SXSWi: Learning the lessons of 'people-powered' companies

AUSTIN, Texas--Why invent the wheel by yourself if you can turn instead to a group of peers and solve it together?

That was the premise of a gathering here of executives from most of the leading companies in what might be called the "people-powered" industry.

These are companies like CafePress, Moo, Etsy, and 8020 Publishing whose business is manufacturing physical products designed by customers. CafePress, for example, makes T-shirts, coffee mugs, hats, and many other products emblazoned with logos and designs uploaded by users. Moo makes business and greeting cards adorned with users' own photos and images, and 8020 publishes photo and travel magazines full of readers' work.

But each of these outfits has until now had to solve a set of problems unique to this nascent industry--legal issues, community management processes, and even questions of nomenclature.

So as many of the people behind these companies prepared to go to Austin for this year's South by Southwest Interactive (SXSWi) festival, Moo CEO Richard Moross decided that maybe this would be a good time and place to get everyone together and discuss whether a cooperative investigation and search for solutions to common problems would be a good thing for everyone involved.

After all, there's strength in numbers, right?

"For all of us to get in the same room as the others was hugely valuable," said David ten Have, the CEO of Ponoko, a company that allows customers to design everything from chairs to lamps to iPhone stands. It allows us "to learn from others' mistakes....We all deal with communities (that) power us in one way or another. I've got this issue, and others are saying, 'I've got the same problem.' A problem that might take six or 12 months to solve might be solved (much faster) by getting together in a room and having a discussion with people who've done it (before)."

In addition to the companies named above, executives were also on hand from bag maker Timbuk2, shirt makers Spreadshirt and Threadless, custom framed art maker Imagekind and several others.

"We struggle every single day with the fact that it's really challenging to get a community to make something together," said 8020 Publishing CEO Paul Cloutier. "So the chance to talk to others having similar problems is not very common.

I was originally invited to attend the gathering, but some of the participants balked at the idea of a reporter being in the room, worrying that having someone taking notes might make people feel like they couldn't open up and say everything they'd like to. As a compromise, I was allowed to show up just as the formal discussions were ending but before anyone left and to talk to any of the participants about anything I liked.

The copyright challenge
To Moross, the major issue that got tackled Sunday during the four-hour closed-door session was that of copyright.

He said that in an industry where each company is making products based on designs submitted by customers, it's essential to be sure that nothing is produced to which those users don't own copyright.

"A lot of us are pushing some serious (legal) boundaries," said ten Have.

"One thing we agreed on as a next step," Moross said, "was linking up all of our legal departments to just get synchronized on those issues."

Another big issue was the simple problem of what to call this type of business. For now, the term is "people-powered," but as Cloutier noted, other terms could be "community-created" or even the familiar "user-generated."

Coming up with common terminology that each company--and newcomers to the industry--can use is crucial, the participants said, because it would go a long way towards building wider public awareness of what the industry is about. That would be a big step for the participating companies because that awareness could draw customers attracted by the very notion that such an industry exists.

One way to achieve that, several of the executives on hand argued, could be to create some sort of logo that could be placed on the Web sites and marketing of any participating company, much as the "Made for iPod" logo designates products certified by Apple that work with iPods. The logo itself, in other words, could be an effective marketing tool.

"That's the heart of the question," Cloutier said. "Is there marketing promise in being community-created...in being people-created versus top-down" created.

The CafePress precedent
To many in the room, there is already one leading example of how to deal with some of the issues each company is facing: CafePress.

That company has been around since 1999, and so Moross invited CafePress vice president of business operations Abdul Popal to attend the gathering both to share in the group discussion and to be on hand as somewhat of a "grandfather" figure.

"The challenges that many of these companies are facing," Popal said, "are things that we went through....As almost the grandfather of the industry, you're seeing the children go through what you went through."

But as the industry veteran, CafePress has definitely impressed upon the newcomers that it's possible to build a successful business on the idea of letting customers do the design work.

"It's flattering to see what was one company and one idea spawning all these micro-businesses and doing the same idea," said Popal. "It was unimaginable at the time that this one business is going to spawn an industry."

But on the heels of building a base of 6.5 million users that have created 170 million products, CafePress definitely has something to teach the Moos and 8020s of the world, Popal said.

"The takeaway is that this is a market," he said, "and these businesses are starting to prove that."

And that's probably why the energy level in the room at the end of the discussion was so high and so buoyant. Many of the participants told me that the gathering would never have happened without Moross taking the time and energy to get them all together, and the gratitude towards him seemed palpable.

Regardless of who had done the organizing, there's little doubt that most, if not all, of the participants on hand want to move forward. They've already created a private wiki that they're using to keep things moving even when they can't be together in person, and a blog is also likely.

But no matter how far these people and their companies take this and no matter how big their industry grows, the sense of the value of coming together and creating a set of standards and of working for a common purpose all started in a dark room in the bottom of a dingy club in Austin.

"To be able to say there's almost a sense of movement, that there is something happening," Cloutier said, "is an exciting thing. That is the greatest promise of this."

See more stories in CNET News.com's coverage of SXSWi (click here).