BiggerPockets Money Podcast - 476: The Real-Life Girlboss: How I Built Nasty Gal to a $100M Business

Episode Date: December 5, 2023

Nasty Gal went from an eBay side hustle to a business doing $100M in sales in under a decade. Behind it was the most famous “Girlboss” in America, Sophia Amoruso. She had no business experience, management training, leadership coaching, background in logistics, business financials, or running an online shop. Somehow, she built a business to heights few entrepreneurs ever reach, owning an extremely profitable clothing empire and finding herself on the cover of Forbes. But then, Nasty Gal went bankrupt. What happened? Sophia joins us on the show today to explain it all. She’ll share her full financial story, which included watching her parents go bankrupt, eventually selling her business, and seeing it suffer the same fate. From entrepreneurial mistakesto risks Sophia took that led her to massive financial success, Sophia has seen both success and failure, and she has priceless insight to offer any aspiring entrepreneur or investor. If you want to build a business, invest in one, or start a profitable side hustle, Sophia can help. She’ll also uncover what led to Nasty Gal’s downfall, the pressure “Girlboss” put on her, and why growing too fast can kill your financial future. In This Episode We Cover How Sophia turned a thrifting side hustle into a nine-figure business  Hiring your first employee and why you DON’T want to over-scale your side hustle Venture capital, investing in businesses, and when you should give up equity Going bankrupt and rebuilding yourself after a financial failure What Sophia is investing in NOW that’s helping her build even greater wealth Advice for new entrepreneurs and anyone who wants to sell online And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment Here’s What It Takes to Succeed as an Entrepreneur Building a Massively Profitable Business Around Your Passions Click here to check the full show notes: https://www.biggerpockets.com/blog/money-476   Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome, my dear listeners to the Bigger Pockets Money podcast, where we interview Sophia Emma Russo and talk about how she built her first business, Nasty Gal, to astronomical success, how that business ended and how she was able to reinvent herself in her new businesses. Hello, hello, hello. My name is Mindy Jensen, and joining me today is my senior producer, Kaylin Hope Bennett. Hi, Mindy. It's so good to be here. Well, I'm here like every day, but just on camera this time. It's so good to have you in front of the camera this time. So, Kaelin, we have an awesome show today. Sophia Emma Rousseau is the founder of Nastygal.

And we are going to talk to her about the rise and ultimate bankruptcy of that business and how she pivoted to the new companies that she's running today. We're also going to talk about her groundbreaking book, Girl Boss, and we're going to cover a lot of other topics, too. Yes, a lot of other topics in between. think that this is a really special show for us. Sophia was definitely an inspiration for a lot of young women in my age group. And so I think it's really powerful that we have her on the show today where she's actually

going to tell her story about how this business functioned, what went wrong, what went right. I just, I think it's going to be a really great show and some great learning moments for our audience today. Yep. Selling on eBay, venture capital. We've got, we've got so many things to discuss on the, like, meteoric rise of her company, Nastygal. And it is a really, really fun episode. Without further ado, let's bring in Sophia Amaruso. Tax season is one of the only times all year when most people actually look at

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You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in Eadle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at monarch.com code pockets. I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes?

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Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger, Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth.

Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. Sophia made her mark in 2006 as the founder of the fashion e-commerce phenomenon Nastygal, which she built to over $100 million in revenue. Sophia is also the best-selling author of Girl Boss.

She now runs an entrepreneur mentorship program called Business Class and has her own venture capital fund called Trust Fund. Sophia, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. I'm so excited to be here. Let's jump right into it. It's the Bigger Pockets Money podcast. Let's talk about money. What was your relationship with money like growing up? We didn't really talk about money a lot. I remember it being a bit of a struggle. We grew up solidly middle class. Nobody taught me about money. I remember my dad telling me things like cash is king and that's you know and you know when i got my first job at subway it was like you know hustle and you know clean the floors and even when they're clean just keep you know keep working like keep finding things to do and that's how you keep your job kind of a thing

i ended up being that kind of an employer in the beginning and that's not how it works especially with millennials uh that's a whole other story but money was you know i watched my parents file for chapter 11 actually when when I was like I don't know what age 10 and they I distinctly remember being in this credit counselor's office and watching them cut their credit cards in half and put them in a clear glass like fish bowl on top of like a whole bunch of other people's credit cards that they had cut in half and put in the bowl. That's a really weird memory for a kid. That must have been really hard. Did that sort of create any negative connotations with money or make money a really emotional topic for you and through your adolescence?

