0:01
[Music] Safia, welcome to the show. Thanks for having me.
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0:07
Let's start at the beginning.
0:09
So, both of your parents, as I understand it, never work for a salary.
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They were kind of work for a commission.
0:15
And that seems to have been, from what I've read, like a a kind of culture in your family that you've got to go out there and hustle and and kind of make make your money by hustling. Yeah. Is that right?
0:23
And do you think that is a big part of why you became an entrepreneur?
0:26
Yeah, I think it is right.
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I don't My parents weren't like, "Wow, you should be an entrepreneur.
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We really think you should start a business."
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And neither of my parents necessarily started businesses.
0:35
You know, my mom sold homes for a builder and my dad did loans and worked with like new home developers and stuff like that.
0:42
Um, but they never worked for a salary.
0:45
And, you know, there were ups and downs financially in my family.
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My dad's dad owned a motel um that he grew up on with like seven of, you know, the kids.
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So, um, he comes from a really, I don't know, kind of like you have to pull yourself up by your bootstraps kind of, uh, environment, even though he never quote unquote bootstrapped a business.
1:09
Um, and I think, you know, for me, I never really belonged.
1:12
I guess there was no career path that I was really drawn to.
1:18
Nobody really explained to me what a career was.
1:20
Um, and that was definitely a disadvantage when I started employing people because I had no idea what they needed to be successful.
1:26
Um, and just kind of landed in entrepreneurship very much accidentally trying to avoid working for other people or working period and then I became a CEO and the rest is history that I guess we'll talk about.
1:41
So it's interesting that that does seem to be a common pattern amongst very successful entrepreneurs like you of school years just really grating against the idea of these rules which seem so arbitrary often applied by people who you may not feel uh should be in charge of you. Yeah.
1:58
Let's fast forward a little bit to your later teenage years, early 20s.
2:04
Reading up on you, it sounds like you had all sorts of wild adventures and got yourself into all sorts of scrapes. tell us about them.
2:11
Tell us about the the the fun as a as a late teenage year person and and what lessons you learned from all of that. Totally.
2:17
I mean, I hated high school and so I homeschooled in the later years of high school and actually moved out when I was 17 before I got my diploma, moved into a closet for $60 a month. A closet? A real closet? Yeah. Yes. Like under some stairs.
2:35
like you couldn't stand up in it, but I put like a sleeping bag down and I got like a carpet remnant and cut like cut it to fit.
2:43
I think actually it it like you know did this.
2:45
It wasn't like perfectly cut.
2:47
You literally slept in a closet. Yeah. Wow. Yeah.
2:49
I was, you know, I didn't really want things.
2:55
You know, it wasn't until I guess I could afford things that I wanted things or had any taste level or I'm not really sure.
3:02
Um, but that's where I, you know, went at the end of high school.
3:06
My parents had divorced when I was 17 and my mom moved to Oakland and my dad was like figuring it out in our family home and it was just not a happy place.
3:14
So, I did that and then I moved to Olympia, Washington.
3:17
I was just very I was still angsty but very much like an anti- capitalist.
3:22
I like in high school I went to the anarchist book fair in San Francisco every year.
3:27
Um, why why were you anti- capitalist?
3:31
cuz I didn't I just didn't want to be a quote unquote quote wage slave.
3:36
I didn't want to spend my you know I thought that work was you know submitting to the 9 to5 and then having these like whiffs of freedom you know between you know on weekends and that you spend most of your life working.
3:49
I've spent most of my life working now, which wasn't my goal, but I've aligned, you know, naturally kind of like aligned the things that I'm curious about and it got me very far because I was interested in them and, you know, there's times it felt like work and times it didn't feel like work.
4:04
Um, so I moved to Olympia, Washington, did a bunch of like goofy hitchhiking um up like up and down the West Coast in like big rigs, so those huge trucks and um had a lot of fun.
4:19
Um, but at a certain point I feel felt like, you know, I'm going to age out of this.
4:23
I was just like I got caught stealing actually. I was Oh, yeah. Yeah.
4:29
And so that was when I was like, you know, Yeah.
4:32
I was like, I don't want to I want to be in control of my life.
4:34
And if I'm doing things that break the law, I'm actually doing the opposite of what I want.
4:41
So, it wasn't like I'm going to go play the game now, but it was just like I'm going to go get a solid job at a photo lab and a, you know, then a record store and then a shoe store.
4:50
I didn't know there were careers beyond like retail.
4:54
And I thought that people worked in business were like corporate slaves and um squares and they all carried briefcases and just like you know and that's just like a very simplistic view but I had never you know seen what it's like to really be in a workplace.
5:13
And then I was 22 and again still like working these goofy hourly jobs.
5:20
And my last job was in the lobby of an art school um checking student IDs.
5:25
And so the job was just sitting there and if someone walked in I'd say like hey can you sign in? Can I see your ID?
5:31
And I'd be like admissions is on the second floor. And that was it.
5:34
That was the entirety of the job. But I had a computer. Mhm.
5:39
And I was on MySpace at the time and I started getting friend requests from eBay sellers who were selling vintage and using MySpace and you know had a profile and you know each week like announced like new listings.
5:55
You know you could publish this kind of stuff on my state myspace and you know went and clicked through.
6:00
I wore entirely vintage at the time.
6:02
I just liked it more for whatever reason.
