From brand savant to accidental entrepreneur, with Sophia Amoruso

0:00Scaling a business in the US can feel like a maze. Each state has its own payroll, benefits, and compliance rules, pulling your focus away from growth, which is why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert, plus Fortune 500-level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So, if you're scaling, make it simple with Deal. Go to deel.com. slash MOS and get up to three months free. If you're in private capital, you understand that your next great deal starts with who you know.

0:41That's why over 3 ,000 firms trust Affinity, the CRM platform purpose-built for private capital. Affinity's relationship intelligence reveals your team's strongest paths to founders, investors, and decision makers using insights It's hidden in emails, calendars, and meetings. With powerful AI tools like Affinity NoteTaker and Deal Assist, you'll spend less time managing data and more time closing the right deals. Learn more at affinity.co slash marketplace.

1:19I've heard hire slow, fire, fast. But I've spent so much time with people up front, and you only know what it's like to work with them when you work with them. Sophia Amoroso says hire slow and fire fast was common advice she got early and often when she was starting out as an entrepreneur. But it's one of the many corporate axioms she shirked along her scale journey. Sophia built the buzzy e-commerce brand Nasty Gal. And under her leadership, it reached nearly$100 million in annual sales. She managed to get there with absolutely no formal business training. And then firing fast is like kind of risky.

2:04Like don't fire too fast. You should give people opportunities to improve and point at this is your job description. If that doesn't work for you, like that's totally cool. Maybe we're not aligned. I think treating people with humanity is really important and something that I used to be a lot more mercenary about and didn't do. And it's something that's really important to me now. I've known Sofia Amoroso for more than a decade. Even in a world of other founders who lean toward the unconventional, she stands out as an unabashedly irreverent expert in branding. She's also the first to admit that she learned a lot of entrepreneurial lessons the hard way.

2:44you gotta have incredible talent at every position it's like this huge push there are fires burning when you're going home can you believe it such an idiot and then you go back to this is totally going to be amazing there are so many easy ways i have no idea what to do sorry we made a mistake but you have to time it right oops working out of a three-bedroom apartment stuff that just seems absolutely nut balls 10 years later like well that's just how you do it we haven't made just

3:14This is Masters of Scale.

3:21I'm Jeff Berman, your host. Today, we're going to hear from Sophia about scale lessons from her first two ventures. The apparel brand Nasty Gal, which she started in her early 20s, and the Girlboss Media Empire that became her personal brand. But first, I wanted her to catch us up on what she's been doing since exiting those businesses. Sophia. Hi. Welcome to Masters of Scale. Thanks for having me. It's nice to see you. Yeah, it's always nice to see you. Right now, you've got two major things going, business class and Trust Fund VC. Tell us about business class first, if you would. Yeah. So I started business class during COVID in 2020, and I was like, I want to go back to bootstrapping, right?

4:06And it wasn't like, wow, I want to start a big business. It was, there's all these amazing tools at my disposal. I have so much to share. I've been through the gauntlet, right? I've been through experiences that very few entrepreneurs have and I've seen the ups and the downs and the guts. And I just wanted to share that. So I put together a course for entrepreneurs, mostly bootstrap entrepreneurs in the program. It's a membership. and you get like eight hours of trainings from me where I go through everything from finding product market fit to putting your brand together and naming your business and all the weird kind of sideways that I did this in a way that other people didn't.

4:44And then some things that I've learned that are more traditional, maybe you might learn this in business school or I've learned from really amazing executives that I'd have had the pleasure of either employing or working with or knowing along the way. So it's just like a treasure trove of knowledge. And then it's also a community. So we have workshops and co-working sessions and ongoing content. And then probably at this point, over 100 hours of video with workshops and interviews that's exclusive to the community. Part of what's so interesting about this is not only does it build on the crazy, incredible experiences that you've had and relationships you've built, knowledge that you have, but it's a way to scale yourself, right?

