Creating a new market
From a business point of view, the success of Damien Hirst, who is currently making headlines again with a diamond-studded skull of a child, is a model for how to create, and sell to, an entirely new market. In his case, this was the super high-end market for new art. Hirst’s idea was to use expensive materials such as diamonds, gold, and platinum to raise his production costs way above the norm. In this way, the price would become part of the artwork itself. Being more expensive than others would be the characteristic that made his art unique.
In analyzing this market he asked himself three questions:
- Who would be interested in buying expensive art?
- What should the artist offer this type of customer?
- How should it be marketed and sold?
Hirst clearly found answers to his first two his questions – he has been extraordinarily successful at creating pieces that the super wealthy want to buy and his new art has been bought by the likes of the Mugrabi family, hedge fund managers such as Steve Cohen, and the Russian businessman Victor Pinc.
But he also answered his third question in an innovative way. In order to sell his art he bypassed conventional distribution channels - dealers and gallery owners - and partnered directly with Sotheby’s auction house. He saw that, just as with the art itself, there was a need to redefine the rules. He felt that the established art world had become victim to a phenomenon that psychologists term “inattentional blindness”, meaning that when attention is very focused on specific approaches, humans often fail to perceive significant events, threats or opportunities that are outside their focus. By initiating shows and then leveraging these shows to position his own artwork, he gained focused attention on what he was trying to sell.