NastyGal Founder: I Was A Stripper! A Shoplifter! Then Built A $400m Business! Sophia Amoruso | E239 | Transcription

Transcription for the video titled "NastyGal Founder: I Was A Stripper! A Shoplifter! Then Built A $400m Business! Sophia Amoruso | E239".

1970-01-06T10:10:57.000Z

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Introduction

Intro (00:00)

Didn't you get an offer to sell the company for $400 million? Yeah, I did. What made you super rich? Why didn't you say yes? You're very good at this. Sophia! Russo! Founder of the Nasty Gal, a best-selling author, and a powerhouse in the entrepreneurial world. I was rebellious from a very early age. I was a stripper. I wasn't even 21. I used someone else's idea to work there. Built an online business. The first thing I sold online was stolen. Get a whole shopping cart of stuff. Put them on Amazon for $0.10 less than the other resellers. And then gotten arrested for shoplifting. I'm a little dark. I realized I could connect my creativity to something legitimate. Started Nasty Gal, selling vintage. Nasty Gal went from $150,000 a year to doing $150,000 over lunch. I didn't realize the amount of responsibility I had, being the poster child of entrepreneurship. Then I was this girl boss, but my naivete and lack of experience did send me to the grave. Nasty Gal fell apart after 10 years. My husband of like a year left. The headlines weren't nice. Then Netflix comes out. You just got played. What is it like from a mental health perspective? It's hard to pull yourself out of a hole when you don't want to get out of bed. It's challenged my confidence, and I'm still like, I don't belong here, but I don't belong here is also a really great motivator. I don't belong here means I don't fit in, but that's going to be a superpower. I can do things differently. What was the plan in life at that point? Oh gosh. Before this episode starts, I have a small favor to ask from you. Two months ago, 74% of people that watched this channel didn't subscribe. We're now down to 69%. My goal is 50%. So if you've ever liked any of the videos we've posted, if you liked this channel, can you do me a quick favor and hit the subscribe button? It helps this channel more than you know, and the bigger the channel gets, as you've seen, the bigger the guests get. Thank you and enjoy this episode. Sophia, take me back to those suburbs in San Diego and give me your earliest context.


Childhood, Personal Struggles And Entrepreneurial Journey

Early context (02:04)

Wow. I was born in San Diego at Sharp Memorial Hospital, only child, eternally and only child. I think wound up having the personality of a, probably seven children. And the challenge of maybe seven children for my parents. We moved a few times. You know, our house was like, it was, it was happy-ish when I was young. I lived in San Diego until I was seven and it's a beautiful place. And I so wish we would have stayed there, but we moved to beautiful Sacramento, California. And that was really the suburban experience. Where, you know, when you're a kid, a little kid, you don't know what a suburb is, and chasing the ice cream man is great. But once you get older, living in the suburbs, if you have any amount of curiosity about the world, the homogenous, you know, nature of living in the suburbs is something that totally crushed me. I knew there was more out there and I didn't know what it was, but I wanted, I like wanted out from a very early age. What did you want at a very early age? When you say you wanted out? Oh yeah. What did you want? Yeah, I wanted out of my family home. It wasn't happy. My parents didn't get along. I was playing referee, you know. Really? Yeah. At what age? Starting at like 10 or something. I mean, yeah, it was just, it wasn't a super happy place. And they, yeah, they didn't get along. They didn't always agree on how to raise me. And I think when your parents, you know, everybody's relationship has issues and everybody's, not everybody's, but most people's parents, you know, sometimes don't get along. When you have a sibling, I think you can go be like, that's funny. Are there whatever? Let's just go play with Legos or something like that, or let's go ride bikes. But I think being isolated in a house that wasn't super happy, as an only child made it worse. And I just remember so many drives, silent car drives, where I was in the backseat alone. And I just remember like the silence and the light of the street lights, like washing over the car, just in silence with my parents in the two front seat. Yeah, they were really like only affectionate after like an argument. And even then it was like, I don't know, hand holding or something. They were very strict as well. I had a bag to go to a boys birthday party in sixth grade. We weren't super religious, but my mom grew up in the 50s in a Greek Orthodox household. Just not puritanical because that sounds less cultural than Greek orthodoxy. But strict. What about money? What if that, what if arguments happened in my household when I was younger because of money? Yeah, I mean, my dad sold, my dad did loans and my mom sold houses, but track homes in the suburbs. And they were both working with builders and banks and manufactured homes. And so on the weekends, by the time I was, I don't know, maybe 10, my mom was working in the model homes that are all kind of dressed up. And you can tour them and pick your manufactured home and change a couple things. And there's like a fake keyboard in there and just all kinds of funny things to play with. And then so I was with my dad on weekends and my, and they both worked entirely commission. So I've never seen either of my parents work for a salary and my mom's dad didn't work for salary. And my dad's dad on a motel and they all grew up on a motel. So there's like generations of my family who wouldn't necessarily call themselves entrepreneurs, but they're people who ate what they killed. And that's what I witnessed. Money was good. I think when I was like, you know, when we were in San Diego and I think it got tougher over time. I remember very vividly being in a credit counselor's office. I just can't believe they brought me, but there was no, I don't know where they would have put me watching them cut up their credit cards, like cut their credit cards in half and put them in a clear jar with like other people's cut up credit cards and file for chapter 11. bankruptcy. Yep. Did you know what was going on? No. I still don't know what happened. I don't know.


