view episode transcript
If you can’t really speak to art history, and as you know, just like finance, there’s a lot of jargon and things to know. It’s not always the most welcoming ecosystem, or at least that’s not everybody’s experience. But that was my experience.
Jay Clouse 0:14
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them. Welcome to Upside.
Eric Hornung 0:41
Hello, hello, hello, and welcome to the Upside podcast. The first podcast finding upside outside of Silicon Valley. I’m Eric Hornung, and I’m accompanied by my co host, Mr. Wall of art himself. Jay Clouse, Jay How’s it going, man?
Jay Clouse 0:57
Ah, you’re admiring my backdrop.
Eric Hornung 0:59
As I always do.
Jay Clouse 1:00
It’s pretty good. I mean, you have a backdrop now. This is your your map of the world is definitely better than the bare wall bathroom door that you had for a while, I think.
Eric Hornung 1:10
Yeah, this is a better this is definitely a better look. I got a little bookshelf here, which is nice. I have my M25 unicorn.
Jay Clouse 1:17
Eric Hornung 1:18
I’m the only person as I was told by Victor. So this could be you know, could have been embellishing but I’m the only person who has not been funded by M25 who has got one of those unicorns, So.
Jay Clouse 1:30
How have we not had Victor on the show yet?
Eric Hornung 1:32
I think it’s gonna be our three year thing. We’re gonna have Victor on the show for our three year it’ll be like, big blowing up too.
Jay Clouse 1:37
Yeah. All right. Well, I’m jealous of the unicorn what I got over here. As far as artwork goes. Well, I have most prominently our five custom concert posters for a concert series that I helped put together a couple years ago. I helped pick the bands, pay the bands. We found artists to make unique designs for each of these posters. That was a lot of fun. We’ve got our what sucks painting that we both have one of courtesy of Caroline Zouk.
Eric Hornung 2:07
Oh, you can’t see mine. It’s behind the peloton. But it’s right there.
Jay Clouse 2:10
I know, just tell me again about the peloton.
Eric Hornung 2:12
Jay Clouse 2:12
I’ve got I’ve got the movie ticket for Test City, USA from the premiere. I’ve got a hand drawn recreation of the portrait and bojack horseman’s office that my sister made and printed on canvas for me. And I’ve got a splatter painting that I made at what we call a Jackson Potluck.
Eric Hornung 2:32
Oh, wow. A Jackson Pollock. That’s a great name.
Jay Clouse 2:36
The way we did the Jackson Potluck was we had white bread and naan bread. They put on top of a tarp on the floor. We had things like macaroni and cheese we put food coloring into. I forget the rest of the food stuff. But it was all colored. And we threw that at the naan bread to make like a Jackson Pollock food experience. And then we ate it. It was delicious.
Eric Hornung 2:56
You ate you ate the art.
Jay Clouse 2:58
Yeah, that’s why as a Jackson Potluck.
Eric Hornung 3:00
Oh, that’s actually really cool. I thought you’re just gonna waste the art. And I was like, well, or waste the food, which became the art. You know.
Jay Clouse 3:06
Food was art. We ate the food. But we also have these canvases where we made real art and that is here in the office.
Eric Hornung 3:12
You know what else I saw that you had there was a little artsy lately. Oh, those custom Creative Elements cookies.
Jay Clouse 3:18
Eric Hornung 3:19
Those were dope.
Jay Clouse 3:21
Those are very good.
Eric Hornung 3:21
They taste as good as it looked.
Jay Clouse 3:23
They were very good. I mean, they’re sugar cookies. You’ve had your cookies. You could probably tell by the way they looked what that tastes like, based on your own experience. But they were good. And yeah, my girlfriend, Mal surprise me for our anniversary, which I feel bad, I didn’t get her an anniversary gift. But it wasn’t like a two year anniversary. It was a 22 months anniversary. That’s an important one. Yeah, I didn’t know we were doing gifts. So that’s on me. The cookies were great. The artwork was great. Yeah. Art’s fun, Eric.
Eric Hornung 3:50
Isn’t it cool when we get to support local? I don’t know, actually, when this is coming out. But we may who this might be a little leak. Is this a leak?
Jay Clouse 3:57
This is a leak.
Eric Hornung 3:58
Okay, so we have a little bit of an upside redesign coming down the pipeline here. And we commissioned a local artists as well. And honestly, our local graphic designer, I love supporting independent people. I think you called me after we talked, he said I love telling independent graphic designers, creative people in general. Here’s a vision and then just seeing what they do with it.
Jay Clouse 4:17
That’s great. That’s so fun. And it’s just fun to support artists in that way. And speaking of art, Eric, very excited about today’s episode, we are speaking with John Crain, the founder and CEO of SuperRare. SuperRare is reinventing art collecting for the digital age. Very simple description, very complicated explanation that I’m excited to get into. But SuperRare was founded in 2017. He might say they’re based in San Diego but as a distributed team, and they’ve been bootstrapped up to this point.
Eric Hornung 4:46
Can you imagine your life as an art collector? I feel like that’s a very hoity toity. Ooh, I like that term, hoity toity description of what do you do? I’m an art collector.
Jay Clouse 4:56
I will probably save this a little bit for the outro maybe the interview I went on an art trip. A couple years ago, met art collectors, met some artists, met some curators, it was a fascinating eye opening, just a completely different world than anything I’ve ever experienced. And it was really interesting to me, but it just felt really, really inaccessible. And with SuperRare, what they’re doing with digital artwork, I think is really interesting. And I have a lot of questions. And I don’t know how it’s all gonna work, Eric, but I’m excited to find out.
Eric Hornung 5:30
I can’t wait to not get a word in in this interview. I’m guessing this is your this is your style.
Jay Clouse 5:35
That won’t happen.
Eric Hornung 5:36
Do you think that when you think about your financial portfolio, how many people do you think have art in it?
Jay Clouse 5:42
Probably the people who are really worrying about wealth? I think a lot of them probably do.
Eric Hornung 5:47
You know, who would have a great answer that question, who are friends of Ethos Wealth Management who are helping you live the one life you have the best way you can? If you want to learn more about Ethos, you can go to upside.fm/ethos.
Jay Clouse 5:59
All right, Eric. Well, let’s get into this interview with John Crain of SuperRare. If you dear listener, have a thought that you want to share with us, you can email us firstname.lastname@example.org or tweet at us, which is preferred @upsideFM, and will get that conversation right after this. Hey, listener, have you ever wanted to get a message in front of the Upside audience but weren’t sure how to sponsor the show or weren’t able to do a long term sponsorship? Well, now you can just go to upside.fm/classifieds. And let our audience know anything that’s going on in your world, whether it’s an event, an application, a special coupon, or deal, or just letting them know who you are, what your company does, all you have to do is go to upside.fm/classifieds. And you can place an ad on this show. That’s upside.fm/classifieds.
