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Colossus (Invest Like the Best / Business Breakdowns)Podcast20 Sep 2022Source: joincolossus.comHost: Patrick O'Shaughnessy

Trina Spear - Billion Dollar Scrubs - [Invest Like the Best, EP.295]

In plain words

This interview tells how Trina Spear, founder of FIGS, turned scrub suits (the uniforms doctors and nurses wear) into a multi-billion-dollar brand. She says lazy companies sell into an existing market, but innovative companies create a new one—FIGS didn't just compete; it invented more stylish, comfortable scrubs (like jogger pants) that healthcare workers actually want to buy. She's bullish on FIGS itself: gross margins over 70%, 13 styles drive over 80% of revenue, and a lean team of 300 people. She also mentions Lululemon (founder Chip Wilson is her advisor) and eBay (ex-CEO Meg Whitman is an advisor) as positive references.

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Trina Spear, a former Blackstone investor and co-founder and CEO of FIGS, shared on the program how she built FIGS into a multi-billion dollar scrubs brand for healthcare professionals through vertical integration and a customer-first strategy. The core thesis is that this market opportunity had lon

~8 min full read · 8 sections
Deep Analysis

Quick Overview

Trina Spear, former Blackstone investor, co-founder and CEO of FIGS, explains how vertical integration and a customer-first strategy turned scrubs, a neglected category, into a multi-billion dollar brand. The most impactful judgment of the entire interview: Trina Spear believes that "lazy companies sell into TAM (Total Addressable Market), innovative companies create TAM" — FIGS did not enter an existing market, but redefined "what scrubs are" through product innovation (e.g., inventing scrub joggers and sleeveless mock-neck tops), thereby creating demand that did not previously exist.


Theme 1: Vertical Integration Breaks the Feedback Loop — From "Not Knowing the Customer's Name" to "Having Thousands of Data Points"

Trina Spear points out that the core of FIGS' success is vertical integration, which solves the long-standing "broken feedback loop" problem in the industry.

  • Original industry structure: Manufacturer → Retailer → Consumer. Retailers (approximately 4,500 U.S. stores) only sell but do not manufacture; manufacturers do not know the customers' names. Consumers complain, "No pockets, need safety pins to secure wedding rings," and retailers respond, "We just buy the products; we can't change them."
  • FIGS' solution: Develop fabrics from the yarn level (core patented fabric INX), build its own DTC online channel, and control the entire chain from manufacturing to delivery. "When you own and control the entire chain from manufacturing to sales, you can inject the extra profit margin into products and marketing."
  • Financial results: Vertical integration brings structural advantages — product gross margin exceeds 70%, whereas in the traditional model, retailers take about 60% of the retail price, and brand licensors then take 8%-12% royalties, leaving almost zero room for product innovation.

Theme 2: "Slow Is Fast" in the First Four Years – Building the Foundation for Bamboo-Like Growth

Trina Spear emphasizes that in the first four years, FIGS sales were less than $5 million (Year 1 < $1 million, Year 3 $1 million, Year 4 $4 million), but these four years laid the foundation for the explosive growth that followed.

  • Key foundational building blocks:

1. Fabric R&D: Spent years developing the proprietary INX fabric, which no competitor has been able to replicate to date. "If the fabric is right, you want to look good, feel good, and perform your best – it all starts with the fabric."

2. Community connection: No paid customer acquisition; instead, an organic approach to understanding the healthcare community. "We earn customers, we don't buy them."

3. Brand tone: Avoid clichés like "thanking healthcare workers" and communicate in a genuine, fun way.

  • "Bamboo-like growth" analogy: Bamboo takes a long time to root, then grows at an astonishing speed. "The later you reach the peak, the harder it is for others to catch up and knock you down."
  • Financial discipline: Burned through only $10 million in funding over 10 years, while generating over $1.2 billion in cumulative revenue. The seed round was just $2 million.

Theme 3: SKU Productivity – The Ultimate Application of the 80/20 Rule

Trina Spear believes SKU productivity is one of the most important metrics, with 13 styles contributing more than 80% of revenue.