Do you know what affected you most as a child? (07:04)

As an adult, are you able to look back on that, that first sort of chapter of your life and figure out how it had a lasting impact on various elements of who you are today? I think it allowed me to, even though it was so challenging younger in life, to learn how to assimilate into different environments, to, I guess, entertain myself independently, to realize that authority was like adults were not trained to be parents and weren't any further along with their maturity sometimes than I was at my age. I looked at teachers and thought, wow, you know, you have domain expertise. You know some stuff, but I can tell that you're morally bankrupt and I don't trust you. And why have I been put in your hands? I think the thing that had the biggest impact on me is how critical my dad was. So he's half Italian and half Portuguese and his dad was a mean, mean guy. And my dad's very charismatic and I love him and he's super chill now, but when I was young, he had a lot of pressure on him and he didn't really have the best model of what a great parent looked like. And I can't say he was a bad parent. You know, he did his best. I know that both my parents did their best with the materials that they had, the ingredients that they had to be parents, but it instilled in me this unfortunate, but also very fortunate, always peeling back another layer of the onion, examining myself, but also real internalized drive to do better and a self-criticism that has worked very well for me. That's been challenging. It's challenged my confidence over time, but it also has been a superpower to in some ways, I don't know, in some ways hold myself accountable because I'm always, I almost want to say second-guessing myself, but also very, in a very, I guess someone said Jesuit way at one point, but a way where I can see both sides of everything, you know, challenging my doubts and my ego, but the problem with that is sometimes it's hard to differentiate between the two. What is, you know, fiction and what isn't and what of my self critiques are accurate because I want to be, and I think I am a pretty self-aware person, and even with the things that I'm not great at, I'm like super proud of that because I've got a ton of advantages and things that I'm really great at. I think it was the criticism I experienced early on in life for so long that instilled that in me, and I've learned how to turn it into something that's more balanced than what it was when I inherited it. When you inherited it? When it was handed to me. And the first time I saw it. The model I had, the level of critique that I had that didn't have the counterpoint that I'm able to provide for myself. You're talking about your father here? Yeah. He would critique you. Yes. When you say critique, do you mean, oh, that's naughty. Don't do that. No. No, like, that's not how you do something or why why did you do it like that? Or can you not? Or, you know, I mean, I love my dad, and he's, you know, as both of my parents have gotten older, they split when I was 17 and I've just watched them both become such better people. I remember congratulating them when they finally split up and was so glad at 17 years old. And I was also like, I'm out of here. See, yeah. You seem to become a bit of a rebel, you know, from, from when you moved out of your parents' house the next couple of years, the behavior looked really rebellious.


Always wanting to rebel (11:06)