John Crain 6:56
Grew up in San Diego. I did my undergrad in San Francisco. And then I moved to Brooklyn, to work in advertising, while I was in San Francisco, actually took an econ class as GE was not something I was interested in studying Civil Engineering at the time. But it was the fall of 2008. And so that was, you know, quite very exciting things happening in financial markets. And I had this super nice kind of chill older professor and he came in one day, super pissed off. He was like, we got to murder the bankers. And it was like, was this very extreme? Yeah, we were talking about supply and demand curves yesterday, to kind of change the topic. So that was super interesting. For me, I’d never really been interested in finance or anything like that. But it got, you know, as things were changing, you would kind of like riff on that at the beginning of the class. And so I kind of got interested. And so that’s sort of what when I moved out to New York, I was still kind of interested in economics, got interested in Austrian economics, and then kind of ended up in Bitcoin and crypto.
Eric Hornung 8:01
But you were studying civil engineering, and you went into advertising. So help me understand how, like, that’s a lot of different angles.
John Crain 8:10
Yeah, I wasn’t actually, you know, the most. I was like, originally, I thought maybe I do architecture, I kind of like math. But I also wasn’t super focused. I was like, I’ll get a degree and do something. And then I realized I was going to have to work in the field of civil engineering, and decided that this was not a good personality fit. And so at the end, early midlife crisis, decided programming was probably better suited for me. And so I started like, doing websites and stuff. That’s how I ended up with that as a job.
Jay Clouse 8:41
Okay, but I started doing websites and stuff, and then became being a self taught coder, it sounds like, tell us more about that, and how long that took and what that journey looked like. Because if anybody could just start doing websites and stuff and teaching themselves how to code for people believe that they could that more people will probably do it.
John Crain 8:57
Yeah, I guess. So we had, you know, I had done some coding like in engineering, there’s like, I don’t know if you guys are familiar with like MATLAB, or some of these sort of like math, coding oriented things. So at the time, I was like, Well, you know, I don’t want to be a civil engineer. And actually also kind of related to, you know, later on with SuperRare. I was also, you know, into like drawing and sketching, and then kind of got interested in processing, which is like, a generative art coding tool. So I was doing the processing stuff, and MATLAB. So actually wasn’t a huge leap. I kind of had the basics down. And just looking at the job market. I was like, Well, I don’t really want to know what I want to do. Starting businesses sounds kind of cool. I think I’ll have more flexibility if I just double down programming. I wasn’t, I wasn’t super focused. I was like, this seems like the right general area. I’ll just go over there.
Eric Hornung 9:50
Was there any culture shift coming from San Diego which I pictured to be a very like chill town and the west coast in general to the Don Draper. advertising, Madison Avenue Manhattan.
John Crain 10:04
There definitely was, I often joke with my wife, who she’s also from the west coast and we met in New York, we sort of felt like we weren’t really a good fit for either the West Coast or the East Coast. So we were a little bit too uptight for, you know, most people he might find in San Diego, and then maybe a little bit too laid back as far as folks in New York are concerned. But I was always, you know, as far as like my friends here, I was the guy who was just like, doing different things. I was staying in on the weekends trying to learn to code and, you know, trying to convince people they should let me build their website says, had a little bit of that hustle and kind of wanting to get out of the very, very chill San Diego lifestyle.
Jay Clouse 10:45
So take us forward from that agency to getting into the world of crypto generally.
John Crain 10:53
So yeah, while I was, you know, working at the ad agency, I was doing a lot of kind of experimentation and stuff. I was getting more more into design, and also just exploring lots of different meetups and one of the ones I found was the New York Bitcoin meetup started going to that. It was, you know, early enough before it had gotten, like, heavily blown up. So it’s kind of fun. It felt more hackery sighs I was gonna like design a wallet software had a bunch of different Bitcoin projects that. You know, I love starting the project. So I will build a wallet, I’m going to build a you know, an asset tracker sounds kind of like tinkering and experimenting the whole time.
Jay Clouse 11:34
But real quick, what what year ish? Was that? And how is that contextualized? With the world becoming a little bit more familiar with Bitcoin?
John Crain 11:42
Yes, I think it was like, the 2014, 2013 or so kind of it was like, right before one of the big runs, unfortunately, didn’t have any money at the time. So it was it wasn’t terribly exciting for me as to just you know, making software. Yeah, it was, you know, it was exciting to see and kind of like, I was getting more interested in business and finance. I was gonna like, thinking about like, Okay, that was sort of like the early seeds for SuperRare. I was thinking about like, okay, we’re gonna have some kind of programmable money. You know, a lot of these consumer apps, like the business models are a little archaic, just like selling ads, visit the same business model. You hadn’t the newspaper, online. And so, I was just starting to mull that over, like, what is what is the consumer internet look like in India, you can experiment and play with business models.
Jay Clouse 12:31
Okay, sorry, I interrupted you. So you were getting into bitcoin, designing wallet software, keep going with the story.
John Crain 12:38
Okay, designing wallet software. I then, I also took a detour, I worked at a sort of like a eyewear like Warby Parker competitor called Eponym. So it’s kind of like Warby Parker as a service. So I was there for about a year. And still, crypto is kind of like the side side project. And then I started hearing about Ethereum, I was pretty skeptical. I was sort of like a more like a Bitcoin, counterparty maximalist person. And then when they actually launched the network, and it was working as like playing around with some of the solidity stuff, sort of like, you know, that to be my ego, I was like, Alright, this is actually pretty cool. I think I want to get involved with this. And so that’s when I decided to leave our startup, and I went to work with consensus, which were.
Eric Hornung 13:31
For our listeners who maybe aren’t as familiar with the difference between Bitcoin and Ethereum. What was so cool about Ethereum that you were forced to eat your ego.
John Crain 13:41
Jay Clouse 14:50
Can you get even more concrete with like an example of what somebody is doing with Aetherium in this arbitrary way, as you’re putting it?
John Crain 14:59
Yeah, sure all you know, I’ll plug SuperRare. And give an example of one of the things that we do. So SuperRare it’s a marketplace for digital art in one thing that’s, you know, people have kind of talked about for a long time, and have been sort of hard to implement and practices, royalties for living artists, when there are resells and appreciates that they might sell. These are a couple years later, maybe a collector sells that at a 10 x premium what they bought it for. And there’s actually some laws that have been written in Europe around like you’re supposed to pay royalties. But you know, there’s easy ways to get around them, you know, the deal happened in Malta, so the law doesn’t apply. And so one thing we did is just any time, a piece of our resells in the marketplace, we can pay a 10% royalty to the artist kind of in real time. So as somebody buys it, you can easily divert funds to the creator of that artwork. And it’s like, two lines of code. It’s super easy. It’s literally like, if this is this, like if this is not the first time a piece of art selling, send, you know, X percent back to the artist, and it’s super simple. You know, it’s like this much code. And that’s just one kind of small example, is just like something that you know, if you tried to do that with more legacy banking system might be pretty difficult. And this is just now the technologies is basically trivial to do things like that. So that was just exciting.
Jay Clouse 16:28
How did you come to this concept for SuperRare? You know, in your story, we left we left off you becoming a product engineer at consensus at some point, you had this idea and you started acting on it. So can you talk to us about the the birth of SuperRare?