6:04
and my jacket's vintage, you know, and that you bought offline or online back then.
6:11
I bought it all offline, you know, there wasn't a ton of online shopping.
6:13
There were there was eBay, the marketplace, and then there weren't a lot of like small businesses opening, you know, ecom shops, selling vintage or clothes.
6:20
It was very much like big retailers, you know, eBay, Etsy didn't exist. So, this is in 2006. Mhm. and was like, "Oh, wow.
6:31
These auctions are going crazy."
6:34
You know, it wasn't like, you know, place an offer kind of eBay.
6:39
I don't even know if that was there at the time.
6:41
It was auctions only and they would start the prices at $9.
6:47
99, which seemed I mean, I could buy things for less than that. Okay.
6:49
But, you know, a girl in Copenhagen, a girl in Australia, you know, maybe the dollar's strong in, you know, some European country and for them it's a lot cheaper to buy it from the US.
7:00
And um, you know, the auctions just like went crazy.
7:06
And the prices I saw were like way beyond what I had ever seen vintage go for. And I was like, cool.
7:10
I've got I had like the dome, you know, iMac. Yes.
7:17
and um you know got some vintage together and like created my account and named it Nasty Gal Vintage and put my first listings up and they didn't sell right away, you know, it took me a while to learn what people wanted and that's like a whole another story.
7:35
But and you're doing this from the job where you're checking people's ID and you're like sitting there on the side selling the stuff on eBay.
7:42
No, I actually quit that.
7:44
I got that job because I needed health insurance. Okay.
7:46
And in the US at the time, if you had a pre-existing condition, I had a hernia.
7:51
You couldn't get individual health insurance.
7:54
The only way to get it would be group health insurance.
8:01
And so I got the job at this like pretty corporate art school um in San Francisco.
8:06
And you know, had to wait 3 months for my insurance benefits to kick in. Uh got my hernia fixed.
8:11
got my sal, you know, surgery done and, you know, paid $50 to Kaiser or something and then was like, I don't know what's next.
8:22
And, you know, was kind of bouncing like living with my boyfriend at the time and then was like, let me let me see if I can make a few bucks on eBay so I don't have to work for other people and that was it.
8:32
I was just trying to evade work.
8:33
How quickly did it start to really work?
8:39
I mean, I'd say I learned a lot just watching other sellers.
8:41
I didn't do exactly what they did, but it's not hard to reverse engineer something as simple as selling things on eBay and seeing what works and what people are bidding on.
8:50
So, I'd say like probably a few months before I started wasn't exploding yet, but I was like, "Okay, this is solid."
8:58
"Okay, this is solid." and you know my customers came back and you know I'd see the same name and you know address of someone who had won an auction and you know started growing the myspace audience for Nasty Gal Vintage and this
9:14
was you know before Facebook ads and you know what what they've built you know their entire business on but I had this bot that I this like illegal bot that I downloaded somewhere And at the time like you know you could scrape people's MySpace profiles. They
9:33
They were you know all of that data was just whatever like HTML on the web.
9:38
It wasn't like something like Instagram.
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And I would type in their user ID number on this bot and and I like say it's like a magazine like a cool fashion magazine that I know my customers followed.
9:50
I could type that user ID in and then even drill down as far as ages, countries, like and then who they who they were friends with.
10:02
And so I was able to do like really targeted marketing and the thing would sit there and add friends.
10:09
And every like 10 or so I would have to sit there and enter a capture code to prove I was human and then it would add like another 10 friends.
10:15
And I would just sit there for hours having this bot ad really qualified people on MySpace.
10:24
And I don't know if I had like 30,000 or 60,000 friends or whatever they were called on MySpace um by the time I left, but MySpace was a really big engine for Nasty Al.
10:35
Um and that kind of approach to growth hacking presumably was something that no one else running an eBay store was doing. Probably not.
10:42
And how do you reckon you were someone who figured that out?
10:47
What was it about you that did something like that?
10:49
But then also the brand that you created was just kind of like fire compared to a lot of cuz the rest of the sites back then who were doing something similar were all quite kind of uh not very exciting. Put it put it like that. Yeah.
11:01
I mean they would sell stuff that people loved but it was all very kind of hippie- dippy vintage.
11:06
And I I would call myself a punk.
11:10
Um maybe still, but at that time my references were just really different.
11:16
You know, I was into, you know, this woman Betty Betty Davis who has, you know, made incredible funk music and she was, you know, married to Miles Davis for a while and allegedly like too wild for him and her lyrics were, you know, really edgy.
11:30
And so I named Nasty Gal after an album of hers and also a song on that album.
11:35
But I was like, I'm just going to do it differently.
11:39
And it could have either been, you know, it wasn't, it could have been like, ew.
11:44
But it was it was sticky.
11:47
And I think, you know, my mom's my mom writes a lot and gets paid for it.
11:50
Later in her career, really started doing that and wrote for the new local newspaper.
11:58
And so I think words have always been really important to me.
11:59
and naturally just kind of became a copywriter who, you know, the way I wrote things, whether it's the eBay listing or the description of the product or, you know, that week's update, um, and or like my, you know, MySpace profile, what what didn't really exist that exists now, and there's agencies that do it all day long, is like a brand that feels like a human, like your friend is talking to you.