  • Definition of SKU Productivity: Revenue per SKU/per style. "How do you sell more of the same thing? That's the best business in the world."
  • Product Expansion Philosophy:
  • Do not design for design's sake; only solve real problems. "Designing for design's sake is meaningless."
  • In the early years, only sold 6 styles for years (women's: 1-pocket top + basic pants + cargo pants; same for men's).
  • Build trust first, then expand—"We could sell napkins or pens now and they would sell out, because the community trusts us."
  • Handling Low-Productivity SKUs: Some low-volume SKUs are used for brand display (e.g., high-priced technical styles); purchase small quantities, the purpose is to prove that "FIGS can do this," thereby enhancing trust in core styles.

Theme 4: Talent Density and "Hire Only A-Players"

Trina Spear insists that a 300-person team can support a multi-billion dollar scale, emphasizing talent density over headcount.

  • Key metric: Revenue per employee of $1.5–2 million is the industry's best-in-class level.
  • Hiring philosophy:
  • Pay above the 90th percentile of market compensation for every role. "You can only do this when you have 300 people, not thousands."
  • Reject the mindset of "I need three designers" — "How do you know that one person won't be just as good?"
  • Hire only A-players and do not believe in the idea that non-A-players also have a place. "If you are truly doing something exceptional, the best people will come."
  • Meg Whitman's lesson: Every executive will say, "I need $5 million and 20 people to succeed" — this is a mindset to resist.

Theme 5: CEO's Core Responsibilities — Vision, Team, Decision-making

Trina Spear distills a CEO's role into three things: setting the strategic vision, building the team and motivating them, and making tough decisions.

  • Vision: Repeat it over and over, because new people are constantly joining and people's memories are short.
  • Team: "Believe in others more than they believe in themselves — that can change a person's life."
  • Decision-making: "Make the decision first, then turn it into the right decision." Decide decisively even under uncertainty, then go all in to ensure success.
  • Relationship with the CFO: CFO Danielle Ternshine does not think from a "cost-cutting" perspective; instead, she provides data to help the team perform better. "If you focus on the inputs (product, community), the outputs (financial numbers) will follow naturally."

提及的标的

标的 嘉宾态度 关键数据
FIGS Bullish (self-stated) Product gross margin >70%; 10-year cumulative revenue >$1.2 billion; only burned $10 million in financing; 300-person team; 13 styles contribute >80% of revenue
Lululemon Positive reference Founder Chip Wilson is an advisor and mentor to FIGS
eBay Positive reference Former CEO Meg Whitman is an advisor to FIGS
Patagonia / North Face Neutral comparison Their fleece is suitable for outdoor, but FIGS is redesigned for indoor medical settings

Memorable Judgments

1. "Lazy companies sell into TAM, innovative companies create TAM." (Trina Spear) — FIGS does not enter the existing scrubs market; instead, it redefines "what scrubs are" by inventing new categories like jogger pants, sleeveless stand-up collars, etc.

2. "We earn customers, we don't buy customers." (Trina Spear) — Focusing on organic community building for the first four years kept customer acquisition costs far below DTC peers. Each customer is a "walking billboard," spreading through word of mouth among healthcare professionals.

3. "Make the decision first, then make it the right decision." (Trina Spear) — Speed of decision-making is more important than perfection, then go all-in to ensure success.

4. "13 styles contribute over 80% of revenue." (Trina Spear) — SKU productivity is a core metric. In the early years, only 6 styles were sold for many years, building trust before expanding.

5. "The later you reach the peak, the harder it is for others to catch up." (Trina Spear) — The slow growth in the first four years (<$5 million/year) was the foundation for the later explosion, analogous to "bamboo-style growth."

6. "Don't major in the minors." (Meg Whitman, as relayed by Trina) — Even the most complex business can be boiled down to five important things.

7. "If you're going for the money, then go for the money. If you want to partner with a brand that is truly doing something different, then come with us." (Chip Wilson, as relayed by Trina) — Do not retain talent/ambassadors through bidding wars; attract the right people through brand conviction.

8. "Every executive will say 'I need $5 million and 20 people' — this is the mindset that needs to be resisted." (Meg Whitman, as relayed by Trina) — First ask "What can one person achieve?" rather than defaulting to needing more resources.