Remember when it used to be considered a bad thing to “disrupt” something? For a very long time this was certainly the case in the art world, where genteel manners, discretion, and personal ties were the hallmarks of success. Now, however, we live in a vastly different moment, when every aspect of that traditional gallery model—from selling art to representing artists to fabricating works—has been disrupted by online upstarts that promise to use digital technology to eliminate gross inefficiencies in the market (and make a tidy bundle in the process). One of the latest companies to enter this fray is ARTA, which launched this February and takes as its wobbly, infirm target the traditional model of shipping artworks from one place to another.
Full disclosure: the 30-year-old founder of ARTA, Adam Fields, acquired his digital expertise in the crucibles of art e-commerce... specifically, as the vice president for artists and institutions at Artspace, where he oversaw all gallery partnerships. Since leaving to create ARTA, he has grown out a healthy amount of scruff and taken up boxing, both suitable pursuits for a young adventurer on the heath of entrepreneurship. To find out more about his new business, Artspace editor-in-chief Andrew M. Goldstein interviewed Fields about what makes ARTA tick.
One brilliant thing about your concept is that, in the entire exciting world of art and collecting, there is literally nothing as boring as shipping and logistics. Everyone has to do it, but nobody wants to have to deal with it. How did you get the idea for ARTA?
[Laughs] ARTA is really a business that came out of Artspace and the whole rebirth of selling art online. When we were building up the Artspace operation as a transactional marketplace for art, the biggest issue we had was the shipping component. As a human in the world today, when you’re shopping online you’re used to putting something in your cart, checking out, seeing a shipping price, and then knowing that you’ll see the package arrive in a few days. It’s just click-and-buy, and you can go on with the rest of your day. When it comes to art, that’s not really the case—you can buy something that costs a million dollars and weighs 50 pounds, and you’re not going to want to ship that via FedEx.
As Artspace was growing, selling works that couldn’t be FedExed, we ran into the big issue of how we were going to tie this in with the marketplace and create a seamless checkout experience. And what any good entrepreneur would do when they see a problem is think about how they’re going to solve it. So it started with speaking to galleries, advisors, and collectors and asking them how they ship their art. The answer, in short, was: not easily. Everyone spoke about calling or emailing a lot of art handlers and needing to wait for hours or days to receive responses, and then seeing such a wide range of pricing and quality of service. Others just didn’t know the best options for a particular job, route, or service.
It was obvious that this was hardest for offline patrons of art. But, also, shipping is one of the main reasons that online players today—whether it’s Paddle8 or Artsy or 1stDibs—are struggling to turn from the lead-generation or inquire model to transactional marketplaces. They work more along the lines of, “Click here and we’ll connect you with the gallery and you can figure it out from there.” So it’s really not a problem for the majority of art sellers, because the lack of that transactional component passes the brunt onto the buyer. But, in the online art market, the shipping component was the Achilles heel for any site that wants to own all aspects of the transactional. That’s really where the idea started.
So what is ARTA, exactly?
What we’re trying to do is to become a kind of Expedia or Kayak for art shipping. We have a network of about 100 fine-art shippers around the country, some of which you may know and others you may not. These are not just mom-and-pop truckers who crate, pack, and ship—this is a built-out infrastructure of really high-level individuals who can get anything anywhere in a matter of a few weeks. On their own, however, they’re fragmented, with really no way for them to connect, and the prices are all over the place. Now, through ARTA, anyone who wants to ship art is able to fill out a request form and, with the click of a button, receive quotes from the best art handlers in the United States in a matter of hours.
To start, we are focusing on the post-sale side of things to make life easier for arts professionals and create a positive post-sale experience for collectors and buyers of art. The word “user experience” is not one used in galleries very often. Galleries are commercial by nature—they’re focused on selling things. As soon as they sell an item they’re on to the next sale—no offense to any gallerists—and everything is passed onto the registrar in the corner who is tasked with taking care of everything. We’re trying to make it so that the registrar or art dealer or art advisor or auction house can tap into our platform network so they can be more efficient while actually enhancing the experience for the people spending a lot of money with them.
Users can also send their collectors or clients a link to all of the shipping options available, so they can add some transparency to the process. And, in what is considered a golden ticket in the art world today, they are able to pay for shipping via credit card. This very much streamlines the invoicing process and makes things easier for everybody. That, in a nutshell, is what we’re doing.
Accepting credit cards seems like a real attraction, considering all the benefits that can accrue from these kind of big expenditures.
Yes. Most galleries or shipping companies don't and won’t accept credit cards, and the ones who do usually require you to fill out an authorization form and add a processing fee. The integration of credit cards in the art world is a new phenomenon, but it's really a standard practice everywhere else. No one wants to write another check or receive another invoice three months later and have to remember what it's for. Getting some some credit-card points out of it doesn't hurt either. It’s a win for everyone.
