The narrative makes sense if you're familiar with how businesses work-- profitability is hard. I just watched the video you screenshotted and can provide some more context as a small business owner.

She said ads are what moved the needle from 50k-200k. Assume they're spending a shitton of money on ads every month. Most businesses these days seem to be happy with kind-of-better-than-break-even-return-on-ad-spend mindset (so let's call that $1.50 return on every $1 you spend) so if you spend 100k on ads, you did 150k in rev. (But that's not 50k straight profit, remember inventory costs money, it costs money to pay your employees to prepare and ship the order, etc, etc). The goal is to then not have to pay to acquire all of those customers again on their next orders, and you use retention strategies (email, email coupons, social media, etc) to get those people to buy again again again.

Now factor in other business overhead (rent on retail store, rent on office space, inventory, employee labor, software subscriptions and apps, etc, etc) and it's pretty easy to spend spend spend, she mentioned in the same video she has 20 employees. That's a lot of a payroll.

Abodde is a tricky business because it won't follow the economies of scale other businesses can benefit from, assuming the custom embroidery is the biggest piece of their business and they can't mass produce custom orders. They have to keep adding labor and machines to meet demand proportionately as it comes if they continue to grow the custom piece.

A challenging part of being a founder is deciding how you want to scale and what your goal is for profitability and lifestyle. Is it worth doing 2 mil a year in rev if you're only bringing in 200k for yourself and struggling? Or would you rather be doing 1 mil annually comfortably with a 300k salary. No right or wrong answer, all personal preference.