The Konsole Podcast – S1E2 – Shotca

In this episode of The Konsole Podcast, we interview a young entrepreneur who is building a revolutionary online art marketplace! We talk through the struggles young entrepreneurs face, ideate around different product challenges, and have a very candid conversation on how we as young entrepreneurs are often better equipped to build companies than our older mentors.

Music Credits: Don’t Stop by YFLY

Listen: https://ffm.to/yfly

Buy from Shotca: https://shotca.com

About Bryan Uribe: https://bryanuribe.com

About Daniel Guiney: https://www.linkedin.com/in/danielguiney/

Transcript:

Bryan Uribe: What’s up ladies and gentlemen, Bryan Uribe here.

Daniel Guiney: And Daniel Guiney. We’re here with Konsole Consulting.

Bryan Uribe: And today we’re going to present.

Raymond Carapella: Shotca Art.

Bryan Uribe: Now, your name?

Raymond Carapella: Oh. My name is Raymond Carapella. I’m the CEO of Shotca Art.

Bryan Uribe: Awesome. So, thanks for coming. We’re super excited to have you. So, we’re going to keep this super informal, so laid back and just dial in and we’re here to have a good conversation. So first off, what is Shotca? And before you lead with that? How do you spell it?

Raymond Carapella: You spell SHOTCA.

Bryan Uribe: Okay.

Daniel Guiney: Shotca?

Raymond Carapella: Yes.

Daniel Guiney: Awesome.

Raymond Carapella: And what Shotca is, it’s a platform for artists and buyers to come on share artwork and exchange artwork at the same time.

Bryan Uribe: Badass.

Raymond Carapella: Yes.

Bryan Uribe: Awesome. So where are you in your development process?

Raymond Carapella: Right now we are pre-beta. We developed our MVP and we’re looking to Beta launch within the next month and a half.

Bryan Uribe: Nice, Nice.

Daniel Guiney: And for the listeners. Can you define what an MVP is?

Raymond Carapella: MVP is the Most Viable Product. And what it is, it’s what you are going to be offering to your consumers, the people who are you going to be using your business. So we’ve developed that and we’re getting ready to launch it.

Bryan Uribe: Yes. And the goal for the listeners is market validation. That’s the biggest thing. You got to make sure that people actually want to buy your product and you hit it on the head.

Raymond Carapella: Absolutely.

Bryan Uribe: So, how did you come up with an idea like what was your inspiration behind it? Walk us through that?

Daniel Guiney: And yes, even just to dive into that more like can you talk to the why of your product, right? Like I’m sure it’s cool, outstanding moneymaking idea, but specifically why, like what the type of service or solution are you providing?

Raymond Carapella: So, I will have to start off with the story behind it and then dive more into the why. Because the why is never the first thing that I feel that the company kind of thinks about. I feel the why comes when you start to develop the plan a little bit more than the idea.

Bryan Uribe: Yes.

Raymond Carapella: So, the idea started with a friend of mine about two years ago who was an artist. And he had a manager down in Miami, but the manager was taking 50% of every piece sold. So he has $6,000 pieces, this man is walking away with 3000.

Bryan Uribe: Must be nice.

Raymond Carapella: Yes.

[Laughter]

Raymond Carapella: But that’s what the manager has to take when they’re in a gallery and they have a house they have to pay for. And our idea was, you know, we’re college students, 50% a little greedy, you don’t need to be taken out. And this artist is trying to provide for himself. He needs to make his money. So, we thought let’s be his manager, but only take 25%, so we could cut it in half and give the artists an incentive to want to work with us. So it started out and he was very reluctant to work with us. He was like, “You know, I’m not very interested. My manager wouldn’t be happy and I don’t really trust you guys yet.”

So we were completely understandable. We get it. We’re young, we don’t have this foot in the yard door yet. But we sat back and we thought, why would we just stick with him when we could develop a platform that could partner with every single artist in the world and use this model with every single artist. From then on, the idea started to develop, right? And we’re like, “Cool, let’s build a platform. We’ll allow artists to come on and share their artwork, sell it directly through us. We’ll take that smaller commission fee and we’ll just cash in.” But we’re like, that’s really not enough. We started to look into the art market itself. $65 billion market, but only 4% of that market is online. And we “Thought, wait, wait, wait. There’s a really big problem here. Why aren’t people buying art online?”

Bryan Uribe: Sure. Absolutely.

Raymond Carapella: Like that is – especially in today’s day and age. You got people buying cars online. People are going to buy a $50,000 car online. Why aren’t they buying a $50,000 apiece? Well, the barriers that come with it, right? So when somebody wants to buy an art piece, and this is where the why comes in, right?

Daniel Guiney: Okay.

Raymond Carapella: Because people see the issues with, “I can’t physically inspect this piece before purchasing it. I don’t have the provenance, anything like that.” There are not online security payments like you could buy a car online, right? It’s very secure. They don’t have that for the art market. So the why behind Shotca is provide a place where consumers, especially buying high-end pieces, can feel comfortable buying it. We want the people who come onto Shotca to feel the same confidence as they’re walking into a gallery and buying it right there on the spot.

Bryan Uribe: Absolutely.

Daniel Guiney: Very cool.

Bryan Uribe: Yes.

Daniel Guiney: All right. So that’s the why behind it. And can you tell us a little bit about the team? Who’s involved?

Raymond Carapella: Yes, absolutely. So, my partner, CEO, Co-founder, Jonathan. We met two years ago. He actually helped me start the idea. Both worked in finance, both very driven. He’s a CEO because he’s always like “long-term, long-term, long-term.” This guy, he’s a visionary. He’s like… We wouldn’t be where we are today and have developed all these ideas without him pushing us. I mean like, “Did you see this new technology? We got to find a way to implement this. We have to, we have to.” So, he’s that whole visionary mindset behind the idea like “Let’s do this in five years. Like we got to aim for this, let’s do it.” So he does that, it keeps us all on track.

I am Chief Operating Officer because my role is sort of like his counterpart, right? So there’s a lot of things that he lacks. He’s very visionary, right? “We got to be here in five years.” But if you were to explain it to people, he would be all over the place. Not really.

Daniel Guiney: Got you.

Bryan Uribe: Yes.

Raymond Carapella: But I’m very like, I don’t want to say in a way I take shortcuts, but I’m very like cut clear to the point. So, if he has a five-year plan, I can be like, “Okay, we’re going to do this, this and this.” And break it down as simple as possible for everybody else on our team.

Daniel Guiney: Okay.

Raymond Carapella: So, we are CEO, COO, we started it and then with us on the team is Anthony Rush and we actually just got an engineer on this past week. Kenny.

Daniel Guiney: Outstanding.

Raymond Carapella: So they are marketers and it sounds like they love marketing. That’s their thing. They love it. Social media in person, banners, sales funnels, all of that. They love it. It’s what they live for. As I said, they get excited about this stuff.

Bryan Uribe: Absolutely.

Raymond Carapella: So, that’s kind of it. Obviously, John and I kind of work with them because everything they do and you’ve got to get approved by the whole entire core of a group. And we don’t act as a vertical structure. It’s like top management has the final say. We work as a team, as a unit. Although they haven’t been here for two years, they’ve been – and Kenny’s been here for a week. You know, and we give him a lot of say in things. Like, because he is a smart guy. His input obviously matters within our organization. So if everything that kind of goes through all of us, it gets approved as a collective. So we all work very well together as a team. I give everybody credit like we would not be where we are without everybody working together on it.

Bryan Uribe: Absolutely. I think that’s the biggest thing too, especially for young teams, is understanding that it’s not just one person, right? Like there’s a lot of successful solopreneurs, they’re not as common though because you do need that infrastructure. And the successful solopreneurs were going to be successful either way. So, you can put them with a team and those that do succeed, you’re just great and brilliant, but those people are not common. Right? So, having that understanding of this is a team and we all need to see on the same page. All cogs have to be moving at the same pace, the same tempo. And if it’s not, we need to triage that as fast as possible. It’s really critical. So, my questions for you are, what are some of the challenges you’re facing as a young organization, a young company?

Raymond Carapella: A young organization. I think there’s – well several things. There’s going to be to all this at the end that are more, I feel every organization, especially in the startup phase has these issues. But to start off obviously being young, right? So I’d say the average age of our team is probably, I believe it’s 21. So, when you have a group of 21-year-olds, we’re obviously not as well versed in the business world. Not necessarily. Like none of us have really started businesses before.