To break down the logistical challenge of art shipping, can you describe what steps a person typically has had to take in the past to get an artwork shipped from, say, a gallery in Chelsea to their wall in Aspen?
It’s similar to how the travel industry was around 30 years ago. Before you had all these online entities like Orbitz or Kayak, you had to know which airline you wanted to fly, go to them directly, and say you were in New York and wanted to go to Aspen. The airline would get back to you with a price, and then you’d go on your way. This progressed to travel agents coming along and putting a layer on top of this, saying you know what, we’ll go about getting tickets the same way, but we’ll provide it as a service and help people out.
That's kind of where the art-shipping world is today. People who need to ship something have to know who to go to, go to them directly, and say this is what I’ve got; then they say they’ll get back to you later that day, or sometimes in a few days. Or maybe they’ll email you, and then you’ll email them. It’s sort of a hodgepodge industry. It’s inefficient, and just because one company can ship art it doesn’t mean they're the best option. Just like if you fly United—they might have better options to Chicago than to Omaha, Nebraska.
What types of people make up ARTA’s user base? Are they collectors, or galleries, or a mix?
It’s a mix of everyone, because the shipping component really applies to everyone, and it isn't always transactional. Auction houses, dealers, advisors, collectors… we’ve even had a lot of Sotheby’s students trying to use this platform for projects that they’ve done. One of the major things that we are trying to do is to tie into online marketplaces. If you’re checking out on a site like Artspace, say, leveraging our data and using a shipping calculator that can automatically spit out quotes and tract online transactions is much easier for works that you cannot FedEx. If you are just FedExing works, it’s easy to tap into their rate system and make that process pretty seamless.
So why would a shipper and or art handler want to work with you? Doesn’t ARTA’s pricing transparency mean that they have to lower their rates to be competitive?
The benefits are many. For one thing, we make their lives easier. Many times, when someone is trying to ship something, the information is all over the place—we make sure that the shippers have all the information they need to make an accurate quote right from the start. We’re streamlining their payment process too. One of the things about ecommerce businesses that people enjoy is that there’s one source for everything. So, if you’re working with Artspace, Artsy, or Paddle8, they are, for the most part, the merchants of record, and they’re making sure that the payment is collected and that people are being paid out in a timely manner.
We’re doing the same thing for the shippers and art handlers, and the one thing art handlers notoriously hate is having to track people down for payment. We collect payment up front and ensure that all of our art handlers are paid on time at the latest, and usually earlier than requested.
But the big thing that I think ARTA can do for the art world is optimize resources. It makes things easier— rather than having to go to a lot of different places, you can go to one place and use the technology and analytics to make things more efficient. Our data lets us know who the best options are to ship from A to B. While shippers can certainly get income from people who don’t know what they’re doing, we make sure our users are connected with the right service providers. More importantly, we want to make sure that our art handlers are only quoting on jobs they have a realistic chance of getting.
How do you vet the service providers? How do you tell a good art shipper from a mediocre art shipper?
There isn’t a scientific method to it. Two top-flight shipping companies that we align with closely gave us their master list of art-handling companies around the world, and we have cross-referenced that with recommendations from our users and industry experts. We have a network of many galleries that use the platform, and they can suggest or approve a certain shipper. We require our shippers to have at least three approvals from ARTA users and then maintain an internal approval rating, just like Uber.
What is you geographic coverage? If I were a collector in Anchorage and I wanted something shipped from Art Cologne, could I do that? What about Palermo?
That question is very pertinent to the whole online art ecosystem. Art is obviously global. But I think, from a start-up business perspective, focus is key, and making you sure you can cater to your user is very important. I’ll use Artspace again as an example. When we first started, Artspace was only domestic because it was difficult to ship around the world, and there was also the challenge of the currency issue, measurement translation from inches to centimeters, and languages. There’s a lot to consider with the global ecosystem—you can say that a lot of people in the art world speak English and know what dollars are, but it can be very fickle.
Artspace, obviously, now does global shipping. That said, we’re focusing on domestic now. The United States is a pretty big player in the art market, and while we have a lot of people who want to ship internationally, we can expand to that down the road. We’re also working on integration with inventory management systems, which are very important. When you’re talking about art, ecommerce and inventory management are the biggest start-up verticals. I think logistics can be third, but we in the meantime we’re trying to tap into those existing marketplaces too.
Then again, there are entities that are doing very well on the international side of things when you think about Dietl, Masterpiece, and others. We're trying to see how we can collaborate with them to offer them the best parts of our technology and access to our user base so they can quote and connect more efficiently. We’ll continue to see what makes sense for us as a business and, most importantly, our users.
Because of the rampant growth of the art market, a number of players are getting into the logistics and shipping game, including the New York-based blue-chip storage company UOVO. Collection management, on the other hand, is a bit like storage in that it entails storing the data of a collection. Since ARTA is an online company, who would you say your competitors are and what gives you the edge over these competitors?
