We are always market-testing
Success today does not mean you will remain so tomorrow
I am sure you have read that Singapore's Pinacotheque de Paris has closed down. (Read about the news here). They have cited poor visitorship and other business challenges. If you are like me, the average Singaporean, you might probably be going, "Pinaco-what? Is that some kind of drink?" You wouldn't be penalised if you didn't know what Pinacotheque was. Chances are, many Singaporeans also don't.
Pinacotheque Singapore is an arts museum located at Fort Canning. It has internationally acclaimed paintings by Renoir, Monet, and Modigliani. These are consigned by private collectors, so one might not usually be able to view such masterpieces. The museum also had a local history section to cater to the region. The idea was first conceived in 2013 by the Singapore Tourism Board, and opened in June 2015 to the tune of US$24 million. Unfortunately,
not more than 11 months later, the museum has closed and the US$24 million down the drain. This project cannot be seen in connection with the main Pinacotheque de Paris, which also closed down this year in February.
Pinacotheque de Paris
What went wrong?
Without fully knowing the ins and outs of the operations, we take a stab at what what went wrong, conjecturing from what we can see from the outside, hoping, like all growth mindset leaders, to learn something from this.
(1) If we build it, they will come
This is a very typical mentality of business owners. Putting down US$24 million in prime district and negotiating to bring in big-named exhibits will get undone if it goes unnoticed. Just because you have built it, it does not mean that people will come. A huge amount of publicity, marketing, and attraction sales is required to pull in the crowd. And the beginning pull is very important. If there is no critical mass to bring in more visitors, any business will quickly face demise.
(2) An international brand doesn't guarantee success
Singapore has a brand fetish. Not that it is bad, because brands do come with a certain promise, a certain standard. But just because something comes out of a renowned city like Paris does not mean it will be a hit here as well. The concept may work in that city, but transplanting it here may be a bigger ask. We have already seen that Singapore is taking on its own culture, its own modus operandi, and to simply plonk down an international brand with all its operating norms into Singapore might not work.
(3) Was there sufficient due diligence?
Although I did say that the parent company in Paris is distinct from the Singapore project, the fact that they had gone into receivership in November 2015, and then to have closed down in February 2016, shows that there were underlying business model issues. I know it is not easy to uncover these issues, and the project was mooted in 2013, when times were different; but over the course of time until 2015, the STB should have been monitoring visitorship, ticketing, revenue, costs, to detect a failing business model. It would be highly unlikely that in 2013 the books were healthy, and then come November 2015, they go into receivership, with no signs whatsoever. Perhaps someone took his eye off the ball for some time? If a business is planning on bringing in an outside brand, they need to keep more than one eye firmly fixated on the happenings of that business right up to the day operations start in Singapore, cutting losses if there may be any irregularities.
(4) Do you know your customer?
When I went to the Pinacotheque website, I got the impression that it was designed for the free-spirited art-loving segment. Perhaps that is the reason why I didn't know about them; I was not their customer! There are many people in this segment in Paris, and to a larger extent, in Europe. But how large is this segment in Singapore? Being the pragmatic, logical, hardworking people who don't have enough time to spend on the "higher things in life", Singaporeans are more down-to-earth, and certainly not very free-spirited. Which then begs the question - who is their customer? If the STB had hoped to use this as an attraction for foreigners, then fine. But I don't think that was their business model going by the rate card they published on their website which gave a huge focus on the different segments of society - NS discounts, senior citizen discounts, students discounts, family bundled pricing, etc. That they couldn't sustain the business 11 months in means that they grossly misunderstood their customer, something which all new businesses may suffer from.
(5) Competition
Finally, the Pinacotheque had competition from the local museums, which were offering free admission. So if I were a Singaporean who has some
limited free time to spend in a museum with my family, I would want to pick out one which was cheaper. And one cannot be cheaper than the National Museum which has free admission to Singaporeans! And unfortunately, there isn't a sufficient enough distinction between Pinacotheque and the National Museum for one to fork out money to visit it, given the free alternative.
We are always market testing
It is always sad to hear that after spending so much time and money trying to bring in fresh content into the arts scene, that idea becomes unviable within a year. No one wants to see this happen but such are the vagaries of business. Prior business planning is important, although we can never see the impact of some of our assumptions until we go to market. As such, every idea, every opportunity, every business, is a constant market test. Even if you were successful today, yesterday and ten years ago, it doesn't mean you will remain so tomorrow. We must always be on the lookout for changes in the wind direction, and pivot our business when the time comes. But if we took our eyes off the ball for one minute, and cruised along with our assumptions, we might just be another Pinacotheque.
Should Pinacotheque have even started in Singapore? It is not for me to say because there may be other agendas at work than just a business one. But it does come with some lessons to be learnt, and I do hope that business owners take heed.
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