Bryan Uribe: Yes.

Raymond Carapella: So, in a way, it’s taken two years to get off the ground because it’s been a lot of learning and development. Obviously, we couldn’t launch it and then it’d be just take off because we’re still young. We don’t know everything we need to know.

Bryan Uribe: Absolutely.

Raymond Carapella: So being young has been obviously one big impediment for us, but we’re learning, we’re growing. As it goes, we have a great handful of advisors, consultants like you guys who have just really helped us develop our minds and get ready to keep moving forward.

Daniel Guiney: Just to that point before we even jump to the next one. You know, I always say I was echoing people like Gary V, when I say that, “You know, being young isn’t a disadvantage.”

Bryan Uribe: It’s an advantage.

Daniel Guiney: It is an advantage certainly. Because you guys are just privy to the new tech that’s breaking through, you’re privy to the new trends. And you know, to be able to innovate, you can’t do what’s been done for 50 years. Like you said previously, only 4% of the art market is purchased online.

Bryan Uribe: Yes.

Daniel Guiney: That number blows me away.

Raymond Carapella: Right.

Daniel Guiney: Just hearing that upfront, right? Everything is purchased online. So to even have a concept of we can do this online, I think that’s [inaudible 09:18.]

Bryan Uribe: I mean, even growing past that, like I definitely do want to like hone in on that. Like being young is so much more powerful than getting somebody that has 20 years’ experience in the industry. Their experience as an executive at a multinational organization with a thousand employees is all the way different from what you’re going to experience with five people trying to penetrate or disrupt an entirely different market. So, a lot of the things, a lot of the preconceived notions that like candidate A with more experience has, you don’t have. So, when it comes to decision making, a bad decision for a thousand-person organization is the right decision for a five-person organization. So, it is a little bit of a balancing act and a little bit of giving and take.

So, I think that’s super powerful and also just understanding that too, right? Like a lot of what we talking about is knowing what you don’t know. So, we don’t know what we don’t know, but that’s why we talk to other people because we hope to find what we don’t know out. But yes, absolutely. Keep going.

Raymond Carapella: I’m going to keep it with the young thing because that kind of like where we’re at, right?

Bryan Uribe: Just hold on a second.

Daniel Guiney: Yes.

[Brake]

Daniel Guiney: Are we live again?

Bryan Uribe: Yes. We’re alive again.

Daniel Guiney: All right, we’re back. There you go.

[Laughter]

Daniel Guiney: Back in this bitch. All right.

Bryan Uribe: Don’t worry guys. We’re getting new cameras, a new microphone, new everything bro.

Daniel Guiney: It’s all coming together.

Bryan Uribe: Yes. Thanks.

Daniel Guiney: So, as you were saying. Continuing on the young trend.

Raymond Carapella: Yes. I’m going to keep it on the young trend because I love the fact that I’m young because you say, you don’t know, you don’t know. And being young and developing a business, it humbles you in a sense. I’m not going to grow older and be grouchy and be like, “Oh, I don’t want to learn new things.” I’m always going to have that open mind like, “Yes, sure, let me learn from you.”

Bryan Uribe: Yes.

Raymond Carapella: Because I’m learning it while I’m young. That you got to learn new information, you got to learn from other people. So, I love that. I think it’s good. Another thing is, is like you said, this 50-year-old man whose work has a thousand employees working beneath him. Like he may just have a one-track mind, right. And I think, I don’t remember whose video was, it may have been a ted talk somewhere, but the guy made it a point. “Stay young in your mind.” That you have to stay young. Because like you said, being young, we have this innovative technology we’re working off of.

Daniel Guiney: Sure. I

Raymond Carapella: If you get old and you’re too accustomed to like that older viewpoint, then you’re going to fall behind. It was like IBM having the option to take on software, I believe. Or hardware. They had the option to take on hardware, but the CEOs and their board were like, “Nah, we don’t want to do that.” Because they were just stuck in their old, like “We’re only doing software. That’s what works.” And then they miss that huge opportunity. Whereas I believe Steve Jobs worked at IBM right before leaving with somebody.

Daniel Guiney: He took some of their technology. Some of their technology inspired the first Mac. Same with HP. And you know, I think that’s critical, right? I believe it was HP who invented the mouse. And HP also had the first graphical user interface in the world.

Bryan Uribe: Okay.

Daniel Guiney: So if HP would’ve come out with that, even IBM.

Bryan Uribe: No, it was HP with the graphical user interface. IBM started building the computers and they were like studs and they were great mainframes and all this other stuff, right. They did great with that. Same thing, when you look at Google versus Yahoo. Like Yahoo had the opportunity to buy Google.

Bryan Uribe: Yes. Blockbuster and Netflix.

Daniel Guiney: Yes. 100%. So it is looking at some of these things and likes looking at how you could approach disruption. That’s the biggest thing to just maintain competitively. I think that the biggest thing I try to practice, and this is going to sound kind of nuts, but I actually tried to live by this. I like putting myself in uncomfortable situations. Like at least once every other week. I’m like, “All right, fuck man, this is nuts.”

Bryan Uribe: And verified.

[Laughter]

Daniel Guiney: It’s like, “Oh, this is kind of nuts. Am I really doing this?” And then it like, all right, you shoot your shot and you typically find success. Because the thing is too is most people aren’t actually putting in the work. And like, I have this whole concept and I guess now’s a good time to share it, but I feel like it’s like struggled porn. Like we liked – yes. It’s like struggle porn,

Bryan Uribe: Trademark.

Daniel Guiney: Yes. Trademark. It is, dude. It’s like, “Oh yes, like I’m a starving artist.” It’s like, “No bro, go get paid.” Like you can get paid. You can get paid. Put the work in.

Bryan Uribe: Yes. Absolutely.

Daniel Guiney: “Oh, I don’t want to put the work in.” I want to watch all these videos of these people doing it. It’s like we were talking about it earlier. You actually weren’t there. I was talking to this girl earlier and from our last video and I was telling her how people go on twitch and they like the kids watch people play video games. Like, I’m looking at my nephew three hours on his iPad and I don’t understand it. I want to get on and I want to kill some of these kids. Not actually, in the game.

Raymond Carapella: No yes. I got you.

Bryan Uribe: You got to be sensitive now.

[Laughter]

Bryan Uribe: No, but that’s what I’m saying. Like I think that’s really necessary. What do you foresee your biggest challenge as been moving forward as an organization?

Raymond Carapella: Two big things that I feel every startup, every company has these issues.

Daniel Guiney: Okay.

Raymond Carapella: Capital being one. You need capital to move forward and sales. Sales generating capital, whether you’re going to reinvest it or just payout. So I feel like moving forward, those are the two biggest issues.

Daniel Guiney: Alright. That was a very interesting answer. Just to like break it down a little bit, right? Like so capital is certainly a challenge. I would agree, but I don’t know if capital is your biggest challenge, right. And telling me like this is how I feel, tell me what you think of it. You know, I think capital and sales come from your innovation, right? So I think it’s more of a proposition problem in that you have to position the solution that you’ve come up with, right. Because clearly, you have a really innovative product. Art sales 4% are only done digitally. That’s the problem you’re solving. So I think the main problem is not how do we acquire capital, but how do we position this in a way that we can capture more of the market, right? And then the sales will come if you can get it in front of the right people and show them that there’s a better way to do it. Does that make sense? Is there a clear distinction there?

Raymond Carapella: That makes a lot of sense, yes.

Daniel Guiney: Right. So, you know, I forget, we’re at Iona College right now and I’ve professor one time who’s since passed. But he had a really interesting point in my entrepreneurial class where he said, “You know, I don’t know why all these kids keep coming to me telling me that they need money.” You know, he says “The most successful people that he knows to start businesses without any money.”

Raymond Carapella: Yes.

Daniel Guiney: Right. And the reason they do that is that they’re solving problems. So they identify the problem that needs to be solved and they position themselves to facilitate that solution. And when they do that, they find all of the money that they could possibly need. Because everyone wants to get in and on at that point, right. You hit the early adopters, like, sure, you need a little capital to make sure that you have housing and make sure you have access to the resources you need to further the business. But as soon as you capture those early adopters, it’s going to spiral and you’re going to acquire more capital than you initially know what to do with it.

Bryan Uribe: Yes. And I also want to challenge you too, right? So, you have an interesting sales model where there is, in our last conversation, you do have the opportunity to have more established revenue streams. Like, position it that way off of our last conversation. So any organization that can do customer-facing sales, and I’m not talking like – so your challenge isn’t to get a firm that is going to buy a ton of heart, right?