There’s a lot going on in the storage arena, with places like UOVO and Mana Fine Arts, and a lot is at play in that field. They aren’t online businesses or are focused solely on transportation, though, so we don’t view them as direct competitors . There are other art shipping marketplaces, like uShip or ShipHawk, that are catering more to freight or furniture. Dietl and Masterpiece deal with art shipping and logistics on an international level, but they aren’t online and don’t really have any tech component behind them. There are some things popping up that can become competitors, but they haven’t really launched yet.
So it’s a blue ocean in that we’re first-to-market. But look at what happened when Facebook launched—it spawned an entire new ocean of industries that piggybacked off of that. The online art industry is still in its infancy stages, and as people become more familiar with it and what the problems are there’s going to be a whole new bucket of businesses. Some will be smarter than others, and some that haven’t even been conceived yet will exploit problems that early-stage companies are just encountering now.
So ARTA is the Facebook of shipping?
I don’t know if it’s the Facebook, but I know that the online art industry—whether it’s Artnet or iStore, one of the earliest print publishers—is still in the early stages of its first generation. I think over the next couple of years, we’re going to see second-generation businesses that will tie into those initial start-ups.
You’re a collector yourself, and happen to be the son of Larry and Marilyn Fields, two of Chicago’s most accomplished collectors of contemporary art. What are some of the experiences you and your parents have had that let you know that there was a need for something like ARTA?
I think that the art world is a sexy world—the big sales, the big parties, and the glitz and glamour. The shipping component is often overlooked, and that’s one of the things that attracted me to it most, because it’s a niche business with high potential. There’s a lot going on in the digital sales world, but I think that world is getting a little diluted, with every month, week, day that goes by seeing a new endeavor enter the arena.
Recently, for instance, I connected with the founder of a cool company called Verisart, which is trying to use the Bitcoin block chain to catalogue every work of art ever—something I find super interesting. But there are so many new businesses coming out, and most of them are trying to be sexy. Shipping is not sexy. But if you can take an un-sexy, pain-in-the-ass problem and come up with an efficient solution, it doesn’t take much to convert someone into a user. That’s what drew me to it.
Why did you call it ARTA?
[Laughs] That’s a good question. I think a lot of people are trying to get names with “art” in it for their online art start-ups. While I can’t deny the “art” in the name is the reason for it, ARTA is a city in Greece that in ancient times was the center for mercantile shipping, so it has some deeper meaning to it. It’s not Artsy trying to be clever by taking “art” and adding a Syrian domain.
So, you were at Artspace, and then you had the idea for ARTA. How did you secure your first clients, and how did you turn ARTA into a reality?
I gained a lot of relationships throughout building Artspace, which is key. One of the great things about the art ecommerce space is that you’re able to network and meet people in different capacities throughout the art world, and maintaining and developing those relationships is crucial. In other words, hustling is a big part of it. One thing that helped is that any small gallery is, in essence, a start-up, with people wearing a lot of hats and doing a lot of different things, so many people in the field can relate somewhat to trying to do something new.
Being relatable is important, because there’s a lot of competition in the online art world. And because shipping is something people hate, people are very interested in trying to solve it. So we’ve been able to partner with many galleries and art organizations, from the Armory Show to places like the San Francisco Art Dealers Association, to help promote what we’re doing because dealers have so much trouble with it. And everyone is very happy to spread the word. When it comes down to it, it’s about hitting the pavement, networking, and meeting people to get the snowball building. I wish I could say that it’s easy.
One thing that has made the art world a bit slow to go online is that, unlike most other fields, personal relationships are necessary to do most high-value business. How do personal relationships figure into the way you’ve built ARTA?
I think personal relationships are still, and will always be, an vital part of any art-world business, whether it’s shipping or sales. People want to work with and associate with people they trust. People also want to make sure there's always someone they can connect with should they need an answer to a question or to get something done. So, on the one hand, ARTA is an online portal that can help automate things and optimize processes in an online context. On the other hand, ARTA can make the personal relationships people already have with clients or art handlers work more efficiently, and we have a customer service and project management team that can work with users offline if needed as well.
I love the cliché VC question, so I’ll pose it to you now: Is ARTA scalable? How do you internationalize something that’s built on a network of personal relationships?
Well, scale is imperative. I think from a shipping start-up standpoint, if you can funnel people to you more easily and then figure out how to manage those incoming requests, then that’s what makes you more efficient. Once you need to spend more time dealing with incoming requests than trying to get incoming requests, then that’s the place you want to be. It is all about figuring out where the incoming is coming from and how to funnel these people to what they’re looking for.
So what’s the craziest thing that you’ve shipped, or the most unexpected client you’ve worked with?
