Carlos A. Rivera on the Rise of ArtRank (Formerly Known as Sell You Later)

by Corinna Kirsch on March 21, 2014 · 1 comment Interview

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March 21, 2014 screenshot of ArtRank’s front page.

Who is Carlos A. Rivera, the man behind ArtRank, the website formerly known as Sell You Later? Within just a few weeks of the website’s anonymous debut, it inspired a flurry of press over the site’s straightforward recommendations to “buy,” “sell,” or “liquidate” works by emerging and established contemporary artists. All are based on a top-secret algorithm. Is it a joke, art, or just venture capitalism? I went straight to the source, and chatted with Rivera about his involvement in the art world, Sell You Later’s short history, and what’s in store for ArtRank.

How did you get involved in art?

My involvement with art began when I graduated in 2009. I had been involved in technology for a couple of different firms and 2009 was a terrible time. One of the leading VC firms, Sequoia Capital, had recently sent out this PowerPoint on the death of good times, urging startups to get in survival mode. So that was the climate I graduated in, and it was just a mess.

I asked myself how I could take advantage of the recession. And people aren’t going to like this answer, but the very truth of the matter is that I saw big opportunity coming out of the recession in assets that could be hedged against inflation. Historically those are things like gold and art.

And I had always had an interest in art because my parents were collectors. So I thought art has always fascinated me, but I don’t understand how value is created. I don’t understand why a Botero is seven million dollars and a different work by an equally talented artist is only 1,000 dollars.

So I sought out a developer in downtown Los Angeles who had created a mixed-use development. His commercial spaces were vacant and I convinced him to take over one of the large spaces. I promised that at the very least I would put a gallery space in, gentrifying the building and if we made any money, we would split it fifty-fifty. And so I opened this gallery [Rivera & Rivera], but I didn’t know much about contemporary art, and I thought I’d learn along the way. I like to think I did an okay job of it, and after a year I moved to an Arata Isosaki space on Robertson Boulevard in West Hollywood.

Around 2012, one of the collectors I had met early on approached me and said, “You have a good feel for what’s going on. Why don’t you come raise an art fund for me?” I closed the gallery in December 2011 to do the art fund.

For the art fund, I wanted it to be mathematical. I didn’t want it to be subjective and have relationship bias (for instance, I didn’t want to buy works only by Banksy based on my relationship or lack thereof with him). So that’s the basis for what became ArtRank, a metrics-based approach to art collecting.

Did this art fund have another name before ArtRank?

No, it was just a generic name—the name of the person who hired us to build it. We didn’t want anyone who got a check from us to think that there was an art fund involved.

What I think is fascinating that no one has talked about [in regards to ArtRank] is the fact that the first website the fund spun off [CuratorCircle] was meant to be a charitable endeavor. One of the problems we had coming out of the art fund is all this artwork that we hadn’t sold and we wanted to be able to loan to museums. I thought “Oh, it’ll be really easy. I’ll just contact a few curators.”

And museums are rarely seeking out artwork, if they have time. They’re not necessarily approached.

Exactly. So with that in mind, I set off to build a database where curators across all museums could have access to philanthropic collections across the world.

There was absolutely no interest whatsoever. They [the collectors] said, “Great. You’re doing something really good and we wish you luck, but we have absolutely no interest in everyone knowing what’s in our collection.”it’s a privacy and security concern, and this is a business.”

I thought, “Well, you’ve got to be kidding. You’re treating art like money and you’re not supposed to do that.” I hadn’t realized that even at the top of the game, everybody is treating this like money. And the biggest reason they don’t want someone to know what’s in their collection is because then it’s exposed that they might be trading artworks. So that stuck with me.

So you then started ArtRank, formerly known as Sell You Later. Technically your role with ArtRank is the founder? Do you have a team?

Initially we thought about doing another emerging art art fund, but the way the emerging art market is growing right now isn’t sustainable. I don’t believe that the art market will be able to sustain this sort of growth for another two years. And yes, I am the founder. I have two partners; they’re not art professionals.

I have to admit that when I first saw it, I thought it must have been a net art project. I think partially because it’s a fairly nuts-and-bolts website. And obviously it had such a straightforward, almost tongue-in-cheek name. Was an impression that you had hoped for? Who designed the website?