John Crain 16:44
Yeah, I mentioned in college, I had kind of started experimenting. Yeah, I was never considered considered myself an artist, but I was an avid doodler, and was playing around with processing, which is the sort of programming language to make a generative art. And, you know, had been wondering like this, you know, this is cool. I have friends that run galleries, they still mostly sell like canvases and stuff, like, you know, what would it look like? Could you collect a piece of, you know, processing art? Does that mean like, giving you access to my GitHub repo? Or like, what does this even look like, as I was kind of just like in the back of my mind. And then fast forward to working with Ethereum? You know, thinking more about like, Okay, I think we can build new interesting business models for consumer applications, experimenting with that. And then I kind of saw, but there are a couple things like a project called CryptoPunks launched in the summer of 2017, which was a generative art project on Ethereum. And you could kind of see is these 10,000 different, they were generated punks, you could you own a specific one that had specific properties. So like, is sort of like a collectible piece of art. That was fascinating. And then with CryptoKitties they kind of took that concept and built a standard around it. And that was super interesting to me, just based on what had happened with, you know, I don’t know if listeners are going to be familiar with the ICO boom, that there is no crazy speculation, people were buying these tokens, some of them worked out last didn’t have but the reason the boom was possible is because they took the time to build a standard. So any wallet that interact with it, or any exchange was really simple to build a piece of software that interacted with that token. And so that’s kind of what CryptoKitties did with these sort of like unique specific tokens. So they call them non fungible tokens, which is like a complicated way of saying, this is the thing that has an ID and I can track everything that happens to this thing. And so that was kind of like an aha moment for me. I was like, Oh, this is gonna be amazing for digital art, you now have a really simple standard, which, you know, I think a lot of great things, especially native digital ones start with simple standards. It’s a simple standard. So anybody can issue this thing. And it can kind of represent, you know, whatever you want. You maybe think about it like a CD ROM. So like CD ROMs are useful tools. They get really exciting when you put interesting content on top of them. And so that’s kind of like what the NFT is. It’s the simple thing. And you can tie really interesting stuff to it. And so I was like, oh, wow, this could be a very powerful tool to build a digital art market because there hasn’t really sort of today, the contemporary art market is still mostly been kind of canvas and sculpture, and digital arts like a small subset of that. They even though lots of a really groundbreaking interesting art that’s being created today is itself like natively digital. So it’s like, you think about somebody making a sculpture with tilt brush and say you know, if you want to be a patron, and what would you buy?
Jay Clouse 20:02
I just want to repeat something back because Eric’s a lot more in the know on all things crypto than I am. And so I’m here advocating for the listener who isn’t as familiar with this stuff. It sounds to me. Actually, let me start with this. You mentioned CryptoKitties a couple times, which I remember seeing a couple headlines from because I think Andreessen Horowitz invested in them, and it was a big deal. Can you tell us what CryptoKitties was that created this standard?
John Crain 20:27
Sure, CryptoKitties was a game that basically you could you could think about it like tamagotchi’s, or you had these little like digital paths that you could have. So you kind of have this, you know, Tamagotchi, it’s a CryptoKitty. And if you had two of these CryptoKitties, they could breed and generate a third one. And so this CEO can like cat breeding game, certain ones were more exclusive and rare than other ones. So they were kind of like basic boring kitties. But you might, you had some probability that you could get they called fancy cats. And so maybe it’s like a cat with like purple hair. And this was super valuable, because you can breed it with any other cat. Now you’re going to make new purple haired cats, obviously very fun to get the cats are adorable, like super fun game. The reason it blew up is it was just like very fun to do. But sort of the interesting. Kind of like the pioneering technical work was like underneath that each cat was uniquely tracked on the blockchain. And so you could see everybody who had ever owned it. So as you know, if a famous person owned cat number 100, everybody else who’s into CryptoKitties could easily go check like, Oh, yeah, that’s true. You know, Kanye West owns cat number 100. And so then you can think about like, well, in addition to the fact that yeah, this cat’s purple, somebody famous owned it. And so now there’s like this interesting story around it. So it can be more valuable than some of the other ones.
Eric Hornung 21:59
Do people still own CryptoKitties?
John Crain 22:02
They do. Yeah, I think it’s not, you know, quite as huge as it was when it really took off. But yeah, it’s still active and going.
Eric Hornung 22:10
At what point do people no longer like? Will the network ever shut down? Can it ever shut down?
John Crain 22:17
So the, I mean, I think Dapper Labs is the company that like, you know, owns the IP and does the hosting for CryptoKitties. So I guess they could shut down. But to sort of like have the CryptoKitty tokens, like the the digital representations go away, he basically had to shut down Ethereum. So, so long as that doesn’t happen. The cats either.
Jay Clouse 22:42
Okay, so this, this helped me really circle around here. So because of CryptoKitties. And because they made this standard, where you could have these unique trackable codes that laid the groundwork for SuperRare, you’re applying that to artwork, and specifically digital artwork.
John Crain 22:58
Yeah, that’s correct.
Jay Clouse 23:00
The art world, especially the art collectible world strikes me as like, very old school. So how did you get involved in art, first of all? And second of all, has this been a difficult marriage of concepts between like an old school industry with a very new technological standard?
John Crain 23:23
Yeah, very good question. So how did I get involved, myself as a doodler as like kind of like, passion for art always loved going to museums and things like that. But at the same time was also it didn’t feel that the art world didn’t feel super approachable for me, personally, I had friends, I moved to Brooklyn. Some of the people I lived with report art collectives, I had a couple friends who ran galleries, so I was like, kind of on the periphery of the art world, which, you know, it’s ongoing, the gallery opening is fun. But yeah, if you can’t really speak to art history, and as you know, just like finance, there’s a lot of jargon and things to know, it’s not always the most welcoming ecosystem, or at least Yeah, that’s not everybody’s experience that that was my experience. And I always kind of found that funny, because in my mind art something fun. Anybody can, you know, maybe it’s not art history, but it’s, you know, art is that something fun anyone can participate in. And I always just thought it was sort of interesting that it is kind of this very open, fun thing to do. But then, like, art collecting is really exclusive. Even though a lot of the components like, you know, auctions are fun. I think anybody who’s been in an auction or like a raffle, or like, these are, that’s a fun game to play. Most people can have a good time if they go to a museum and just look, even if they don’t know our history. They’re like, Oh, this is beautiful. I can at least appreciate the beauty. And you know, it’s also kind of fun to, you know, feel like you’re supporting the arts like by even people maybe have never bought a piece of fine art, but maybe they bought a piece of art from their friend just because they want to support passion in the hobby. And so it is sort of individual components. I are very fun, I think very relatable to everybody. And I thought it was interesting that there are collecting itself was not very fun or relatable to most people. And so I said that was kind of like my background in are wondering about this. And then, kind of at the time, were thinking, you know, I saw what’s happening with CryptoKitties, I was like, Oh, I think you could build a huge digital art market taking a lot of these components. But if you make sort of like the onboarding and the user experience a lot better, you can open this up to a lot more people, because most of my friends have never considered themselves art collectors, even though they could be if they kind of have the right hand holding and onboarding into the into the process.
Eric Hornung 25:49
We’ve mentioned this term a few times. And I think you’ve kind of alluded to it a little bit. But I have a dumb question. What is digital art?
John Crain 25:58
That’s, that’s great question. So it’s just art that’s created digitally. So this could be you know, a doodle on your, on your iPhone, maybe you’re just using a drawing app could be using something like illustrator or blender even you there’s a lot of interesting 3d art, animation art on superare. It’s just something that’s created in the digital realm. And there’s some interesting philosophical questions like, if you make something in Illustrator, and then I print out something on a piece of paper, like, what’s the original, because originally, I created a digital object. And I have a physical copy of it. And so there’s some, you know, fun, artistic philosophy and debate around what is the piece of art that is just art is created digitally to start with.