The most interesting thing about the digital world is that it opens you up to a trove of people who you would never think would get value of what you are doing. With Artspace, on the sales side, we found people in the middle of nowhere who collect art but who have never been out to a New York gallery and are interested in buying their work. The most unexpected thing that I’ve found with ARTA is that it applies to much more beyond art. Louis Vuitton is now one of our biggest customers, not necessarily because they’re buying and selling art but because they’re selling high-value objects that require a very high level of care. So we’ve discovered that the art-shipping model can easily transfer to design and furniture.
How did the connection with Louis Vuitton happen?
Through the power of the Internet. That sounds corny, but it’s true.
You were just contacted by Louis Vuitton out of the blue?
They just submitted a shipment. We have a lot of high-end design firms now too. Art, furniture, and design have a preexisting intersection in any case, which you can see with the auction houses. And I think design is becoming sexier—just look at Gagosian and the Prouvé show they recently had. That’s something I’ve become fascinated by. There are a lot more opportunities, vertically and horizontally, among people who are interested in what’s going on digitally in the art world.
What is the volume of shipments that you have facilitated to date?
That’s a good question that I won’t answer specifically, but we have been growing at a steady clip. It’s a graph that would pique the interest of investors, which is a good thing. And the art-shipping world is a $4-6 billion industry, which, when you consider that the art-sales business is in the $30-50 billion range, shows that it can hold a candle to that. That’s very surprising to people—and selling things is the hard part. We’re just shipping things that have already been sold. In other words, we’re just piggybacking on the people who have done the hard work. Also, we’ve been fortunate in that we haven’t had to devote much of our budget to marketing. And we plan to announce some features, functionality, and partnerships that should increase our growth for 2016.
Every start-up tends to go through a set of formative crises that anneal it in the flames of trial and error. What are some of the formative crises that you have gone through—the things that you thought were going to work but that fell through?
It is very humbling. You’re taking a gamble with a problem, and then you’re really at the behest of your users. The challenge is trying to change the way people think. We’ve been lucky, though, and a bit of victim of our own success—the scalability issue is the main issue. We’re doing very well, but how do you start a business based on your resources and your ability to hire new people and then also build out to handle the level of incoming business that we have? So we’re in the process of trying to raise money so we can expand, but it’s also about trying to get other people in the arena to play along with you.
Then, there’s the education challenge. There were very few comparable sites when we started Artspace, and we had to change the way that galleries and museums were doing their business. When a gallery sells something, they go through a certain process of going to their accounting team, then their registrar, and so on—but the online world happens so fast. So you have to get people to conform what they do to what you are doing, and trying to get people to change their muscle memory and bringing them out of the inertia, if you will, of the normal operating procedure has been the more difficult part. People understand the idea quickly, but it takes them a little bit of time to internalize what it entails, not just hitting them over the head with “This will make your life easier,” but actually trying to change their behavior.
Most online companies have the forward-facing offerings that they’re known for and then behind-the-scenes capabilities that leverage user data to most efficiently run the operation. Considering the sheer number of artworks that you’re shipping from one stakeholder in your network to another these days, you must be amassing quite a trove of data. What are some of the ways that ARTA is leveraging that information to make a better product?
Data is key to all businesses, and how you’re able to harness it determines your success. When it comes to data and art, there’s a lot that can be gleaned. I think auction records and purchase histories are the easiest models to point to, in that if someone buys something it tells you a lot about him or her. You get an idea of their income level in a general sense, because you know how much they’re willing to spend on something; you know what they like from a preference standpoint, be it an artist, a medium, or a style. There’s a lot that can be done in the art world in that capacity.
There’s also a lot to be done in terms of protection. One of the interesting things I’ve seen on the shipping side of things is that a gallery will guard their client list with lock and key, but, when it comes to shipping, it’s open for business—they’re ready and willing to share their client info and impart their clients’ emails, addresses, phone numbers. Which I find fascinating. How you leverage that information is a whole different discussion, and we’re not leveraging it currently. I’ve never worked at an art gallery, so I don’t know how they use their buyer data, and I’m interested in learning how galleries leverage these types of preferences. But the online side is definitely where there’s a treasure trove of money that can be made if this data is optimized well.
As the central node in the shipping network you’ve built, ARTA is obviously sitting on a huge store of valuable data. In the wake of the whole Ashley Madison hacking scandal, how are you protecting this data?
That’s interesting, because my head of engineering said to me the other day that we’ve officially made it because we now have people from China and Russia trying to come at our systems—not in a malicious way, but you see that people are beginning to prod and read and try to access what we’re doing. So it’s important to be super protected on the payment side of things. For credit card protection we use Stripe, so we rely on their encryption for that. Our data, meanwhile, is stored on Amazon Web Services, which is obviously a huge part of their business. The art world is a world that’s built on discretion, so you really want to maintain that at all costs.