sustaining a lucrative career in the arts

www.edenstrategyinstitute.com COPYRIGHT Eden Strategy Institute 2012

Sustaining a Lucrative Career in the Arts

eden strategy institute

Workshop for:

Date: 19 MAY 2012

1


Agenda

1. Introduction

2. Creating your business model

3. Case study

4. Exercise 1: Business model (What to do?)

5. Break

6. Making rain

7. Crafting your own Artist Statement

8. Exercise 2: Role play (How to do?)

9. Q&A

2COPYRIGHT Eden Strategy Institute 2012


eden strategy instituteMarkets · Innovation · Sustainability

What do we

do?

Who do we

impact?

Who are we?

• Seasoned Strategy Consultants as well as writers, musicians, painters, and performers

• Deep internationalexpertise across industries

P r o d u c t s & S e r v i c e s

S p a c e s & E x p e r i e n c e s

P r o c e s s e s

Asia’s Leader in Social InnovationABOUT EDEN

B u s i n e s s M o d e l s

P o l i c i e sP l a n s

• Government agencies, Start‐ups, Angel investors, Venture capitals, NGOs

• Proven record of industry impact

• Active seeding in local start‐up enterprises

• Measurable outcomes for holistic sustainability


Myths about being artists

“Great art and money don’t mix”

“It’s noble to be a starving artist”

“Artists who make tons of money are sell‐outs”

“Money corrupts true creative expression”

“Art is a calling and other professions are not”

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Beliefs to make money so you can make art

Artists who make lots of money have good business sense.

Money can help fuel creative expression.

Creativity is free; paintbrushes aren’t.

Great art is financially valuable; surely the artist deserves a fair share.

Art is a creative endeavor, but it’s also a business.

Great art deserves great financial support.

Fans are nice, but customers pay the bills.

5www.edenstrategyinstitute.com COPYRIGHT Eden Strategy Institute 2012


Introducing the Business Model Canvas

Who can help me? How should I spend my time?

Why would people buy my art?

How to interact with customers?

Who would most appreciate this?

How to go to market?Low cost ways to acquire resources?

How can I make money?Can we drive down my costs?

Source: Osterwalder, Pigneur & al. 20106


Do we know our Customer Segments?Customer segments

‐Don’t distinguish between different Customer Segments‐The Value Propositions, Distribution Channels, and Customer Relationships all focus on one large group of customers with broadly similar needs and problems

Niche Market

Mass Market

‐Cater to specific, specialized Customer Segments. ‐ The Value Propositions, Distribution Channels, and Customer Relationships are all tailored

‐For whom are we creating value?

‐Who are our most important customers?

Diversified ‐ Concentric vs. Horizontal Diversification

Segmented ‐By size, corporate vs. individual, level of sophistication, geography, demography, or psychographic ‘tribe’

7


What is our Value Proposition?Value

proposition

‐What value do we deliver to the customer?

‐Which one of our customer’s problems are we helping to solve? Which customer needs are we satisfying?

‐What bundles of products and services are we offering to each Customer Segment?

Newness

Performance

Customization

Design

Brand/Status

Price

Cost reduction

Risk reduction

Accessibility

Convenience / Usability

8


What are the Channels we can use?

‐Through which Channels do our Customer Segments want to be reached?

‐ How are we reaching them now?

‐How are our Channels integrated? Which ones work best?

‐Which ones are most cost‐efficient? How are we integrating them with customer routines?

Channels

9


Business landscape

How do we boost Customer Relationships?

‐What type of relationship does each of our Customer Segments expect us to establish and maintain with them?

‐Which ones have we established? How costly are they?

‐How are they integrated with the rest of our business model?

Customer relationship

Personal assistance

Dedicated personal assistance

‐Call centers ‐Point of Sale

Self‐service/Automated

Communities

Co‐creation

10


Business landscape

How do we create Revenue Streams?

‐For what value are our customers really willing to pay?

‐For what do they currently pay? How are they currently paying?

‐How would they prefer to pay?

‐How much does each Revenue Stream contribute to overall revenues?

Asset sale

Usage Fee

Revenue streams

Advertising

Subscription fees

Lending/Renting/Leasing

Licensing

Brokerage fees

11


Business landscape

Where do we get our Key Resources?

‐What Key Resources do our Value Propositions require?

‐Our Distribution Channels?

‐Customer Relationships?

‐Revenue Streams?

Physical

Intellectual

Key resources

‐ How do you obtain your resources and physical assets needed for your work?‐Are your sourcing for your art inputs through the best/most efficient channels?

‐ What is your brand? How strong it is? ‐ Can people relate to your brand through your artwork?

Financial

‐Do you invest in your human capital (both yourself and those involved in producing your work)?Human

‐What are your revenue streams and how can you innovate on them?

12


Business landscape

What should be our Key Activities?

‐What Key Activities do our Value Propositions require?

