Vuori: Joe Kudla

Hey, you know, we hear a lot of stories on how I built this about overcoming self doubt. I recently talked with Sigourney Weaver about this exact And why she was reluctant to pursue acting for so many years. I know it's hard to believe that one of the most acclaimed actors of her generation almost didn't act. Wherever you listen to podcasts. And now On to today's show.

you know, I think some people saw the opportunity. but maybe question. whether I was really gonna be the guy that was able to go and do this and disrupt this space. you know, a lot of meetings were short and there was a lot of passes. Yeah. I developed a really unique relationship with rejection. And so that was all building my backbone up for trying to raise capital for an apparel brand'cause it was kinda like starting a band and telling your friends you're gonna be the next rolling stones. People are like, Yeah

Good luck. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements. They built. I'm Guy Raz, and on the show today.

How Joe Kudla made a risky bet that men would buy yoga clothes. rewrote a bad business model in real time and built his venture into the Powerhouse ActiveWare brand. Theory. If you heard my interview with Chip Wilson on this show back in twenty eighteen. You may remember the story of how he started Lululemon.

It was 1997 and he went to his first yoga class at a gym in Vancouver. And as he tells it, He was the only guy in the room. But In that class, he saw that yoga was starting to explode, especially for a certain type of young, professional, health-conscious woman. But most of these women

They were wearing sweatpants and t shirts. So Chip decided to make clothing specifically for yoga. He found performance fabrics and tests them out, but only on women because at that time yoga was dominated by women.

And Lululemon. took off. The brand basically pioneered the concept of athleisure. And it wasn't until 2014 that Chip expanded to clothing for men. And the reason it took so long is because people thought men really didn't care about what kind of clothes they wore when they worked out.

But at around the same time that Lululemon branched out into men's clothing, Joe Kudla launched Viore. A yoga and activewear brand designed, at least initially. Just for men.

As Joe soon figured out, what men seemed to want most was athletic gear that performed well and was versatile. The same pair of shorts that might work for a yoga class? Men also wanted to use those shorts for running, hiking, surfing, or just hanging out. And once Joe had that insight,

Viore began to hit its stride. Today, the brand is a huge business with 1500 employees and revenue in the hundreds of millions a year. But before starting the Ori Joe struck out with two previous fashion ventures. But he learned a lot about what didn't work with those other attempts, and it helped him figure out how to get Viore right.

Joe grew up in the eighties and nineties in Washington State. His dad practiced natural medicine and acupuncture, and his mom was a psychologist who led guided meditation retreats. And as a kid Joe knew that his life was very different than a lot of the other kids he knew. I grew up on this little island called Vashon, which uh is just off the coast of West Seattle.

It was a very alternative community and when we were in middle school we moved to Bellevue. And you know, Bellevue was really known for Microsoft was really becoming a popular thing. And so Bellevue became a a fairly affluent town and we we were kind of like the hillbillies that move to the city. And my parents just having these very kind of alternative lifestyles and professions.

And interests, you know, my house was always the house. I was always a little you know, shy to bring people there and look in the fridge. It was all these like healthy, natural, organic foods and But it but it was a beautiful upbringing, very rich in love, not necessarily rich in material possessions. So naturally I was hanging out with a lot of other kids who I just

looked at their families and was a little envious, you know, just There was Coca Cola in the fridge and they Annual trips to Hawaii and That

seemed like a very appealing lifestyle at the time. And so I was a little bit um Yeah, I I I w I I was just a little bit envious of people that grew up in a more traditional way. You um you ended up going to college in California. You went to the University of San Diego, which is I believe it's a a Catholic liberal arts college, a small liberal arts college. Yeah, you know, growing up in in Washington, I was Wakeboarding a lot in the summer.

I was skiing in the winter. I I was fascinated by these kind of alternative sports and Really fascinated by Southern California beach culture. And I remember I called the admissions office. I think the first contact I ever had with the school was. to ask them how many miles away they were from the beach. And uh

I remember the answer was seven they were seven miles away from the beach and that was good enough for me and You know, I had to work my way through school. My parents literally sent me there with virtually no money and and it was up to me to get through. I had scholarship and financial aid, but but my friends again were always You know, it never stopped me from being a part of that social scene. Hm.

