An Art Business in 10 Years

In this episode, Patrick and Nick discuss the ongoing transformation in the art industry, emphasizing the shift from reliance on third-party platforms to direct sales and ownership of distribution by artists. They delve into the impact of the pandemic on accelerating this shift and explore the benefits of running live online art shows as a superior alternative to traditional galleries. They highlight the importance of artists owning their marketing and customer base to build sustainable businesses. Additionally, practical advice is provided through real-life examples and a reminder about upcoming consulting sessions for artists to help them navigate these changes.

Podcast Transcribe

Patrick Shanahan: Yeah, I see that. I see that. Okay, uh-oh, what does it look like? Continue. I mean ten years as far as... I mean, I'd almost say three years or five years is like the most interesting one because I think there's gonna be a... we are like... there's gonna be a radical shift. It's not that there's going to be, there is already happening. Yeah, the radical shift has already begun and we're at the very, very beginning of it and it was accelerated as a result of the lockdown, right?

Nick Friend: Whatever. You know, I love saying ten years to perspective. It's just like, yeah, like we sit here and we realize, and maybe this is to a fault on our end, but it's like, you know, we've probably not done enough to lay out our vision of how we see this going, right? With an artist owning all of their distribution, all of them keeping all of their sales in control of absolutely everything. And even if that's only eighty percent of the business, we probably don't ever want to see a dip below eighty percent of the business or seventy percent of the business. You have to own it all, right? Like that's our drastic big picture idea of the business. And it sort of feels like, you know, winning—you tell me if you feel differently—winning in my mind is a whole heck of a lot of customers full-time well into six figures owning all of their own distribution, and that's a project that takes years.

Patrick Shanahan: Yeah, absolutely. Absolutely. By the way, you've got a typo on the Instagram pin comment with "this" and "brought business" instead of "what does an art business."

Nick Friend: What do you think when I say that?

Patrick Shanahan: Well, I think you're hitting the nail on the head on the most important part of the discussion. And this came from a Zoom call yesterday with non-Art Storefronts members where Pat and I were doing some consulting and helping some people, and it brought up this broader discussion, you know. And I think this also goes back to the mindset discussion, right? It's a very similar thing because there are some things that... how do you see this... it's like there are some things at the top of the funnel, so to speak, or at the very beginning of your decision-making process as a photographer or artist that you have to get right or you are toast. If it doesn't mean you're completely toast, it just means that you're on the wrong path and you're always going to be pushing a cart up a hill and the wind's in your face. You'd be like, "Why is this so hard? Why am I always struggling?" And it's the problem with it. This is why there's a starving artist problem, right? One of the big things we talked about that starts at the very beginning—if you get this decision wrong, you're toast.

Nick Friend: Okay, you are really going to struggle, and it is whether you are building your business based on reliance on third parties, i.e., galleries, whether they're offline or online. Don't forget the online: Saatchi Art, Fine Art America, all of them, Redbubble, blah blah blah. They're just online galleries. It's just one more online gallery. Being reliant—Etsy, another one, eBay, doesn't matter. These are all third parties. If you build a business reliant on third parties where the majority of your sales are coming from, you eventually will get the rug pulled out from underneath you because you can't control third-party distribution in any industry. All of these business publishers is another one, right? And even the art shows have proven to be a third party, right? Even though you're selling direct at an art show, it depends on non-pandemic scenarios, right? It depends on the organizers actually wanting to do it. It depends on them doing marketing and getting the right clientele to the show. And all of that means that you're just showing up. It's just, again, it's reliant on a third party. Nothing has taught everybody that relied on art shows more during this pandemic that that rug can get pulled out from underneath you, right?

