Insights Into 10 Years Of Building Threadless – With Jake Nickell

by Tim Jahn on December 10, 2010

When Jake Nickell started the popular crowdsourced t-shirt design site Threadless 10 years ago, he thought he’d be holding down a job nowadays, with some creative hobbies on the side. After all, Threadless was only a hobby for Jake back then.

Threadless is an overnight success that took 10 years to build.  Jake didn’t give himself a salary for 2 years.  In the beginning, Jake would go to the post office during his lunch hour to ship out the shirts that people bought.  When an employee needed a soundproof booth to start a podcast, Jake suggested they find an Airstream for the office on eBay (and they did).

I interviewed Jake to get some insight into how he built Threadless over the past 10 years into the success it is today, and explore some of the ups and downs along the way.

Transcript

Tim Jahn: So Threadless is ten years old now which is congrats, is awesome. And I would venture to guess — I think it’s safe to say your one of the if not the most popular site online to buy T-shirts from a community of I want to say everyday designers and I don’t mean that in a bad way.

But I mean, that I’m not a designer but I have a shot at least of designing something and hopefully you guys will print it, right. So ten years old, most popular site. Ten years ago, when you started Threadless, where did you see yourself in ten years?

Jake Nickell: Really I saw myself as kind of holding down a job but still having like creative hobbies because that’s always been a part of my life where I have something that your kind of working on whether its building a fort in the woods with a friend, or skating and making skating T-shirts. And then, but my skill set was in web design and web development.

So my goal in life was kind of to continue working on the Internet as a web developer and get married. And actually like my girlfriend that I’m married to now when I first started Threadless, she was a chemical engineer and she had a great job, and was like making the money in the family. And it was kind of always that she was going to be the one that was probably going to be making more money.

Tim Jahn: A chemical engineer?

Jake Nickell: Yeah.

Tim Jahn: Oh my goodness.

Jake Nickell: So she, a few years into the business, she left that and started helping us out because she has a good logical head on her shoulders for the process. Like what a chemical engineer does mostly is figures out the processes of how to take like a recipe and mass-produce it on a huge scale.

And so she provided us with a lot of help on how to like get our operations in order because we were having issues with like accounting, legal, order fulfillment, customer service. She did all that stuff for like four years. And then when she left in 2007, we had to hire like six people to replace her. Yeah, she’s the real, the business head in the family for sure.

Tim Jahn: I imagine when she left her chemical engineer job to help you guys that you, Threadless was providing enough income for the family that you guys could justify that?

Jake Nickell: Yeah, Threadless –

Tim Jahn: What did that feel like? I mean, I imagine a chemical engineer gets paid a pretty decent dime. What did it feel like to have her quit that and join your crazy T-shirt idea?

Jake Nickell: She was so happy about — because as much as she loved her job, it was also not the same as working for yourself and she was working weird hours and I mean it felt so good to be able to just, both of us focus on this fun idea that was doing well enough for us to pay ourselves.

I mean, for the first two years of starting Threadless, I didn’t take a dime for myself. Every penny that came in from T-shirt sales was used to just make more T-shirts. It took two years before I even took a salary.

Tim Jahn: Did you do that on purpose or was it just kind of you weren’t even thinking about paying yourself?

Jake Nickell: Yeah, I wasn’t even thinking about it. It was just a hobby. It was kind of like, like if you’re the tree fort example that I gave like yours spending money to build your tree fort because its fun to do and it’s a hobby to have after school but you’re not intending to make money from building your tree fort. But somehow this, Threadless ended up making money. I mean, I think the thing that I didn’t realize when starting Threadless was simply that there were enough people in the world that were interested in building art on T-shirts; that you could actually build a business on that.

Because when I was growing up like products, apparel was more about the brands. Like it was all logos on your shirt and you’re wearing like an Aeropostal T-shirt and Threadless was more about celebrating the artist and putting it on the shirt. And I just didn’t think there was a market for that. It turns out there was. So I think simultaneously, culturally, we were becoming more individuals. Like I feel like we’re coming out of a age where everything was mass-produced and we were told what to like and be it music or whatever. And now everything seems to be coming more distributed and people want to be individuals and express themselves more.

Tim Jahn: Yeah, I think so. I mean, that speaks to the popularity of Threadless now I think is that you’re right in tune with that. How did you — you said that with the tree fort, you don’t expect to be making money and Threadless all of a sudden became a business. But how did it become a business? You had to at some point say, “Okay, I actually think I can make some money off of this.”

Jake Nickell: The turning point — it was basically just time. Because for the first two years, we’d be selling T-shirts and I would ship them out either after work or on my lunch break. And it eventually got to the point where were getting, selling enough T-shirts where I needed to commit more of my time to maintaining that. Where I could no longer work at my job, so now I need to — I either need to stop doing Threadless or I need to do it as my job and be able to make money from it because I’m not going to be able to devote a full days work to Threadless if I’m not making a salary from it.

