Art of Disruption : FairArt

FairArt founders Nicolas Kidd and Francois Costa, credit: Jean Cazals

Art of Disruption is our new series featuring the latest in emerging art platforms and the founders behind them. For our first feature, we spoke to Nicolas Kidd, co-founder of FairArt.io a company to create a fairer, more profitable art market for all.

Congratulations on the launch of FairArt. Can you tell us what inspired you to build this product?

Thank you. It’s been a long road . . .

The first time I remember thinking that things needed to change was on a lockdown group call with friends that turned into a conversation questioning how I - at this point a 22 year old, just out of school - was able to collect art. ‘Where the f*** do you even start?’, one of them said. ‘It’s confusing, up-itself and way too expensive’. I knew that my friends appreciated art, so if they all thought that the barriers to collecting it were impossible to overcome, then something was definitely wrong.

The starting point for FairArt actually came from a Nina Chanel Abney quote: “If my work resells for a ton of money, it would be great to have some of it . . . all artists talk about it. No one is happy with how it goes . . . it’s just all about supporting the artists . . . who wouldn’t want to participate in that?” It was through reading statements like this, and further research, that I came to understand the full extent to which the industry’s lifeforce – the artists themselves – were excluded from receiving any direct compensation from the industry’s largest segment: the secondary market. Not only did this seem deeply unfair, it was completely out of step with other creative industries.

What are the biggest challenges in the art market that you're trying to solve?

From day one, we’ve been intent on ensuring that FairArt is a fairer solution for buyers, sellers and artists alike.

For buyers, the greatest challenges are opaque pricing, trust and access. That’s why every past sale, listing and offer is publicly available to view on FairArt. Far too many dealers and secondary galleries take advantage of information asymmetry to artificially inflate prices, and we are countering that by giving buyers clear, unambiguous tools to better determine an item’s value.

Another area of serious concern for collectors is the condition and authenticity of their purchases, and we’ve devised a new process for verification that boils down to ‘you get the artwork you ordered or your money back’.

Finally, from the buyers’ perspective we wanted FairArt to be an interesting place not only to find art to purchase but also to learn more about art and artists. That’s why we put so much time into creating a comprehensive database that highlights the most exciting artists out there, both emerging and established, so that people can enrich their knowledge and, we hope, get more into art in general.

For sellers, the main challenges are cost, convenience and transparency. The current high fee structures for selling art make no sense and are completely out of step with what is acceptable in other secondary markets. So another priority was to make listing completely free – and to offer clear, competitive selling fees with no hidden additional costs.

People often compare the challenges of selling art to the ordeal of selling a house. We’ve broken that model by taking care of everything, from images, to descriptions, to outreach to shipping. Essentially, all a seller has to do is name a price.

Again, the inclusion of artists in all these considerations was essential. Solving the problems art collectors face would have only gone so far if we had decided to ignore the creators. After all, they’re the only reason any of us are here.

Tell us about the team behind FairArt.

My co-founder, Francois-Baptiste (aka FB), has been a close friend since pre-school, and we started working on FairArt together in May 2020. Since then, the team has grown into an exciting mix of young art collectors from across Europe, who embody the radically new approach we are taking.

What has perhaps been most unexpected and exciting since our soft launch in December 2022 is the number of collectors who’ve approached us directly and sought to join FairArt, even volunteering to leave their jobs. We haven’t been able to accommodate all of them yet, but we are launching an ambassador’s scheme later this year, and we can’t wait to bring more people along for the ride.

You have a unique position on artist royalties. Can you tell us why you thought it was important to give a royalty % to artist? What has been the reception from artists and collectors?

The art world has come quite a long way in democratizing creativity but has yet to democratize ownership. It makes no sense that artists cannot share in the upside of the value they create for their collectors, and that they are excluded from their industry’s largest market segment – especially since theirs is an occupation that lacks benefits, workers’ compensation or pensions.

Think of other creatives. Filmmakers, authors, musicians . . . They all receive royalties for their work. Why should it be different for artists? That’s why we’ve established the first global royalty scheme for artists.

Yes, we were aware that some more frugal collectors might complain about a hit to their bottom line. But the great thing about our industry-leading fees is that it actually makes it profitable for collectors to give back. And if selling costs less and buying is more affordable, why would a collector not want to support their favourite artists? Essentially, we set out to create a scheme that made giving back to artists a no-brainer.

We’re not claiming FairArt is a silver bullet that will solve all issues around fairer compensation. We want FairArt to push people, some for the first time, to be engaged with and consider the value of artists' royalties, and so far that’s exactly what’s happening. Our ultimate aim is that we are the start of a much wider industry shift towards fairer compensation in both primary and secondary markets, for all artists.

What makes your product different than competitors in the space?

A lot besides royalties. FairArt is the first live art marketplace where prices reflect real-time demand, and allows neutral market forces to determine a fair value. And because we’ve made listing so easy, you can get a work up for sale in less than a minute – and in turn sell an item immediately, which brings a new kind of liquidity to a notoriously slow-moving market.

Of course the danger in moving fast is that you cut corners, so even as we were trying to radically simplify the process, we also committed to going above and beyond our rivals when it comes to ensuring condition and authenticity, with our eight-layer authentication process.

Also, again as a counter-balance to unparallelled simplicity and speed, we’ve conceived FairArt as a place where people will want to spend time exploring new artworks and discovering new artists, so they can make their own, informed decisions about what to collect, rather than just following the crowd.

Basically, FairArt is designed to be a one-stop solution. Everything a buyer or seller could require is available on the site, with no need to spend time searching for artworks across the web and cobbling together bits of information from multiple sources. It’s all there in one place on FairArt.

What have you observed in terms of art market trends? How is FairArt well positioned to be a major art marketplace in the future?

