Episode #738 - Mistakes Give Rise To Growth with Mark Weiss, Owner of The Weiss Gallery

Foreign.

Welcome to this edition of the million Dollar Mastermind podcast. This is where we pick the brains of high achievers from all walks of life and get their hard earned real world insights on winning. I'm your host, Larry Wydell.

Why did you do that?

Why did you narrow your question that everything that I'm asked on a. For obvious reasons, on a reg. And it's a question to which I have no sort of crystal moment where I think, oh my God, this is what I need to be doing. It's something that has just been intuitive within me. I recall quite clearly that when I came back after this sojourn in, in in America in 75, as a result of my first broken heart, having joined the business in 72, my parents very bravely would allow me to take what called the checkbook and go out to the local auctions around the country and use my own judgment as to what to buy and what to sell based on, you know, the experience and what they've tried to instill my eye. And I was just always intuitively drawn to quirky early British portraiture. And so I clearly remember the very first sale that I went to when I came back in August 75. So probably, you know, September, October 75, I went to a local auction and I bought this quirky English portrait of a woman circa 1620. I can still see the picture in my mind now. There's no reason why I bought it other than I just kind of fell in love with the thing, the quirkiness of it, the rarity. And I think the other thing is, you know, I'm actually sort of quite passionate about old England and the countryside.

Right.

You know, we lived in. We live in one of the most char or lived in one of the most charming parts of the country, East Anglia, with these beautiful little villages and lane country lanes. And somehow in my psyche, these portraits were synonymous with the Englishness that I loved. The fact that very few people understood them. And certainly in these early days, I didn't understand them either. I was just buying them out of just an intuitive interest. And then over the sort of subsequent sort of, from what, 75 through till the early 80s, specifically the early 80s, I started to have some quite significant discoveries which were relatively transformational. And you know, I realized that there was only one other dealer in the market in London at that point who was dealing in this area. And I was initially, I hold my hand up, I kind of wanted to mimic him, right. He was more successful than we were at this stage. And he had a Lot of very wealthy clients. There was also a moment, you know, my father's health by this time had started to decline. He'd had a major heart attack in. In. In the early 70s, which required major surgery. And I was. As I was becoming more dominant within the business, became clear to me that we were kind of stagnating in East Anglia. For the business to grow, we needed to be in London and we needed to be in the heart of London. So this is a whole new story. How do you move from a small country, provincial gallery, you know, and if you don't have unlimited wealth or finance behind you, which we didn't, we've always kind of relied on bank finance. We need extraneous funds. And one of our clients, who actually then became a friend and who had initially funded us with a small pot of money to trade it on the basis that we would split profits, which is something that is actually relatively common within the art world, he had this idea that we. So to separate his funds from the business, we created a separate limited company. And then he came in the gallery one day and he said, right, I know how you can move into London. He said, under Margaret Thatcher, the then Prime Minister, they'd come up with this to encourage new businesses. This scheme, called the Business Expansion scheme, whereby outside investors could invest in a startup company. And at that moment, the highest tax rate was 60%, with the base rate being sort of the median being 40%. It. You were allowed to invest up to 40,000 pounds in a new startup company as long as you kept your funds in for five years. When you then crystallized that investment, whatever profit you made was tax free. So, yeah, so that was quite. It was quite a big incentive. This. This. This friend and client who'd been in the property world and in truth, was a bit of a character, to say the least. He introduced me to a person who. Sorry, I should go on display that these new startups, in effect, because they had outside investors, were public companies. They weren't private limited, they were public companies. And with everything that entails in terms of legislation and proper due diligence, et cetera, et cetera. So you'd have a board of directors and so you needed a chairman of the board. And he'd put me in touch with one of his friends who had just retired as the finance director of one of the big companies, a big. A company called Debenhams who do stores. This man had invented the idea of in house store credit, which was revolutionary. And anyway, he'd done quite well. He was quite wealthy. And so he was introduced to him. He liked the idea and he was going to be the chairman of the company. And so we decided the whole thing had to be blue chip. So we went to the best prestigious solicitors, lawyers at the time, which called W Greenwell's or Emma. Our accountancy firm was Arthur Anderson, who then very, very serious, we took the view we needed a prime location. The center of the art market in London is Mayfair or St. James's you know, anywhere between Sotheby's at high end of New Bond street or Christie's down in St. James's right, I'll just throw in another little story there. At this time during this period, my then girlfriend happened to be the daughter of the most famous businessman in Britain at the time, Sir John Harvey Jones, who was chairman of ici, Imperial Chemicals Industries, which at that time was one of the most powerful global chemical companies in the world. And Sir John was the person that in Britain, I think three years in a running in a popular vote, was voted the man everybody wanted to see run in the country.

Ah. So instead of Margaret Thatcher.

Instead of Margaret Thatcher. Anyways, he was a great, very personable man, but he, as it turned out, he had no idea about the art market or indeed how it works run. So when I remember putting together our business plan as to, you know, how we should. How it would work, and he thought we'd got our eyes on a premises in Albemarle, Albemarle Street, a street just across a small bijou little unit retail unit that was just being redeveloped. He said, well, I'm very nervous about that. You need to be testing the water. I think you should start off dealing somewhere less expensive in North London.

