this benefit reputation, as I believe it is the ability to build one’s reputation that is driving the majority of crowdsourcing activity, but it’s essentially the same point.

Now I won’t get into the nitty gritty of how they ran the test – but if you are fluent in things like alphas, p-values, and logs, the write up is fairly interesting (and quite short). I would like to highlight an interesting contrast in the findings though. As one would expect, the researchers found that when attention is low (i.e. few people watching your videos), productivity (i.e. # of videos you upload) drops, and in many cases wastes away to nothing. At this end of the spectrum, individuals compare themselves mostly to the performance of others. Increases in attention have the opposite effect (i.e. more people watching = higher propensity to upload)… and at this end of the spectrum, individuals compare themselves to their own previous benchmarks.

In other words, “bad” is determined in relation to others, but “good” is determined in relation to one’s previous record. Could be an interesting tidbit of information for people looking to grow their own crowdsourcing platform…