The 21st Century Collector
Dan Colen, The Space Between her Belly Button and her Breast, 2010. Paper, mylar confetti, and beva on canvas
When three entrepreneurs founded Paddle8 in 2011 with the idea of changing the face of the traditional auction house and bringing it into the digital age little did they know that their dream to make art collecting accessible to the young generation would translate to partnering with major online auction provider Auctionata*. With plans to soon launch live-streamed Paddle8 auctions around the clock and to expand the live auction experience, Total Management spoke with Co-founder Osman Khan to understand more about how his background in business and passion for art and collecting inspired the creation of this truly modern approach to art.
Can you tell us more about the concept and where the idea came from? Alexander (Gilkes), Aditya (Julka), and I founded Paddle8 in 2011. After realising that the traditional brick and mortar model was failing to address the needs of the younger, mobile, digitally-savvy collector, we wanted to create a platform that offers collectors an easy and trusted portal to a curated destination for contemporary art.
Can you tell us a bit more about your personal route into creating Paddle8? My foray into Paddle8 was a leap of faith based on an idea and a team, and sometimes that’s all you have to go on! As a long time consultant and investment banker, I had seen the disruption of traditional creative industries for my entire career and felt strongly that at some point I wanted to be a part of that natural evolution, driving change and creating legacy. When we conceived the idea of revolutionising the auction landscape, all we really had to go on was a vision and the fact that three of us were capable, hardworking and brought together a very complementary skill set, so it seemed like a very natural and harmonious configuration.
Paddle8 and Auctionata Management Team
It is the world’s leading secondary marketplace for art and luxury collectibles, do you have competitors or is Paddle8 really the first ‘modern’ and technologically advanced approach to the auctioning of art? Yes, Paddle8 was one of the first companies to enter this field and after our merger with the online auction provider Auctionata in May 2016 and we are now the only company that provides the full collecting experience online, including timed auctions, video auctions, benefit auctions and a curated online shop. There are of course various other online marketplaces offering art and luxury collectibles, but most of them just connect buyers and sellers or offer dealers an additional gallery storefront, but we provide the full service from start to finish. This unique value proposition has allowed us to become the global online leader in art, collectibles and vintage luxury, one of the top 10 auction houses worldwide outside of China and the fastest growing company in the sector in just five years.
Why do you think the sector has been up until now so resistant to technology? I think the biggest challenge for all players in the art sector is to identify the ways in which the existing and future technology can enrich and facilitate their service offering, without compromising the aesthetic, visual, and emotional experience the clients value. Therefore, many players are afraid of waiving their traditional value proposition and thus continue to do business the “classic” way, which still works for some of their current clients, but will become increasingly problematic when future generations of tech-savvy, mobile collectors dominate the market. With that in mind, I think it is indispensable to embrace technology and integrate it into the value proposition from the very beginning.
What does it mean to the art world to have a more diverse client base? Having a diverse client base is an essential requirement when you want to grow the business and establish new categories and products. For Paddle8, it was always important to attract collectors with different backgrounds from all over the world, especially since we want to provide a comprehensive collecting experience that will eventually not only include contemporary art, but also collectibles, design and vintage luxury goods. Our current international user base of nearly 800,000 is an essential argument for our sellers to reach the right audience and will enable us to provide our buyers with the best possible auction experience and category diversity.
Paddle8 has a number of noteworthy investors including Edgar Berger, Chairman and CEO of Sony Music Entertainment International, while gallerist David Zirmer is on the Board. What do you think it is that inspires and appeals to those involved? All of our investors are fascinated by the content of our business, the objects we sell and the way our start-up business has revolutionised a century-old industry. Paddle8 operates in very traditional and very dynamic environments at the same time, and has brought together a fantastic team that shares the same vision and dedication to bringing the joy of collecting alive online. The strong belief in our business model and our team, and the fact that Paddle8 has continuously demonstrated significant growth and a strong financial performance is what appeals to our shareholders and makes them want to stay onboard and part of this development.
Paddle8 operates in very traditional and very dynamic environments at the same time, and has brought together a fantastic team that shares the same vision and dedication to bringing the joy of collecting alive online
What’s the story behind the name? The word “Paddle” comes from the traditional auction world and refers to the sign that the bidder raises when he wants to signalise his bid to the auctioneer. “8” is a lucky number around the world, so Paddle8 ultimately describes a destination where bidders and collectors can get very lucky and find exactly what they were looking for.