Oh, yeah. No, I mean, I was rebellious from a very early age. I remember in middle school, a teacher, I was eating an apple in class. I was eating an apple. It was healthy. I was hungry. I've got agency over my body. I didn't know what that word meant. I'm hungry. I'm gonna eat food. I'm human. I'm hungry. I'm gonna eat food in the middle of class. But like, who, how could you tell someone not to eat when they're hungry? It's like a simple bodily function. And it keeps me healthy. And it's gonna make me a better student. And it's, and I, and the teacher told me to throw the apple away. And I just started the apple. And of course, I had the attention of the entire class. And I got up and I sauntered over to the trash can super slowly. And I just like ate the apple all the way to the core, like super fast, finished the apple and was like, dink in the trash can. So I was like that. If, if someone said not to do something, I did the thing that they didn't say I couldn't do that was similar. It was peripheral. You're pushing that. And then by the time I got to high school, I was going to the anarchist book fair in San Francisco. I was sure capitalism was, you know, the worst thing ever. I was very angsty. I thought that adulthood, it's funny. There's a Netflix series about my life. And the first thing that the character says is adulthood is where dreams go to die. And it's so weird to reference your own Netflix series. Like, who does that? But that's how I, that's how I felt. I wasn't trying to be a child, but I also didn't want to go work in an office. I also wasn't ambitious. So somehow, along the way that lack of desire to live a conventional life became something that turned into ambition because I, I didn't even ambition just curiosity, something that I was good at and, you know, eventually built a business. But I, in high school, in high school, I remember there being bells. Like, right? There's a bell that rings and you go from one room to another room all day, a bell rings. You sit at a desk, a bell rings, and you stand up and you shuffle over to the other room, and then you sit down and you like, memorize some stuff. And then you, like, this is my youth. I was sure I was being trained for something super mediocre, not that I wanted excellence. I just wanted out. Why are you like that? Because you know, the other kids were cool. I came out like that. You came out. I actually came out. I came out like that. Yeah, it is not. I mean, I'm, I might have some hereditary, just kind of like Italian, I'm not sure what, or something. It's not, it wasn't a nurture thing. That was a nature thing, or I don't know, I just like came out, actually hatched out of a disco ball. But that's the way that's how I came out. I had a Gabomata here who's this like, I think he's just interviewed Prince Harry actually, in a little like pay-per-view therapy session or whatever. And Gabomata said something to me that I've been pondering ever since. He said that as children, we're like narcissists, and we are that way because it helped us to survive. So we think that everything is about us when we're like babies and young. So if the parents were arguing, we actually interpret that as there being something that to do with us. And that's the way we view the world as a survival mechanism. And he says, one of the things that happens when we're in a, we're a young child and we're in a house where there's lots of arguing and lots of drama and shouting is we learn to avert our attention as a way to help us deal with the emotional distress. And that develops into something they call ADD and ADHD. Yeah, I took Adderall this morning. Well, they will. Yeah. Just to prepare for the podcast, just kidding. Now I've major ADD. ADD. But they diagnosed me as a kid and I was like, no, this is mind control. Forget it. I'm not focused because I thought it was situational. I thought it was my environment. And it maybe was partially because I wasn't interested in what was happening and distracted because I was curious about other things. But also it's a real thing. And it wasn't until a few years ago that I finally realized it was a thing and sought treatment. And it's helped, but it's helped like marginally. It's not. Hadn't you realized it was a real thing a couple of years ago? I've, I've been, I mean, I go to a psychiatrist and I talk about what's going on with my brain and do what I can to help myself holistically. But also I know I'm also predisposed to depression. I'm not predisposed. I've suffered with depression my whole life. Since when? My whole life. I don't, I can't remember an age where I wasn't depressed. I just, I wasn't always miserable, but I've, I'm kind of a dark, I'm a little dark. Um, and that's not something, you know, it's hard to pull yourself out of a hole when you don't want to get out of bed. Like that's, you know, to have the willpower to just get over depression and put on a happy face and whatever people do get an Ith's bath and jump in the sauna and meditate. You know, I'm still struggling to be the well-rounded person, but I'm functional. I think we're all struggling to be a well-rounded person. I don't know. Some people seem to like have these parents that teach them that and they come out and they're like, you know, boop, boop, boop, boop, boop, boop. And it's not, you know, that's almost diminishing to be like, whoa, whoa, whoa, whoa. But I'm, yeah, there's people who just seem to, you know, and some people come out of the womb like that. I know parents that are creative, chaotic. I know people who are well-rounded, whose parents were addicted to drugs and somehow, they just wound up like that. And how do I tribute that to your parents? That's a hard correlation to me. Did you ever, you said a curious phrase now, which made me ponder. You said, I'm a little dark.


I'm a little dark (17:33)

