NastyGal Founder: I Was A Stripper! A Shoplifter! Then Built A $400m Business! Sophia Amoruso

28:47And you know, even with stripping to certain extent, it was a shortcut. I was trying to evade like working hard. But it was also a lot of fun. But that was really that was a low point. It had lots of low points. But at least it's like this, right? It's been like this. You know, doesn't. This is never go that low. There's clearly a slight issue here with authority. And it feels to me like the ultimate authority, which is the law eventually was like he can't help but ask we're not the teacher. Yeah, it was like, okay, like maybe just figure out how to go to get along, you know. It wasn't like wow, I'm gonna go have a career and do everything.

29:30I'm gonna just do everything differently. But also I just didn't want to cut corners. I didn't want to end up not in control of my environment or stuck in jail or something stupid. Shoplifting. Why did you make that sound? I don't know. It was fun. What was your favorite thing to steal? I don't endorse shoplifting. Neither do I. My rationale for shoplifting was that there was so much excess in, you know, our culture that it would never make a dent to steal organic tampons from Fred Meyer, which is like target in Portland or whatever. So when I did get caught and this was my favorite thing was just walking out with stuff.

30:23So I would get a whole shopping cart of stuff. I had a little teeny tiny little razor thingy. So I knew where the sensors were and I would cut them off. They were there and pile a shopping cart. I would just walk out with no bags or anything. I did it at grocery stores. I furnished apartments. I walked out of places with like literal rugs. This high just walked out because nobody expects you to be that like obvious about it. They're looking for somebody who's like putting stuff in their pockets. And when I did get caught I had like a George Foreman grill. I think a basketball, organic tampons, some food, really nice shower curtain rings.

31:12They were metal and then they had like ceramic. They were heavy and they had like a ceramic thing that said hot and then the other ones had cold. And I was like, yes, this is this is luxury. It's worth gel time. So that was yeah. And you know, I built an online business. And the first thing I sold online was stolen. So another thing and I learned this from people who were professionally trying to like avoid getting jobs and participating in capitalist culture, which is a privilege. It's lazy. It was it was it was I was really young and I just didn't want to work. You know, it was an ex some kind of quasi political lazy excuse for just not working hard.

32:00Anyway, I learned from some of the best. I had a friend who had written a book called Evasion literally. And I would go into Barnes and Noble and they had a no chase policy. Like I knew what the policies were at these places. Because if their employees chase someone shoplifting, it's going to cost them way much more if they get like knife or something, then it would for them to lose a few books. And so I would go on Amazon. And I would look at the best selling books. This is in 2002 2003. And even look at the ratio of most expensive book to least pages. So I could stack them as many of them as possible.

32:48And I would just walk to the front like the front of the store would have all the best sellers and huge stacks. And I would just like pile them high. I look like an employee like who's carrying a huge stack of books. I was right in the front of the store and I just like walked my car. And I put them on Amazon for 10 cents less than all the other resellers. I'd sell them overnight. I'd ship a media mail and I'd pay my $350 a month rent. Why wouldn't you scan it? I think I was. But it's when you get scared that you get caught. And it's when you hesitate you fail. It's the same thing. If you're snowboarding and you're like, oh, it's kind of icy.

33:26Let me look down. You're just like catch an edge. You're surfing and you look at the nose of the board. Right? So even that's what you're a life lesson. I guess. I guess I guess I'm not proud of this. I was really young and I was fighting my way. I never stole from individuals that was like not on thesis for me. I couldn't justify it. No, I couldn't justify it. I would never feel comfortable doing it. But big box retailers. I was like, hmm. Q1 is often when businesses start implementing new systems and processes in hopes of creating efficiencies for the year ahead. And over the course of my career, I've learnt just how crucial having the right systems in places, one which has helped me across many of my investments is NetSuite.

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34:49And free download the CFO's guide to AI and machine learning. That's netsuite .com slash Bartlett. So by this time you're getting a little bit acquainted with the internet and selling things on the internet clearly because you're selling stolen stuff. Yeah, yeah. Vintage. Mm -hmm. Why vintage? Why did you start to sell vintage clothes? Yeah, so by 2006, I had gotten some real jobs. Now after I had worked in two stores and record stores and photo labs and subway again. I drive dry cleaners. I... How did you get on with those jobs? It didn't last very long. I like jobs where you're off of Thai things though.

35:36So record stores, photo labs, bookstores, like paper. Makes me feel important for some reason. Mailing things. I don't know. It worked out with my eBay store. And the last job I had was in the lobby of an art school in San Francisco. At 79 New Montgomery Street called the Academy of Art University. It was a job I got because I needed to get health insurance. And at the time, you couldn't get health insurance with the preexisting condition. You... Is this your honey? Yeah. The hern. The hern. Yeah. So a hernia, if you don't know what it is, is a place... It's a hole in your muscle wall that your gut's poked out of and it makes a little bump.

36:21And I had one kind of in my groin area. I called an in -gwin all hernia. And it didn't hurt. But they're kind of dangerous because they can... Like if your muscle tenses up or something, they can get strangulated and necrotic, which is a disgusting word. So I had to get it fixed. But before I got it fixed, it was kind of fun. I shaved everything but the hernia. My poor boyfriend. My poor boyfriend. And yeah, it was entertaining. It was kind of funny to have like a small lump in my pants for a few weeks or something. But at the time, you could not get health insurance with preexisting condition, even with depression.