12:28
And what I created with Nasty Gal, I don't know how, was, you know, this this kind of world that a woman could see herself kind of stepping into and being like one degree ahead of where she was like slightly cooler, slightly more sophisticated, slightly more stylish, but not to the extent that I'm alienating her.
12:52
And so, you know, I didn't just dump clothes on a model. I styled it.
12:57
and she had a handbag and sometimes sunglasses and she was like there was movement and she was going somewhere. I wasn't a photographer.
13:02
I wasn't a trained copywriter.
13:04
I wasn't a trained merchant.
13:07
You know, there was none of those things, you know, were anything that I had learned formally, but just, you know, presented it the way I would have wanted to see it.
13:19
Um, and just kept iterating, right?
13:23
just kept iterating, right? like I was not in a place where someone handed me a business like a venture capitalist um and said like okay like here you go here's some training wheels like go iterate but you might run out of money like there was no there was no way for me I couldn't run out of money you know I didn't have a lot of overhead but I
13:45
was like if I'm going to do this I have to sell things that people want and sometimes there were things that I would never wear okay you know it wasn't about my style, you know, I I, you know, imbued everything with a personality that was very much mine and very much a brand, but it was never like about me because the whole idea is that you're selling things that people want to buy. And there was no, you know, back stop
14:10
And there was no, you know, back stop for me had I tried to do something that didn't that people didn't want. Like that's it.
14:18
You create something that people want and you keep listening, do a better job. Yeah.
14:21
and you find product market fit, which I guess I did, you know. Yeah.
14:25
And the name, you know, comes from this very inspiring, empowered punk woman and and you know, this kind of I guess very cool but ultimately feminist vibe going on there.
14:38
Was that something do you think which really resonated with the customers or was it more just you know you you you created something very cool or was there an element of like people were buying this stuff because they bought into that philosophy? Yeah.
14:48
No, they absolutely bought into it.
14:50
Like Nasty Gal was a feeling.
14:52
Like if you bought a motorcycle jacket from Nasty Gal, it was emotional.
14:56
It was like this is a promise to my more confident self.
14:58
It was way more, you know, than a jacket.
15:01
And you know, if an order was late or we shipped the wrong thing, it was like your best friend had you betrayed you.
15:11
It was the level of excitement of getting a package from Nasty Gal was, you know, beyond I think almost any brand that probably like it was it was a phenomenon.
15:23
Um, and that was really cool, you know, and it, um, I think by its own nature, just kind of being there showed people a level of confidence and um, uniqueness, individuality, permission to be themselves in a way that hadn't existed in the same way, at least online.
15:47
Um, was that a big motivator for you? What was your purpose? Was it that?
15:51
Was it getting a real kick out of that empowerment? Was it money?
15:54
What was driving you on to make this happen? It was money.
15:59
Not like I wasn't making a ton in the beginning, but it was just like I cannot work for other people.
16:03
And it was like this is fun. Oh my gosh.
16:05
It was the first time in my life where if I did a better job, the results were better.
16:10
Like you work in a lobby, I was like, I'm not I don't want to be promoted.
16:15
I don't want to manage people.
16:17
I don't even know what that means.
16:18
you were in a record store, it's like, "Wow, I'm going to be the best clerk in this record store."
16:21
Like, if I did a better if I did a better job alphabetizing and filing things and putting a whatever sticker on it when it came in, the result wasn't different.
16:32
So, I did kind of bare minimum in the hourly jobs that I had, but it was the first time I'd applied like my like talent or intellect or curiosity in a way where okay, I watch, you know, adapt.
16:46
Oh my gosh, this auction went higher or you know there's more people bidding on it or whatever it is, you know, and so that was just really gratifying.
16:55
Give us a sense of how quickly that happened.
16:57
How quickly did it give us an idea of some of the numbers and scale of speed of this thing. Yeah.
17:02
So the first year uh Nasty Gal did I think 75K in revenue. Okay. And it was just me. But I didn't spend it.
17:09
I didn't I mean I just ate burritos and like Starbucks chai.
17:11
I didn't I didn't want anything.
17:14
had like an 87 Volvo and was just spending my time in thrift stores and at estate sales.
17:19
So, I guess I kept the money in the business.
17:24
And the second year was 250K. The next year was 1. 1.
17:28
Then it was 6 and a half.
17:31
And then I think it was like 12 and then 28.
17:33
I have the original deck that I presented to index in 2012. Index ventures.
17:38
You became the first venture investor, first outside investor in this business. Yeah.
17:41
And so started Nasty Gal probably December, November, December of 2006.
17:46
And by 2012, I had raised $50 million on a $350 million post money valuation. Wow.
17:54
And before that happened, the the revenue numbers are just surging.
17:58
At that point, are you feeling like you've won?
18:00
Are you feeling giddy from the just incredible success of what you've built, which is extraordinary from nothing?
18:06
I think so, but I just I hadn't had a lot of recognition for it. I was just doing my job.
18:13
Um, was it strange to you?
18:13
Was it kind of, you know, having been checking these ID cards, a very short time later, you're running this business which was turning over $28 million. Yeah. I mean, I was clueless. I started hiring people.
18:26
I mean, before I had raised money, I had a COO for a little while. I'd hire an HR person.
18:30
There was no gusto or just works, you know.