Not really. I don't think it really registered to me what was going on. But money wasn't important to me. I didn't really want a lot of stuff. I remember wanting like Jinko's jeans, like, you know, and they were like $80. And my mom was like, I'm not buying you $80 jeans. that's insane. You're in middle school, which is pretty fair, you know, I think like $40 sunglasses were like a big deal. I just remember, you know, we were going to Mervyn's, which is basically Coles.

And it was like, you know, it was like it was just very, you know, we were in Sacramento. It was like very solidly middle class. But I don't remember it really messing with my concept of money. It was always nice to have a little, but I never really cared about having. much more than a little. Which is so interesting because you grew such a big business, which we'll get to. But I think the thing that's always struck me about you is you have this innate ability to pivot. Like if it's ending of one business, moving to another, was there anything in your childhood

that made you such a nimble entrepreneur that sort of influenced that way of thinking? Yeah, I mean, both of my parents were, you could say they were entrepreneurs. my mom sold houses and my dad did home loans. And so they really only made money when they were getting work when he was closing deals, when she was closing deals. You know, my grandfather owned a piano shop. My dad's dad owned a motel. He grew up on a motel with like seven kids.

So I think it was like kind of immigrant mentality from, you know, the grandparents side. And then my parents just ended up kind of, you know, they ate what they killed. and there are good times and bad times. So I was watching them think on their toes a lot. In terms of my ability to pivot, I think it's somewhere between ADD and survival. And also just the fact that, right, if you lose your job for whatever even then, God forbid,

you're going to do something else. It's called pivot, right? I mean, it's not that unique. I'm just doing it in front of other people. And I get a lot of credit for it because it's out in public. But I think it's important for people remember that that's just what you do, right? Like that's what life does to you. A relationship ends.

You pivot. But I've done it on a grand scale. And I've pivoted really different things. I think being in an only child and going to a lot of schools and sometimes playing referee for my parents, not having another kid, you know, sibling to bounce things. off of forced me to operate independently and process things independently. And then it was really beyond that, it's, I think, been somewhere between ADD and survival. Yeah, that makes total sense. I think I'm not an only child, but I have a lot of friends who are. I think that kind of gives

you like lone wolf syndrome where it's really on you to make everything happen. You really have to become your own counsel. And I think from, you know, following you over the years of reading your book and so on and so forth. I really see that in your journey is that you've kind of become the master of of having your own counsel, whatever business you've decided to pursue. Yeah, I mean, there's no backstop for me.

Like there was no, my parents split up when I was 17. There was no home to go to, you know, home to my mom was running a really small place, didn't want to live with my dad. I moved out when I was 17. And I wanted to.

I just wanted to go kind of throw myself at life. And, you know, little did I know that being inambitious and hating working for other people would somehow become this whole, this massive business that I built and, you know, becoming some representative for ambitious millennials. That's the last thing I would have expected. Well, let's jump into Nastygal. I know you've told the story before, but can you give us a quick overview of how you founded it? Yeah. I mean, I didn't consider it founding a company. I didn't even consider a business. I thought

business people carried briefcases around and like, you know, went to business school. I was, you know, my last job was in the lobby of an art school. I was sitting on eBay, clicking through listings and getting MySpace request, friend requests from eBay sellers who are promoting their eBay stores to other girls who looked like they might be customers. And click through and was like, oh, my gosh, this stuff is so expensive. And I pretty much wore only vintage at the time. I wanted to be a photographer, but I wasn't a photographer.