Jay Clouse 26:45
I’m looking at the gallery or the market right now on SuperRare, and so much of it is there’s like an interactive element to it. Which makes sense to me, because that adds a level of almost authenticity. like it’d be difficult to just copy this and be like, this is mine, this digital asset thing, because it’s like, well, yours isn’t actually moving or changing colors are flashing in this way. I’m thinking still about the physical art world. And I think a lot of people get into that, because there’s like an element of tangible illness, and also status, like people can see this thing that they own because it’s on their wall. What does that world look like for digital art collectors? They care about status? Do they care about displaying this? Where do they display this? Like, what’s the motive?
John Crain 27:32
Yeah. So if you if you click on one of the one of the pieces that are in the marketplace, I think this is interesting to. It’s less well known. And instead, actually, our CTO, Charlie, he’s my younger brother, but he actually worked at a business called Arc-net. And Are you guys familiar with Arc-net? Yeah. So there’s this interesting business around art data. And so if you want to know, what was the average price of all the Picasso’s that were sold last year, it’s not actually something you can google gallery, there’s no requirement to report any of this information publicly. And so they have these kind of aggregators who have relationships with galleries who do have this information, you know, if you want to know, like, Okay, I’m gonna make a big investment in this Picasso, I want to know, like, Is it the ballpark appropriate range for this type of art. And what’s interesting with this kind of, like NFT art is getting created in like a public way on blockchain is you have a lot more kind of like free public data about it. So if you go to one of those art pieces, you can scroll down and kind of see the history. And so every interaction gets recorded, and is, you know, pretty trivial to go ahead and audit. So you now have this closed ecosystem kind of being opened up. And anyone can go see like, oh, how many pieces of AR? Is this artist creating on average? Or, you know, how often are people buying it? Or, you know, so there’s this play, I think the art data industry isn’t very sexy, so no one really talks about it. But it’s a huge component of the art market. And so what’s interesting here, too, is you’ve kind of taken that it’s now open and free. Anybody can start scraping this data aggregating it. So that’s so one component there is if you relate it to the social status and location around like, you know, why would you do this? If you buy a piece of art, you’re now forever in the history of that piece of art. So you’re like, you’re cementing your record in history with this specific piece of art. So that’s one fun component. And then, as far as the display solutions go, I think this is actually a pretty big opportunity. It’s a pretty fragmented landscape. So you guys can see I have an iPad behind me. I have a bunch around the house. Those are one of my favorites. You can move them around. They’re easy to charge and swap out. But there’s also like the Samsung frame is a company called Narrow. And so there’s a there’s a lot of work being done. I think, over the past 10 years, just with screens getting so much cheaper, we’re gonna see a lot more happening around. And like in home display and display specific just for like design for art. We’ve been doing some experimenting, we’re looking at recently Nvidia has a, Are you guys familiar with the Raspberry Pi, sort of like a cheap open source computer, Nvidia is making a similar one, but they’re putting a nice graphics card and like a big heatsink on it. So now you could have like, you know, potentially art that looks, maybe we have a recording of it on the SuperRare website, once you own it, and it’s running in the display now looks totally different. Because you have this superpower graphics card. It’s kind of designed for the art piece itself. And so I think it’s still pretty early days there. But there’s a lot of fun. We’re having a great time and have experimented with new, but.
Jay Clouse 30:57
This is so fascinating to me. And I have so many questions that I just don’t even know how to articulate them. Like thinking about the art world again. There’s such a big role in collectors and curators, like when a collector who is known to be a collector of good art buys something from an up and coming artist that suddenly places that artists in a new category where all of their artwork is now more valuable. What’s the analog in a digital world? I mean, I love what you’re saying about the history because it sounds like you can start to create a reputation for yourself as a digital art collector. And that will place value on these things. But like, what makes a digital piece valuable right now in the absence of like a long term history where people have just agreed that this is an artist that we find to be valuable?
John Crain 31:46
That’s another great question. You seem to only ask great questions, Jay. So yeah, it’s so the story, I think, in my mind, when I think about you, like, you could debate the philosophy of what is our kind of all day long, but for me personally, it’s, it’s the narrative in the story. So it’s about, you know, who is this artist and like, Where were they, when they get the idea is directed to create this piece of art. And there’s a lot of interesting things there. And so one of the things we’ve done to kind of help make that information more digestible is we recently launched is like, at the beginning of the year, an editorial to kind of help tell that story. So we have new artists, studio tours, or just, you know, maybe a whole piece on a specific piece of art, like what are the deeper, deeper meanings, the layers for that artwork? And that’s it that that goes a long way. Right? It’s like if, you know, sort of like the emotional experience like, Where was this artist? Where’s their head sit, like, where was their head at while they were creating this piece, it can add so much more meaning and you’re, you know, maybe the piece itself is, you know, visual, I find this interesting for like, my own art collecting sort of patterns, which I’ve just been fascinated to watch. There’s certain like, a kind of, there’s this like, type of like, terrific, like glitch are or like weird ayar is like, not at all, like beautiful, the traditional sense. Like it’s not soothing to look at. But it’s fascinating, like, I just want to own that piece. It seems so captivating for me. And like one of the artists x copy pieces kind of dystopian future glitch artist. And I just like the message, they’re super interesting around like, you know, it’s kind of like black beer as if, you know, if you had it on your screen on the screen in your home for too long. Like, you know, you might have a seizure. It’s not like you want to look at it all the time. But like, I like to look at it occasionally. And so it’s, I think that’s also interesting to like, the the depth of collectors psychology is interesting. And collecting for decorative purposes, you know, who want to have something pretty on the wall is kind of different than like, Oh, this is historically significant for me, or maybe for art history, or isn’t a pretty big difference there.
Jay Clouse 34:00
What is the role of the artists, existing audience play in this? Like, does most of purchases driven on the marketplace right now come from the audience, the artists already having an audience and saying, this is where I’m selling my pieces. And they’ve already built a history of story and narrative with these people? Or are you guys building your own audience that is saying SuperRare, is the modern digital artwork collector, like, in a way, this is like a digital museum? Right. So what does that look like right now?
John Crain 34:32
I’d say the majority of the collectors kind of discover the artists through SuperRare a lot of I mean, we have there’s a whole wide range. So you know, some of the artists have more traditional art backgrounds. They might, you know, have a gallery that they work with and are participating actively in kind of the contemporary art market. And then other folks have been kind of participating in these, you know, just virtual communities of people who appreciate our nibin you know, Making gifts on Tumblr for 10 years, but never really, you know, there wasn’t a clear path to like, Oh, I’m gonna just go to our basil next year, and I’m gonna bring my gifts and you know, people are gonna buy them. So for them, these are people who truly have, you know, they have a craft, they’ve been developing it for a long time, but maybe never considered. Those do that they didn’t consider the art something that you could like a piece of fine art that somebody could buy. And so they’re not really bringing a collector base. But there is a pretty deep collector base on SuperRare. So it’s a it’s a great partnership.
