Ep. 052: On Launching a Performance Apparel Brand — The Joe Kudla Interview

Product Launch Rebel

Hear this new episode where John interviews entrepreneur Joe Kudla, the founder of Vuori Clothing. Listen as Joe uses fear as an opportunity to grow professionally and personally. Learn how Joe raised capital for his startup, who has influenced him the most as a business owner, and what has brought him the most joy -- and frustration -- since starting his company.

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Top Takeaways from this Episode:

(1) Experiencing fear could be a way to identify where you need to grow, either personally or professionally. Let fear be a guide, not a burden.

(2) Lacking experience, in your startup, can often be a curse -- but it also has its benefits.

(3) It's amazing what you can accomplish when you rid yourself of ego, and trust people with their expertise.

Transcript:

John Benzick: In today's interview, I talk with Joe Kudla the founder of Vuori, a hot new clothing brand out of southern California. You'll hear Joe talk about his joys and frustrations of being an apparel entrepreneur along with key advice on all aspects of launching a startup. One of the key lessons revealed in the interview was how Joe uses fear to his advantage, which is in contrast to how most of us experience fear, which is unfortunately a barrier to our own personal and professional advancement.

Joe Kudla: I've always enjoyed that kind of risk versus reward relationship, and I've never been afraid of taking a risk and falling on my face. And I guess if I was to say anything, it's to let fear sometimes guide you and for me, if I'm afraid of something, I'm typically drawn to it. So the idea of going out and getting in over my head or you know, taking a public speaking engagement or talking on a podcast. Sometimes it can be a little scary, but I try to use that as a beacon to know that I need to walk through that door if I want to grow as a human being, and I think that that has served me well in entrepreneurship.

John Benzick: Greetings Product Launch Rebels and welcome to the Product Launch Rebel podcast brought to you by VentureSuperfly.com where we help double your entrepreneurial courage, even if you don't know what you're doing, please visit the Venture Superfly website and check out the contact page to join our mailing list. Bear with me today as I'm trying to recover from a cold. As you might hear my voice by won't let that hold me back with my excitement because today I'm interviewing Joe Kudla. He's the founder and CEO of a clothing brand called Vuori clothing based in Encinitas, California. The brand has sort of a west coast vibe, but with definite and smart technical elements. Joe Distributes his brand through leading retailers, including REI and Core Power Yoga. Additionally, Joe has an interesting background. He grew up in avid multisport athlete. He attended the University of San Diego and a model traveling the world for major fashion brands.

Then was a CPA for Ernst and Young and even started and grew a successful professional staffing company. This'll be an inspiring interview to learn more about Joe's startup journey and to learn more about Joe's company, visit the Vuoriclothing.com; that's V, U, O, R, I clothing.com. In fact, Joe has kindly offered a 25% discount on any item at the company's website when you enter the Promo Code "Rebel 25" so be sure to do that as soon as possible. Hello, Joe, thanks for being here, and welcome to the Product Launch Rebel podcast.

Joe Kudla: Thanks so much for having me, John. I'm excited to be on the phone.

John Benzick: Oh man, I'm excited. That's for sure. So Joe, within this podcast there are three segments. The first is called, give me the basics, which helps set the context about your company for our listeners. The second part is let's get personal where we get into some of the more personal topics about what it's like to start a business. And the final part, Joe, is what I call tell me how where we'll get to the heart of the matter on issues that aspiring entrepreneurs want to know now to help them move forward. Joe, what do you think? Are you ready for some questions?

Joe Kudla: Let's do it.

John Benzick: All right, here we go. This'll be great. So Joe, tell us the story. How did you originally come up with the idea to start? Vuori clothing.

Joe Kudla: So I started Vuori really out of identifying a personal need. You probably hear that from a lot of guests on your show. But I was a competitive athlete growing up, played primarily physical sports, grew up playing football and lacrosse and played lacrosse in college at University of San Diego and pretty much just beat up my body. I had suffered from a lot of back pain and about 10 years ago, a good friend of mine suggested that I try yoga and I did. And I ended up falling in love with the practice. It was really one of the first restorative things I'd ever done for my body. And the first question I asked after a couple months of practicing was what does a guy wear to yoga class? And at the time, there just really weren't a lot of options out there. Lulu Lemon was definitely making a push into this space.

They were really focused on the female consumer and there just weren't a lot of options out there for guys like me. And so that, that was really the Aha moment was, man, there's a lot of guys practicing yoga these days and you know, the mainstream athletic brands weren't really speaking to that guy. We were wearing a lot of board shorts to go practice yoga in and they were great from some, from some standpoints, you know, they moved well, but they weren't really designed to stretch and sweat in. And so we just saw this opportunity that was kind of originally inspired by Yoga but really extended into this kind of lifestyle that we were living here in Encinitas. And that was, gosh, long time ago.