Uh-huh. What do you mean by I'm a little dark? Why are you giggling? You're making me look like you are a little dark. I am. I'm not evil. Uh, I'm not a witch. I, I guess I've just, you know, like I said, I've struggled with depression. I'm not a bubbly person. I'm not someone, you know, as a child, my mom has said, you only laughed when something was really funny. You know, I think kids run around like laughing and smiling because they're like children or something, but I had to have a reason. I'm not sure why it's still kind of like that. And maybe it's, I don't know, as an adult, it's become something that requires, it's just being genuine and maybe I'm not, I think maybe I'm not impressed. Maybe in general, I'm just skeptical. You went to see a psychiatrist when you were 16? Oh, I went to see a psychiatrist when I was like 10. I mean, I was in therapy when I was like 10, 11. With what's in trying to be diagnosed? Like, what's wrong with her? Why can't she stay on task? Why is she so weird? Why doesn't she get along? Why is she distracted? So I have report cards that say chooses to disturb others. You know, doesn't stay on task. It's stuff like that. It was like, I was always like, you know, not paying attention curious about something else, engaged with something else. It wasn't always to be rebellious. Sometimes it was very good natured and I would get in trouble for things that I didn't think were bad or intend to be bad. But it was also just very, a very willful, independent thinker who didn't fit into a traditional educational environment. And, you know, that's something for whatever reason, seemed to be needed to be diagnosed. But then I was like, no, no, I'm not taking well, mutual, and I'm not going to take it. It's like an antidepressant. I didn't take it. I was like, no, I'm not taking any of this. When did they went? That was by high school. So you were 16 inch around that time when they? Yeah, 15, 16. And I was like, this is it's, I don't feel like myself feel wired and weird. And I got like, I think I got riddling. And someone tried to buy it off me in like high school and I was like, what do you what? I don't even get it. I was like, I'm just throwing this stuff in the trash. And then so you get diagnosed and prescribed an antidepressant at 16 ish. Your parents break up at 17 ish. You leave them. I move out. You move out. I move out at 17 before I graduate high school. I was home schooling. So I got my diploma in the mail. I thought the like most embarrassing thing would be, would be to wear the cap and gown. I was like, what is that? I don't understand. What's the tassel? Why do you have to wear a robe? What is this robe? I wouldn't have been proud standing in a group doing some group thing. I'm not a group person. Even though I've built a lot of really powerful communities, I'm not I don't assimilate well into groups. And I think groups are responsible for the most heinous things in like human history. So, uh, so I moved into a closet. You moved into a closet? Under the stairs for $60 a month. We sleep in the house. Uh, these guys that were like in bands and artists who had met going to shows because I was really into music and went downtown and Sacramento and saw music and. What was the plan in life at that point? Was there a plan? You know, you're like 17, 18. No, you told me there was a plan. I wanted to go to first wanted to go to Reed College, but that was expensive. But then I wanted to go to the Evergreen College. So by the time I was 18, I had moved to Olympia, Washington to get residency to go to the state school called the Evergreen State College, which is a super duper hippie state school that's interdisciplinary and there's no majors. So the point of it not really being worth going, but if I was going to go to college, I was going to go to a place like that. But even state tuition was expensive. So I lived in Washington state for a year to get state to get residency. So I could go to that school and by the time I got residency, I was like, this school's not going to do anything for me. You described this chapter of your life as being very lost. Super lost. Super lost. I was looking for my, I kind of hate this word tribe. I was looking for people like me. I thought I would find people like me and then all would be well, like a, you know, some Disney character that ugly duckling or someone who loses their lost from the wolf pack. I don't know what these movies are. And then they find their family and people understand them. And so from the time I was 17, I moved from downtown Sacramento to Olympia, Washington, lived in two places there, Seattle, lived in two places there, San Francisco, lived in one or two places there, Oakland with my alcoholic fry cook boyfriend. I had met in Olympia. We couldn't get jobs and my parents were like, yeah, we can't help you with college stuff. So then we moved to Portland. I was a striper. I was lost. I was lost. That's an interesting turn of events. Yeah, that was an interesting turn of events. And that chapter of your life in some ways mirrors the transience of the start of your life. You said you moved to like eight, eight or 10 different schools when you were young. And then when you leave the nest, you end up bouncing around as in your own words, like looking for your family. I was, yeah, I was looking for someplace to belong and I never found it. And I kind of love that. Because it's forced me to make my own and forced me to stay creative thinker. And also, I don't know. This isn't fair, but the people in some of those communities, like peaked and never left. It's like, you know, I listened to pop punk in high school. Can you imagine? I'm sorry if anybody listening is like never graduated from listening to pop punk. But if you don't graduate to metal or some other, it's not even more sophisticated, but like less juvenile varieties of rock, it's the same as finding, you know, some comfortable community when you're 20 and then never leaving. Like that sounds, that sounds awful to me. So I'm, I'm glad I didn't find a comfy place. And it's been uncomfortable since then. How long did you try this stripping thing?