37:00If you had medical records that said you had depression and your insurance lapsed, insurance companies would decline you now. That's not the case. You can have a preexisting condition apply for health insurance. You'll be given health insurance. You could only get health insurance with a preexisting condition like a hernia with a group health insurance with a job. So I had to go find a job that had health insurance. And I got this job in the lobby of the art school as a campus safety host, which was a different way of saying you're cheaper than a unionized security guard. And I wore a starchy white shirt.

37:41It was like a men's clothing. I had to wear this awful uniform with like a magnetic thing here that had my name and the school's logo on it. And check students in and say, hi, you need to sign in. Can I see your ID? That was. Were you doing anything sort of criminal at this point? My job. No. All of your money came from that job. And yeah. And so there was a three month waiting period for health insurance. And while I was there, I had time to, I had some time, down time in this lobby and there's computer. And there was no Facebook or Instagram at the time. This is 2006. And I was starting to get friend requests from these eBay sellers on my space.

38:27I wore only vintage. I was like, you know, route and scoot and to like oldies and rock and roll and dive bars and subsisting on burritos. I loved vintage. I wore vintage. I wasn't necessarily into fashion. And I didn't want to be in fashion. But I loved style and I loved vintage. And I loved thrifting. And I saw what they were doing. And their auction prices were crazy. Like I thought hate street was expensive. Because I had shopped at thrift stores and found great stuff. And saw what their auctions were going for. And these were actual prices that the customer was determining. They would start the auction price at $9 .99.

39:07And these things were going for like $200, $300. And they were just making it look like something that Sienna Miller, some boho at the time. It was like boho, Olsen twins, Sienna Miller kind of vibes. And they would do that, put this stuff online. And the customer determined the price. And it was so much money. And so I thought, okay, so I waited my three months for my health insurance because there was a three month waiting period. It got the herring fixed. And I started an eBay store and I wasn't trying to be an entrepreneur. I was trying to legitimately not work for anybody. And that's when I realized that I could connect my curiosity and independence and creativity and resourcefulness to something legitimate that made money that I learned from every step I was taking.

40:04And started an astigal selling vintage out of my boyfriend's apartment. Before that point, would people have called you lazy? What unmotivated? I didn't know any people who would have said something like that because my friends were just like me. So objectively, then, if objectively, I think just lost. I think it would be a judgment to say I was lazy. I can relate to so much of what you said, especially all this stuff about authority. Like I just decided to stop going to school. And I was polite about it. But I've always had a challenge with authority. Every job I had through that period of my life lasted for three months.

40:42I was just cool centaugh thing. Get to the bonus threshold quit, give me two months, but I don't have to get a job. Call up another cool set. Employed those people. Yeah, I'm one of them. And it's funny because I think people would have looked at me in school and stuff and said, like written me off. Oh, it's he's lazy. Well, like my thesis is that everyone, most people are lazy. And you should be lazy for things that you absolutely hate doing. But you should be so. Yeah, I'm only motivated by things I'm curious about. If someone assigns me something, like I've tried to write a second book and publish two books after Girl Boss, which was a thing.

41:17I can't. I cannot be assigned something. I it either comes out or it's not there. That's that. Do you think that's the the rabbit and you? It is, but it's why everything I do is so inspired and honest and. I don't want to be like I'm unique, but. Because you never accepted or lung compliance. It's an actual representation of who I am and what I think and how I feel in my perspective. Instead of a manufactured version because somebody has given me an assignment. Like you didn't even want the bell in school to tell you what to do. Oh. The gift in a curse. They're right. I mean, it's pretty logical that you would question.

41:57What a bell ringing and someone moving from one room, the same room to the next room every single day. Do you think anyone else questioned it? No. No. But if you really think about it, it's pretty wild, right? That that e -base store that you start in your free time when you're working that job that you took to fix the iron. It was successful. Can. And you know, you kind of frame it as you saw maybe a price arbitrage or whatever. But it's more than that, right? It's more than that to be successful at that time. I'm not sure a lot of people saw that price arbitrage and they didn't build an astigirl.

42:38So when you reflect on why and how you were particularly successful, how did you diagnose that? I reverse engineered everything everyone else did and did a better job and did it with my signature on it. Do you think, and I'm thinking about that bell again in school, where you were like analyzing the bell window and else was, do you think that kind of default to thinking in terms of first principles like asking the question, why, why the fuck do we do it that way? Has been part of the reason why that e -base store was successful? I think so. I think most people that start an e -base store are copying what other people are doing.

43:18They might reverse engineer some things and see what their competitors are doing. And I did that, but I just did it 10 times better with a totally different spirit, with excellent copywriting, with great styling, great models, and increasingly better photography. And I would, I was extremely resourceful. I would buy stuff on eBay and sell it for more than I paid for it. I was searching for Eve's on the runt just misspelled, you know. That's wrong. Even that's first principle thinking that's like, you've got a convention on one end which says just like do what's being done. And then you've got these like first principle thinkers who kind of think first about what they know to be true.

44:02And they're really good at filtering out convention. They can kind of see through it at the truth. Whereas convention like is safety, it's comfort. It guarantees you a pre -tried blueprint. So people follow that. But then these other little rebels, they have this almost inbuilt ability to just like fucking see through to that truth that nobody can see. And in that case, I mean, that's a great idea. But even caring more about the copy and you having your own belief as to why the copy mattered or the photography, like why photography really, really mattered on eBay. Yeah, on eBay, which a lot of people would have had like that.