5:26Because you can't do this in one on ones. It would take 29 hours a day. Yeah. I've done a little bit of one on one consulting, which is actually really fun. But the one on one stuff that I do is with the founders that I invest in. And then the way I can scale myself or be a master of scale or scale my mastery is through being able to distribute what it is that I know. And I do that for free on social platforms. And I have a newsletter with like 140 ,000 subscribers. So I do it in all the ways that I can. But, you know, it's like the more we can share what it is that we've learned, especially the hard stuff that's been really painful and put it to use.

6:03It just feels really good to do something with it beyond internalize it and try to apply it over and over again for ourselves. But I allow other people to see around the corners because of what we've been through. Yeah. And the free part is sort of the Gary Vaynerchuk give, give, give, ask of it, right? It's like, I'm going to keep giving you and at some point I'm going to ask or offer you something more. And if you want to go deeper and get more like jab, jab, right hook or whatever. Yeah. Or no like trust. So it's like, oh, I'm aware of who you are. Oh, wow. I like you and your personality. And then trust is like, oh, shit.

6:37I trust you and what you have to offer and what you're selling. And I'm going to go through the bottom of the funnel. And this builds on two extraordinary entrepreneurial experiences. So I know you've talked a lot about both Nasty Gal and Girlboss and other places, but will you tell us how you got started as an entrepreneur and where this journey began? Well, I didn't mean to be an entrepreneur. I guess I'm an accidental entrepreneur. I was 22 years old and I didn't consider myself ambitious. I was just really bad at working for other people. I was pretty much unemployable. And no one really told me what a career even was.

7:15Were I to pursue it, I would not have known where to start. And so my way to evade working was to start an eBay store selling vintage clothing, right? At that time, eBay was the marketplace and then Amazon had book reselling, which the first stuff I sold online was actually on Amazon as a book reseller. But I was selling stolen books. I was like 17. But I paid my rent and it was great. And I'm not proud of it, but it happened a very long time ago. Because I was like, I'm F capitalism, right? And now it's in my title. I'm a venture capitalist. But I started selling vintage clothing on eBay. I followed my nose and I did a better job each week.

7:52and sales went up and it wasn't about making money. It was just exciting. Like, wow, what can I pull off here? I didn't think I could do any of this. I didn't think this was possible. Still didn't consider myself ambitious, but it was really fun curating stuff and styling it and photographing it and writing descriptions for it and seeing how much people liked it. Just having that positive feedback loop was so motivating. And at the same time, And there were thousands upon thousands upon thousands of people selling on eBay who weren't creating a brand. I think I've just always had an irreverent point of view.

8:30I came out of stripping and stealing and like, you know, wasn't trying again. I didn't really care. And what I've done or how I operate just kind of naturally cuts through the noise. So as someone who grew up just really angry at authority and am able to pull from asymmetric references and bring them together and combine things in the same way that someone who's writing a song does, right? Like everything's referential, almost nothing's new, but borrowed from a bunch of different influences. Called it Nasty Gal, which was after this amazing album by this woman named Betty Davis, who is this amazing 70s funk singer who was married to Miles Davis and allegedly too wild for him.

9:18And her lyrics are just awesome. And I was like, OK, hippy dippy, whatever. I'm going to call it Nasty Gal Vintage. And it was just like naturally kind of edgy. A brand is so many things. You can't pinpoint what it is. It's the name. It's the spirit. It's what you curate. It's how those things blend together. It's the models that you cast. It's the way you style it. It's the quality of the photography. It's the way you describe something, right? It's the copy on your website. It's the design of the website. It's the user experience on the website. It's what happens when you write customer service.

9:53the brand lives within the organization it's how people operate it's the things that they live by and that has to live out and like every pore of every component of your business like that is also your brand all of those things matter to me the way i slapped a label on a shipping box when i was still shipping stuff was like you know that was important to me the little handwritten thing people got in the very beginning that was like whatever xoxo nasty gal or something was important to me and, you know, had stickers that said, I'm a nasty gal and eventually created something with nasty gal and eventually with girl boss, where the name of my business was put at the end of a statement where people said, I'm a nasty gal, I'm a girl boss.

