Tom McLeod founded his company, Arkive, to answer one question: what if the Smithsonian was curated (and owned) by the internet?
Traditionally, museums are curated by a small number of board directors, who are ultimately responsible for acquiring thousands of pieces, of which less than 5% are on display at any one time.
Arkive exists to do things differently. Embracing the power of crowd-sourced intelligence and diversity, they use the Polygon blockchain to coordinate thousands of members, who debate and vote on which items to acquire, and then exhibit and track those items at museums all over the world.
We speak about how Tom had the idea for Arkive after selling his storage startup to Coinbase, how it actually works and why blockchain is so critical to its success, and his vision to democratise the cultural landscape.
Read below for the full transcript:
Leo Nasskau, Culture3: Hi Tom. Thank you so much for coming onto the Culture3 podcast. You are now a, whether you like it or not, a museum pioneer. So I have to ask, what do you want people to be feeling? What emotions should people feel when they walk through a museum?
Tom McLeod, Arkive: I think they should have a sense of wonder. I think that's the goal. You should feel inspiration. You should feel wonder. You should feel some kind of reflective creativity. So, by experiencing others' creative outputs or interests or collections of key moments of life, you should hopefully walk away with something there that puts a little bit of that back into yourself. Maybe that's just me. Maybe that's how I like to feel in a museum. But pushing that out to others, that's what I'd like to get everyone to feel if they can do it, if it's possible.
Leo: How does that affect your thinking for what museums in the 21st century should look like? Why do we even have these things that people can go and visit and learn about?
Tom: I think you have to meet people where they are. I think that's a new idea around it. And if you were starting a museum today and you're looking at the way the systems have been built out for the last, 200, 300 years (museums aren't a new idea!), they were largely built around a time when folks stayed within a very short range of their homes. As travel opened up, they became destinations. They became points of cultural pride for cities and locations for travellers.
Now, people are moving about pretty significantly and the places they go and spend time in, spots where they could feel that same thing we described, are changing. I think the definition of having to enter a fixed building could adapt, even though a lot of the pieces that are there still need to still exist, right? You still need to put things in academic context. You still need to exhibit things that have cohesive explanations when they're put together. But the way to find them, participate in them, or experience them, I think can evolve. And that doesn't mean that the old ones have to go away. It just means that there are going to be new opportunities to do this in different ways. And we should always be happy with that. We should try to do that with almost everything.
“How would a museum come together if the world was your playground?”
— Tom McLeod, Arkive
Leo: And speaking of those different experiences, Arkive is, from the outside looking in at least, is really built around re-imagining how we experience and create the museum. So I imagine these sorts of conversations are happening all the time. I'm interested in why this was such an important thing for you to work on. Why was this something that you were so passionate about?
Tom: I love museums as a concept, right? I lived outside of New York City. I grew up in New Jersey, and you go into New York and they have some of the greatest museums in the world. I loved that and I wanted to figure out how you could make that broader at some level. When I look at what we've started to work on together and when we see the community and the people that are involved, everyone is very passionate about maintaining that experience.
The experience of seeing something impactful, how that shapes and changes you, and what a lot of the conversations that have come out of it have almost always focused on is this idea where the location doesn't matter as much, as long as the impact of the location is still intact. So, putting things in a place that creates that context that still describes where and why and what part of the piece that you're viewing matters, is still paramount.
And if you look at the shifts in the way museums have been put together over the last, let's say, 50 or 60 years, you're seeing a decline at some degree of state-run museums that have often been soft power displays of conquest, like the British Museum or something like that. You're seeing a rise in private museums, of private collections being put on display so people can see them.
I think we sit somewhere in the idea of what would a public collection look like if the curatorial team was global. How would that museum come together if the world was your playground, and how would you focus the collection? That's where most of the conversations and group chats go. It's been beautiful to watch, to be honest.
Leo: I think that vision of 'what the museum look like if it was curated by the people actually walking through it' is a really powerful image. I want to dig into how it actually works in a moment, but how did the idea come to you in the first place?
Tom: The idea actually came out of a combination of that interest in museums and a previous company I ran where we did on-demand physical storage. In that company (Omni) we would collect items from individuals. You had too much stuff in a small apartment somewhere in San Francisco, and we'd show up and would take it away and let you call them back. If you wanted to go camping, you could say "bring me back my tent, my sleeping bag, my canteen; I'm going camping for the weekend."
