The Product Development Process: Community-driven vs. Traditional

Besides the obvious difference of developing a product online verse in a corporate office or retail environment, the major distinction between a community-driven product development process, such as Threadless, and a traditional product development process is the presence of diverse community member’s active participation in product creation. This enables a company to quickly and efficiently listen and gain insights from thousands of customers, with a broad array of information, knowledge, and experience, about potential opportunities to enhance and create new products and services fast. In Threadless’s case, the company discovered that members were using Threadless blogs as a tool to receive design feedback. This newfound realization led to the creation of a “design critique portal,” a service that satisfies both the designer and the potential t-shirt buyer by allowing the community to comment on an artist’s designs before submission. Furthermore, by designing and selling products hand selected by a community of potential buyers, the product’s ability to maximize revenues is substantiated. Threadless exemplifies this by typically selling out of all printed designs as well as by consistently increasing revenues, over a 5-year period, to an estimated $23 million.

Additionally, by allowing a community to develop a product, a firm saves money, since large salaries are not required to hire an elite group of internal designers, a process vital for the traditional product development process. Moreover, both R&D and marketing costs are lower if utilizing a community- driven product development process. Although this is true, in order to ensure success, a community-driven product development process requires a company to maintain both a functional and up-to-date website as well as the correct Internet bandwidth.

On the other hand, similarities between a community-driven product development process and a traditional product development process within a firm include the logistical capabilities to support printing, warehousing, and shipping and handling of returns. Most importantly, whether a community or traditional product development process is implemented, a company must ensure there is adequate supply and demand for the product in the desired market. Both product development processes must focus on a group of targeted consumers as well as a specific product to fulfill an unaddressed consumer need. Additionally, no matter which process is used, a firm must outline a marketing plan to attract, maintain, and retain profitable customers. This includes defining promotional methods as well as discounting and reward techniques, and selecting domestic and international markets to offer products. Threadless, for instance, created “The Street Team,” a point-based system, which allowed community members to receive credit earned towards future Threadless purchases. It is clear that there are numerous differences between implementing a community-driven and a traditional product development process within a firm, but at the end of the day, if a company does not have the necessary skills to effectively create and market a product to an outlined group of customers, then a company will never succeed no matter how a product was developed.