Patrick Shanahan: So this is the fork, right? Third parties or direct. Direct is, as Patrick said, owning your own distribution, selling direct, owning your email list, owning your customer list, making the most money from your work, and building that business, understanding the skills that you need to build that business, what it's going to take, and what that's all about. And that is the heat. I mean, if you just said that all artists are startups and just traveled on this path—all artists are startups. Let's say it was normal, you know, VC—VC is venture capitalist where you come up with an idea and you go pitch a venture capitalist because you need money to grow your idea, right? You need money to build the thing and to hire a team and to get their business up off the water. If you went to any of those venture capitalists and you sat down and had a conversation with them, they would say, "Okay, what are your revenue sources going to be?" And you'd say, "Oh, well, it's great. I've got these third-party galleries that I'm going to get all of my revenue from and it's going to work out great." And they'd be like, "Okay, wonderful, wonderful, wonderful. Do you own your own customer base in that scenario?" And you'd tell the VC, "No, no, I don't." So you don't own the customer base, you don't have any way to contact them. That's not technically your customer. "Yeah, that's correct, that's correct." They'd be like, "See you later, pal."

Nick Friend: Right, that's exactly right. There's nobody—there's no return for your hard work, really, right? Like, you work hard, you grind, you get these people connected with your art, and then you don't own anything. You own nothing. You have nothing. Done. You have nothing. And then Facebook or Instagram or Twitter or YouTube or any of them, when they change the rules, and like, what you never—when people got so up in arms when you paid Facebook for all these likes and then no one saw your posts, people got so angry, right? Like, I hear about it still to this day, like the shock of that. And yet, what does everybody do? They just go and do it somewhere else. Same thing. Like, you cannot build a business that way that is sustainable or attractive in the slightest.

Patrick Shanahan: Yeah, exactly. So it's indirect versus direct. And so it goes like, if you get that decision wrong, right? Like, you are going to struggle immensely, right? So let's say, right, so you go down the indirect—it's indirect versus direct. Indirect is through third parties, right? And that is the life of struggle. That is building your business on sand rather than on rock, right? And so that right there, if you get that wrong or you got that wrong for the last five years or ten years or you've been getting it wrong the entire time, your entire life as an artist, which most have, that's why you're struggling. That is the source of the starving artist problem, guys. I just made it simple for you. I just made it simple. That is the source of the problem. You have to get that decision right. Okay, so now you go, "Okay, I knew you guys. I understand the indirect. I'm going to treat that as gravy. The direct is what I'm going to try to do, right? I'm going to go down that path." And it's like, perfect. Okay, you're good to go. You're good to go. Right now, now when you go down that, there's another fork in the road, right? Which is making sure that you are properly equipped to succeed in that model, right? And that means you need to have a proper art gallery website, not some generic website on, you know, Shopify, Squarespace, Wix, GoDaddy, go down the list, right? Where people are selling, yeah, portfolio sites, glorified business cards, people are selling, you know, handbags and, you know, toilet paper or whatever on a generic website. You need a proper art gallery website to get the job done. And then you need to solve the marketing problem, right? We talk about this all the time. There's just Google it: 99% of all Shopify stores fail. You just Google that and you will see, and it's not Shopify, it's every generic website. Because the ruse is that all you need is a website to have a business. No, you need a successful marketing strategy. That's what you need, right? If you have a successful marketing strategy, you can have a great business even without a website. It's just that the website will take it to the next level because people need an easy way to buy from you 24/7 and you don't want to run all that admin, right? It's just easier to take transactions, it's easier for them to make decisions, and you're going to make a lot more from the marketing that you do. But the truth of the matter is you really only need the marketing. Is that not the truth?

Nick Friend: Yes, but right, so that's the second fork. First fork, indirect versus direct. If you go down the direct path and you're like, "I'm going to get the majority of my sales from direct," you know what I mean? Over the next three to five years, that's what my goal is, right? And then you go down that, and if you properly equip yourself and you go and you get a proper art gallery website and you solve the marketing problem long term, right, then you are now equipping yourself to actually succeed. If you don't do that and you just throw up a generic website and then you don't realize that marketing is the biggest problem and you just, you know, you try to do it alone, you try an email here or there, a Facebook thing, you're always looking for the one hacker tactic when that's not what it's ever about, then you are again going to have the headwinds. You're going to be struggling, you're going to be pushing that, you know, cart up a hill just wondering why it's so hard, right?