Eric Hornung 35:37
What do you get when you own a piece of digital art? And I guess to maybe give you a little bit of where my head’s at here, I get that on the blockchain, you’re you are the authorized owner of that piece of art. But I guess I’m comparing it back to the physical world. And if I own a painting, it’s hanging in my house, no one else can own that painting. No one else can use that painting. But if I like, go to the image address, I can see the things that are currently on the marketplace. And I could use that maybe that’s theft? I don’t know. So if I just committed that, sorry. But I was just curious on like, what’s the difference between owning a piece of digital art and not owning, but using a piece of digital art.
John Crain 36:24
So I kind of think about the NFT is like a certificate of authenticity. So I think what you’re really buying is this certificate of authenticity. So one of the cool things about them, how it’s structured in SuperRare, is we don’t create these, it’s actually the artist to create this visual object that’s like a certificate. And they, so they digitally sign a message, they tell you the blockchain, like hey, I’m gonna make this piece of art. This is what the art file is, here’s a bunch of other information about it. And so this is sort of like the artist authorize original. So I think about it kind of like, I don’t know, maybe a baseball card is like, you can photocopy a baseball card, or a Pokemon card, you can still play the game of Pokemon with completely photocopied versions. But having like, you have one that was signed by either the manufacturer or the artists themselves, and so you’re really buying is the certificate of authenticity. And then it comes with some rights. One of those is you can resell the certificate. So even though you might have a copy of an image, that’s not actually where the value is the value so accrues to the certificate, that is, you know, something, somebody can look at audit history and say like, Oh, yes, this is the real one that was created by the artist.
Eric Hornung 37:49
And if I own that certificate of authenticity, do I have like, right, or recourse to go around the internet? And say, this can no longer be up there? Because it’s not the original? Or is, how’s that work?
John Crain 38:03
Yeah, so it’s, you don’t basically you’re just buying a collectible. So like, when you buy a piece of art, from an artist, like you’re not buying any IP or other rights, you’re basically just buying this one thing that you can have to kind of enjoy as you’d like. But you have no, it’s not like IP marketplace where it’s like, Okay, I see this somewhere else, I can go attack them, that would be kind of still in the realm of the artist who owns all the IP around, that these are.
Jay Clouse 38:32
In the art collecting world today. It’s a bunch of rich people who have like, nothing better to spend their money on. In this world, you have to have some level of technical knowledge to even get a wallet with Ethereum in it to make a purchase. And it seems like that old world I’m talking about isn’t going to be quick to adopt that. So who are the customers here? And like, how deep are their pockets? Like is this really just like a? I mean, I presume this I feel like a lot of people made a lot of crypto money during this run up. A lot of people lost a lot of crypto money. Is this a place right now where people who made crypto money are spending some of their crypto money?
John Crain 39:12
Yeah, so it’s definitely a place where I’d say, you know, 80% of the collector base is people who come from the crypto ecosystem. And then the other 20% is, you know, more kind of like cutting edge experimental collectors. So these are people from traditional art, who are who are jumping through all the hoops to get a wallet. You know, they kind of see this is an interesting point in time. And, you know, potentially is, you know, in our mind, this is kind of like, fueling this revolution in digital art collecting that hasn’t really happened before. And so right now, it’s mostly Yeah, 90% for folks. And a lot of what we’re building over the next year is going to be kind of like making that a little bit easier. So you don’t need to, you know, you could use your own bargain a slight instead of already having to have either maybe go through possibly going days or however you get it.
Jay Clouse 40:08
I had so many questions just about like, how this world works, because it’s like such a new different concept that I haven’t even gotten into questions about, like, how this business works for you? Are you guys focused on? Like, what what is the metric that’s important to you guys right now? Is it velocity of transactions? Is it the number of items on the marketplace? Like what moves the needle for SuperRare the company to get this to be more of a mainstream thing? And is that even what you care about?
John Crain 40:36
I’d say one of our main metrics is just the kind of like average number of collectors, obviously, where it’s a marketplace business. So volume is important that affects that affects the bottom line the most. But we kind of view this is, you know, 10 years from now, there’s going to be a vast number of digital art collectors. And so having the kind of like, looking at the is that growing, right, is that growing at a healthy pace, and super important for us. And then also thinking about, you know, both sides of the marketplace, I think that’s been one thing, like is a first time marketplace entrepreneur, thinking about supply and demand, you don’t want too much on either side. And so we’ve tried to be really thoughtful and the speed at which we’re bringing in new artists to kind of match in growth and collectors. Does it still, you know, it’s uh, the the market, I’d say, is pretty nascent. It’s not, it’s not huge at this point. It’s, you know, we’re seeing the trends look great. Right? The the numbers, we actually just crossed, I think artists have earned just over $1.6 million on SuperRare. So that’s pretty Yeah, it’s pretty exciting. Most of the people who weren’t on there before, severe is.
Jay Clouse 41:53
Do you how do you think about trying to convert old artworld money people and collector people and curator people into the digital space versus trying to reinvent it from like the ground up?
John Crain 42:06
Yeah, I kind of think about it like, yeah, I think one thing that’s super fascinating is right, like, it’s like, the shoe market, I sort of think about it, and there’s the you know, people are like now like fractionalized ownership of your Nike’s. And you can sort of think about this, it’s like, the shoe is almost this new type of canvas. It’s a it’s a piece of art that people really appreciate as a lot of culture. And it was a ground up thing, and you now have the art world starting to like pay attention and kind of like, blast certain, you know, they’re like, Okay, well, that’s actually interesting. You know, we thought you were silly. And this was a joke before, but now maybe it’s real. And I think that’s how this is playing out, is artists are getting really excited. They’re doing a lot of experimentation. And ultimately, and so they’re either building a new collector base, and we’re starting to see some people from the more traditional art world, kind of take notice and say, Okay, I thought maybe this was a joke, but there’s actually a lot of beautiful, interesting art being created. And so it’s going to be a new kind of collector base. But eventually, you know, I kind of think about, like, like Bitcoin with bankers also, right? It’s like, first, it was crazy. cypherpunks out on the fringe, and slowly is more mainstream. And now, you know, you have the chairman of the Fed saying bitcoins, a store of value.
Jay Clouse 43:24
What about the role that SuperRare plays? Like, ultimately, you’re talking about supply and demand, you control? What supply is accepted onto the platform? So how do you think about your role in determining like, what is art that’s even valuable enough to be on the platform, I feel is like a heavy responsibility.
John Crain 43:44
It is, it’s somewhat controversial. There’s lots, you know, you can hang out in the discord. There’s always lots of discussion around this. And so we, you know, kind of early on, we made the decision to, we sort of felt like there are two paths we could really happily curate to start or have it be totally open. We decided to have a curate just because we didn’t want to spend a bunch of time building like tools to prevent scam and like, you know, if something’s totally open, yeah, it’s like, who knows it’s gonna be up there. So we’ve kind of continued to be pretty heavily curated. There. We have a curation team, who doesn’t include me anymore. So we brought on and wrong is kind of like our head curator right now. And, you know, we try to be pretty open, but at the same time, be mindful of like, do we think this is going to be a good fit? Is artists going to have a good experience? when they join? They’re sort of like, Is it a personality fit or not, you know, it’s still a pretty tight knit community. And so, you know, it’s like, is this person who they are who they say they are, so, you know, we have a pretty long vetting process, we view the artists as partners, we try to get to know them, you know, have video calls like this with them. And so but yeah, it’s very challenging and yeah, I don’t know, if you guys are familiar with fair use as a concept. And for our listeners who aren’t in art, it’s, you know, sort of like, if you took a picture or something and you own IP of the picture and then like, you know, I put a red dot in, the middle, I might be able to claim this is, you know, a commentary on communism, and it’s actually my art and I can go sell it to somebody, and you have no claim over me because I’m making kind of artistic commentary. So it’s a very gray area as far as like, there’s a lot of interesting things there. And so, you know, we kind of try to be careful and let people know, like, Hey, this is, you know, this is a small ecosystem. I think social commentary and fairies is really interesting. But also, we’d love to not get sued out of existence, while we’re small. So, yeah, you do kind of have to be thoughtful about who was coming on.