Raymond Carapella: No.

Bryan Uribe: Your challenge is getting Daniel Guiney and me to buy art.

Raymond Carapella: Absolutely.

Daniel Guiney: Right. Through your platform.

Bryan Uribe: And then everybody else that we know. So I’d kind of challenge you to kind of rethink that. And I understand, like no sales experience, it is difficult. But capital doesn’t come unless you have revenue typically.

Raymond Carapella: Yes. Absolutely.

Bryan Uribe: And capital also doesn’t come if you don’t have any traction. So one of those has to come in one way or another. But your product/service is so unique that you’re in a really interesting place where you could legitimately never have to raise capital.

Raymond Carapella: Yes. You’re absolutely right.

Bryan Uribe: But you got to be an animal. Like you got to get like a stud salesperson in there.

Daniel Guiney: Oh yes.

Bryan Uribe: You got to get like some really consistent sales strategy and it’s got to be all hands on deck. I mean like you, the marketer, the CEO, like everybody. But the engineer’s got to be [inaudible 18:09].

Daniel Guiney: It’s like zero to one pretty much really.

Raymond Carapella: Yes.

Daniel Guiney: And you guys are bringing to market like this is not something other people are doing that I’ve seen. I mean, you know I haven’t done it…

Bryan Uribe: It’s not prevalent.

Daniel Guiney: It’s not prevalent if it’s there. Can I just ask you to jump back on those two topics you said initially? What were the two main barriers you identified?

Raymond Carapella: Physical inspection of the piece and authenticity/provenance.

Daniel Guiney: And authenticity. Would you be able to talk to a couple of solutions you thought surrounding those?

Raymond Carapella: Absolutely. To dive in-depth with it. Now, you said don’t obviously expose…

Bryan Uribe: Yes. Don’t expose any intellectual property. Yes. Don’t get no like a unique process. But if it’s a generic, yes you could.

Raymond Carapella: Yes. So, for the…

Bryan Uribe: Yes. If there’s salt in there, you can talk about the salt. Don’t talk about the Paprika.

[Laughter]

Raymond Carapella: Absolutely. So I’ll break down, So, the basis of how we’re solving the issue, but I’m not going to explain how we’re doing it. So augmented reality. Very prevalent, coming out. A lot of people are starting to use it, a lot of companies, but no art company. Several art companies who’ve tried to do it, but obviously they kind of run into issues with working with their user interfaces and like a clean way. So, augmented reality. The big one to solve, the physical inspection part of it. So if you are a collector and you see this $5,000 other piece, you’re ready to add it to your collection. You see it on our app, but you know what? You don’t really know what it’s going to look like in your home, in your collection itself. You could walk in, pull out your phone, click on that piece and put it right on your wall in real-time. And they can walk around and be like, “You know what? Yes, this is perfect. I absolutely want this piece because it looks perfect in my house. It goes perfectly with my collection.” Boom, he purchases it right there. So he just saw right there from his phone. He saw what it looked like without having to be there.

Daniel Guiney: Okay

Raymond Carapella: The second one. Provenance and authenticity. Again, not going to go into details.

Daniel Guiney: Not giving up the source.

Raymond Carapella: Blockchain. And, no, not bitcoin. We are not selling art with bitcoin. Although we can, we’re using Blockchain technology at its core of what Blockchain is to provide an authenticated certificate for each art piece. So, anytime artists were to come on, it would be validated onto the Blockchain and it would be securely put there.

Daniel Guiney: Outstanding. Yes, I was wondering if you were going to go that way and I think it’s really innovative that you are. Very cool.

Raymond Carapella: Thank you.

Daniel Guiney: Very cool.

Raymond Carapella: It’s come a really long way. Because everybody’s initial thought, especially with Blockchain is “Oh, yes. Just use bitcoin. Just buying and selling with bitcoin.” Yes. Bitcoin is like why Blockchain came about. But that’s not a Blockchains purpose. You know, it goes a lot further than that.

Bryan Uribe: I think you have a massive market opportunity, especially with this trend behind decentralized web where they’re trying to find ways to get everything off the web because the web can actually crash. Like that happened two years ago. I think 60% of the internet wasn’t accessible in like the northeast. All right. So like, when you see like statistics like that, a lot of that is because of technical debt. So in other words, technical debt being all the old infrastructure that was put there first and then everything you build on top of that at a later date. So yes.

Daniel Guiney: Very cool. Now if we circle it back around, that was an excellent answer to the question. I think that’s really brilliant. What you guys are doing on those two points and solving two key issues. Can we talk about how you’re telling people you’re doing this?

Raymond Carapella: So we try not to overwhelm people with the whole technology. Because let’s be real when you’re trying to market a product in a sense and nobody really cares. Like nobody cares, “Oh, they’re using augmented reality or they’re using Blockchain.” Like our consumers don’t care about that. They just want to get on and be like, “Oh this is awesome. Oh wait, but they do this too? That’s great.” So, the way we try to explain is not, “Oh, we’re using this technology, this technology.”, But we have the best user interface you could come on and it’ll feel like you are in a gallery or you’re managing your own portfolio as an artist. So the way we get them on is this will be the most seamless platform you could come on and use as an artist and the easiest way to sell your artwork. And for a collector, this is the best marketplace you could come and buy the artwork. Hands down.

Daniel Guiney: So, you’re really facilitating a B2B and a B2C conversation?

Raymond Carapella: Yes.

Daniel Guiney: Right. At the same time,, simultaneously attracting both artists to come in and clients to come and purchase. Are you wholesaling that? Is it going to be like a one to one conversation with the artists or how are you planning on reaching the artists?

Raymond Carapella: Like us obtaining the artists?

Daniel Guiney: Sure.

Raymond Carapella: So, it started out before even developing a platform. In a way we started as a media company, right? We knew we needed to build up our artist base before being like “Okay let’s build the Beta.” Because if we did that we would have nobody on the Beta, right?

Daniel Guiney: Absolutely.

Raymond Carapella: So what we did is reached out through social media, when to art fairs and just talked. Word of mouth at these artists. It’s like “Oh we got this really great idea that we’re building but we need artists first. And we really just love to share your work on our social media and get you that extra exposure that you don’t have.” Do your social media through this art fair. And through that process, we’ve gained about 100 global artists just in about three years and a half. And we haven’t been doing as much recruiting as of late. Just through word of mouth and be like, “Oh come jump on the platform.” And we know once the Beta launches that all those artists are like, “You got to check out this platform that like they launched like this is sick.” And they’ll start spreading to all their friends and it’ll be like a web of just conversating, conversating about it.

Bryan Uribe: Have you quantified what your total reaches? So you have 100 artists? 100 artists have at least 100 pages. A lot of these guys are probably having multiple pages, right? So, what would be your total reach if you just got these guys to act as influencers at no cost? Because at that point in time it becomes a totally different conversation. Where it’s like, “I got 100,000 people. Yes, check out Shotca.”

Raymond Carapella: Yes.

Daniel Guiney: Right.

Bryan Uribe: “Beta just came out, try it out. I got a piece up there. It’s exclusive.” I mean, I’d even challenge you to consider like, dude, what about like a discount? Like, post this, you post this bro, 10% bro, have at it.

Raymond Carapella: Absolutely.

Bryan Uribe: Have at it and just get the volume going. Because that’s what you need. You need some early success.

Raymond Carapella: You’re right.

Bryan Uribe: So, I mean have you had time to quantify that? Because your customer base right now isn’t as direct, which we’ve had this conversation before. I would drive you to try to get as many emails and as much of a direct emotional conversation relationship with your clients or your audience. But have you quantified that yet?

Raymond Carapella: So, it’s hard, right? So we have established artists with over 100,000 followers, which would probably be the ones that we could be like, “Hey look, let’s do this. We’ll give you discounts. You can make a percentage of every sale that we make through your discount code.” Almost like an affiliate type of program. But then we also have emerging artists who only have 500 followers.

Bryan Uribe: Yes.

Raymond Carapella: So, it’s, it’s hard to really quantify our reach in that sense. But we do have some artists that have 100,000 followers, 50,000 followers who could really be that early success if they love the platform, which they will love the platform. Because looking at all the competitions, it’s like our platforms just blow them out of the water. So we get these artists on and they love it. They even are like, “Hey, yes, just give us a quick little shout out. You can get 10% of every piece that sells, every print that sells and we can keep moving forward from there.” And then right there it’s an extra 150,000 just offered to artists alone.

