Roots Studio: Digitizing and Licensing Unseen Art

In an urbanizing world, where finding work or making money often means leaving home, rural communities with rich cultural traditions are vulnerable to disappearing. Roots Studio digitizes art from rural and refugee communities into an online library for licensing. Art is then downloaded by designers who apply and manufacture them onto textiles, prints, and other products. We’ve digitized thousands of designs into our library across India, China, Indonesia, Panama, and Jordan, and royalties wired back to the artists and community have averaged 5 - 20x the original selling price of the art. Some disclosable clients include H&M, Outdoor Research, PrAna, Tommy Bahama, amongst others. 7 foot scrolls for theater backdrops displaced by TVs have now generated over $40,000 in revenue. Art forms with fewer than 40 artists will launch through $25,000 partnership deals next year. We're reclaiming authorship and strengthening the economics of rural villages through their own roots.

We are witnessing the largest extinction of heritage culture in this generation. While anthropological documentation is critical to preservation, lack of sustainable income and displacement are the key causes as to why culture is being lost inter-generationally in rural areas. In my 7 years working with artists, much of this loss links back to one key issue: lack of income.

Artists are one of the hardest sectors to employ, yet they are a massive opportunity of untapped talent. The craft sector is the 4th largest economy for the rural sector. Just in India alone, there are over 200 million people who rely on the craft sector for their livelihoods. Yet, they are receiving less than 2% of the profits from the total sale. The need we are addressing is a way to connect talented, unreached rural artists wherever they reside, to a multibillion-dollar market that has shown a large and consistent demand for cultural designs. 

But licensing has remained an offline and onerous practice. Could we turn everyday products into museums of culture, with a concrete income stream artists in isolation?

The social criteria of the artists we work with

1.  Marginalized, indigenous groups
2.  Earning below 30% of National poverty Line
3.  Practicing an endangered art form, qualified by 50% or more vocational loss between generations

While we have worked primarily with rural artists, we are also moving towards supporting marginalized urban artists.

The rapport we have built with artists is from enlisting community leaders who are from and are respected by the artists. We also have a rigorous system that links every piece back to the artist and their bank account, profiles, and consent forms.

• Artist to Designer: how to readapt visual and compositional skills for other applications

• Digital Design Tools: scanning, and drawing techniques to ensure transition from physical to digital

• Feedback from the global market: how global markets and companies perceive and use visuals, and curation intended for various audiences

•One’s Voice: One’s voice and confidence through oral, written, and video storytelling

• Financial Literacy: New models to share wealth within a community, how to appoint leaders of a community fund, how to budget and distribute funds 

Designers often report limited options for non-stock looking surface patterns that requires minimal labor in manipulation. Our expansion of our design catalogue is geared towards these customers, who will see the immediate benefit in our large library of searchable images that can be purchased and downloaded within minutes without any legal concerns of stealing from artists. 

We set up design centers in villages for artists to digitize and post their art to our subscription-based copyrighted library. Our library allows retail designers to search for art based on trends, colors, and other queries. Once the art is uploaded, our subscription-based online library allows retail designers to search for art based on trends, colors, and other queries. High-resolution files are sent as color separated files, and manufactured into thousands of clothing and home décor, amidst other products. Licensing fees are then wired back to the communities quarterly to individuals and a community fund, amounts that have amounted 5 - 20x the original selling price. Our library enables copyrights through watermarks attached to each art piece, where Roots Studio exclusively represents the artist in the US and European market. Once purchased, the design is removed from the library for that season which gives the brand exclusive rights within their industry to use that design for manufacturing. The stories and authenticity of the cultures represented are also critical to preservation. Our library allows brands to tell the story of the artist by purchasing a "story package". Our program greatly increases the profitability of an artistic lifestyle, ensuring that these community artists continue to thrive. 

Digital assets replicate perfectly and become more than a one-time sale, do not deal with onerous supply chains, yet nothing is physically extracted out of the community. 

Our competitive advantage is our massive supply of unseen art, editorial level stories and portraits - all connected to artists and their bank accounts. Existing competitors who license surface patterns are museums, antique textile resources and archives, such as Design Library. They are offline, technology-adverse, and their sourcing is one-time where relationships with artisan communities are cut off after the art has been acquired. 

