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And here's a story of another successful start-up, a smaller one. Threadless is an online t-shirt company. It's also an online community. Each week the Web site stages a design contest to determine the next t-shirts it will produce. The members vote, the winners get printed, and the t-shirts sell out, sometimes in just days.

The Web site was started by two young college dropouts with about $1,000 and a desire to build a Web-based community that would also be a business. Chicago Public Radio's Jenny Lawton reports.

JENNY LAWTON: Last year at about this time, my little brother came home from college wearing the most bizarre t-shirt. At first glance, it looked like a reproduction of Leonardo da Vinci's “The Last Summer,” but when I looked closer, I discovered that the apostles sitting at the table were actually fast-food icons. Ronald McDonald and Colonel Sanders gaze up at a Jesus who's been replaced by the Burger King. My brother told the t-shirt had a name - "The Fast Supper." Ba-dum-ching!

It's part of an ever-evolving line of clever, ironic and oftentimes punny t-shirts from the online company Threadless. The Web site gets about 150 design submissions a day - that's about 1,00 a week. Entries have seven days to get scored by the community. At the end of the week, 10 of the highest scoring designs are selected and about 1,000 of each are printed.

Threadless's 25,000-square foot warehouse is buzzing with activity. It's the holiday rush, and a crew of about a dozen young people is briskly unloading thousands of printed T-shirts. And in large part, it's the Threadless community that's determined what's in this warehouse.

Mr. JEFFREY KALMIKOFF (Creative Director, Threadless): When you have something that people care about, they will spend their time to make sure that it stays good.

LAWTON: Jeffrey Kalmikoff is the company's creative director. He's watched the list of registered users voting on shirts climb to over 400,000, and he says the key to the site's success is keeping that community happy.

Mr. KALMIKOFF: Every move we make is completely transparent. If we screw up, we apologize. If things go well, we reward people. I mean it's really just like hanging out with like 400,000 friends.

LAWTON: Yeah, but at the end of the day, they're still customers. And Threadless tries to keep its projects affordable - most under 20 bucks - which isn't bad for a limited-edition piece of pop art. Co-founder Jake Nickell says the company has sold 1.5 million t-shirts in the last six years. And he says the key to understanding Threadless as a business is that it's an online community first.

Mr. Jake NICKELL (Co-Founder, Threadless): It's absolutely the most important thing, because as much as our community has made us grow, they could destroy us.

LAWTON: And so Threadless keeps evolving, and now offers a kids line, sweatshirts, even shirts with - collars. There's a MySpace/Friendster element to the Web site too. Each registered user has a profile and can post pictures and start discussions with other members.

And Threadless emphasizes that everyone is welcome to submit to the t-shirt design contest, whether they're a trained artist or a novice doodler.

Mr. CHUCK ANDERSON: It was open to everybody. It felt so inclusive. It felt so welcoming, and it gave me something to kind of hope for.

LAWTON: Twenty-one-year-old Chuck Anderson didn't go to college, didn't study art, and thought that meant he'd probably never make it as an artist. But three years ago he submitted a few designs, and won. These days winning gets you $2,000 in cash and prizes. Back then, he says, the cash reward was less, but just winning did wonders for his self-esteem. Now he's a busy freelancer selling illustrations to Pepsi, Reebok and Nike.

Threadless's ability to harness young and emerging talent is one of the things that drew Harvard business professor Karim Lakhani to the site. He checks it pretty frequently these days as part of his research, and because he's hooked. Lakhani is also a proud member of the t-shirt of the month club.

(Soundbite of typing and laughing)

Professor KARIM LAKHANI (Harvard University): That's hilarious.

LAWTON: He just clicked on a red T-shirt called Communist Party.

Prof. LAKHANI: See, now, who would've thought of like doing the communist party and showing as like a party, you know, with Marx and Lenin. Oh, Marx has a lampshade on his head and Mao is offering some drinks and we've got Fidel in the background having a great time. You know, I just can't imagine some designer at, you know, nameless big retailer.com coming up with this kind of an idea.

LAWTON: Lakhani says Threadless succeeds because it draws on the creativity of thousands of people from outside the company. And the company is using its Web site to encourage that communication.

Prof. LAKHANI: Instead of me asking you what's a good way of designing, I'm giving a tool now that says, why don't you just design it yourself and tell me, because you'll know better than I will, and then we can produce things that our customers want.

LAWTON: By doing so, Lakhani says, the business doesn't just get great ideas, it also learns what people will actually buy.

For NPR News, I'm Jenny Lawton in Chicago.

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