Arts Entrepreneurship Podcast: Making Art Work
Arts Entrepreneurship Podcast: Making Art Work
#273: Alex Farkas (Founder of UGallery) (pt. 2 of 2)
This week on the podcast is part 2 of our interview with entrepreneur Alex Farkas. In 2006, he founded UGallery--a curated online gallery offering a unique selection of heirloom-quality artwork from both emerging and established artists. He studied art history, sculpture, and entrepreneurship at the University of Arizona and launched Ugallery upon graduation. After being part of San Francisco’s vibrant art market for 15 years, Alex packed up and moved to Amsterdam, where he runs the business today. Join us for a better understanding of all that goes into selling art online. https://www.ugallery.com/
Welcome to the Arts Entrepreneurship Podcast. Making art work. We highlight how entrepreneurs align their artistry, passion and vision to create and pursue opportunities to capture value in the arts. The views expressed by guests on the Arts Entrepreneurship Podcast are solely their own and do not necessarily represent the views of the podcast or its hosts. The appearance of a guest on the podcast, the venture they represent or reference to any product or service does not imply an endorsement or recommendation by the podcast or its hosts. The content provided is for entertainment and informational purposes only and does not constitute business advice. Here are your hosts Andy Heise and Nick Petrella.
Andy Heise:Hi Arts Entrepreneurship Podcast listeners.
Nick Petrella:and I'm Nick Petrella, we have Alex Farkas with us today. He founded U Gallery in 2006. It's a curated online gallery offering a unique selection of heirloom quality artwork from both emerging and established artists. He studied art history, sculpture and entrepreneurship at the University of Arizona and launched U Gallery upon graduation. After being part of San Francisco's vibrant art market for 15 years, he packed up and moved to Amsterdam, where he runs the business today. We'll have U Gallery's link in the show notes so you can read more about Alex, his team and see the art offerings available on the site.
Alex Farkas:Thank you for the warm introduction.
Andy Heise:That's wonderful. You know something you said earlier in your early response to that question about focusing on student artists. I think it's interesting that the customers that you thought you had that were easily accessible weren't actually the customers that wanted the service that you were offering.
Alex Farkas:Yeah, lots changed on both sides. Really. When we launched UGallery, we thought UGallery is going to be this great service where we'll help people who are our age own original art instead of owning posters. And we learned right away well, 23-year-olds, 25-year-olds, 30-year-olds they're buying furniture and pots and pans and getting married and they're not spending money on art for a long time. And truly, our customer is much older. We focus more in the 50 to 70-year-old customer, and it took us a long time to realize that.
Alex Farkas:I joke all the time that, uh, in the art world, people say people start buying original art after their last kid, graduates from college and before they buy their first sports car. And it's so true, I mean, we've seen that. And so it took us a long time to evaluate that side. And then, yeah, with the artists too, there's this whole dynamic of who wanted the service versus who we thought wanted the service. And we really we thought, yeah, student artists, this is going to be revolutionary for them, but they don't even necessarily know, if they're going to be artists, much less what they want to make. And I also didn't want to taint that process as much as possible. My goal has never been to tell artists what to make and it takes time to figure it out. I was always happy to work with people to try different things, but from my perspective, especially as marketers, we really see ourselves as storytellers.
Alex Farkas:So everything we do is around telling a story to the client about a specific piece or an artist.
Alex Farkas:We write newsletters each week, three newsletters to our customers and it's always one good story. And it's much easier to tell that story if someone's kind of figured out who they are in terms of their aesthetic and their portfolio and so all these things kind of laddered up to show us well, okay, we can be doing this a little bit differently and realizing with any business you have to make some changes. Here and there you pivot when it's necessary. We had a print business for a couple of years in the late 2000s where we thought this is going to be revolutionary as well. Again, we're going to tap that younger, less expensive market by selling prints. And we did that. We put a lot of effort behind that and we decided are we doing this? We can sell one painting or we can sell 100 prints and have the same effect. So you just kind of learn things over time and not to be dissuaded from continuing to try new things, but always just realizing you can change. There's an opportunity every day to do something better or differently.