Bryan Uribe: Absolutely. Yes. You know, that’s solid. I would definitely tell you to think through that because – think through what your total reaches too, because that’s the other thing that you need to understand, right? And it’s something that’s not talked about a lot and we spoke about this in our last video is network effects. Network effects are a concept of – my personal, Instagram has like 600 followers. My business Instagram has close to 2000 or 1500. But then my business Facebook page has close to 3000 and my personal. Like it all adds up. So I have my own little network that I could spool into and say, “Hey guys, check this out.” But as soon as I tap into Daniel Guiney’s if I get an average 10% conversion rate and then it has a bigger network or a smaller network, I just need one to Daniel Guiney’s people to say like, “Hey.”

Daniel Guiney: Oh, yes.

Bryan Uribe: Right. And that’s how you get virality, is understanding network effects. So having a way to quantify that and say we have the potential of reaching X amount of people. Instagram shows your post to 30% of your followers or something like that. Yes. Like the whole algorithms change. So having that information and be like, “Hey.” Like to an investor, I’d be like, “So how many have you got?” “5,000.” “Okay, cool.” “That’s it? Where you got them? Instagram?” You know how I feel about Instagram?

Raymond Carapella: Really. So, it was only 30% realistically of that $5000.

Bryan Uribe: And you may convert 10%.

Raymond Carapella: Yes.

Bryan Uribe: Maybe. Right? Versus like, okay, well we have a hundred artists, we have established agreements with these artists that in the event that they do act as influencers, we’ll give them a coupon code and we’ll actually help them track conversions. Because that’s what artists are really fighting, for now, is understanding like, “Hey, what am I worth? What’s my brand worth? How many eyes am I getting?” Because they can’t see that, right?

Raymond Carapella: You’re right.

Bryan Uribe: They can only see what Instagram shows them. They don’t see the link clicks and what they do for another third party brand.

Daniel Guiney: The metrics, yes.

Bryan Uribe: Yes. The metrics.

Raymond Carapella: But that does help them a lot. It does. It’s almost like, not even just like the artist where you see it so much – I’m a fitness nut, right. Before developing or going into art, I was wanting to start a fitness brand and do all that. And there are so many fitness influencers now that they do that.

Daniel Guiney: Sure.

Raymond Carapella: Or the supplement companies, they’re like, “Yes. Use coupon code, get 15% off and then that discount.

Bryan Uribe: There are a lot of prettier ones too. So.

[Laughter]

Bryan Uribe: Yes.

Raymond Carapella: But, so taking that same model and you could apply it into artists, which nobody has done. You don’t see artists being like, “Use my coupon code at this company.” Like you don’t see it. So in a sense of, we kind of want to be the first one to make art really like relevant in this day and age. I feel like it’s so big and you listen to songs about Jay Z. Like Jay Z songs. You know how many times he mentions art in his songs?

Bryan Uribe: Absolutely.

Daniel Guiney: Yes.

Raymond Carapella: So many times.

Bryan Uribe: I think Magna Carta, Holy Grail. He spoke about 60 pieces or something. They did like a whole piece on him on that one album. Dude.

Daniel Guiney: That’s wild.

Raymond Carapella: Yes, I think, maybe the song that called Picasso or something. It was just about art.

Bryan Uribe: Yes. Picasso maybe.

Raymond Carapella: Yes. The song, it was just about art. Like that was it. But still like nobody’s been like, “Hey, let’s just try to find a way to get to youth, that millennial age group to appreciate art and get them to want to buy it all the time,”

Bryan Uribe: I think they already appreciate it. I think it’s ignorance towards it. They just don’t understand it or they just don’t have access to it, right. Because, where we’re at as a society right now, there’s so much going on, we have exposure to so much. So there’s a lot of stimulus going on. I don’t know if the arts are a big push. Music is super prevalent now.

Raymond Carapella: Absolutely.

Bryan Uribe: It’s probably the biggest it’s ever been as an industry, but also from a social impact perspective. So like, people are like kind of getting in tune with technologies, making it more accessible for people to create art or to create music. I think it’d be really interesting to see how you can educate the consumer and thinking through like some of those nuances, right? Like why is the Mona Lisa so impactful? Why was Starry Night such an amazing piece? What was revolutionary about it? It looks like a bunch of squiggles. Right? That’s what some people say. Mona Lisa looks like a woman and she’s not even that attractive. But like understanding the theory behind it.

Daniel Guiney: Savage.

Bryan Uribe: While seeing it in person…

[Laughter]

Bryan Uribe: She’s really not that pretty. No, but I appreciate it and I understand why it’s so amazing, but I think like people just don’t understand that. It’s not prevalent. Like in the seventies and eighties when our parents were in school, they probably learned about art way more than we did. It was much more of a focal point.

Raymond Carapella: And I 100% agree and bring up a great example that I had not too long ago, probably about a month and a half ago. And I was working on a project and it was called The Anchoring. So you put – I’m not going to go into it. It’s called The Anchoring where you set a value to something. It’s behavioral economics.

Daniel Guiney: Absolutely. Yes.

Raymond Carapella: And you get people to like guess lower or higher based on like the anchor that you put. And I use art, obviously, I’m an art company, so I wanted to see the arbitrary value that people thought behind these art pieces. So I picked one that was valued at 14,000 and I obviously asked my close friend circle first because they were just the easiest participants with it. And nobody was willing to pay the price that it was set at. And asking why. And they’re all like, “Oh, I don’t like art, I don’t appreciate it.” And I had to sit there and explain to them where the value was held within this piece that this artist has been selling pieces for 20 years and he’s hasn’t shown these pieces to the world yet. Like this is a piece that’s exclusive to us. He’s never shown it to somebody before.

But when somebody who, who’s not educated on it, they don’t know that. They have no idea what this artist has been selling pieces that are this expensive and people buy it. But also that this is a piece that nobody’s ever seen before.

Bryan Uribe: Absolutely.

Raymond Carapella: It would be like John Michael Basquiat having a piece, him dying, nobody even knowing it’s a thing. And then it comes out into the market 40 years later and if it’s just being worth like $250 million, that’s what it’s equivalent to. And trying to get people to understand that and also understand, “Yes, you may not like art now, but let me know what you feel whenever you buy your first apartment or house and you walk in, you’re like, wow, I have on my wall.”

Daniel Guiney: Sure.

Bryan Uribe: Yes.

Raymond Carapella: What am I supposed to do now?

Bryan Uribe: I also think the other thing too is access, right? Like a $14,000 piece of art is not accessible.

Raymond Carapella: Absolutely.

Bryan Uribe: To 90 something percent of the U.S. population at all.

Daniel Guiney: Do you have minimums and maximums, you guys are looking to employ?

Raymond Carapella: Well no. Then we put like a barrier on ourselves, right. So here’s how we go about this. So that $14,000 piece, right? We’ve licensed this artist’s work. So say somebody did like that $14,000 apiece, but they don’t have $14,000, they’re not doing that 90%. They could then get a cheaper gallery quality reproduction for, I believe we actually just found a new distributor for these reproductions and manufacturer. We cut our prices significantly so now you could get it for, I believe…

Bryan Uribe: We like that. [Laughs]

Daniel Guiney: I like that a lot. It’s very smart.

Raymond Carapella: So we’re originally selling them for 250 we’re now selling for 120 the same quality and the same size. We just cut the price significantly. So you can now buy this $14,000 piece eliminated edition for $150. So if you love and can’t afford it, well congratulations, we just got you a cheaper reproduction.

Bryan Uribe: Have you ever heard of, I think it’s called like the yellow path or something like that? They do art like that, but it’s not exclusive. They just kind of like – so it’s beautiful pictures and art and they’ll sell it to you for like, I think it was like their top end. It’s like a thousand changes. They’re a European company.

Raymond Carapella: Some companies specialize in canvas prints. You see them all over now. You’ve got Paddle Aid, Iconix one of them. There’s a company, Canvas Freaks.

Daniel Guiney: Okay.

Raymond Carapella: But they don’t have this exclusivity that we offer as a company, right? So they’re prints, it’s just somebody their in house designers saying, “Oh, let’s put a couple of balloons and an inspirational saying on a print and we’ll get people to buy it.” It’s like, “Yes. That’s great. You just sold it for 50 bucks.” But what’s the real value in that canvas print you just sold to these people?