There seems to be a lot of emphasis on philanthropy within the business, how do you select the charities that you are involved with? When we launched Paddle8 we maintained a firm view that it was incumbent upon us as founders to find a way to leverage our expertise, technology and brand in a manner that would benefit our community, both locally and globally. In the fall of 2011, I reached out to the board members of the New York Academy of Arts and convinced them to host their annual gala auction online as a means of increasing the organisation’s exposure to a broader Paddle8 community and enhancing their overall fundraising goals by allowing a global collecting audience to bid on their artworks. The auction only raised $2k; however, over the next three years we led the development of our non-profit auction platform and committed to building out a team of professionals dedicated solely to servicing non-profits. In that time, we have hosted over 600 charity auctions globally from Los Angeles to Lebanon to Hong Kong, and helped organisations with a diverse range of philanthropic motivations raise over $50MM (the services are offered at next to no cost). In New York alone, our efforts with all the major arts organisations have dramatically changed the fundraising landscape, helping local organisations raise in excess of 40% of their typical fundraising goals by utilising the Paddle8 platform and in turn using those funds to offer new artist residencies, expand educational programs for emerging artists and host events targeted to improving awareness for the arts in the community. As we continue to grow the team we have had to become more selective about the partners we work with, but we always strive to ensure that we work with a diversified set of partners who can benefit from our platform and are engaging with the philanthropic mission of Paddle8 in a meaningful way.
David Hockney, Hotel Acatán: Two Weeks Later, 1985. Lithograph printed in colors on two sheets of HMP handmade paper
Where did your personal passion for art begin? I had always been interested in art, but primarily tangentially through friends who may have worked in the art world. In 2010 I attended my first art fair at NADA with a friend who owned a gallery at the time who was kind enough to give me a comprehensive tour and I felt as though my immersion into the art world had only really begun.
Has the creation of the brand been a challenge? For us, building the brand has always been a key priority. We have put a lot of thought and dedication into building the Paddle8 brand, since it plays an essential role in building a trustworthy reputation in the market. Since we started the business by hosting auctions for non-profit organisations, we were able to cooperate with fantastic partners and increase brand awareness simultaneously. In addition, we offered our users top-quality content and products, which helped us to establish Paddle8 as a premium brand among a very sophisticated audience and become very well-known in the relevant target group. After our recent merger with Auctionata, the challenge will now be to transform and evolve the company’s brand in a way that best leverages its strength and extends it across a new product portfolio.
Today’s collectors are interested and well versed across many different categories and genres and there are more and more cultural influences that have broadened the traditional concept of what is labelled as art
You recently sold a rare sole copy of Wu-Tang Clan’s album ‘Once Upon a Time in Shaolin’. Do you think that Paddle8 has bridged the gap between what was traditionally viewed as ‘art’ allowing for a more outward looking approach to the field? Absolutely. Today’s collectors are interested and well versed across many different categories and genres and there are more and more cultural influences that have broadened the traditional concept of what is labelled as art. As a result, the desire to collect pop culture memorabilia of fascinating artists has been growing steadily and has led to a generally more diversified perspective on what is ‘artistically’ valuable.
How are works for auction selected and in there a specific process? We seek out different kinds of collectible works — from contemporary art and design to fine jewellery and design objects with cult followings. Our experienced specialists curate the objects for our auctions, taking factors like authenticity, condition, market prices, and provenance, into account.
*Paddle8 and Auctionata are the leading marketplaces for art and luxury collectibles worldwide. Breaking down many of the traditional barriers to art dealing and collecting, the platforms offer both veteran and novice investors or collectors a seamless online process to discover, sell and purchase art works, furniture, jewelry and luxury collectibles through for-profit auctions, non-profit auctions and private sales. Through their merger in May 2016, Paddle8 and Auctionata have created the global leader in online art, collectibles and vintage luxury and the destination of choice for the 21st century collector. With joint sales above $150M and nearly 800,000 registered users, the united company is one of the top 10 auction houses worldwide outside of China and a dominant player for art and luxury collectibles in the most important markets globally.
All images courtesy of Paddle8.
January 9th 2017