Magnus Resch

This transcript was generated automatically (YouTube auto-captions) and then edited for readability: names and obvious mis-hearings corrected, filler words removed, speaker labels added where the speaker is clear. Passages that could not be understood are marked [unclear]; short omitted passages are marked [...]. Timestamps are approximate. The recording is the authoritative version.

Host 00:00:00

Welcome back to another episode of Campus To Capital with your usual hosts. Our today's guest is Magnus Resch. Thank you so much for your time and welcome, Magnus.

Magnus Resch

Thanks for having me.

Host

So let us dive right into it. Magnus, could you give our listeners a brief summary of the multiple things that you are currently pursuing in regards of your career?

Magnus Resch

You didn't want to do an introduction, so I have to do the work now, right guys? Very smart of you. I'm working in the art world in different disciplines. As an entrepreneur, I started a company that works like Shazam for art. It's a mobile app. I built an Instagram account called Larry's List where we portray art collectors. I wrote multiple bestselling books, and I teach at Yale University courses on the art market. All of these activities have a very simple goal: I'm trying to make the art market more transparent, so more people buy art.

Host

Perfect. And I mean, as you already showed, you're a big part of the art world, and people even call you the biggest art market expert on a global scale. But you also enjoyed an education from some of the most prestigious business schools, such as the HSG in Switzerland or the London School of Economics. When you were at university,

00:01:31

did you already have a career in the art world in mind, or did you ever consider a more, let's say, common path that is mostly pursued by business students, such as management consulting, for example?

Magnus Resch

Yeah, so I started being involved in the art world at a fairly young age, not because of my family background. I'm not from one of these art collector families, but because I was hanging out and being friends with artists who told me about their struggles, of what it means to be an artist, how difficult it is to sell art and so on. So while I was hanging out with them, eventually I joined the army, the German Army, and then I started studying. So in order to make money, I started selling their works. I thought it's an easy way to gain additional cash to finance my studies and the lifestyle around it. So while I was doing this, I continued pursuing my studies in economics, but at the same time was always selling art. So I was having this business economics education while being with one foot in the art world as a practitioner. So that followed me throughout my entire studying, while I did my bachelor's and my master's. And when I then applied to jobs, I applied to Goldman Sachs and

00:03:01

McKinsey, and I didn't get in. I thought, okay, so if I don't get in, what could I do now? The easiest option for me was to just add another year or so to write my PhD thesis, and I wrote it on a subject that I was interested in personally, and that was the art market.

Host

Okay. So most people our age are always on the lookout for great career advice, like ourselves as well. However, we would like to know if you've ever gotten any career advice that turned out to be terribly wrong, and if so, if you could share it with us.

Magnus Resch

Yeah, I think in general advice is not the best thing. I'm always reluctant to give advice to people, because, you know, what do I know about your life? And really, I mean, taking advice, who would I take advice from? From superstars in my field? Probably not, because they have followed a very different path, and circumstances were very different than when they were my age. So I'm reluctant to give advice, and I've always been very reluctant to ask for advice because of this. Have I had terrible advice? Probably most of the advice I got was terrible. Usually, you know, when you study business and economics, you're surrounded by people who follow a very clear path, the path that I also thought might be the right one: the BCG, McKinsey,

00:04:31

Goldman Sachs corporate path. You know, if I had followed them, I wouldn't be where I am, and I definitely would have had less fun. So thank God I didn't follow their advice.

Host

[...]

I mean, I think there is not really a one-size-fits-all, and I think it's very important to rely on your own personal experience. And I mean, as you briefly touched upon just now, you [unclear] a gallery at the age of just being 20. In what way did this prepare you for your future entrepreneurial ventures, such as Gymondo, for those that don't know, it's an online fitness app, or what you mentioned earlier, Larry's List?

Magnus Resch

Yeah, so I've done several different businesses. The gallery was really the first one, and I did this out of

00:06:02

necessity, to sell my friends' art and to finance my studies. The learnings in all the startups that I did: I then, after my PhD, I left the art world for a short bit and started Gymondo, probably the most successful online fitness company in Europe, that is making more than 50 million revenue and is highly profitable. I sold it to ProSiebenSat.1, the large German media company. The business in itself, only the website or the front end changes, the back end is always the same. In order to be successful with a business, a lot of luck is required. You know, I've been the same person throughout. I think I brought in the same dedication in all my ventures, and some of them were successful, others weren't. I'm only talking about my successful tech startups, Gymondo, but I've also had two failures. I was the same person, the team was mostly the same people, and they all had the same drive and energy, and we put the same amount of dedication into it. However, some worked out and others didn't. Why is that? Often luck, market fit and timing. You know, with Gymondo I was probably a little bit early, but I was still riding that early wave. Now, especially during Covid, I

00:07:32

mean, this company made so much money. I'm no longer involved. Not sad about it, I'm happy for the new owners, because they even made more money than they invested in it, or they bought it from me. But timing is just so important. When I built a mobile app, technology wasn't there yet when we did image recognition. So I built a mobile app that works like Shazam for art, and the technology just wasn't there, that we were able to match every artwork, simply because AI wasn't a thing when I did it 10 years ago. So yeah, the learnings that I got from the gallery is probably: hard work is important, but also there are a lot of elements that you cannot influence. So if it doesn't work out, don't worry, just try the same thing in five years.