‐Our Distribution Channels? Customer Relationships?

‐Revenue streams?

Production

Problem solving

Key activities

Platform/network

‐ What are the different stages in the journey towards producing your product?‐Do you focus on designing, making and delivering your product in substantial quality and/or superior quality?

‐Do your products address a ‘problem' or ‘need’ in society?‐ How responsive are you to your clients’ requests?eden strategy institute

‐ What network‐related key activities do you engage in to sell your products?‐What do you do to make your networks serve you the best?

13


Business landscape

With whom should we form Key Partnerships?

‐Who are our Key Partners? Who are our key suppliers?

‐Which Key Resources are we acquiring from partners?

‐Which Key Activities do partners perform?

Optimization and economy of scale

Reduction of risk and uncertainty

Key partnerships

‐ Are there untapped channels/partnerships which could help optimise your resources and increase the scale of your production (if that is the desired outcome)?

‐ Are there partnerships you can form to reduce the risk in producing your product? ‐ Are there shoulders’ of giants you can stand on to promote your products?

14


What is our Cost Structure?

‐What are the most important costs inherent in our business model? Which Key Resources are most expensive?

‐Which Key Activities are most expensive?

Value‐driven

Cost driven

Cost Structure

Value

Variable Costs

Fixed Cost ‐Rental

‐Material costs‐Equipment‐ Wages‐ Time cost

‐Unique selling point‐Value proposition

Economies of Scale

Economies of Scope

Competitor‐driven

15


Case study: A Real Journey



Background

May is an illustrator. Within a decade of graduating from school, she has a gallery in Hong Kong that permanently displays her art, and has exhibited in 13 countries in Asia, Europe and N. America. May has successfully earned a living being an artist. Besides selling her art, she also alternates between being a freelancer for commercial jobs and being employed at news publishers.

How did she get here?

Her journey:

May was born in Singapore and had followed a “traditional” path in education. During her time in university studying Chemistry, she took a fine arts elective and discovered drawing. May decided to pursue her passion.

Her first job:

Fresh out of university, May did not have connections in the fine arts space. Her interest was in encouraging dialogues about real live scenes she illustrates.

She decided to learn about the industry by working as an illustrator in a well‐known publishing house.

May put together a portfolio and emailed the editor for an internship. The editor liked her work and she got the internship. The internship worked out very well and she landed a full‐time job.

The Problem: But, the publishing house shut down less than 2 years later. May had to find something else.

She decided to give it a shot as a freelancer. But she was still considerably new in this field.

What would you have done if you were her?

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Gaining Visibility

What do you think she did to gain visibility in the beginning?

What most people will think of:

• Leverage personal networks for recommendations for freelance jobs

• Ongoing subtle reminders to personal networks through some light marketing, e.g. email updates

What else she did:

• Enter local and global competitions

• Participate in local and global art festivals

• Respond to open calls from museums globally

• Apply for residencies globally

• Apply to win awards

• Get small “press” mentions every once in a while (through her journalist friends)

• Build relationships with gallery owners

18


Generating Revenues

What different revenue sources could she tap into?

What most people will think of:

• Try to sell own work locally

• Get recommendations for and “cold‐call” for commercial jobs

What else she did:

• Enter competitions

• Give workshops to both adults and children

• Apply for grants from Foundations who are interested in the dialogue she creates from her work

• Take on residencies with museums overseas

• When times are bad, she takes on part‐time or contract roles with magazines and news publishers

• Because of the relationships she nurtured, she now has a gallery that promotes and sells her work.

19


Key partners Key activities Value proposition Customer relationships Customer segments:

Channels

Key resources

Revenue streamsCost structure• Patron / Corporate sponsor• Originals• Auctions• Lease• Subscription• Limited run prints• Going commercial – art licensing• Grants / contributions• Advertising revenues• Brokerage

• Mentors• Peers• Critics• Connectors• Information brokers• Promoters / dealers• Fans• Die‐hard supporters• Actual customers, by

segment• Local vs. overseas• Mass market vs.

niche• Individual vs. high

networth vs. corporate vsfoundations / interest groups

• Diversified• Multi‐sided

• Networking• Customization• Self‐service• Automated service• Communities• Co‐creation

• Performance (e.g. aesthetics)

• Design• Newness / novelty• Brand / status (e.g.

premium artist reputation, in‐group)

• Risk reduction• Accessibility• Relationship• Convenience / usability

(e.g. functional division of a space)

• Customization• Getting job done (e.g.

lending class to a space, communicate message)

• Doing good• Cost availability(e.g.

multiple price points)• Investment value

• Promotional channels• Sales force• Online• Own gallery• Pay premium galleries?• Wholesaler• Feedback channels• Mailing lists• Platforms (e.g.

universities, galleries,, auction houses, museums)

• Practice to perfection• Finishing your work• Expand relevant portfolios• Killing off unfinished works• Find networks, build relationships• Research clients for alignment• Create visibility (e.g. by giving work)• Stage / exhibition time• Sales: Explain, Envision, Design,