John Benzick: So Joe, I think I told you that I used to own a soft goods company myself. And so I know that the clothing industry is just so really incredibly competitive. And so tell me about what's so unique about the Vuori. How did you cut through the clutter among so many apparel companies out there?

Joe Kudla: I'm glad you brought that up because I'd always dreamt of being in the apparel business. I loved creating products. I love design. And so I had invested in and kind of by by default become a part of the management team of, to start up apparel companies before Vuori. And both of them were great learning experiences. But you know, I'm not doing those, those companies today. And so you can imagine how those ended. But with Vuori, you know, we really felt strongly about the needs that existed in the marketplace. If you think about what was happening in our country, people are getting more and more health conscious and yoga participation is exploding.

You know, when we were doing our research before we started the brand, there were 17 million people practicing yoga in the United States and 30% of those were men. And if you compare that, that's about, you know, spread around 6 million guys. And if you compare that to the number of people that surf in the United States, there's only 2 million people that surf. And so you think about all the different surf brands out there going after those 2 million guys. We felt like this was just a wide open space. And so you know that that's where we got a lot of confidence from a market standpoint. But then when you think about specifically what we wanted to do within the category is, you know, we're from the beaches of southern California and we wanted to build product that first and foremost was built with the best quality performance materials, have a saleable product that was moisture wicking, quick drying at great stretch was built with incredible seam construction.

So it would last and but the difference where I think that a lot of the brands kind of worked delivering is we wanted to build our product with an aesthetic that would effortlessly transition into everyday life and are in the women's active wear market. They call that studio to street. And so that's really kind of the force that's been propelling the active wear market on the, on the women's side of the business. But we felt like on the men's side of that, the men's side of the business that was really missing. And so we wanted to deliver on that brand promise. And I feel like we've been effective in doing that, which I think is part of the reason why we've gotten out of the gates with such a fast start. It really seems like a great idea from which to start.

John Benzick: And it's great to hear that you were in the apparel business to some extent before you started your business. So you didn't go into the business sort of being blind to all of the challenges.

Joe Kudla: I went in with a little, a little bit of insight. However, knowing now what I know have been through the last four years of growth at Vuori, I really didn't know much. And I think that that's a blessing and a curse in entrepreneurship having, you know, let's say I worked as a designer at Xyz company and I only saw a little corner of the page, I probably would be scared about trying to step in and and run an apparel business knowing all of the moving parts. And all of the different roles and responsibilities that it takes to execute on a successful brand. However, being a little bit naive, you know, I wasn't afraid to take that first step and kind of learn as I went.

And so I had a little glimpse into the space. But having been through what I've been through, I know now that there was a lot more to it.

John Benzick: Sure. And I indicated early in the introduction what types of retailers you sell to, but tell us a little bit more about the retailers that you sell to now.

Joe Kudla: In a nutshell, when we first launched the business, we were focused on point of participation, which is what we call places where people use the product for its intended end use. That's yoga studios and gyms primarily. And so Core Power Yoga was an early partner of ours and we sold to a lot of independent yoga studios and gyms. But in our second year of business REI gave us a call and asked if we would want to be a part of a small 10 door test.

It was a men's fitness incubator program. And we felt like we had won the lottery. We were, you know, frightened by it, but we were very excited at the same time and we participated and it turned out Vuori was one of the top performing brands in that test and they grew us from 10 doors to 70 doors. And we maintained our kind of top spot as one of the top performing men's fitness brands. And then we grew from 77 doors to all doors. And we maintain that. We have a great relationship with REI. We're doing very well there and very excited to be launching a women's business with them as well. So from a wholesale standpoint, you know, REI and Core Power, big anchors of ours but we're sold through 650 wholesale doors across the country. And one of the things that we did a little bit differently when we built our brand, you know, as we were forced to build a direct relationship with our customer, the wholesalers weren't a hundred percent sure about the men's fitness category.

Men's fitness historically in our country has been dominated by big box retailers like Dick's Sporting Goods, Sports Authority, Sports Chalet, and a lot of those guys were in a race for the bottom. So the quality, you know, in that channel wasn't necessarily kind of the type of quality that we're building. Lulu Lemon came in and really changed all of that, but your wholesalers in fashion, in the outdoor industry. In Surf, they, they weren't really paying much attention to the active apparel market. And so when we launched and we came to these guys with a bunch of samples, they weren't really ready for it. So we were forced to pivot and really build a direct relationship with our customer. And I'm really grateful that that happened because now our website is our single largest point of distribution for the business and it's a really healthy place to be. And we really love our ecommerce business from a wholesale standpoint. We really positioned the product so that we could sit and be authentic within five different points of distribution. So we've got the point of participation, which I mentioned.

