#339 Joseph Duveen Robber Baron Art Dealer

In this episode, the hosts discuss the extraordinary career of art dealer Joseph Duveen, who built a business catering to America's wealthiest individuals by recognizing that Europe had art and America had money. Duveen's strategy involved monopolizing the market, controlling supply, and creating a demand for rare art pieces among the rich, leading to his success as a legendary art dealer. The episode also touches on the Founders Notes subscription service, offering access to comprehensive notes and highlights from the books covered on the podcast, and the introduction of a one-time payment option. Additionally, the hosts are seeking partnerships for B2B products with Patrick O'Shaughnessy from the Invest Like the Best podcast. The discussion highlights Duveen's calculated approach, his influence on clients like Andrew Mellon, and the establishment of the National Gallery of Art in Washington, D.C. Duveen's legacy is shown to be a blueprint for modern art dealers like Larry Gagosian, illustrating the timeless value of understanding human nature and the power of branding in business.

• Speaker A and Speaker B introduce the episode about Joseph Devine, highlighting the unique aspect of his business.
• Devine's business was built on serving a small number of extremely wealthy clients.
• The episode also includes a promotion for Founders Notes and a partnership opportunity with Patrick O'Shaughnessy.

"Imagine building your business based on a handful of clients. Your business only has a handful of clients, but those clients are the wealthiest."

The quote emphasizes the unique business model of Joseph Devine, who catered to a select few of the world's richest individuals.

• Joseph Devine noticed the imbalance between art in Europe and money in America and capitalized on it.
• Devine's career began at age 17 and involved traveling between Europe and America to buy and sell art.
• Devine's services extended beyond art dealing, providing his clients with exclusive access and luxury experiences.

"Joseph Devine noticed that Europe had plenty of art and America had plenty of money, and his entire astonishing career was the product of that one simple observation."

This quote summarizes the foundational observation that led to Joseph Devine's successful art dealing career, bridging the gap between European art and wealthy American buyers.

• Devine was known for his competitive spirit and meticulous service to his clients.
• He provided his clients with access to European nobility, prime accommodations, and even assisted in personal matters like selecting brides.
• Devine's aggressive and fervent approach to art dealing set him apart from his competitors.

"There was almost nothing Duvine wouldn't do for his important clients."

This quote illustrates Devine's dedication to his clients, going above and beyond to meet their needs and secure their loyalty.

• The podcast discusses the influence of Joseph Devine on modern art dealers like Larry Gagosian.
• Devine's strategies and business model serve as a blueprint for contemporary art dealers.
• The episode references historical profiles and biographies that detail Devine's methods and impact.

"Larry Gagosian is alive and operating to this day. But almost 100 years ago, Joseph Duvine built a career that Larry used as a blueprint."

The quote connects the past and present, showing how Joseph Devine's practices continue to influence today's art dealers.

• Devine's success was based on a simple yet serious idea: connecting European art with American wealth.
• He believed in the power of scarcity and controlled the supply of art to maintain high prices and exclusivity.
• Devine's enthusiasm for art was contagious and played a significant role in his salesmanship.

"The enthusiasm that you have for your product is transferable to other people."

This quote highlights the importance of passion in sales, suggesting that Devine's enthusiasm for art was a key factor in his success.

• Devine was known for his calculated and strategic approach to business.
• He meticulously rehearsed client interactions and built extensive information networks to gain insights into art collections and noble families.
• Devine's practice of paying high prices for art paradoxically increased the perceived value of his merchandise.

"Everything with this guy is extremely, extremely methodical."

The quote describes Devine's deliberate and strategic approach to art dealing, which contributed to his remarkable success.

• Devine emphasized the scarcity of his art pieces to elevate their value and desirability.
• He would buy entire collections and store them, creating a sense of rarity and exclusivity for his clients.
• Devine's insistence on high prices reinforced the premium status of his offerings.

"He wanted to control supply. He wanted to say, hey, I have literally the best and rarest pieces of art all over the world."