Over time, we started to get items that weren't just utility use items. We started to get collectibles. We had a Rembrandt etching show up one day, we had the first Macintosh computer sealed in a box, we had fancy handbags, comic books. We realised pretty quickly we couldn't store them next to the dirt bikes. That wasn't gonna float... so we ended up building private rooms inside the large warehouses that were like vault rooms. Entering those, you could see all of these unique one-off creative items.
I used to think about it like this was a museum curated by our customers. If you work a nine-to-five regular job somewhere and you're not a full-time curator, but you have passions, maybe you like Star Wars collectibles, sneakers, or small prints of famous artists. You go home after 5pm, you eat your dinner, and then you go on Reddit and you sit and you talk with other people all over the globe about them.
And some of those ended up in Omni. That was the was the impetus. Flash forward to 2021, I saw the NFT market booming and what people were doing around that space. I saw folks speed running my understanding of 60 years of the contemporary art market. They were coming together to form groups, almost like little museums. People's individual wallets were being tracked, like private collections.
But they were doing it in six months. It was like 60 years and six months. And the thing that I was taking away from it was, 'Hey, those same folks probably used to store items in Omni, they probably collected real items as well, physical goods.'
“The only place we don't touch blockchain is financialisation.”
— Tom McLeod, Arkive
What if we did that? What if we took the two things? What if we took the speed of blockchain, the provenance, the ability to vote, the ability to have transparency, the ability to be global immediately, but we attached it to the older world model of physical items out in public space?
My big thing internally was I now had run seven years of running warehouses. A museum is basically a giant warehouse! I never wanted to run a warehouse again. I wanted to be able to place things out without that overhead. And that's where this idea of decentralised voting with a distributed museum come together.
Leo: I think like all best web3 businesses, the blockchain words come in when you're talking about how it works under the hood, and it's not part of the marketing fluff. What exactly is the blockchain tech doing for you and making possible that you're not able to do with something else?
Tom: There's a few things, and I think they're the key parts of blockchain that I've always personally rallied around as where we should focus time and energy. So we're moving provenance onchain. Historically, provenance has been: where something is, who owned it, at what time. We can expand that. When we have a piece of art out in public and you use the Arkive app, when you scan it, you can 'check in' to the item. Think of it almost like Pokemon Go for art and culture. That check-in takes a geo-ping of where you're located, it maps who you are from the app, still anonymous if you want, to your wallet that you registered with, and it signs that you've seen it and tags at that moment, irrefutably, and every person who checks in now adds their name to the record of having seen it.
So, the provenance goes from just being 'it was at a location' to 'it was at a location and these are the thousands of individuals who have seen it'. Some of those folks might doxx themselves and become notable people who have seen it, or notable influencers or curators, which adds to the overall upper momentum of the piece. But we've moved that there, so provenance moves onchain.
Second, we look at that idea of what did you collect and what have you voted on. Those things come together. The voting happens that way (onchain), so it's also that same idea of what happens and what occurs is now forever locked. No one can change the votes, no one can ever say that this wasn't part of it; the permanent record of that item is now there. And so we look at it that way.
And then for a distribution. When you collect those things, while you don't physically get them, you now have this keepsake that enters your wallet that shows you're there and you're now on a global leaderboard. So you're now showing everything that you've seen. You're helping to basically sustain the network of real items by checking into the blockchain underneath it of where things are — we use that for validation purposes, so if we have an item out in public and we don't have a camera on it 24/7 like you would in a warehouse, having someone check in, take a new photo, and verify that basically maintains that the item is still where we say it is, which is important for insurance, it's important for security, and it's important for appraisal, because you get updated quality and condition photos. So, we use it for that whole spectrum.
Honestly, the only place we currently don't touch blockchain is financialisation. We've moved that out of the core piece, but everything else around the experience, we have at least a blockchain layer that touches it.
Leo: So really what blockchain is giving you is the decision-making process for voting and deciding which pieces get elevated, and the provenance of recording how they're experienced. I'm curious as to what the end process is and how it actually is experienced. You have these items, they get curated, how do they actually get put in an exhibit? Or how do you actually go and see them? What's the end state? Do you physically enter them?
Tom: Yeah, they're in a real space. We run curatorial on top of all the items, you learn about them, we write papers, and then put everything in context, so you can read about it on arkive.net. You can see everything that's been added to the collection. No different than experiencing a traditional museum through its online portal, right? So we've mimicked that basically one-to-one.