Being a stripper (24:47)

I don't know. I mean, when you're in your late teens, early twenties, time just feels like it felt like a decade that I was, you know, bouncing around to these places. Probably three or five months. It was fun. I loved it. Nobody pulled anything. I never got messed with. I drank my white Russians and ate the subway sandwich from next door and played photo hunt. And I wasn't even 21. I used someone else's ID to work there. And I got to dance to music that I liked. I made money. I didn't really have to engage with anybody. And I got really comfortable with my body in a way that I hadn't before. And that was cool. You know, they say, I read a new book where you said that you believe you hold the world record for having the most shitty jobs, like back to back throughout that period of your life. They say, you know, I've learned this from this podcast that every job teaches you something. And that thing can be applied to business. There's always a sort of a transferable skill or whatever. Learn what was the transferable skill? But you learned from stripping that you think has probably stayed with you today. I think that even though I wasn't, didn't have the upper body strength to be the traditional one upside down swinging around. What I could do, I mean, it was like shuffle around and whatever was enough and still charismatic enough and still great enough to entertain other people. And then being comfortable with my body, it's like exposure therapy. You know, I was the girl at 18, it would like make out with someone. And then if I was like naked or something, I'd like put on my clothes to go to the bathroom or something. I was like, not, I didn't sleep with anybody until I was 19. So I was just, I was kind of late by 20. I was stripping and stripping. I'll tell you the crescendo of that experience. So dating with dating Wade, the alcoholic fry cook who was 10 years older than me. I was on birth control. I went off birth control for like one day. And there's almost, we were hardly even, you know, engaging in the way that someone might get pregnant. Like, so briefly, like that day. And then no other day. You're like, yeah, I'm like, I don't know. We're here. I don't know who's watching. And, and I wound up, I wound up pregnant. So I'm like 20, maybe 19. And I went to the sliding scale women's clinic. And, but, but it was the only day I could get in, but it also happened to be the day of my court date, because I had gotten arrested for shoplifting. So I had to have the women's clinic, right, an excuse to the court, telling them why this poor girl couldn't make it to her court date. And the whole thing got there. Just, I kept following up to be like, when is it rescheduled? And I think they all just felt so bad for me. It kind of vanished. But that was, that was like, okay, no more shortcuts. It wasn't like, I'm going to go be a CEO. But it also just taught me that breaking some rules puts you in other people's hands. And I was, you know, being arrested. I'm not as autonomous as I would have liked to have been. And, you know, even with stripping to a 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. Had lots of low points. But at least it's like this, right? It's been like this. You know, doesn't, this doesn't ever 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, you can't fuck with us. 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 going to go have a career and do everything. I'm going to 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. Mm hmm. Why'd you make that sound? I don't know. It was fun. What was your favorite thing to steal?


Shoplifting (29:38)

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 I, when I did get caught, and this was my favorite thing, was just walking out with stuff. So 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 high and just walk out with no bags or anything. I did it at grocery stores. I, I've 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. They 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 one said cold. And I was like, yes, this is, this is luxury. It's worth jail 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 capitalistic culture, which is a privilege. It's lazy. It's, 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. Anyway, 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 knifed or something than 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 lease pages so I could stack them as many of them as high as possible. And 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'd 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 month rent. Why weren't you scared? I think I was, but it's when you get scared that you get caught. And it's when you hesitate you fail. Same thing. If you're snowboarding and you're like, Oh, it's kind of icy. Let me look down. You're just like catching 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'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. Who can justify it? No, I couldn't justify it. I would never feel comfortable doing it. But big box retailers, I was like, Over the last couple of how long, maybe four months I've been changing my diet, shall I say, many of you have really been paying attention to this podcast. We'll know why. I've sat here with some incredible health experts.


Ads (33:54)

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The start of Nasty Gal (35:50)

