The diamond market is artificially thin, artificially high-valued, and riddled with speculation as to the integrity and non-conflict status of the commodities it comprises. Diamonds, though common, are sold through a network of different companies owned by one large conglomerate—DeBeers—which, through various mergers and acquisitions over the past century, has managed to legally, pervasively, and abidingly sell diamonds through anti-competitive behavior.
It acts, today, as a de facto worldwide cartel that restricts diamond supply to artificially inflate the value of the diamond market and thus, diamonds themselves. As such, this market is also artificially exclusive and highly complex, and distributors are often highly unfair regarding the prices they charge buyers.
So, due to the cartel-like nature of DeBeers as a company, there has been little innovation in the area of diamond manufacturing, sales, mining, and so on. Buyers are increasingly put on the long end of the pricing game and they are paying for it—literally. With some diamonds costing as much an entire car payment, there has opened a market vacuum for companies looking to make diamond purchasing more equitable and simpler for the average consumer.
Startup entrepreneurs are noticing, and there has been a flurry of activity in New York City around the business of making diamonds more affordable and easier to access for non-affluent buyers. Unfortunately, these businesses have usually taken the form of local jewelers looking to one-up each other with uncannily similar business models that offer little differentiation.
Enter Rare Carat (RC). RC is Kayak for diamonds. It has an all-inclusive, simple interface— powered by IBM’s Watson, using data science, artificial intelligence, virtual reality, and blockchain to help users make intelligent purchases. With the understanding that the diamond industry has thrived on complexity, Rare Carat searches and scores over 1 million diamonds at twenty trusted retailers with one click.
Its founder, Ajay Anand, used his own experience buying diamonds to jump into the shoes of the everyday consumer to build the product. He found that a tool to limit the complexity of buying diamonds was sorely needed.
“Look, before I got engaged, I had read the famous Atlantic article and thought diamonds were a waste of time. Turns out when you’re proposing, it doesn’t really matter what you think. The tradition isn’t going anywhere, and so I wanted to build a product for others in my shoes. At our core, we really look to be a buyer’s best friend, using the latest in tech to help them make an intelligent purchase.”
RC doesn’t actually sell anything—it simply connects buyers to retailers that will give them the best prices for whatever diamonds they might wish to buy. The company’s strengths lie not in diamonds and jewelry, but in technology, and because of that RC has managed to differentiate itself from every jewelry retailer in the US. Just like Uber has no cars and AirBnB has no actual hotel rooms, RC has no actual diamonds.
Their smart technology’s only function is to connect buyers to retailers and help those buyers make the most intelligent purchasing decision possible. The value they deliver, therefore, is not in diamond quality, but in the quality of the intelligence their IBM Watson-powered platform delivers to users looking to get the best bang for their buck.
Skeptics and competitors might wonder about the actual value of something like this—after all, DeBeers has dominated the market for a century, and shows no signs of going anywhere. And, says RC founder Ajay Anand, “we actually started the company knowing nothing about the way the industry was supposed to work.” Yet, the power of RC is not in its minerals sourcing, but in its functionality, and it’s this that’s allowing them to carve up market share in the diamond industry. Just follow the numbers: the company is only three months old, yet has seen nearly 200,000 visitors perform over 400,000 searches.
“We built this with a consumer’s hat on, which has been critical, and with such a large purchase value, the revenue our company is driving to retailers is well into the millions. So, our success really reflects a clear market need and the fact that we’re filling it. Diamond buyers want an unbiased partner to guide their journeys into what are often daunting and expensive purchases. We are that partner.”
This month, Rare Carat will be rolling out its Watson AI chat bot. Built in conjunction with IBM, the pure processing power of IBM’s Watson big data platform will be combined with Rare Carat’s diamond pricing intelligence aggregation platform to complete a seamless experience where anyone, including complete novices, can interact with this new functionality to quickly make sense of the market.
“By the end of 2017, we’ll be the go-to place to start and end your diamond search”, says Anand. “Companies in this space really haven’t explored how new tech can add value to the industry, which has been around for thousands of years with little real changes.” Exploring new applications of data science and AI valuable to the industry, RC has partnered with Everledger, a startup that has created a permanent ledger for diamond certification and transaction history using blockchain. Says Anand, “the industry could do well to step outside of itself and see how frustrating the buying process is for customers.”
Rare Carat is growing—they’re in the process of moving to new office space on 43rd and 8th in Manhattan. As most of their work in AI and data science is leading in the diamond industry right now, they’re open to talking in person or over email to anyone interested in their work. After all, the strength of any great company is its people. To the itinerant diamond buyer, you can find them at www.rarecarat.com to learn more.