Nothing ventured, Nothing gained best sums up the approach—and massive success—of Scott Savitz over the course of his illustrious venture capital career. The exec is now Managing Partner of Data Point Capital, a Boston firm he founded in 2012 with the aim of being involved in multiple start-ups building innovative, scalable, and fun businesses.
“We look at 40 to 50 deals a week, and every couple of months we come away with another great business that we invest in, where I often become a director and a partner to help in any way Data Point can,” Savitz says, noting the current portfolio consists of 30 “terrific” companies. “We’ve had a number of very fruitful investments, and instead of working with one very fun company, I’m now working with numerous very fun companies.”
Those include:
• online sports betting leader DraftKings, which now has a market cap of more than $18 billion
• leading online mattress seller Resident, which reached $1 billion in annual sales within six years, with $100 million in profit (it was acquired by Ashley Furniture last year for close to $1 billion)
• Paintzen, an on-demand marketplace for painters that grew 800 percent since Data Point invested and was acquired in less than two years by PPG Industries
• Rent The Runway
• CABA Design, one of the largest online customized furniture retailers
• Returnalyze, a software company that allows companies such as Wolverine Worldwide, Brooks, and Famous Footwear, among many others, to significantly reduce returns as well as improve customer experience.
“We have numerous other businesses in cyber security, AI, ad-tech, future-of-work, and other fascinating categories,” Savitz adds.
That’s an impressive line-up. Yet Savitz still regards ShoeBuy as one of his favorite unicorns. The site launched in 1999, and at its height about a decade later, featured 1,000 brands, 800,000-plus products, and more than $3.5 billion in inventory—all available at the click of a mouse. At the turn of the millennium, online retail was in its infancy; there were far more doubters than believers that consumers would buy shoes en masse before trying them on. Boy, were they wrong.
Savitz believed differently, even if he gives credit for the initial idea to a friend who struggled to find shoes for himself and family. As ShoeBuy lore goes, Savitz thought about his friend’s difficulties and determined that if he could partner with a terrific selection of brands and offer their products in a convenient manner, he’d have the makings of a great business. Boy, was he right.
Savitz dreamed big from the onset. His start-up research showed that the mail order shoe business had been about $1 billion annually for years. Plenty of consumers were already ok with buying shoes before trying them on. ShoeBuy, he believed, could be a print catalog on steroids. In a 2010 Footwear Plus profile, Savitz cited ShoeBuy’s working mantra—“put the customer front and center in everything we do and keep trying to create a better shopping experience”—as key to the company’s success. His early innovations included a sister site featuring 200 designer labels, introducing an iPhone shopping app, and creating a mobile shopping site compatible with an array of smartphones. Additional breakthroughs added an advanced search function that allowed shoppers to narrow their selection by size, width, color, price, heel height, country of origin, etc. There was also another sister site, Product Express, which highlighted more 10,000 products, all with free overnight shipping. ShoeBuy added sunglasses, watches, flowers, activewear, and outerwear to its mix because consumers asked, and the company delivered. In fact, Savitz has never claimed to be a rocket scientist or a shoe savant; he and his team just listened to customers, which made ShoeBuy much smarter.
Savitz has maintained a customer front and center formula. “This has without a doubt proven a winning thesis and something we not only look for in the ethos of the companies we invest in but are always looking to see ingrained in the company’s DNA,” he says. Other best practices developed at ShoeBuy include trying to become profitable on “very little outside capital”; continually innovating and looking to improve the consumer experience; paying attention to the customer already in the door rather than just trying to get more customers into the store; and being obsessed with what customers are saying and doing, using metrics, data, and customer feedback as a compass. “We look for incredible innovative teams that share many of these characteristics,” Savitz says. “As such, we don’t think it’s a coincidence that our average companies have grown over 100 percent annually since we invested and that so many of our businesses have not only quickly become category leaders but have created significant value for everyone involved.”
ShoeBuy will always hold a special place in Savitz’s heart. It was one of his first unicorns, after all. He misses the “incredible employees who made us great and all our great vendor partners. I also miss getting a discount on shoes. I had a blast with ShoeBuy, and I loved the journey.” Happily, he still has a toe in the biz with Returnalyze. He’s very involved in working with brands to decrease returns and improve customer experience—a platform ShoeBuy would have “embraced in two seconds.”
Once a “shoe dawg,” always one, according to Savitz. “I’ve maintained so many wonderful friendships from those days. That’s something I could not be more grateful for,” he says. “There is life after shoes. But, if you ever miss the industry, just look down at your feet.” •