Eric Hornung 45:52
How do you think about your transaction fees and pricing on the platform? Jays talked a lot about the kind of historical artworld. And there’s just massive transaction costs there. And when I think about crypto, I think there was this promise of very low transaction costs, but then you had Coinbase, charging six plus percent on every transaction to get people in and out. So how do you think about what a fair transaction price is?
John Crain 46:20
Yeah, so right now, so we have this kind of like a two tiered component is like the primary market, which is the first time an artist sells a piece of art in the secondary market would be collector to collector. And in the kind of contemporary art world, the fees are super high, or they can be like 40, to 60%, almost, which, you know, maybe the gallerist has like a physical store, and they’re paying rent. And yet they’re, you know, doing a lot of work to sell the piece that is the very high right now with SuperRare, we take 10 or 15% Gallery commission, which by the idea of a fair fee is like, we should be able to pay everybody and we kind of run the servers. And so that’s, you know, based on the current volume, kind of what’s fair, I think long term ideas, volume goes up quite a bit, and fees can come down. Yeah, it’s a good point. And I think that is where we’re headed. Like, you know, volumes are going up. And so eventually, these can come down. And one thing we’ve been talking about, too, is, it’s pretty interesting that you have a platform like Ethereum. And, you know, what does it look like if the community kind of determines the fee structure? Right, like, you know, we have the artists royalty on secondary sales is 10%, which is, yeah, that’s, that’s a big chunk of the sale, we added a 3%. And then you actually, there was a huge discussion within the community, kind of like collectors and artists talking with one another. We sent out a bunch of surveys did a bunch of interviews. And it turns out, people love the patronage aspect. So you know, a lot of collectors wanted the royalty to be higher, I think, eventually, we can have a model where it’s kind of like determined by the community itself.
Jay Clouse 48:04
Similar point, you guys are incentivized to some degree to have more transactions. And so pricing is a big part of transactions. I’m looking at the marketplace, some of these things are priced in like, the equivalent of millions of dollars right now. And they’ve been sold before for like 200, you know, $200? So I’m not sure what what the decision was for some of these artworks to price that high? Do you feel like you need to play any role in helping the owners price things, quote, unquote, appropriately, so that there are more sales?
John Crain 48:39
I don’t think I think, you know, right now, the majority of sales happened in the primary market. And a lot of you know, I think a lot of people put those up just to be ridiculous. And it’s also like a signal that like, Hey, I really value this, like, Don’t even try to make me an offer. on SuperRare, you can kind of make offers at any point that you want. And so there’s some, you know, a communication, they’re communicating through the price of the art almost.
Jay Clouse 49:07
Even from a marketing standpoint, like I sorted by price highest, and if they want to be at the front of a sword, they can do that by pricing the highest.
John Crain 49:17
Yeah. Yeah, it’s, I think a lot of the a lot of the collectors kind of know, you can Yeah, there’s some stats, you can go like, sort through and see, like, you know, okay, here’s how something is trending so they can kind of get an idea of what a fair price is. But I think ultimately, we’ve seen things sell at numbers were like, Wow, I didn’t think you know, it was December was the first piece of art sold for $10,000. And the month before, the highest piece that it sold is $1,000. And I was like, wow, as you know, has gone extremely fast. And so I think the interesting thing about artists like is really hard to price and it’s kind of in the eye of the beholder. There’s certain pieces in my collection read just couldn’t offer me anything because it has sentimental value. So it’s, you know, maybe there would be things like, I’ll give you $10 million for this, but it’s it’s pricing ours. Pretty interesting.
Eric Hornung 50:13
Do you have any collectors? Or have you seen any indications of people financial realizing the platform, like turning it into a fund collecting outside fees and coming in and making purchases? Or is that something that hasn’t crept in yet?
John Crain 50:29
So it hasn’t, yeah, it’s exactly like the crypto kind of greater crypto community loves finance and things like this. And so there’s been lots of discussion around it. I think nobody’s that had nobody’s actually done it yet. I think over the next kind of like, probably two years, we’ll see more stuff like that happening. We’ve seen a couple other people too, like fractionalization. So like, kind of like selling pieces of an NFT that they bought? Which is interesting. I think eventually, you know, we’ll see more of that. I don’t know. Yeah, I think like, our role is more more about the art and like, you know, like curating a good experience for reviewing the art. So I don’t think that’s something that we’re gonna get heavily involved in. But I think people are thinking about stuff like that.
Jay Clouse 51:17
Do you think that this is an off the wall question. Do you think that the future of museums are physical museums that are displaying digital art, or digital museums?
John Crain 51:29
I think both. One thing that’s been interesting, and I think I forgot to mention we talked about display is a lot of collectors are building kind of elaborate VR exhibition spaces. And so that’s something we do we try to do an exhibition every month, it’s usually in this browser components. If you don’t have VR, you can still go check it out. But it’s also pretty amazing. If you do have Oculus. To check it out that way, I think long term that you like the VR viewing experience can just yeah, it’s sort of like after the imagination, right? Like physics doesn’t even play a role. So you can build super crazy viewing experiences. But at the same time, having a digital display in a regular museum kind of helps bridge the gap for, you know, people who don’t enjoy the experience of like, looking into VR. So I think the kind of in home or like in museum digital display, helps bring the mainstream to virtual art. And then the really interesting kind of like forward thinking stuff is experiences in like full on VR, that we haven’t even really thought of what they are yet.
Eric Hornung 52:35
I feel like so much of that’s the space can be we haven’t even really thought about what it is yet. Who do you look to? Who do you talk with, for inspiration and just like thought about creating the future of industry?
John Crain 52:48
I mean, one thing, one place I draw, you know, like, I I’m reading snow craft right now, like, I think there’s a lot of this sort of like the old sci fi, you know, I think there’s a lot to draw on from there. Yeah, also, like a, you know, a lot of artists do, like, I think the artists themselves are kind of like pushing the boundaries in a lot of ways. Like, they’re like, what if we did this, you know, like, what if I have a piece of art that’s based on code, like, can it actually be have a viewing experience, it’s like this. And so they’re actually pushing a lot of it forward, as well. So I kind of like part of it is like, well, I’ll get out of the way, kind of let the art happen. And that can kind of dictate, you know, the tools that we’re going to build.
Jay Clouse 53:28
Well, we’re we’re up on time here, John, this has been fascinating. I could have asked a ton more questions just about like reinventing this industry. If people want to learn more about you, or SuperRare after the show, where should they go?