44:35And it was called nasty gal. The spirit of it was really irreverent. At the time, the eBay sellers were selling like, you know, it was called Mama Stone vintage was a really big one. And it was all very hippy, hippy, and vintagey. And mine was vintagey, but it was like very hard hitting edgy. I named it after an album by a woman named Betty Davis who had an album called nasty gal. She was so stylish in the 70s, put out some incredible records, was married to Miles Davis for a short period and was allegedly too wild for him. Her lyrics are just so, and I was stripping her music when I was like 20 and that was like cool, nasty gal.

45:22And it cut through the noise. And I think when you start a business and you don't need to survive, you might have more time to naval gaze. Or you might do things super conventionally, but when you need to survive, there are certain things that other people have done right that you can see, you know, accelerate what it is that you may do on your own, but learn from them. And then also take and make your own way. I think had I tried to do things completely differently than everybody else. I wouldn't, I wouldn't have survived. I would have been dead in the water. Speaking to something really interesting now, which is like this balancing act between naivety, which is great for innovation.

46:07And then convention, which is great for staying alive. I'm talking about like the nasty girl, meaning a CFO. Yeah. You know, like that's how I feel when being a young founder, 21 years old, stop this business. It grows incredibly quickly. Okay, the naivety made us interesting, but our naivety will also send us to the grave here. If we're not, if we don't know what we don't know, I've been to hell. I've been, I died and now I'm in the afterlife. It did send me to the grave. My naivety and lack of experience did send me to the grave. It happened so fast. That's a quote. It was shocking how fast it all happened.

46:45Naistie go went from doing $150 ,000 a year, doing $150 ,000 a day, and then $150 ,000 over lunch. Yeah, $150 ,000 over lunch. It was either a day or over lunch that we all worked out of this warehouse. It was a bunch of kids in the East Bay in Emeryville. I had the 7 ,000 square foot warehouse, which I thought was the hugeest thing. And I was like, when we hit $150 ,000 a day, God, what's the day? It must have been the holidays. I was like, I'm going to get a bounce house. You know those things that people jump on, the inflatable things, that children jump on. It was upside down horse and its legs were in the air.

47:24When you jumped on it, the legs like, that's what you wanted. And in between, you know, on our breaks, we got to jump in the bounce house. I was like 23, 24 years old. It did happen really quickly. To be fair, now you say it. When we raised investment for the first time, the first thing I bought was a $13 ,000 slide, big blue slide, which we had in our office. That was the first thing I bought before we got desks. So talking about neither day. I paid off my mom's mortgage. Oh, did you? I couldn't do that with investor capital. No, wasn't with investor capital. No, it was the first time I made money.

48:03Yeah, my slurn was with investor. Okay. Yeah, no, no. They actually, those investors did really well. They got bought out within six months. They got a big return. Good job. What do you attribute at such a young age? I'm just going to review you for a second, because you couldn't have had a ton of experience under leaders to give you a model of what leadership looked like. You were naive. You know, could you? I couldn't empathize with the people I was managing because I had never experienced leadership. And I just showed up and I did what I what needed to happen. And what I said I was going to do.

48:35I didn't understand that people needed to be held accountable because I held myself accountable, especially C level executives and grownups whose careers were longer than I had been alive. Like, how did you do that at such a young age? Well, I think I, I think I messed up. I think like for the first two years, I hired people that were very, very inexperienced. I reflect and I go, I think I did that because I thought they were easier to manage. And I couldn't fathom the concept that I could hire someone who was two times my age and three times my experience. And A, they'd want to come here and be with us with that with our slide and dogs and tree and basketball court and ball pool.

49:10And they would like to take us seriously, but also like be like maybe there was an insecurity about how I'd manage them. And so what ends up happening is you hired lots of like young people, you know, I remember the BBC digital article saying is this the young is company in Britain, because I think we were like somewhere but our average age was maybe 20 or something. And we had like we had like 100 almost 100 people, you know, and you feel the strain of that you feel things breaking. This is where you go convention is right about some things processes, HR finance, you feel things breaking at the seams a little bit because of the growth.

49:41And then at some point an adult enters the room and you go, oh, I get I get this. And so we hired some really, really great people and the great thing is great people, high great people. So we went from being this kind of very lopsided in experience organization to being a balanced one. And I say balance because it's my belief that to own the future, you have to understand the present, which is where you want to hire a 16 year old that gets tick tock or whatever. And you also need to hire someone that's maybe look much double their age experienced in client services and understand the old rules of the game.

50:15If you understand both games, you can understand the game of the future, I think. So made a lot of mistakes. And when they nearly went under several times and had to call people and beg for money in the lead up to pay day, but somehow managed to survive. But going back to you now, I feel that we missed a part because you know, you're at the reception, you went from starting that store to bouncing around on that bouncy castle thing we call it bouncy castle. Okay. Horse castle. Between there, between that bouncing on that horse castle and the starting the store. What what happened? So first year, just on eBay, did $75 ,000 in revenue.

50:58I was the only employee. It was just, you know, pure cash. All of the money just went back into the business. I didn't even know what expensive things I would have wanted. I'd never eaten an oyster. You know, I was drinking like Budweiser or an idiot still like eat subsisting on Boston market and like Starbucks. So I didn't spend any of that money. I thought building a business and I think for the most part it is was selling things for more than you bought them for and not spending all the money. That's it. That's all. And so I bought things. I sold them for more than I paid for them. And no one else would have given me money.

