Fired SPI CEO Mike Singer’s Emails Reveal: When SPI Couldn’t Beat FIGS Fairly, They Decided to “Attack”
Strategic Partners, Inc. lacked an online or direct-to-consumer (DTC) strategy. When FIGS started succeeding, SPI tried to copy us. When it couldn’t, SPI decided to “attack.”
SPI’s decision to pursue litigation against FIGS has nothing to do with the made-up claims they’re making in the lawsuit. It has to do with the fact that for years, SPI and its now fired CEO Mike Singer were asleep at the wheel, doing business the old way – with commoditized products, licensed third-party brands and an analog business model that gave them no connection to the healthcare professional. After FIGS disrupted the market, SPI woke up and vowed to “attack” FIGS and “drive it out of the market.”
Email after email after email from Mike Singer and those around him at SPI leave no doubt about this. None of these emails ever claim that FIGS was doing anything wrong – only that FIGS was beating SPI in the market, and that SPI needed to do something to “attack.”
Here are some key points from the numerous emails linked below:
SPI described FIGS marketing as “so damn good” and said that SPI is “getting our asses kicked” by FIGS. SPI even did an analysis of FIGS that concluded that with FIGS: “There is no disappointment. It is just like ordering food at your favorite restaurant, the food is always good . . . FIGS is the definition of being cool without even trying. FIGS is the sexy yet simple white tee or black dress.”
On the other hand, SPI and its retailers recognized that consumers find their products “old school and frustrating,” that its “brand is tainted,” its approach had gotten “formulaic,” and that they fell into a situation where they “simply lose creativity and everything becomes similar.” One of its retailers said, “I hate to say it, but if I were a doctor, I probably would be wearing FIGS scrubs” because “FIGS succeeded in creating a clean, modern aesthetic surrounded by a perception of luxury, exclusivity and better quality.”
Another retailer complained to SPI that “FIGS has great marketing” and implored SPI that it “sadly needs a refresh” and “good material like FIGS.”
SPI recognized that DTC companies like FIGS “have a big lead” with a “five-year head start” on SPI and are a “threat,” since SPI is “years behind Amazon and the DTC companies” and because FIGS’ direct channel represented a “competitive advantage.”
SPI said FIGS was “picking up significant momentum” and “was pulling consumers and dollars away from traditional manufacturers and retailers” like SPI’s model.
SPI said that it wanted to take on FIGS, but recognized that it couldn’t because it was “handcuffed” by its retailers. Indeed, SPI’s retailers told SPI that “the idea that SPI can have its cake and eat it too by selling direct on two fronts and squeezing retailers . . . is not a tenable long-term situation for SPI or its retailers.”
SPI told its retailers that it understood the “growing pressures” caused by FIGS’ success, that it does not underestimate FIGS’ “growing ability to disrupt our business,” and it implored its retailers to “make the battle . . . fierce” and to “work together to make it harder” for FIGS to succeed.
SPI decided that it needed “to pressure [FIGS’] bottom line, compete with them for business, drive up their cost and dry up their funding. If we have the guts to impact them, especially in the short-term by out spending them, and being willing to sacrifice some EBITDA in the short run, we can limit their future success.” One retailer asked SPI to “hinder FIGS’ ability to secure funding,” “create skepticism among FIGS investors and cause them to pull back on the seemingly endless supply of funding.” Another told Singer, “it’s do or die.”
As a result, Singer asked his team, “how do we attack” FIGS?
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