Um, I I guess you majored in in accounting in college and and when you graduated you were 'Cause the plan was you're gonna work at Ernst and Young in in San Diego like Yeah. But that didn't didn't happen, at least initially. So so what happened instead? What what happened that summer? Yeah, so I was

surfing in La Jolla one day and I came out of the water and was going back to my car and a a woman stopped me on the beach and asked me if I had ever considered modeling before. And It was something I kinda chuckled at at the time, but she explained to me that her son had been living in Europe. and had been traveling and having this incredible life experience. And um if I'd be open to exploring it, um

she would introduce me to this guy. So I said, okay, well I'll I'll take a meeting. So I met this gentleman. Uh he was a manager and he was having a casting in San Diego. with a an agency from Milan in Italy. And

So he encouraged me to come to this casting. And if he told me that if I happened to get picked, he would represent me. And so I remember I showed up, there was a line wrapped around the the block. And I waited in line and I met with this group and You know, they ended up choosing me to go and

Yeah, I think I was like one of there was three guys that were selected and So I flew straight to Milan with a suitcase. What the wrong type of clothing and

I ended up spending the summer working in the in the fashion industry as a model and fell in love with it and was like, Why would I go home? I'm traveling the world. I have an opportunity to continue doing this and And so that's what I did for a couple of years. I hesitate to ask you this'cause I know you've been asked this a thousand times by your friends and people who might have Giving you a bit of a ribbing.

But was it anything like Zoolander? Yeah. I did love that movie. Uh 'Cause there were there were some some things that maybe were just a little bit too close to home. Um But

I actually didn't really ever like being in front of the camera or on the runway. Um Those things didn't necessarily light me up. But I learned so much, and it was like my little peek behind the curtain at the fashion to understand how things work a little bit and ultimately. I loved watching designers build

collections and how they worked with fabrics and you know just being around the creativity. was very inspiring. Did you make decent money. I mean, a at that level of modelling, especially as a man, can you Can you actually make

Good money? You know, I was never s I was never a superstar model. Um I made enough to travel. and come home with enough money to buy a car. and um and kind of settle in and and get my roots back in San Diego.

Um But it wasn't it was never gonna be a huge career for me. So you always knew you were gonna come back to pursue being uh a CPA. But to come back as an auditor. And I guess that's so happened. You came after two years, you got

I guess Ernston Young in San Diego agree to hold your job for you and and you w when to start your work there. Yes, exactly. In meantime I guess you start a little side hustle with with your girlfriend at the time.

Um tell me about who who she was, what this side hustle was that you started. Yeah, um I went up to Washington in the summer. before I started my job at Ernst and Young and and s was studying for the CPA exam and she was about to get ready to go off and and start at fit'em and study fashion and So

Um So we dated for a while and when she graduated from fitum I encouraged her that you know, we should just start our own brand and she could design the clothes. I would help her in every way possible. I would do all the books. I would help use my salary from Young to fund the business.

Um And so That was that was the path. We we decided to launch a women's contemporary brand. We called it Sammy Joe, uh, which was her middle name and my first name. And uh We

jumped in not knowing anything about what we were doing. And I guess presumably the idea of of launching a a women's fashion brand, you were inspired by your time In Europe you were like this is Yeah, I've been watching these. You know.

these brands I've been watching, you know, how they take textiles and turn them into clothing. I've been you know visited manufacturing facilities like I think Maybe I can do this. Yeah.

That was very naive. But I had never Taken an art class. I'd never nurtured a creative bone in my body. I just always, you know, ran into things for sport. You know, I was a football player and a lacrosse player. So I d I I didn't have a lot of confidence in my own creative sensibilities, but I loved supporting others that did.

And um And so we decided to start Sammy Joe as a women's contemporary line. We would drive up to Los Angeles on the weekends and shop for fabrics. And we'd literally drive away with bolts of fabrics that we would buy on the open market. And then we would work in San Diego with local pattern makers. Um

You know, Abby would do design work. Um and we would visit little specialty boutiques and we would sell them our clothes and You know, we got into a bunch of great boutiques up and down the California coast. It was a really awesome experience. How did you I mean so Abby is it was your partner, she was designing the clothing Was it

Blouses, um trousers, like what types of clothing was making. It was women's contemporary clothing. So we worked with a lot of, you know, silks and we would do skirts and little, you know, blouses and Dresses, um, things of that nature. And in the meantime, you were doing at least forty hours a week at Ernst and Young. Forty hours on a light week. Uh it was a very busy time in my life and You know, we were young and we had a lot of

lot of energy. So we were able to to do it. But The fact that the materials we were using weren't repeatable because we were just buying them off jobbers. They were like leftover scraps. And so we couldn't really create a repeatable model for making the clothes we were making, and we didn't know enough. And so ultimately at the time we were faced with that decision.