51:38Parents were going to give me money. I don't even think I had a credit card at that age. I didn't understand what venture capital was and I was living in the Bay Area and had I not bought the company to eventually, you know, $28 million run rate. Super profitably. I would never have known. And so yeah, you're two left eBay about halfway through launchman website and ask to go vintage calm and did $250 ,000 in revenue. The next year did 1 .1 million. The next year did six and a half. The next year did 12 and I was coming off a $12 million a year revenue. Owned 100 % of the company. Had a bunch of kids working for me.

52:27And that's when venture capitalists came in. And at that point, you know, we were selling non -ventage stuff. What really allowed the company to scale was going to trade shows and showrooms and curating from the market based on what I had learned from my customer having sold vintage to them. So I knew them very, very well. And that gave me the ability to then go by greater breadth and depth in things I knew they would love. And that's what 2011, 12. Venture capital comes in 2012 was when index ventures invested $60 million. $60 million on a $350 million valuation on a business with the $28 million run rate.

53:10Yeah, you're profitable at that time. Significantly pretty significantly. I have a 10 % or 20 % of I don't know. I don't know. I didn't even look at that. I was I never had to learn to read a PNL because my company was profitable. And I just, you know, generally knew how much it cost to run. I didn't and I didn't I didn't buy expensive office chairs. Did you know you're like gross margins on your on the products? Yeah, on the operating margins. No, I don't I don't think I didn't understand what operating margin was. Pretty incredible that you can be running a business that's generating. It has a $28 million a year run rate and not know what operating margins you're dealing with or what your net profit is.

53:51It's luxury, but it was also a disadvantage once we plowed $60 million into the business and things got a lot more complex and a lot less profitable. You talk about that 60 million going into nasty going into 2020 2012. What did it break? I mean, we no longer had to live within our means. That's what investor money does unless you maintain profitability and keep that money in the bank for, you know, another time or pocket all of it as a founder. We, you know, I had hired a COO at that time. I had a top tier investor on my board and very little like historicals data financials to base the future growth on, but it had been exploding just continue to be exploding with that capital behind us.

54:53We could grow even faster and the expectation was that the next year we would grow from 28 million in revenue to 128 million dollars in revenue. We just round it up by 100 million and then we hired into that and we bought into it. Oh, you believed it and everyone, but I had grown ups forecasting the stuff with me. I relied on them. It's why I brought them in. You hired the right ones. Clearly, I didn't pick the right ones or I'm not sure what happened. But I remember sitting in a room with them and us deciding I didn't push for it. This wasn't, you know, we're going to just grow by 100 million dollars this year and someone put a plan together and this is we hired a hundred people.

55:40But it was like the tower of Babel, you know that story. You don't know. It's like a biblical story where people are building this tower or something, but they all speak different languages and I could be completely wrong. I don't think I am. But none of them get along or understand what another and it was, it was just a mess trying to integrate a hundred people into a company in a year, especially a company with no processes and no real intentional culture that had been established. No real intentional anything other than the brand, the spirit of the brand, what needed to be done. It was like a family business that just got really big.

56:25It was, I was a kid. How are you feeling in terms of at this point in terms of what's going on around you, 60 million dollars has just come into the bank account you're looking at it thinking that's a big fucking number. You're, you know, because you have a valuation of 350. Yeah, I'm worth 280 million dollars on paper at this point. So, and wherever you go, they'll lead with that and remind you of it and you'll be treated as such, even though it's paper and it's not realism on your bank account. How does that make you feel when you, you know, then they put you in the front cover of Forbes. Yeah.

57:01How does that make you feel? It was a blast. I didn't do any of it to have glory or go on a victory lap and I wound up with it and I embraced it and I had a lot of fun. It distracted me. You know, the book in 2014 turned into a phenomenon. You know, it was champagne clinks for some milestone with a company or new hire, promotion, any given time. I, people would come up to me and say, congratulations. And I had to ask which thing they were congratulating me for. It was, it was just like oysters for everybody. Finally, you know, I got better taste in wine. I got better taste period. Thank God. But now I spend less money with the good taste that I had to spend a lot of money to acquire a lot of my own.

57:57But did you feel, did you feel like it made sense? Like the image that's been, that I had been built of you at the time, that the world is now like, oh my God, is that what was going on inside? I think it made sense. I think it was a freak show. I was a community college dropout who boosts dropped a business to $28 million in revenue. Super profitably. You know, investors came out of the woodwork, you know, top tier ones, anointed me as someone who could pull it off. And I didn't know what I was signing up for or what I was supposed to pull off. But it was considered a rags to riches story. Impostos syndrome.

58:42Any that? For sure. Yeah. I mean, I still walk in rooms. And I'm here. I was talking to your team. And I was like, oh my gosh, you guys have really big people. I hope I can keep up. I say like a lot. I'm intimidated. I hope I can provide some value. What are the comments on YouTube going to say is this going to be a valuable conversation. I really hope people like it. You know, and she was like, what you wouldn't be here. If that wasn't the case, what what are you talking about? You're great. But I get nervous. Right. I get nervous on stages. And I'm still like, you know, I don't, I don't belong here.