Nick Petrella:Oh yeah, and plenty of businesses pivot, you know, and the nice thing about the 50 to 70 year olds is they have more disposable income than the other day, exactly.
Alex Farkas:Yeah, they're. I think they're more settled in what they're looking for. They know about art. We realized at some point too we aren't in the business of educating people to buy their first artwork. That's a long and expensive path, and so we're looking for people who already have an interest in art. Maybe they bought art on vacation or from galleries or you know any different places.
Alex Farkas:But UGallery provides kind of a unique service we see with our clients. Typically it's either people who are in urban centers where there are galleries, but they don't necessarily have the time to go and be part of the gallery circuit, cause, as you guys know, it takes a lot of time to go to the uh, you know monthly openings and get to know the galleries and things like that, and sometimes it's just not what people want. Um, we have one client who income friends with over the years and they bought about a hundred artworks from you gallery. It's a husband and wife. They're both, uh, they're older but they're both still working professionals and they don't even see each other that much during the week. But they get together on the weekend, on Sunday, with a cup of coffee and they look at the art that they like on you gallery, talk about it and to them that's doing the openings, um, or we have people who are located in places that are just really far removed from art scenes.
Alex Farkas:There's one man in Iowa who's bought a lot of art from us too, and he said I found you guys because I checked out my local galleries. All they sold were hunting scenes. He said I wanted some contemporary art and so I started looking online. I found you guys and haven't looked back, and so I think we start to see. You know, ugallery serves a function for this specific type of buyer, but that's it. We're not trying to be everything to everyone. We really are focusing on this specific profile of a client and really our artists too, and I think that's how we can be successful for the most people.
Nick Petrella:Yeah, Alex. What can an artist expect when they show their art on UGallery?
Alex Farkas:Yeah, kind of back to what we talked about earlier was this personalized touch, so it's not a site where you just fill out a profile account and let it sit.
Alex Farkas:For us, it's really about getting to know each other so we can tell your story, and keeping a really live and active account. We want to represent new art, we want you to provide us new pieces all the time and it's a way for us to really sell the work and tell a good story to the customer, and I think that with that, it takes someone who's interested in doing the work. Sometimes I think people are looking to just post things and leave them, but we're looking for someone who's engaged and they want to look at us as their online partner and we'll help them with whatever else that they need help with, like writing a good bio and writing a good artist statement and giving them feedback. As I said, I never tell people what they should make, but also if they have goals in mind of what they're trying to accomplish, we can talk about how the art they're making is in line with those goals or I like that.
Nick Petrella:You studied both art and entrepreneurship. What do you spend most time on these days? In the business you had mentioned, you can help writing artist statements. You understand marketing. You understand art history. So how do you spend your time?
Alex Farkas:Yeah, well, I have a team who helps with a lot of the work that we do and my role is really now kind of overseeing the direction of the business. I do still do as one hands-on weekly activity, I do still curate all the art, so I choose the artists and the artworks. That's something that I've done from the beginning and for me it's just, it's fun, but also I think it's good for continuity for what we're doing. But beyond that, I really kind of oversee the rest of the team, the direction of our marketing and also kind of the direction of our design.
Alex Farkas:It's been really fascinating. As you guys probably know, when you start a business you do everything and then, as things go on, you're able to hire more people and create more specialized roles in the company, and so you get to get a little higher and a little higher and a little higher up in your role until you can have more of a kind of a 30,000 foot level than a day-to-day putting out fires. So that's kind of where I'm at at this point. I get to choose what direction we're headed in and really think about overall, what does each piece of the business really look like and how does it function.
Nick Petrella:Yeah, that's great. So you were able to transition from working in the business to working on it.
Alex Farkas:Yeah, that was always my goal and it took a long time to get there. We did a lot of clever things, I think in the last five years or so. We hired some good consultants, we hired a marketing coach and someone who helped us with kind of systematizing our business. All that stuff was kind of in my head for a long time but I needed someone to actually give me the proper guidance on how to do each of those pieces and that's been really kind of revolutionary for how I work in the company and, I think, also how our business functions too.
Andy Heise:Yeah, I think I noticed your team is very international. You've got team members from all over the world.