18:34
It was like, you know, everything was very manual and rubbing two sticks together and, you know, had to hire a guy to process returns and someone to ship things and I had done all those things.
18:45
So, it made it a lot easier, I think, when I started hiring people, at least for the essential things to get the job done at the time.
18:53
I was able to train people on my voice and customer service, you know, hi, of course.
18:58
Not sure, you know, don't call it sparkly, call it call it glitter. I don't know.
19:03
just stuff like that that I remember, you know, sitting with people who eventually wrote product descriptions or answered customer service inquiries um or shipped stuff and like here's how you slap a label on it, whatever it was, I had already done it, which made that easy to kind of hand over to other people.
19:19
I think the styling, photography, editing of the photography and yeah, that and and buying like curation was something that I held on to for a long time.
19:29
like that was the thing that I was had was in most in the weeds of for the longest time until I hired like a creative director or something.
19:39
But I think I think I was really excited about it, but I just didn't I don't think I had much perspective.
19:45
And I was like, you know, it was definitely holy You know, I remember in you know, one holiday season uh we were doing in like a day what we were doing, you know, the month a year prior.
19:59
These are all like kids in their 20s that are, you know, shipping stuff and we're all doing like, you know, manual pretty basic work.
20:07
I remember being like, "Okay, if we hit these numbers, we're going to get a bounce house and put it in here."
20:13
And it was like this bouncy castle. Yeah.
20:15
But it was an upside down horse.
20:17
So when you jumped in it, the horse legs kind of like moved around and the head like bobbed.
20:25
It was I think I might have a photo of it somewhere, but that was, you know, so they'd ship packages and then go jump in the bounce house and rented it. Phenomenal.
20:32
It wasn't there forever, but that was my idea of like a company park. Amazing. Yeah.
20:36
It sounds like you were having great fun. It was really fun. It was the most fun. Yeah.
20:41
I mean, I got to buy all the vintage.
20:44
I didn't keep any of it for myself because I my job was to sell it. Yes.
20:49
Don't get high on your own supply. Exactly.
20:51
What were you most proud of with Nasty Girl?
20:54
I think the way it influenced women and their level of confidence.
21:01
I wasn't like, "Wow, I'm going to create a feminist brand."
21:04
But, you know, I think um being yourself, which I was being, gives other people permission to be themselves.
21:13
There was a CMO, was like the CMO at Patagonia, I think, that said to me a long time ago that the best brands give people permission to be themselves.
21:22
Um, and a lot of women identified plus+ with nasty gown and were like, "Wow, you know, I could see myself being as cool as that model." She's not too pretty.
21:34
She's pretty, but she's friendly, you know, and she's done like alien luxury kind of, you know, runway model.
21:40
So, there's a lot of things where, you know, I met the customers where they were and then challenged them enough for it to feel aspirational.
21:51
I want to come back and talk in depth about the effects on women of both Nasty Girl and Girl Boss, but you mentioned their uh index ventures and venture capital.
21:59
And so that feels like a kind of cru couple of crucial moments where they came in um invested a very high valuation, you were profitable before, then you get kind of flooded with venture capital money and not long afterwards things take a turn for for the worse.
22:15
I guess they also I've I've heard advised you not to sell the business for $400 million. Yeah.
22:19
Um so two kind of pivotal moments.
22:22
You're a venture investor now.
22:23
I I obviously uh co-founded giant a venture firm.
22:26
So we I I assume both believe that venture capital can be a real force for good.
22:32
But it but it's not right for every business.
22:34
And how do you look back at the involvement of of venture capital with with your business?
22:38
I mean it completely changed the business like overnight.
22:41
I no one had ever set expectations for my business before.
22:43
I hadn't really set expectations.
22:46
It was like, "Yeah, cool. We'll hit this number."
22:49
But I was just knocking out of the park.
22:50
I didn't even know how fast it would grow.
22:54
And I was just trying to keep up with the demand.
22:55
So, it wasn't like, "Great, we're going to hire 50 people and accelerate growth and invest in this."
23:00
It was like, "Oh stuff's selling out.
23:03
Let me go buy more of it." And it kept selling. It was pretty simple.
23:06
Just buy things that people want.
23:08
sell them for more than you paid for them and don't spend all the money.
23:13
That's how you build a profitable business.
23:14
That was literally all I knew. Um and index came in. Yeah.
23:16
And plowed 50 million into it.
23:20
Um I took some money off the table.
23:23
So the first money in was out of a growth fund. Okay.
23:25
Um and at that point it was like I owned 80% of it after I raised $50 million, which was kind of wild.
23:34
Um, so on paper I was like worth a lot of money, but again I didn't even I don't know.
23:38
It was It changed my life. Yeah. Very very materially.
23:43
Um, I think I was like I was like 27 or 27. Yeah. Wow.
23:46
And and on paper at that point you're worth like $300 million. Like 280 or something.
23:51
And then you know the expectation you know I brought in like a whole suite of seale executives and a chief people officer and a CTO like there was no Shopify.
24:02
like we had to build our ecom site in like cold fusion.
24:07
I'm not you know an engineer but was like at that time it was even like ancient technology.
24:11
Um had to have a whole product team to just build a regular shopping app.
24:16
So it was it became a really expensive enterprise and you know I remember sitting at a table with Danny Rhymer and the COO I had hired at the time and it was like okay we're doing 28 million this year did like I don't know if it was six or 12 or I mean it could have been more.