Story• Gather feedback to iterate

• Fixed vs Variable (e.g. guitar vs studio rental, paintbrushes vs paint)• Value‐driven vs Activity‐driven – costs should be driven by activities that

increase quality and pricing power (e.g. quality of training, quality of delivery, increasing accessibility of channels vs # of recordings, # of channels)

• Economies of Scale considerations (e.g. what is an optimal venue size in comparison to the costs of event management)

• Economies of Scope considerations (e.g. does it make sense to offer 2 types of products leveraging the same expertise, such as photography for investigative journalism vs corporate headshots)

• Trainers / Coaches / Mentors / Critics

• Producers / Content co‐creators

• Performance / Exhibition Venues

• Recording / Digitization studios

• PR, Brand building & Marketing agents

• Sales channels• Event management

firms• Customer / Fan

management tools

• Physical (e.g. co‐sharing / bartering studio, equipment/ tools)

• Intellectual content creation• Human (e.g. advisors, assistants at

acad institutions)• Financial (e.g. friends, crowdsource,

grants for start‐up, operational, marketing costs)

• Alternative revenue streams e.g.• Corporate gigs• Murals, cars, sports gear• Design products• Live events• Lectures• Training / workshops• DVDs• Residencies

Sample Business Model Canvas for Artists

Note: Blue indicates aspects May addressed 20


Exercise 1



TEAM SIZE OF 5 PEOPLE EACH

15 mins: Complete 10 items per box for 3 boxes

Key partners Key activities Value proposition Customer relationships Customer segments

ChannelsKey resources

Revenue streamsCost structure

22


Break

23


Making Rain



Crafting your own Artist Statement

Write a specific artist statement in language that all can understand, so people can connect to your brand, you, and your art:

• Why you make your art

• Unifying principles in your work

• The connection between your interpretation of the message and the medium

• How you make it

• What its made of

Speak powerfully about who you are & what you do



Work ethic

• Clutter‐free space in studio, with a small body of work that customers can be ‘alone’ with

• Be there

• Be attentive to all, just introduce yourself to anyone who seems interested

• Talk briefly to as many people you don’t know, not lecture

• Connect & ask what they want in their art, what art means to them, what they expect to get out of it, and why they want to own it

• Speak their language

• Make people comfortable around your art

• Don’t argue with their interpretations

• Receive feedback

• Always stay positive, even about critics / competitors

• Give unexpected personalized statements / background / info to delight customers

“Repetition adds to Reputation” Andy Warhol



Brand You

• Find your niche

• Develop your own style

• Make your art distinctly recognizable

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Promote shamelessly; no one will do it for you!

• How is your work special?

• Thoroughly research galleries for fit, and obtain a referral when you’re really ready

• Document portfolio / brochures / articles / website: Recognizable shows, awards, venues (e.g. even restaurants), other collectors who buy your art, what they liked, photos of how your art is displayed

• Network to help others

• Make it easy:

• Say yes to every opportunity!

• Encourage clients to advertise with your work / name / face


Business cards

• Never leave home without them

• Hand them out often

• So interesting they won’t trash

• Develop a contact database to interact with (e.g. postcards, press releases)

• Have as much art out there as possible; your art is the best ‘business card’ that sells more art



Sell

• Why are you contacting a gallery/dealer/museum/customer?

• Why would customers want to buy art (e.g. personal connection to its perspective/style/quality etc., as a trophy for money/taste/knowledge)

• Customer concerns (e.g. confidence in understanding art / expressing oneself, quality, art becomes unfashionable, price) and how other customers were concerned but now ok

• No obligation sample / 2 week loan to see how it will look

• Don’t oversell / pressure



Structure your prices

• Understand true market rates

• Make sure everything is priced

• A structure for existing artwork & another for commissions. Rush fee?

• Confidently talk about how long it takes to make it, materials used, how you price, what subject matters/ mediums/ compositions collectors like most, investment value, and recent sales

• Be consistent about how you set prices, not based on how attached you are or how broke you feel

• Annual inflation adjustment

• People don’t value what they don’t pay for

• Demand % of sale even for charities

• Don’t use high prices to fix your self‐esteem

• Have a variety of price points available (e.g. different sizes)

• Structure a payment plan (e.g. installations, upfront deposit)

• Discounts for returning customers

• Adjust if not working


It’s just “no” for now


Exercise 2: Role play


GROUPS OF 4 PERSONS EACH

20 mins: Take turns to SELL your art to 3 strangers

• Go up to the group and introduce yourself & your work

• Ask questions

• Answer questions

• Make the Ask

• Defend your price

• Negotiate


Thank you!

eden strategy institute

Contacts: Calvin Chu Yee Ming

Partner, Eden Strategy Institute

E: [email protected]

T: +65 9751 5817
