Question

According to Warren Buffet how could the company threadless's brand function as a moat to protect them competitors?  What can they do to ensure that their is a more effective moat in the future?

Answer 1

Threadless company advantage over its competitors is bridging of the engagement between artists and consumers where artists designs are chosen to be printed on their products after online voting from the public. The artists whose designs are chosen and printed on the shirt will earn royalties whenever their designs are printed. What this does is reduces the cost of hiring designers and outsources this functions to freelancers. It also gives them a large pool of design and the popular ones are chosen. It also solves the problem of which designs will work since popularity is already established by online voting. This has created a brand image of threadless for freshness and quirky designs along with the engagement of consumers with the brand. This engagement moat is difficult to be duplicated since consumers are getting fresh designs every week and have no reasons to migrate to other companies. Since designs is the key to purchases, fresh designs from freelancers are in fashion always. Therefore, the garments will sell.

Threadless can expand their engagement to offline programs with designers and graphic artists to further their brand which will create a more effective moat.