I wasn't a stylist. I wasn't a buyer. I wasn't a business person. But I thought, okay, I'm going to go give this a shot. Let me see if I can just scrape together a little bit of money. And it was fun. It was exhilarating. Even when things didn't work, I learned.

And building Nastygal was a series of micro-pivots, right? Like we're pivoting every day when we're learning. Something doesn't sell. Your description doesn't, you know, your product description doesn't land. A customer's not happy. You're iterating. You're pivoting every single day based on what you're learning, at least if you're paying attention and listening.

So I did that over and over and over again. The first year we did, we being me, you know, and this is just selling vintage clothing on eBay, 70, like 2,000 in revenue, which was like insane. But again, I was paying 500 bucks a month rent. I had nothing to spend money on. So it was all in the business. It was profitable, but I didn't know there was any other way to build businesses. I didn't know you could run a money losing business. I thought you all this is make money, right? Yeah, you bought things and then you sold them for more than you paid for them and you didn't spend all. That's the only way. I could

of build a business. I had no credit. And then year two was 250 grand. Year three was 1.1 million. Your four was six and a half. Your five was 12. And we were on our way to 28 when investors came knocking. And this was, you know, just me and some kids in a warehouse. It hired a CEO for, you know, a portion of, you know, the, that year where we were on our way to 28 million. But it was a rocket ship. Sophia, before we get to that massive success, I'd like to take just a step back and really hit the roots of Nastygal. Out of any other business you could have started, like, why are you so attracted to vintage clothing and selling on eBay out of anything else? I mean, I think we all start with what we have, access, understanding, money, you know, experience. And so what I've learned is that it's not about.

what you have because there's people who have a lot more than me who have better educations. There's always going to be someone who has more than you. And it's not about what you have. It's about what you do with what you have. And what I had was a digital camera and access to thrift stores that was, you know, I didn't know what trade shows were. There was no Shopify or Squarespace or Etsy or Stripe or cloud or slack or any of these tools. eBay was the place I could do that. So it was kind of the only option. And I didn't sit there and think, wow, should I start an eBay store or should I open a physical vintage? I didn't have like money, like startup capital to open a physical retail space. It was just by the sheer constraint of,

you know, what I had, what I understood and what I was inspired by. And I loved vintage clothing. And I loved style. I never cared about fashion. But, I loved style. And that's what really like was the rocket ship that started to carry nasty gal was no one was styling clothes on eBay and making it look so cool and attractive and and exciting at the time. Like I think that that was really the game changing thing that set your business apart from other businesses. Thanks. Yeah. I mean, it seems logical that you would put clothing on a person who looks like a person and style. You know, you can't touch the clothing. So you dump a t-shirt on a model, cut their head off, with no context of, you know, who they are, you know, culturally, their style.

And through Nastygal, I was able to kind of imbue in the photography and in the styling, this aspirational woman that Mike, I wanted to be, my customers wanted to be, who was still relatable and approachable, but just one step ahead or maybe a little bit more confident. The models were pretty, but they weren't like, you know, they weren't like alien runway models, right. They were normal cool girls that I paid with hamburgers. And that was, you know, that's a big part of it. And now, you know, styling, it's just everything looks like that. But Nasty Gal was the first to do that with e-commerce photography. So what made you stop selling on eBay and open up your own website? I'm kind of an angsty person. I don't like rules. And eBay gave me a great

platform to start. But once I realized I had built a customer base who at that point was obsessed, and I had built this pretty large MySpace following, I mean, Facebook was hardly emerging at this time. You know, I was getting like slapped on the wrist for linking out to my MySpace page from my eBay listing templates and stuff that was just like, you know what, I'm driving more traffic to my listings on eBay than eBay is driving to my listings at this point. And it was an amazing marketplace for me to start, where there were built-in customers and discovery, which is what these platforms like Etsy and fiber do for us. But I realized I was building a brand.