This quote explains Devine's strategy of controlling the art supply to create and maintain high demand among the wealthy clientele.

• Joseph Duveen uses a psychological tactic to sell art to Rockefeller Jr. by letting him house the pieces temporarily.
• Rockefeller Jr. is given the chance to grow attached to the art pieces over a year before deciding to purchase.
• The strategy is set during the Great Depression, which impacts Rockefeller's initial offer.

"Year'S options on the bus, right? So they are going to remain for a year in the Rockefeller mansion as non paying guests." "During that time, Duveen hoped that the attraction between Rockefeller Jr. And the bus would ripen into emotion that was more intense."

The quote explains Duveen's strategy of allowing Rockefeller to become emotionally attached to the art pieces over a year, hoping this would lead to a purchase.

• Duveen is unaffected by the Depression, unlike most people, due to his business model.
• Rockefeller Jr. offers to buy the art for less due to the Depression, but Duveen declines, emphasizing his financial stability and leverage.

"Depression, you might welcome a million in cash. Duveign's response was that I am not in the stock market, and therefore I am immune and not the least bit affected by the depression."

This quote highlights Duveen's strong financial position during the Depression, which allows him to negotiate from a place of strength.

• Duveen sets a firm deadline for the purchase option, using it as a psychological tool to compel Rockefeller to make a decision.
• The deadline creates urgency and a sense of scarcity, influencing Rockefeller's eventual decision to buy the art.

"The option is going to expire on the 31. December. You can either buy them, and I've made it very clear, I'm not budging on the price."

The quote shows the use of a deadline as a psychological tactic to pressure Rockefeller into purchasing the art at Duveen's price.

• Duveen caters to a small, exclusive group of wealthy clients, understanding their desire for prestige.
• His business is built around creating a luxurious environment that reinforces the clients' right to own historical art pieces.

"He built his entire business around eight to ten people. And two, he understood that they were very wealthy."

The quote summarizes Duveen's business model of serving a select group of ultra-wealthy clients and providing an environment that aligns with their status.

• Duveen teaches his clients that acquiring art is equivalent to acquiring upper-class status.
• He emphasizes that European nobility had titles and prestige, which his American clients could attain through art ownership.

"Buying art was also buying upper class status and maybe the highest class possible, because these are the former possessions of kings and emperors."

The quote underlines the idea that owning art is not just a financial investment but also a means of obtaining social prestige.

• Duveen's charisma and enthusiasm are contagious, making his art pieces appear more valuable in his presence.
• His personality becomes an integral part of his business strategy, influencing clients' perceptions of the art.

"The pictures that you sell me always look better when you are here."

This quote illustrates how Duveen's presence enhances the perceived value of the art he sells, showcasing his personal influence as a sales tactic.

• Duveen's purchases and sales are newsworthy, providing free advertising and reinforcing the exclusivity and desirability of his art pieces.
• High prices and the rarity of the pieces create a sense of urgency and fear of missing out (FOMO) among potential buyers.

"Sir Joseph Duvine, the art dealer, has bought a rambrant for $410,000. It's $410,000 in 1920, $6.01 of the highest prices ever paid."

The quote exemplifies how Duveen's high-profile transactions serve as effective advertising, attracting attention and interest from potential clients.

• Duveen aims to monopolize the art market by controlling the supply and being the exclusive source for high-value art.
• His strategy involves paying premium prices to ensure he secures the most sought-after pieces, reinforcing his position in the market.

"When you pay high for the priceless, you're getting it cheap."

This quote reflects Duveen's belief in the value of exclusivity and his willingness to pay steep prices to maintain his monopoly in the art market.

• Duveen conceals his cleverness by emphasizing his mistakes, using them as a disguise.
• He is singularly focused on his business, which contributes to his innovative strategies and success.

"He was interested in practically nothing except his business."

The quote highlights Duveen's intense focus on his business, suggesting that his success is partly due to his dedication and concentration on his goals.

