By Leslie Walker
Washington Post Staff Writer
Thursday, April 29, 1999; Page C1
The moment he hands you his business card, you know Bill Lederer is different. The founder and president of Art.com Inc. printed information on both sides, vertically, so you have to hold the card oddly and flip it over to read everything.
That's typical of cyber-visionaries. They have a different slant on the world. They take more risks than the rest of us take, too, often relishing the skepticism they encounter.
Lederer, 37, appears supremely confident that his full-tilt, multimillion-dollar, so-far-unprofitable run against the prevailing wisdom of the art industry will produce a brand name that will transcend the print-and-framing business from whence it sprang and make art more accessible to people around the world.
His fervor may explain why Lederer paid so much $450,000 for the rights to the Art.com World Wide Web domain name last November. The original owner was Advanced Rotorcraft Technology Inc., a helicopter consulting firm that had registered its corporate initials as its Web address.
Lederer's board of directors thought he was crazy to pay it. But he was adamant about the need to broaden his mission beyond the Art-U-Frame identity he started with last May.
"The name is everything," he explained. "Your identity on the Web is fundamentally critical to everything about you."
And if customers aren't rushing online yet to buy the custom-framed prints and posters that Art.com offers from its 30,000-square-foot warehouse in suburban Chicago, Lederer believes that is because he is a step ahead of consumers. He has to help them "develop some confidence and comfort" before they can trust that what they see on their computer screens is what they will get when the delivery truck reaches their home.
Lederer's competitors believe that consumers do not want to order framing online. Cyberspace simply cannot translate the texture of framing well enough yet, they contend.
"Texture and color are very important in custom framing," said Steve Lowrey, chief executive of Franchise Concepts Inc., a privately held company whose three print businesses make it the largest print retailer in North America.
"With the current technology, there is a high likelihood of disappointing customers with the final product. When they get it home they may find the colors and texture are different from what they saw on their screen."
That's partly why Franchise Concepts sells no art on the Web and has no plans to help its more than 200 Deck-the-Walls frame shop franchises move into e-commerce soon.
"Our customers are not moving toward this yet," Lowrey said.
"At the moment it makes sense to do it, we can."
Art.com's top Web competitor takes a similar view. Barewalls.com co-founder Daniel Spira said he believes consumers are ready to buy prints and posters online, but not framing. So his Cambridge, Mass.-based Web site offers the same vast print selection as Art.com more than 130,000 images that consumers can search by genre, artist, topic or keyword but sells them unframed.
Lederer, who learned about art in a family print business, nevertheless remains convinced that being able to display what a piece of art will look like matted and framed will be a winner. His proprietary "visualization" software lets you click on a mat color and frame type, then automatically draws both around the image on your screen.
Framing makes Art.com a more costly operation than Barewalls.com.
Without framing, Barewalls.com has less need to stock prints; it simply transmits print orders to publishers electronically and has the items shipped.
Art.com's framing mission, on the other hand, requires it to hold prints as inventory, which is why Art.com has a warehouse and employs 72 people four times the staff of Barewalls. Art.com currently stocks 10,000 popular prints and adds more every day.
Lederer wants to expand beyond prints and posters to limited editions, lithographs, non-paper items and even an eBay.com-style art auction scheduled to start in July. He also is developing "art mail" the ability to e-mail images, perhaps with a gift certificate attached and plans to license images for other electronic uses.
Instead of risk, Lederer sees opportunity in a fragmented industry that no company now dominates. With more than 20,000 print and framing shops in the United States, the industry generates more than $5 billion in revenue each year. Lederer believes Art.com will expand the overall demand for reproduction art by making it easier and cheaper to buy and frame.
Lederer has obtained $11.5 million in venture capital and is preparing for a possible public stock offering. Company officials say that revenue is growing by more 50 percent a month and will exceed $10 million this year. Its 30,000 customers include many frame shops and retailers who have opened wholesale accounts to take advantage of what Art.com claims are aggressive price discounts. To streamline the wholesale business, Lederer bought the print industry's leading print catalogue of art images for sale and is retooling it for Web commerce.
Competitors worry that if Art.com catches on, its lower prices could make the fine art print business as much a commodity as books.
That would be fine with Lederer, who thinks the art business has been too elitist for too long.
© Copyright 1999 The Washington Post Company