Why Silicon Valley’s Young Elite Won't Invest in Art
Walking through the frigid warehouse that housed the inaugural San Francisco edition of the Untitled Art Fair in January, 23-year-old entrepreneur Connor Zwick took in the fair’s 55 contemporary art galleries and was unimpressed.
“I look at art all the time and see a lot of art I like,” he said. “But it’s not correlated with price at all.”
As he went from booth to booth and was quoted prices ranging from $7,000 for five photographs by the artist Buck Ellison to $42,000 in a different booth for a single, larger photograph by the artist Ori Gersht, his perplexity deepened.
“When a $1,000 piece brings me just as much enjoyment as a $30,000 work, I don’t see why I would ever spend $30,000,” he said. “And no, I’m not on a quest to discover why I should spend $30,000 on art.”
It would be one thing if he were a casual observer, but Zwick was a potential collector. He'd developed a lucrative flash-card app in high school, which was downloaded more than a million times; once he sold it to online textbook company Chegg, he had financial freedom “for the rest of his life,” he said. Next, Zwick left Harvard at the age of 19 after winning the prestigious Thiel Fellowship, a $100,000 award founded by the tech billionaire Peter Thiel, meant to induce recipients to drop out of college in favor of entrepreneurship.
Zwick, in other words, was young, interested, educated, and flush with disposable income—precisely the type of person dealers had come to Untitled to meet.
“I was hoping, and still am hoping, to meet a few tech collectors,” said Toby Clarke, the director of London’s Vigo Gallery, a few days after Zwick’s visit. “I thought there would be tech squillionaires who would need a bit of guidance, which we’re very good at providing." Clarke said he'd sold out most of his booth—paintings by the highly sought-after artist Daniel Crews-Chubb that ranged from $14,500 to $32,000—but the sales, he said, were to his existing clients. The point of an art fair, he said, was to meet new ones. "We try to be really friendly, and hopefully we’ll meet one or two," he said. "But yesterday there was no one.”
As the fair wore on, other dealers began to express the same sentiment: The fabled tech mavericks, reputedly bursting with cash and barely out of high school, were not buying art.
“Doing this younger fair, we were hoping to meet more people of our generation,” said Hannah Hoffman, the owner of an L.A. gallery whose booth’s prices ranged from $4,000 to $90,000. “We brought a number of works that we presold, but I feel like we’re not even talking to people [at the fair] who have the potential to buy.”
One such person who ultimately stayed away was Ruchi Sanghvi, who was the first female engineer at Facebook (as a product manager there, she came up with site's News Feed) and who, after her and her husband's startup Cove was acquired by Dropbox, joined the company as vice president of operations. (She's since left the position, though her husband, Aditya Agarwal, was recently promoted as Dropbox's chief technology officer.)
"Even though I am very interested in art, I find investing in the art market intimidating," she said. "I don't know where to start, and I don't know how to educate myself." Sangvhi said she buys art—just not the art that dealers at Untitled were selling. "I like the way I'm purchasing art right now," she said. "I support local artists." Still, she didn't rule out a more robust approach to collecting in the future.
"I would say that I don't have a reason to [collect] at this moment in time," Sanghvi said. "I would possibly do it down the road."
San Francisco's collectors come from virtually every sector: finance, real estate, venture capital, even retail. The city has an established arts culture, and its older families—the Schwabs, the Fishers, the Haases—have bought, and then donated, hundreds of millions, if not billions, of dollars’ worth of art. (The new wing at the city’s Museum of Modern Art is filled with works donated by the Fisher family.) But the highest echelons of the tech world—the new elite of San Francisco—have been slow to join them.
The difference between the tech industry and other sectors, dealers said, was that—while billionaire tech chief executive officers have begun to buy art along with the houses, planes, cars, and other objects that cement their status as members of the global rich—there has been little to no emulation from the lower, merely wealthy ranks.
“Very often it takes a single figure in a community to become a mentor,” said John Berggruen, whose eponymous gallery sells works by such artists as Ellsworth Kelly and Henri Matisse. He pointed to Thomas Weisel, a prominent San Francisco banker, as an example. "He collected [art], and then a number of his employees became collectors, too," he said.
Berggruen said he has seen the same thing happen in other industries. "One or two people are friends, they become more comfortable buying and more familiar with it, it’s an experience, and they bond," he said. "I don’t know if that’s happened in Silicon Valley yet.”
Sabrina Buell, an art advisor who, with her business partner Mary Zlot, has emerged as the go-to consultant for the city’s nascent class of billionaire technocrats, echoed that sentiment.
CEOs of tech companies "definitely buy, but they do it discreetly—they’re not doing it the way that oftentimes New Yorkers do,” she said, pointing to Instagram co-founder Mike Krieger and his wife Kaitlyn as examples of under-the-radar collectors. “It’s different even from the L.A. collecting community, which can be more trend-based, and a little bit more showy.” The Krieger collection, for example, primarily comprises conceptual and process-based works and includes photography by contemporary artists such as Wolfgang Tillmans and Sara VanDerBeek.
Indeed, at the more upscale Fog Design + Art fair, which ran the same week as Untitled, dealers reported robust sales to local collectors from a broad range of industries, though many were hard-pressed to say where, precisely, the buyers' money came from. “It’s blown our minds this year,” said Kristine Bell, a senior partner at New York’s David Zwirner Gallery, whose booth offered work ranging from $10,000 to about $600,000. “We just expected to see the same people we saw last year, but we’ve had a host of sales to brand new clients.” Bell hadn't "done the post-mortem yet," she said, but noted that buyers were "definitely from finance, maybe some from tech."
Buell, the adviser, speculates that the rising ranks of tech managers will eventually get around to buying art, but “I think it’s going to take a little bit more time, I’ll be totally honest,” she said. “People in the art world are like ‘hurry up and spend money,’ but many of these guys are working their tails off,” she continued. “They’re just having their children and buying their first houses. I think the trickle-down will happen, but further down the line.”
Sanghvi, the engineer, said outsiders need to remember that the tech sector continuously deemphasizes ownership of anything, let alone million-dollar artworks. "Today, people aren't inclined toward buying a home or car or owning things," she said. "And there have been markets that have been developed to facilitate things that are communal—like Uber or Airbnb." If you don't own your house, in other words, you probably won't spend tons of money to decorate it. "Most of the material things that we've traditionally invested in are no longer relevant for this generation," she said.
Zwick, for his part, at least partially agreed.
“I just don’t think there’s a culture here of spending that much money on art, or at least, there isn’t in the subculture I’m in,” he said. “I think if I were in New York, it would be very different. I’d hang out with people who appreciate art more, and go to more galleries, and over time develop a finer appreciation of it.” As it stands, he said, "I would be open to spending money on art, but it's never really been a big enough priority in my life to think about what the next step should be."
And then it was time to leave; he'd allotted less than an hour for his time at Untitled, and he needed to get back to the office.