The Diary Of A CEO with Steven Bartlett - NastyGal Founder: I Was A Stripper! A Shoplifter! Then Built A $400m Business! Sophia Amoruso

Episode Date: April 17, 2023

In this new episode Steven sits down with serial entrepreneur Sophia Amouroso. Sophia Amouroso is an American business woman and New York Times best-selling author of ‘#GIRLBOSS’ which later became a Netflix series of the same name. Sophia founded the female fashion retailer, ‘Nasty Gal’ in 2006 when she was 22 years old. 6 years later, Nasty Gal was named the "Fastest Growing Retailer” in America. However, in 2016, the same year that Sophia was named by Forbes as one of the richest self-made women in the world, Nasty Gal filed for bankruptcy. Since Nasty Gal’s bankruptcy Sophia has founded ‘Girlboss Media’, an online community providing mentoring and support for women worldwide. As well as ‘Business Class’, a comprehensive tutorial course that helps founders accelerate and scale their businesses. In this conversation Sophia and Steven discuss topics, such as: How Sophia’s rebellious nature helped her to create an original business How she regards being an outsider as a superpower Why as a CEO you only know 10% of what is happening in your company Why Sophia would never want to be a CEO again You can follow Sophia here: Instagram: instagram.com/sophiaamoruso Twitter: twitter.com/sophiaamoruso Follow me: https://beacons.ai/diaryofaceo

Quick one. Just wanted to say a big thank you to three people very quickly. First people I want to say thank you to is all of you that listen to the show. Never in my wildest dreams is all I can say. Never in my wildest dreams did I think I'd start a podcast in my kitchen and that it would expand all over the world as it has done. And we've now opened our first studio in America, thanks to my very helpful team led by Jack on the production side of things. So thank you to Jack and the team for building out the new American studio. And thirdly, to Amazon Music, who when they heard that we were expanding to the United States, and I'd be recording a lot more over in the States, they put a massive billboard in Times Square for the show. So thank you so much, Amazon Music. Thank you to our team. And

thank you to all of you that listened to this show. Let's continue. Didn't you get an offer to sell the company for $400 million? Yeah, I did. We've made you super rich. Why didn't you say yes? You're very good at this. Sophia! Emma Russo!

Founder of 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 ID 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 10 cents 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.

Sophia, take me back to those suburbs in San Diego and give me your earliest context. Wow. I was born in San Diego at Sharp Memorial Hospital. Only child, eternally an only child. I think wound up having the personality of 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 till 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, 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 what 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 or they're 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 back seat alone and I just remember like the silence and the the light of the street lights like washing over the car just in in silence with my parents in the two front seat um 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 to beg to go to a boy's 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, you know. What about money? 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 a salary. And my dad's dad owned 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. know 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 um to i guess entertain 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. You know, I looked at teachers and thought, wow, you know, you have domain expertise, you know some stuff, but I can tell that like, you're morally bankrupt, and I don't trust you. And why have I been put in your, you know, 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 onion, examining myself, but also a 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 but 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 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 that's naughty don't do that no no like that's not how you do something or why why'd you do it like that or can you not or you know i mean i love my dad and and he's you, 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 ya. You seem to become a bit of a rebel, you know, from when you moved out of your parents' house for the next couple of years. The behavior looked really rebellious.

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 going to eat food. I'm human. I'm hungry. I'm going to 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 going to make me a better student. And it's, better student. 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 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. 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 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 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 not 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, all the other kids were cool. I came out like that. I actually came out. I came out like that. Yeah, it is not. I mean, I might have some hereditary, just kind of like Italian. I'm not sure what or something.'s not it wasn't a nurture thing that was a nature thing or i don't know i just like came out i actually hatched out of a disco ball

but that's the way that's how i came out i i had um gabble mate here who's this like i think he's just interviewed prince harry actually um in uh in a little like pay-per-view therapy session or whatever and gabo mate 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 are 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 where you were 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 well yeah just to prepare for the podcast just kidding no i have 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 how did you realize it was a real thing a couple years ago 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 kind of a dark and a little dark. 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. put on a happy face and whatever people do get an ice bath and jump in the sauna and meditate and 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 yeah you know boop boop boop boop boop's not, you know, that's almost diminishing to be like, 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 to attribute that to your parents it's that's a hard correlation to make did you ever you said a curious phrase there which made me um ponder you said i'm a little dark uh-huh what do you mean by i'm a little dark