And to really control that brand, I needed to put it on its own website and to give my customers the entire Nastygal experience. I wanted it to live off of eBay. And just kind of overnight switched eBay off and turned on. nasty gal vintage.com. Everything sold out. You know, I didn't, it was a website with zero traffic, but I announced it and I had just editors, fashion editors. I didn't even know what that meant who had been shopping with me and who what wear sent out a dedicated email and daily candy at the time sent out like dedicated email, which was like, people pay a lot of money for that. That was like they were making money from advertisers. So I was, I don't, I don't want to say I was lucky

because I didn't have connections. I was like in the East Bay deep in Benicia in a weird little warehouse by myself. But what I had done, it attracted some people that had a platform. And that was a big part of how nasty gal found its early success off of eBay. In addition to that,

it was building an audience, which is now what everyone is doing, what everyone has to do. And I did it on MySpace. But now, you know, we have every other platform to do that with. But it's also much more crowded. When did you first learn about venture capital? I didn't know about venture capital until investors came knocking.

They came inbound and I was getting emails from them. This was in probably 2011. I was still in the East Bay. We were in Emeryville, Bay Area, San Francisco area just across the bay from the city and had a warehouse with like, I don't know, at 12 kids, you know, it was like OSHA violations all over the place. It was like a returns person and a couple shipping people. And we had a little, you know, place where we shot in the corner. And my IKEA desk felt really, you know, going to IKEA

and like spending $500 was like so fun at that time. He needed the office pink. And it was, I don't know how, and I don't know how they heard about Nasty Yell. Usually it's like their wives are shopping and they hear from some lady in their life like, oh my God, I'm obsessed with this. So a lot of venture folks find these companies that are focused on women. And I didn't really need anything from them. I didn't know what to do with them. The company didn't need money. It was profitable.

Around that time, I had saved a million dollars cash in the bank in the Wells Fargo account. I actually have a screenshot of over $900,000 in the business business. bank account and my personal account was also in Wells Fargo, it had like $8,500 and I had a credit limit of $2,500. Eventually, when I bought a nice car, I had to pay cash because I was invisible to the credit companies. So you said investors came knocking. It doesn't sound like you were seeking them out. They came to you. What were you hoping to get out of the relationship with the investors if you weren't seeking them out in the first place. I was curious. I was, I was, it was a whole new world. I mean, I lived in the Bay Area forever and I didn't know what everybody in that city did. I was in, you know,

working on hate street or at a photo lab and, you know, dancing at dive bars and subsisting on burritos. So I was curious. And at that point, you know, was like, okay, you want to invest. Like, tell me what that's about. What are we going to do? What would your expectations be? And oh, wow, I can sell 20% of my company for $50 million and still control it. That sounds like no sweat. Like what's the downside here? So eventually decided to do that. And even though you'd think nothing changed, a lot changed.

So you decided to take the investor, you signed the documents. They infuse quite a bit of capital. It's like $60 million. Is that correct? Yeah, it was somewhere between 50 and 60 over two rounds in 2012. So what happens next in the business? Were the investors helpful? They were helpful, but also, you know, it was a different time when e-commerce was like,

you know, there was no playbook for it. We had to have a huge team of engineers to have an e-commerce website or a shopping app. It was so much work, right? There was, like I said, there was no Shopify. So it was very expensive to build a business like that. So we were doing $28 million in revenue in 2012. And these experts came in. I was like, oh, my God, amazing.

You've done this a bunch of times. I hired a chief operating officer and had a finance and chief people officer and said, okay, diagnose the business. Tell us what needs to happen next. And we went from being a very profitable business in 2012 to, to a business that eventually was no longer profitable because we rounded up. And we sat, I remember the board sat at a table and said, hmm, what do we think we'll do next year based on this trajectory?