John Crain 53:40
Yeah, so if you want to get in touch with me, DMS are open on Twitter. I mean, @SuperRareJohn, if you want to learn more about SuperRare and digital art collecting got a SuperRare.co we have a link to the discord in the footer. Yeah, come hang out. The discord was there. I’m talking about art.
Jay Clouse 54:04
Alright, Eric, we just spoke with John Crain of SuperRare and you’re right, I took the reins, and I asked a lot of questions.
Eric Hornung 54:11
Yeah, I just kind of watch your run. Honestly. It was like sitting in someone else’s podcast interview.
Jay Clouse 54:17
Which, you know, it’s kind of nice, I’m man, I am so fascinated by this business. And I almost said I love this business. I think I do. I think I do.
Eric Hornung 54:26
Don’t commit yet.
Jay Clouse 54:29
I love the idea of the business. I don’t know how I have no idea how to predict how successful this will be or not. And if I invested in a business and wasn’t successful, I probably wouldn’t love that business. But I love what this company is doing. And I am fascinated by what they’re doing.
Eric Hornung 54:46
This is gonna sound bad because we just had their whole interview with them. And I think logically, I understand it, but I don’t I don’t get it. Maybe that’s just me, maybe like I’m not the person but like there’s something that’s like I’m sure that like when you told ever heard the story about Sara Blakely when she went out and like, tried to get investors for Spanx.
Jay Clouse 55:09
Eric Hornung 55:10
And she pretty much pitched exclusively to like old white men. And they were like, well, I don’t get it. That’s how I feel here. I just I just I don’t, don’t get it.
Jay Clouse 55:19
And I think that’s a challenge, because I’m not convinced that this market appeals to your typical art collector that people who quote unquote, historically get it. So if they’re trying to capture a different market, and expand the market and make this more accessible, and kind of build their own idea around what art collecting is, people like you need to get it.
Eric Hornung 55:40
And I want to, I want to get it. Like, it’s not that I’m, like, standoffish about it. I just experimental art in general, is something that I’m fascinated by because I don’t understand how people value it. How like, I have some friends, like, who live in Brooklyn when I lived in Manhattan, and they would show me stuff. And they’d be like, how sweet is this? Like, this is the coolest thing ever. I’m like, I just a guy standing in a road. I don’t get it like,
Jay Clouse 56:03
Yeah, what I mean? Like there’s there’s an inherent value in anything that is scarce, if there is demand for it.
Eric Hornung 56:12
Jay Clouse 56:12
Right. And that’s the difference. I had the same kind of thought when CryptoKitties came out. I was like, I don’t I don’t I don’t care. Why do I care that there’s this one kitty that looks like this? Why do I want to collect that? And so the key to all this, I think is there’s has to be a lot of demand for this for the scarcity to matter. And that’s the role that curators play in the art world. They are the ones who say, this is valuable, which creates demand in the market for people who are looking for a signal as to what is valuable. Yeah. And so the question is, like, how much of the traditional art world are we going to recreate in terms of like, the value chain, or the players involved here to generate excitement in value here in also outside of that, like the demand and the traditional art world is from people with a lot of means. So that really drives the value and the prices. Now I’ve been following super rare since this interview has been a little bit since we did the interview. And I see that what they post, and it’s like this was just collected for several thousand dollars. And just like what, how and why I don’t get that I love this, this is beautiful, I would not pay that kind of money for like a digital piece of artwork. But ultimately, like it just comes down to the story that the purchaser wants to believe or has for themselves about the piece and what it’s worth to them. So yeah, you know, ask them like is this is this appealing to a market where these people made a lot of money in crypto already, and they just like, have money to spend, they said kind of a lot of a lot of that is, but for this to go more mainstream. I don’t know. Like, we’ve got to, we’ve got to really believe in the story and the scarcity and understand why this is valuable and to whom. So that’s that’s why, you know, at the beginning, I was like, I’m a little hesitant to say that I love this business, because I don’t quite understand it as a business. But it’s so different. It’s so unique. It’s one of those things that I kind of wanted, I would want to take a chance on, you know, because it feels like if it hits it’ll hit and they’re in a really good position to be in the center of this universe, because they’re kind of first movers. But yeah, it feels like you have to really create the market.
Eric Hornung 58:21
Are there other analogues of things that you own? And don’t show off? Like when I’m thinking about collectibles, and art and all that, like you buy a painting and it’s in your house you and then you can tell people Hey, look, I have this painting and let me tell you how awesome it is and how awesome I am because of it or like you buy a pair of Jordan ones. And that’s better than a pair of Jordans sevens, which are you know, I don’t actually know anything about Jordan. So I have no idea. I’m just assuming ones are the best. Or you buy like a certain release of a Patek Phillipe and it’s just like, now I have this watch. And I’m going to wear this watch, I’m going to wear these shoes. Maybe you don’t maybe you just keep them I’m not sure. But like, Is there an analogue of things that you buy and don’t show others?
Jay Clouse 59:09
I feel like to answer this question, you got to think about status. In the art world, this type of thing, like you’re trying to signal your status or your taste, you know, like you wouldn’t necessarily need to show this off. If you knew that the people you cared about caring about your status, we’re looking at the ledger to say, Oh, this is owned by this person.
Eric Hornung 59:31
So it’s social. That might be enough for people if they knew that people were looking at who owns it. So it’s like, Ah, I’m going to show up there I’m going to get I’m going to build some status or credibility with people that I care about. to bring that out of a ledger, though. I think he mentioned having these like 3d museums, because you can create a virtual world have all of this artwork, and your name is the owner could be on that virtual world as people are walking around.
Jay Clouse 59:55
That’s interesting to me, because you could build you could build your own reputation. As a collector or curator by creating your own exigible exhibits and museums and collections, what’s also opened up about this is you can have like wildly unique pieces here that create a very different experience. Like we’re not just talking about, yeah, you have the static visuals even have some like 3d visuals and animated visuals. But this is going to expand into like, immersive environments and worlds, I’m sure with AR and VR coming like, you can have large pieces of art that, you know, maybe you are creating your own digital museum that you charge people to come and see and experience. Like there could probably be business models built out of this, too. It’s just like, it’s so big and so expansive. And that’s got to be funded by immediate purchases, probably, you know, like,
Eric Hornung 1:00:49
Yeah, I’m interested in like future royalty arrangements as well. Because as you were talking, my brain just kind of went into a future state where, instead of playing Call of Duty with a controller, I’m playing Call of Duty in a VR environment, why can’t there be art that’s posted around there? Why can’t there? Why can’t like I sell that into future movies that maybe are immersive movies, as opposed to how he experienced them today?
Jay Clouse 1:01:15
I don’t know. A lot of value is also derived from the artists themselves. And that’s just going to take time, that’s like a lot of time. And the thing is, it’s not historically, it hasn’t really been like, any type of meritocracy like museums, when they decided what to put into different areas, the museum basically defined like, what is the the canon of value in this impressionist style of painting, you know, like, museums, basically, anointed artists by what they chose to display. And so there’s going to be some analog to that now, too, but could be, you know.
Eric Hornung 1:01:49
Jay Clouse 1:01:50
Decades, like, frankly, some artists will probably die. And that will make their work more valuable. And that just won’t build the type of history that traditional art does for a very long time.