We chose to close the business. So it was a it was a great learning experience. I learned how clothing is made. And so for that I'm forever grateful. So you um All right. All right. So you close that business but but almost immediately well I I think you were still at Ernston Young

Um you you started another one. What What was that? What what was that business? Yeah, so when I closed Sammy Joe. I very quickly thereafter started a a graphic t shirt company. Um with a partner.

And and this partner was w what was his or her name? Uh his name is Chad. Mm-hmm. Chad was a really talented graphic designer. And so we decided to start making t-shirts. Working with

Different humanitarians and environmentalists to tell their story on the inside of these garments and then but really the business model was just to sell them to boutiques because they were really cool. The art was very contemporary. It was very fashionable. And you know, this is at the time when like Ed Hardy and these brands with like big graphics all down the front of the shirt was really popular back in the early two thousands. And so that was the that was what we were creating with Fiore. You called it V you call it Viore. Yeah, it was uh it was a different business, but it was called Viore and that that's ultimately

where I got the name to start the Viore that you know today. And and that name means mountain in Finnish. Well, you know, it's interesting'cause Viore 1.0

It was all about honoring these humanitarians environ environmentalists. They were our heroes. We kind of told the story of how they almost climbed these mountains with with what they were choosing to pursue and what they were taking on. And so I'm still trying to figure out how how that was gonna make money. You would you would sell the T shirts Into boutiques. And I understand the humanitarian side of it, but like you still have to make a sustainable business, right, to finance your business.

So how was like w just help me understand how this was going to Yeah, I mean no different than like a Tom's shoes or any brand that has a give back component to their brand. There was a great margin business and apparel, and um there was enough left over for for us to donate a percentage proceeds back to these organizations. So that was the model. It was like you buy this shirt, we're gonna give some of the proceeds to this group that and and and how did you get into did you get into Like how many stores did you get into?

We were probably selling to twenty five to thirty stores. when we decided that we needed to close the business. And and a couple of things happened kind of concurrently, but the great financial crisis of like two thousand seven, two thousand eight hit right after we started the business. And

All of a sudden, Walmart started selling organic cotton graphic T shirts for twenty five dollars. And we just kind of we just could not compete and the the plan that we had Wasn't it we weren't getting the type of traction that we needed to see in order to continue on and Chad wanted to go and travel.

And uh and came to me one day and said, Hey, I I'm gonna go travel around the the US in an R V and and I'm I'm out. So when Chad when you guys decide to kind of shut down this business What do you remember thinking this is around two thousand Seven, eight, I guess.

Um Did you think Well, there's still something else in me, or did you think, Okay, maybe I'm not cut out for this'cause that's you know, the second business I've shut down. And and I wouldn't say other of them were failures. You just They didn't quite

reach velocity like you'd wanted them to. Yeah, you know. It w I was heartbroken. And I always saw something big for that business and I always thought it could really materialize into something.

Um It probably wasn't gonna end up going anywhere. And so I think ultimately closing that business was really the the wisest decision. Um, even though at the time it felt like a a death in my family. You know, it was something that I had put a lot of energy and invested, you know, my my all of my savings into. All right. The second apparel business. And I guess you also around this time you also decide to leave Ernst and Young.

And and then and then I guess and then you help Launch yet another business which is not this one was not in fashion, but I guess this was a like a recruiting and a and a consulting firm called Yeah. Um which I I guess you did with a a couple of other people. And and you did this for quite some time, like eight eight or so years.

Um But during that period were you also Thinking about you know, like Mm maybe one day getting back into fashion. Yeah.