The difference is instead of you being able to see all 19 items in one spot, when you go to visit a city, they're all over the place. We have a piece in Calgary, we have a piece in Mexico City, we have a piece that's going to a university. It's all over the place. And what we look at is where when you land in any city in the world, you open up Arkive, and it's like a Get Your Guide for art and culture.
You should be able to see things, things should be both placed in interesting locations that you'd want to spend time and learn about or participate in, as well as the items themselves are of interest. So you land in Oslo, you land in London, you land in New York: as opposed to saying, 'oh, where should I go?' you open up Arkive and you're like, 'oh, I'm gonna go check in at the Raphael Hammer that we acquired because it's now on display at XYZ location.' Our goal is to be the first place you look when you're trying to find art and culture; anywhere in the world is where Arkive has placed items.
Leo: I'm curious as to how big that can get. If Arkive is wildly successful over the next five, ten years, how is the world different?
Tom: If you reverse out from where we left off in that last question, what you get is a giant decentralised museum, right? And so the museum is everywhere. The placements are locations that can maintain quality, control condition, some degree of conservation of the pieces, which puts you in spots that can take care of art and might have other interesting things around them.
“It's like a GetYourGuide for art and culture.”
— Tom McLeod, Arkive
So they become points of interest. We think that means any cultural experience, in a travel situation or even in your own town, can start by the lens of Arkive, in the collection that's there. I'd love it if you landed in Mexico City and instead of opening up Google Maps and typing in 'nearest museum', you open up Arkive and you see pieces around you — some of them will be in museums; they'll always be in interesting places. There will always be opportunities there for you to learn and experience something.
That's your starting point. And because you went and tagged it and collected it, you get Arkive points, which we can get to later, on the business model, but that can get you perks and services and opportunities for helping be a part of the whole network. So that's where we think we can layer on a business model on top of what has traditionally been largely non-profit funded.
Leo: So really this feels like the lens through which people engage with art and culture — and it's much more than a lens as well: people are actually putting together the pieces that they're seeing in front of them.
But you mentioned the, the funding aspect. How do the economics work on curating all of these pieces? Because museums, publicly funded or privately funded, there's an enormous financial pressure on delivering them – and I think that's partly why we've seen an uptick in private collections because there's just been that strain on public finances around the world – how do you square up the challenges that most museums are facing with those ambitions?
Tom: Right. So I think if you look at challenges of museums, there's financial challenges, always. If you look at large museums, they actually have an acquisition problem, and it's not the one you think. It's actually that they're extremely good at acquiring and, by percentage, not incredibly good at displaying. You think about a museum and you think, 'oh, there's 3,000 works of art on display; wow, that's a huge amount'. And then you look and you realise that they have a hundred thousand items in the collection and less than 5% are ever on display at any given time.
Where I think we differentiate between those two is the ability to put things on public display and offset the cost of that display. If you look at the operational costs of a museum, you have two sides. You have the cost of acquisitions, which often can get offset by donations and grants and the non-profit structure, which plays into a larger conversation around tax write-offs and incentivisation structures which allow for that flow of capital.
The other side is just the simple operating costs of running a giant building in a major metropolitan area. There's staffing, there's security, there's air conditioning, there's electricity, there's so much that goes into that — that's not a small line item.
We are a 13-person team that doesn't have any of the physical ops or infrastructure. Having spent a lot of my life in that physical ops and infrastructure part of the business, I want to figure out how to offset that. And so when we lend an item, we don't charge, we don't look at that as a revenue-generating source. We want to have as low amount of friction as possible to remove our cost structures. If we lend to a museum or to a library or to a hospitality business, they're picking up those costs because they already have the structure to take them. They're already covering it.
So for us, the issues around money are largely tied directly to 'can you find capital for acquisitions?' And we have structures that we've started to put in place where people should be able to invest in the underlying art. As that comes together, that can unlock the ability to continue to acquire without the operating overhead of the physical buildings.
“The community works as a super-organism for curating.”
— Tom McLeod, Arkive
And that's how we think we can scale this — not even 'think', I mean, that's literally how we're scaling this efficiently at this point. Less overhead, negative operating expenses on placements, direct investment in the underlying asset, and a curatorial team that's based upon a community that are economically incentivised, not through capital, but through perks of the placements. That creates a flywheel on top of everything.
