In this segment of the My First Million podcast, the hosts dissect ArtRes, a startup that lets consumers purchase fine art through monthly installment plans. They outline the company’s value proposition—selling whole artworks with a buy‑now‑pay‑later (BNPL) model—drawing parallels to fractional‑ownership platforms like Masterworks and to large BNPL players such as Affirm, Afterpay, and Sezzle. The discussion moves to ArtRes’s go‑to‑market approach, which relies on Instagram artists embedding the platform’s link in their bios to drive traffic, likening the growth tactic to early SoundCloud. The hosts debate competitive threats, noting that Etsy’s handmade‑craft focus differs from fine art, but still questioning whether ArtRes can survive against established marketplaces. A key point of contention is why ArtRes builds its own financing layer instead of integrating existing BNPL services, raising doubts about the uniqueness of its core offering. Throughout, the hosts express skepticism about the difficulty of launching a successful art marketplace and warn that raising external capital could increase the likelihood of failure, despite the apparent market size and early sales of $36,000 in three weeks.
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Okay, so let me explain a little more about ArtRes from what we know. So here's what, here's what they say. The value proposition is that you can buy fine art in installments. So you were saying Masterworks lets you buy a piece of a piece of art. They sort of fractionalize it. These guys say it's yours, but you get a monthly payment plan. This has been a big trend in e-commerce. Anybody who's been paying attention to Affirm or Afterpay. These are multibillion-dollar companies that are just saying even low-priced items, right? Here's a $40 item, but you can buy it in 4 easy installments of $10.
And Affirm is doing quite well. Both of those companies are going to go public or it's looking like they will.
Right. Afterpay is actually already public and Affirm is, I think, going to go public. And so there— and there's, there's more— Sezzle, there's, there's others that are doing this too. So that's a very good business to be in, I believe. And so, so that's what these guys are doing. They say they've sold $36,000 worth of art in 3 weeks. This is unlike Affirm and unlike Afterpay. They're not a payment option on other marketplaces, other websites. They are their own marketplace. And so what they're trying to do is they give artists the ability to sell their work. They say most artists don't even sell their work. So they say list it here. We offer people the ability to buy in installments so more people can buy. So we have more buyers in our pool. And they, they get the artist to put their link to their store, just like an Etsy store, in their bio. So they put their Art in Res link at the bio, and that's driving a lot of users because these are, you know, Instagram artists, or artists with an Instagram who have, you know, 100,000 followers. And they're getting into the bio of all these different artists, and that's gonna drive traffic. That's a lot how SoundCloud grew early on, was going for these independent artists and then saying, cool, we'll give you an easy way to host your artwork and in that case music, but you know, share your SoundCloud profile. And that's how they got tons of traffic and built up their marketplace. And so, I think that's what these guys are trying to do. I think this is smart. The art market is one of those markets that's bigger than you think, 'cause you don't even learn about it till you're already rich. And once you're already rich, you don't start a company in it. And so I think it's one of those big invisible markets to most entrepreneurs who are scrappy and don't own, you know, like a pencil, let alone a piece of art.
I, uh, so I would have agreed with you, and before you start talking, I, I agreed that it was great. But then you, the way you described it, if— okay, so I would, I would be against it if, if Etsy is competent, they can destroy these guys.
Yeah, I think it's going to be hard though because Etsy's niche is handmade crafts, and I think that's just fundamentally different than fine art. I think when you— it's like putting a bottle of wine next to a Budweiser, right, in the aisle. It's, it's a little bit I don't think the people who want their art to be sold, or fine art to be sold, or want to buy, want to be next to somebody who's making bracelets. That would be my— that'd be my bear case against that.
Okay, I buy that. I buy that. But— oh, okay, I get it. So I see a painting on here, it's $3,000. I can pay over time for 24 months for $137. Okay, so my question is this: Is this pay over time feature even that unique enough to build most your company on top of? Why not just like have a normal art store and just install Affirm?
Yeah, that's a good question. I don't know why they're not just using one of the existing installment plans, uh, you know, why are they, why are they owning that piece of it? It's like an art marketplace, but then also this financing program when they could just use one of the existing financing programs.
So I'm looking at it now. Yeah, I'm changing my mind. It's stupid.
Okay, we'll see. Jury's out on Arden Res. I'm not an expert in this area, but what's your bet? There's something there. My bet would be, I think marketplaces are really, really freaking hard to start. And so for that reason, I think that it's going to be incredibly difficult. And they definitely haven't shown that they've done that yet. But, um, you know, so I would say odds are always against any marketplace being successful, but I do like the fundamentals of what they're trying to do. I don't think this is a stupid— I don't think this is a stupid bet to take if you're an entrepreneur, but I do think still likelihood is that it doesn't work like most startups.
I think that it— okay, but there's a difference here of working and just building wealth and then working by raising money.
No, I mean the business working, not raising money. Lots of companies can raise money.
Yeah, but what I mean is, should— I think this, if it for sure can make a living for the owners, the question is, is if they raise money, then will it work or will it not? My prediction is if they raise money, it's going to fail.
I feel like that's your prediction with most things. I think you just don't like when people raise money for the most part.
No, the next one that we're going to talk about, Carrot, I think that could work.