We also sell in a lot of fashion accounts like Nordstrom for example. And then we've got the outdoor industry with REI leading the charge and a lot of outdoor specialty. And then we've got fitness, which you know, the fitness industry is, you know, we define as as like sporting goods. We also lump running specialty into that category and then we've got resort. And so with, within all of these Vuori can sit and decide to be selective and only sell to the best dealers within these five channels. And that's a really healthy place to be. It's a place that we want to be so we don't have to sign up maybe the down channel retailers for growth because we're growing our business direct and we get to be selective and pick the best partners in the wholesale channel.

John Benzick: When you started out, how difficult was it to choose the type of products and the scope of products when you started and how is that product line expanded at this stage?

Joe Kudla: That's a great question. You know, when we launched our first entrance to the market was through men's shorts because our feeling was if you go to a yoga class, I mean half the guys in yoga classes aren't even wearing shirts, but every guy has got a pair of shorts on at least. Hopefully, and so we looked at the men's shorts category as an opportunity to come in and do something really cool, especially with our background in surfing and you know, living this west coast beach lifestyle, we thought we could do something cool by introducing, you know, unique prints and cool colors, stories and making shorts that were really wearable that you could wear to a gym or a yoga class, but would also look great on Saturdays walking your dog or going to the farmer's market or meeting a friend for a drink at a bar.

And so shorts was really our entrance to the market and that's where we put a lot of energy. And then once we got people into the brand and they loved our shorts, we had the opportunity to kind of introduce different products to them. Was that the right decision to start with the shorts? It was I mean my, I think tha I still to this day shorts represent a large percentage of our sales and I think that's where a lot of people kind of enter the brand is through our shorts. But it's really exciting for us now because now we're offering, you know, kind of this whole technical sportswear offering where you know, we have pants that you can wear on the golf or where did the office or where on your on your bike riding and riding to work in the morning. You know, we're getting into some wovens and buttoned down shirts and stuff that you wouldn't necessarily wear to the gym, but they're infused with that same performance lifestyle aesthetic that we've gotten known for sure.

John Benzick: Since we're talking to a lot of aspiring entrepreneurs right now that are listening to this podcast, I like to give them sort of a context. When these companies like yours start out, how many employees did you have starting out maybe in that first six months or a year? And how many employees do you have?

Joe Kudla: So there were two of us when we started. It was myself and our head of marketing who is still with us today. She's been an integral partner of mine from the beginning. And today we're just approaching 20 employees.

John Benzick: That is really astonishing. Great work, Joe.

Most entrepreneurs go into business with a set of assumptions and many of those assumptions prove to be different or wrong from what they expected, thereby making them scramble to make changes in order to survive. Regarding Vuori's uniqueness, that sort of yoga angle tied in with some of west coast lifestyle, did your original assumption about the uniqueness prove motivating to consumers or did you discover a slightly different selling proposition after being in business for awhile and getting some customer feedback?

Joe Kudla: It's a great question. When we launched the brand, we made an assumption that we could build it or at least get out of the gates by selling to the yoga studio marketplace. There were a lot of women's brands that were launching and having a lot of success within yoga studios. And we thought, well, 30% of the audience is men's by selling in this at this point of distribution, we have a great opportunity to at least build a foundation which we can grow upon. And that assumption was unfortunately wrong. We sold into some of the better yoga studios in the country sell through was, you know, okay. It wasn't, it wasn't anything that we were ultimately super scared about, but it wasn't time. The inventory wasn't turning at a pace that it needed to in order for us to really build a sustainable business. And so we knew we had to pivot.

And so at that time we were launching a b to c business. We're selling on our website. And a lot of the marketing and advertising that we were doing through social channels was really targeted towards men's yoga. The original inspiration for the brand. What we found through that experience was that men maybe don't identify as identify themselves as Yogis, like a say a woman would. And so we did a lot of testing. At one point we sent a survey out to all of the customers that had purchased from us and we asked them, what do you like about the product? What do you not like, what other brands are you wearing? What do you use the product for? You know, and what was really is we thought for sure based on all of our brand communications being targeted towards yoga and men's Yoga, we thought for sure yoga would be the number one or at least number two activity that people were using the product for.

But what we found out was that yoga was like number five. Number one was running. Number two was training. I think even like walking the dog was ahead of yoga. And so we recognized early on that there was a great product market fit, but we were communicating the end use wrong. And so we made some pivots in our brand communications in our...