You know, at this point I wasn't wasn't eager to start another apparel brand. you know, Chad and I parted ways and I bought the trademark off of him. So I had that sitting there, just knowing that I love the name and the brand. So i in the event I ever did want to do something in the future. It could be there. As an option, but But no, I just immersed myself into VACO.

And we ended up building a really great company. We had a couple hundred consultants working for us across San Diego. We had multiple lines of business. But I'm kinda starting to feel like maybe material wealth alone isn't ultimately what's gonna inspire me.

Mm. I was going through a Tough time in my life. Um I just have a uh had a business partner that You know it kinda left and But my first marriage didn't work out. I got divorced.

And I was in a relationship that was you know, kind of toxic and probably not good for me. Um, and and I was partying probably more than I should have. So There's a story I've read and I and I'd love to to s sort of

tease us out a little bit because um I guess there was a Uh You you met somebody at a party. I've seen this described as a psychic.

Tell me about this story,'cause I don't know whether this is Apocryphal real or if it's even that significant in your life. But I I read about it, so I'm curious to hear your take. part of my story and so happy to share. I um I'm at a party. And

this woman who was a life coach. She worked with a lot of executives, but she's also an intuitive. came up to me and She started telling me all these really crazy things about my life, about how I was raised. How?

like my mom was my dad She told that I had had worked on a business that was my passion that I wanted um to be successful. So desperately.

And she said, This business that you're working on, this this idea is gonna be wildly successful. She's like, it's gonna be bigger than you could ever imagine. But it's not gonna be in its current form. And it's not gonna be with your current business partner. Hm.

And I just Literally started Crying. And ultimately she encouraged me.

You know, to step into some of those things that I was feeling. And so the next day I woke up. I broke up with my girlfriend. And I went to a yoga class. A friend I had been suggesting that I try yoga to heal my back for a long time. But I knew that yoga had a lot more benefits than just physical.

So you start to get into yoga. I mean, did you connect to it right away? Was it did it feel cathartic, like almost immediately? Well, at first it felt really hard. Um you know, and You know, being somebody that's worked out and been into exercise and played a lot of sports, you know, I wasn't

Scared of a hard workout. But But yoga was just different and I was taking these They were non heated classes. But I was sweating. so much and it was like very intense. And then the feeling you would get after class was just like

a complete release, like complete relaxation. And And I became Really addicted. It was like a very healing experience, not only for the physics and getting a lot of relief in my back. But also just feeling light.

So Joe, um while you're I mean obviously you you had Two small apparel brands that you'd started in the past. Neither of which kind of panned out. You had experience as a model as a younger man. Clearly at some point.

You started to think about what you are doing and Apparel.

w how those ideas start to percolate in your mind. When do you remember starting to think You know, there's there's something missing here. Yeah, well You know, it was really a a good friend of mine, a guy named Chris Miller, who's a Hall of Fame skateboarder.

And Chris had started some action sports brands. His first company was a company called Planet Earth, which was one of the first sustainable action sports brands. They did a lot of cool outerwear for snowboarding and um and then he he sold that business to K2 sports and then became the president of their action sports division and they launched a a skate shoe company called Audio Footwear. Um And so Chris also was very into yoga. We'd go to the same classes together and you know, I was starting to think about apparel.

and getting another brand going and Chris was actually having a lot of the same kind of thoughts and and so he and I would go surf together and it was just a very inspiring time and we live in this incredible community in in Encinitas in in coastal North County San Diego. And it's It's a this stretch of coast right along the Pacific Ocean. There's yoga studios on every block. And Chris and I always felt like And Sinitas is the perfect

source of inspiration for a brand. I mean b meantime there were Brands out there, right? I mean there was uh Patagonia, for example, just the first thing that comes to the top of my head. Um, maybe that's more sort of mountaineering and hiking, but Um, they were surf brands, surf brands have been around for a long time.

Uh but what was it what was missing? What what our observation was that the big brands That we grew up with. As kids competing in sports, you know, you think of the Nikes and the Adidases of the world. Like they design clothing that really

identified you as somebody that was going to the gym or going to compete in a sport. It had a very competitive spirit about it. It was very urban, kind of street inspired. lot of big logos, shiny reflective details, kind of loose baggier fits. But As I gotten older and now I'm in my thirties, I'm going to yoga.

you know, the lifestyle was just very different. Like studio fitness was booming and it became All about community. Yeah. People weren't looking for product that you just wanted to rush and change out of right when class was over. Cause you would stick around, you'd mix and mingle, you'd go do something with friends. And so we needed clothing that would keep up with us. And so what was really interesting is in Southern California, our observation was that people were wearing board shorts that were designed for surfing. Like long sh longer short.