59:23But the I don't belong here is also a really great motivator. I don't belong here is I snuck in the back door. I don't belong here means I can do things differently. And a belong here means I don't fit in. But that's going to be a superpower. And I think it's okay to feel like an outsider or an imposter sometimes because you find yourself in places where you have an outside perspective and are able to learn things. Unlike the people who are invited to the table who all showed up there with the same pedigree. And then you get to make oblique connections between who you are, where you came from, and then the door, the room that you just snuck into as an imposter.

1:00:17That is radical. Would you remove that self -doubting voice if I put a button in front of you and said you press this, you'll never die yourself again? No. It's so boring. I had a coach recently and he was lovely. We did five sessions. He was like $5 ,000 a month and I was like, taxes. I'll buy something else to save them.

1:00:42He was like, can you imagine he asked me that word or he asked me that question and I was like, but what would I struggle with? What would I be if I didn't have challenges and I was happy all the time? It's like the scaffolding would fall apart or something. That's a story I tell myself. But it's fun to have a dark counterpoint to hold yourself accountable and be like, maybe does that or not that? And I think that counterpoint is an opportunity to gain self -awareness. Do you think it's additive to your performance or reductive? I think it can slow me down and I can make really slow decisions because I doubt myself.

1:01:34But beyond that, I think I've found a way to harness it that really works for me. Have you developed like a decision -making framework to help you navigate the two voices in your head? It's funny because when you're describing your mother and your father, it felt like those were the two voices. Your mother would seem to be very supportive. Your dad somewhat critical at times or pessimistic. Have you found a way of being able to struggle those voices so that you can make decisions decisively and quickly? No. No. I can have these conversations. When I do make a decision, I've learned to be slower with making decisions because I either make them extremely quickly or slowly on accident.

1:02:23I want to be very deliberate in the decisions that I make now and think more critically rather than, you know, naval gaze or be reactive to something. I went to this retreat, even though it's not really a luxury experience with 30 other people called the Hoffman process. And it's seven days with no phone, no internet, no books, no music. You were 30 other people and you're going through this process of mapping your patterns from your childhood against your parents and how how you inherited that and it's all directly correlated and basically graduating from your emotional child into an emotional adult.

1:03:09Super embarrassing, weird process like so dorky and everybody came with something different to work on or what emerged for them. I feel unloved. I feel unlovable. I don't feel unlovable. My thing, it sounds really weak, was like, I don't trust myself. I don't think I'm deceiving myself, but I think I can rationalize a lot of things to the point where I'll tolerate them too long. And that's gone for relationships that went from my most recent relationship. And so that's a strange thing. I don't trust myself because I do have these voices. It sounds I don't have voices in my head, but I can see things from any perspective and not be totally attached to either one to the point of being slow and asking for too much advice.

1:04:09In that retreat, did you have to sort of like go upstream and figure out where that belief started? Is that the point of that retreat? Did you figure it out? Did you go upstream? What a good question. You're very good at this. Oh, thank you. Yeah, I think it was that my parents didn't agree on how to raise me that I felt misunderstood that my good intentions were sometimes construed as trouble -making. That the fact that I didn't fit into the environment, I was raised in, I was not accepted and I was some kind of weird deviant when I was just being myself and felt punished for being myself. And I think that gave me like a lack of confidence or something and I don't identify with being an unconfident person.

1:04:57But when it comes to decision -making, when everyone around you is telling you something a different story about yourself than you have and doesn't understand why you operate the way you do. That is really with integrity and in line with who I was and what I needed to be successful as a child. But if other people live in a different world and don't understand that those are your needs, you just feel wildly alone and think, wow, I am a freak. And that found its way into my career through the public too, which has been super fun being told I'm something that I'm mostly not. What have you been told you are?

1:05:46Oh gosh.

1:05:51So Nasty Y 'all fell apart after 10 years. It was a quick rise and it was a slow rise and it was a relatively quick fall, a couple of years in the making. And when it did fall, the headlines were crazy because I had all this press from this book I published and being the poster child of entrepreneurship going on the victory lap. National inquires had had a picture of me and it said rags to riches like straight up tabloid American dream stuff like a caricature. And I didn't realize the amount of responsibility I had to like other people as an example like I kind of did, but as some symbol for entrepreneurship or my generation, you know, generation of the entrepreneurs coming up behind me or at least what the press thought I was responsible for.

1:06:48The headlines like does the failure of Nasty Y 'all mean millennials aren't ready to lead it's like wait, how is one example representative of a generation.

1:07:02And I've also read headlines like when the Netflix series came out the worst thing about Netflix's girl bosses its source material. Not even the show just me.

1:07:21But I'm not bad. I don't believe it. How does that make you feel at the time though? By the time that Netflix series came out, I had been this hero as an entrepreneur, then I was this girl boss because I wrote a book called Girl Boss and it was pink and I was like this and I look like I knew it was up but it was like 27. And then there was the me whose company fell apart the CEO there was the girl boss who had built a toxic culture or just no intentional culture at all that like warped into something that wasn't perfect but wasn't still don't think it was the worst. And now this person this conflation of all those things with this girl on the scripted comedy which came out four months after I left Nasty Y 'all.