Bryan Uribe: Yes. Facts.

Raymond Carapella: You know, like they just bought like some piece of trash. Whereas we have like real artists who put their time, energy, passion into this work and real people who really appreciate this work. Whether they can’t afford it or they want to buy the real one, they can now get this cheaper reproduction. That’s where we separate ourselves in the canvas industry.

Daniel Guiney: And, when you said reproduction, it’s like paint or is it?

Raymond Carapella: No. So it’s print.

Daniel Guiney: Magnet?

Raymond Carapella: Yes. Into print. Screen printing.

Daniel Guiney: Alright. So very nice.

Bryan Uribe: Quick question for you. Is there any differentiation between the copy and the original?

Raymond Carapella: The copy and the originally?

Bryan Uribe: Obviously the materials are different, but are there any differentiation between the design, between the copy and the original?

Raymond Carapella: So, we have some artists who don’t put their signatures on their original pieces, but they will ask us to put their signatures on the prints. So…

Daniel Guiney: It’s interesting.

Raymond Carapella: Just because if it’s a reproduction, they don’t want us to just go off selling it without them getting any credit for it. Which I 100% understand, is you’re getting reproductions made, you want your name on it. Right? So, we have some signatures. If we have exclusive pieces that are made by us, we put our logo on them hidden off like because a gallery rapid like straps under the canvas prints, we put it at the bottom. So it’s not invisibly insight, but you could see that “Oh this is a Shotca piece.

Besides that frames, so if there’s a certain piece and we feel like it may look better in a frame, we will get it custom framed. So, the original may not be framed but the print reproduction will be framed.

Bryan Uribe: I was curious about that too. I think that’d be pretty decent. Like how do I say this? Auxiliary income. It’s like an additional stream of income. It’s an add-on. That’s what I want to say. It’s add-on revenue, right. I think that’d be really interesting selling frames that you have to put together. It’s time-consuming for labor and expenses.

Raymond Carapella: Yes.

Bryan Uribe: It’d be really interesting if you guys thought through. Like how could you make Ikea like frames?

Daniel Guiney: Snap it together?

Bryan Uribe: Yes. Like snap it together or like glass or something?

Raymond Carapella: I wish I could go into more detail about it. But it is a project we’re working on.

Bryan Uribe: Okay.

Raymond Carapella: So, a goal in our team is for each member to come up with an upstream project. Which is one idea similar to how Google lets its employees like to go work on something and your free time? It’s a project. It’s an ideology very similar in the fact that everybody in our team gets to pick one project that they want to work on to better Shotca actually…

Daniel Guiney: In vertical?

Raymond Carapella: Yes. In the vertical scheme of things. And our CEO John is actually working on a new framing alternative. That involves a technology that’s emerging and becoming a lot cheaper. So we are working on that end of things. I wish I could talk about it more.

Daniel Guiney: To not push that point. Could we pivot and take a look at another significant barrier to entry, I think you mentioned, which has to do with the education component around the art.

Raymond Carapella: Yes.

Daniel Guiney: And are you guys implementing any solutions or social media activations maybe that can address that and attack it.

Raymond Carapella: And so we actually recently started to do a lot of news-related posting to inform the people who do follow us about new emerging news within the market itself. This is something relatively new for us. We’ve always just been a get the artists to post their content, but we were like, “Let’s start changing it up a bit, doing more informative information.” So we’ve started to do news off of almost every major news art source. Have we thought about implementing it onto the site yet? No. Only because of the way our platform is, we have just been trying to launch the Beta at this point. So, for us to go in and be like, okay, let’s now put in a new section it would be like, almost like a step backward, because now we’d have to go back and implement all of that.

Daniel Guiney: Sure.

Raymond Carapella: So, that’ll come later on, probably Beta 2. But we have started to do a lot of news updates in the art world to inform our followers about it.

Daniel Guiney: And you engaging in places where art enthusiasts are already aggregated?

Raymond Carapella: In?

Daniel Guiney: And so Reddit communities, Facebook communities, things like that. Instead of trying to like, you know, go out and find these people, just go to where they are already?

Raymond Carapella: Yes. Absolutely. And that was like the tactic we first use. So they go, let’s go to where they’re at and we’ll start where they’re at and then we’ll branch out in the sense like how we said we build that base first, that’s where we started.

Daniel Guiney: Very smart.

Raymond Carapella: Where everybody, like we knew where the artists were. We’re like, “Okay, let’s go where they’re all at and then we’ll branch out from there.” So, absolutely. Reddit not so much. Only because Reddit is a lot of just blah, like blah. I wouldn’t even call them a competitor at this point, because they’ve just become like a Reddit for art. It’s called Art Devian…

Bryan Uribe: [laughs]

Daniel Guiney: Okay. I have heard of it. Yes.

Raymond Carapella: And they’re just, not to bash them or anything. They are a competitor, but they’re just trash.

Bryan Uribe: You are really not bashing.

Raymond Carapella: I mean we try to…

Daniel Guiney: We are not bashing them but…

Raymond Carapella: They are trash.

Daniel Guiney: They are trash.

Raymond Carapella: They’ve been…

Daniel Guiney: [inaudible 40:16] statement.

[Laughter]

Bryan Uribe: You guys want to call us of you want for consulting.

Daniel Guiney: You guys want to call us. We can work that out.

Bryan Uribe: We can fix that for you.

Raymond Carapella: If they watch us, let me give you guys some advice here. Get rid of your clutter. All right.

Daniel Guiney: Oh.

Bryan Uribe: Oh, there you go.

Raymond Carapella: It’s been, you go on there and you see things, you’re like, this isn’t even art. I don’t know what this is. You look at it, you’re like, “This is something somebody just found on Google images and posted here and claimed it was art.” That’s how bad it is.

Daniel Guiney: That’s wrong.

Raymond Carapella: That’s really bad.

[Crosstalk]

Bryan Uribe: A nice little set of Shutterstock photos put it on a canvas?

Raymond Carapella: But really what it is. But they didn’t even do that. They don’t even – I can’t even explain to how they’re a disgrace to an art company. I’m sorry. I’m sorry.

Daniel Guiney: They don’t have it. Yes, they hear it clearly.

Bryan Uribe: [laughs]

Raymond Carapella: They’ve been a role model to us in the sense, “Okay, this is what we’re not going to be.” You know, you have like if you have an older sibling in there, like a bad older sibling and you’re like, “I’m not going to be that.” They’re a great role model because you’re like, “I’m not going to be that.”

[Crosstalk]

Bryan Uribe: You are a great inspiration to society kid, but I am not going to follow you.

[Laughter]

Raymond Carapella: And that’s what they are like.

Daniel Guiney: Savage. So, do you have metrics in place for how you screen artists you’re selecting? Because I assume and correct me if I’m wrong, you want to scale this, right? You don’t want 100 artists, you want 100,000 artists with content up there.

Raymond Carapella: So, the model is now we have a curator in a house that artists actually tying it all back to the beginning. Right?

Daniel Guiney: Okay.

Raymond Carapella: So that artists that we first like modeled the idea after, he’s like our consultant in a way and he’s like, “Yes. This piece is good. This piece is good. Like, put them on there.” So we have our own curation team…

Bryan Uribe: You got some quality control.

Daniel Guiney: Outstanding.

Raymond Carapella: Exactly. So we don’t want just any piece. Like we don’t want – like I said, how are…

Daniel Guiney: Like a $5 pencil scribble on a napkin.

Raymond Carapella: However, we do…

Daniel Guiney[inaudible 41:59]

Raymond Carapella: No, no. We actually have an artist who – he drew something on a blank piece of paper. Mac Miller piece, right? And we’re like, “Okay, this isn’t going to work well on a canvas, but here’s what we’re going to do. We’re going to put it on a wood panel.” Turned out sick. This guy just took something and drew something on a blank piece of paper and pen. We turned it into an art piece by putting it on a wood panel.

Daniel Guiney: It’s awesome.

Raymond Carapella: We sold like 10 of them for like 250 bucks or like our old a manufacturing. Like, people loved it. So like something that virtually took somebody…

Daniel Guiney: RP Mac, yes.

Bryan Uribe: RP Mac Miller guy.

Raymond Carapella: And now this actually, we kind of like fed off of that a little bit. Because it’s his birthday and we launched it and that was kind of like sold all of it.

Daniel Guiney: Sure. It’s a nice tribute.