The art market’s performance has always to varying degrees been tethered to economic headwinds, and this current period of financial instability is no different. However, we are increasingly seeing signs that a recent drop in prices has bottomed out, and a (very) slow recovery seems to be on the horizon.

FairArt is very much built with a new generation of consumers in mind, which should put us in a strong position to benefit from the largest transfer of wealth in history. Over the next decade, $1.74 trillion in art and collectibles will pass from one generation to the next in the US alone. The values of this new generation of collectors are very much aligned with those of FairArt: transparency, flexibility, accessibility, sustainability, ethical trading and, of course, convenience.

It’s the relative accessibility of prints that convinced us to prioritise them on FairArt, but I believe the editions market has got a bit ahead of itself in recent years, and prices have moved faster than demand. For this segment to succeed in the longer term, galleries and artists must not forget its fundamental purpose of making artworks more affordable to more people.

The pandemic accelerated the growth of the online art market by at least a decade, and the rapid growth in digital art that we’ve seen is not as surprising as some might think. The NFT market in particular has had a dizzying past few years, and I think it has now entered a much needed stage of self-reflection and correction. There remains a number of issues that need addressing, and we are going to continue to keep a close eye on that market, but also a bit of distance, until they are sorted out.

Security, trust and anonymity are important for collectors. How have you addressed these needs in your platform?

First, buying and selling on FairArt is completely anonymous, and no personal information on transactions will ever be shared with galleries or artists (despite requests).

Legacy marketplaces operate under the policy that ‘the buyer is always right’. When challenged on the potential for fraudulent buyers, their response has been ‘this is an accepted risk of selling goods on the internet.

At FairArt, we have built a robust verification system that protects sellers as much as it does buyers. All artworks on FairArt have been handpicked by the team, and each holds a unique set of requirements: from provenance, to artworks images, to original packaging that help us verify them.

This process is linked to thorough identity checks from our payment partner that assure that sellers are exactly who they say they are. We also run a cross-check on existing fraud databases to ensure a user has never been flagged.

All payouts to sellers on FairArt are held securely by our payment partner until a buyer has received their item, and if someone is found to have purposefully misled or sought to defraud, we will charge a penalty fee and ban the account.

We also have our own internal background checks. Everything from a collector’s industry standing and levels of past FairArt activity, to social media presence and transactional patterns are considered. An example of this playing out are high risk items being off limits for first-time collectors, whereas established secondary galleries meet fewer restrictions.

Our partnership with DHL gives us in-depth access to information on a package’s size, weight and spot checks of the contents. All items are sent tracked and we receive a proof of delivery. We also divert an undisclosed number of shipments through our offices as an additional layer of security.

Finally, to keep things simple all artworks must be ‘as new.’ We’ve learnt from other marketplaces that general uncertainty around condition is one of the main reasons that disputes take place, and a full definition of what ‘new condition’ means is available on our site.

Apologies for so much technical detail, but all of this is incredibly important to us.

Marketplaces can be tricky (the League had one for a while). We've found that there is a chicken and egg problem around supply and demand. What's FA's strategy to get the marketplace flywheel spinning?

A year into building FairArt, I came to learn that marketplaces were some of the most challenging ventures to get right for exactly this reason! It requires a careful balancing act between seller and buyer outreach, but both are completely interdependent and the question remains: how the hell do you appeal to one without the other?

When we decided on our model – which imitates a live stock market – we wanted to overcome the chicken and egg paradox, so that one doesn’t have to precede the other.

Imagine a traditional marketplace: a buyer’s options are restricted to what’s already available for sale at a vendor’s stall, effectively putting all the power in the hands of the seller. But our model allows buyers to place an offer on an item before it’s available for sale or before a potential vendor has even stepped foot in the market. In other words, the buyer creates an incentive for a vendor who might not have planned on coming to market otherwise. It’s the same on FairArt - buyers can place offers on works that are yet to be listed.

So, on FairArt, buyers and sellers play an equal role in bringing each other to the platform, in what is intended to be a kind of perfect symmetry between supply and demand.

As to how that balance has worked so far, without any marketing or a press release planned for this initial stage we definitely expected the site to be heavily weighted towards buyers looking for sellers. But we’ve been surprised and slightly overwhelmed by how many sales we’ve already facilitated.

In terms of direct supply from artists, galleries, producers, we don’t look to limit anyone’s access to FairArt. We have a few artists who have listed their backlogs onto the site, and a number of galleries have already been in touch. In fact, we have a feature coming soon that will allow galleries to list their entire inventories in a matter of minutes. So, we are open to all (legitimate) comers.

You currently operate in the UK. What are your plans to scale and launch in other markets?

I'm excited to announce that we have just opened the platform up to buyers from around the world!

We have plans in place to expand to US/European sellers in the second half of this year and sellers in Asia nearer the turn of the year.

The aim is that by 2024 we’ll have a fully integrated international marketplace up and running, where people are buying from and selling to others around the world and collectors are always getting the fairest price wherever they live.

Anything else you'd like to add about FairArt and what we should look out for in the near future?

We have so much planned for this year! Exclusive print releases from FairArt artists, the inclusion of original works to expand the reach of royalties, an innovative solution to manage your collection, digital COAs…

Every start-up says this, but it’s true: we are in this for the long haul. Yes, we want FairArt to become the destination marketplace for buying and selling art, and for converting more and more people into art lovers and collectors. But it’s equally important to us that our raison d’être – to make royalties for artists on secondary sales an industry standard – is realised. And if that sounds a bit righteous, so be it.

Thank you Nicolas for your time and we’re looking forward to following the FairArt journey.
You can visit FairArt at FairArt.io and on Instagram

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