Okay, we're at 28. Let's shoot for 128. What? That's crazy talk. Like for our audience, just to kind of give you some contacts, like reasonable business expectations are like maybe a 20% lift. Like year over year? like and that's that can be pretty aggressive like i don't even know what x that is i didn't know what i'm signing up

for i mean that's like 10 i think i'm still not good of math but i think it's not x and um we hired 100 people in a year and it was like the tower of babel where everyone was speaking different languages to one another and duplicating tasks then you know there weren't any operations for people to step into and, you know, processes for people. Culture hadn't really been built intentionally. So that was, so that was a mess. It was the most fun. But the foundation of Nastygal wasn't built on hiring a huge business or being a proper

startup. It was like a bunch of kids, you know, it was a bunch of kids in a warehouse and, you know, money in the bank and cool, it's buy some clothes. I'm sure when you grow a business that exponentially, it's, it's hard to manage your employees at that point. It's hard to manage investor expectations. I think there's so many wheels turning. And I'm sure you as a very young CEO who's incredibly, who was seeing all this success at this point, is maybe internally freaking out. What was going on internally at that point in time for you? It was really challenging because I hired a bunch of C-level executives who had

experience longer than my entire lifespan at that point. And I said, okay, all right, step in, build this thing with me, tell me what needs to happen, hold yourself accountable because I thought that was what grownups did, because I never had to be told what to do in my business, and realize that even grownups need to be held accountable and even executives need to be held accountable. And I thought they would go and do what they said they were going to do and have all of the solutions because, you know, at this point I'm paying them hundreds of thousands of dollars. And it wasn't that simple. I was definitely in over my head. I didn't know what I didn't know. As cute as it is as it is that I bootstrap this business to that big and

started on eBay and, wow, anybody can do something like that. I don't recommend doing it as quickly as I did. And if possible, I don't recommend doing it with the lack of experience that I had. I was very much at a disadvantage, not having had any experience literally working in an office or managing anybody or even experiencing leadership in a proper organization. Every office I've worked in my name has been on the lease of. And I was not qualified to be signing leases for, you know, maybe ever. I don't know. But we were growing so fast that I remember leaving like a wake of leases behind us that were like still, that we were still paying for because the company was exploding. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going. And more importantly, where your tax refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress.

Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place.

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So that was four years later at the end of 2016. And when you raise on a $350 million valuation, and even when your company is doing $100 million in revenue and venture capitalists who are the kind of people that set crazy valuations like that decide that fashion e-commerce isn't as cool as it was in 2012 or maybe they just kind of want to stay away from it. for now or that, you know, $100 million even wasn't enough for us to get to the next round where they could mark up their valuations and we were worth more, which looked good on paper to them. The expectation was that the next time we raised money, it would be at a billion dollar valuation. And even at $100 million in revenue, that was a wild multiple.

And so I began to talk to. more strategic investors who would, you know, built apparel businesses or private equity firms who would come in and maybe value the company at two and a half times revenue, which is still pretty great for any company. And my investors didn't like that. And even though I controlled the board, I took a lot of advice. And, you know, the story was basically, if you can't pay three $450 million, if that's not the valuation you're going to give the company, then it's not going to work. And something that you sell is only worth what someone's willing to pay for it. If it has to go on sale, like it has to go on sale.

And that is not what my investors were interested in. and our ability to continue fundraising even when we were doing over $100 million in revenue was almost impossible. And I think in 2012 that really, I didn't know what I was signing up for, but that was kind of the first nail on the coffin. And it was a series of Hail Mary's at that point because those options went away. And then it was even, then it was like, okay, well, we have to take a lower. valuation. We like have to. And my investors didn't want to invest more money. They owned their 20%.