A lot of people think that there was this master plan behind Sell You Later, to make it cheeky and then immediately rebrand with a sleek new website. But no, we just hadn’t expected the site to go viral and the site was mid-construction.

In terms of a viral timeline:

Day one, it launches.

By day three, there’s an Artspace article.

By day seven, ArtRank has reached 78 countries and 900 subscriptions.

By day ten, there are more than 10 billionaires subscribed.

By day twenty, our Early Access product sells out within an hour of launch, and since then, there’s been a tidal wave of mentions in the Financial Times, New York Times, Artnet, Gallerist, et cetera.

So it just grew and we hadn’t given much thought to the name. When the name Sell You Later had come up, we just thought, “Well, that’s fine. That’s kind of funny.”

One thing that I’m curious about is with many private sales, basically any sale that occurs through a gallery. How does ArtRank calculate those metrics? It seems like you’d have to be a spy to get certain types of information.

Sure. We have enough strategic partners that are art professionals. It’s not terribly difficult to find that private information. People talk about it. They’re good at talking about artwork that is selling…and artists don’t necessarily want to keep that information secret either.

In the next two months, we’re working on a platform to make all of this trade information available to our subscribers.

So for the forecasting index on ArtRank, are you forecasting the value of artworks into the next year, the next five years, the next ten years?

In terms of the recommendations, they are somewhat immediate. When you buy an artist in the “buy now” category, under 10,000 dollars, for instance, those artists increased in value significantly just last month. There are companies that have been very successful at researching the art market like Artnet and ArtTactic, but I don’t think they provide the immediately actionable information we do.

So that’s very recent growth.

And then in terms of “sell now,” there’s less immediacy because it’s not like Tauba Auerbach paintings are going down in price. They’re still going up in price—they’re just not experiencing exponential growth. So that’s been something we haven’t really explained fully because there are some intricacies in this algorithm that, like any trading algorithm, if you talk about the actual math and expose all of the inputs, it becomes very easy for people to manipulate it.

We’ve had no shortage of people approach us and say, “Hey, this thing is absolutely terrible…we want a part of it—and we want to tell you which artists to put on it.” But we have no interest in that whatsoever. We have no interest in manipulating the data. That’s why we sought to maintain anonymity in the first place.

I assume you have clients who come from investment backgrounds, not necessarily art. How do you discuss adding art to diversify their portfolio? How do you convince them to collect art? You’d already mentioned art being like gold, that it’s an asset that will retain its value over time.

I can honestly say that I’ve never successfully convinced anyone to start collecting art. I’ve failed at that and that’s why I don’t have a gallery anymore.

What’s fascinating about collectors is there’s a lot of backlash about the idea that we’re telling people what to buy and sell. But really, the people who have found value in this [ArtRank] are the several people who have bought Early Access. For the most part they are multi-millionaires and billionaires who have zero interest in selling art. And they’re actually really amazing collectors. They actually enjoy supporting the artists and at these highest levels, collecting is an academic pursuit of “being first.”

These collectors enjoy the idea of being able to tell their friends, “I bought Grotjahn for 1,800 dollars.” It’s a bragging point for these people. We’re not talking about people who are looking at this like a portfolio. In fact, I don’t know of anyone who has acted upon the “sell” and “liquidate” categories based on our recommendations.

The algorithm is accurate enough to be able to identify that Adam McEwen [in the “liquidate” category] may not be in a downward spiral, but that his market got too far manipulated, too saturated, and the values just went too high, too fast.

So to pull out from that, just specifically, collectors should go to galleries because it’s beneficial to the artists.

Absolutely. The idea of buying art from a gallery, at primary prices, is ideal, but if for whatever reason you don’t have access to an Ostrowski because “the train is gone and all the works are promised elsewhere,” ArtRank has value in its ability to suggest where you should look now. Sure, if you really want an Ostrowski, you can still go to auction. But if you’re looking to patronize or invest in the emerging art market, there are more intelligent ways then paying a steep premium at auction or on the secondary market. Not to mention, when you buy in a gallery you directly benefit the artist, not so at Phillips.

So do you collect work as well? I assume you must.

Funny enough, I don’t have any works by any of the artists on this index except for two in the liquidate category. And both of those are co-owned by myself and some of my past investors in the gallery. They were not aware of me being one of the founders behind ArtRank, until recently. Those phone calls weren’t pleasant.

 

  • Guy

    What is that P.T. Barnum quote?

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