hmm dark why are you giggling you're making me think 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 and 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're 16 oh I went to see a psychiatrist when i was like 10 i mean i was i was in therapy when i was like 10 11 with what's 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 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 mutrin and i'm not gonna take it's like an antidepressant i didn't take it i was like no i'm not taking any of this when did they when that was by high school so you were 16 ish 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 out like i think i got riddled and someone tried to buy it off me in like high school and i was like what are you what i don't even get it i was like i'm just throwing this stuff in the trash i didn't

and then so you so you get diagnosed and prescribed antidepressant at 16-ish. Your parents break up at 17-ish. You leave. I move out. You move out. I move out at 17 before I graduate high school. I was homeschooling. So I got my diploma in the mail. I thought the most embarrassing thing 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? 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 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 with a sleeping guy 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 in Sacramento and saw music. What was the plan in life at that point? Was there a plan? You know, you're like 17, 18. No, he 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 Eversh Green 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, 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 uh you know some disney character that you know ugly duckling or someone who loses you know they're 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 stripper. I was lost. I was lost. That's an interesting turn of events. Yeah 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 ten 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 some place 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 a 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 awful to me. So I'm glad I didn't find a comfy place. And it's been uncomfortable since then. How long did you try the stripping thing?

I don't know. I mean, when you're in your late teens, early 20s, 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 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 that 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 who 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 i didn't sleep with anybody until i was 19 so i was just i was I was kind of late. And by 20, I was stripping in Portland. I'll tell you the crescendo of that experience. So 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 was almost we were hardly even, you know, engaging in the way that someone might get pregnant. and then no other day yeah i'm like i don't know who's watching and uh 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 and 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 write an excuse to the court telling them why this poor girl couldn't make it to her court date and the whole thing got they were 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 gonna 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 shortcut i was trying to evade like working hard but it was also a lot of fun but that was really that was a low point it's had lots of low points um but at least it's like this right it's been like this you know doesn't it doesn't ever go that low there's clearly um 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 get along you know it wasn't like wow i'm gonna go have a career and do everything i'm i'm gonna just do everything differently. But also, I just didn't want to cut corners. I didn't want to end up not in control of my environment or stuck in jail or something stupid.

Shoplifting? Mm-hmm. Where did you make that sound? I don't know. It was fun. What was your favorite thing to steal? I don't endorse shoplifting neither do i my rationale for shoplifting was that there was so much excess in you know our culture that it would never make a dent to steal organic tampons from fred meyer which is like Target in Portland or whatever. So 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 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 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 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 & 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 bestselling books. This is in 2002, 2003. And even look at the ratio of most expensive book to least pages so I could stack them, as many of them as high as possible. front of the store would have all the best sellers and huge stacks and I would just like pile them hide 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 to 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 a month rent why 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. It's the same thing. If you're snowboarding and you're like, uh-oh, it's kind of icy.

Let me look down. You're just like, pfft, catch an edge. If you're surfing and you look at the nose of the board, pfft, right? So even that taught you a life lesson? I guess. That job also. You're surfing and you look at the nose of the board. Right. So even that taught you a life lesson. I guess. I guess. I'm not proud of this.

I was really young and I was finding my way. I never stole from individuals. That was like not on thesis for me. You couldn't justify it. No, I couldn't justify it. I would never feel comfortable doing it. But big box retailers, I was like, hmm. So by this time, you're getting a little bit acquainted with the internet and selling things on the internet, clearly, because you're selling stolen stuff. Yeah.

Vintage. Why vintage? Why did you start to sell vintage clothes yeah so by 2006 i had gotten some real jobs you know after after i'd worked in shoe stores and record stores and photo labs and subway again i dry dry cleaners i how did you get on with those jobs it didn't last very long i like jobs very alphabetized 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. 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. Is this your hernia? Yeah, the hern. The hern.

