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After reading the article, this movie version had the same issues as this real life founder.
If only she had watched the movie about herself maybe she wouldn't have bankrupted herself.
My own theory is that toxic culture is a drain on every company with one, like a parasite on a host organism. Sometimes the host is strong enough to survive, sometimes it isn't.
I've worked for toxic tech and toxic finance companies. In both cases I felt that poor decisions were made that a healthier culture could have avoided.
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Revenue is absolute. Money either came in or it didn't. Profit is fungible because the accountants and business principals decide what counts as a cost and what counts as a surplus. An infamous example of this is "Hollywood accounting" [0], whereby major studios spin off independent LLCs for each film project they pursue, charge these LLCs exorbitant fees for marketing, distribution, etc., and then the LLCs never pos…
> Revenue is absolute. Money either came in or it didn't. Sadly nothing is that absolute. Plenty of revenue scandals out there. A typical example of this: a large supermarket hasn't made enough money for the year, and asks its suppliers to book future sales that (very likely) will come next year as real sales now. The suppliers do this, and actually pay up, because they want to stay on good terms with the big superma…
I thought they got paid by customers and they paid suppliers.
To learn about the facts leading up to the bankruptcy, a great resource is to read the declaration in support of the first day motions. This is filed under penalty of perjury so there is a reasonable expectation it is factually accurate. From the filing, here are the financial details [1]: "For the year ended January 31, 2015, the Debtor reported revenues of approximately $85.0 million, gross profit of approximately…
thanks for those details. For those like me who didn't know: EBITDA = Earnings before interest, tax, depreciation and amortization
I'll pick out a thread here: the toxic culture. When businesses fail, it's regarded as obvious that the toxic culture contributed to the downfall. With successful businesses like Uber or some bank you recently read about, it's assumed that somehow these behaviours are what makes the companies profitable. My own theory is that toxic culture is a drain on every company with one, like a parasite on a host organism. Some…
I'm not sure that's true. At least with Uber, it's pretty well-understood that they are successful despite their toxic culture. And that's mostly because they have received billions from VCs, which does a great job shielding them from the consequences of bad decisions such as harboring and protecting sexual harassers at the corporate level.
The clothes were awful. It sounded like a good story from a distance, but if you looked at the catalog it was a definite maybe and if you saw the clothes in person you realized they used cheap materials and were photographed from the good angle.
One HN user wrote about why she liked them in a previous thread on Nasty Gal: https://news.ycombinator.com/item?id=12923367
If you're like me and wear pretty much the same thing everyday bought from thrift stores (excepting underwear), it can really open your eyes. Women do, generally speaking, all look better than men. I probably spend too much on outerware, but I save on clothes because I just don't care.
As an anecdote, one of the baristas at my coffee shop said a ski pass at our closest resort (I'm in the Rockies) was too expensive while wearing, what I thought to be, fancy clothes. After 9 months of interaction, I've concluded her clothes budget would cover 3 ski passes. My parents taught me to value experiences over material goods, and I'm very thankful for that.
It looks like overall a classic mistake of trying to go too fast too soon. The issue with taking on VC capital is that you need to be in control of how you spend that money, and if you don't need it, then don't take it. There are also challenges with any business in crossing the chasm. Selling to more customers, or a different set of customers is akin to searching for product market fit a second time and is tricky li…
The founder and chief executive had a majority 55% stake. Considering she had final say on all decisions, you can't blame VCs for blowing up the company.
By my read they tried to do the kind of high-growth strategy that benefits other kinds of online businesses, but routinely kills retail, what I internalize as "the Boston Market problem." They opened two stores while also ramping up manufacturing, while finding new designs, and having an inexperienced CEO, and so on.
$40MM should have been enough to create a decent sustaining business, but maybe they thought they'd get acquired? That part isn't mentioned, natch: "what were the actual goals of all this?"
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I didn't realize I criticized a YC company founder; that was a mistake, but I stand by my sentiments (it made my eyes go crossed).
This could reflect a personal difference in abstraction. I'm not saying this is what should be the case, but for me "VC" might as well be it's own word with it's own associations and connotations. If you're used to mentally expanding contractions for precision - as lots of programmers and analysts are - then I can see that "VC money" would be a stumbling block. Not something I thought about enough before your second…
These days, I read cash flow, income and balance statements in the thousands per year.
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> hen she decided she had to write a book, so she spent around $500,000 of company money on a ghost writer and marketing for the book. She had a publisher, but the publisher only picked her up because Amoruso was paying all the costs to publish out of the NG's pocket. Any idea how involved she was with the TV show as well? That had to be distracting: http://www.imdb.com/title/tt5706996/
Amoruso was as involved with the netflix production as much they would let her, which is to say a lot. But by this time, Amoruso had mostly handed the company over to Waterson so that Amoruso could focus on building up her own personal brand and #girlboss "foundation." Basically, Amoruso checked out around 2015 to focus entirely on her own girlboss brand and promoting her book. She was/is totally obsessed with maker…
I was very close to insiders at the company, can't tell you who I know, but you'll have to trust me. Nasty Gal was a lot worse of an environment that this article leads on. There's a lesson to learn here, so that's why I'm posting. Basically, Nasty Gal made a string of horrible investments, one after another, which makes one wonder if they were trying to fail. Lots went wrong, but I'll cover the stuff that hasn't bee…
Thank you for the insights into the company. I don't know whether this is common in VC backed companies, but I am surprised at the lack of governance around spending of company money for personal gain. 500K on a ghostwriter when you are trying to steady the ship and then make it move full steam ahead??! That sounds insane and if I were an investor I'd kick that CEO's ass. Moreover, very surprised Index Ventures poure…
When Index Ventures came along NG was profitable and their growth was impressive, therefore NG negotiated very favorable terms since they were well in the black. That said, Index was the only VC firm willing to make that investment. No other firms participated. Later on, all other venture capital NG received was in the form of very high interest, high risk loans.
The problem was that when Amoruso got the money, she mismanaged that power and made horrible investments (she also pocked a lot of the investment from Index, buying a $5MM home, Porsches, and other luxury goods). She tried to shift away from what had made NG money in the first place, to high-risk vanity projects.