Rock of Ages: The Enduring Power of Relationships in the Art Market
A few weeks back I ran across a short piece from the Wall Street Journal about a transfusion of venture capital into an arts-tech startup called ArtBinder. Their product is a cloud-based, image-centric, inventory management app meant to eliminate the need for gallerists to assemble and laboriously update Necronomicon-sized binders of physical print-outs for presentation purposes. Instead, ArtBinder equips them with far more options digitally through the convenience of an iPad.
Led by Index Ventures–whose website portrays them as both a prominent VC fund and, unwittingly, an emporium of awkward press photos–investors had taken an interest in ArtBinder to the tune of $3.17M in Series A funding. And for the life of me, I couldn’t tell whether or not this was an intelligent choice.
As it was described in the piece, the most striking aspect of ArtBinder was how basic it seemed to be. The app’s main selling points were the ability to tag JPEGs with typical inventory vitals–artist, title, date, medium, dimensions, etc–and access them remotely.
Digging deeper into ArtBinder's features expanded my perception of its usefulness, though only incrementally. It’s helpful that the app can sync with widely used inventory database software, and in-app search and sorting tools are beneficial, too.
Still, these features are hardly revolutionary. If this was the extent of ArtBinder’s capabilities, I felt like its funding success said more about the state of the art industry’s underdeveloped relationship with technology than it did about ArtBinder itself. Considering that none of its features are proprietary, weren’t there already a legion of other software options out there doing very similar things?
As my art criticism pen pal Mike Pepi pointed out to me, iOS offers essentially the same capabilities today, and there are indeed other competitors in the space running, for all intents and purposes, the same model as ArtBinder. Artsystems Pro and its standalone iPad app seem to qualify as the most prominent among these, while other, less feature-robust players such as ArtBase Go and Collectrium attempt to grasp for market share as well.
True, according to artnet, ArtBinder’s funding round will go toward muscling up its extension app, ArtBinder Viewer, which will allow the general public to peruse the holdings of subscriber galleries online. This wrinkle will differentiate them from both cloud storage alone and the inventory management-based rivals I just mentioned.
But despite the fact that there are currently no announced plans to integrate in-app purchase capabilities, ArtBinder Viewer would seem to position its parent on an inevitable collision course with existing online fine art middlemen like Artsy, ArtSpace, and artnet itself.
So the question remained: What would be the incentive for VCs to invest in ArtBinder instead of one of its competitors in this category?
Then this week, I read a Gallerist profile of ArtBinder’s founder and CEO, Alexandra Chemla, and the dense layer of smog surrounding the issue wafted away.
What the profile reveals is both simple and crucial: Ever since the day that a delivery room attendant tugged a tiny pink beanie onto Alexandra Chemla’s head, she has been exceedingly well connected in the fine art market.
In the piece, her father is identified as a “mega-collector who founded ALTOUR, a prominent travel firm.” Her mother is noted as the commander of one of the 19 seats on the board of The Chinati Foundation, the keepers of the Marfa flame. And one of ArtBinder’s primary investors, the billionaire and fellow mega-collector Leon Black, is referred to as a “family friend”– one whose stacks-on-deck acquisition highlights from 2012 alone included a ca. 1519 Raphael work on paper for $47.9M and Edvard Munch's 1895 rendition of The Scream for $120M.
Suffice it to say, if you’re starting a business centered on selling a product or service to major gallerists, these are very good people to know well. You don’t need to build a much better mouse trap if you already have the keys to the houses with the fattest mice.
In retrospect, I should have anticipated that the relationships involved might be a component of ArtBinder’s appeal. The WSJ piece mentioned that the startup’s clients include some of the most elite galleries in contemporary art–Zwirner, PACE, Hauser & Wirth, Gladstone–and that Alexandra Chemla had been on staff at more than one of them.
But I didn’t think to explicitly check the legacy. And when it comes to the art market, that’s a little like being a homicide detective who investigates a suspected serial killer’s home without bothering to look in the dirt-floored basement.
This is not a criticism of Chemla or her business. Any smart entrepreneur capitalizes on the advantages she starts with and scraps like an orphan to create more. The Gallerist profile suggests Chemla is doing both. If that’s indeed the case, more power (and market share) to her.
At the same time, ArtBinder’s deeper background and social context reminds us that it is, and has always been, impossible to overvalue the importance of relationships in the fine arts. Pretending as though they aren’t a factor in Chemla’s fundraising success and subscriber base would be naive. And even as technology inevitably remodels the art world in ways large and small, this aspect of the status quo will likely always endure.