How Jake Nickell Built His Threadless Empire

FROM SMALL TO XXL: You’ve heard of crowdsourcing? The 31-year-old founder of the Chicago T-shirt company basically invented it. Now he’s taking it to malls across the country

Nickell and his merch at Threadless’s West Loop headquarters   Photo: Taylor Castle

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Jake Nickell meets me in the front office of Threadless, happy to show me around. This is his place; he built it, figuratively, from an idea he had a dozen years ago, and so he has an obvious sense of pride, though a soft-spoken, easy-pedaled way of projecting it. “So we use this room in a number of ways,” he says vaguely, waving his hand.

No kidding. It’s not really a front office so much as a front playroom, a cavernous space that is only a small part of the 45,000-square-foot former FedEx distribution center in the West Loop that Threadless leased and rehabbed last year. (Click here for a photo tour). An Airstream trailer, where Threadless podcasts are shot, sits on one side; a sofa with crumpled cushions holds the back of the room, near the beer keg refrigerators; murals of parrots and exploding comic book exclamations—“WTF!?” “Awezome”—fill the walls. There’s plenty of room to project movies or race go-carts—both things Threadless employees are known to do. It’s like Pee-wee Herman’s playhouse reimagined by some goofy hipsters.

Moving at a fast pace, Nickell continues his tour. A boyish-looking 31, he wears skinny jeans, Toms shoes, and yellow-and-orange plaid socks. He’s so lean that he barely fills out his medium-size tee. On his left hand, in place of a wedding ring, is a tattoo of the letter S, for his wife, Shondi. “After I lost or broke four rings, this seemed to be the way to go,” he says sheepishly. How do you break a wedding ring? “It was wood.”

A hive of young employees—all dressed very much like Nickell—hover over scores of computers on two floors. In the warehouse, endless rows of shelves hold stack after stack, box after box of tees. There are enough shirts to outfit a small army, which is pretty much what Threadless does. The company sells more than 120,000 T-shirts a month to cool-hunters around the globe. As Nickell and I race-walk past the shelves, the placards identifying each design speak some secret hipster code: “Wild Rage,” “Bird Hair Day,” “Ride or Die,” “Bang!” There are more than 750 designs here; how can Nickell keep them all straight? He gazes across the room, over the sprawling shelves. Then he smiles and replies, “This is what I do.”

Threadless is a T-shirt company, sure, but it’s much more than that. It is one of the first companies anywhere to make crowdsourcing an essential part of its business plan. Just as Facebook lets users create customizable social networks to connect and collaborate with others online, Threadless gives its social network—two million people and counting—creative control over the products it sells. Anyone in the network can submit T-shirt designs that site members vote on, with winners printed and sold by Threadless.com (see sidebar on next page for details). Back in 2008, Inc. magazine called Threadless “the most innovative small company in America.”

Revenues for the privately held firm have been widely estimated at $30 million last year (a figure that Nickell will neither confirm nor deny). But that could change dramatically if Threadless’s latest strategy—forging partnerships with huge national retailers—proves successful.

Gap sold a limited run of Threadless tees in the spring, followed by an early summer line of new designs, created by designers from Shorewood, Illinois, to Tangerang, Indonesia. A back-to-school line of new tees arrives in August. At presstime, Bed Bath & Beyond planned to roll out in June a back-to-school line of products (linens, wastebaskets, comforters, pillows) with Threadless designs. Add in Griffin iPhone covers with Threadless designs and customized laptop covers for Dell and you have the makings of a cultural juggernaut.

It’s an amazing accomplishment for any entrepreneur, especially one who isn’t cranking out computer code like Mark Zuckerberg. Nickell built his empire on T-shirts—not exactly a rare commodity. But he did capitalize on a key insight before most anyone else: the power of crowds.

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2 years ago
Posted by anonymous12345

"You’ve heard of crowdsourcing? The 31-year-old founder of the Chicago T-shirt company basically invented it."

Uh... just as long as built into "basically" is ignoring the fact that crowdsourcing is merely a coined term for something that has been going on for 30+ years under many different names.. customer co-creation, consumer innovation, etc.

For a company as old as they are, they seem to be more in "throw crap against the wall and see what sticks" mode more than companies 1/10 their age. Tee shirt vending machines? Logos on garbage cans at Bed Bath and Beyond? Partnering with The Gap and bands no one has heard of all at the same time? Maybe I don't understand what their vision for the future is, but something tells me that the Jake who started Threadless would kick the ass of the Jake who currently holds a vanity title and seems to be the cashed-out mouthpiece while his experienced executive team drives what he built into the ground in pursuit of a fatter bottom line.

2 years ago
Posted by setpixel

Haters gonna hate.

2 years ago
Posted by pelaej

I'm actually really close to someone who works for Threadless in their warehouse. If you had the opportunity to sit and talk with this person about their views on how Threadless is run, and how they treat their employees, you might not have the same outlook on this company.

