Click to Print

How the Museum of Sex Turned a Nonprofit Snub into an Asset

June 14, 2012
URL: http://www.entrepreneur.com/article/223623

New York's Museum of Sex (MoSex) got a lot of press attention before it opened in 2002--but not for the sensational reasons one might expect. The stories focused on the state Board of Regents' refusal to charter MoSex as a nonprofit. Using "sex" in the same breath as "museum" makes a mockery of the institution, they said, forcing founder Daniel Gluck to open a for-profit museum.

Gluck wasn't too upset with the state's decision. Worried that conservative-leaning nonprofit board members would undermine his mission to frankly explore "the history, evolution and cultural significance of human sexuality," he had originally planned to launch the museum as a private venture--but advisors encouraged him to try for nonprofit status.

Once jilted by the state, the Wharton grad felt free to pursue his original, for-profit vision (with a nice publicity boost from the brouhaha). Since opening day, growth has been slow but steady, with a 15 percent uptick in traffic each year. The museum, on Fifth Avenue in the Flatiron District, broke even operationally after the first year. Gluck predicts a profit of 15 to 20 percent of net for this year, and expects that percentage to double in 2013. MoSex is adding 15 employees, and the facility's basement bar/cafe will be shuttered in September in favor of a full-service restaurant.

A self-described serial entrepreneur, Gluck came up with the idea for MoSex in 1998 during a brainstorming session with some colleagues. The irony of opening a museum focused on sex while Mayor Rudy Giuliani's administration was busy scrubbing the smut out of Times Square did not escape Gluck, but he warmed to the idea after doing some market research.

Daniel Gluck, MoSex
"I couldn't believe there wasn't anything like it already in the world. This seemed like such a large gap in the cultural landscape."
--Daniel Gluck, MoSex

"I couldn't believe there wasn't anything like it already in the world," he says. "This seemed like such a large gap in the cultural landscape."

To lend credibility and star power to the project, he reached out to academics and notables. Camille Paglia was the initial lead academic advisor.

Arianna Huffington, Sandra Bernhard and Bill Maher agreed to lend their names. Gluck wrote into the corporate bylaws the forbiddance of financial backing from anyone in the adult entertainment industry. By 2000 he was conducting the first of two rounds of financing; about 20 investors put up several million dollars. "Attractions can be very, very profitable places," Gluck says, pointing to the expanding Madame Tussauds wax museum empire.

This year MoSex expects 200,000 paying visitors. (One of the museum's LivingSocial campaigns sold 12,000 tickets in three days.) Thirty percent of revenue comes from the museum shop and 10 percent from the cafe, Oral Fix.

And there's more MoSex to come.

"We think there's potential to open up a location in Vegas. There's a possibility we can go into building a boutique hotel," Gluck says.

First, he wants to make sure the core brand is well-defined. He and a "team of smart, thoughtful people" have logged 100-plus hours trying to crystallize MoSex's sophistication, scholarship and, well, sexiness into a few sentences. "Dealing with such a loaded subject makes this a complex process," he says. "[The topic] is a tool at our disposal, but it also affects people's perceptions. We have to be careful about everything from what's in our window to what's on our website."

So far he has walked the line by hiring preeminent designers to create exhibitions and marketing materials that are more MoMA than Larry Flynt. Gluck is also busy devising a name and identity for the new restaurant and is talking to product-development experts about brand extensions. "We think there's a whole angle there," he says. "I mean, if Burt's Bees can build an empire on lip balm, we feel like we can build something pretty substantial on what we're doing."