Kegan Schouwenburg

Kegan Schouwenburg Founder/CEO, SOLS

In this second episode of the Collective Wisdom podcast you’ll learn about innovating in unattractive industries — like orthotic shoe inserts. Kegan Schouwenburg has used 3-D printers and a killer design sense to make the treatment for Hammer Toe as elegant as an Hermès handbag. While most of the tech industry is focused on social networks and self-driving cars Kegan has managed to make feet interesting to reporters who ususally cover Facebook. She’s also raised nearly $20M from VCs to fund her startup.

Listen and learn from her experience — after all if she can make orthotics interesting, you have no excuse.

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Transcript

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Micah Rosenbloom: Hi, I’m Micah Rosenbloom, host of “Collective Wisdom,” the podcast where we walk a mile in the shoes of tech founders to bring you lessons you can apply to your own business. I’m a venture capitalist with Founder Collective, a seed-stage venture capital firm that has invested in companies like Uber, Buzzfeed, and Hotel Tonight.

Most of the tech industry is focused on social networks and self-driving cars, and Apple watch start-ups. My guest today is “bewitched by bunions.” That’s right, shoe inserts, to be specific. Kegan Schouwenburg founded a company called SOLS, which recently raised over $11,000,000 to go toe-to-toe with Dr. Scholl’s.

Her company SOLS, that’s S-O-L-S, uses an iPad and a 3-D printer to create custom shoe insoles that are perfectly matched to your feet. Here’s what it sounds like when we visited their New York offices to get fitted for a pair.

Travis Lopez: I’m Travis Lopez, I’m the mid-Atlantic territory manager here at SOLS. We actually use the iPad to take pictures of peoples’ feet. This is where we pull thousands of data points and we get a lot of measurements from the foot, combine it with the patient data we got from you as far as your foot length, that kind of thing. Then a couple of little prescriptive elements that we can pick. What it does is we run it through a deep learning algorithm in Computer Vision Technology, so it creates basically a digital impression of your foot. Then that’s when we make the 3-D model of the orthotic off of.

Quality control, we’ve got a couple of biomechanics Ph.D.’s, and people who have worked at orthotics labs. They’ll just look over the end product, they’ll send it to our printers in Texas, and then they’ll 3-D print it there. Ship it back here, we’ll throw a top cover on, send it to you.

MR: The process is amazing. It’s like getting a glimpse of the future, the way NIKE might be 20 years from now. We’re going to talk to Kegan, and see what motivates her to be preoccupied with plantar fasciitis, and what it’s like building a 25,000 square foot 3-D printing facility. Moreover, how to get VC’s and the media excited about shoe inserts.

Kegan, it’s great to see you. Thanks so much for joining us and sharing your wisdom today. You’re innovating in such a fascinating area. So many people are focused on the next mobile app or social media or imaging thing, you know, sharing photos. You chose feet as the place to innovate. What got you excited about feet in the first place?

Kegan Schouwenburg: Feet are weird.

MR: They are weird, as I squirm and wave my shoes thinking about my feet.

KS: I have to laugh a little. I never in a million years could have imagined that I would have an orthotics and insole company. I try actually not to describe like that because-

MR: As a child, you weren’t like, “One day …”

KS: What do I aspire to be? Gee.

MR: Mom, I want to innovate in orthotics.

KS: Oh, my goodness, no. For me, it’s about how ubiquitous the problem is. I was actually just talking about this earlier today. We’ve got so many people that are innovating on these sort of new problems our society is creating, or these big problems about really moving technology forward. What about where we’re at today? What about these basic problems that we’re faced with everyday? I mean, if you think about it, people get up, they put on shoes, they go to work, they go to the park. They have different pairs. It’s this massive industry that exists around it, nobody’s doing anything. You’ve got a couple of giant companies, they’re all marketing-driven, and none of them are actually innovating.

I think when you look at that, and you think of the opportunity from going from a marketing-driven landscape to a product-driven landscape, where that’s where the innovation is coming from, it’s using technology to solve real-world mass problems, it’s fascinating.

