Miles, what kind of projects are you looking to get involved in? I know plenty of people in the city looking for hackers. hit me up at brett AT appfund.com
Well, all I'll say is that one of the most prestigious venture firms in the world saw fit to invest in their seed round. Also, they took considerably less (half) of what is considered standard salary. In any case, it certainly wasn't an example of wily entrepreneurs ripping off dumb money. Everyone took risk because they felt that there was significant upside.
Kudos to them for returning the money rather than trying to ride it out. That said, I somewhat agree with the post below about things taking time. You need to be around a while before people start to trust you. That has to be an especially problematic hurdle if you're managing people's joint ownership of physically indivisible objects.
They closed the business about a year after it was formed. Also, i wouldn't say that the business was formed because of the stock market, more that the economic downturn had an outsized influence on their customers propensity to spend. The aspirational art market (35 year old hedgefund managers) evaporated over night. Yes, perhaps they could have seen it coming, but then again, these hedgefund managers certainly didn't...
Your point about the art market boom and downturn is definitely true. As the article alludes to, fractional models tend to do well in downmarkets because they enable buyers to reduce risk.
Hi-
People already physically share their art with other people and institutions over the course of the year, think of all art in museums that is "on loan" from private collections.
Fractional ownership would enable art investors to diversify their portfolios and would reduce the entry point for investors in the space. Also, unlike planes, art is an appreciating asset.
I think skmurphy understands the theory behind fractional art ownership but is simply skeptical such a market exists in practice.
Is there an established market for shared art ownership (besides fractional donations for tax purposes)?
If not, then I think there's a more direct and simple lesson from the failure: if there's no existing market for your idea, the most likely reason is that people don't want to buy it or use it. Thus you better have solid evidence there really exists unmet demand, probably via experiments in the earliest stages of the venture.
There are firms that rotate paintings/photographs through corporate lobbies but retain title to the collection (it may also be for sale). There are many "loan" arrangements. I am not aware of "fractional ownership" arrangements: I think one of the key challenges may be "fractional sale."
I can't answer directly for Jordan, but I would assume that their costs were a lot hire than you would expect because they were working in the ultra-luxury goods category. When communicating in this market, everything is about extravagance- from your website to your office to you business cards. Building a company in this market is just a lot more expensive than getting feedback on consumer web app.
That certainly allows for an increase. It's a different type of market with different requirements. I have respect for the man in the arena and I'm positive there's more information that I don't know; I'm just genuinely curious as to how one could spend that much money so quickly.
Realistically a fancy website and business cards should not cost you more than a few thousand/month. However, a nice office in a good location with fancy decor could really burn some cash.
There's no reason 2 guys need a nice office in a good location. They were a pure internet company doing something like group-buys for fine art. Chances are the expenses might be something they couldn't reduce like warehouse space, escrow, or insurance related. Usually employee salaries are the biggest expense for typical internet companies.
I can definitely understand why you might think that this business was an pure internet play but it certainly wasn't. As PG learned, people don't buy highend art over the internet. They need to experience in person. The need to know what it is going to feel like to "live" with a piece.
Jordan knew this going in, and their model required a fair amount of in-person, highend selling.
"stupidity more often takes the form of having few ideas than wrong ones."
best line of the essay.
This is probably sophomoric, but... I was wondering why there is no semantic engines that can identify the major themes in the comments and present them like a table of contents or color code them like checking a cached page on google? I'm imagining something like Yelp's engine that picks out the best dishes.
The hiring process in general is outdated, if not broken. It is exactly the same (Resume to Interview) regardless of the type of job in question (Banker vs Developer vs Babysitter). Where is the customization?
As more and more work becomes digitally distributable thought-work, why aren’t we judging people based on relevant examples of their work? Why is an entry level hedgefund analyst judged by a 30 minute "tell me about yourself" interview as opposed to the performance of her personal account (and the verbalization of the rationale behind it)?
I think it is interesting that we just assume that "talking to someone" is the ultimate tool for determining intelligence, competence, and fit. Ultimately, talking to someone measures how well they can talk, not how well they perform. Are there more pertinent tools for assessment or will hiring always come down to how we "feel" about someone after a 30 minute interview?
Also, a provocative essay on "elite education" that is a good foil to Paul’s point about how elite education makes people feel about themselves. From this author’s perspective, it is a disadvantage. Get past the first four paragraphs and some ridiculous ivy-towerishness and I think he makes some good points):
http://www.theamericanscholar.org/su08/elite-deresiewicz.htm...
Postscript: This is a tangential point related to measurement. I just spent a scholarship year interviewing entrepreneurs and venture capitalists to understand how they evaluate or measure the progress of early stage ventures before the standard financial metrics become available. Paul, would love to hear your thoughts given your unique position. Thanks.