Patrick Shanahan: Yeah, it's not even that. It's like straight-up Sisyphus, right? Like, you know, you roll the rock to the top of the hill and it rolls right back down, and then you roll the rock to the top of the hill and it rolls right back down. Rinse and repeat, straight-up Sisyphus.

Nick Friend: Yes, but, you know, like, look, I think that we need to do a better job of articulating our vision of what it looks like. And it's very simple: a full-time artist or photographer that can support their family, have a business well into six figures where they own everything and they're not reliant and they're not exposed to whatever whims come down the pike. That's what we're trying to create.

Patrick Shanahan: Right, exactly. Exactly. That takes, there's certain things that that takes, and then the perspective of time with how long it takes. And some are going to be lucky and they're going to get there in a very short period of time, and most everyone else, five to seven years until the business really starts rolling. But you can't shortcut. No one ever has shortcut mankind, aside from someone that won the lottery, and what are the odds on that, right? Like, you're more likely to die from a bee sting. So I think setting that firmly and saying, "This is what we're trying to create. By the way, you're not exposed to anything." It's sort of like your 401(k), right? Like, you don't have to get a whole lot right with the 401(k) as long as you don't get a whole lot wrong. Invest with the right horizon, contribute to it regularly. By the time you're ready to retire, what an incredible asset, right? It's like, is the photo business or an art business any different? You know, the returns are shorter term, but it's like you're building this long-term asset that is not exposed to anything, right? Like, it's protected.

Nick Friend: I don't know. We just feel like we need to do a better job articulating that.

Patrick Shanahan: We do, we absolutely do. And this is a great conversation because, like, I'll be dead honest with you, like, in starting this business, I had no idea that we'd even have to explain this. I had no idea. I really didn't. Like, I thought this was all common sense. I mean, I guess it's just like, I'm so jaded being, you know, in the business world, you know, running companies for 20 years, right? Like, that, you know, selling direct and like making the most money from your work, not being subject to the whims of third parties, you know, all of that is like, this is common sense in every industry, right? But this is a really big, scattered, independent industry with not a lot of organization in it, right? And what we have found—I mean, it's just, it is what it is—what we have found in talking to tens of thousands, if not hundreds of thousands of individual photographers and artists, like literally verbally talking to them, is that this is a major problem. This is a major problem. Like, these early steps, these early decisions, and the mindset is like creating the entire problem, right? Like, did you even know that there's indirect versus direct in the business world? And you choose. You choose as a business owner, "Am I going to be going indirect or am I going to go direct?" And you understand the risk with both of them, and you understand how hard you're going to allocate your time and energy at both of them, and then you make decisions from there, right? And so these decisions supersede everything, right? It doesn't matter what you paint. If you made that decision wrong, it doesn't matter. It doesn't matter what you paint or what you see. If you make those bad decisions, you know?

Nick Friend: Yeah, and it's like you had told me on there, go ahead.

Patrick Shanahan: It's not that it's common sense. To an extent, it's common sense, but one, you know, you didn't have enough conversations with them, right? We didn't have enough conversations with actual artists and photographers. That box is ticked now. But two, every industry goes through this level of disruption on its own timescale, you know? Like music just went first, right? Like there was music. You either went through their system or you didn't stand a chance. And then all of a sudden, the MP3 happened, that turned everything upside down on its head. Everyone started stealing music, and then independent distribution happened, i.e., I can put my music up on SoundCloud and get a million downloads and I don't need a record company for anything. So that whole thing got turned up, but that was way before this. I feel like art is finally having its moment here, right? Art and photography, direct sales, owning your own distribution, no middleman, keeping a hundred percent of your profit, owning your entire database. It's sort of having its moment right now. The pandemic's created it, right? This happened to taxi cabs ten years ago with Uber, right? It happened, what, nine years ago with Blockbuster Video, right? And Netflix, right? Like, art is sort of now... it's like they all have their own timelines. And that's okay. That's okay, right? Like, that's just the nature of the beast. Everything gets disrupted at a different pace. But I do feel like now is the time. Now is literally the time.