They were happy with that. And when you have a business, it's not a good signal when your existing investors don't want to continue investing, even just anything, just something nice, that signals that, okay, they believe that even though things aren't going great right now, they still support you. mine didn't want to do that and it was very very hard for me to find investors because of that and eventually my investor said okay well the only way we'll do this is I'll double whatever of your money you put into the company and so it was either that in 2015 that the company that the company who knows what possibly fall apart or I double down and put a lot of my money, two million dollars back into Nastygal to try to save it,

to turn that two back into whatever it was, a multiple of two. And at that point, I was in way over, I mean, so far over my head. I had hired a CEO. So I was the chairman of the board. Again, I was like, okay, I've got a CFO, a CEO, a CTO, like a CMO, a chief creative office, or like, there's got to be a way to figure this out. My investors were finance guys. They had never operated businesses. That wasn't where they were helpful. As an investor, I'm a big value ad because I've operated businesses and I've been

through the hardship. And those are the kind of investors that I really value and as a founder learned that I wanted to work with when I went on and built my second company, Girl Boss. So ultimately, it was a series of Hail Mary's fucking friendliners, me being like, holy shit. I just put a ton of my money into this business. I don't know what to do with it. At that point, Girl Boss, the book, was this insane success. And it became what other people called a movement.

I think it's really weird to say that you started a movement and I don't, whatever. But it inspired a lot of women. who had never seen someone start an eBay store, build anything as big as I had. It was a year after lean in. And there was so much interest in me personally. And I didn't know what to do with Nancy Yel. So I started spending more time on Girl Boss.

I started a podcast called Girl Boss Radio. I wrote two more books, The Galaxy and the Girl Boss Workbook. and left the company in the hands of grownups. At that point, I'm like 30 years old, right? Like, I'm a grownup, but, you know, I knew, at that point, I knew what I didn't know, and it was everything needed to turn a company around. And let's see.

And I remember distinctly it was in 2016 in November of 2016 that we had a board call, you know, we were out of options and said, okay, we have to file for chapter 11. We haven't paid vendors in a month. We can't keep doing that. We are fiduciaries of this company. We have to do what's most responsible for it. It was an incredibly hard decision. But after that much strife and layoffs, and at that point, you know, even though Girl Boss was this massive success, it was, there was bad press, toxic workplace culture. I had no idea what I was doing. And it was, it was heartbreaking, but it was also like, wow, I put in 10 years and I did my best.

And this is the only, like, I'm out of this. That's insane. And also kind of a relief as f***ed up as that sounds. No, I don't think it does at all. That's the first thing that came to my mind is that must have been a way of stress, just completely off of you. And so for our audience, you sold your company to boohoo.com correct for like $20 million. And then you really turned all of your attention to what turned out to be a book and a media company called Girl Boss. And like you were saying, this book just caught wildfire.

I remember being in the middle of Chicago. All my friends and I were big thrifters. And everyone was like passing around this book. Everyone was like, you have to read this book about this girl. became a Netflix show. Like, I just feel like everyone at that time was, was reading your book. And that became the true story here. I mean, it was, you know, there wasn't, it wasn't a huge relief off my shoulders when Nastygal ended because there was, you know, a lot of bad press. You know, I was, there was headlines like, does the failure of Nastygal mean

millennials aren't ready to lead? It's like, oh, my God, am I responsible for a generation? That's insane. No. In the comments, you know, it's like maybe she is a nasty yell. Whatever. It was endless. So there was, yeah, some relief.

And I mean, I'd been through a divorce like six months prior. It was a lot at once. And it had been two years since the book was written. There was a Netflix series being written about my life about the book that Charlize Theron was producing. And that came out in 2017 in April. So four months, five months after. Nasty gal basically fell apart. If you could go back and do it again, what would you change?

I think I would have given the people who worked for me more feedback before I gave up on them. I wasn't in a position to coach them, which is what you want your leaders to do, even the executives. And I wasn't capable of doing that. but when things didn't go right, I wish I had given them more of an opportunity to do better because it's very disruptive to an organization to just remove people, which I did a few times, and it was at the expense of the greater business. I think the big thing here is, like I said, you're the queen of the peasant. You went from Nastygal to Girl Boss, and you pivoted again into other businesses.