24:37
The deck I looked at that I presented them was actually the growth was bigger than I've feel like I've been saying on podcasts for a long time. Just like all such blur. Yeah.
24:48
Um and so we rounded up by 100 million.
24:50
I was like these are like grown-ups that have built business.
24:53
You know Danny hadn't built a business but he's seen you know the you know insides of enough businesses to where I was like okay these people know what they're doing.
25:04
And you know of of course he does.
25:06
And he was your investor at Yeah, he was my investor. I had one board member.
25:10
I had two seats and he had one and the other one of my seats was empty. Okay. Almost until the end. Yeah.
25:15
Which wasn't a good choice. Okay.
25:17
But we sat there and rounded up by 100 million and then your forecast. Yeah. Okay.
25:22
Just round just that was it like based on I don't know explosive growth but and then it was like okay well to do that we need to hire I don't know 100 people.
25:33
Um, and I was really illquipped to run a to hire a hundred people, right?
25:40
And, you know, to build processes and, you know, it just became this kind of like, you know, Tower of Babel cluster of, you know, people showing up and, you know, duplication of efforts and people bumping into one another and it was just not something I was like able to manage.
25:59
It was a really good recruiter and everybody wanted to work for Nasty Gal.
26:03
I could imagine Um, but it was a major step change and that's usually a good word, right?
26:08
Um, in the business and the expectations of me as like a CEO and a leader and I have to get up and inspire people. Like I'm an introvert.
26:16
Like I have a personality, but it's not my nature to get up and like rah rah like I cannot put on a smile unless I actually think something is funny. Yeah.
26:26
Um, so I had no idea what leadership was.
26:30
Like I kind of understood management, but people needed to be told what to do, inspired to do it, and then told what to do, even sea-le executives.
26:42
And then I had to make sure that they actually were doing it.
26:47
And I was like, I'm sorry.
26:47
You know, these people have had careers for longer than I've been alive, some of them, you know, 25 year veterans, whatever.
26:55
And I thought they'd show up and diagnose the business and all work together and you know figure out a plan and you know grow the thing because they had you know built other companies and built teams before and that wasn't necessarily the case.
27:10
I didn't always check in and okay well you said this is going to be two months and it's like this person's paid like a few hundred grand a year.
27:18
Just do what you say you're going to do.
27:20
I show up and do what I say I'm going to do.
27:22
I do what I think the business needs and I don't have any other choice.
27:27
But I had never, you know, been an employee and I had no example of what leadership looked like.
27:34
So I had absolutely no I guess I want to say empathy is tough.
27:38
Like I I can't say I didn't have empathy.
27:40
I don't know what the word is, but I had no playbook for what my job had very quickly become.
27:44
Did you feel at the time like you were losing control? No.
27:51
which is probably the problem. Okay. Yeah.
27:55
I mean, I didn't really see under the hood until late, you know, later on.
28:01
How do you look back now at the decision not to sell the business for $400 million and the advice you got around that?
28:06
Urban Outfitters um isn't historically inquisitive. Okay.
28:12
And I think whatever the deal would have been I think integrating the company into their I mean family business really um would have been really challenging and I 99% of deals just don't get done anyway. Okay.
28:27
So I you know I don't want to be like wow 100% that would have happened and God I regret it so much.
28:36
It's an example of me taking advice from people who I would say are greedier than I am and have LPs to answer to and would rather lose the money than mark it down or just hold it a cost.
28:45
Like I didn't know I didn't know they had bosses. Yeah.
28:49
and they had to go put on a you know you know a you know annual kind of AGM um for their investors and be like rah raw look you know if they had had to mark Nasty Gal down or sell it at cost it wouldn't have looked good but holding it at costs not not so bad um and so you know I didn't know for a long time that you know as much as supportive as my investors ers were our interests just were not aligned.
29:21
And that's something that is um I think a important thing to talk about, an important thing for founders to understand um because I learned that the hard way.
29:34
Um and like I said, I didn't have a board because I had heard from other people that boards are just pissing contests and people disagreeing and people having egos.
29:43
And so I was like, I don't want to deal with that.
29:45
But had I had other voices around the table, advisors, you know, other investors, because I raised from index and Thrive, I think Thrive put in a million. Okay.
29:56
Like Josh Kushner and Will Gabbrick with like crackly voices. They were like kids.
30:00
I was like, who gave you this money? This is crazy.
30:02
Um, and uh and you know, had I had more like former operators around or maybe had I raised money from an a former operator, I think it would have been really different. Agreed.
30:16
So, 2016, you've built this incredible business.
30:21
It's starting to go perhaps a little bit wrong, but the outside world doesn't know that.
30:25
You've written this incredible bestselling book, Girl Boss, which has been then turned into a Netflix show.
30:30
You've the show has been shot.
30:32
You're the hero of the show, and just before it comes out, things start to really fall apart in the business.
30:38
Tell us about that year and what it was like living through it. Yeah.
30:40
So 2016 I would say is the hardest year of my life.
30:46
Um we had had some layoffs in 2015.
30:49
You know it was not the best.
30:49
I wrote the book at the beginning of it was published at the beginning of 2014 right?
30:57
So it's been 11 years which is wild.
31:00
Um and you know we had had some layoffs in 2015.