Eric Hornung 1:02:01
Does it also democratize that taste making process? Because you could have Jimmy who’s a 12 year old who just happens to kind of like with stock x, where you had that kid who was like, he just was really early on this sneaker game, and then he sells curated shoes to all the celebrities and rappers, you could have something like that here, I guess, where it’s you don’t have to have credentials to do it. You just have to have taste.
Jay Clouse 1:02:24
I think yes. And, you know, that’s, that’s the second step after you build some sort of following for some reason, this can democratize it, but that person is also going to have to build their own following. You know, I think historically, art collectors or tastemakers didn’t have 10s of thousands, hundreds of thousands of followers, quote, unquote, they had a few dozen of people and power and status and authority who were like, these are the guys. And that’s what mattered. I think this is a different model, where those people do need to have a lot more status. And with digital connection, like they’re gonna have way more followers. And I don’t know. So all of this is like, super fascinating to me, and I could talk about it forever. But I have no idea how to value it as a business.
Eric Hornung 1:03:08
When we look at the business model itself, if we can make the assumption that people want to buy and people want to sell, and people want to create digital art, then it’s a marketplace business, and it’s potentially infinitely scalable. So just like looking at Set Scouter, it’s a niche marketplace. And we love that business, because it makes sense. There’s, there’s buyers and their sellers, and there’s creators. So to me, like from a business standpoint, if the underlying proposition holds that people will demand and will create this stuff going into the future at a increased rate. I love the business model. It’s a simple marketplace, business model.
Jay Clouse 1:03:45
And marketplaces are often kind of like a winner take all. So if they’re first movers, they built the infrastructure, and they’ve like really started to build their name. If I’m an artist, I’m going to sell on SuperRare as opposed to some other marketplace, and that’s just going to perpetuate.
Eric Hornung 1:04:00
You’re gonna get the highest price on SuperRare, as opposed to some other marketplace that’s even more niche even smaller, you know, make sense to me.
Jay Clouse 1:04:07
Alright, Eric, well, what do you want to see from super rare the next 6 to 18 months,
Eric Hornung 1:04:11
I’d probably want to look at the incremental rate of growth of GMV So gross merchandise value. How’s that increasing both in aggregate, so, you know, going from zero to $1 million of sold items probably took X amount of time, one to two takes y two to three, take z, I want to see those XY and Z shrinking over time, because that means we’re going to see more velocity of sales, which is going to talk to me about that increased demand. I also want to see an increase in average merchandise value, because that tells me that there’s more bitters coming on the platform. So if GMV is going up, and we have 100 items that are sold for $100 each, it’s a lot more interesting. If the next quarter, there’s 120 items sold for $110 each, because now we’re saying, okay, both of those trends are heading in the right direction.
Jay Clouse 1:05:09
Those are really smart answers. I, I’m interested in seeing, like, I want to know more about the different stakeholders in like an eventual digital art universe. Like, are there curators like what are the what are the roles that we should be worrying about? And how are they growing? But honestly, I just want to see more art on their Instagram. Like, I love it. Just keep those on Instagram i’m happy.
Eric Hornung 1:05:32
Yeah, you’ll keep sharing it to your story. I’m sure.
Jay Clouse 1:05:35
You know, Eric, one thing we didn’t talk about was John to the founder.
Eric Hornung 1:05:37
Well, that was a foregone conclusion.
Jay Clouse 1:05:39
The interesting. So I love John’s background in crypto and blockchain. I think that makes a lot of sense for this business. JOHN doesn’t have an art background. Do we care about that?
Eric Hornung 1:05:48
Um, I don’t because he’s in our interest, obviously, I think that, I mean, maybe maybe it would be better if he was deeper into this space. But it sounds like he has friends in the space sounds like by being this person, he’s probably has the connections now to the space. So it doesn’t give me a lot of pause. I do really love that. He was kind of in the heart of the Ethereum bubble in Brooklyn. And you know that he’s probably flipped through a couple hundred ideas about what to do with Ethereum And this was the one where he was like, I’m running with this.
Jay Clouse 1:06:22
Yeah, I think I think that’s probably the more scarce skill set here. If the art background was a problem, that seems like something you could hire for, or get an advisor for. And I think it’d be really interesting,
Eric Hornung 1:06:35
Or get some investors who have connections in the art space.
Jay Clouse 1:06:39
Well, dear listener, we’d love to hear what you think about this episode. You can tweet at us @upsideFM, or email us email@example.com. Thanks for listening, and we’ll talk to you next week. That’s all for this week. Thanks for listening. We’d love to hear your thoughts on today’s guest. So shoot us an email at firstname.lastname@example.org. or find us on Twitter @upsideFM. We’ll be back here next week at the same time talking to another founder and our quest to find upside outside of Silicon Valley. If you or someone you know would make a good guess for our show, please email us or find us on Twitter and let us know. And if you love our show, please leave us a review on iTunes. That goes a long way in helping us spread the word and continue to help bring high quality guests to the show. Eric and I decided there were a couple things we wanted to share with you at the end of the podcast. And so here we go. Eric Hornung and Jay Clouse are the founding parties of the upside podcast. At the time of this recording. We do not own equity or other financial interest in the companies which appear on this show. All opinions expressed by podcast participants are solely their own opinion and do not reflect the opinions of Duffin Phelps LLC and its affiliates on your collective LLC and its affiliates or any entity which employ us. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. We have not considered your specific financial situation nor provided any investment advice on this show. Thanks for listening and we’ll talk to you next week.
Interview begins: 6:56
John Crain is the Founder and CEO of SuperRare.
SuperRare is a marketplace to collect and trade unique, single-edition digital artworks. Each artwork is authentically created by an artist in the network, and tokenized as a crypto-collectible digital item that you can own and trade.
Each artwork on SuperRare is a digital collectible– a digital object secured by cryptography and tracked on the blockchain. That’s just a fancy way of saying they’re provably scarce items that can be collected, and that hold value just like cryptocurrencies like ether and bitcoin.
You can think of SuperRare like Instagram meets Robinhood. A new way to interact with art, culture, and collecting on the internet!
- Getting to the world of crypto 10:45
- Difference of Bitcoin and Etherium 13:31
- What’s does SuperRare offer 14:58
- SuperRare 16:28
- Crypto Kitties 20:02
- Art world and Technology 23:00
- What is Digital art? 25:49
- Collecting digital art 26:45
- Value of digital art 30:57
- Audience of SuperRare 34:00
- Certificate of Authenticity 35:37
- SuperRare as a marketplace business 40:36
- Transaction fees and costs 45:52
- The future of art/museums 51:17
This episode of upside is sponsored by Ethos Wealth Management. Managing wealth with an eye toward the future demands vigilance and skill in today’s global economy. Over the years, Ethos Wealth Management has worked with clients and their other professional advisors – including attorneys and accountants – to create comprehensive wealth management plans designed to make the best use of their wealth today and help ensure its endurance for future generations.
They can do the same for you.
Visit upside.fm/ethos to learn more.
Want to share information about your company, or an opportunity with the upside audience?
Book a classified advertisement and your advertisement will be read in an upcoming episode of the show.
Classified ads are priced at $100, and are:
read by Jay and/or Eric on upside
linked from the show notes
linked from this website, upside.fm