Yeah. Vintage. Why vintage? Why did you start to sell vintage clothes? Yeah. So by 2006, I had gotten some real jobs. Now, after I'd worked in two stores and record stores and photo labs and Subway, again, I dry cleaners. I... How did you get on with those jobs? It didn't last very long. I liked jobs where you alphabetize things, though. So 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. And 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 pre-existing condition. You... Is this your hernia? Yeah. The hern. The hernia. 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 guts poke out of and it makes a little bump. And I had one kind of in my groin area. I called an inguinal 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 pre-existing condition, even with depression. If 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 pre-existing condition apply for health insurance. You'll be given health insurance. You could only get health insurance with a pre-existing condition, like a hernia, with 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. It 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 contract criminal at this time?" My job, no. So 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 down time in this lobby and there was a 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. I wore only vintage. I was like, you know, rootin' tutin' scootin' 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. And these things were going for like $200, $300. And they were just making it look like something that Sienna Miller or 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 hern 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 and 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 the 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. I was like, I was just call center hoping, get to the bonus threshold, quit, because me two months where I don't have to get a job, call up another call center. 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, 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. Yeah. 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. I can't, I cannot be assigned something. It either comes out or it's not there. That's the, do you think that's the, the rabble in you? That's what 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 learned 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 didn't occur, so they're right. I mean, it's pretty logical that you would question what a bell ringing and someone moving from one room, the same room to the next room, everything. Do you think anyone else questioned it? For what? 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, you took to fix the heron. It was successful. 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 sure a lot of people saw that price arbitrage and they didn't build an nasty girl. So 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 when no one 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 you 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 started an e-base store are copying what other people are doing. They 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 saw in the romp just misspelled, you know? Even that's first principle thinking that's like, you've got a convention on one end, which says, like, do what's being done. And then you've got these first principle thinkers who kind of think first about what they know to be true. And they're really good at filtering out convention. They can kind of see through it at the truth. Whereas convention 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 in-bought 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. And 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, dippy, 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 then I was like, cool, Nasty Gal. And 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 navel 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 have survived. I would have been dead in the water. Speaking to something really interesting there, which is like this balancing act between naivety, which is great for innovation, and then convention, which is great for staying alive. I'm talking about like the Nasty Gal, meaning a CFO. Yeah. You know what I mean? Well, 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. Yeah. 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 naivete 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. Now, a sticker went from doing $150,000 a year to 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 this 7,000 square foot warehouse, which I thought was the hugest thing. And I was like, when we hit $150,000 a day, God, what's it today? 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, that children jump on. It was an upside down horse and its legs were in the air. When you jumped on it, the legs like that's what you wanted. And in between, you know, on our brakes, 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 pound 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. But I probably... No, it wasn't with investor capital. No, it was the first time I made money. Yeah, my slide was with investor one. Okay, yeah, no. They actually, those investors did really well. They got bought out within six months. So 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 needed to happen and what I said I was going to do. I didn't understand that people needed to be held accountable because I held myself accountable, especially sea level executives and grown-ups whose careers were longer than I had been alive. Like, how did you do that at such a young age? Well, I think I messed up. I think like for the first two years, I hired people that were very, very inexperienced and 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 B, with us with our slide and dogs and tree and basketball court and ball pool. And they would take us seriously but also be like, maybe there was an insecurity about how I'd manage them. And so what ends up happening is you I had lots of young people. I remember the BBC did an article saying, is this the youngest company in Britain? Because I think we were somewhere with our average age was maybe 20 or something. And we had like 100, almost 100 people. 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. And 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 lot of sided in experience organization to being a balanced one. And I say balanced because it's my belief that to own the future, you have to understand the present, which is why you want to hire a 16 year old that gets tick tock or whatever. And you also need to hire someone that's maybe much double their age experienced in client services and understand the old rules of the game. If you understand both games, you can understand the game of the future, I think. So made a lot of mistakes. And when it nearly went under several times and had to call people and beg for money in the lead up to payday, but somehow managed to survive. But going back to you now, I feel like 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. I was the only employee. It was just, you know, it was 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 had never eaten an oyster. You know, I was drinking like Budweiser or an eat, 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. Parents weren't 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 built the company to eventually, you know, $28 million run rate super profitably. I would never have known. And so yeah, year two left eBay about halfway through and launched my own website, nastygalvintage.com 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. I owned 100% of the company. I had a bunch of kids working for me. And that's when venture capitalists came in. And at that point, you know, we were selling non-vintage 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 buy 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 a $28 million run rate, you were profitable at that time. Significantly. Pretty significantly. I have a 20% or 20% of them. I don't know. I don't know. I don't even look at that. I never had to learn to read a P&L because my company was profitable and I just generally knew how much it cost to run. And I didn't buy expensive office chairs. Did you know you were like gross margins on your... On the products, yeah, on the operating margins? No. I don't think I didn't understand what operating margin was. Pretty incredible that you can be running a business that's generating that has a $28 million a year run rate and not know what operating margins you're dealing with or what your net profit is. It's a 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 the $60 million going into a nasty gun in 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 another time or pocket all of it as a founder. I had hired a COO at that time. I had a top tier investor on my board and very little historical data financials to base the future growth on, but it had been exploding, just continued to be exploding. And with that capital behind us, we could grow even faster. And the expectation was that the next year we would grow from $28 million in revenue to $128 million in revenue. We just rounded up by $100 million, and then we hired into that and we bought into it. Oh, you believed it and everyone but I had grownups forecasting this 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 this year and someone put a plan together and this is, we hired 100 people. 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 one another and it was, it's just a mess trying to integrate 100 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. It 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 is just coming to the bank account you're looking at and thinking that's a big fucking number. You know, because you have a valuation of 350. Yeah, I'm worth $280 million of 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 real, it's not because it's in your bank account. How does that make you feel when you, you know, then they put you on the front cover of Forbes. Yeah. How 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 the company or new hire, promotion, any given time. 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 and wine. I got better taste, period. Thank God. But now I spend less money with a good taste that I had to spend a lot of money to acquire. A lot of money. But did you feel, did you feel like it made sense? Like the image that's been, that had been built of you at the time, that the world is now like, "Oh my God, I don't know. 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 boosstrapped a business to $28 million in revenue super profitably. You know, investors came out of the woodwork. You know, a 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 and... Imposter syndrome. Any of that? For sure. Yeah. I mean, I still walk in rooms and I'm here.