Leo: Awesome. Let's, let's dive into that. What is funding the acquisitions today, and in the long term, could you talk about how that flywheel will work?
Tom: Sure. Today we use balance sheet capital. So right out of the gate we raised money for the overall tech play. For the network, for that ability to do perks and community around cultural items out in the world. We also think over time we'll bring in items that aren't just the Arkive collection; we'd like to index cultural items everywhere. So can we actually have that data layer of where things are, what they are, who's seeing them? That's what we're building towards.
We're now building out a back-end structure where qualified investors should be able to invest in the actual vehicle. They should be able to provide capital and see ownership in the underlying art. What we've done though is separate the two: the community isn't economically incentivised, they are access, perks, and partnerships incentivised: dinners, events, book clubs; all the stuff that the community has to offer. And investors are getting access to the knowledge of that community working as a super-organism for curating interesting items that go on public display.
You could theoretically be in both, but neither is a requirement of either. That's how we've had to evolve with global regulatory structures, maintaining compliance, and what we think is incredibly important, which is to maintain that the community side and the curatorial team has the ability to make decisions without direct interference from economic incentive structures.
Leo: This feels like a really inventive way of approaching things. So if I've just got this right, there's the curation community, the members of Arkive who vote on what pieces to add to the Arkive collection—
Tom: And they propose as well. So they're sourcing.
Leo: And then the acquisition cost is paid for by investors who, because these assets appreciate over time, whether they are Hot Wheels collections or art; that's where the money comes from. How does that work? Do the investors sign up to spend on whatever the curation team wants? Or is the curation team limited in what they can actually pick? How do you marry those two sides up?
Tom: The most oversight comes from Arkive Inc.; the company sits in between those two. What we do is use our curatorial internal team to say to the community, 'hey, we're looking to continue to acquire in this space', 'hey, we'd like to get blue chip contemporary art', or 'we'd like to work on vintage music memorabilia', or 'we have a partner that is looking for classic vintage video game paraphernalia, and we already know where it's going to be placed; we'd love to have access'.
We tap the community to find interesting items, the community can then vote, and we can do it that way. So, using the community as a sourcing and supply mechanism while the demand is actually on the partnership side. We reach out to find where things can be placed. Where can this go? What is the Four Seasons looking for?
'If we got you an incredible piece of art, would you like to have that?' And they say, 'yes, we'd love a 12x14 canvas piece for our main lobby. We'd happily take that and cover it if you can do it.'
We go out and say to the community, 'we'd love to find a contemporary piece of art', and we use the capital from the other side to back it. So everyone plays their role.
“Those who want to be here will find us.”
— Tom McLeod, Arkive
If you're on the capital provider side, you're saying, 'this is amazing, this group of people are getting me entry points into interesting art that is going on public display that I can go see, almost like I'm a patron, in a location that I stay at, that over time, at some point, can be sold at a profit if that occurs, or I can underlying shares and/or tokens for a profit, if that piece is growing, as a part of the whole collection.'
Leo: Okay. This is starting to piece together in my mind. There are the curators who get incentivised by what they can get from the museums in terms of opportunities and access. And then—
Tom: Yeah! If we place that in the Four Seasons, we don't ask for the Four Seasons to pay, we ask the Four Seasons for a one room upgrade for the Arkive members. So if you stay at the Four Seasons now you get an exchange of service. When you put the promo code in, you get a one room suite upgrade when you stay there. That's what you are incentivised with, right?
Leo: Oh, excellent. And then the community are offering this service of the curation to the people providing the capital, which is a service in itself, and that connects the flywheel. Makes a lot of sense. So, this feels almost like it's a three-way marketplace, and Arkive is in the middle connecting everyone together. Is that a useful model for thinking about this?
Tom: That's what it looks like on my whiteboard.
Leo: That makes sense. So I want to think about the community side of that trio, because this is premised on the idea of 'what if the world is curating these collections'. How have you gone about building that community? If I understand it right, it's a few hundred to low thousands of people. What does it look like today?
Tom: Yeah, it's about 3,000 people. I think there's 5,000 on the waitlist.
Leo: Oh, wow.
Leo: How did you go about marketing it? Because I imagine there's a lot of effort that's gone into finding, almost the right kind of people, or something like that.
Tom: Yeah, so we went about marketing it, ironically enough, just by trying to create authentic connection in the cultural worlds, right? We spent capital sponsoring things maybe other people wouldn't have sponsored, that weren't directly tied to revenue. We didn't have anything to sell. We were host sponsors at Art Basel, Miami Beach last year, and that brought in a lot of people that were of the art world, that would see us; we had our entire first collection on display. That was an incredible experience for many, many people.