MR: It’s almost like most of the startups, and if I think about the startups that pitch us every day, are focused on your digital life, and how to make the digital life better. You came in and said, “Actually, the physical life, the real-world life is pretty important, too.” We all walk. Especially here in New York City, we walk a lot. There’s a better way. It sounds like that was part of the … Does that make it more satisfying, having not just a bits and bytes business, but an atoms business?

KS: It’s awesome. The physical world is really behind. We’ve spent so much time and there’s been all these unicorn companies that have evolved out of the digital landscape. Our physical world, now is the time of that. Now, I think, we start to see companies really changing that landscape, and looking at it and wanting to address it. That gets me really excited. I love that we create something that people wear and use and walk around in, and it improves peoples’ lives every day in a very visceral way.

MR: Take me back. You started in the furnishings business, if I’m not mistaken, right?

KS: I have an eclectic background.

MR: It’s not a linear story, how one gets from furniture to shoe insoles. You had a very real business in that industry, right?

KS: Mm-hmm (affirmative)

MR: Tell me about it.

KS: Absolutely. I did. I studied industrial design. I loved making things. I’m really bad at making things. I was not born with a gift of craft. I was born with a gift of working with factories. Also, working with on-demand digital technologies. I always wanted to make things. I wasn’t able to make them, and sort of saw …

First, I found factories. They were able to make my furniture real, right? That went from housewares, where I found factories that were able to make small house tchotchkes and gifts real.

MR: You were enamored with factories.

KS: Yeah, I was. I applied for a job to run an IKEA factory in China at one point in time.

MR: That’s hysterical. I take it you didn’t get the role.

KS: I did not get the job. I was not qualified.

MR: I think you need to speak Chinese, perhaps.

KS: I was not at all qualified for the job. I was very excited about it. I think I was 24. Flash-forward, I’m running this factory and making all sorts of stuff. You think about the body, and you think about the fact that our bodies are custom, so it’s sort of like a natural leap forward, where it’s like, “Okay, we have the capacity to make custom things. What are we going to use that technology for?

We could make iPhone cases, but does anybody really need a custom iPhone case? I don’t think so. I don’t need that.” Maybe people do need custom shoes, right? That seems like a pretty reasonable answer to that question.

I knew about Invisalign, and what Align Technologies has done. I was so excited by the fact that that company existed. They were one of my inspirations, I think, for building the Shapeways factory.

I started thinking about applying that to footwear and answering the question, “How can we make footwear custom?” You go forward with that thought. You’re like, “Okay, footwear is great, but for where we’re at with 3-D printing, for where we’re at with the technologies today, it’s not quite there.” The materials aren’t there. The cost isn’t there. The speed isn’t there. The elements don’t add up to really build a business on top of that.

What does make sense right now, and what is possible, is actually bringing that down one layer and saying, “Okay, it’s not about the shoe itself. It’s about customizing footwear.” Personally, also, I just love shoes. I always have. I don’t think you can be an industrial designer and not love shoes.

MR: Is that part of that, like if we looked in shoe closets of designers, they would be quite large, filled?

KS: Yes. Shoes and cars. Those are the two tracks people went down. Specifically, I love really, really strange and weird heels and certain brands, and things like that.

MR: How many pairs of shoes do you have, do you own?

KS: You know, not so many. Probably 30, maybe.

MR: Okay.

KS: I’m not the bulk buyer.

MR: I see.

KS: I’m more like the very specific buyer. Yeah, I have all sorts of types. I have ones I never wear because I they’re incredibly uncomfortable to wear. The gap between being uncomfortable and making them comfortable is so small, but it just doesn’t work with the way shoes are made today.

MR: You want to make the most uncomfortable pair of high heels feel like a pair of the most comfortable running sneakers, or-

KS: Doesn’t everyone?

MR: Trying to make SOLS cool, trying to make insoles cool, from a design and product standpoint, how is that experience translated to product design for the shoe inserts?

KS: It’s funny, because when I started the company, I had this grandiose notion that we were going to be using the best of 3-D printing, and we were going to use it in super-unique ways, cutting-edge technology to innovate on material properties and the body of the orthotics, and we were going to have this single uni-body construction that popped out of a printer and was done and was beautiful, and it was the sexiest thing anybody ever-

MR: The BMW of shoe insoles. Yeah.