Yeah.

You don't do that.

Was this girl. Let me ask you this, what year is this?

This is 84.

But up till 84 you're still outside of London.

I'm still working with.

You're paying your dues, you're making a. A profit, your name is growing.

I'm doing, I'm doing the mileage, I'm doing art fairs on my own.

What was that like when you're out there doing art fair? You know, you talked about if we're going to get this, people can follow how it relates to things they have to do. You had to dig in and hit the road getting inventory and sounds like you were on the road quite a bit.

I was on the road. I'd spend on average certainly every other week, two or three nights in different. You know, you work Your way around. So at that time there was a, a trade newspaper called the Anti Trade because that was still ghost today. Right. The weekly magazine that had adverts for auctions. You know this, you know one has to remember this is pre Internet, pre mobile.

Right.

Only way of communication was fax post or the telephone.

You would buy these, you're on the train, are you having to carry these back, you know, kind of wrap them.

In a state car or a station wagon.

Oh, you did. Okay. And so that, that made things a little easier. Now you did that for how many years?

Well, I joined in 72 so until we launched the public company in 85. I would describe that as my apprenticeship.

Yeah, it was a long apprenticeship. But you met a lot of people.

And you huge circle of people and you developed, but mostly all UK based. I mean where I am we are a veritable international business, which we were not in those days.

Yeah. And so we'll talk about the transition to that. But you, you're, you're a sweat equity. You're building this thing up from the ground up and it's your ability to get out there and beat the bushes. But then how would you put on attend fairs, go to fairs. How many of those a month would you be at?

Yeah, I only did, did the Harrogate fair and there was a fair in Birmingham at the nec, which I did and there was a fair in London and then there was a local fair. So probably did four art shows a year. You know, primarily I would pack, you know, I'd rent a van, right. Pack the van myself, drive the van to the fair, unload the van, hang the pictures myself, do the lighting, do the labels, do sit through the fair. Then at the end of the fair I take the pictures off the wall myself, pack the van myself and drive the van all the way home myself. I do stuff that I don't do anymore.

You were no stranger.

To work primarily for many people, many successful people, that has to be the bedrock on which future business is built. You have to experience everything at the ground level. You have, you know, if you're running a factory really you should know what, what it's like to be working on the shop floor. You should have some experience of that. Yeah. You know the other thing which, you know, my parents, my father in particular was incredibly brave but had great foresight and vision. He had, he realized, and this is a rare thing I think in family businesses. He, you know, if Mark is to learn, he has to make his own mistakes. They're going to Be our mistakes because he's spending our money.

Right.

He has to make those mistakes. And only by making mistakes do you really learn.

Yeah.

What not to do in the future.

Right. And because you were so involved again with a checkbook going out of there, you knew the decisions he was making and you knew the how it. When it turned out good and turned out bad. So you were learning along with his.

I stuck close to my father and I, you know, I like to think I was a good son. I, I listened to him, you know, and I watched the way he operated. And I've, you know, kind of modeled myself on him. And so, for example, I would describe myself as whether it's an old style businessman, but certainly an old style art dealer or an antique dealer, all the same thing. And I'm sure that also happened in, say, the diamond business or whatever. It's your word is your bonds and a handshake is a deal. And, you know, if you shook on something or agreed on something, whether you decided you'd made a bad deal or not, you, you stuck by it. Yeah, I still believe in that today. So it's a complete anatomy, all these contracts and legal documents and everything. For goodness sake, do we really need all of this?

Well, again, you go back to the attention deficit thing. Who wants to, you know, that's why you have attorneys and, you know, they can read them for you. So you're now, after all of these years, one, one thing about growing a business is it you have to give it time to mature and grow. If you were up, if you had put in those years up to 84 and had that reputation, had the contacts and everything, there's no way you would have been prepared to even consider moving from outside of London and to where you're going right into the downtown. And you would know what you had to have to make that work.

I mean, you, you in truth, I had no idea.

Did you?

It was, it really was Dick Whittington. I thought the streets were going to be paved with gold. I thought as soon as you just get to London, you know, it's going to be so easy. We're going to sell pictures like hotcakes. Boy, was I wrong.

Yeah, it sounds like I was watching a Sylvester Stallone documentary on Netflix last night. And he said when he had the big hit with Rocky, of course everybody said he, you know, they all turned it down and, you know, he had to write it himself. He had a directive, he had to do the whole thing himself. And then when they screened it, half of the people. They screened it before the opening and two thirds of the three quarters of the audience walked out and during the screening and. But then somehow, miraculously, four hours later, they had the real crowd came in and the paying crowd. But he said by the time they got to the knockout punch at the end of the movie, the crowd was on their feet screaming and everything. And his he said, right. He said at that moment he knew his life had changed. But he thought, like you said, the streets are going to be paved with gold. I'll never have a problem again. And he said, boy, was I wrong. You know, they expect every everything you do after that to be a monster hit. And of course, that doesn't happen.

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