10:38And I think like the best and highest thing you can do with a brand is have somebody identify with it, have their identity tied to it and have it give people a sense of confidence or see a future for themselves that they didn't otherwise. And that's like peak brand. Like, that's what I'm most proud of. Yeah, I mean, it's literally building identity brands. But you've done it more than once. Yeah. Which is a stunning thing. And so when you went from Nasty Gal to Girlboss, were there lessons from Nasty Gal that you immediately applied to Girlboss so that you kind of supercharged that journey? Yeah, absolutely.

11:12So, you know, Nasty Gal, I was totally at a disadvantage. I'd never worked in an office before. Every office I've worked in, my name has been on the lease of. I'd never managed anybody. And then on top of that, I didn't know what leadership was, which were like totally different things. So after 10 years at Nasty Gal, Girlboss had become this whole thing. It was this book, spent 18 weeks on the New York Times bestseller list, sold half a million copies, became a Netflix series, and it became part of the zeitgeist in this way I could never have predicted. And so even though Nasty Gal was eventually doing, I don't know, over$100 million in revenue, the noise of Girlboss was even louder.

11:50When I started Girlboss, I wanted to be really deliberate. I didn't want to start another business on accident because when you start something on accident or without intention, it's serendipitous. And oh, wow, accidental entrepreneur. And look at this. Unlikely. Blah, blah, blah. Rags to riches. Yay. It doesn't scale. like having intention at the beginning having a foundation for how the company operates making what you think is implicit explicit for people as early as you can and reiterating it make the implicit explicit like can you give us an example of that yeah for example at nasty gal right the brand was just like lived in me right and as it exploded i had people buying and curating you You know, there was a person who bought knits and dresses and wovens and planners and a creative director and photographers and people styling stuff and hair and makeup people and people doing casting and locations and all of like a huge creative team in an in-house studio.

12:50And all of those people were trying to decode what the brand was. And it was very late by the time we had this thing that was like, this is the brand book. This is how you use the logo. this is the voice of the brand it's this not that it's irreverent but it's not snarky it's warm but it's not saccharine right like all of these things where you can point at them and when somebody writes some copy or when someone takes a photo or when something is out there that represents the brand it's not oh Sophia wouldn't like this or oh it's my opinion I think that's ugly right it's like here's what it is because at a certain point people were just kind of trying to predict what it was and their egos get attached to it they're like oh but that's not cool and there was conversations in rooms without me where i would hear eventually that people were saying things like oh so if you wouldn't like that which is like oh wow that's cool that they care but also maybe they're wrong and the people you're telling that to you were like that feels bad they're like oh i don't get it they're telling me i'm not cool or that's like not on brand that's like the worst is like, that's not on brand.

13:58And it's like, if that is debatable, what's on brand or off brand, then it's just going to be like a cluster of people disagreeing and the haves and have nots of creative or culture or whatever it is that you're trying to create something objective outside of you that says, look, this is what it is. We can all point to this North Star as our source of truth. One of the contradictions of the current world is it's never been easier to build a brand because the barriers are down, right? I mean, like fragmentation of media, et cetera. And at the same time, it's never been harder because it's never been noisier.

14:38I mean, we are bombarded with impressions second by second effectively. Who's doing a good job of this right now? Who's breaking through in a way by taking sort of an outside of perspective or an oblique angle and creating a really meaningful brand in the world? I mean, I think Liquid Death is a great example. so I invested in liquid death when it was like worth like 50 million and they're like over a billion now and Mike Cesario is a phenomenal yeah and he came out of like the punk hardcore scene yeah right so and he was a creative director I think like an advertising agency or something yeah we had him on recently so yeah so he's bringing a totally different perspective and has the audacity to make water tough like there's again it's like peak brand like people have liquid death art tattooed on their bodies.

15:22I mean, I was part of the founding team of Together, the women's sports and culture company with Sue Bird and Alex Morgan and Chloe Kim and Simone Manuel. And we said from the beginning that we will know that we have a brand when someone tattoos our logo on their body, which has now happened multiple times. It's an incredible experience to see that happen. What are the other metrics that you look for, particularly now as we evolve into the investor life that you have, where you go, that's a brand that's breaking through or going to break through. What are the data points you're looking for that tell you that?