Yeah, so a hernia, if you don't know what it is, is a place, it's a hole in your muscle wall that your guts poke out of and it makes a little bump. And I had one kind of in my groin area 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 criminal at this point my job no all of your money came from that job and yeah and so there was a three-month waiting period for health insurance and while i was there i had time to, I had some downtime in this lobby and there's 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 MySpace. I wore only vintage. I was like, you know, rootin' tootin' 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 Haight 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 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, so I waited my three months for my health insurance because there was a three month waiting period. I 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 Nasty Gal, selling vintage out of my boyfriend's apartment. Before that point, would people have called you lazy or unmotivated i didn't know any people who would have said something like that because my friends were just like me so objectively then objectively i think just lost lost i i think it would be a judgment to say i was lazy I can relate to so much of what you've said especially all the stuff about authority like I just decided to stop going to school

and I was polite about it but I 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 hopping get to the bonus threshold quit gives 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 it's he's lazy well like my thesis is that everyone most people are lazy and you should be lazy for things that you absolutely hate doing like 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 i published two books after girl boss which was a thing i can't i cannot be assigned something i it either comes out or it's not there that's the do you think that's the the rebel in

you it is but it's why everything i do is so inspired and honest and i don't want to be like i'm unique but because you never accepted or learned compliance it's an actual representation of who i am and what i think and how i feel and 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 no it's a gift and a curse though 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 every single day anyone else questioned it for what do you think anyone else no no but if you really think about it it's pretty wild right

that that ebase store that you start in your free time when you're working that job you took to fix the heron um it was successful yeah and you know you kind of frame it as you saw maybe a price arbitrage or whatever but 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 a nasty girl. So when you reflect on why and how you were particularly successful, how do 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 now about that bell again in school where you were like analyzing the bell

where 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 we do it that way has been part of the reason why that ebay store was successful i I think so. I think most people that started an eBay 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 copywritingwriting with great styling and 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 saundler on just misspelled

you know but even that's first principle thinking that's like you've got a convention on one end which says just like do what's being done and then you've got these like first principle thinkers who kind of think first about what they know to be true and they're really good at filtering out convention they can kind of see through it at the truth whereas convention like is safety it's comfort it's it guarantees you a pre-tried blueprint so people follow that but then these other little rebels they they have this almost inbuilt ability to just like fucking see through to that 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 why photography really, really matters. On eBay. Yeah, on eBay, which a lot of people wouldn't have had. 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 hippie, dippy and vintagey. And mine was vintagey, but it was like very hippie 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 uh in the 70s put out some incredible records was married 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 i wouldn't have survived i would have been dead in the water speaking to something really interesting now which is like this balancing act between naivety which is great for innovation and then convention which is great for

staying alive like i'm talking about like the the nasty girl meeting a cfo yeah you see what i mean or like that's what how i feel when being a young founder 21 years old start 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 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. Nasty Girl 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 the 7 000 square foot warehouse which i thought was the hugest thing and i was like when we hit 150 000 a day god was it a day it must have been the holidays i was like i'm gonna 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 he jumped on it the legs like that's what you wanted and in between you you know, on our breaks, we got to jump in the bounce house. I was like, 23, 24 years old. It did happen really quickly. To be fair, now you say it. When we raised investment for the first time, the first thing I bought was a 13,000 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 naivete. I paid off my mom's mortgage. Oh, did you? I couldn't do that with investor capital. No, it wasn't with investor capital.

No, it was the first time I made money. Yeah, my slide was with investor money. Okay, yeah, no, no. They actually, those investors did really well. They got bought out within six months. So they got a big return. Good job. Yeah.

