In 2010, a pregnant Jaime Schmidt was inspired to start developing an all-natural deodorant with transparent ingredient labeling. Her kitchen-built formula quickly became a global product line carried in more than 30 countries. The Schmidt’s brand is carried by retailers that include Whole Foods, Walmart, CVS, and Costco. In 2017, Schmidt sold the business to Unilever. In 2020, her book Supermaker recounted her journey, alongside lessons about marketing, product development, customer relations, and partnerships.
Today, Schmidt and her husband, Chris Cantino, run Color, a venture capital fund that focuses on early-stage consumer product companies and prioritizes founders who are women and/or people of color. Schmidt recently spoke with Quartz about the prospects for entrepreneurs in the middle of a pandemic, the value of bootstrapping a small business, and why not every company needs a higher purpose to fulfill a mission. This transcript has been lightly edited for length and clarity.
Quartz: Despite the pandemic and the resulting economic environment, you’ve claimed to feel pretty good about the prospects for founders right now. Are you genuinely optimistic?
Schmidt: First, [I should acknowledge that] I generally try to put a positive spin on things. That said, I truly do think there’s major potential. I think there are more obstacles than ever, we have to hustle more than ever, both from the investor side and the brand side. But this past year, my fund, Color, saw no shortage of deal flow. It’s been constant. It’s a sign of a lot of new businesses coming up.
There was a record-breaking number of companies that registered as businesses in 2020 and a record amount of VC funding that was deployed. Historically a lot of businesses drop out pretty quickly, but I think if they can get through this, they can get through just about anything.
I think a lot of people are trying to monetize their passions or their craft. Maybe it’s because they’ve been laid off. It brings me back to when I started my business—not only was it interesting economic times but I also was pregnant.
We expanded our portfolio by 56%, from nine to 14 investments over the year. [We invested in] brands that started last year and are seeing some of the positive impact of the Covid situation. Haus is a low-alcohol beverage brand. With Covid, they instituted alcohol shipments to homes. A Kids Book About writes books on issues that are difficult for parents to talk to kids about. It just really took off, mostly with the BLM push we saw this year—their first book was a book about racism.
What do you make of the pandemic’s effect on matchmaking between founders and investors, which is now largely happening virtually instead of in person?
It’s very quick, it’s cheaper, we’re not jumping on airplanes, we’re saving money on travel. It speeds things up.
Traditionally people fly around and go on these tours to raise cash. Now it’s just, “Hey, let’s put a call on the books next week.” There’s more efficiency if it’s not a match.
You’re also talking to a lot of founders on the audio app Clubhouse. What’s that like?
There are a lot of rooms where people can go in and practice their pitch and get direct feedback from seasoned investors. And then there are rooms where you’re actually connected to investment opportunities. The room I was in the other night was all tech—it’s not all consumer.
Clubhouse has over 1 million users now. I’m hosting [a talk] tonight on CPG 101, to talk about the basics of the consumer products business.
I think it can be exhausting for sure. I think it also can be overly competitive. Having more opportunity to meet people through audio opens access to so many brands, but it becomes harder to be seen. And not everybody is equipped to just jump on an audio app. So there are rooms where people are talking about imposter syndrome, or how to prepare to pitch.
What do you tell entrepreneurs about growth? Now that you’re an investor, do you see it as essential, or can it be enough to have a good business that’s kept small?
My advice is to really take things at your own pace. That was important for me in building Schmidt’s. I spent the first couple years just building brand equity and awareness for the business. I think the worst thing you can do is rush into things because of outside pressures. Also rushing into fundraising. There’s no denying that getting funding is sexy, but I still preach bootstrapping when I can. I talk a lot of companies out of fundraising.
You don’t have to work with VCs to take your company to the next level. Such a small percentage of companies get funded that way anyway. I’m often a proponent of brands that choose to stay small. [For them I might] become a mentor or advisor, but probably not invest. But there’s no judgment there if a founder wants to grow slow.
You recently tweeted about how it’s OK for business owners to be in it for the money, and philanthropy can come later, that “not every business can save the world.” That’s kind of a heretical thing to say these days. What kind of reaction did you get?
I see a lot of founders showcasing how their business is saving the planet or doing good for the world, but in reality not every business needs to or can be positioned that way. We need plumbers, you know? The impact maybe is just on the customer.
I hear founders stress about this kind of thing a lot. I think it’s important. But I’ve also seen companies that say things like, “For every dollar you spend, we plant a tree”—when it has no alignment with what the business is at all. You can read through people generally. You know when it’s authentic.
I felt it more personally—it was my mission and something that was kind of selfish. But when I started seeing the impact I was having on other people’s lives, getting heartfelt emails from customers … then I quickly understood that there was opportunity to really change an industry and make healthy, natural products that were accessible to the masses. So I claimed that as my mission. But I wouldn’t have been able to articulate that, probably, my first year or two. I do think there’s more pressure now to be able to articulate a kind of greater purpose and impact. But I think what’s most important is to really know what you stand for and to have your values.
Did you always know you wanted Schmidt’s to go from a high-growth small business to a very large business?
If I had been an investor at the time that I started Schmidt’s I never would have invested in my brand. Throughout the first six years of growth, I didn’t think about getting acquired. I didn’t have plans to sell. I was comfortable keeping us at that size. Some companies have a niche customer base. With Unilever, I didn’t realize i was ready [to sell] but once I started talking to them it was clear that I was. I realized once they did come calling, there was so much opportunity with them, and I was ready for my next phase.