Raymond Carapella: But so you’d be surprised. So somebody like sends in something that’s on a piece of paper, which a lot of artists do,

Bryan Uribe: But I think that’s also really critical, right? Because that’s product design basically, right. And it’s also, it’s product management in the sense that you are receiving inspiration. You’re like, “Okay, well this isn’t good. What about this though?” You take this like, “Eh” to “Yo, we just made 2,500 bucks in a day.”

Raymond Carapella: We showed the artist and he was like, “This is amazing.” He’s like, “I didn’t even think…”

Bryan Uribe: Okay. Did he buy one though?

Raymond Carapella: No. He actually didn’t. He didn’t actually.

Bryan Uribe: That would have been the ultimate sale.

Daniel Guiney: Yes.

[Laughter]

Daniel Guiney: Yes.

Bryan Uribe: “Yo Bro, I’ll give you a 25% discount.”

Raymond Carapella: You bring up a really good point that we probably should do that. We should probably send it to him.

Bryan Uribe: Because you know what, like give them a – I mean, you guys are startups so let’s not…

Daniel Guiney: Shoot you something first.

Bryan Uribe: Well let’s not spend money. Yes. Like if you can’t justify, look at the numbers, I’d give them a 50% discount.

Raymond Carapella: Yes.

Daniel Guiney[inaudible 43:40]

Bryan Uribe: Yes. Well like shipping.

Daniel Guiney: Yes. We’ll include the cost.

Bryan Uribe: And taxes. Yes. But like give it to – and you know he’s going put it on like, “Hey you, these guys were awesome. They took my little piece of paper and they made this.” And I think that’d be really interesting. And that’s building brand loyalty to you.

Raymond Carapella: Yes.

Bryan Uribe: I would actually be stoked if he would have bought one of the strengths. That would have been sick.

Raymond Carapella: Shame. He’s poor college students so we can’t. We’ve given him his money off of licensing this piece. But he’s still like, he’s still in that college struggle.

[Crosstalk]

Raymond Carapella: So, we were going to take her out. It’d be the pay for that. Like, “Call Austin and just gave it to him.” Which we’ve done actually. Because we have an artist who did the design of a really good friend of mine who’s a fitness influencer. He has 40,000 followers. And I went out and I saw it. I was like, “We got to license this artist because I’m going to send him some piece of him.” So, that was pretty.

Daniel Guiney: Awesome.

Bryan Uribe: So, I’ve got a question for you and I think this is going to be probably one of the bigger challenges as you guys scale. How are you going to manage customer service? The reason why I ask that is this. You have a QC managers or Quality Control manager, right? This person’s going to – I don’t know if they’re inspecting the artwork or not. You’re probably going to have to get to the point where they can just to make sure it’s consistent. Or you can keep your manufacturer to specific standards in the contract. So in other words, I need 99% accuracy. And digital presses, they will do that because they have to calibrate it. It’s an expensive machine, but your work is worth way more to them than them having to spend an hour making sure the devices calibrate. I would think through that. But what happens when somebody, I don’t need answering. It just a thought. What happens when somebody buys an art piece says “This doesn’t look like what I have on my screen.” You and I know that just about every screen you buy is modified and oversaturated. So which actually red in all actuality like an orange. Or maybe like what’s orange is actually red. So have you thought through any of that?

Raymond Carapella: So, we’ve actually had an issue with prints. Well, actually originals too. We had a, we’ve had issues for both. So, for prints, our original manufacturer, we designed something up online. This was a commission piece by style society, which actually at the barbershop over here. And when we ordered it in the gray background and we had done, it came out like a greeting. And we were like, “This is not…

Bryan Uribe: Yes. They weren’t calibrated.

Raymond Carapella: Yes. It wasn’t calibrated at all. So, our manufacturers, free shipping, free returns, and then free redesign. So for the manufacturer, it’s been pretty straight forward.

Bryan Uribe: They’ve held you down?

Raymond Carapella: Yes. They’ve been like, ” Oh we got you, don’t worry. That’s our mistake.”

Bryan Uribe: Something really interesting that I would kind of ask you to think through is – so when you go paint a wall, right. You know, they get that little piece. That’d be really interesting if you had a hue card.

Raymond Carapella: Yes, it would be cool.

Bryan Uribe: So, it’s like, hey, these are the colors that you have. So now you could actually have like either a spectrum color, they could go into Home Depot and get like the actual spectrum and then go to like whatever furniture store they have. Like, “Hey, I want to get something to match this.”

Daniel Guiney: Yes.

Raymond Carapella: I liked that a lot. And I don’t know if on our website we could actually show the color, but…

Daniel Guiney: I would ask anybody who want it.

Raymond Carapella: Yes.

Bryan Uribe: No. But, I’d included, right. Like it’s a little card like this. This is a business card bro. It’s a small business card and it’s just like, hey, this is this and these are the dominant colors.

Daniel Guiney: That’s awesome. Yes.

Bryan Uribe: These are the four or three or two or one dominant color in this piece. If you want to find something to match it, this is where you go. Right?

Raymond Carapella: Yes.

Bryan Uribe: Because most people would be like, “Yes, it’s orange.” That’s blood orange bro.

Daniel Guiney: Yes. Right.

Bryan Uribe: They don’t know the difference. What if you’re like color blind? That’s a total demographic that you have to consider as well.

Raymond Carapella: Actually, we have another barrier. So right, for that barrier company – I can tap into it. So artificial intelligence, right. And what this company does is they – like when you upload the piece, they scan it and they can pull apart every single color and piece of information about it. So like you’re saying, if the artificial intelligence read the piece that was uploaded, it could pull out every color and if somebody came on our platform – we’re not doing this, but you did bring up a really good point. We could put it in, in the description, it could list off every single color that the program had read.

Bryan Uribe: What about how are people making their submissions?

Raymond Carapella: To us? Through emails as of now, but eventually, it’ll be through the platform. So when it’s uploaded it’ll go through an approval process of two to three days. So we’ll approve it and then it’ll get posted out.

Bryan Uribe: I would stress to you if you could find a partner that had the capacity to scan this in at a high resolution at true color. Consider that I know FedEx, they have like the wide format copiers. I don’t know if all of the scan. But having that kind of infrastructure would be interesting. That’d be the first one. The second one is recommended scanners. So if you’re an artist, this is an investment. I am investing $1,000 in this dope ass scanner because I’m going to make $10,000 back.

Raymond Carapella: Yes.

Bryan Uribe: Right.

Raymond Carapella: It’s a good idea.

Bryan Uribe: And maybe even quantifying that and you could do some affiliate brand partnership with that so you give like a discount to some people. Maybe even get like some lead or some like revenue out of that.

Raymond Carapella: And building off of that, we actually, when we first started diving into the Blockchain sphere, we sat down with a man named Nick Spanos who created the crypto exchange on Wall Street and he gave us this idea. This is back when we first started everything and he gave us this idea and he said he could do it. He was like, give me $50,000.

Bryan Uribe: One-second guys. This shit keeps fucking turning off.

[Brake]

Bryan Uribe: You were talking about Nick Spanos.

Raymond Carapella: Yes. Nick Spanos.

Bryan Uribe: Nick?

Raymond Carapella: Nick. And he brought it up to us. This isn’t why we’d gone to talk to him, but when we started talking to him about our idea and he was like, “I could make this thing is probably a month. You guys give me 50 k, I’ll make it for you.” And what it was, it’s a laser scanner that if we had the piece you could take it. Actually, he wanted to mask it, add just like a little attachment onto a phone and anybody who wanted to work at Shotca, we could send them the little scanner and what they could do is put it on and take a picture and it would scan the art piece and be able to like basically what you’re saying as the highest resolution scanner can possibly be. And you could like to create the laser and have it say all the color gradients just about the material it’s made out of, the style it is. And he’s like, “I could make it in a month.” No problem. Just like that. We’ve thought about it.

Bryan Uribe: So my concern with that understanding photographic equipment, not photographer, I worked for a copier company, so having sold $80,000, $90,000 copiers, like these things are really, really complicated. Like you need no light, it’s got to be dark, right? So that’s why I like it closes flat, right. Like you don’t scan something with the light up. Right. So, like that something out – his concept sounds great. I’m a skeptic. I’d have to see it.

Raymond Carapella: I’d have to see it too. So it did dive into it.

Bryan Uribe: Yes. So it’s like, hey, like if you can get a proof of concept going, that’s great. But it’s like how many people can find true darkness. I know you got a mold them in your house, you got like all this other stuff going on.