15:54Or is that gut for you? That's a really good question. It's pretty gut for me. One thing that I always considered when I bought something for Nasty Gal was, is the product inherently shareable? You get one millisecond when someone's scrolling for something, they may or may not read the description. So every piece of real estate that you have to catch somebody's attention is important. So I think if you can see the silhouette of the product in more of like a Rorschach, is that how you say it, kind of way, if the brand or the logo or some copy or something about it is so strong that it imprints on your brain like a stamp, it's going to last.

16:41And that can be marketing, that can be a logo, that can be the product, and it kind of all has to work together. But when I see that, I really understand the power of a brand. You know, I invest in B2B software. So the thing that I'm able to help these companies with is they're not inherently brands, right? One of the companies I invested in is called Toothio and they're a dental labor marketplace. I'm investing in companies through Trust Fund that are creating products that I wish I had when I was rubbing two sticks together and there was no like drop box when I started. There was no like project management collaboration tools or, you know, AI web scraping stuff and social media automation or really social media.

17:29I was like adding people manually on MySpace in the beginning. So having built a company, a consumer business, yes, but a company on the internet, not having any of these things that have emerged to make it easier to start a business, to become an entrepreneur, you know, dental labor marketplace, it's not a workplace tool, but dental hygienists are able to work for themselves and set their schedules for the first time ever because of a platform like that. That's the power that eBay gave me. And I understand it more than almost anybody. And also those tools that I didn't have now exist and they're continuing to emerge.

18:12And I know which ones entrepreneurs really need or freelancers. Or I think the word entrepreneur means something very broad, right? You talk to a lot of people who've raised venture capital or whatever. It's like someone doing Postmates is working for themselves. You can do a better job than other people. It doesn't matter what you're doing. You can do a better job than other people. And you can take what you learn, even if it's in a gig marketplace, and you can leave and do your own shit. But all of these things give people an opportunity to move faster, a framework to build a business. So, but, Sophia, I mean, first of all, I'm not going to say double click.

18:45I will not say double click. But I do want to pause for a moment on there's this popularized version of an entrepreneur who bootstraps a company and then raises venture and whatever. And the vast, vast majority, I mean, like 18 million new businesses started in this country over the last four years are not venture backed. And there's no aspiration for them to be venture backed. And there shouldn't be. They shouldn't be venture backed. That's exactly right. But they still need software. They still need products and services to help them run their business. And so part of what I hear you saying is that's a marketplace you understand because you were and you are to work for that.

19:24The density that I had, the little amount of information I had and the amount of shit I had to decode without that software. And then how far I got understanding what that complexity looks like once you have hundreds of employees is kind of an unlikely thing. Still ahead, we hear how Sophia has translated the scale lessons she learned as a founder into her new chapter as a venture fund operator. Plus, she answers your questions. Stay with us.

20:05Real leaders don't back down when the stakes are high. They innovate, they push forward, and then they take the stage at the Masters of Scale Summit. Join us in San Francisco, October 7th to 9th, to hear from the CEO of the New York Times, scientists using cutting-edge technology to find cures, the leader of crypto powerhouse Coinbase, a retired four-star general, and many, many more. Apply now at mastersofscale.com slash apply25. That's mastersofscale.com slash apply25.

21:05aws.amazon.com slash activate and start building. Expanding your business in the U.S. can feel like a maze. Every state has its own payroll, benefits, and compliance rules, which can pull your focus away from growth. That's why founders use Deal. Deal is the professional employer organization, or PEO, that gives you a dedicated HR expert plus Fortune 500 level benefits for your team. The National Association of PEOs says businesses can grow twice as fast if they use one. So if you're scaling, make it simple with Deal. Go to deel.com slash mos and get up to three months free. Welcome back to Masters of Scale.