• Success is not determined by the industry but by the unique approach and focus one brings to their work.
• Art dealers as an example, with only a few becoming extremely wealthy due to how they conduct their business.
• The depth of focus can lead to innovative ideas that those with a superficial understanding will never attain.

"There is a ton of art dealers that don't make any money, and there's a handful, one or two or three that became billionaires."

This quote emphasizes the disparity in success within the art dealing industry, suggesting that a few individuals achieve significant wealth due to their distinct approach to the business.

"And this idea of crazy focus and just thinking about your business longer and harder than anybody else does, you're going to get so deep down that curve."

The quote underscores the idea that intense focus and prolonged thought about one's business can lead to profound insights and a competitive edge.

• Duveen built a vast information network that became a significant asset.
• His network allowed him to access and acquire valuable art before competitors.
• The network included various people, from clients like Henry Clay Frick to deck hands on transatlantic ships.

"Compounds in value becomes one of his greatest assets later in his life."

This quote suggests that Duveen's information network increased in value over time, becoming one of his most significant resources.

"And so he's having, like, a launch and a conversation with Henry Clay Frick."

This quote illustrates Duveen's close relationships with influential clients, which were part of his information network.

• Duveen's success was partly due to his ability to create strategic relationships and "fabricated coincidences."
• He would pay deck hands on ships to seat him next to wealthy Americans, leading to new business opportunities.
• Duveen's interactions were often premeditated to appear coincidental, enhancing his allure and access to potential clients.

"And so here's an example of that. And so it says, among the american millionaires, the Devine met through the deck hands."

This quote provides an example of how Duveen met potential clients through orchestrated encounters, made to seem like chance meetings.

"This is another example of what I meant. He has all these fabricated coincidences."

The quote reveals that what appeared to be coincidences in Duveen's interactions were actually carefully planned strategies to engage with potential clients.

• Duveen aimed for a monopoly in his field by being the exclusive source for the best art.
• He reinforced the idea to his clients that they could only get the best through him, dismissing competitors.
• The concept of monopoly was central to Duveen's business method, shaping his interactions and sales strategies.

"Monopoly was his method. Monopoly was his method."

This quote encapsulates Duveen's business philosophy, where he sought to dominate the art market and be the sole provider of the finest art to his clients.

"Ignore these competitors, come straight to me. You will get the best every time."

The quote highlights Duveen's tactic of positioning himself as the only reliable source for high-quality art, encouraging clients to bypass competitors.

• Duveen's meticulous attention to detail contributed to his success and was likened to the strategies of celebrated generals.
• He paid for information that would give him an advantage, such as seating arrangements on ships.
• His attention to detail extended to building relationships with various individuals, from critics to servants, to gather useful information and insights.

"Duveen displayed that scrupulous attention to detail that has distinguished the careers of other celebrated generals."

This quote compares Duveen's attention to detail to that of successful military leaders, implying that such meticulousness is a trait of high achievers.

"He built relationships and paid people to give him information."

The quote explains how Duveen's focus on detail included cultivating relationships that would provide him with valuable information, giving him an edge in his business dealings.

• Duveen understood and capitalized on human nature and psychological tendencies to influence clients and close deals.
• He recognized that owning a collection associated with his brand increased its value due to the psychological impact of branding.
• Duveen's strategies hinged on the idea that human nature is constant and can be studied to predict behavior and preferences.

"Studying history is like watching game tape on human nature."

This quote suggests that learning from history is akin to analyzing patterns in human behavior, which can be predictive and advantageous in business.

"These are some of the most smartest and most sophisticated people on the planet."

The quote acknowledges that Duveen's clients were highly intelligent and sophisticated, yet they were still influenced by the same psychological tendencies as anyone else.

• Duveen was instrumental in the creation of the National Gallery of Art in Washington, DC.
• He used the gallery as a solution to the problem of his clients running out of wall space and facing high inheritance taxes.
• The gallery served multiple purposes: it allowed clients to appear as public benefactors, cleared space for new purchases, and maintained high art prices.