Yeah. Exactly. And they had fixed waistbands. And so when they would get sweaty, they would kind of fall down off your hips and great for surfing, but not necessarily designed for sweat and movement in the way that you'd move in a yoga studio. And so Our feeling was like, why is it that people in southern California that maybe grew up in these subcultures of surf and skate. didn't identify with the big mainstream active war brands.

And so you So you thought all right, I'm gonna I'm gonna go for this. And Was Chris

Also Ready to do it at that point or or not quite yet? Was he still'cause he He was Running a a business. Yeah, you know, ultimately we decided that we were gonna

that I would be the first one to leave. I would quit my day job. And the plan originally was that Chris would eventually kind of follow suit and and join me on the journey. And I understood that if we were gonna have a chance at at doing it, um I was gonna have to jump in with two feet because there's just too many opportunities where things get tough and you wanna retreat back to what's comfortable. And if you have a day job, you have a salary paying the bills. It's too easy to return to that safe space. Um people thought I was crazy at that time. Um, especially my parents who were like, Wait a minute, you've just

invested eight years of your life building this great company of great flexibility. Like why would you leave to start your third apparel company, two of which have already failed. And I had this acute awareness of what it would be like to be on my deathbed. looking back and saying, gosh, I saw that opportunity so clearly and I didn't pursue it. And I just wasn't willing to live with that. I couldn't live with that.

Mm. When we come back in just a moment. How Joe sets out to design activewear that does not scream Activeware. Stay with us, I'm Guy Raz, and you're listening to how I built this.

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One more thing before we get back to the show, please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and it's totally free. Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2013. Joe leaves his consulting firm VACO and starts working with a new partner, Chris, to start an activeware brand. For men.

We needed to raise money and we would have calls with private individuals, sometimes financial institutions, really anybody that was willing to talk to us. Um we put together a brand deck and a business plan. We took A lot of investor calls and sadly got A lot of rejection in those early days.

W what was the what was your what was your pitch? Tell me how you would pitch me. I mean, you'd come in and you say, We're gonna start a men's lifestyle brand and I'm and I'm like, Well what does that mean? Tell me what you would say. Well, it was very much, you know, Lululemon had really exploded. But they weren't resonating. necessarily with men, you know, it was one of the fastest growing active apparel brands in the space. But men's was an afterthought. Yeah. We saw yoga and this active lifestyle for men as just a wide open space with nobody really competing for it.

Yeah. And people were like, Well, what's the IP? Like what's the customer acquisition hook? Are you guys digital marketing experts? You know, and And we were kind of cut from the old school, like Chris built a legacy wholesale brand. Neither of us had a lot of ecom experience or we weren't thinking through th about the business through more of a tech or digital lens first.

We saw an opportunity to build a community ab around the brand that was different than what existed in the market. And this was around twenty thirteen when all those stars you you start to see an explosion of DTC companies. raising money. Some of them succeeded, some of them didn't. But I imagine that also some of the questions were like, so wait, you're gonna make Like what? Like yoga pants or yoga tops? Like tell me what you're gonna make for guys. It almost never even got to that point, honestly.

I think when people realized that there was nothing proprietary or there wasn't a customer acquisition gimmick or hook to the business. A lot of meetings were short and there was a lot of passes. You know, which is funny, y you know when you talk about a relationship with rejection, being a model and working in Europe was constant rejection. And then my experience at VACO to trying to be a salesperson when I was a pretty shy guy, naturally. Yeah. I developed a really unique relationship with rejection. And so that was all building my backbone up for trying to raise capital for an apparel brand because it was kinda like starting a band and telling your friends you're gonna be the next rolling stones. People are like, Yeah

Good luck. Yeah. Um but nobody was interested in investing. So Well yeah, I mean and I'm sure they were like yoga guys aren't Guys aren't gonna buy yoga gear. That's they don't do that.

