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Masters of ScaleHer parents mortgaged their house. She sold the company for nearly $800 million (Simple Mills CEO)
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At a glance
WHAT IT’S REALLY ABOUT
Katlin Smith Turns Kitchen Experiments Into Nearly $800 Million Simple Mills Exit
- Katlin Smith started Simple Mills after changing her own diet, experimenting with almond flour baking mixes in her Atlanta apartment kitchen and learning everything from FDA rules to LLC formation through Google searches.
- Early growth was hand-to-mouth, with Smith selling her car, maxing out credit cards and receiving $200,000 from her parents, who mortgaged their house after a family friend's investment deal fell through.
- She raised a little over $2 million in 2012 by talking to many investors and relying on angel groups, and the company stayed capital efficient, raising less than $10 million in its first eight years.
- Smith says Chicago Booth and the city's consumer-goods talent pool helped, and she dropped out after her first year once investors raised the question.
- She sold to Flowers because she believed it would expand distribution, innovation and consumer reach, and she credits a strong culture and a continuous-learning mindset for navigating COVID-era disruption.
IDEAS WORTH REMEMBERING
5 ideasYou never feel fully ready, so start anyway.
Smith pushed up her first Whole Foods meeting to Saturday even though she was still in the research stage, arguing that entrepreneurs never feel ready.
Founders often underestimate what a consumer brand costs.
Smith had modeled that $200,000 was all the money she would ever need, but she was underestimating marketing, packaging costs and working capital, since retailers don't pay immediately.
Casting a wide net helps fundraising in unfashionable categories.
In 2012 investors wanted tech unicorns, so Smith spoke to about eight investors a day and leaned on angel groups, which she says were more passionate and open-minded. Her lead investor was found after a chance encounter in a Whole Foods aisle.
Capital efficiency can still fund the fundamentals.
With a little over $2 million, Smith invested in package design, first hires, manufacturing upgrades and a full-time salesperson rather than fancy offices or large salaries.
Locating where the talent is can be a major advantage.
Smith says Chicago offered strong consumer-goods recruiting, large CPG companies and more affordable talent than some expensive cities.
WORDS WORTH SAVING
5 quotesI don't think you ever really feel ready as an entrepreneur.
— Katlin Smith
I didn't found this company to, um, to make money. I, I-- like I squarely remember points in our history where I was like, "Well, I could lose all of my money, and this would still be worth it."
— Katlin Smith
I had, uh, an advisor early on who told me that being an entrepreneur is one of the most downwardly mobile professions out there.
— Katlin Smith
And what she meant by that is that if you're successful, then at some point your job will outgrow you.
— Katlin Smith
Being where the talent is is huge, um, a- and also affordable talent too.
— Katlin Smith
SPEAKERS
Katlin Smith
guestFounder and CEO of Simple Mills, a better-for-you packaged food brand that grew from kitchen experiments to a nearly $800M sale.
Jeff Berman
hostPodcast host on Masters of Scale who interviews founders about building and scaling companies.
High quality AI-generated summary created from speaker-labeled transcript.