Nick Friend: I love that. I think you're totally right. I think you're totally right. You know, every industry is having its time at a different point, and I think you kind of nailed it right there. I really do. Yeah, I really do. I think that is so true. And we believe it's having its time largely because, you know, because of the pandemic and the lockdowns that ensued. By being able to run your own art gallery online, right? And by that, I mean like just a website. That's not what it is. It's like running the business online, utilizing social media, utilizing live video, live selling, live art shows, along with a place, a venue where people can purchase from, which is your proper art gallery website. But you can do all of this from home, and the opportunity is larger than ever because these live art shows that are a success. You can actually do and get the benefits of what was normally reserved for physical retail galleries. And that's incredible.

Patrick Shanahan: You should talk about, like, good, and let's talk about what you just did. Like, what you literally just did, like last week. It was the second time you ran a live art show with one of the Art Storefronts artists, right? It was his basement art. It wasn't even his best stuff. It's like the stuff that never sold, right? And two times now in the last, what, 30 days? Two times in the last 30 or 45 days, you've run live art shows with him in order to figure out the trade route. Two times in the last, like, 14 days, 15 days, I think. Is that all it's been?

Nick Friend: And you've sold, what, roughly 10 to 12 thousand dollars on each show in a matter of days after each show, right?

Patrick Shanahan: Go on. And how did he do it? By live selling, bringing in the pieces out. You got high-definition video, people can watch on their phones, on their computers. You're literally, like, when they're watching, they are in your gallery. It's as good—it's not as good as being in person, but it is right below.

Nick Friend: Why is it as good, though? Or why is it that close? Because the sales are happening, which means the visual quality, the visual experience that they're getting, being able to see it up close on the sides, you know? Like, we're always comfort—constantly putting products up to give people an idea, like you can see what the product is. You know, it works. It works, and people are buying the art. They're spending thousands of dollars on original paintings. And so the fact that you have that now, in addition to everything that you had before, is why I think we're all, we're so excited, right? And why art is having a moment.

Patrick Shanahan: Yeah, I think I'm onto something with that classification, though, because it feels that way to me. And you know, you're trained through pattern recognition if you've been an entrepreneur and a marketer for a long period of time and you've seen when things start to break, and you sort of just like, you get a feeling, right? Like, early on in my career, I worked with this guy who was a home builder, and he said one of his greatest talents was he would get into a neighborhood and he would go drive through the neighborhood and he would take a look at it. And he was looking like, "What's on the outskirts?" And he could just feel when some things were about to turn, right? When things were about to turn and he was going to go forward full-on and buy some land around the outside, right?

Like, or the stories of Bill Walton where he would get in his plane—Bill Walton, the founder of Walmart. Is that Bill Walton?

Nick Friend: Sam Walton.

Patrick Shanahan: Sam Walton, same Walton. He would fly above a town, right, looking at the highways on the way in, and he would see where the roads went, and he'd be like, "Okay, this is the way the town's going to grow. I'm going to build the Walmart right there," right? It feels to me like we are seeing that now, like it is clear as day what you can achieve on your own proper marketing. The understanding of how long it takes, and you own everything. You own everything. Like, it is such an amazing place to be when you can say that when it's actually you're building a business instead of laboring for someone else. Or, you know, another pandemic happens three years from now, it's worse, and we really shut in for six months. Like, what are you going to do then? But the opportunity now, I think, is here. I think it's here. I think the disrupt—

Nick Friend: Yeah, and we should plan our fight, totally.