Now, I know there will always be that one person who has a negative outlook on things, and in this case that person is definitely me. But I wouldn't say anything unless I felt as passionate about it as I do this. The truth is, is that Threadless really doesn't treat their warehouse employees all that great... The pay is pretty bad, the hopes of becoming a full-time employee are slim to none and health benefits are so expensive that if you do have the opportunity to work full-time and buy into their health plan you can't really afford much of anything else once you do. Up until recently (I'm talking a couple of weeks ago) they were scheduling their part-time employees to work full-time hours without the option to buy into their health insurance plan. I guess they realized that it was illegal, so now they schedule their part-timers to work just enough hours so that they're legally under a full-time work week (hmmm, sounds like Walmart). I heard a story about how one employee approached management looking to see if they would hire them on full-time. This employee mentioned to them that they felt they deserved full-time employment because of the hard work they put in, including overtime. Managements response was that overtime is a privilege. Pretty sad, considering employees only work overtime when there's a sale and it benefits the company. The icing on the cake is that they don't even have a human resources department where an employee could have some type of outlet. I think at least Walmart has that.

I realize that it takes everyone in a company to make the company successful... but warehouses seem to be a pretty central part of a companies existence. Especially a company that does a majority of their sales through their website. I also realize that it probably doesn't take an exceptional amount of skill, or a college degree for that matter, to work in a warehouse. But when a company claims to be great, or people claim that a company is great, I would think that in order to be great you'd need to be that way from the inside out. To be great I would think that you would treat your employees great, not just have a great product (which, by the way isn't that great. Their t-shirts are incredibly cheap and they have products returned to them constantly).

I've found that once you peel back the trendy facade of Threadless, and dig a little deeper, it's not so appealing anymore. It makes me sad to know that this company's appearance is a central part of why people find it so attractive and think that it must be a cool place, it must be awesome. I know, I was one of those people. Not anymore...

2 years ago
Posted by Jake Nickell

Thanks for the article, Chicago Magazine! My wife opened up the magazine and saw that picture of me and just laughed uncontrollably for like 10 minutes, pretty hilarious photo. Nice one, Taylor :)

I wanted to address PELAEJ's comment about our warehouse. While most companies in our position would likely outsource their distribution to a third party, we feel that our warehouse has become a hugely important part of our culture here at Threadless. Some of the most creative people I've met work in our warehouse. Artists, musicians, comedians. Many of our warehouse staff has moved into full time roles. Many even into positions on the office side of Threadless as well. Mike, Dustin, Kim, Steve, Jen, Kara, Bob, Tristan, Joe, etc… nearly 20% of our current office staff started in our warehouse, and that's in addition to those who have moved to full-time roles within the warehouse. They now play key roles in our company in nearly every department here from marketing to creative, tech, production, customer service.

As for part-time vs full-time, unfortunately we can't have everyone all work full-time hours all the time because there just isn't enough work to do every day. When we have a sale and our volume increases by as much as 10 times, we need the flexibility to accommodate that. In addition to our part-timers having the ability to earn more hours during those times, we also bring in as many as 90 more temporary workers during these times.

For health insurance, we offer a variety of plans to our full-time employees and pay 75% of the premium (and 100% of dental, vision, short/long term disability & life insurance). There are very economical options for our staff.

PELAEJ, I'd love for your friend who works in our warehouse to come discuss this directly with me.

2 years ago
Posted by Wylieknowords

Great photo of Jake Nickell. I have been sending slogans to Threadless and voting for artwork for over two years. Thank you Chicago Magazine for explaining better how Threadless works. A few weeks ago Threadless stopped sloganeers from sending in a daily slogan. Now we must collaborate with an artist or become an artist. I was so angry and sad I wrote a few large comments. Then I calmed down and discovered there were artists who needed design ideas and slogans who reached out to me. I hope to submit artwork next week. When I tell artists in Richmond, Virginia about this company in Chicago that prints a small photo of the person who created each design, along with that person's name and hometown, they are shocked. Most businesses treat inventors, writers, and artists as kleenex to use and throw away. To me crowdsourcing is fun. Going to Threadless to vote 0-5 for artwork from around the world is a video game for me. I learn a lot and love to help artwork get printed. (I've helped 150.) How did I discover this Chicago Magazine article? I have a Google Alert for 5 subjects. One is slogans. It brought me to you. I have one Chicago slogan:
"Chicago--NY With a Personality & Better Pizza." Most people think of Threadless when you say "crowdsourcing" or Tees. That always brings you back to Chicago. "Threadless gives crowdsourcing something to wear." www.knowords.com I used to write for Richmond Magazine and Virginia LifeStyle. I'm happy to have discovered Chicago Magazine. I've been all over the world and never to Chicago. Makes me want to visit. Just read about Chicago Impact this morning. To me Chicago is city where things get done without a lot of fanfare or spin. Five years ago I first heard about Threadless and this new invention called the Kindle. I've been explaining both for years. Good job on this article. Look forward to reading more Chicago Magazines.

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