Yeah. So business class is now what I'm doing, trust fund, which is my venture fund. And after all of this hardship and incredible fun and so much learning, I just want to pass it on. like that's kind of the best and highest thing you can do is not it is when you've extracted so much value and knowledge and a network is be able to pass it along and it be like no sweat which whether it's educating people about entrepreneurship and business class or investing in startup founders we're building companies actually for other founders that's what I'm investing in. It's the best feeling because I don't really like building companies, but I know what

it looks like and I can totally hope. And I love supporting founders. So it's interesting being in this different phase in my life after being an entrepreneur for so long, no longer. I am, but business class is a tiny bootstrap business that's hosted on Kajabi. build technology and, you know, trust fund is, is a business. It's a venture fund, but I'm not building huge organization and chasing revenue in the way that, you know, we had to at nasty now. From your experience owning a venture capital funded business, are you doing anything differently now that you have your own venture capital fund called trust fund? Yeah. So when I invest, I make sure that neither I am investing in a valuation.

that is going to put the founder in some kind of valuation purgatory that is way, way, way too high and that I'm not investing in something that is too expensive. And there was a while where that was happening. There's been a big correction. And the founders starting companies in this time in a downturn are here for the right reasons. And they know that it's going to be tough. And they know that finding funding is going to be tough.

And their expectations are much. more in line with what the market should look like and is. With trust fund, my inventory is my relationships and my experience and my talent with building brands and my ability to access deals and make a material impact on these companies and work with these founders on everything from getting them a piece in tech crunch, which I've done twice in the last month, just cold emailing editors to referring the CEO of a huge fashion brand to one of my companies who's still in beta and now his creative team is like in the beta plot, which is the first check I wrote out of the fund. So it's so fun just to see what I can harvest for other people instead of say,

okay, well, we're going to do brand partnerships and we're going to do a conference. And like that is a different kind of inventory when you're working with brands. You're selling something different. The value exchange between the people who invest in me and the portfolio founders that I work with is just kind of the pure channeling of what I've built over 15 years. And that's not something I intended to build. And there's plenty of, it costs me plenty of trauma and money and all kinds of stuff. So I'm using it for other people. And it's what I really enjoy doing. I love to hear that. Are there certain businesses, like, or business types that you're looking to invest in? Like, are you looking for forward thinking things? I think I saw something

online that you invested in an AI company. Yeah, I've invested in two AI companies. One's called Browse AI, and they're already profitable. They were profitable when I invested. And they didn't raise an absurd valuation, but they continue to explode. So I'm investing in anything that helps founders start and build companies or helps people become entrepreneurs. So Browse AI, you can basically scrape any page on the internet and it will update you when that changes. So it creates Google alerts for the entire internet, which as an entrepreneur, I've reversed engineered everything.

I've had to go troll LinkedIn to see if someone quit or had layoffs or who used to work here. And now you can set up these automations with Browse AI super easily to do that. another company invested in is called Paxmouth, which is a logistics platform for e-commerce retailers. It's literally people called Paxmouth in their homes, packing and shipping goods for the for the e-commerce retailer. So they're not doing themselves, but also they're able to have their products in different states so that it's much cheaper and faster for those products to get to their customers, which is really cool. You know, a project management.

management platform for creatives, plot I invested in, a marketplace for dental workers to find shift-based work in dental offices and fill in shifts and for dentists to fill in shifts. Like they get to work for themselves, right? Like for me, that is the same as the framework that eBay gave me to work for myself and the flexibility it gave me. So I see that as a product that also helps people become entrepreneur. So it's pretty broad, but I understand the psychology of the person using those products, which allows me to really help the founders that I'm investing in and have the heads in on

of the people that they're building for. That's so cool. I love it. I can't wait to check all of those businesses out. Sophia, what advice would you give someone starting today in the e-commerce space? I think it's important to have something differentiated. I think just creating other people's products and stuff. I did that at Nastygal

and it became more competitive. Other people had access to the same products and trade shows. We started making our own products, which was very expensive. So make sure that what you're building is something that can be profitable or is profitable from the beginning, unless you're creating some kind of newfangled product that requires, you know, development and, you know, prototyping and, you know, really capital-intensive stuff. You may need to raise money or invest your own money at front to get to a place where you can

sell that product. But you can also with whether it's something you're sewing at home or something you're thinking about investing $5,000 and having a prototype made of, talk to customers, people who would be customers. So whether it's a deck or a, you know, a drawing, you can put it in front of people and say, what do you think about this? Would you use it? And go through a lot of user interviews.