Host

Okay, yes. So talking about AI, would you say that maybe currently is the best or the easiest time to start something in entrepreneurship?

Magnus Resch

There's never a good and a bad time. You know, when I hear people saying, oh, in the early internet ages everything was great. I think now is the best time, and tomorrow is the best time, and yesterday was the best time. So when you consider doing something, I never think about, is the timing right? Because you will only be able to find out if the timing is right if you actually do

00:09:02

it. It's impossible to predict it. Look at early investments, VC investments. It's really an art and less of a science. So it's almost impossible to predict if your thing will go through the roof or not. So yeah, while timing is important, unfortunately you will only be able to find it out later.

Host

So talking about one of your successes, the Magnus app, which you have already shortly introduced. So when you founded the Magnus app, you attracted prestigious investors such as Leonardo DiCaprio. What would you say are the dos and the don'ts in the process of attracting investors?

Magnus Resch

Don'ts is probably: send long emails, when you're trying to explain everything. I noticed that the attention span of every investor is so little. I mean, we all know it, just look at Instagram, right? It's the 10 seconds, and the first three seconds really matter. So the shorter the email, the better. Then elevator pitches are important. I constantly pitch companies to everyone. I also wouldn't hold back with my idea. When I hear people saying, oh, I'm working on this new thing, and I ask them what is it, and they say, oh, it's too early, I don't want to talk about it, you might steal my idea, it always makes me laugh, because maybe I know someone

00:10:32

who wants to invest in your idea, or maybe I'm the investor in your idea, or maybe I've done the same thing and it didn't work out. But you can only find out if you share your idea with me. Ideas are worthless, so share them openly to get feedback from other people on it. Then, don't create too big spreadsheets at the beginning. I mean, I've been doing this for so long, in the sense that I've been creating spreadsheets and trying to predict the market, whatever. It's never going to work out. It's just really, it's almost like a useless art piece. You can destroy it after you created it. And then dos is: so constantly talk about your thing, try to pitch it to everyone and feel out what they think. Don't listen to people's advice unless you find them very credible in your space. So be very cautious with advice. And I probably would say don't over-plan things. Rather try to build something fast and see where it gets you. Thinking about, you know, often you can do a lot of things with little money that get you to a certain point, so you figure out if it's worth it or not pursuing.

Konstantin Girst 00:12:02

I think that's a very fair point. Yeah, and I mean, now we covered the entrepreneurial side of things, and I think now we would like to move on to the art world, because you often criticize that the exclusiveness and discreetness of the art world acts as a barrier to entry, especially for new buyers. And in a recent conversation with Jerry Gogosian you mentioned that you think artists should change their strategy and uncover their prices in order to improve sales and in order to attract buyers. And do you think if more artists were to pick up such a strategy, together with a direct-to-consumer sales approach, that they could combat the power of galleries, or are they too dependent on the galleries' network and infrastructure for this?

Magnus Resch

Yeah, Konstantin, you've done your research. That's pretty, [...] Thank you. Now I know the one listener to that podcast. No, I'm joking, it's actually highly successful. I'm doing it with a friend of mine. It's the most listened-to podcast in the art world, so I'm pretty happy about it. I actually did one just yesterday, so it seems

Host

Yeah, I was listening to this this morning as well.

Magnus Resch

Oh wow, look at you.

Host

I haven't yet finished it though.

Magnus Resch

Okay, a hardcore fan, that's great. No, I admire the preparation. I've been doing so many podcasts, and you guys are very well prepared, you are highly professional. So I've done really huge podcasts with Freakonomics and CNN and so on, and you guys are up to their level. So bravo to

00:13:33

both of you for being super great hosts and organizers. So your question was: will artists be able to do it themselves, or do they still need galleries? I think we're now seeing a very interesting shift in power. Historically, galleries were the gatekeepers to the art world. So as an artist you had to be represented by a gallery in order to be seen by a larger audience. This has changed due to social media. So now we're seeing artists like CJ Hendry or Devon Rodriguez making millions of dollars by circumventing galleries and selling directly to consumers, and that's a model that I think will be even increasing in the future. I don't think galleries, the intermediary, the gatekeepers, will go away, because people still need someone to filter through all the artworks and artists that are out there. However, their relevance will decrease a little bit.