We've hosted dinners at everything from F1 to Davos at this point. We're all over the globe with that. Usually with the idea that we're bringing in a curatorial community side with every one of those. 'Hey, if you're invited to this dinner, invite someone else that you'd like to have join.' We don't think this needs tech company social scale, right? This isn't consumer app scale. I don't need a million people, you really just want to maintain high engagement of folks that really care. And I don't know where that comes out to. Maybe that is 1 million people net of 7 billion, but we don't need to be there tomorrow.
It's one of those things where we've been very methodical, maintaining the idea that those who want to be here will find us, and the folks that find us and want to stay will be with us for a very long time. And they're extremely active and engaged participants. So that's been how we've rolled this out. We've never done paid search ads, there's no CAC here, in a traditional business structure. That's been how we've put it all together.
Leo: I imagine though, if there was a cost of acquisition for 3,000 people, going to F1 and Art Basel, that might start to add up.
Tom: For sure.
Leo: You've got so many different types of people from literally all over the globe. What are some of the lessons that you've learned personally, just engaging with these sorts of people, spending time with them?
Tom: This is probably not a hot take but I do think even with the amount of community platforms that exist out there and the amount of different ways to connect, people are still looking to find their group, thematically tied to their deepest interests. And the IRL component of this changes. I personally, like I do actually collect a bunch of vintage video game stuff, right? And so there's a lot of people I interact with on Discords and Reddit forums and YouTube chats and comment boxes where we all follow the same folks and learn about these things, but you really only meet them at a convention, like a giant convention.
“Everyone is perpetually curious.”
— Tom McLeod, Arkive
It's not like a place where you see that all the time, versus with Arkive, you meet in the app now, you used to meet in the Discord, you start to relate to folks, and then when there's a dinner, when there's an event, it brings people together.
We've now thrown events on four continents, I want to say 50 countries. We've been rolling around, we've had dinners, meetups, groups, everywhere, and there are always people who want to show up. It's usually well attended and it's because the stuff that you get are unique experiences and you get to experience it with people that are as passionate about those things as you are. Folks want to find that connection, certainly in this post-pandemic lockdown world that we're in now.
Leo: Yeah, I think a lot of people have come to that same conclusion. But 3,000 people, 19 curated items so far. What does the curatorial process look like for those 3,000 people picking whatever item?
Tom: So there's always been two flows of items in. It's either been internally, so Arkive in the middle, our curatorial team getting inbound about an opportunity, and that's usually with an artist or a person or a specific collector. It'll be items from one collector or one artist, or represented by one gallery or thematically tied to one time period. We curate those and present them to the community, usually we bring that curator, artist, or collector onto the call; they get to meet with them, have a whole conversation, then those items are put in context and put up for vote.
Or it goes the opposite where we do an open call for community items based around a topic or a theme, and the community is like, 'oh, my cousin has, the first Lego set', or 'my friend was the choreographer for Madonna, and she has the "Vogue" Fans' (and that's legitimately how that one came about, for instance). Those are presented to the community, through the community.
Leo: And is it the case that all 3,000 people are really interested in whatever arts collection is up for debates, or is it split up into more focused niches or something like that?
Tom: So everyone is voting on the same thing currently. I think in the future we'll probably have thematic guilds. There's already a group that's that focuses on fashion. They all came together and they're really big on fashion as a subset: vintage handbags, dresses, watches probably even fall into that category at some layer. I think we'll see that more and more. It doesn't change the fact that everyone is, how would I put it, perpetually curious. That's probably the through line of every Arkive member.
And so even if they're not enamoured with 80s pop art or something, if we did a review of it — I think our job and what we've managed to do with such strong team on the curatorial and contextualisation, is just like any good museum, you walk in not knowing a tonne about it, you walk out like, 'huh, well you know what, that might not be my new passion, but I'm better for it. I understand why this matters or why someone might care about it'. Certainly enough that you can make a pretty educated vote, knowing that none of the answers are wrong, based upon what you've now learned in the process of being a part of the community.
You might see slightly lower engagement if it's an obscure item that doesn't resonate with people. It's actually an internal debate: if we should have an abstention vote. Our engagement is extremely high. It's in the high twenties to 30% of people who do consistently vote every single time. Which if you compare that to most like online communities or DAO structures, they're usually low.