Patrick Shanahan: Yeah, I totally agree. I totally agree. I mean, we're seeing it. Like, it's not a theory. This is not a theory. Like, we actually are seeing it with our own members, and we're doing it. I mean, okay, so then let's go into—in twenty minutes, we have a private workshop with Art Storefronts members, and we're going over the entire live show playbook, right? Because there is a lot of tradecraft in running it correctly in order to actually get sales from it. There's pre-marketing, there's marketing during it, and there's post-marketing. There's a whole thing that you want to do to make that happen. So we're doing that at one o'clock, and then we're actually doing it again on Thursday because we're having everybody run their art shows—all the Art Storefronts members run their art shows at the end of next week, actually next Friday. So there will literally be hundreds, if not thousands, of individual photographers and artists running their art shows for the first time according to our state-of-the-art playbook that we've learned because, you know, we've had members running them and we've been running them alongside our members. And it's going to be amazing. I mean, how incredible is that going to be? That is going to be the first tranche of action of live shows in this industry where a lot of the demand is going to get sucked up. You know, this is like—I consider this like normal gallery demand. It's normal, like, retail in-person demand is getting sucked out of the market and it's not going to be there anymore. It's going to get sucked out by these people who are doing these live online shows, the creators themselves. Because frankly, too, Pat, you know what else I like to talk about is like, yeah, it's such a better experience for the consumer. And I don't just mean convenience. Convenience is a big deal.

Nick Friend: Yeah, come on.

Patrick Shanahan: Anyway, do you see that?

Nick Friend: Yeah, I did. Yeah, a new brand a new future.

Patrick Shanahan: That's cool. Bringing the comment in.

Nick Friend: Yeah, so what I was saying is it's not just a consumer watching the art show and doing it from home because that is a big benefit. Like, how many more art gallery openings can you go to, right? Like, as a consumer, maybe—I mean, and we've talked about this before, but maybe people went to one, maybe zero, maybe one a year, but now they're now going to be able to do them, you know, watch a hundred of them because they could do it while they're standing in line somewhere or they're on their couch or at a restaurant or on vacation and it's entertaining and they don't have to dress up. They don't have to convince a spouse or a significant other to go to it. The convenience factor before it goes so much deeper.

Patrick Shanahan: Yeah, but the point I was making, though, is that it's the artist that's actually showing their work, not a salesperson hired by the gallery. It's the actual creator that is just so... like the big game instead of...

Nick Friend: Oh, yeah. So the gain when you add up the gains versus, you know, the gains of doing a live show versus a gallery experience with a third party, it's just better. I'm sorry, you cannot replace the artist selling their own work. And they're selling it without, like, trying to sell it. They're just talking about it. They're talking about their inspiration, what's behind it, where the great parts are. They're showing the texture and, you know, the materials used. There's just—you can't sell that. No one, no third party can sell it better.

Patrick Shanahan: No. Okay, let's end this because we gotta get ready for the thing. Okay, so do we want to... we got it... so we got an artist session tomorrow?

Nick Friend: Yeah.

Patrick Shanahan: Did we set the time or do we just do those at 9:00 a.m. now?

Nick Friend: Remember?

Patrick Shanahan: Yeah, let's do that. Let's just do it at 9:00 a.m. Pacific, 11:00 a.m. Central, and 12:00 Eastern for non-Art Storefronts customers. Patrick and I, we're going to do this one a little differently. We're just an open consultant, okay? Like, art business consulting with us. We're going to have a Zoom call. You can get on it. We're going to give you free consulting, okay? We can't give detailed free marketing tactics. That's not what we're doing, but we're going to consult you on a high level strategically about your art business or photography business. What's going on? Where are you stuck, you know? Or what are you working on? What do you think the opportunities are? What do you want to do? What are you thinking about your niche? Are you thinking about how many pieces you need? Are you thinking like, you know, are you thinking about, you know, a proper art gallery website? What are you going to get? How are you going to do it? We're going to help you with anything that you've got. So come and you'll get to talk to us directly and it'll be fun. So we're just going to get right into it, right into it, right when we start.

Nick Friend: So get on our email list in order to get the Zoom link and then make sure you like us on Facebook so that you see when we go live. Okay.

Patrick Shanahan: Dan Ron.

Nick Friend: All right, we'll leave it there. Thank you, guys.

Patrick Shanahan: Yep, bye guys.