Reinventing Rehab: An Interview With Scott Kim, Co-Founder and CEO of NEOFECT
Scott Kim (MBA ’11)
Co-founder and CEO of NEOFECT
San Francisco, California
Med-tech startup NEOFECT helps stroke survivors and people with spinal cord injuries, musculoskeletal disorders or neurological conditions regain independence and live more active lives. Its game-based rehabilitation solutions deliver engaging, quantifiable therapy to improve cognitive, hand and upper arm function, while its robotic orthosis creates an artificial grip to increase hand mobility.
When Scott Kim (MBA ’11) was undergoing grueling and lengthy rehabilitation after childhood surgery for spina bifida, little did he know that years later he’d be heading NEOFECT, a med-tech startup that brings game-based physiotherapy to millions of patients worldwide. What launched Kim on an entrepreneurial career path was a class taught by Darden Professor Saras Sarasvathy and a serendipitous encounter with a fellow Korean-born Darden student Hoyoung Ban, whose family had struggled with stroke recovery. Inspired by Sarasvathy, Kim and Ban set out to revolutionize what they saw as an archaic approach to physiotherapy. In 2010, they launched NEOFECT, which has since raised $20 million in a Korean IPO. Read on to learn how NEOFECT built a global market for engaging computer games, which combine artificial intelligence (AI) and virtual reality to help stroke survivors and people with spinal cord injuries recover.
Sean Carr: Let’s start with your company. What is NEOFECT?
Scott Kim: NEOFECT is a medical technology company that develops software and hardware for patients with neurological conditions, mostly focusing on rehabilitation. Our flagship product is a wearable device, paired with our proprietary software, called the RAPAEL Smart Glove. It’s an FDA-approved medical device designed for stroke survivors. The main concept is rehab through games. So, while you’re playing games, like catching a baseball, you’re going through a clinically proven process of stroke recovery. Our software is equipped with AI, so the more you play, the more it learns about you. It then gives you training sessions that are customized specifically for you. We sell it to large hospitals and stroke rehab centers like Stanford Medical Center, NYU Medical Center and New York Presbyterian. We also sell it to thousands of Americans who are using it in the comfort of their homes.
Sean Carr: That’s incredible. Where did the idea come from?
Scott Kim: When I entered Darden, I wasn't sure what I wanted to do. I was thinking about strategy consulting, but then I took this entrepreneurship class with Professor Saras Sarasvathy. That’s where Hoyoung Ban, who’s also from South Korea, and I started talking about different business ideas. Hoyoung's father had passed away from stroke, so he wanted to create something that would benefit people in similar situations. And I had surgery for spina bifida as a child, and I went through rehabilitation. I did what I was told, but I didn't know what outcomes I was getting. So, when Hoyoung told me about this smart glove idea that his engineer friend had, I thought the concept was great, and I thought we had a shot.
Sean Carr: What was the moment when you said, "This is what I'm going to do now?"
Scott Kim: First, I realized that strategy consulting wasn’t a good fit for me. I was also inspired by Saras’ class, by that mentality that if you want to found something, just do it. Hoyoung and I were First Year students at Darden, and we had nothing to lose. Then I did my summer internship in California, and I started telling people about this idea. I met many successful entrepreneurs who gave me lots of good advice. Everyone was saying, "This is a great idea. You guys should just go for it.” They were repeating exactly what Saras was saying at Darden. So, after my internship, Hoyoung and I were really pumped up. We applied for a grant for tech entrepreneurs from the South Korean government, and we got $150,000, which really boosted our confidence.
Sean Carr: What happened right after you graduated?
Scott Kim: Initially, our goal was to work on this business together, and then bring it to the U.S. in six months. When we got that grant we thought, "Wow, $150,000, this is crazy,” but when we actually started running the company, we ran out of cash, and we ended up pouring our own money into the business. So, we decided that Hoyoung would return to Korea, and I’d stay in the States to work on the business. But to legally stay here, I had to find a full-time job. I ended up doing product management for mobile games, and I had to step away from day-to-day operations for a few years.
Sean Carr: So, what put it back on the table?
Scott Kim: We needed investors, and it was the most difficult thing. You’re desperate, but at the same time you have to find someone who’s genuinely excited about your idea and can move it forward in the right direction. After lots of ups and downs, we got series A funding, about $4 million. I immediately quit my job and rejoined the team.
Sean Carr: How big are you now?
Scott Kim: In Korea, we have about 60 employees, and in the U.S. about 20. But the U.S. business is the fastest growing. We just opened a new office in Richmond, Virginia.
Sean Carr: You met your co-founder and you developed your idea at Darden; you were also inspired by a significant faculty member, Saras Sarasvathy. Were there other ways in which your Darden experience may have influenced you?
Scott Kim: Probably the social events at Darden, the official and unofficial ones, like the Thursday Night Drinking Club [TNDC]. I went to most of them, and I was the social chair for Darden’s General Management and Operations Club. Those things matter, especially to a foreign national. I’m in the U.S., so I should know the culture, the etiquette and how things work. I learned a lot of the intangible skills, like communication and leadership, at those events, and that gave me confidence to lead a team of Americans. My sister-in-law is currently at Darden, and I told her, "Go to TNDC, participate in all activities, because once you’ve graduated, no one will teach you how to socialize and network with people.”
Sean Carr: What advice would you give to aspiring entrepreneurs?
Scott Kim: They should just do it. Saras actually wrote about this—it’s called effectuation. You’ll make mistakes, but you can learn from them and even come up with a new direction for your business. Don't wait to write a business plan. It may be useful later, but even when you're talking to investors, they're more interested in your experience.
Sean Carr: So what’s next for NEOFECT?
Scott Kim: As a public company, we have more resources, and we’re expanding beyond rehab. After working with stroke survivors, we recognized the need to improve the mobility of other patients. Our latest product, NeoMano, is a wearable robotic hand that moves the fingers of those who’ve lost hand mobility due to spinal cord injuries. It helps them perform daily activities like brushing teeth. We launched it on Indiegogo last year. It also got a great response at CES, the Consumer Technology Association trade show. And we’re planning to move beyond just products. We have enough data to come up with new insights about stroke rehab, and we’re partnering with prestigious clinics in the U.S. The Stanford University Stroke Center has already published a study using our software and data. So we're looking forward to really going outside of our comfort zone.