ACADEMIC ARTICLE SUMMARY
Creating a Platform for Costless Personalization in Clothing
Article Source: Frontiers in Research Metrics and Analytics, September 6, 2022
Publication Date:
Time to Read: 2 minute readWritten By:
Shane GreensteinTAP Scholar
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ARTICLE SUMMARY
Summary:
A case study of Threadless reveals the importance of co-inventions combining understanding of technology with business processes. Threadless creates digital dark matter, benefits that cannot easily by measured.
POLICY RELEVANCE
Policy Relevance:
The value of platforms often comes from co-inventions.
KEY TAKEAWAYS
Key Takeaways:
- “Co-invention” occurs when a new business process is developed to complement and commercialize a new technology.
- Print-on-demand clothing technology (PODC) lets buyers choose any design to personalize clothing for little additional cost, irrespective of scale.
- Historically, textile innovations enabled sellers to operate on a larger scale at lower cost, but color quality and artistry were reduced.
- PODC changed that trend, supporting high-quality imagery.
- Historically, textile innovations enabled sellers to operate on a larger scale at lower cost, but color quality and artistry were reduced.
- Threadless began as a crowd-sourcing platform that allowed consumers to vote on T-shirt designs; recognizing that improved PODC could disrupt the textile business, Threadless began to offer new services as a defensive strategy, ultimately becoming a new type of platform.
- Threadless’ three-sided business platform supports graphic artists, consumers, and manufacturers; Threadless’ key nonobvious co-invention enables the platform to match users effectively on a large scale.
- New platforms face a chicken-egg problem, that is, success depends on large scale, but scale cannot be achieved without success; Threadless solved this problem with a sequence of co-inventions.
- Threadless recognized the needs of key partners and graphic artists, offering “Artists Shops” to give them their own branded stores alongside other services valued by artists.
- A new platform was established to match buyers and sellers.
- The platform was scaled up to offer more items and support more artists.
- Later co-inventions allowed cost savings.
- Threadless recognized the needs of key partners and graphic artists, offering “Artists Shops” to give them their own branded stores alongside other services valued by artists.
- Some innovations solely enable "business stealing," increasing sales at a new firm but decreasing sales at older firms; however, PODC offers more, as it makes platforms and users better off in ways that will not be measured in Gross Domestic Product.
- PODC creates “digital dark matter,” digital goods and services that have zero cost, are effectively limitless, and serve as inputs in production; the benefits of digital dark matter are not captured by conventional cost accounting.
- Much of the value of platforms arises from business process co-inventions.
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About Shane Greenstein
Shane Greenstein is the Martin Marshall Professor of Business Administration and co-chair of the HBS Digital Initiative. He teaches in the Technology, Operations and Management Unit. His areas of interest include: digital economy, information technology, networks, and technological innovation. Professor Greenstein is also co-director of the program on the economics of digitization at The National Bureau of Economic Research.