"The solution was the National Gallery of Art in Washington, DC, which Duvine helped create in 1937 by getting Andrew Mellon to donate his collection to it."

This quote explains how Duveen resolved a significant challenge by establishing the National Gallery of Art, turning it into an opportunity for further business.

"In one gesture, his clients avoided taxes, cleared wall space for new purchases, and reduced the numbers of paintings on the market, maintaining the upward pressure on their prices."

The quote outlines the multifaceted benefits of the National Gallery of Art for Duveen's clients and his business, reinforcing his legacy and influence in the art world.

• The story of Joseph Duveen illustrates how perceived value and branding can significantly affect the price people are willing to pay for art.
• Duveen convinced wealthy clients that art was more important than money, leading them to feel they were getting a bargain by paying high prices for "priceless" art.
• Price acts as a signal of quality and rarity, making customers more comfortable paying higher amounts.
• Duveen's strategy was to position his collection as superior, thus justifying higher prices.

"Had he bought the pictures directly from Goldman, he would have saved millions of dollars. But he wouldn't have had the warm feelings of owning a lot of Duvenes."

This quote explains how the brand and story behind a product can increase its value in the eyes of the consumer, beyond the inherent quality or cost of the product itself.

"Duveen had taught them the idea that art was priceless, and when you pay for the infinite with the finite, you are indeed getting a bargain."

This quote highlights Duveen's strategy of framing art as an infinite value, making any monetary price seem like a good deal.

"They felt better when they paid a lot. It gave them the assurance of acquiring rarity."

The quote underscores the psychological effect of high pricing, where customers equate higher costs with exclusivity and rarity, enhancing their satisfaction with the purchase.

• Reading biographies and history is seen as a form of leverage to learn from past successes and failures.
• Larry Gagosian modeled his career after Joseph Duveen, demonstrating the power of historical patterns in shaping modern business strategies.
• The podcast episode serves as an example of the value found in historical knowledge, as mentioned in "Poor Charlie's Almanack."

"The episode that you just heard is a great illustration of this quote that is in this book on Charlie Munger, poor Charlie's Almanack, where it says that there's ideas worth billions in a $30 history book."

The quote emphasizes the immense value that can be derived from studying historical figures and events, as they can provide insights worth far more than the cost of learning about them.

"Larry Gagosian, who starts his career 40 years after Joseph Duveen dies, by his own admission, reads every single biography that he could get his hands on about Joseph Duveen and essentially patterns his career after him."

This quote illustrates the direct impact that studying a historical figure's life and career can have on an individual's business approach and success.

• Founders Notes is a platform developed to share detailed notes and insights from books and podcasts on history's greatest founders.
• The service is designed for successful entrepreneurs and aims to provide high value for the price.
• The platform encourages repeated engagement with historical knowledge for deeper understanding and application in business.

"For years, since 2018, I've been putting every single highlight of the books I read and every single note on the highlights into this app called Readwise."

This quote explains the process of compiling detailed notes, which form the foundation of the Founders Notes platform, emphasizing the meticulous documentation of knowledge.

"Founders Podcast is essentially a free trial for founders notes. Founders notes takes everything that you and I are learning on the podcast and just takes it to another level."

The quote describes the relationship between the Founders Podcast and Founders Notes, with the latter being an extension and deepening of the knowledge shared in the former.

• Plans to expand Founders Notes include building out a comprehensive, organized curriculum of knowledge from history's greatest founders.
• Features in development include a chat interface for dynamic interaction with the database and themed collections of ideas across various books and episodes.
• The platform aims to be a valuable resource for personal and company-wide learning and growth.

"I think founders notes can be this giant platform... I think it'll be an ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders."

This quote outlines the ambitious vision for Founders Notes as an expansive and ever-growing repository of entrepreneurial wisdom.

"I want to organize around this idea that this is an ever-increasing, giant, valuable curriculum that condenses and clarifies the collective knowledge of history's greatest founders."

The quote reinforces the goal of creating a structured and comprehensive learning resource that distills the essence of historical entrepreneurial success into actionable insights.