Host

Okay. So in a recent survey by Art Basel and UBS of global collecting, they valued the art market at $65 billion in 2024, but it is currently stagnating at best, as it is not growing in proportion to the increase in global wealth. What in your eyes are some aspects that need to change in order to improve the art

00:15:03

business and help it to grow?

Magnus Resch

Yeah, so, I mean, you mentioned a number. Just to put this into context: you mentioned 65 billion. That is the total annual revenue that all the players in the art world combined are making. So think of all the 20,000 galleries, all the art advisors, all the auction houses, Christie's, Sotheby's, all these thousands, hundred thousands of players. Their revenue combined is 65 billion, which sounds like a big number, but let's put it into context. FedEx, and we all know FedEx, right, the shipping company, is making $87 billion. So it is making substantially more than all the players combined. One single company in the transportation space. Now there's UPS and DHL and so on. So that gives you an idea of how little the art world in fact is compared to other industries. The big question is, will this change? Well, I believe the biggest opportunity in the art world is the people who are not buying yet. So those who don't contribute to the 65 billion, but those people who are consuming art as viewers. More people go to art events than to sport events in the US. Think about this: more people go to art events than to sport events in

00:16:33

the US, yet sports and entertainment is so much larger in terms of revenue numbers than the art world. And I believe that is the big potential, and that's still why I'm involved in the art world, because I believe if I'm able to convert those viewers who go to events into buyers, then we have a very healthy market that will not be stable at around the $60 billion size, but that can easily triple to [unclear] to $200 billion. What do you think does it need to ignite the spark, so that people like you start buying art? Have you bought anything?

Host

Yeah, actually I have before, but not that much yet. We'll get there one day.

Magnus Resch

Yeah, you'll get there. But think about this, right? The journey starts much earlier. Most art costs less than [unclear]. In fact, you find great art for $200, $300, original pieces, not the Ikea posters that you buy, if you would make the effort and go into the art academy which is in the city that you are in. There's an art academy in almost every major city. You just walk in there and you see something that you like, you go up to the artist and say, how much is it? They state you a ridiculous price, probably $5,000, but they don't know any better. So you say, look, I don't have $5,000, but I'm giving you $300. And then they say, all right, I've got the smaller piece here. And that's how you

00:18:03

start your journey in the art world. You just have to go out there, connect with artists. You can find them on Instagram and Artsy, and then start buying art. If that happens, then you get the, I call it the virus, but it's a positive virus, because once you start living with an art piece, everything changes and you start buying more pieces. And that's also one of the reasons why I'm doing so many of these talks and interviews, TV and all that, because I like to encourage people to buy art. So you two, by the end of the year you should buy a piece for less than $200, an original art piece from an artist whose phone number you will get afterwards. And I'm saying this phone number thing because it's relevant that you build up a connection with them, that it's not some random entity that you buy from, Ikea, but you actually build a connection with the artist and you follow them.

Host

Yeah, I mean, I heard that some people even go to, for example, the graduation class of Central Saint Martins, and they buy up basically all the paintings from a student, whether it would be from a collection perspective or investment perspective. But I mean, on that note, we talked about the over-exclusivity and how that presents a problem. But I also think, with the globalization of art and more art being present on social media, a lot of art has less original ideas, or it just imitates great artists, and there's a sort of

00:19:33

commodification happening. What do you think is a bigger problem for the art world, the exclusivity or the commodification?

Magnus Resch

Yeah, I mean, exclusivity is the key, is what's keeping people away from the art world. They make it so difficult to buy art. It feels a bit like, in the old days, a velvet rope outside of a nightclub, and nobody gets in, and then if you somehow manage to get in, it's empty inside. So you're thinking, what is all the fuss about? Why don't you let everyone in who's waiting outside of the door when your nightclub is empty? And that's kind of how the art world is structured. It's fake, it's exclusive, but for no reason. So that has to change. The commodification is something that art historians are scared of. Hey, why shouldn't art be a commodity? Why shouldn't art be traded? I mean, if it gets to that point, that's good for everyone, right? The more people buy art, artists make more money. Everything that helps to sell is good for the art world.

Host

I see. And I mean, talking about sales, you teach at Yale, you teach art management, I believe. And you've also mentioned before that you think it's very important for artists to kind of have a business perspective, so they don't just make art, but they also make it possible for them to make a living of their craft. So you said that it's important that you invite some of the arts students to join your management

00:21:03

class, as you think they can learn something from the management students and the management courses. What do you think, on the other end, can management students learn from art students?

