Making a case for it

Saffronart becomes a case-study for MBA students at the Harvard Business School.

When in 2005 the Harvard Business School got in touch with two of its alumni, Minal and Dinesh Vazirani, co-founders of Saffronart, the Mumbai-based couple could hardly have expected it to spin off into a visit, earlier this year, back to school to see their work being turned into a case-study for Harvard's MBA students.

What they, in fact, had up their sleeve, and which unrolled last week, was a new look for their online gallery and auction house, the only one to have achieved the level of success in an area where other, more experienced players, had simply crashed out earlier.

It was this, said the Harvard professors, that they wanted to understand. Would the Vaziranis, therefore, put on paper their journey of how a young company came out of nowhere to lead the market in terms of modern and contemporary art, and how it came to occupy that space?

"The discussion," says Minal now, "was beneficial to us because we had been so busy with the business, we had no opportunity to look back and see how it had progressed." And yet, in late 2002, early 2003, they had actually considered shutting down the business.

"There was a gestation period between exhibitions and online transactions," says Dinesh. "We had to sell part of our personal collection, take loans, to provide that last push. Looking back," he says, "I'm glad we held on."

The deliberations, when it came to writing the case-study, helped them put their business model into perspective. "Finally, it came down to three main areas," shares Minal: "innovation; entrepreneurship; and creating and developing new markets." What they had achieved was phenomenal: they had created a market where one simply did not exist.

What helped Saffronart build an online community of buyers and sellers was price transparency: its collector's corner lists the price of every painting being sold online, it also provides links for comparable rates for auctioned works, and the bidding process is accessible to everyone, and can be monitored.

"When we came about," recollects Dinesh, "there simply weren't prices available for modern and contemporary art. That one act empowered buyers of Indian art."

What the Harvard Business School wondered was why an Indian online auction space had worked where those in other geographies had failed? The Vaziranis had an answer for that too.

"We believed the Indian diaspora was very tech-savvy, their Internet penetration was extensive, and they were looking for opportunities to buy Indian art." Later, as net penetration grew in India, Saffronart "began to focus more and more on the Indian market" too.

Art analysts believe that other online galleries do not always put prices on works of art because they want to leave room for negotiation. But with access to prices, and archives on the histories of the artists and their works, Saffronart simply swept the market away.

That was in 2001. India has simply grown up since then buying art online as confidence levels have peaked. And with it, Saffronart is determined to lead change too. Having launched its new-look site, it has now announced a sale of fine jewels for the first ever time on its website, to take place in October 2008. "Next year," says Dinesh, "we will enter art from different geographies."

And as a measure of its triumph, it will open a London office in June. Also on the cards are offices in New Delhi and Dubai. "When we studied at Harvard, the only Indian case-study was on Tata Sons," says Dinesh. "To see the Saffronart case-study being taught to MBA students, to be on the other side," agrees Minal, "is very exciting."