Dealing with self-doubts (59:34)

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 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 belong here. But the "I don't belong here" is also a really great motivator. The "I don't belong here" is "I snuck in the back door. I don't belong here" means I can do things differently. And "I don't 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. That is radical. Would you remove that self-doubting voice? If I put a button in front of you and said, "You pressed this. You'll never doubt yourself again." No. That'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 buy something else to save them taxes. And he 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? Who 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 it is 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. But beyond that, I think I've found a way to harness it that really works for me. Have you developed 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. You're dad somewhat critical at times or pessimistic. Have you found a way of being able to juggle those voices so that you can make decisions decisively and quickly? No. No. So I can have these conversations. And 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. So I 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're with 30 other people and you're going through this process of mapping your patterns from your childhood against your parents and how you inherited that. And it's all directly correlated and basically graduating from your emotional child into an emotional adult. Super embarrassing, weird process like so dorky. And everybody came with something different to work on or what emerged for them. You know, 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. In 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 troublemaking, 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. But 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, if other people like 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? Oh gosh. So 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 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 Enquirer said, 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. There were 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? And I've also read headlines like when the Netflix series came out, the worst thing about Netflix's girl bosses is its source material. Not even the show, just me. But 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 looked like I knew what was up, but it was like 27.


The downfall of Nasty Gal (01:08:34)

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 of those things with this girl on the scripted comedy, which came out four months after I left Nasty Y'all. So the biggest kind of personality or whatever identity crisis was, you know, I'm on the cover of Forbes in June, I think of 2016, July of 2016, my husband of like a year's like, "May I change my mind?" And I'm like, "Oh my god, that wedding was so expensive." It was devastating, but I'm just like, "God, that wedding was so expensive." It was a great party. So in that space of like 12 months, you're on Forbes, husband leaves, Netflix comes out, Nasty Y'all goes under, then Netflix comes out. So the show had been shot when things are all up and to 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 eventually, yeah, like fell apart and that 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 Y'all, when for the first time in 10 years in my adult life, since I was 22 years old, I am no longer associated with the thing that I have 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 and to move on when there's a full PR campaign about who used to be. You'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 health perspective? Hmm, I had 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 lick my wounds. I think I was also, I was also on antidepressants. 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 Girl Boss, right 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 Girl Boss 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 college drop out from Sacramento started a business with an internet connection and a computer gave them license to, you know, yes, they were inspired, but also embraced their own failures because the hero face planted publicly. And that can also inspire people. This is hopefully the most cliche question I ask, but I want to know because you have a, 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 have taught me the most, it's not, it's not when things go right, that's a validation of your hypothesis. It's when things go tragically wrong and 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 fund raise, for example, a lot of people will hear that you raised a company raise investment at 350 million and think amazing. That's when people clap, right? They get the champagne out of the rest is for 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 did a big valuation hurt? 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's doing, you know, on an upswing, $2, $28 million 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 an infinitely scalable marketplace. It'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 King's Lang in, in Beechman in shoe dazzle, there was no playbook. There were no e-com veterans or, you know, performance marketing people who had been in those jobs for even very long. I was hiring executives who had worked at like Macy's, right? Nobody had like e-com. It wasn't called direct to consumer at the time. It was very, very different. There was 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 a term sheet around and 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 finishes with RS. Yeah, I was like, you're awesome. You can get it. You know, what Danny said when 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 and to 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 recede 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 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, were 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 were 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. Didn't you get enough of to sell the company completely for 400 million dollars? 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 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 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. Are 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 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 had an earnout based on them 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. There'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 looking into the data room and due diligence. Yeah, and then copy it. Yeah, exactly. So we didn't get that far. I don't regret it. But yeah, that was a big thing. 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 much of a markup for him.


Advice for aspiring entrepreneurs (01:20:18)

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? I can think of the first piece of advice that I give young founders when they come to me. I'm wondering what your 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 even try to market it, talk 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's going to be worth more than if you would raise money when you just had an idea and were asking for a check. When you do raise money, having a reasonable valuation is important and a lot of founders optimize for price because bigger price and investor pays, the more ownership the founder has, 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 shape than raising 350 and owning 80% of it and going to zero or whatever. I think where things are right now with venture is a place that is close to that. 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 at such a high valuation, these founders, nobody's going to reinvest in them. They've blown through their money. They thought they were on an upswing. Their company might be doing two million in revenue, but 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 have figured out how to survive ones like, we have another term sheet. I mean, I've been there. What about the psychological advice you'd give to a friend? I would say to listen to your gut, 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 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 to lose touch with your intuition and it's probably what got you to where you are as a founder without the money and without the experts and 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?