And people might say, have already seen something like that or what about this? Make sure that what you're doing addresses their questions so that when you put that product in front of them and when you message it, you've already filled those gaps for them and you're making it really easy for them to show, up and buy and use what it is that you have to offer.

Sophia, I think that that's really sound, excellent advice for our audience. We just really want to thank you for your time today. It's been just really great getting to know you and I guess learning about all of the behind the scenes of what happened at Nastygal and really getting some valuable business information for our audience today. If people want to learn more about you or follow business class or trust fund, where can they do that? Yeah, it's trust fund.vc.

you know, the course I teach is businessclass.com. And then I'm just Sophia Amaruso with an AM-O-R-U-S-O pretty much everywhere. Awesome. Sophia, this was so much fun. Thank you so much for your time today. And we'll talk to you soon. Okay. Thank you. All right, Caitlin, that was Sophia Amaruso. And that was awesome. I loved hearing the story of how this company just kept making money and just kept making money. And then all of a sudden, these guys with lots and lots of money knocked on her door and were like, hey, you want some more? Like, what a fun position to be in. And I can totally see why she would take that money. When somebody gives you $60 million, what do you say? No, thanks. I'm good. I agree. And I think she was so young at that point. I think that she did a

really good job sharing of how stressful of a position that is to be so young, so successful, offered an infusion of cash. I doubt, you know, if she ever thought she would see a check for $60 million in her life, but she took it with such grace. And she, I think the thing about Sophia that really struck me is she made the best decisions with the tools she had at the time. And she kept learning along the way. She's doing the best that she can with the tools that she had at her disposal.

And she said, I was making money. I had money in the bank. So I wasn't, I didn't know how to read a P&L sheet. I don't know the CEO and the CFO and all of that, but it seems like that's the position that she hired somebody to do that for her. She should have somebody backing her up. But again, you know, I'm not privy to any of that information and any of what they were doing. It just seems like there was so much that was going right. It's so easy to like sweep under the rug the things, oh, maybe this isn't quite going right this time. I think the thing that was really interesting about

Sophia's story and why she rose to so much fame and her business gained so much notoriety is because she really was the first entrepreneur that publicly admitted like, I don't totally know what I'm doing. She felt very accessible. She felt like anyone could do it. And I still think that story really rings true to entrepreneurs today. Yeah. When you are honest and vulnerable and your life is happening in the public, it can seem really like you're the, you know, the, what did she say? leader of a movement, which sounds like, like she said, this sounds silly to say. But it's also so much pressure.

And then anytime you'd make a mistake, it's blown up way out of proportion because it's so public. And like she said, when you get another job, when you lose a job and you go and get another job, that's just what you do. But when you do it publicly, it's this giant story. And I think she's taken it with. clearly a lot of grace. And she's taken those lessons and pivoted into other very successful businesses that aren't on the grand scale of nasty gal or girl boss, but sound like they're

highly profitable and making a difference in founders' lives. And she's really turning her entrepreneurship knowledge that she gained over that time and putting it to really good use. Yep. And that is the best thing you can do is take what you've learned and then share it with others. Yeah, absolutely. All right. Should we get out of here, Kaelin? Let's do it, Mindy. That wraps up this episode of the Bigger Pockets Money podcast. She is Kaylin Hope Bennett and I am Mindy Jensen saying, See you later, Alligator. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash Bigger Pockets Money.

Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, A big thank you to the bigger pockets team for making this show possible.