What do you attribute at such a young age? I'm just going to interview you for a second because you couldn't have had a ton of experience under leaders to give you a model of what leadership looked like. You were naive. You know, could you, I couldn't empathize with the people I was managing because I had never experienced leadership and I just showed up and I did what I what needed to happen and what I said I was going to do I didn't understand that people needed to be held accountable because I held myself accountable especially c-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 I think I messed up I think like for the first two years I hired people that were very very inexperienced i reflect and i go i think i did that because i thought they

were easier to manage and i couldn't fathom the concept that i could hire someone who was two times my age and three times my experience and a they'd want to come here and be with us with with our slide and dogs and tree and basketball court and ball pool and they would like take us seriously but also like be like maybe there was an insecurity about how i'd manage them and so what ends up happening is you hide lots of like young people you know i remember the bbc did an article saying is this the youngest company in britain because i think we were like somewhere but our average age was maybe 20 or something and we had like we had like 100 almost 100 people you know and you feel

the strain of that you feel things breaking you know 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 um and then at some point an adult enters the room and you go oh i get i get this and so we hired some some really really great people and the great thing is great people hire great And so we hired some really, really great people. And the great thing is great people hire great people. So we went from being this kind of very lopsided and experienced 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 TikTok or whatever. And you also need to hire someone that's maybe much double their age, experienced in client services and understands the old rules of the game if you understand both games you can understand the

game of the future i think so um made a lot of mistakes and when i nearly went under several times and had to call people and beg for money um in the lead up to payday but somehow managed to survive but going back to you now um 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 and they're 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 didn't i'd never eaten an oyster you, I was drinking like Budweiser

and still like 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. $50,000 in revenue. The next year did $1.1 million. The next year did $6.5 million. The next year did $12 million. And I was coming off a $12 million a year revenue, owned 100% of the company, had a bunch of kids working for me. And that's when Venture Capitalist 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 by greater breadth and depth in things I knew they would love. And that's what 2011, 12, venture capital comes in. 2012 was when Index Ventures invested $60 million. $60 million?

On a $350 million valuation. On a business with a $28 million run rate. Yeah. You were profitable at that time? Mm-hmm. Significantly? Pretty significantly. on a business with a 28 million run rate yeah you were profitable at that time significantly pretty significantly i have a 10 or 20 i don't know i don't know i didn't even look at that i was i i never had to learn to read a pnl because my company was profitable and i just you know generally knew how much it cost to run i didn't it and i and i didn't i didn't buy expensive office chairs did you did you know

your like gross margins on your on the products yeah on the operating margins no i don't i don't think i didn't understand what operating margin was um pretty incredible that you can be running a business that's generating it has a 28 million dollar 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 dollars into the business and things got a lot more complex and a lot less profitable you talk about the 60 million going into nasty gun in 2020 2012 what did it break i, we no longer had to live within our means. That's what investor money does unless you maintain profitability and keep that money in the bank for, you know, another time or pocket all of it as a founder. We, you know, I had hired a coo at that time i had a top tier investor on my board

and very little like historicals data financials to base the future growth on but it had been exploding just continue to be exploding. 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 grown-ups 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 a hundred

million dollars this year. And someone put a plan together and this is, we hired a hundred 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 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 point in terms of what's going on around you 60 million dollars has just come into the bank account you're looking at it thinking that's a big fucking number you're you're you know because you have a valuation of 350 yeah i'm worth 280 million dollars on paper at this point so that 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 yeah in your bank account how 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 um 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. 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 at 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 just like oysters for everybody. Finally,

you know, I got better taste in wine. I got better taste, period. Thank God. But now I spend less money with a good taste that I had to spend a lot of money to acquire a lot of my own but did you feel did you feel like it made sense like the the image that's been that had been built of you at the time that the world is now like oh my god is that what was going on inside? I think it made sense. I think it was a freak show. I was a community college dropout who bootstrapped a business to $28 million in revenue,

super profitably. Investors came out of the woodwork. 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. Imposter syndrome. Any of that?