Alex Farkas:We have people on a few continents. We've got people in the US, and we have employees in the Philippines and in Poland and India, and we've got some contractors who work in places like Australia. It's really fascinating. We really use our resources to find the people who suit the job best. It's nice to cover all the time zones too. Lots of good coverage throughout the day.
Andy Heise:I'm curious about the early days when you were just getting started. Was you gallery sort of a you know a side hustle sort of thing, that you were trying to get started while you worked other jobs or did other things? And, um, where is it now? Is it your sole focus, or are you still doing some other have other forms of income?
Alex Farkas:You know, from day one we were all in on this business so we didn't do anything else. In fact, the business partner I had when we graduated from college we just rented a little house in Phoenix and we got a third roommate so that we could help pay the bills and we basically slept in the two smaller bedrooms so we could charge the third guy a little bit more for the rent and we worked in the like sunroom and we'd get up at eight in the morning and we'd pretty much work till like midnight or one and go to bed and do it all over again. And that was that was life. To get the business off the ground and we were I think we've always been really good at, uh, understanding our finances and being conscious of every dollar spent, and we just did a few things right in the early days which allowed us to get the business going, and then that's been my soul, my sole career, uh, for the last 20 years. So, um, yeah, it's, it's been really kind of lucky and special in that way.
Andy Heise:Yeah, that's that, that's amazing. Um, and you mentioned like you won some, some, some funds from those competitions, uh, which is sort of like non-dilutive investment, I guess, or if you want to call it a grant, basically to get started and and you also used personal funds. Was there any additional outside investment in the company?
Alex Farkas:Yeah, we did have investors for a number of years who contributed and really helped us grow the business, which was great. And yeah, I mean I think we've been very fortunate at many stages of this process being able to find the resources we needed to grow the business and get to the pieces we needed.
Nick Petrella:Yeah, so just for clarification, you did have some runway when you started. We did.
Alex Farkas:Yeah, we launched the company with our winnings and our bank accounts which I want to say was about a hundred thousand dollars at the time Um, so that was. That was enough to basically ensure that the company would go for. Really, we thought that was 18 months of runway, um, and enough to pay our expenses, like our rent, and we legitimately ate a lot of Costco hot dogs, because it was a Costco about a mile down the street from where we lived. So, yeah, we, just like I said, we were very frugal with our money and figured out how to make it work for us and we got some really kind of important early press and that helped get sales going.
Alex Farkas:There was an email newsletter at the time called Daily Candy, which was popular, and we got into Daily Candy in, I think, the first three or four months and that was big for us because it was a huge boost in traffic and started to get us some recognition. And then we realized, oh yeah, pr is really kind of a crucial angle for what we need to do. It was free in the sense of you didn't have to pay for it, you paid in your time, but we pitched everyone we could and I think it was a new and novel concept and people liked that. We were young kind of entrepreneurs at a school, so it was a good story to tell and that all really helped us right along. That's great.
Nick Petrella:How do you determine pricing for the art on the site? Sure, Does that come from the artists, come from you? A combination.
Alex Farkas:Yeah, that's a good question. It's a little bit of both. Most of the artists that we work with already have some kind of sales experience, so that's an easy place to start. Typically, we'll evaluate what they're selling their work for and see. It's even part of kind of our onboarding process to make sure that we're a fit, because we know what our price points are, I think, kind of what the outer limits are for what we'll sell, and then we talk to artists to see if that fits with what they've been seeing. And then, for artists who are just getting started out, we also have kind of an overall idea of where we think we should start with them. And usually our philosophy is artists who are already selling and it's going well, don't rock the boat. Start there and see if that's a good strategy.
Alex Farkas:And then with new artists, my strategy is to pick prices that give their work value, but don't over-inflate it to the point where it makes it hard to make the first sales, because I think once artists start selling they'll sell more. And this is something I take from my mom. She always said my goal is that I can take one piece of pottery, sell it, make five more and sell it, and then you've got this business going, and I think for artists it's the same thing. You just have to find a way that you can make one thing which gives you the funds to make more and kind of grow your business in that way. So I mean pricing art is a art, not a science, and there's always ways to make changes to it. We are really conscious of that and that's a live and learn sort of thing.
