Banking on Bansky
Tokyo entrepreneur launching street art non-fungible marketplace
Marty Robert’s wife worried about her husband’s odd behavior. During the pandemic, the father of two stole out of their house in the middle of the night, jumping over fences, to scout for graffiti artists as they painted on the Tokyo canvas. Roberts said he was conducting market research for a new startup venture. His wife thought him nuts for taking needless risks.
If caught and prosecuted, graffiti artists can be jailed for up to three years under Japan’s draconian judicial system.
In truth, the 43-year old American was restless, having sold a majority stake in his first startup, enTouch, in 2019. Still at the firm’s helm but removed from day-to-day operations, Roberts had enough time on his hands to explore the many start up ideas which popped into his head.
The idea for Totemo, his new venture, emerged during the pandemic while supporting his six-year old son through distance learning. Both parents assisted by teaching different subjects. Robert’s wife taught math, English and Japanese, while he taught physical education and music—specifically skateboarding and the history of punk rock.
Roberts recalls how he came up with the idea during lessons: “As we were skateboarding and listening to the Dead Kennedys, I was thinking and feeling like I was 12 years old again…. Skateboarding, hip-hop, punk rock…. what else did I love back then?” Roberts asked himself. “Graffiti!” he thought—the activities each being intertwined in his mind.
That’s when he began researching the market for graffiti and hanging out with street artists.
The graffiti market
Modern graffiti sprung from Black and Latino communities in Philadelphia in the early 1960s, before spreading to New York City streets and subway cars. Gang members tagged to mark territory and disaffected youths to voice rebellion, in illegal acts of vandalism.
Tagging, the act of signing one’s name, symbol or pseudonym to the urban landscape is the most basic and prevalent form. The more sophisticated kind, which includes murals, wall paintings and so forth, is called street art.
Some street artists, tired of ducking the law, commercialized painting graffiti, for example as a form of paid street advertising. Most street artists, however, earn only bragging rights for their efforts. "Many are fine artists during the day,” writing graffiti by night for fun, suggests Roberts.
The Tokyo entrepreneur spent the next six months meeting street artists on their turf, trying to find a business model which earned artists more money. Many, he discovered, travel around the world to places like Brazil where they paint street art and perhaps skateboard too. “They connect to one another because they need to know where the safe spots are and how not to get caught,” he says.
In March 2021 Christie’s, the prestigious auction house, sold a digital work of art by Mike Winkelmann, professionally known as Beeple, for a record-breaking $69 million as a non-fungible token (NFT). NFTs are digital contracts built on blockchain technology which can verify ownership of any asset, including street art.
Until October 2020, the most Winkelmann reportedly had ever sold any work for was $100.
The following month, Yuga Labs released the Bored Ape Yacht Club, a set of 10,000 similar-looking ape graphics, each sold as an NFT for the equivalent cryptocurrency price of about $200. The Bored Apes sold out almost instantly, as their price soared on the secondary market.
The Global NFT market, which includes Bored Apes, catapulted to $25 billion in 2021 from almost nil in the previous year. In January 2022, pop star Justin Bieber paid $1.29 million for a Bored Ape, before announcing the purchase to his 219 million Instagram followers.
The NFT market has since collapsed according to market research firm NonFungible, as has the cryptocurrency market. The future of NFTs is now hotly contested.
Critics think NFTs confer no more than bragging rights. Proponents think branding, social media network effects and improved blockchain technology will revolutionize NFT content distribution, under the next generation Internet Web 3.0. No one knows for sure if NFTs will follow a similar path tech stocks took after the dot-com bubble burst at the dawn of the millennium, when they re-emerged triumphant under Web 2.0.
A startup to brag about
Roberts launched Totemo in April 2021, encouraged by Christie’s sale of Beeple’s work. He put together a small team with art world expertise, raised seed funding through Japan based venture capital firm Shizen Capital, hired a team of programmers in Belarus and began building an NFT trading platform.
When fully operational, collectors will be able to buy curated street art NFTs through Totemo’s website. Street artists, who typically earn only a commission on primary artwork sold by traditional galleries, will earn an extra 5% commission on secondary-market sales made through the website. The latter is a potential new and important source of recurring income for street artists.
Totemo is not the first to sell digital art NFTs. Opensea is the Amazon of NFTs, says Roberts. “You can buy anything on Opensea,” he notes. Rarible, another NFT marketplace, trades art and collectibles but offers little curation. SuperRare, yet another, curates digital art NFTs. Its business model may be closest to Totemo’s.
To build the street art market, still in its infancy, Roberts plans to educate potential market participants. In March, Totemo held a live-art exhibition at Tokyo’s UltraSuperNew Gallery featuring La Mano Fria, an urban artist with New York roots. More live future events are planned. “We curate the artists and throw events for them to increase their popularity. And we auction off their works on our website.”
His firm also plans to publish a book about the Tokyo street art scene. The book will highlight Japan’s graffiti laws and give visiting street artists advice about what to say, what not to say and who to call if arrested. A security camera map covering the Shibuya area will give visitors a lay of the land. The publication is yet another way to help educate potential buyers and sellers about today’s global street art scene, he says.
Roberts is optimistic about the future of digital art. “If you can scoop up an NFT created by a street artist now, it could be in a museum in 20 years,” he argues, citing famous graffiti works by Banksy, Keith Haring and Jean-Michel Basquiat.
"There is a huge untapped market for artistic talent which art collectors might want to collect.”
Beacon Reports reveals Japan through the lens of thought leaders.