KS: Like that. We did that, right? We showed it to people. We sold it to people. We had them wear it. The questions that came back were not … What we thought they were going to be was like, “These are uncomfortable,” or, “The arch is in the wrong place,” or “Your algorithm’s not working right.”

It was none of that. It was, “Can I get this leather in a different color?” Or “Why doesn’t it have foam on it?” Or, “Why isn’t this squishier?” All of a sudden at some point, I sat down with a couple other people on the team, and I was like, “Guys, I think we have to put foam on this.” Nobody wanted to do that. We were all so anti-foam.

MR: Foam is the old technology.

KS: Yeah, just a layer of foam on the top to make it squishy. We literally had a meeting about this. I was like, “I think we have to put foam on this. I know this is not in our value system, and I know this is what we said we were not going to do, but we have to sell this product to people. The people want the foam.”

At some point, you’ve got to step back and say, “Okay, are we going to do it or are we not going to do it?” We did, obviously. Now our customers are much happier. Nobody ever gets SOLS without foam. I never in a million years could’ve expected that things like that would’ve been so powerful.

If you look at what Dr. Scholl’s has done with marketing, there’s this psychological aspect to it, when you go to the Drug Store or you go to the Duane Reade, you see a pair of insoles hanging there. There’s a cut-out. I can tell you, I know all the insole packaging from every Duane Reade in New York. You see that cut-out-

MR: Yeah, so you can squish that little material, yeah.

KS: … With the squishy gel thing that has so many buzzwords on it.

MR: It’s hooked me. I’ve bought a few of those pair.

KS: I have, too. It’s impulse buying. You’re like, “Oh, God, my feet hurt. Okay, it’s $10. Let me buy it right now.” Literally, that little detail is so successful for them. We think about things like that as well. How do we think from a consumer’s mindset and not from a tech mindset? That’s a very different thing.

MR: It sounds like with the foam and with some of these adjustments, you want to make it both sexy and cool, but also a little bit clunky, a little bit similar to the past. If it’s too futuristic, or it looks too different, it’s almost harder to sell.

KS: Yeah, that does seem to be what we’re encountering. It’s a balance. I think this is an opportunity, and we use this as a way to differentiate, or further differentiate our medical offering and our consumer offering. It’s fine. That’s okay. We need to be doing that anyways. If this is one of the ways that we do that, we do it in a way that feels like SOLS, and feels good and is in-brand and is beautiful.

Isn’t that like maybe we’re the Porsche of SOLS is selling in a consumer market is more comfort-focused, and we think about ways to couple the old with the new in the medical sector to make it feel a little bit more approachable and good for everyone involved.

MR: You mentioned you have 50 folks. Very cross-functional. It sounds like mechanical engineers, markets, and software engineers. It’s still a foot business, and you’re competing in a very tight labor market for technology talent and marketing talent.

KS: Mm-hmm (affirmative)

MR: How does that impact … It’s not a social media company. You’re not doing something that maybe is obvious to your average engineer. How do you get them excited to work at SOLS?

KS: I think the biggest thing is that we’re actually creating a product that helps people. That resonates in a very real way with everybody on the team. When people come, that’s what they get excited about. They’re like, “Oh, I’m not going to be working on another app. This is not a new social network. This is not a new way to book hotels. This is something that every day, people, their lives are going to be improved by.”

MR: Everyone on the team, I assume, as some sort of foot issue. That’s sort of a requirement for-

KS: Not everybody, but I would say 75% of the team has some sort of foot issue or knows somebody that has a foot issue.

MR: Fair enough. Do you feel like there are certain potential employees, though, that just don’t get excited about the mission and select themselves out, or can you take anyone and give yourself or your team a few minutes of talking about the vision, and you can get just about anybody excited about the mission?

KS: I think I’m pretty good at that.

MR: I’m sure you are.

KS: It’s about what they’re excited about. There definitely is our core team, which has feet problems, and that’s part of it. I think the thing that a lot of our engineers get excited about is the fact that we’re developing physical product in a way that is totally, totally different and driven by software.

MR: Are you hiring sales folks out of the industry who have the experience selling these types of products, shoe inserts, to the industry, or are you taking people with completely different backgrounds and teaching them how to sell in this market?

