Durand-Ruel: The Rise of the Modern Art Dealer And Why The Modern Venture Capitalist Should Pay Notice
Nussbaum April 2015
I’d like to suggest that the
roles of the art dealer and venture capitalist as curators, patrons and social
mobilizers are essentially identical.
Further, I’d like to suggest that the process of “making” art today is
essentially identical to the process of “making” startups. The gallery and the incubator are singular spaces
specifically designed to maximize volatility within a network of makers,
gate-keepers, investors, marketers and, ultimately consumers.
Each of these players
navigates this larger volatile creative space inside a smaller buffered and
protected space, harnessing the volatility. Guiding the players at the center
is the Curator/Patron—the art dealer or the incubator VC (angel
investor/venture capitalist). Dressed in
the ceremonial garb of the “trusted friend” or the “knowing insider,” the
Curator/Patron has personal ties to all the players inside the network and is
primarily responsible for “shaking the network” to boost the speed, frequency
and magnitude of the volatility within its space. The Curator/Patron personally “makes the
There are two goals to
“amping up the volatility.” The first is
to maximize “disruptive innovation” and generate the unique, the original, and
the most valuable. The second is raise the price paid for the new value,
whether it is a Monet or an AirBnB IPO. The idea then is that the Gagosian Gallery
and Kleiner Perkins use the same process to spin creativity and value out of
man-made volatility. Innovation and creativity then, are social, not
technological, processes that can be built.
Let’s begin with Paul Durand-Ruel,
who, in the late 19th and early 20th centuries, invented
the role and practice of the modern art dealer. There is a wonderful exhibit in
the National Gallery in London on “Inventing Impressionism,” which describes
Durand-Ruel’s emergence. It begins with rejection—the rejection in 1863 by the Paris Salon, sponsored by the
French government and the Academy of Fine Arts (the established Old Money/Old
Authority) of a new school of painting—Impressionism.
painters—Degas, Monet, Manet, Cezanne, Pissario, Renoir, Sisley and others—set
up with their own Salon, the Salon de Refuses, which drew ridicule from the
public, the press and the art establishment. Few, if any, paintings were sold.
Enter Durand-Ruel. His father
was an established art dealer in Paris and as Durand-Ruel took over the
business, his curatorial reputation was significant. He made that reputation by supporting the
immensely popular and successful 1830 School of painters in France. Durand-Ruel was the first—and only—art dealer
to add his reputational and financial value to the new Impressionists—but it
took two decades for him and the painters to succeed. He had to overcome
opposition from the public, official artistic circles and established
And he had to take risks. He
was called “an unrepentant risk-taker” and a “speculator” in his time (he went
through two bankruptcies). Not only did he play the role of Patron himself, he
established the first private, global network of collectors to further leverage
the buying and selling of art—making a new modern market and adding fresh new
volatility to the art space.
Durand-Ruel,as a private art
dealer, stood in place of the Paris Salon, as a curator of the new school of
art. He built a private network of New Monied Collectors, the rising
industrialists, financiers and merchants of the late 19th and early
20th centuries, to replace the state-backed museums, Royal,
Religious and Old Family Money sources of buying art. He did this by going
global, staging shows and setting up galleries abroad to bring in New Money Collectors
from New York, Philadelphia, Boston, Chicago, London, Berlin, Moscow and St.
He brought finance for the
first time into art by borrowing large sums from banks and partnering with
investors to buy dozens and hundreds of paintings at a time from painters,
“cornering the market.” Durand-Ruel, during his lifetime, bought 1,500 Renoirs,
1000 Monets and 400 Degas.
He used modern marketing and
branding strategies to boost the value of his paintings and their painters. He staged
the first solo, rather than group show and published the first monograph on a
single Impressionist artist to market a painter’s work.
Durand-Ruel, then “vibrated”
this network of new Collectors and Patrons by selling and buying, by making a
market. By personally controlling so many paintings, he “gifted” a collector
with a Manet or Sisley at a price, then had that collector offer it at a higher
price to another collector he selected. Durand-Ruel was at the center of this
network, personally working as the trusted agent to each and all collectors,
moving the value of the paintings higher and higher, faster and faster. At
auctions, he would bid paintings higher to build further value into the work or
prevent prices from falling, supporting existing value.
Within this vortex, the
Impressionist painters found demand for their creations and value for their
work. Durand-Ruel provided buffers to
the volatility of the market he himself created by buying whole collections
from individual artists, providing the money to work. He loaned money, paid for
studios, commissioned future work, paid for their travels to the US and
elsewhere to advertise their work—all providing the protection, the buffer to
move within his art market, his volatility.
The art market, like the VC
and IPO markets, is opaque and secretive, defined more by personal ties than
clear market pressures. Durand-Ruel managed his volatility in person and in
secret. While collectors offered commissions personally to Impressionist painters,
the vast bulk of their work passed first to Durand-Ruel, and then to
collectors. He managed the speed of
their sales, the magnitude of their price changes and the velocity of their
exchange among collectors. At the same
time, Durand-Ruel managed the artists’ buffering as they moved through the
volatility of his collector network. In
this way, a volatile vortex was manufactured, drawing the best paintings from
Impressionist School artists.
A wonderful series of articles
on the Silicon Valley incubator, YCombinator, in Fast Company, shows a nearly
identical process at work in the business world of startups. AirBnB came out of YCombinator, as did many
other new companies.
What lessons might we learn
from these two examples of Volatility? One is certainly the sociability of
volatility. Volatile spaces can be manufactured. Second, is the probability of creativity.
Shaping a Vortex, building a Volatile space, through which creative people can
transit, boosts the chances of generating originality. Third, Volatility can
have a market structure, as in art auctions, but in the case of incubators and
art galleries, most of Volatility comes from key opaque, personal
relationships. Fourth, the roles of Curator and Patron are as critical to
Innovation as that of the Creative.
Curators must value the new
over the old to promote innovation. Patrons must finance the new over the old
to promote innovation. Paris has “lost
its vibe” because of the failure of its Curators and Patrons. New York has a
renewed vibe because it has good Curators and Patrons (although not good
enough—entrepreneurs complain that there is a dearth of Angel Investors in NYC
compared to San Francisco. In the case of
new art as opposed to new startups, there is no shortage of Patrons
willing to invest or Curators willing to cheer).