Leo: Like single low single digits.
Tom: Low single digits, right? So, we're way up there. That's been consistent for 18 months and has scaled with the community scaling. That was when it was a hundred people. Now when it's 3,000 people, what you will see is a slight flux in that. That is probably tied to, do people either feel a) that they have enough information to vote, or b) did they engage enough with the subject matter to want to vote.
Leo: I'm curious as to how the plan looks to keep all these people engaged. You mentioned the opportunities and the dinners and things like that, but I can see the scaling side being a challenge potentially. My pet hypothesis for DAOs is that people are engaged when the level of influence that they have is commensurate with how much of a stake they think they've personally put in and how much they care. And when you match that up, that is when you get the most engagement. Guilds are quite an interesting idea for me in terms of navigating that trade-off, but how are you thinking about scaling to many more people in the long run?
Tom: Right. So the items themselves, when they're placed in public, do a couple things. They create a sense of ownership; whether you own it or not, having participated in it being out there, when you scan it will say you voted for this, you participated in the round. So there's now these things out in the world that are basically out of home billboards for your community and participation, and you can verify that you've been a part of it. I think having this tangible connection and knowing that the more you participate, the more goes out in the world and the tighter that network occurs, is one.
Two is, while we're not doing direct economic incentivisation, I think that partnership hook, and the fact that for every place we put it, we're asking for something back to the Arkive community. Maybe that's 10% off at the gift shop, a free one room upgrade, or a baseball cap, whatever it is, there's going to be some reward for when that placement happens. So, collecting and being a part of that does give you a tangible benefit.
Now, do I think that's something that a billion people want? Probably not. But for folks that are already collectors by nature, they travel, they want to experience things. They spend a lot of their time, energy, and life around participating in cultural events. We're just giving them a guide map, plus it's rewarding, plus there's perks. I don't know what that scale is, but it's probably under a billion, more than a hundred million people, who would engage with that on a yearly active user basis.
“Networks exist, it's just about coming at them authentically.”
— Tom McLeod, Arkive
Leo: Coming into this, I had the assumption that a key part of the model was it would be museums paying to have these items, and somehow that gets filtered back to the people who curate it. That's not how it works now, but I'm curious as to how likely you think that will be involved in the future, or why you just didn't want to start with that.
Tom: So I think you stated it early on in the conversation, which is museums already need money; even if you're a large museum, they're already on a constant ask for capital.
Leo: But you said acquisitions weren't the problem!
Tom: But they still need to raise money for the other side. It's not the acquisition capital that they need, because we're not selling it to them (we're loaning it). We would be operating expenses against their actual growth budget, we would sit on a line item cost. So I don't think running around saying 'our business model is charging museums' is going to be a great way to get a tonne of capital. Maybe a tier one mega museum, but that's not necessarily who needs us or who we'd want to work with.
I'd rather find a small museum, in the suburbs of London, that's looking for something amazing to display, that can drive more traffic to that museum and they pick up the cost. What becomes interesting is if we can onboard the rest of their collection into that, there's a lot of things we can do around controlling the data flow of where things are. And I think that becomes a larger business model. Could you check into all of those? Could people, when you collect, do a scavenger hunt that is sponsored by a major brand, let's say in, pride month? Can you find and collect three major works of art by LGBTQ artists over the last 20 years? Scan, check them in, and some brand, say Rockstar energy drink, gives you a free case of energy?
I think we can do some pretty interesting things there by taking the partnerships, the community, and the intent, and then adding in this marketing layer, that we can also give capital, not just to us, but back to the locations themselves. I actually think we can start to generate revenue sources for them. And that's largely where I'm looking at: I think if we can get to a point where that data layer can become unique, valuable, and something can come from that, that's where we're going to spend most of our time on the economics.
The underlying asset management structure by itself can drive enough revenue to keep us in a 'minimum viable alive' state for quite a while. So that's been our push there, to get to a point where we're near breakeven so we can continue to grow the overall data around global art and collectibles, in public locations, and then what can you build off of that? If we know where there's 20 million different pieces of art distinctly managed and placed, there's a lot that can happen from that data layer and no one has that currently.
Leo: Yes. I was thinking a couple of moments ago as we were talking, that if you could create that data layer that has every single museum item on it, then that is an enormous amount of value and opportunity that could be created that could really take the museum experience up to the next level.