KS: A little of both. I think up until now, our focus has been people who know how to sell. People that are good at forming emotional connections.

MR: In any market.

KS: In any market, yeah. We’ve been teaching them the vocabulary and teaching them how to speak and what matters, and teaching them about podiatry.

MR: Plantar fasciitis. I may not have even said that right.

KS: Teaching them about plantar fasciitis. All of that. We have also brought in some people from the medical industry. We brought over somebody from ZocDoc, so that starts to move a little bit more. We’ve looked at, and I think we’ll probably be hiring more people that have backgrounds selling these types of soft medical products.

MR: How do you spot those doctors that have an eye for the future and can articulate, on your behalf, where the industry’s going?

KS: At the beginning, this was looking on LinkedIn. I would stalk all the trade groups, and I still do. I do this all the time. I participate and then we’ve gotten in arguments with people. We’ve also had people email us and apologize for people who have gotten into arguments with us publicly. I mean, this has been a really interesting part of it.

MR: Meaning, some people publicly have actually gone against SOLS and said, “You’re doing bad for the industry.”

KS: We had one doctor who just hates us. It’s fine. It’s fine. You’re going to have these people, and it’s fine. You know that you’re doing something disruptive if people are doing that.

If you publicly, as an unestablished company, go into these groups where there are experts in their field, and you say, “Hey, we’re doing things differently. Here’s why you should pay attention,” you’re definitely going to ruffle some feathers. You’re also going to find people who are incredibly aligned with your value system, who are really excited about what you’re doing. It helped that in podiatry, a lot of people knew about 3-D printing already.

I remember this one time; this was back in the very beginning, at this point it’s just me and this girl Kristy who was our first salesperson. She works on marketing now. Christy’s just amazing. She drags me to this podiatry office that I think was in South Brooklyn, in the basement of an unmarked building in South Brooklyn. I get there, and then she ends up-

MR: I’m just picturing this. You have to knock 3 times to see this podiatrist.

KS: It’s leaking. These are not always the nicest offices. You know what doctor’s offices in New York are like. Anyway, so I get there early and end up having to hang out in this coffee shop and wait for her. She finally gets there; she’s all flustered. We walk in, and these doctors have no time. They’re always in a rush, and we were 30 minutes late. You do not want to be late when you’re meeting with a doctor. You want to be early so that whenever they’re ready, which may be at the time that they said that they’re going to be ready, but it may be up until half an hour after that. You are there to talk with them for 5 minutes, make the pitch, close the deal, and get out.

We got there, and we were sitting in this waiting room with this bag full of samples, and in retrospect, we’re really not good. This doctor comes out and is flustered, and he’s clearly aggravated that we’re late, and he doesn’t know what we’re doing there, and pulls us into one of the office exam rooms, which is probably 6’x6′. There’s 3 of us huddled in this room together, pulling these samples out of the bag and putting them on the chair for the person to sit in. Christy, she’s just started in this. She pulls open her computer and starts give the standard presentation that we give, which takes 15 minutes. She gets one slide in-

MR: This doctor would have none of it.

KS: She gets one slide into it, I’m like, “Christy, just no.” I’m like, “This is what we got, this is what it costs. This is where you’re going to sign up. This is what that means for you.” The guy, he signed up.

MR: Wow.

KS: He signed up, and he was like, “I don’t know about this, but the fact that you’re still here and haven’t left yet must mean something.”

MR: Has he been a decent customer?

KS: Yeah, yeah.

MR: Wow, that’s amazing.

KS: He’s a decent customer. My point was that sometimes, you just got to roll with it. You find yourself in these situations, and especially with sales, no situation ever goes as expected. You have to immediately go in, size up who you’re talking to, how they want to be spoken with, what their values are, what about your product is going to interest them. I always say, “Ask 3 questions in the beginning, and use those 3 questions to basically figure out how to frame what you’re going to say over the next, call it, 5 to 30 minutes, depending on how much time you think that’s going to go.” Then watch for those body signals, and watch for those behavioral signals to see, “Are the things that I’m saying actually resonating with the person that I’m talking with, or do I need to readjust because it’s not working?”

