Can 20x200 Be Saved? Anger From Collectors Mounts as Leading Art Site Flounders
NEW YORK — On January 16, Esther de Hollander placed an order from affordable print purveyor 20x200 for her sister’s birthday. Her credit card was charged immediately, but she did not receive shipping confirmation. A week passed. Then two. After emailing the company, she was told it was experiencing delays and she would receive an update within three days. Nearly two months and several follow-up emails later, de Hollander has neither her print nor any answers from the company.
De Hollander is one of several customers who have ordered artworks from the well-known site, only to be left hanging after it suddenly went offline on January 31. Details of the company's troubles are murky at best, but it appears there may have been some sort of dispute between Bekman and investors.
Just last fall, 20x200 founder Jen Bekman celebrated the company’s fifth anniversary. At the time, she reported the website had raked in $15 million in cumulative revenue and anticipated that it would turn a profit in 2013. Widely considered a leader in the online art startup scene, 20x200 produced more than 200,000 prints by more than 200 artists, including stars like Lawrence Weiner and William Wegman.
Behind closed doors, however, the situation was less rosy. Printers and artists were consistently paid late and communication among different branches of the business had become difficult, according to several people close to 20x200. By the end January, several members of the board had resigned, including Tony Conrad, a partner at the venture capital firm True Ventures, who led the company’s second round of financing in 2010.
On January 31, tensions finally came to a head: The website went offline. (A simple but vague message — “Stay Tuned: We’re taking stock and making updates” — has greeted visitors ever since.) Though rumors of Bekman’s departure proved premature — according to people familiar with the company's transition, she is still technically CEO — her entire staff of 18 is no longer working with 20x200 in any official capacity.
Without a staff, board, or cash flow, 20x200 has been unable to fulfill orders. “I was a loyal customer — I have at least a dozen 20x200 prints in my home and loved giving them as presents,” De Hollander wrote ARTINFO in an e-mail. “But the way they're handling this situation has left me cold. The form letters [sent to clients] are filled with subtle jabs at some mysterious entity, but without knowing the details, they just come off as lame.” Emails sent to de Hollander from a former staffer were adressed to “XX” and noted that the company was “in the middle of a ‘rocky transition’ and a ‘complex situation.’”
De Hollander is not the only one still waiting on prints, either. Several 20x200 customers have contacted ARTINFO about orders from January they have yet to receive. “It feels like keeping track of 20x200 has become my full-time job,” said Jill Krupnik, who is trying to pin down a print her parents ordered for her in mid-January.
Collector Tim Clark received a form email in January when he wrote to check in on his $110 print order. It reads in part: “We normally try to respond to our collectors' emails within 24 hours. Right now, though, we're in the midst of a transition here at 20x200, so there have been some hiccups in our process. We're working hard to get things back on track, and will have more news about what's next in the coming week.” He has yet to hear back.
Meanwhile, several printers who work with 20x200 and artists who sell work through the site have not been paid for months. Though a representative for the company declined to comment on how much money it owes partners, some familiar with its operations estimate that the bill is conservatively in the tens of thousands of dollars.
Reached by ARTINFO, Bekman declined to comment on the state of matters at her company, beyond stating that she was “100 percent focused” on finding a solution. An integral part of that solution, people close to the company say, is securing alternate sources of funding for the site. But that may not be easy. (Investors often retain their stake in a company even if they are no longer on its board. 20x200’s venture capital funders would therefore need to approve any proposed arrangement that might infuse cash into the company, such as a new investor, partner, or buyer.) An arrangement of this kind will likely take weeks, if not months, to iron out.
Even if 20x200 manages to secure new funding, some still question the sustainability of its business model. “I always thought there was no way they would achieve the volume necessary at the low price points they sold at to be successful,” said Jim Hedges IV, president of the art-oriented investment firm Montage Finance. (20x200 offers prints at prices ranging from $24 to $10,000.) “You have to be selling on fab.com or Gilt Groupe — somewhere where you’re touching 12 million customers — to sell art that costs $20. 20x200’s customers may get burned here, but I think they are dealing with a very small universe. If it were anything but, they wouldn’t be in this situation.”
The state of this one-time art leader illustrates just how challenging it can be to bring art into the start-up space. Venture capitalists take big risks lending money to small companies, and for their investment to continue, they expect major growth — the kind of growth the slow-moving art world is unaccustomed to seeing. “Venture capitalists are looking for significant returns on investment because their returns for many of their investments are negative to zero,” said James D. Cox, a professor of corporate and securities law at Duke Law School. Large VC investments — like the $2.85 million pledged over several years to 20x200 — often dribble out according to specific performance goals that company management must meet.
Despite the dire straits, the idealism behind 20x200 — its oft-repeated mission statement is “art for everyone” — continues to inspire. “I believed in what we were doing,” said Dylan Fareed, 20x200’s former director of technology. “Everyone I’ve talked to is looking forward to having 20x200 back online. And Jen has been dogged in her pursuit of that.”