31:06
open a couple stores, you know, try to go offline.
31:08
And at the beginning of 20, I had hired a CEO for the last two years.
31:17
I was like, I don't like this job.
31:18
I want to do the creative stuff.
31:20
So, I had moved into, you know, just the chairman role, but was still very involved.
31:25
At the same time, the success of the book was something that it was just like a runaway success.
31:29
and Girl Boss, the book, the philosophy, the word, the hashtag, uh the movement that people called it was almost louder than Nasty Gal, which was like the business that I had built to over 100 million in revenue.
31:44
By the way, I think that's probably important to mention.
31:47
Um, and eventually kind of ran out of it.
31:51
But it became harder to fund the business because, you know, like I said, similar to the acquisition offer I had gotten, it was in my investor's best interest not to, you know, take a haircut or do a down round and just say like, "All right, figure it out. Figure it out."
32:11
We, you know, took on some venture debt and just kind of kicked something that didn't have to be inevitable, but the inevitable down down the road. Is that what you say? Right.
32:24
Um, colloquialisms are different here.
32:27
So, I'm going to start like my American colloquialisms are going to start atrophying.
32:30
I'm going to say things like, uh, I can't be aren't here a month. You're a quick learner. I know.
32:37
I'm dating an English man, so there's that. Very good.
32:39
And so in, you know, things were already tough.
32:44
There had been headlines about toxic culture.
32:45
You know, we' had layoffs. Was that toxic culture? Probably.
32:50
Um I don't think I was toxic.
32:54
I think I didn't give people a chance.
32:56
So I would just like fire them and be like, "That's not okay. You should know better." Okay.
32:59
Um, so I think I would have been a better leader had I helped people like get there or given them opportunities to improve, but I would have had to know what they don't know to do that and I didn't know what they needed to do, you know, to a certain extent.
33:18
So, you know, that's hard, but every founder experiences that.
33:20
I just think some founders are probably better than others at it.
33:23
Um, and yeah, I mean, you lay off the PR team and they're gonna they it's their job to yap, right?
33:32
So, not not that I don't take responsibility for, you know, everything that happened in the company.
33:37
The fact is that the CEO knows 10% of what's happening in their company. Sure.
33:45
There's just I don't know what boss is being a dick to some junior employee.
33:47
I don't know who's saying weird you know, you know, and people in a room saying things like that's not on brand and you know, other employers like feel bad about themselves and there's like, you know, it was a fashion company and I wasn't clicky, but you know, people working at Nasty was very cool, right?
34:08
And you know there were people who thought very highly of themselves because they were there and they were in positions of power and um you know I think that can just get really ugly.
34:20
It's you know it's the companies that people have a lot of affinity for that you see in the headlines when things don't go right.
34:26
don't go right. It's it's there where you know there's this schism between the utopia the employees think that you know they've signed on for because you know they're working at this cool company but actually it's like any other company and
34:40
you can only employ people when there's the business to support it but it was similar to a customer getting you know an order late and being like oh my god you know it was like a personal assault on somebody who was who was removed from the company because you know they
34:57
identified so much with being a part of Nasty Gal and the culture which is what you want but it's also you if you get fired from Verizon you know or I don't know Temp's water like I don't think you're going to be like oh my god I'm not part of this thing that you know
35:13
when I went out to a bar and I said I worked at Nasty Gal people thought I was cooler like so laid people off whatever not whatever but um in 2016 I had gotten married in 2015 okay to someone I had dated for like four years before that and actually met when I was 19. And by
35:28
And by 2016 um in in I think June of 2016 I was on the cover of Forbes.
35:36
Um they said I was richer than Beyonce. Um on paper.
35:41
Uh and by July my husband of like a yearish was like see you. And I was like what?
35:51
Like he didn't even like argue.
35:54
Can you at least argue before we get there?
35:56
It was just like, you know, a big surprise.
35:57
And I had a solid prenup, so whatever.
36:01
He got like 50 grand in a Volvo. Loser.
36:03
Um, he didn't work for like the la like three, you know, he had like my credit card. It's like whatever.
36:11
I was like, I'm a generous person.
36:13
I'm just like, you know, if it was like some dude that had made a bunch of money and his girlfriend was working for 50 grand a year, he'd probably just be like, listen, like I don't even get to see you cuz you're grinding away at this job.
36:25
So maybe that would have been normal, but and I tried to just do what seemed normal, like we're building a life together kind of thing, but I don't know how that works the other way around.
36:36
Anyway, so by July, he had like bounced.
36:38
By November, Nasty Gall filed for Chapter 11. Okay.
36:45
And so it was a series of potential acquisitions. We did do a down round.
36:51
You know, Ron Johnson from like Apple, JC Penney came in and, you know, tried to fix things and brought his cronies in and, you know, was like, we're, yes, we're going to, you know, have this strategic acquisition.
37:03
And I just remember walking up to I don't like one of his guys and saying, "What's the chance this happens?" And his answer was 100%.
37:12
And that's where I was just like, "Oh, fuck."
37:13
Like, "I know that's not like if you don't know that is very unlikely to be true.
37:20
Then I'm really scared for the future."
37:24
And at that point, I was just so far in over my head.