We are unlike the thousands of handicraft companies out there that deal with onerous physically supply chains. The key to our value creation is that digital assets replicate perfectly and become more than a onetime sale, do not deal with onerous supply chains, yet nothing is physically extracted out of the community. Licensing fees are wired back to the communities quarterly. There are several ways in which digital art is able to expand the proverbial pie for this market. First digital assets replicate perfectly and infinitely. Thus art can become more than just a one-time sale. Second, as a digital asset, these artworks can now be applied to new products. When a company the size of Target or Whole Foods licenses an image and their standard contracts include 7% royalties on net sales, one image that would have taken 10 hours to produce could realistically yield $3000 or more per design and story. Third, digital assets are trivially cheap to distribute require no physical couriers, freight coordinators, or just packing material which can on average eat up 40-55% of a distribution chain.

Our Theory of Change

A prosperous village - by creating sustainable income for artists, they will value their skill set and be able to provide for their families without taking on the financial risks of leaving their communities. 

A turn back to local identity - many of the artists we engage with work in dying art forms. Through economic parity and authorship we hope to increase value and confidence in their identity and heritage.

How Income is Returned: Royalties wired back to village average 5 - 20x times the original selling price. In the case of a larger recurring royalty license (ie. 7% on gross profits), we tilt the profit split structure to 50% - 50% between the artist and community. Our profit split structure -- 75% to the artists and 25% to a community fund, recognizes individual talent but also allows the village to participate as a whole and vote on spending for community needs. The community fund is governed by 3 members of the village, elected bi-annually to oversee public spending priorities. A common use of the community fund is an "Artist Participation Fund", where all participating artists receive a portion of returns, even if their art work did not sell. Other fund uses could be indirect community upgrades, such as upgrading a hand pump to a rain water harvesting tank.

Current number we are serving

Artist Side

-   Digitized over 4000 designs into our repository

-  Worked with over 2500 artists across 18 tribes. 

-   80% of our artists are female

-   Increased the annual income of highly participating artists (submitted 30+ art pieces a year), by 300%.

Number we are serving in 1 year:

Artists: 3200

Number you’ll be serving in five years:

Artists: 10,000

Our plan is to hit $15M in revenue by 2025. In the next 3 years, there will be high fixed costs in developing our online portal, continued art acquisition, and continued brand building. We expect modest revenues until Y3 as design for manufacturing has long deal cycles (3-5 year contracts). Royalties will come in post Y3 with a 2 year deal cycle lead, we do not anticipate receiving massive inbound royalties from licensing until after the 2nd year of a deal.

On our online platform:

• Year 1: 400+ downloads, acquire 100 deals through trade shows and offline appointments for licensing and engaging in wholesales, Acquire 8000 additional pieces into repository by end of year, aiming to double the annual household income of highly participating artists (30 + art submissions), conduct 12 pilots

• Year 2: 3000+ downloads, acquire 200 deals, continue expanding with partners in countries, aiming to triple the annual household income of highly participating artists

• Year 3: 15K+ (subscription-based)

• Aiming for 150-200% growth per year

• Average deal size: 4-5 patterns per customer

1. IP Protection

Protection of our digital assets is a critical factor for consideration, especially as laws and rules vary from country to country. However there is only weak or nonexistent IP reinforcement in most regions.

2. Community Partnerships and Image Sourcing

The Roots Studio business model is reliant upon our ability to source and partner with rural artists who are committed to producing content to be displayed in our repository. It is a difficult and delicate process, and our ability to accomplish this is a function of a strong team of community organizers who have worked in these contexts. As we scale, maintaining deep and thoughtful relationships while ensuring maximum upside from the market presents challenges.

3. Maintaining in-country management while scaling

Designers want a variety of choices every quarter and a core advantage is having a diverse and large repository for them to choose from. However, this demand backs our back end organization more challenging. The more we work across different regions, the more unique legal, financial, and cultural working hurdles we confront. 

1. IP Protection

Our artists sign exclusive contracts with Roots Studio that protects all of the works submitted within the American and European markets, and we work with key community leaders in the village to ensure that there is full comprehension and agreement on both sides. Roots Studio maintains full creative control over branding and who to publicly disclose a partnership. The pricing model for digital assets has been structured to de-incentive creative theft as it is more cost effective for design licensers to purchase the image upfront then invest in the labors and time consuming vectorization process that comes when appropriating an informal image, not to mention the public shaming in an industry currently sensitive to cultural appropriation.

2. Community Partnerships and Image Sourcing

We hire an individual in each village to take responsibility for teaching and provide the printers and scanners necessary to submit artwork.