Magnus Resch

Yeah, it's a very interesting class that you're referring to that I'm teaching at Yale. It's called Introduction to the Art Market, no sorry, this one is called Entrepreneurship in the Art Market. So I'm teaching MBA students, business students, how the art market works, and to encourage them to start ventures in the art world. And this class, it consists of MBA students but also MFA students, so artists. And it's just always interesting to hear these conversations that they're having, putting them together in groups to work on certain challenges, to have these different perspectives in a classroom, and confronting artists with questions such as, you know, you're selling your piece for $5,000, but it only cost you $100 to produce, and you just told us that you only worked on it for 3 hours, so why should I spend $5,000 on it? Doesn't make sense. And that artists very early in their career get confronted with very honest and authentic questions like this can only be helpful and fruitful for both parties, because then you hear the answer from the artist saying, hey look, it took me a lot of time to come up with that idea. It's not the actual process that goes into it, but it's all the reputation that I've built

00:22:33

up over the years that led me to this price. The banana, the famous banana that we all know, that sold for $6 million, is just one example of how prices are built in the art world, and I'm explaining that to my students. So in a nutshell, since people are interested in this: the banana sold for $6 million for a very simple reason. When it comes to art, it's never about the actual piece, what defines the price. It's about who the artist is. So the brand of the artist is so much more important than anything else. Similar to fashion, right? A Louis Vuitton bag only costs $40 to produce, but they sell it for 4,000. Why is that? Because it has the Louis Vuitton stamp on it. And in the art world it's exactly the same. The banana didn't sell because the banana is so expensive to be produced. We all know that it only cost a dollar or so, but because it's by Maurizio Cattelan, an artist who always sells at the high end. You know, his works sell for millions of dollars, he's represented by a top gallery, and that piece was one of the most photographed pieces in the past six years. Plus the buyer wanted to get the attraction and attention to him and to his crypto company. So when you ask how artworks sell for these high prices, there's the answer: it's never about the piece, it's about everything else.

Host 00:24:04

Yeah, for sure. And I think he was probably also able to make more money than he spent on the actual banana at the auction. Yeah, so I reckon that not only reputation and sales skills are important, but also an extensive network and great connections are extremely important to establish yourself in the art world. What are some skills one should maybe pick up to master the art of networking, in your opinion?

Magnus Resch

Yeah, networking is in my opinion the most important part, especially when you are a student. Building your network now, not only to people at the companies that you'd like to work at, but to your peers, is incredibly important. I'm doing very actively business with those people who I met throughout my studies. [...] The quality of teaching is, I would say, not exponentially better at top universities. However, what is better is the people around you. [...] They tend to have a very, very clear plan where they go to, and they will keep that plan for the next

00:25:34

couple of years, 10, 20 years, which will be helpful for you once you get into a working environment. So you can leverage that network that you build very early on. So networking not only applies to artists, but it applies to business people and students too. In the art world, networking is even more important than the product itself, so I would highlight it even more in the art world.

Host

Makes sense, I guess. Yeah, I see that as well. So one of your many books has the title 100 Secrets of the Art World. So we would like to know from you: what is your secret of the art world?

Magnus Resch

So I wrote this book with a good friend of mine, Thomas Girst, who is the culture manager of the year, I think, in 2019, and one of the most relevant people in the international art world. He is also the head of cultural engagement at BMW, so has one of the largest, if not the largest, network in the art world. And besides, I'm presenting him here now as the super guru and superstar that he is, but besides that, he's also one of my closest friends and the coolest guy I know in the art world. And with Thomas I wrote this book, 100 Secrets of the Art World,

00:27:05

where we asked 100 people to provide a secret about the art world. So we had all the big collectors, big artists like Jeff Koons, big gallerists like Larry Gagosian, really the who's who of the art world, who contributed their secrets to this little book that you can get on Amazon for less than 10. And you asked me about my secret. Well, Thomas and I decided to not include our secrets of the art world into the book, because we like to give more exposure to those people who we asked. I think one of the secrets that I can share with you is that, while the book is called 100 Secrets of the Art World, it actually does not include 100 secrets, but maybe a little bit more, maybe a little bit less. But you can only find out if you buy the book. So if you buy the book, write me an email and tell me how many secrets there are in the book. I'm very curious. My email is Magnus at magnus.com. And while I talk about my email, for those people who are listening, I'm inviting you to follow me on Instagram and to sign up to my newsletter. Don't worry, it's no spam. I'm only sending out four newsletters a year, where I talk about things that I find interesting in the art world. I talk about artists that might be the next superstar investment. So if you're interested in that stuff, and in the art world, just subscribe to my newsletter, which you can find

00:28:35

on magnus.com, and there you can sign up. I guarantee no spam, only valuable information about the art world.

Host

Well, you heard him, so go ahead and do that. And I also really can recommend the book. It's a very interesting read if you're interested in diving into the art world and learning a bit more about the biggest personalities in it. Well, thank you very much, Magnus, for your time. It was very, very interesting speaking to you, and I think we and our listeners will be able to learn a lot from this conversation. Thank you.

Magnus Resch

Thank you. Thanks for having me.