37:28
head. to a certain extent I had checked out and we could have rec capitalized the business you know after bankruptcy we could have like you know started again but I was like I did this for 10 years I'm not going to start the thing I already started um and it
37:46
was like the first point where I was like I'm going to be selfish about this and when we did file for chapter 11 it was like I have to say like a little bit of a relief because when you raise $50 million It's really hard to quit and it's with a brand like Nasty Gal, it's really hard to be fired. So, I was like, "Oh my god,
38:02
So, I was like, "Oh my god, I'm out."
38:06
It was devastating, but it was also like a big exhale at the same time.
38:09
And at the same time as all this is happening, you are literally all over the world on Netflix or your character is. Yeah.
38:18
You're the hero of this show.
38:20
November, the company files for Chapter 11.
38:22
while this show is being made called Girl Boss about who I was when I was 22 years old starting an eBay store in San Francisco.
38:30
Four months later, 5 months later, I think in April of 2017, Netflix, you know, releases a show called Girl Boss, streams it into 130 million homes in 195 countries in almost every language.
38:49
And I, this was 4 months after, you know, Trump had just been elected, Hillary had lost, like the whole conversation around women had totally changed.
38:57
Things became way more political.
39:00
Um, and it was just like a goofy kind of scripted comedy, but it was, you know, uh, like girl, why would we need to be called girl bosses?
39:10
I'm just a boss, you know?
39:12
It just was like it was just the name of a book like you know it it it and the timing was just bad because then I was like you know I tanked a company maybe I wasn't the girl boss you know I was a fraud and there were headlines like does the failure of Nasty Gal mean millennials aren't ready to lead and I was like oh my god like the public sees me as the example of millennial leadership I didn't even know that that's was the case.
39:42
And so it was really devastating.
39:45
The hardest part was when the Netflix series came out because there's this huge the public just really conflated the character.
39:53
What happened on the show?
39:55
She was kind of abrasive.
39:57
You know, things, you know, they wrote stuff into the show that like didn't actually happen.
40:01
I thought it was like kind of a cute show.
40:02
Like outside of depicting me, I didn't have influence over the script or how I was depicted.
40:07
I was like, "Here's some vintage.
40:09
don't make her look lame and get that band poster off the wall in her bedroom.
40:13
That was that's like the that was the extent of my influence.
40:17
Um, and so there's just a huge conflation between like Sophia, the leader, the girl boss that we loved, like someone responsible for a lot of employees and a lot of, you know, money and this character that, you know, had been totally made up.
40:32
And it's like, which one of those is she?
40:35
And so it wasn't really any of them.
40:37
I wasn't any of them because I'm a complex person that's like nobody nobody who could no stranger who writes something about me could ever know.
40:48
Um so that was that was really really hard.
40:52
Were you treated differently as a female founder who failed compared to how a man would be treated? Yeah. In what way?
40:58
treated? Yeah. In what way? I mean there's just no I mean if you look at the history I mean of women you know there's so there's so few of us leading and if you look at just like across the board institutionally like the disparity like
41:19
between men and women historically and like we've just kind of always been way behind and also in the workplace and so there's fewer of us and there's few of us to point to and I was the example, the poster child of female millennial leadership and um and so the my megaphone was big. There was a lot more
41:37
There was a lot more eyes on me.
41:39
But um I think in most areas of life and the way people are perceived in women are treated, it's all very much based on other people's perception of our identity, whether that's your religion or your gender or your color.
42:00
It's like you're walking into the room with some privilege.
42:02
you know, there's, you know, I think it's there's a whole whatever intersectionality and ranking of those things, but there's no way that I couldn't have been because that's just the way the world works.
42:12
It's not even like specific to business.
42:14
There was a lot of overintellectualization about um about girl boss, right?
42:20
So, it was like, well, it it shouldn't be people said it should be women boss, not girl boss, right?
42:25
Why they call girls not women?
42:27
People said there shouldn't be, as you said, there shouldn't be girl boss, it should just be boss. Mhm.
42:31
And yeah, lots of intellectualizing about it.
42:34
How do you feel about some of that criticism? It was a pink book.
42:37
It was a pink book that was like, "Go get him."
42:41
You know, it was it was I I was in my 20s.
42:43
It was a book that in that was simple.
42:47
Um some of it was maybe even like naive.
42:51
I had written it when everything was going great.
42:54
So, uh, you know, I think it would have been different had I experienced more adversity in the business before I wrote it.
43:04
Um, but the book had kicked off, you know, this amazing, you know, I'm a girl boss, right?
43:11
I built two businesses where people said, "I'm a nasty gal and I'm a girl boss."
43:15
Like, I don't think it gets any higher as far as a brand goes to have people actually start, you know, put I am in front of the name of your brand, right? Amazing. Yeah, it was amazing. I think it became this.
43:25
I mean, it entered the zeitgeist uh in a way that was completely out of my control.
43:33
And again, you can only hope that the things you create have that kind of impact.
43:39
Um but at a certain point, it no longer became mine.
43:41
And people kind of used it as a shorthand for, you know, sometimes really great like I'm a girl boss.
43:51
And then sometimes like you know, oh girl boss is kind of this oversimplification of female capitalism and whatever and it's just like I don't know I wrote a pink book and you know that was my experience and why am I responsible for all women and you know people were you know asking me to talk about the wage gap and it's like I don't know I never experienced that cuz I never like had a job in an office. It was weird.
44:18
Um but also it was just no longer mine in a way that is really cool.