For sure. Yeah. I mean, I still walk in rooms and I'm here. I was talking to your team and I was like, oh my gosh, you guys have really big people. I hope I can keep up. I say like a lot. I'm intimidated. I hope I can provide some value. What are the comments on YouTube going to say? Is this going to be a valuable conversation? I really hope people like it. And she was like, what? You wouldn't be here if that wasn't the case what what are you

talking about you're great but I get nervous right um I get nervous on stages and I'm still like you know I don't 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 is I snuck in the back door. I don't belong here means I can do things differently. 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 press 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'll buy something else to save on 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 like a decision making framework to help you navigate the two voices in your head it's funny because when you're describing your mother and your father it felt like those were the two voices your mother would seem It's funny because when you're describing your mother and your father, it felt like those were the two voices. Your mother would seem to be very supportive. Your dad somewhat critical at times or pessimistic. Have you found a way of being able to juggle those voices so that you can make decisions decisively and quickly? No, no, no. So I can, I can have these conversations. And when I you know, navel 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 how you inherited that and it's all directly correlated and basically graduating from your 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, and 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 for my most recent relationship. And so that's a strange thing. 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 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 were crazy because I'd 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 didasty Gal 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 Girlboss 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 I was like 27. And then there was the me whose company fell apart,

the CEO. There was the girl boss who had built a toxic culture or just no intentional culture at all that like warped into something that wasn't perfect but wasn't, still don't think it was the worst. 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 Gal. 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, changed 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 Girl goes under Nasty Girl goes under thenflix comes out so the show had been shot when things are all

like 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 dollars a year you know not profitable anymore but a great brand and something that was valuable and eventually um yeah like fell apart and that the there was really a conflation of the the hero the failure and now this girl four months later who's a caricature of a person i was when i was 22 in a scripted comedy playing someone named Sophia starting an eBay store called Nasty Gal when for the first time in 10 years in my adult life since I was 22 years old I am no longer associated with the thing that I had built and now there are 130 million homes in 195 countries watching a story of someone that I was no longer and no longer trying to move on 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 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. Five hundred thousand 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 Girlboss were refreshed that I had face planted publicly because everyone else is face planting in private. And in the same way that watching some random community college dropout from Sacramento start a business with an Internet connection and a computer gave them license to, you know, yes, they were inspired, but also embrace their own failures because the hero face planted publicly. And that can also inspire people. This is hopefully the most cliche question I ask, but I want to know, because you have, 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 has corrected your hypothesis so when you if we go back and think about that fundraise for example um a lot of people will hear that you raised a company raise investment at go back and think about that fundraise, for example, a lot of people will hear that you raised investment at $350 million and think, amazing. That's when people clap, right?

They get the champagne out the oysters. 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 our big valuation hurt yeah yeah i think the 350 million dollar valuation is celebrated as it was and how wealthy i was on paper um was the was the nail in the coffin i think it was it was then in 2012 where we were overvalued and the expectations that was was that the next round of fundraising that we do is at a over a billion dollar valuation. And so the company is doing, you know, on an upswing to twenty eight million dollars in revenue. That's like over 10 times revenue.

And it's a fashion business. This isn't a technology business. This isn't Uber. This isn't an infinitely scalable marketplace. 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 imploded and won King's Lane and Beachman and 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. Indexed ventures, which are phenomenal. I was like, you're awesome. You 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 in 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 lurking below the surface that were dynamics that were already happening that because everything was going so well, 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. I had 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 something's 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, cattiness 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 an offer 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 why didn't you say yes i went to my investor and I said, what do you think about this?

And he said, you need to ask for more. I controlled the board. I owned, you know, I own the majority 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 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, it's a partial regret, but I also know that no deal

actually happens. They're not a, 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 earn out based on them, you know, controlling it and me trying to hit performance benchmarks, even if I had sold the company to them, who knows how it would have played out. I would have made a bunch of money.