Raymond Carapella: Yes. I agree. That’s why I was like, “Oh we’ve got to get the 50,000 to get this thing made.” Because we are like, “Ah, I’m not sure.” He said he could do it. If one day we want to go back to him and say, “Okay create this.” Then, yes. Absolutely, you know.

Daniel Guiney: Alright. So, just to bring it back around, right. Because I think it sounds like you guys have an outstanding strategy here with what you’re creating. And you know, I would just want to touch back on the why right? Why is this the way people are going to buy art?

Raymond Carapella: Because when people buy art, we base it off, “There’s an ambiance when you buy an art piece.”

Daniel Guiney: Okay. I like that.

Raymond Carapella: Anywhere that you walk into and there’s an art piece that catches your attention. It brings this feeling, right. You get a feeling when you look at this art piece. We want to bring that feeling to everybody who comes on to our platform.

Daniel Guiney: Okay.

Raymond Carapella: Not just another website. We want a real feeling and experience when you’re on it. We want you to feel the artwork. We want you to feel what the artists felt when creating it. Like when you walk into a gallery or like the art pieces in your room and you can feel that art piece. So why we’re doing it is we want people to feel this artwork on their phone or on their desktop, not just like it’s a computer screen. We want them to actually feel it.

Daniel Guiney: Sure.

Bryan Uribe: So my brains going right now, I’m going to freestyle this. Shotca exists to bring the emotion of buying world-class art to your smartphone.

Raymond Carapella: Yes. On the head. Right, on the head.

Bryan Uribe: So, you’re going to get a transcript of this or write that down? Yes.

Daniel Guiney: Can I ask just a little bit more about and you know, we’ve probably got 15 minutes left on this. Not to take up too much of your time. You know, we appreciate you speaking with us about art. Can you talk just a little bit about how you’re doing the B2C component? Because I think we touched pretty heavily on the B2B, how you’re connecting with the artists and actually putting those relationships out. Let’s talk about the client, right? Because they’re the ones who were actually spending dollars. I assume you’re not paying the artists, you’re just getting a cut of what they sell?

Raymond Carapella: Yes.

Daniel Guiney: Right, so you’re making your money on the clients?

Raymond Carapella: Yes.

Daniel Guiney: Can we talk a little bit about that acquisition strategy?

Raymond Carapella: So, there’s one strategy, and this is like us actively going out and getting clients. So we work off an interior designer partnership, which is partnering with Interior Designers and working off referral programs. So we send all of our artists, all the art pieces in our database to the interior designers. If they have a client who wants to buy it, they would sell it. And then the interior designer would take a cut and then that client would get their piece.

Daniel Guiney: Okay.

Raymond Carapella: Also, running any type of campaign off of specialized pieces. So that Mac Miller piece I was talking about, we ran really in-depth calculated ads to target people who are interested in Mac Miller, whether they’re people who buy vans, listen to Mac Miller, listen to logic, and we do specialized campaigns with specialized pieces. They can then go into our sales funnel and always pull people back in. So, those are kind of like the two specialized advertising and marketing and then partnerships with interior designers. And Bryan Uribe had actually brought up previously the last time we had spoken about real estate agents as well, which my partner is actually down in Miami right now working with a real estate agent who sells million-dollar homes. And funny enough, guess where he sells them off of Sotheby’s.

Daniel Guiney: Okay.

Raymond Carapella: One of the biggest art auction houses in the world. And we’re about to partner with one of their real estate agents to sell our artwork. So it’s kind of ironic that we’re like feeding off our competitor in a sense.

Daniel Guiney: Sure.

Raymond Carapella: And go ahead…

Bryan Uribe: That’s not your competitor bro, so I don’t know what your strategy is, your exit strategy and think through this. What if you sell to Sotheby’s?

Raymond Carapella: It’s actually not about the idea because Sotheby’s like, they only specialize in…

Bryan Uribe: One of the investors is going to ask you that. “So who’s going to buy you?” Or Amazon maybe, I don’t know like, right? Like it could be Amazon too. Amazon is doing everything.

[Crosstalk]

Raymond Carapella: In a way Chrissy. Sotheby’s would probably be the most, probably have the most potential for us.

Bryan Uribe: The challenge is, do people at the helm of those companies may not be looking at that as a viable market. So it’s your job to show market viability.

Raymond Carapella: Absolutely. And that’s why we want to capitalize on that part of the market that is growing.

Bryan Uribe: Absolutely.

Raymond Carapella: Because the more it grows, the more that they’re going to be like, “Okay, maybe it’s time to make an acquisition in this market because we’re not getting into it…”

[Crosstalk]

Raymond Carapella: Because they even thought that they’re selling historical pieces 450 million. But whenever that market starts to go down, right? They’re going to be like, “Wait, our market is declining, but the online ones growing, but we’re too late to pick up where all these companies are right now. Let’s just go buy Shotca for 30 million or however much…”

[Crosstalk]

Bryan Uribe: [laughs]

Raymond Carapella: However much we are valued at the time, right?

Daniel Guiney: Yes. Right.

Bryan Uribe: And when got $30 million tomorrow. I’ll tell you to run with it.

Raymond Carapella: But I know in five years…

Daniel Guiney: I have commission of a $300 million piece.

Bryan Uribe: Yes.

Daniel Guiney: We can sell one of those at 50% commission.

Raymond Carapella: Yes.

Daniel Guiney: If that’s how that works.

Bryan Uribe: Take 10 points, whatever. Yes.

Daniel Guiney: Right.

Raymond Carapella: But I’m going back around to the question, the B2C. So we actually have another interesting model and I like to call it the C2C,

Daniel Guiney: Okay.

Raymond Carapella: Right? So, we have the consumer to consumer and it’s like we just act as that middleman. But when an original piece sells, we never touched this piece, right? So the artists who have this original, we’ll just take it and ship it straight to the buyer. That way we have no liability of, “Okay, we now have this $10,000 piece. But what if we get in as we’re transporting if we break it?” Then it’s just a cost. We have to pay for insurance all the time.

Bryan Uribe: Massive insurance.

Raymond Carapella: Massive insurance. In our leasing agreements, the facilities, the restaurants or the corporate offices that lease our pieces have to have it insured up to a million dollars. That’s insane. And we don’t want to have that. So we operate off the consumer to consumer model where the artists would just ship it and to make sure that like it is this piece, right? Because a lot of people ask, they’re like, “Well how are you going to make sure that the artist is actually shipping the piece?” So, 20% gets released upon shipping. So when the piece is purchased, 20% of what the person paid gets to the artists, the rest of it’s in an escrow account. When the piece is delivered and the pieces validated to be okay by the buyer, like “Yes. This is good.” The remaining percent would get released. So it’s like that security of like, “Yes, okay. Now there’s not an issue of this is the wrong piece. This isn’t an issue.”

Bryan Uribe: I think the biggest thing that I would kind of invite you to think through is C2C isn’t necessarily known as the C2C, that’s called the marketplace. And the marketplace for business people is pornography. They love it. Like because guess what happens? The more people you get, the more money that’s spent.

Raymond Carapella: Yes.

Bryan Uribe: I would also challenge you to think through referrals. Like so “Hey, you bought a $250 apiece. Your buddy goes and buys $250 apiece. I’ll give you 25 bucks and I’m going to give him 25 bucks.”

Raymond Carapella: Yes.

Daniel Guiney: I would also challenge you to think through that 20% release component. Again, just because from a liability standpoint. Now say, they ship a piece, they get their 20%. Let’s just say it’s $1,000 piece just for like easy numbers, right? Now you released that $200, now they swear it was shipped. And now it’s received and or not received what happens there? And then also say it’s received and it’s damaged. Now you have to work out the logistics of first acquiring back that $200 and then redistributing it back to the buyer. You know, maybe you can explain it what kind of benefit are you seeing by releasing the money before verification has occurred?

Raymond Carapella: So, the idea behind it is shipping the piece itself can become expensive. Like if you have a big sculpture, we ran into a situation where the shipping on the piece was $200.

Daniel Guiney: Okay.

Raymond Carapella: Right? So, like obviously we have to release a little bit of money for them to pay for their own shipping and get it all sent out. The way we set up shipping, so it’s all insured up to the value of the piece, so we have that set up with USPS ensures our pieces.

Daniel Guiney: Yes.