1:08:17So the biggest kind of personality or whatever identity crisis was you know I'm on the cover forbs in June I think of 2016 July of 2016 my husband of like a year's like I changed my mind and I'm like oh my god that wedding was so expensive it was devastating but I just like God that wedding was so expensive it was a great party. So in that space of like 12 months your on forbs husband leaves Netflix comes out nasty girl goes under Nasty y 'all goes under then Netflix comes out. So the show had been shot when things are all like up into the right and you know we were working through challenges there had been some layoffs but the company was still you know $100 million a year you know not profitable anymore but a great brand and something that was valuable and.

1:09:12Eventually yeah like fell apart and that the confi there was really a conflation of the hero the failure and now this girl four months later who's a caricature of a person I was when I was 22 in a scripted comedy playing someone named Sophia starting an eBay store called Nasty Gal. When for the first time in 10 years in my adult life since I was 22 years old I'm no longer associated with the thing that I had built and now there are 130 million homes in 195 countries watching a story of someone that I was no longer and no longer trying to move on to move on when there's a full PR campaign about who you use.

1:10:08You're someone who's as you said you've had a long history with mental health challenges. What is it like in that in that 12 month period what's going on from a mental perspective. I'd fallen in love again. I think I was still like traveling I started another company. I maintain my mental health partially because I keep going. You know I don't stop and like like my wounds I think I was also I was also on an eye depressants I wasn't jumping for joy but I also knew that there was a huge community that still supported me who had read my book. 500 ,000 women who bought it and I went on to start a company called Girlboss.

1:10:56Right as the Netflix series was hitting put on our first conference and I had my podcast and I moved on quickly and even though the headlines weren't nice. The people who followed me my friends my relationships everybody in my network nobody bailed like the girls who were inspired by Girlboss were refreshed that I had face planted publicly because everyone else is face planting in private. And in the same way that watching some random community calls dropout from Sacramento start a business with an internet connection and a computer gave them license to you know yes they were inspired but also embrace their own failures because the hero face planted publicly.

1:11:55And that can also inspire people.

1:12:00This is hopefully the most cliche question I ask but I want to I want to know because you have it from your from that experience you have amazing feedback you have amazing insight invaluable insight I would say because when I think about the things obviously that taught me the most it's not when things go right that say validation of your hypothesis is when things go tragically wrong when you go. Oh okay fuck you have all of this new information about which is correct to your hypothesis so when you if we go back and think about that fundraise for example. A lot of people here that you raise to come raise investment at 350 million and think amazing that's when people clap right they get the champagne out of the oysters.

1:12:41For people listening that aren't in business they might not understand how that can also be a key reason why the company ultimately went under the 350 million why why did a big valuation. Yeah. Yeah I think the 350 million dollar valuation is celebrated as it was and how wealthy I was on paper was the was the nail in the coffin I think it was it was then in 2012 where we were overvalued and the expectations. That was was that the next round of fundraising that we do is at a over a billion dollar valuation and so the company is doing you know on an upswing 228 million dollars in revenue that's like over 10 times revenue and it's a fashion business this isn't a technology business this isn't Uber this isn't infinitely scalable marketplace.

1:13:35It's e commerce it was a different era of e commerce it was pretty early it was the era of fab .com which like imploded and one Kings Lane in in Beachman in feud as there was no playbook there were no ecom veterans or you know performance marketing people who had been in those jobs for even very long I was hiring executives who worked at like maces right. Nobody had like econ it wasn't called direct to consumer at the time it was very very different there's no Shopify and we were overvalued and I didn't know that I didn't even negotiate you know hardly negotiate I didn't shop at term sheet around say I'm going to pick the highest price from different investors I only had one term sheet and I was like great I like you index and she's with you are as you're awesome you can I you get it you know what Danny said.

1:14:30When he invested was something none of the other potential investors said and that was you have a community and I was like yeah we do have a community but when you have that much money you don't know there's been a nail on the coffin or that there's a coffin and that like you might be on your way into it or maybe already laying in it but just several years in the future and when things are up into the right you don't see what's lurking kind of below the surface so when the tide lowers right you see the mud you see weird crab shells sometimes hopefully not you see trash and it's only when things were seed that you see the mud that's underneath and when you're on a victory lap and you're hitting milestones everything's great and everybody loves their jobs and you're a great hero and as soon as things go a different way as soon as there's layoffs yeah there are things kind of there are things there are things lurking below the surface that were dynamics that were already happening that because everything was going so well you know we're harder to notice and you know it's hard to be a CEO it's hard to be a founder I think something a lot of people don't realize is that you only know 10 % of what's happening in your organization at hundreds of employees and ultimately everything was my responsibility but I am held accountable for 100 % of what's happening and when something goes wrong or some things mismanaged or someone has a bad experience in the company the assumption is that I have signed off on it that that is how I want things to be and these things are happening you know caddiness and you know fiefdoms and silos and duplications of effort and all the you know the entire spectrum of things that are no fun at a fast growing company I didn't know what's happening until we laid people off and then they were like hey we didn't like it there I'm like okay and some of that was totally overblown but also anything that any employees ever said about me or I've read even though I don't agree with all of it has been an opportunity for me to learn and take from that how I could be better because there's truth to almost everything.

1:17:10Didn't you get enough to sell the company completely for $400 million? Yeah I did I owned 80 % of it. So that would have made you you know quick maths I don't know very fucking rich. Super fucking rich. And why why didn't you say yes? I went to my investor and I said what do you think about this and he said you need to ask for more. I controlled the board I owned you know I owned the majority of the company but I also took advice from people who I thought knew more from me but I didn't know that my interests weren't necessarily aligned with the interests of my investor whose interest is to whether I'm worth it or not have a piece of paper to show his investors that says I'm worth instead of 350 look they're now worth a billion and they just make up these numbers and then they can show their people that your company's worth more and that was his that was in his best interest and that's what he was giving me advice based on.

