Kimmy Scotti is a renaissance woman of the business world. From launching several successful brands to funding your favorite companies, including Blink Health, Maven, Oula, Hill House Home, and Seed, Kimmy has been the driving force behind unparalleled growth from all angles.
From the shelves of CVS to the counters of HeyDay, we’ve seen Fig.1 scale distribution to more than 3,000 retailers and derm spas since 2021, thanks to its super colorful bottles and science-backed skincare formulas. Kimmy Scotti somehow shook up the notoriously saturated skincare market. Her adeptness stems from her background as a serial founder, and a prolific investor as well. Her portfolio includes Sakara Life, Blink Health, Maven, Oula, and Seed, to name a few.
How does one build, or become part of, so many winning brands?
After graduating from the Fashion Institute of Technology, Scotti was a founding employee of WORKS, one of the first female-driven platforms optimized for the iPad. By offering shoppable content and exclusive discounts to members, the team discovered a new frontier in DTC: healthcare. They redirected their focus entirely towards healthcare and launched ScriptRelief—a prescription discount service. The platform has reached millions of uninsured and underinsured Americans.
After working in the trenches of Silicon Alley during an era of explosive growth that focused on instant profitability, she began expanding her network to Silicon Valley where she noted a startup culture that placed a heavier emphasis on building a healthy business that could withstand market fluctuations and other unforeseen situations, like Covid. The contrast between the NYC and San Fran mentalities helped shape her investment thesis at Neon, an early-stage VC she founded in 2023. She also remains an advisor to 8VC, a prominent technology and life sciences firm she also helped launch in 2015, that now manages $880 million in capital.
Despite her track record in backing buzz-generating brands, Scotti tells Ali Wyatt, co-founder and CEO of FFC, “I don’t believe in growth at all costs.” In this powerful FFC session, Scotti delves into the best rules for building a brand for profitability and for the long-haul. This chat is a masterclass for entrepreneurship and angel investing alike.
- Grant yourself permission to experiment. After winding down her jewelry line and graduating from college, Scotti was fortunate in her early career to land a job at a family office where she was charged with building brands. The founder gave Scotti two rules: “He said I could build whatever I wanted, so long as I didn't spend very much money trying, and things were being built for profitability. Basically, those were the rules and I thought these are the best tools I've ever heard.” These two pillars guided much of her entrepreneurial and investment strategy for the decade ahead.
- Utilize landing pages for idea validation.
By listening to loud and clear data in 2011, she was able to recognize healthcare as a significant revenue stream and she built ScriptRelief. Now that building landing pages is easier and cheaper than ever, she encourages founders to follow the “super loud information” that is usually right in front of them. She suggests launching a landing page, or a few of them with different marketing ideas and branding treatments. Buying online ads to drive traffic to them and see what works and what doesn’t.
“Let's say you have an idea right sitting at home; you're listening to our conversation right now and you've got an idea … What if you could test that idea?”
Note whether visitors are engaging with you throughout the entire checkout flow, and whether there are waiting lists or clear bestsellers. ”Are people interacting with one brand over another, or one subtle differentiation of the product over another?” Scotti asked. “You can take these things before you go spending a fortune actually building them. It's basically like creating an internet-based focus group.” She says this is a fantastic way to establish product-market fit before ever officially launching, and that testing different versions to gauge market interest before full-scale investment.
- Angel investing–with conviction. After the success of ScriptRelief, she recalls receiving her first distribution check of $22,000 and depositing it into her bank account. “It sat there for about five seconds before I handed it over to the girls at Sakara Life, Danielle DuBoise and Whitney Tingle.” This is when she fell in love with investing. “I always say those girls turned me into an investor and I never looked back.”
The Sakara experience helped her form a unique approach to investing that she calls Conviction-Driven Investing, where she has full conviction in the founder’s ability, and deep involvement in the operations for success. She typically invests in the early-stage and follows on as lead investor in subsequent rounds.
But she doesn’t push her portfolio companies to grow at all costs. “You know you have to balance building a great business and strong unit economics with that growth, because the truth is…investor sentiment changes when the market changes.”
- Managing costs and ensuring profitability amidst market fluctuations. Scotti’s Conviction-Driven Investment thesis places heavy emphasis on two words. Say it with us, all!: “Unit economics,” or the costs and revenues associated with selling a single unit of product, or service. Having a firm grasp of your unit economics is one way to safeguard your business through the unforeseeable, be it Covid or inflation. Scotti says not only do you have to understand the costs of production, but the costs of acquiring your customers.
“You have to figure out the cost structure of your business. That means you're building profitability into your model.”
Pro tip: You can achieve this by always projecting for your marketing costs to only rise overtime, as online platforms like Meta and Google continually want to capitalize on your growth, so their prices will rise. But also, initially no one knows you in your target market. After a while, more and more people know who you are. So you need to work harder to find your exact demographic.
- What’s more important than your pitch deck? As the cofounder of prominent life sciences firm 8VC as well as founding operator of her new firm, Neon, Scotti says she places an incredible emphasis on a founder’s ability to build business models. “How do these founders and this team think about scaling the business and does it map to reality or not? Does the business need to break physics in order to work out or not?
“Build those models and create those different concepts of reality for yourself,” says Scotti. The two most important scenarios to build for are a A) Risk-averse Model that factors in the minimum amount of money your business can survive on. She also wants you to build a B) Pie in the Sky Model that measures how you’d scale to profitability if given sufficient capital.
Surprisingly, she advises against outsourcing this task to accountants. “I've seen this before and it's a red flag for me when somebody else has built the model. You have to drive it.” Instead, work alongside a trusted advisor, or follow the formulas on YouTube so you know how to build the basics yourself.
You can also stick with us at FFC as we explore all the ways of building for profitability and growth, with you in the driver’s seat.
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