21:53You can find this interview and more on our YouTube channel. So tell us about Trust Fund. First of all, why become a VC? Why launch your own fund? And then what is Trust Fund? So I had done a lot of angel investing with my own money and had access to deals by the sheer nature of having raised venture capital, knowing other VCs, knowing angel investors, knowing entrepreneurs who are starting things, knowing entrepreneurs who are referring me to their friends who are starting interesting things. And those people having heard of me and seen my story and being like, holy shit, you know, her expertise, whether it's through building a business or knowing what not to do, building a business now or especially building brands could be really valuable to me.

22:43So founders wanted to work with me. They wanted me to invest. I was getting into really great deals. I invested in KindBody and LiquidDeath and Public.com and AteSleep and Therabody and some really awesome brands. and the founders I think generally found me helpful and kept getting those introductions and there's like a purity to just using what I have and sharing it and when someone asks a question and I run my mouth and it's helpful and it changes something for them there's no better feeling so if that's the business I get to have and I have the access and I have the taste and I track record as an angel and I can make a material impact and I can amplify the brands.

23:31I can work behind the scenes with the founders and I can fundraise. You know, it's like there's this whole combination of things, this kind of stack advantage that I have that lends itself to building a fund, having a different point of view. no I'm not in finance but that's not the thing that I'm going to compete and win on as a fund manager I can learn a lot of those things and I have so many fund managers around me and can hire people who've done this stuff to augment what it is that I don't know but the information is out there everything that you need is out there and I don't want to shortchange experience because a fund is not angel investing right it's a portfolio and portfolio construction and recycling and stuff that I didn't know about as an angel investor.

24:21But I like learning and I like doing things that I'm not qualified to do. But guess what? Nobody is. Right. That's one of the I mean, you referenced MySpace. One of the great lessons from my career was Chris DeWolf, our mutual friend who was the CEO of MySpace, walked into my office the day after Google bought YouTube. And I ended up overseeing the launch of MySpace's video platform. But when he put me in charge of it, I was like, Chris, I don't know what I'm doing. And he sort of stage whispered to me, no one does. Nobody does. Right? Yeah. Companies that you're talking about are selling to solopreneurs, to small business owners.

24:52Those are really hard people to reach. And how do you reach them? Brand matters. Right? Even though, again, like I'm not investing in consumer product businesses, my network there is really valuable. And I can just shoot off a blurb to a bunch of CEOs of midsize and larger consumer beauty, fashion, whatever businesses, and they'll take the call. And they're converting. My portfolio companies are making money because of a 30-second email I shot off. They earned it. And that's a value that a lot of VCs promise and very few are actually capable of delivering on. I'm curious, is that part of why you called it trust fund?

25:34I mean, because you're not a trust fund kid, but obviously you're someone who's built enormous trust with so many people over the course of your career. So what's the rationale for the branding there? It's just a good name. That's it. Like rich kids want to wear the bucket hat. Kids that didn't grow up with money think it's funny to wear a hat that says trust fund on it. Kids in the Hamptons are wearing hats that say trust fund. It's just funny and it cuts through the noise. And I could be like, yeah, it's built on trust. And I never had a trust fund. And I want my founders to build. I don't have kids, so I don't even know who I'm not making a trust fund for anybody.

26:07So it's just like, this is funny. You know, when you go to whatever the upfront summit and see these VCs I've known forever who are still at their firms or spun out their own firms. And they're like, oh, why didn't I think about that? I'm like, yeah, I don't know. It's just fun. It's just brand. Yeah. Yeah, it feels like they all work for something where it's like animal name plus tree or animal name plus field. And it's like endless copywriting fun. Like I have a pop up on the Trust Fund website to collect email addresses and it says we're making a racket. But it's like R-A-C-Q-U-E-T. And there's like, you know, a Ralph Lauren ad from the 80s of some like waspy guys holding tennis rackets.

26:49And it's just like that's very funny to me. And like you don't forget that. Yeah. Okay. Okay. I'm going to my phone only to pull up our listener questions, our audience questions. So the first question came in on LinkedIn today. Curious about where you think we are in what has been called the creator economy. Are we sort of post creator economy? Are we, does this have a long way to go? Like, how are you looking at that market? I think the creator economy is not going anywhere. People want to learn from people. They want to hear from people. Brands are trying to be creators. They're hiring creators.