My life could have been miserable. But 99% of the time deals fall through 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 a look into the data room and due diligence yeah and then copy a lot yeah exactly yeah so we didn't get that far. I don't regret it. But yeah, that was a big thing. You know, for me, that would have been a lot of money for him. It was just a teeny tiny bit more than what he had paid for it. So that's not a lot of it's not much of a markup for him. you're giving now to 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 um you know like i think i can think of the first piece of advice that i give young founders when they come to me i'm wondering what your like first piece of advice is i think for

bootstrap founders the advice would be. 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 is 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 an investor pays, the more ownership the founder has. The more they're worth, right? The more they're 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, you're in much better shape than raising 350 and owning 80% of it and going to zero or whatever. And I think where things are right now with venture is a place that is close to that. And founders aren't greedy. Founders who are raising money in this market know it's really, really hard. They don't want to be overpriced because the people who raised money over the last few years raised at such a high valuation, these founders, nobody's going to reinvest in them. They've blown through their money. They thought they were,

you know, they're on an upswing. Their company might be doing 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 Marys. Two of them have figured out how to survive. One's like, we have another term sheet. I mean, I've been there. What about the psychological advice you'd give to a family? I would say to listen to your gut. You know, there's going to be a lot of voices around you. And there are people who know more than you and have experience. And you should listen to them, but you should also always maintain and continue to cultivate a voice that when you know it should 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, um, and, 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 over the last, since you first started that store on eBay? Is there a day you look back and go, do you know what, 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, OK, 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 I felt like I was like hallucinating you know I like went to a hotel for a week I couldn't be in the house it felt like a crime scene with his stuff around and um yeah three a whole a whole week at the beverly hills hotel with three poodles is quite the scene with um yeah chain smoking in the courtyard and

bathrobe has that experience put you off being a ceo of a big company i mean ever yeah everything i've experienced has put me off from being the ce of a big company. I'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 fund.

You have business class. Business class. but what what happens say business class what happens if it becomes globally you know globally successful then you're back to being a big ceo again though where 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. But I have two courts a year. April, I'm launching it and I launch in the fall. And it's an incredible product, but it's also something that is relatively self-led for the students. It's eight hours of video and 300 pages of worksheets and over 60 hours of interviews with me like this with entrepreneurs. And, you know,

students get lifetime access. So, you know, they can take it over the first seven weeks, they can take it over the course of a year 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, you know, whatever Zapier 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 post in the lounge, which is our community. But you're intentionally keeping it. That it no yeah i'm playing i'm 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 it's a 10 million dollar fund what i

get to do is not run a big company and keep trying to apply this stuff that I've learned over, you know, over time, I get to go from zero to one over and over and over again with early stage companies. And out of fun, I get to be in the weeds. If I hired a bunch of people, I they don't want me to be in the weeds. Executives don't want you to micromanage, but I get to look at all the decks and I get to text the founders and say, here's what I think you should do. I can be helpful. And it's so rewarding to harvest all of my hardship on behalf of a new generation of founders and help them see around the corners that I wish someone had shown me around. And I get to keep my firm small. Even if I have a $50 million fund, I can do that with a few

people. And I'm using the assets that I have. I'm the product, my relationships and my network and my access to deal flow is my product. My expertise and ability to help founders is my product. Million social followers and being able to amplify them is my product the engaged community i have who's interested in the kinds of things i'm investing in will actually use them is my product and i don't i'm just it's right here and it's an air table the intentionality is what i find most surprising um inspiring because so many people get dragged by the temptation of like external expectation. If it's great, business class is great by all accounts.

I've 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 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? Yeah, no, no. I, I have had the privilege 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 spent 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 when 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 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 I 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 what is that yeah i mean you can call it magical thinking 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 chasm between whatever and the Holy Grail,

and he has to trust that there is 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 trust that when he walked across that, he wouldn't fall. And so I see magical thinking as 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. Your question is unfortunately not the hardest question in the world. I really wish you'd been given a real stitch up one um 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? No. 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.

I'll be 39 in a month. But I think like finding that and hanging on to it. Like what is that? What is, is there some big meaningful thing that I'm going to find and cling to till I die? You know, and 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, 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 um inclination to be on open and honest and vulnerable um you're incredibly inspiring in the stories you tell in the way that you tell them so thank you so much it's a real

honor to meet you and I'm I'm equally privileged that you said yes to come and do this because oh my gosh and I mean that I'm not gas i'm not just like gassing you up or anything i mean no no thank you you're superb i can't wait to see what you do with both trust fund and business class because um 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 um amount of intellectual leverage and firepower that makes for a great fund um founder so i look forward to seeing what you do there thank you you