So at that point, I was kind of like, okay, I’m going to — and actually when I quit my job I still didn’t really think that I’d be able to make a full income off of Threadless, it wasn’t quite to that point. But I was getting with my web development and web design talents; I was also getting a lot of freelance work on the side. So we start — that’s why Threadless is owned by a company called Skinny Corp. Skinny Corp. used to be like a web design agency. And we would do web development, web design work for clients like Kohler, and Mcdonalds, and Office Max, and all kinds of — we mostly worked with agencies in Chicago; did flash work and stuff like that.

So for another two years, from 2002 to 2004, I was offsetting the Threadless income a little bit with this agency income of Skinny Corp. and it wasn’t until 2004 that we stopped doing that completely. So four years into the business and made all of our money really from Threadless. It took a while.

Tim Jahn: Yeah, I was going to say, you’re an overnight success that took ten years. Were you running out to Fedex during your lunch hour to ship out shirts?

Jake Nickell: I was, yeah. Well it was the post office at that point. But I — I mean, I’d go to the post office, wait in line with just a box of orders and then have to sit there and they’d weigh each one individually. And not only that, but in the beginning I dialed — we actually for our merchant account to charge peoples credit cards, I had a phone number that I would call, like a 1-800 number and you entered in peoples credit cards to process them.

That was a way that — it was like 1-800-merchantaccount.com. It was actually a pretty; ten years ago it was a pretty common place way to charge credit cards online. It wasn’t as advanced as it is today where it’s very easy to just process credit cards directly with a script.

Tim Jahn: Yeah, I was going to say, e-commerce was whole different world back then.

Jake Nickell: Yeah, and when starting Threadless, I didn’t know how to do those things. Not only did I not know how to process credit cards online, but I didn’t even know how to make T-shirts. Like I started Threadless an hour after having the idea and it was just kind of like you guys post designs, I’ll print the best ones and ship them around. And I had no idea how I was going to do that. It was just kind of like I’m going to do it.

Tim Jahn: Is that kind of your personality though that you’ll start something and then figure out how to do it? I mean, you’re not the kind of person that has to read up on books, and then plan ahead, and then do it?

Jake Nickell: No, yeah I definitely — in fact, that’s, I think what I’m most passionate about is learning new things. So I like to put myself in these uncomfortable situations where I’m forced to learn something new.

Like I’ll — if somebody — if there’s something that needs to be done here at Threadless and nobody wants to do it, a lot of times I’ll raise my hand and do it even thought I don’t know how. Its kind of like — I feel like a –

Tim Jahn: What better way to learn though right?

Jake Nickell: Yeah.

Tim Jahn: I — sorry go ahead.

Jake Nickell: Well, you were talking early about how a lot of the designers come from amateurs. And I actually think there’s a benefit to that like Tim O’Reilly recently said that innovation comes from amateurs, not professionals.

It’s kind of like, if you now how things are done, then how are you going to be innovative in doing them? Because this is how they’re already doing it and this is how you know to do it. I almost think like not knowing how gives you an edge because you’d do it slightly differently than somebody else would who doesn’t know.

Tim Jahn: I think that makes perfect sense actually. I never thought about it that way. If you really know, then you’re more likely going that route, right?

Jake Nickell: Yeah, right. So you’re not going to really bring anything new to the table at times.

Tim Jahn: Yeah. Like I said, I was over at your old Chicago office and I was trying to describe it to people. And I said, “It’s like Willy Wonka’s chocolate factory. You step inside that lobby and it was a whole different world.” And I had heard about your headquarters from other people — obviously you guys are a big brand, people are very passionate about you, you have a great community.

So I had heard about how cool it was there. When I stepped in there, it was just a totally different world. Why? I imagine that wasn’t an accident that it’s so unique and it’s so hard to describe. You got the video games and the pool tables and just colors everywhere. And it’s really, really cool. But why did you design it that way?

Jake Nickell: It just happened really. Like it wasn’t actually even — I wasn’t even aware that I was doing it. I mean, it happened in phases. In time like one of our guys was saying, “Hey I really want to do a podcast when podcasts were big maybe like five years ago.” I’m like, “Okay, why don’t you start recording a show?” And then it turns out that he needed a soundproof booth so I was like, “Wouldn’t it be cool — lets look on ebay and see if we can find an airstream and then we can gut it and make it your soundproof booth will be this airstream inside of our office.”

And so that’s like one thing that happened that created something unique inside of our office. But that just kept happening. Like our CTO was saying, “I have this friend who’s an amazing graffiti artist. We should have him come in and paint a wall.” He came in and spent three months painting like one wall. And now he’s actually an employee of ours and makes three paintings every single week that are mashups of all the designs that come out with that week and they go in our store window here in Chicago.

And I mean, yeah slowly these things just build up that — and we become — I don’t know, I almost feel that we’re almost becoming maybe a case for the show “Hoarders” on TV because there’s so much just random crap sitting around. Like behind me we built this fake spaceship for our holiday sale, Blackhole Friday. And our whole theme is kind of like 50′s space movie. And this will probably like sit in the corner of our office for the next 30 years.