Alex Farkas:And I think the industry has changed too, the online industry. We've seen our price points gradually rise up over the years. Our average price point in 2006 was about $400 for a mid-sized painting. Now it's over $1,200 for a piece of art about the same size. So I think it's consumer confidence in buying things online. It's maybe the quality of the work we sell. Lots of things can factor into that?
Nick Petrella:Well, you mentioned earlier. I mean, you have a lot of data. So if someone comes in, an artist comes in and say they're selling X and it's that landscape or that abstract art that you find selling, you might be able to get more margin out of it, and so that might be one conversation that you're having, I'm assuming.
Alex Farkas:Yeah, I think there's certainly that element that we can see. All right, you've been selling for this much. There's certainly that element that we can see all right, you've been selling for this much. Let's try and move your prices up and see how it goes. There's always this X factor with art you don't really know where it's going to go. There's been some artists that we've worked with who we've really pushed to drive their prices up and it's been an astronomical success. There was a lady, a young lady, who started working with us, who was doing finger paintings and she was selling them for a couple hundred dollars and, um, I really thought her work was undervalued and we kept pushing the price up and pushing the prices up and selling it for more, and she went from selling paintings for four or five hundred dollars to ultimately selling them for like 30 to 50 grand through us. Um, so you can see there's this I mean like that I think is a true success story. But but you can see that there's this level of you can keep pushing, keep pushing, but it's better enough to start at 30 to $50,000. If you don't know, you can sell it for that Cause.
Alex Farkas:Also, I think there's something to be said, that is hard to explain where art gets better over time. If people are really focused on what they're doing and everything from the quality of the materials to the quality of the idea to the actual quality of the construction matter, and that's something that you get by that idea of sell one and make five more, sell another one and make five more, you get better at it and that's also what drives the value. I think sometimes the discussion around pricing gets stuck too much on people's time, but you really can't value art in the same way you'd value time sitting at a desk or anything else. You have to think about it in a different scope and it's really like a long game scope. Maybe that's why you were saying five years out of school arts majors are underpaid, because it takes time to get to that place and catch up a bit and it certainly is possible, but it takes a lot of effort as well.
Andy Heise:I bet you've learned a lot about shipping artwork throughout the years and you alluded to this earlier. What tips or tricks can you suggest or things to avoid when thinking about? You know shipping, your shipping, your work we use custom built art boxes now.
Alex Farkas:So we uh have these boxes that are high density cardboard and inside there's three layers of foam. The middle layer of foam is perforated and tears out and the art fits in the box. When an artist a piece, we send them the box with a prepaid shipping label and they send it to the customer. That has been by far one of the best decisions we ever made. It's not a cheap solution, but the art always arrives. It always arrives in good shape. Customers give us awesome feedback.
Alex Farkas:Sometimes people say I love my painting, but actually I think I like the box even more. Joking, jokingly, of course, but I think people people have changed their opinions about packaging over time. We're talking about e-commerce changing. Apple changed people's opinions about packaging. People keep the box that their computer came in. Uh, art is also this special, rarefied, luxury good, so there's no reason it should come in a box with an explosion of peanuts when people open the box. And so I mean, in terms of advice figure out how to create the nicest experience possible for your client if you're sending them art that way. I think that's again back to what services does UGallery offer? People can theoretically do what we do, but we're a gallery, so you know we uh eat, breathe, sleep. The logistics of selling art, and shipping is definitely one of them, and that's just something that took years and years to finesse and figure out, and it's possible to do that on your own, but it also takes time and certainly a bit of money too.
Nick Petrella:I have a follow-up question, so prior to switching to the new box do you? Have stats on the percentage of artwork that would be damaged?
Alex Farkas:Well, I don't have a number for you, but we put it this way we started self-insuring once we switched because it was a better deal for us than to pay insurance rates to the shipping carriers. I mean, we send thousands of artworks a year now without damage, so, uh, it's a huge difference versus before, and sometimes damage is even, uh, less quantifiable. Did the painting get shipped and the stretcher got warped in shipping, even though the box is still like sort of okay, right, like that's, that's something? So, uh, instead of like out and out, like damage where a hole gets punched through the cardboard. But yeah, uh, yeah, it really changed the game and what we did, and again, dealing with filing claims or bad customers, people get really upset if you buy a one-of-a-kind painting and it comes and it's ruined. That's kind of heartbreaking, even beyond the monetary value.