Raymond Carapella: So, 20% is released to pay for the shipping, also have the insurance covered. And then if the piece does get damaged or in between wherever the piece is insured, if it goes missing, it’s also insured. So that artists would always get their money paid back if the pieces damaged and then it would just be a matter of getting the money back to the buyer and notifying them that all of the pieces were missing or it got damaged in transit or something like that. But I agree maybe 20% could be a little steep.

Daniel Guiney: Yes. I’m not sure what the answer is that situation. But I would think about it because you know…

Bryan Uribe: Or split the shipping cost with the buyer.

Daniel Guiney: The buyer just pays for the shipping.

Bryan Uribe: Yes. Like that’s…

Raymond Carapella: Exactly. No, they do. They do pay for the shipping which is why the percentage needs to be released.

Daniel Guiney: But so that’s where you’re loosing or maybe you can help me understand, right? So, if the buyer’s paying for the shipping, why do you have to release funds to the seller to pay for the shipping?

Bryan Uribe: Because the seller owns that piece, they are housing the piece, they have to ship it.

Daniel Guiney: You could just send them a shipping label or…

Bryan Uribe: Fax.

Raymond Carapella: Fax? Yes. Actually yes, you’re right.

Bryan Uribe: Boxing and other stuff. But you could definitely think through that.

Raymond Carapella: Yes.

Daniel Guiney: We’re just trying to explore that option. I can see down the line that becoming an issue. Where if it’s like, you know, the money’s spent. You know like if the money is spent or there’s an issue and like obviously it’s not going to be a big deal for a thousand dollars apiece for these 200 bucks to be released, that’s fine. But if you start selling $50,000, $100,000, $200,000 pieces now then you are talking about like $40,000 that’s on the table and you have to reclaim that…

Raymond Carapella: It’s also an issue of, so when we sold one of our first originals, the artists didn’t feel comfortable shipping the piece without having their money first. Because they were like, “Oh, what if I shipped the piece? I don’t get the money and then you guys never gave me the money or the person never pays.” So…

Bryan Uribe: I would say, look at what EBay’s done with their buyer protection. So you, in other words, you’re operating an escrow account. You released the funds once confirmation has been given.

Raymond Carapella: Yes.

Bryan Uribe: I would challenge you to say, “Why is it different from us over eBay? You can’t sell it on eBay. I don’t think Getz is going to work for you either. And just kind of education around that.

Raymond Carapella: Okay.

Daniel Guiney: Yes.

Raymond Carapella: Absolutely.

Bryan Uribe: I definitely cut you off, but I apologize. I just thought that that like I just thought, eBay…

Daniel Guiney: It’s a good model, yes.

Bryan Uribe: Yes. Well, multibillion-dollar company and they’re buying companies at billions of dollars.

[Crosstalk] [Laughter]

Bryan Uribe: Don’t break what’s already.

Raymond Carapella: Yes. We’re trying to…

Daniel Guiney: eBay is fucking going to buy you.

Bryan Uribe: Yes. eBay will fuck around and buy you. Yes.

Raymond Carapella: They might. We are looking for, the last time we went to a Blockchain in the art event, it was an eBay center and they were like, “We’re actually looking for like a better art marketplace like it’s not – EBay’s not…

Bryan Uribe: You should talk to the business developer or the business manager over there. Typically, the business developer. Yes. BD, yes. The person that works in business development. Yes, go talk to them.

[Crosstalk]

Daniel Guiney: You know, because they got the capital, they can just spin it up.

Raymond Carapella: Yes.

Daniel Guiney: So if you get the model going and then you get the brand recognition, they would want to purchase the brand.

Bryan Uribe: I wouldn’t even say dude, like honestly for them. A lot of these companies have venture capital funds. Google has Google ventures.

Raymond Carapella: Yes.

Bryan Uribe: I wouldn’t be surprised if eBay had something.

Raymond Carapella: They might, sure. They definitely.

Bryan Uribe: Yes. eBay cut you a check for half a million dollars. Go run guys.

Daniel Guiney: Their capital problem is solved.

Raymond Carapella: We’re already operating off a model that’s similar to theirs…

Bryan Uribe: And you’re already making money, you’re cutting profit, so.

Raymond Carapella: Absolutely. I don’t want to say that’s the goal, right? Because obviously we want to grow this thing like our child, but in five years, if a company like eBay, Google sees us and they’re like, “Here’s half a million dollars.”

Bryan Uribe: I would say this. If you’re looking to be an entrepreneur and stay an entrepreneur, that is the way you do it. Entrepreneurs aren’t entrepreneurs if they build a business and run the business for the rest of their lives. What they’re doing is they’re working their ass off to have the job for the rest of their life. At least for me, entrepreneurship is like, “This is the funniest dude. Like I do this every day. Like this is the best. Stressful, yes, but I’d rather do this and go work for somebody else. 100%.”

Raymond Carapella: Absolutely. Yes, 100%.

Bryan Uribe: I would definitely say maybe don’t tell your customers that. Like “Yes. We would sell this in like two years.” But strategically that’s what investors want to hear is like, “Oh this guy gets it.” We make money when you sell or when you IPO. And the problem [inaudible 01:0540] and I love you, you’re great. The probability of IPO is so much less than you even raising money in the first place. The stats are against you to IPO.

Raymond Carapella: I can find a way to go public without even having to go to the stress of it. I could just reverse merger back my way into a public company and just go public instantly like that. You know, I can get 5 million tomorrow if I get the recognition on the public exchange. So that’s a way around IPO and that a lot of companies always forget about it. You could just merge with a company that’s already public. So, you have shell companies that are just unsuccessful public companies that they sell out for 70 k and then they’re just sitting there.

Bryan Uribe: Yes.

Raymond Carapella: I know this because I did the company’s funding through that model. Working with the selected listing, which is another company that I work with.

Bryan Uribe: Good stuff.

Daniel Guiney: So, alright. Yes. So, bringing it back around. Do you have any direct questions for us right now?

Raymond Carapella: What’s the biggest advice that you could give me right now? Obviously, you guys have been giving me a little pointer throughout the whole talk, but the biggest piece of advice. I know you always go, what’s yours why? And I’ve been working on it a lot as you could here. So what is it, what’s the biggest piece of advice?

Daniel Guiney: Say, use cheat codes. Don’t skimp on reading.

Raymond Carapella: Okay.

Daniel Guiney: I’m a strong advocate that reading is a cheat code. People spending their entire lives learning and accumulating and compiling knowledge and putting their life’s work into books. And I think, at least I feel nowadays a lot of people are skimping on reading and I think it really empowers you.

Raymond Carapella: I agree.

Bryan Uribe: Reading is fundamental. I would say don’t stop. It’s going to get hard. It’s not going to be easy. No one said it was easy. Focus up, knuckle up and get after it, bro.

Daniel Guiney: Get things in writing.

Bryan Uribe: Yes, get things in writing and have a good lawyer. But the faster you grow, the less a lot of the problems are going to matter. And that’s a fact. I just finished reading Blitz Scaling by Reed Hoffman. And that’s the entire book is forget being efficient, just grow as fast as possible, and then sell it to someone…

[Laughter]

Raymond Carapella: Who could deal with the problems.

Bryan Uribe: There’s a phase of Blitz Scaling. There’s a phase. So once you’re out, like at 10,000 employees, you’re probably not blitz scaling anymore. But like for your first 100 employees, you’re probably blitz scaling. Up until a thousand, you’re probably blitz scaling or you can be blitz scaling. But once you cross that chasm of a thousand employees or you cross that threshold of a thousand employees, it does become very different. So, I would say, be very, very strict with your time, with your resources and what you’re dedicating time to. But don’t ever forget. Your job is to execute. It’s nothing else. It’s nothing else dude.

Raymond Carapella: If you’re not the executing, what are you doing?

Bryan Uribe: And you’re the COO, so you got to make sure that everybody executes.

Raymond Carapella: Yes, exactly.

Bryan Uribe: So, closing remarks. So again, I got this from the Nard Word again, so let’s do this one again. So, tell everybody who you are one more time and then why should they care about Shotca?

Raymond Carapella: Okay. My name is Raymond Carapella, COO Shotca. And Shotca will be the number one stop to not only by art but by fine objects and luxury items in the future.

Bryan Uribe: Beautiful.

Daniel Guiney: Awesome.

Bryan Uribe: That was sharp.

Daniel Guiney: Real clean.

Bryan Uribe: Awesome. All right, I think we’re done.

Daniel Guiney: Cancel.

Raymond Carapella: Cut it.

[Laughter]

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