People will come in and be like, “It’s so cool, you guys have like a spaceship in your office.” Yeah, it’s just; it’s a lot of fun though. I mean, it’s kind of like a Boys and Girls Club where everybody who comes in kind of like puts some of themselves into it and adds to it. And it definitely wasn’t my master plan that this place needs to be like that. It’s just that everybody feels so much a part of it that they like, the environment just like happens around us all.

Tim Jahn: Yeah, I was going to say. When you walk in there and it feels like it reflects the culture of the company. I mean, the people are just as fun, they’re just as friendly, they look like the type — I mean, they were the type of people that I would expect to be working in that kind of environment.

They were great people. So I mean, is it just a reflection of the culture as you guys slowly built up this culture? I mean, your headquarters just kind of manifested it physically?

Jake Nickell: Yeah, I mean early on, we never really hired people so much for their talents. So like most of the people working for Threadless in the first five years, even six years were friends of mine, personal friends from high school that I had been doing this stuff with all my life, just having fun together with them or people that I’d met online through Dreamless our other design forums.

So I think everybody has this shared interest and I guess shared culture too in design and just fun where the culture, I think the culture of a company is born in their first few years right. And then as you get bigger it’s kind of about preserving that culture. And then new people that you bring on, teaching them what its all about and getting them to be a part of it. So I feel like the culture here happened because everybody was so close and had these shared interests and they were hired more of that than because they’re a really good web designer or a really good web develop or like an excellent warehouse manager.

I mean a lot of the people in charge today like one of the heads in our marketing department; he started in our warehouse as a temp. The head of our warehouse started in our warehouse as a temp. And yeah, everybody’s really grown here over the past ten years. So the culture, it’s kind of easy to keep it around.

Tim Jahn: Yeah, I don’t imagine you guys have high turnover. I mean you throw like these parties and it seems like more of a family than a company.

Jake Nickell: Yeah. We’ve had a little bit of — the highest turnover we probably had was in our tech department. I think that’s my own fault because I my partner and I coded the website by ourselves for probably the first six or seven years.

And a lot of it hasn’t changed. A lot of our code on our site is kind of old and it’s a pain in the ass for getting new people to come in and put like build on top of it. It’s been kind of a nightmare the past few years. We’re trying to rebuild without completely starting over.

Tim Jahn: Threadless seems to be, like I said one of the most fun companies to work for. I imagine it’s just a blast and I imagine you guys as a business rake in the money. I mean, you seem to do pretty well. Overall, you look at your situation; you say it’s too good to be true, there’s got to be a catch. Was there a moment in the past ten years that you were just afraid this wasn’t going to work? That it wasn’t all glory and games here?

Jake Nickell: No, I mean, I haven’t really had that moment. I mean, I really haven’t had that moment. I mean, it’s definitely like in the beginning we were growing by 400 or 500% year over year. So we’re obviously not growing at that speed anymore. But it’s still a very nice comfortable amount of growth.

But I just see us, like I actually see the opposite where its like I see so much potential in what Threadless can be that its more like I guess can we keep up with ourselves kind of thing. I think we’ve spent the past ten years being a really successful T-shirt company and, but what our real talent is, is that we have this amazing art community that’s able to design for products that people want.

So I think we’re thinking outside of the T-shirt right now and also partnerships, we’ve never done well. So we see a lot of future growth and working with other companies to like bring them community-based design. Like how do we partner with the top Shoe Company to bring like our crazy community to for shoes or whatever they are.

Tim Jahn: Artform?

Jake Nickell: Yeah, so –

Tim Jahn: That’s an interesting idea.

Jake Nickell: Yeah, I think there’s a huge amount of potential. And that’s just one, there’s like eight different growth areas that we see as being so compelling that I can’t think there’s not a future in those.

Tim Jahn: So you thought at the beginning ten years ago that you were just going to get a job for a company, and stick with them for a while. And I mean, in a sense, ten years from now you’ll have been with this company for 20 years. You’ve done that but with your own company.

Jake Nickell: Yeah. Yeah, I guess that’s true. And I’d rather have it this way I think.

Tim Jahn: Absolutely. What’s one piece of advice you’d give someone who was in your shoes ten years ago? And I know you didn’t necessarily start out to start Threadless.

Like you weren’t like, all right, I need to make some money. But as you began to realize that this was going to become a business, what’s one piece of advice you’d give someone that was in your shoes looking back?

Jake Nickell: I think the most important thing you can do which I kind of touched on earlier is to not like have really a lot of self confidence and just be fearless. Like I said, you, I think you get a lot of value by learning things as you go. So don’t like hold back on moving forward on something just because you don’t know how. I mean, you can figure out.

We live in like crazy times where like any knowledge you want is at the touch of your fingers like on Google. And if you’re just sitting there saying, “Oh I don’t know how to do this”, that is just not an excuse. So just make it happen. Like learn it, and figure it out and move.

(photo credit)

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