1:18:12Are you mad that he said that I'm not mad. Do you wish you made a different decision? Is that a regret? It's a it's a partial regret but I also know that no deal actually happens. They're not a real acquisitive company. They could have tried to acquire the company. I don't even know if they've acquired anything integrating it into their company if I didn't earn out based on them you know controlling it and me trying to hit performance. Benchmarks even if I had sold the company to them who knows how it would have played out I would have made a bunch of money my life could have been miserable but 99 % of the time deals fall through.

1:18:53There's also in those situations a lot of people trying to get into the data room so they make an offer so they can see your numbers and what you're doing and how your business is working out and then they pull the offer later once they've had a look into the data room and due diligence. Yeah and then copy you. Yeah exactly. Yeah so we didn't get that far. I don't regret it. But yeah that was a big thing you know for me that would have been a lot of money for him it was just a teeny tiny bit more than what he had paid for it so that's not a lot of it's not much of a markup for him. What is the advice you're giving now to women that are and men that are looking to start companies that are within your community the communities you're building within your portfolio companies now that you're an investor.

1:19:38You know like I think I can think of the first piece of advice that I give young founders when they come to me I'm wondering what you're like first piece of advice is. I think for bootstrap founders the advice would be different for founders in my portfolio companies who are raising venture capital my advice would be. Get as far as you can before raising a single dollar validate your idea as soon as you can with the ugliest like most basic quickest thing your first product should be super ugly get it in front of people and get some idea of whether it's valuable or not before you go raise money before you've been try to market it.

1:20:16Talk to every customer every potential customer. And bootstrap it as long as you can if you can because when investors do come in your company is going to be worth more than if you would raise money when you just had an idea and we're asking for a check when you do raise money. Having a reason evaluation is important and a lot of founders optimize for price because bigger price and investor pays the more ownership the founder has more their worth right the more their worth and the more eventually they could make if they sell the company. But when you have a valuation that's in line with market that makes you an attractive acquisition something someone might pay a multiple for that 10 % say you're diluted down to 10 or 20 % you sell your company for 500 million dollars you're in much better shapes and raising 350 and owning 80 % of it and going to zero or whatever.

1:21:21So and I think where things are right now with venture is a place that is is close to that and founders aren't greedy founders who are raising money in this market know it's really really hard. They don't want to be overpriced because the people who raised money over the last few years raised it such a high valuation these founders. Nobody's going to reinvest in them they've blown through their money they thought they were you know they're on an upswing their company might be doing 2 million in revenue but they're someone told them they were worth 80 million dollars and now nobody's going to give them money I've as an angel investor I have three of these right now and it's like Hail Mary's two of them a figure to how to survive ones like we have another term sheet I mean I've been there.

1:22:10What about the psychological advice you give to. I would say to listen to your guy you know there's going to be a lot of voices around you and there are people who know more than you and have experience and you should listen to them but you should also always maintain and continue to cultivate a voice that when you know it should be a voice that you know it. So what you should is able to supersede any advice that anybody gives you. I think it's easy to take all the advice because you're an inexperienced founder and and into lose touch with your intuition and it's probably what got you to wear you are as a founder without the money and without the experts.

1:23:03And if you just rely on the money and the experts you're losing the thing that made what you're doing special in the first place. Which day was your hardest day of the last. Since you would since you first started that store on eBay is there a day you look back and go do you know that period of that day was just the worst the hardest the darkest. Honestly and it's weird the hardest day was when my husband left and I don't miss him and I don't wish we were still together. I don't really think about him. I mean that was in 2016 but I had agreed to take a big swing in my personal life and make a huge commitment.

1:23:51And I thought that bumps in the road were like to be celebrated. I thought it was like wow okay you're not feeling great about things. We're going to work through this and we're going to be so much better as a result of it because I see commitments as things that go up and down and if you're in a commitment together you're committed to working through those things and it all comes out in the wash because you have that level of commitment to the other person. And that wasn't the case for him and so I felt like I was hallucinating. You know I like went to a hotel for a week I couldn't be in the house it felt like a crime scene with his stuff around.

1:24:30And yeah a whole whole week at the Beverly Hills Hotel with three poodles is quite the scene with them. Yeah chain smoking in the courtyard and bathroom. Has that experience put you off being a CEO of a big company? I mean ever yeah everything I've experienced has put me up for being a CEO of a big company I'll never do it again. Why? I just I don't want to that's not the job I want. I'm an early stage founder I'm a master at creating brands that cut through the noise. What happens though if you know you're running a number of businesses now. You've got your fund. Yeah business class business but what happens say business class what happens if it becomes globally.

1:25:20You know globally successful then you're back to being a big CEO again though. I would have to work really hard to make it that and I would have to invest in that and hire into it. That wouldn't happen by mistake I have one employee on business class business class is super profitable I launch it twice a year it's pre recorded so business class is my entrepreneurship program. I have two courts a year April I'm launching it and I launch in the fall and it's an incredible product but it's also something that is relatively self led for the students it's eight hours of video and 300 pages of work sheets and over 60 hours of interviews with me like this with entrepreneurs.