Alex Farkas:Yeah beyond the monetary value, because you can't have that piece anymore and people would be upset with us about it. So yeah, it was a big deal for our business.
Nick Petrella:Yeah, insurance is expensive. I tried shipping something the other month and you know so well over a hundred bucks, and it certainly wasn't worth $30,000. Yeah, yeah, exactly. You mentioned earlier that U Gallery takes a commission, so what should artists who are listening know about what UGallery does for that commission Specifically? How and where do you market, do you ensure works which you just mentioned, and so on?
Alex Farkas:Yeah, well, we really do function like a traditional gallery in the sense of being very hands-on. We spend a lot of effort to develop our following on our marketing channels. Email marketing has actually turned out to be one of the great hits for us, because I think it speaks to who our customer is and kind of having a steady flow of stories. I'm amazed that people who stay on our email list for years just to kind of keep track of what's happening and they'll buy a piece here and there when they want art, but they keep following us, for that matter. So things like that.
Alex Farkas:I mean, obviously we have search engine marketing, google AdWords and Bing ads and Facebook ads and our social media presence. We have a lot of followers on Instagram and Facebook and we have over a million followers on Pinterest, stuff like that. So all of that is what we do. It's our job to be marketing artists appropriately and, as I was saying, we work on a commission basis, so we only stay in business if we actually sell art, and that's always been the partnership. That's what we've said to artists from day one we're successful if you're successful. That's why this works, and I think that is why it works, because we're not trying to charge artists a monthly fee or anything else.
Andy Heise:It's just about selling art. Yeah Well, Alex, we've reached the point of the interview where we ask all of our interviewees the same three questions, and the first question is what advice would you give to others wanting to become an arts entrepreneur?
Alex Farkas:Great question. I would say go for it. We need more arts entrepreneurs and I'd support anyone who wants to jump into this space and make a new business or make a change. There's always room for more. Really hope, as I see this space evolving if we're talking specifically about online art galleries, that there's more of the kind of individual level galleries that are representing artists hands-on curating their portfolios and kind of creating a true online art gallery world Not just the big marketplaces, but seeing more people in the space I think there's there's tons of room. There's a huge amount of people in the world and more people need art in their lives, so I encourage anyone who's interested in this space to to take the leap. It can be great.
Nick Petrella:What can we do to ensure the arts are more accessible and reaching the widest possible audience?
Alex Farkas:That's a big question. Um, probably all the way back to education. I know when I was in school, already in the 80s and 90s, that was uh, when they were really still cutting back on arts educations from the past 20 or 30 years. My feeling is people appreciate the things they know about. So it's, with anything, just better education for young people to get to be around it, get to make it. And exposing the children in your life to art, making art with them, taking them to shows, museums, all of that stuff, just giving people an appreciation and a love for it. To me that's probably the biggest thing we can do, but that's also just a huge idea too. Yeah.
Andy Heise:Lastly, what's the best artistic or entrepreneurial advice anyone's ever given you?
Alex Farkas:One of our early advisors. He was a founder of a t-shirt company and he said to my partner and I when we were first starting, he said you know, every year we look back at the business from the year before our marketing what we were selling, everything, and we think, wow, I can't believe that's what we were putting out. And he said it just keeps getting better and better year after year. If you keep doing the business, if you keep at it every day, you'll be so impressed at the traction and the mileage you make in a year's time. And that was really impactful. That stuck with me because I've seen that same thing with our business. Every year we look back and realize, wow, look, how much we've accomplished in the year. And same thing I can't believe that's what we were promoting a year ago, five years ago. It was always good, but it can always be better. That's been a driving force for me.
Nick Petrella:Alex, your story is really inspiring and you gave artists and entrepreneurs a lot to think about. Thanks for being on the podcast.
Alex Farkas:Yeah, thank you. Great to chat with you both, thanks.
Announcer:Thanks for listening. Yeah, thank you, great to chat with you both. Thanks, ©. Transcript Emily Beynon.