I want to think about the funding then, and think about how that scales as well, because it's coming from a relatively small group of people in contrast to the curators. Do you worry about that constraining the sorts of things that you do collect when you are at a larger scale?
Tom: I think similar to the stratification of the community into guilds, we'll probably stratify the capital pools into targeted investment vehicles around thematic collections. So if fashion, the first one that's starting to go, has a tonne of interest, I think we could probably raise direct capital just to focus on a fashion vertical, and letting that subgroup start to work on that. The only thing that probably decreases the market ability to participate is if we don't have anyone representing the interests of that subset (such as fashion) in the community. It would be very hard to say, 'hey, we're gonna launch sports cards and have no one in sports cards as part of Arkive', right?
Right now, Arkive is largely focused on people that came from art, then there's some incredibly important people that came in from vintage cars. We have some folks that are very deep in music memorabilia that came in after the Madonna fans and the MTV Moonman. Those things start to naturally grow. If someone came to us and said, 'hey, we'd like to focus on vintage music memorabilia', we could run a process on that right now pretty well.
I think that's probably how it comes: we start to focus, we start to do reach out, we move into those spaces. Just like we did the sponsor partnership with Art Basel, there's nothing stopping us from doing Comic Con, there's nothing stopping us from doing major watch collections, there's nothing stopping us from doing the Concours d'Elegance in Monterey, California, for vintage cars. These network exist, it's just about coming at them authentically.
Leo: I think there's a group of people, particularly in the web3 community, that think blockchain gives us this power to reinvent not just the sorts of segments, like fashion or cars, that get curated and exhibited, but the sorts of creators or the types of fashion that maybe don't get represented in museums today. I'm curious how much what you think about this? Because I can imagine the critique of, by taking similar sources of money, you are limited in your ability to really fundamentally reinvent and reimagine the actual items in a museum. I'm curious to get your take on that.
Tom: I think that's more of a conversation around collection construction. What we've been looking at broadly is how do you segment it? If you look at the 19 objects we've acquired thus far, there's a certain percentage you would consider blue chips in their respective categories, right? The patent for the first computer is a pretty blue-chip item in the history of computing.
There's also a lot of smaller things right now that are gaining in traction. People are spending huge monies on sealed iPhone 4Gs that have never been unboxed. I would consider that an emerging market with unknown opportunity or liquidity; if someone brought that to us, we would certainly be interested in learning about it.
“There's plenty of culture — the world should just have more of it on public display.”
— Tom McLeod, Arkive
And that's just one subset. You could apply that same layer to emerging artists and say, listen, you guys have acquired a (Jennifer) Allora and (Guillermo) Calzadilla piece. They've been working for 20 years, they're collected by major institutions, that's awesome.
But you could also say, listen, you guys should think about acquiring such and such person. They're growing, their influence is important, they represent a population that hasn't often had their stories told. I actually think the community will make a lot of those decisions. It's in our best interest to, similar to the way you might think about venture capital versus real estate, where it's like, this is low reward, low risk, steady appreciation, and it's a historical store of asset value. Every now and then though, you probably should invest in a startup, because one might be Uber, one might be Airbnb.
While that is a pure financial methodology, I think that same thing will apply, I think the market forces over time, will say, 'you should add a little more risk to this', and risk in this case might be a type of fashion or a type of art or something that hasn't been historically tracked, but being a pioneer will get you both reward for being culturally curatorial forethought and potentially even financial. I do think those things settle themselves in, for lack of a better word, like portfolio construction of a collection.
Leo: Sure, and I think even if there isn't a replacement of the sources of capital, there is that replacement in the curators actually making those choices. And there's a lot of diversification in the perspectives that are being included there.
I realise we should have talked about this a lot earlier, but as we wrap up, you mentioned the first patent for the computer, I'd love if you could just talk about some of the pieces you've collected, and I also have a question about where you think Arkive will eventually slot in the ecosystem of museums and maybe what museums should be learning from what you're doing.
Tom: Sure. Pieces we've collected: the first thing we acquired was the ENIAC patent. That holds a special place in my heart. There's an incredible book collector, his name's Jeremy Norman, he lives in Novato, California. And he's probably – it's hard to quantify these things – the foremost collector of books on computing. He runs the website called historyofinformation.com, he's written giant books on just everything that's ever been done from the—
Leo: I've watched the Arkive video of where you were visibly really excited to go to visit him and he's got this wonderful room full of books. People should definitely watch that video.