3. Maintaining in-country management while scaling

Moving forward, instead of hiring our own community organizers, we will be partnering with in-country governments and established NGOs 

All our sales happen in the United States and Europe. We run trade shows in New York and Paris, and are launching stories and capsule collections with American and European brands. 

We are planning pilots in 2020 - 2021 with artists throughout the Pacific Northwest, Southwest, and Southeastern United States.

1. Rebecca Hui, Co-Founder and CEO (FT)
2. Himani More, Textile Designer (FT)
3. Roshni Vyam, Community Organizing and Operations (FT)
4. Pamela Lysohir, Sales Development (PT)
5. Willem Dehaes, Developer (PT)
6. Xiao Liu, Community Organizing and Operations (FT)
7. Cindy Lee, Design and Photography (PT)
8. Andy Zhang, Developer (PT)
9. Catherine Nair, Operations (FT)
10. Joseph King, Web Development (Contractor)
11. Taylor Weidman, Photography (Contractor)
12. Vivian Kvitka, Designer (FT)
13. Lan Da Geh (PT), Community Organizing and Operations
14. Guo Lao Xi (PT), Community Organizing and Operations
15. Urmila Devi (PT), Community Organizing and Operations

Our community organizers are leaders of indigenous communities with years of grassroots organizing, with a deep vested interest in supporting their communities, but have working or career exposure in the urban world.

Our business development team comprises of veterans and advisors in fashion who have worked for Ralph Lauren, Judith Leiber, and Lily Pulitzer. 

Our network is affiliated with the Unreasonable Institute, Echoing Green, the New Museum Incubator, National Geographic Society, The World Bank, UNESCO, Echoing Green, Fulbright, Stanford Center for Social Innovation, amongst a number of non-profits representing indigenous communities.

Press
 
Forbes 30 Under 30, Social Entrepreneurship: https://www.forbes.com/profile/rebecca-hui/#647689d33d6b

PBS: https://www.pbs.org/newshour/world/agents-for-change/meet-the-entrepreneur-connecting-indigenous-artists-with-the-global-art-market

Stanford Social Innovation Review: https://ssir.org/articles/entr...

TechCrunch: https://techcrunch.com/2017/09... 

US Department of State, Global Office of Partnerships
Unreasonable SDG Goals

Designers often report limited options for non-stock looking surface patterns that requires minimal labor in manipulation. Our expansion of our design catalogue is geared towards these customers, who will see the immediate benefit in our large library of searchable images that can be purchased and downloaded within minutes without any legal concerns of stealing from artists. Once the art is uploaded, our subscription-based online library allows retail designers to search for art based on trends, colors, and other queries. High-resolution files are sent as color separated photoshop files, and manufactured into thousands of clothing and home décor, amidst other products. Licensing fees are then wired back to the communities quarterly to individuals and a community fund, amounts that have amounted 5 - 20x the original selling price. Our library enables copyrights through watermarks, where Roots Studio exclusively represents the artist in the US and European market. Once purchased, the design is removed from the library for that season (12 months) which gives the brand exclusive rights within their industry to use that design for manufacturing. The stories and authenticity of the cultures represented are also critical to preservation. Our library allows brands to tell the story of the artist by purchasing a "story package" - portraits for every artist, story, video and marketing collateral. Our program greatly increases the profitability of an artistic lifestyle, ensuring that these community artists continue to thrive. 

In the next 3 years, there will be high fixed costs in developing our online portal, continued art and partnership building, and brand building. We expect modest revenues until Y3 as design for manufacturing has long deal cycles (3-5 year contracts). Royalties will come in post Y3 with a 2 year deal cycle lead, we do not anticipate receiving massive inbound royalties from licensing until after the 2nd year of a deal.

On our online platform:

• Year 1: 400+ downloads, acquire 100 deals through trade shows and offline appointments for licensing and engaging in wholesales, Acquire 8000 additional pieces into repository by end of year, aiming to double the annual household income of highly participating artists (30 + art submissions), conduct 12 pilots

• Year 2: 3000+ downloads, acquire 200 deals, continue expanding with partners in countries, aiming to triple the annual household income of highly participating artists

• Year 3: 15K+ (subscription-based)

• Aiming for 150-200% growth per year

• Average deal size: 4-5 patterns per customer

We have tested this model and gained significant learning and traction over the years. We want to scale this beyond our own capacity with more systematic backbones in place. In order to do that, we are looking for larger scale partnerships in business execution, supply side partners, and in the art and retail sector.

1. Ministries of Culture and Governments
2. Non-profits representing heritage communities
3. Introductions in the fashion and retail spaces