Your hardest moment (01:24:04)

Since you first started that store on eBay, is there a day you look back and go, you know, that period or 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 and 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 like hallucinating. You know, I went to a hotel for a week, I couldn't be in the house, it felt like a crime scene with his stuff around and yeah, a whole week at the Beverly Hills Hotel with three poodles is quite the scene with chain smoking in the courtyard and bathroom. Has that experience put you off being a CEO of a big company? I mean, yeah, everything I've experienced has put me off from being a CEO of a big company.


Future Career Perspectives And Mindset

Would you ever be a CEO again? (01:25:37)

You'll never do it again. Why? 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're running a number of businesses now, you've got your funds. Yeah, business class. What happens if it becomes globally, you know, globally successful then you're back to being a big CEO again though. Are you step out the way? 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, then I launch in the fall. 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 worksheets and over 60 hours of interviews with me like this with entrepreneurs. And students get lifetime access so they can take it over the first seven weeks. They can take it over the course of a year or 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 kajabi and drip for email and 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 with students and posting the lounge, which is our community. But you're in touch and keeping it. That's it. No. Yeah. I'm playing. I'm I'm not playing small. With business class, I'm playing to my strengths. That's big. And with trust fund, it's venture fund that I'm raising right now for $10 million 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 weeds. If I hired a bunch of people, 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 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. A 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 as 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 and surprising, inspiring because so many people get dragged by the temptation of like external expectation. If it's great, business class is 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 waiting list for 2023. Yeah. So it's launching in April. Okay. The spring cohort launches in April. So you can enroll for like a 10 day period at the 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. We'll turn it into some boxer shorts or some teddy bears. Mm hmm. Yeah. No, no, I, I have had the pre-all 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 so that I'm set up for success. Wind Trust Fund is super successful, which I can stay nimble with. And with business class, I've engineered that revenue was down last year to the year prior. And that's so that's okay. It's still profitable. I'm not going to hire a bunch of people or a CEO or plow a ton of money into it, trying to solve problems and pivot things. So if I come along and say, I'm going to invest 10 millions of here, we're going to hire a CEO. Okay. But 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. Mm hmm. What is that? Yeah. I mean, you can call it magical thinking.


Magical thinking (01:31:06)

You can call it magical thinking. You can call it manifestation. You can call it prayer. You can call it whatever you want. I 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 a, an invisible bridge and he grabs some gravel and he throws it out across this literal kind of canyon 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 shouldn't 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. We have a closing tradition on this podcast where the last guest leaves a question for the next guest.


Closing Remarks

The last guest's question (01:32:37)

Your question is unfortunately not the hardest question in 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? My 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? This 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 in a month. But I think finding that and hanging on to it. Is there some big meaningful thing that I'm going to find and cling to until I die? You know, it's easy when it's family or easy when it's a kid. And you can create these meaningful things in your life. But 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 years. And that's why I reached out to you to sit here with you. And you are absolutely a superstar in many, many respects. Thank you. You're built for podcasting, but also because of your inclination to be open and honest and vulnerable, you're incredibly inspiring in the stories you tell and 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. Because I'm going to get to meet. And I mean that. I'm not just like gassing you up or anything. I mean, 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 learned from your twisting, turning professional career, you clearly have a huge amount of intellectual leverage and fire power that makes for a great fund founder. So I look forward to seeing what you do that. Thank you. As you might know, the show is now sponsored by Airbnb. Absolutely love Airbnb. Always have. Always been a, you know, saved my life on so many occasions. And my team, when we first got in touch with Airbnb, we're talking about how most people don't realize that their place where they currently live could become an Airbnb. And I guess the second question there is how much could your place be worth? And it turns out you could be sitting on an Airbnb goldmine without even knowing it. Some people Airbnb their entire homes when they're away. That's what I did in New York. When I left New York, my place was on Airbnb and people rented it out sometimes for a day, sometimes for two days, sometimes for a week. And it's a great way to cover some of the bills while you're away. So whether you're looking to go on holiday or you just want some extra cash for bills, or you want to buy something nice for a Valentine that you love, whatever it might be, head over to Airbnb.co.uk/host and you can find out how much your current property where you live can earn while you're not there. I suspect it might blow your mind because it's certainly blue mine.


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