1:26:06And you know students get lifetime access so you know they can take it over the first seven weeks they can take it over the course of a year the next few years. But it's not something that requires a ton of my time outside promoting it twice a year and I built it for that I built it for that I'm using could job be and dripped for email and you know whatever zap year and a variety of tools that allow it to be. Relatively low lift light on human capital still a lot of effort to promote and something I do engage with throughout the year and weekly calls students and post in the lounge which is our community keeping it that's it no yeah I'm play I'm I'm.

1:26:53I'm not playing small with business class I'm playing to my strengths that's big and with trust fund venture fund that I'm raising right now for ten million dollar fund what I get to do is not run a big company and keep trying to apply this stuff that I've learned over you know over time I get to go from zero to one over and over and over again with early stage companies and out of fund I get to be in the week. If I hired a bunch of people I they don't want me to be in the weeds executives don't want you to micromanage but I get to look at all the decks and I get to text the founders and say here's what I think you should do I can be helpful and it's so rewarding to harvest all of my hardship on behalf of a new generation of founders and help them see around the corners that I wish someone had shown me around and I get to keep my firm small even if I have a 50.

1:27:52I'm going to do a $10 million fund I can do that with a few people and I'm using the assets that I have I'm the product my relationships and my network and my access to deal flow is my product my expertise and ability to help founders is my product million social followers and being able to amplify them is my product the engaged community I have who's interested in the kinds of things I'm investing in will actually use them is my product and I don't. I'm just it's right here and it's an air table the intentionality is what I find most surprising and inspiring because so many people get dragged by the temptation of like external expectation if it's great business classes great but all accounts have been on the website went on to I saw that the waiting list is open for 2023 it said like join the way waiting this for 2023.

1:28:42Yeah so it's launching in April. Okay. The the spring cohort launches in April so you can enroll for like a 10 day period at the end of April when things are great we get dragged by our own success. What you're saying is you're going to be intentional and you've designed it so that that's impossible so that you can't get dragged because someone's going to come along and say we love this we're going to give you a check we love this will turn it into some box of shorts or some teddy bears. Yeah no no I I have had the pre -ill village of knowing what's on the other side of success and that a lot of it is not what you sign up for and that when you are successful you're stuck in it so I spend a lot of time thinking about what success looks like for me and what I want my life to look like and how many people I want to have around me and the kind of stakeholders I want to have.

1:29:31So that I'm set up for success when trust fund is super successful which I can stay nimble with and with business class I've engineered that revenue is down last year to the year prior and that's okay it's still profitable I'm not going to hire a bunch of people or CEO or plow a ton of money into it trying to solve problems and things. So if I come along and say I'm going to invest 10 million severe we're going to hire a CEO. Okay for you take the money. Yeah take the money just for the record guys when it's there take real money take take the money. Magical thinking. What is that? Yeah I mean you can call it magical thinking.

1:30:20You can call it magical thinking you can call it manifestation you can call it prayer you can call it whatever you want think it's. You know casting the line out not knowing what you're going to catch trusting you're going to catch it and we'll pull it back magical thinking is like Indiana Jones where there's the vast where's the there's the vast chasm between whatever in the holy grail and he has to trust that there is an invisible bridge and he grabbed some gravel and he throws it out across this literal kind of can you. And the gravel just falls on a clear bridge and he had to like trust that when he walked across that he wouldn't fall and so I see magical thinking is you know thinking beyond what might be obvious thinking you're capable of doing things that you should be thinking you can belong in places that you never thought you could thinking you can accomplish things that you're completely unqualified to because nobody's qualified to being able to see yourself in a life in a world that's beyond your wildest imagination and just staying there.

1:31:44We have a closing tradition on this podcast where the last guest leaves a question for the next guest your question is unfortunately not the hardest question the world I really wish you'd been given a real stitch up one. But yours is yours is fairly straightforward question which is what is your proudest moment.

1:32:01My proudest moment is paying off my mom's mortgage I mean that I can do that that was crazy that was the first thing I did what about this then what's going to be your proudest moment.

1:32:17It requires a little bit of magical thinking understanding what is meaningful in my life and actually spending time on it. You haven't figured that out. Oh, there are meaningful things but what is the people have kids and that's like obvious and I don't know if I'm going to do that. I am super agnostic about it. It's really strange. It'll be 39 and a month. I think like finding that and hanging on to it. What is there some big meaningful thing that I'm going to find and cling to till I die. It's easy when it's family or easy when it's a kid and you can create these meaningful things in your life.

1:32:59But what is that going to be for me when I'm dying what is it what will it all add up to I don't know. Sophia, thank you so much for your time. Thank you for the inspiration. You've been an inspiration for me for many many many years and that's why we start you to sit here with you and you are absolutely a superstar in many many respects. Thank you. Your builds for podcasting but also because of your inclination to be on open and honest and vulnerable. You're incredibly inspiring and the stories you tell in the way that you tell them. So thank you so much. It's a real honor to meet you and I'm equally privileged that you said yes to come and do this.

1:33:31Oh my gosh. I mean that. I'm not just like gassing you up or anything. No, no. Thank you. You're superb. I can't wait to see what you do with both trust fund and business class because they look like exceptional projects. I've looked into the reviews of business class and with your fund with the amount of information you've learnt from your twisting turning professional career. You clearly have a huge amount of intellectual leverage and firepower that makes for a great fund founder. So I look forward to seeing what you do that. Thank you. Thanks.

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