Tom: Jeremy's amazing! He has books, he has art that was programmed by computers in the 1600s and 1700s. They used punch cards that programmed a loom, and the loom runs off of the punch cards and it's thousands and thousands, like over 10,000, punch cards. The loom was programmed with punch cards and that's how it would make art. Every punch card is one line, and it would tell the loom like, do this stitch, don't do this stitch, do this stitch, don't do this stitch. Jeremy has the art, and he actually has a piece where it is a picture, done on the loom, of the guy programming the cards for the loom.
I was like looking at this, like, this is incredible stuff. So that's been amazing. That's a fun thing for me. Every time I get to meet the artists or the curators, creators, collectors. I think of that as the genesis piece, right, and we thought about that deeply. It was 35 people at the time. What should the first item be?
A few things were thrown around. There was an opportunity to collect the first edition of Isaac Asimov's Foundation. I don't know if you know the story of Foundation, it's this idea of a group of people who break out to the edge of a galaxy to start to collect the things that need to be remembered, because there's a predictive engine, AI, that has basically said that the empire which controls it is going to fall, and you need to be there to restore the history of what matters when the Empire falls. And so there was this idea, we're not saying the empire is going to fall, but we are this collective group coming together to, maybe you should do that. Amazing things were thrown out, once the ENIAC patent showed up, it was a great start point.
On the art side, there's incredible pieces. I like when they tell a story and also are aesthetically beautiful. We have this piece by a Puerto Rican artist group called Allora and Calzadilla, and it's this giant white canvas with these black streaks of iron filings on them. And they're made with an electromagnetic field. It's actually called Electromagnetic Field.
But what it's telling the story of is when the blackouts hit after the hurricane in Puerto Rico, they got power back to the major cities early in San Juan and Fajardo where tourists go, but in the middle of the island, the poorest folks didn't have power for months and months. So the two artists cut the downed power lines, got batteries from abandoned cars, and rigged up in series these giant arcs of electricity through the downed power lines from the car batteries, and put it over the canvases and dropped the metal filings on it.
What you're actually seeing is them physically taking the power back from where the government didn't support them, to take care of their people. So, it's like, you look at it, this is aesthetically attractive, this would look beautiful in my home, and then you read about it and you're like, 'ohhh'.
And it's a great story there because we ended up placing that in a library in Calgary, through a relationship with one of the members of our community. Calgary as a city is reckoning with the fact that they've largely made most of their money in energy. It's an energy hub of Canada for pulling oil and natural gas out of the ground. They're reckoning with the fact that by 2050 that industry is going to have to shift.
So when you enter this beautiful library they have, you now have this painting that's amazing, and then you read about it and it's like, 'okay, taking the power back, what are we going to do as a city in transition around power?' It's just a perfect circle. When those things happen, I love when we can do that, and that would be hard to do in almost any other way. If that ended up in a random city, that story couldn't be told; I think the world would be less beautiful because of it.
Leo: It feels like a wonderful place to end. But I really want to ask about what you think the museum landscape is going to look like in the future. Is it a case where Arkive is complementing these museums and you work really well in tandem? Or are there a lot of lessons that museums and yourselves can learn from each other? Or both?
Tom: I think we are complementary. This isn't a rivalry situation. There's plenty of space, there's plenty of people, there's plenty of art, there's plenty of culture — the world should just have more of it on public display. And I think everyone's aligned with how to solve that.
I think where we might be beneficial to them is helping museums place on public some of their stuff that's in storage. Because over time our network of opportunities there might be reflected in a way where they could say, 'all right, if we don't necessarily have to keep everything within a 50 mile radius of our buildings, what could we unearth to the world?' Maybe they start to build out Arkive-esque structures for placing their collection further on public display for people to interact with. That's a huge win.
There are more than enough walls globally for beautiful things and interesting creative, inspirational stuff to be placed. You just have got to get past this feeling that things can only be in these locations, which is just historical hierarchies that I think we're evolving past over time.
Leo: And once you do get past that, you see there are so many opportunities for displaying things of cultural significance, for who decides what those items are, and at Arkive, it looks like you guys are doing a fantastic job of taking steps forward to making that happen. Tom, thank you so much for coming on. It's been an absolute pleasure to learn more about your story and of the Arkive vision as well.
Tom: Awesome. Leo, thank you for having me. It's been great.