MR: Given that this is not the most sexy market, or that all investors are thinking about, “I need to invest in a foot care company …

KS: They’re not?

MR: What was it like fundraising? I can certainly … We talked about potentially investing, and I think my experience, the good and bad of having been through the Bronte’s experience, was weighing on me. I’m curious what it was like out there raising capital for this business in a space that people didn’t know very well?

KS: Yeah. It was hard. Raising our seed round was incredibly difficult. I think it had less to do with the feet aspect of it, or the orthotics aspect of it, although that was weird, and you’re going into these meetings and you’re like, “How do I get this elevator pitch to sound sexy? Do I use the word ‘orthotic?’ Do I not use the word ‘orthotic?’ Do I talk about mass customization? What is the right way-

MR: What’s the right buzzword to … yeah.

KS: What is the right way to pitch? I think I still struggle with that, thinking about it. I think the bigger challenge was just the scope of the idea. The amount of money that it would cost, the time that it would take to develop. I remember, when I think back a year and a half ago, being like, “No, this is easy. It’s definitely not going to cost that much money.” Everything everybody told me was right.

MR: I remember actually when we met, I think I gave you that feedback that I was worried that you didn’t … Not that you could know, without actually going through it, but just how many steps … You’d have to become a Full Stack Solution. I think you go into a problem thinking, “I’m going to fix this slice, and everything else is going to work out.” What you realize is when you insert yourself in one slice, a whole series of downstream things need to change to make it all work. It sounds like that’s what you’ve experienced.

KS: Yeah, absolutely. When you become a full-

MR: I still wish I put money in it, but anyway …

KS: One day, you will definitely wish you put money in it.

MR: I’m sure.

KS: When you become a Full Stack Solution, you have to become experts across the entire spectrum. Much of what you’re building, nobody sees. I’ve actually been talking to a few other start-ups about this that have robust back ends that they have to build. We built out all of the software to enable our production stream so that we can produce mass customized parts for an entire network of doctors and consumers. Nobody really sees that. Everybody’s like, “Why doesn’t your website look better?” It’s like, “We’re going to make the website look better,” and it’s now just starting to look better, which is great. We’ve got to get all the dark and dirty underbelly of this working, so that we actually have a foundation we can build a company on.

MR: Do you find yourself emphasizing the go-through-the-podiatrist channel for some investors, and for other investors who wanted to hear the big consumer create-a-new-brand story, that story. Were you tweaking the story for who you were pitching?

KS: Absolutely. You have to, right? I remember when we were raising money, I had one investor … This was at the very, very beginning … I went in and I asked for $250,000, maybe $500,000. I was unclear how I was going to raise it, but it was sort of like this amount that I decided it was going to be okay if I asked for. They literally told me to go away and come back when I had a realistic number, and an idea of what that was for, and how I was going to spend it. I was so flustered at the time. They were totally right. We’ve almost raised $20,000,000 now, and there’s still so much to do. There’s no stopping in sight. It’s been a ride.

MR: What were some of the really funny or surprising responses you got from investors when you went around with the pitch?

KS: I don’t know about funny or surprising. I think the best, the one that got it the most, and they’re not an investor, actually, but they totally got the vision and they just weren’t ready. This was when we were raising our Series B. The guy, he was like, “When you get this product to $5, and that’s literally what it costs, and you’re putting these in every pair of shoes that is ever made, and literally, shoes have soles, and you are the industry, that’s the unicorn. That’s the billion dollar company. But you’re not there yet, so come back to me when you’re ready to do that.”

MR: A lot of the tech reporters are writing about Facebook and Twitter and WhatsApp. How do you get a reporter in the press to write about shoe insoles?

KS: I can tell you, it makes it a lot easier if you’re in the consumer sector. Our attention went from 25 to 150 as soon as we said that was happening. That was an interesting trigger.

MR: Meaning you were wasting your time talking to the tech reporters in the first place.

KS: In the first place, it was just a struggle. The people want the question, “How do I buy the product?” As soon as you go, “Well, you’ve got to go to a doctor, and go to our website, put in your zip code, make an appointment,” you’ve lost it. That’s done. That is over.

MR: They just want to download an app and go.