44:23
cool. um that what you create becomes this um you know again shorthand for something even if it's politicized or overintellectualized um that you know people can use to um have an important conversation and I do think there are a lot of important
44:46
conversations that where the word girl boss was used but I also think um people are really giddy about taking down women and I think that was part of it where it was like you know and there's the 2020 kind of like slaughter of every female founder and I don't know if you like
45:07
were witness to that but that was like the end of the girl boss is a good thing like there's you know just so many headlines and it's like Glossier is toxic and you know a way is toxic and the founders of refinery 29 are awful and founder of re reformation racist And you know it's like the the wing
45:27
completely went under right a women's co-working space and so I think like I said um uh you know people work for companies if a company stands for something you know they expect the company to cure things that exist everywhere and permeate all parts of society. You know, just because
45:47
You know, just because a woman founds a brand and tries to do good for women doesn't mean that things that, you know, exist everywhere aren't going to sneak into the company and affect the employees.
46:01
But there's like this expectation that it's going to be this place that just, you know, heals all disparity and everyone's going to have like a great experience and, you know, those kinds of things aren't going to exist.
46:12
And I think when you stand for something and I don't know if this has happened with you because you make you know you invest in impact focused businesses there will be people who say like well that's not good you know EVs have batteries that are bad or whatever people will poke holes in anything you try to do that's good and I think that was like a you know that's a big part of why why that happened.
46:36
talking about female founders.
46:38
Do you do I have a responsibility to proactively go out there and try to back as many strong female founders as possible or is it more about just making sure the process is fair and not trying to, you know, impact the number of women who come through the door?
46:54
How do you feel about that in terms of our responsibility as investors?
46:57
I think it's a nuanced like question or answer because you know I see less female founded companies.
47:07
Um there are less of them.
47:12
There's also less second time female founders.
47:17
Um, so if you know five or ten years ago, you know, there were way less female founders, like the guys who built those companies have built shops that as someone who's going to give someone money to build a business, something that makes you feel more comfortable sometimes.
47:32
Doesn't always mean that they're great at what they did and maybe they failed.
47:35
Um, but they have some experience.
47:38
Um, that's something I I mean I like second time founders because I did so much you know I was such a better leader in my second company.
47:47
I was a clueless first-time founder.
47:49
I also see a lot of female founded business that are consumer businesses and I don't invest in consumer so that makes it harder.
48:00
Um, you know, there's it feels like there's a lot more women who want to start brands and you know, my my background is in consumer and brands, but that's not what I want to spend the second half of my career doing because I blew it in the first half of my career and I also don't think that consumer most consumer businesses are venturebackable or can have venture-ized outcomes.
48:29
Um, yes, I have responsibility. I can do a better job.
48:32
Like, if you look at my portfolio, there aren't enough female founders.
48:36
Um, and I think that's just by the nature of like the deals I've seen and what I've found conviction for.
48:45
And it's my job as someone who's investing other people's money to optimize for that.
48:56
Um over I think giving people a shot.
48:58
It's not angel money like it's venture money and um I have bosses and my job is ultimately to make money for them.
49:10
We've backed at least one company together. Yeah.
49:14
Tell me and the listeners about what you look for in entrepreneurs now that you are a venture investor.
49:18
I look for founders that have domain expertise, who have, you know, spent time in companies that are solving similar problems or problems that are parallel in some way or founders who have experienced the problem that they are trying to solve personally.
49:40
um and have you know again like empathy for the end user um and just understand the problem on a cellular level.
49:48
Um I like secondtime founders.
49:53
I like founders who aren't egotistical.
49:56
Like you get on the phone with some of these really confident guys and sometimes they like build companies, but it's just the way they talk is sometimes so entitled and just like cringey.
50:12
It doesn't happen a lot, but I definitely avoid the people that seem overconfident.
50:19
I think being a zealot is different than being overconfident.
50:23
So, I want to hire zealots who are like committed to building the thing.
50:29
Um, who I think can lead and get people behind them.
50:35
You know, if you're investing money in a in a founder, you also need to know that they're going to be able to go raise subsequent rounds or ideally maybe they, you know, become profitable.
50:46
But if they do want to or um raise subsequent rounds, there has to be some talent that they can go pitch people and raise money, you know.
50:54
So I also have to believe that they can keep doing other things as a founder that aren't in relation to the product they're building or aren't even in relation to leadership.
51:03
Like that's a whole another part of what comes with building a ventureback business.
51:06
We could go on forever, but we have time for one more question, which is we we ask all of our guests this.
51:11
What is it about you that has created all of the enormous success which we just talked about?
51:18
I think it's that I'm a really curious person and I thrive in environments that I don't technically belong in and I found a way to make imposttor syndrome something that works in my favor because when I hear or feel that I don't belong, it actually means that I'm just doing something different and I have a different perspective and I'm brave enough to bring that to the table and it tends to cut through the noise.
51:47
So I think for anybody who's, you know, afraid to do that, it's important to know that that can also be your superpower. It's not that hard. You just be yourself. Like I'm just lazy. Very powerful.
52:03
Sophia, thank you so much for sharing your giant idea. Thanks for having me. Appreciate it.
52:06
If you like the episode, don't forget to like, subscribe, and follow the show.
52:09
And you can find many more giant ideas wherever you get your podcasts.