They're gonna come in with their Adidas and Nike shorts. Yeah. Go into yoga classes and Nike shorts. That's what I would do. Yeah. Um, I didn't think too much about it. So I imagine the pushback was like it's it works for women Lululemon because

Yoga is still perceived to be like sort of a sport for women, even though that's not true. But I think that would have been the pushback you were getting. Yeah, you know, we saw the success Lou Lou was having. They really defined a new category with an active. They were working with better materials. You know, the dirty secret in our space is that the big brands You know, they were really premium footwear offerings, but they never really had a premium apparel offering. Whereas like Lulu inherently was working with fabrics that were much more expensive. So before you did any cut and make of the garment, just the textiles, which is a huge ingredient in making a great garment.

Uh they were just better. Yeah. And so we wanted to do something really cool. premium and do something for men. And it just did not exist in the market. But Probably it ca and Lululemon is there's a f a femininity about the name too, or perception probably, Lulu Lemon.

Uh I mean I say this as somebody who has some Lululemon apparel. Uh for men. But I imagine But people at the time that you're trying to raise money from would have said, Well

If Lulu Lemon wants to do this And it's it's now working, wh why why are you gonna work? I don't remember that question specifically, but I think in just in general. People looked at me, somebody that didn't have a track record of success in apparel. And even with Chris, you know, Chris was there because he had a great background. He had had some ex success in consumer retail with in footwear primarily. But they just looked at us and said like

No, these aren't gonna I you know, I think some people saw the opportunity But maybe questioned. whether I was really gonna be the guy that was able to go and do this and disrupt this space. So Any luck raising money from

private equity or or V Cs in twenty thirteen, twenty fourteen. Nothing it was it was really challenging. And and how much were you How much were you looking to raise? I think our original goal was two million dollars. You couldn't raise the money.

From Priv so I from what I understand, you decided to go to reach out to your network of friends and family. To raise the money. I think our first raise, we had a goal of a couple of million dollars. I think we raised four hundred, like four hundred to five hundred thousand. Somewhere in that range.

And that was enough for us to get started and start working on. samples and starting to to bring some products to life. All right, so let's talk about now next step. You raise a little bit of money. You're on this full time. And it's just you and Chris, but but who who are who is gonna help you So let's just start with just designing.

the apparel. Did you have somebody that that you could work with or that you could source? Yeah, so um you know, Chris had some experience with a woman named Rebecca Bray. Who he worked with Um

back in his action sports days back dating back to planet Earth. And you know, Chris always felt Rebecca would be a really good fit. For Fiore. And uh we sat on a on a uh a couch in Chris's living room and talked about the vision, the idea for the brand and

And she just loved it. She she just saw what we saw in the active space. And so we we hired her almost as a consultant and independent contractor. And uh in the evenings I would You know, go over to her house and We would chip away at it. And tell me how you would do that. Like you you would say

I'm looking for like This kind of waistband and and This kind of fit like what would you say? How would you describe what you wanted? Yeah, I mean the first thing we were aligned with was like we wanted to create a more casual point of view in the category.

You know Uh there's a a saying in our space that you know, activeware is turbo, meaning it's like it looks like really technical activeware. product that identifies you as somebody that's going to the gym or competing in a sport, you know, and um we wanted to be the antithesis of that. So we wanted it to be effortless. Easy to wear. We wanted to have functional details that would support you through a workout, but we wanted to almost hide them from eyesight.

And it wasn't that turbo kind of technical look and feel. that was so commonplace in the active market. You know, speaking of sh of technical performance where, right, like I mean, how did you even know what kind of fabric you wanted. You didn't want like stretchy Right, tight fitting pants. You wanted something but not like loose, like

eighties sweatpants or thick. You wanted something thinner, lighter. I mean how did you Even know what kind of material you wanted. Well It's been an evolution.

This industry was just being developed. Premium activeware was was Very new. Yeah. And so where to go for sourcing it was a puzzle. It was it was like a scavenger hunt to figure out where to go to source. So the first products we brought to market was our first product was the the core short for men. And it's still our best selling men's athletic short. And the idea was to create a a short that almost looked more like a board short that was designed for surfing so that it would resonate with our community.

But it had a built in supportive liner. It would support you through a great workout. It would move and stretch with your body. It had an elastic waist. Yeah. And we put a draw cord on the outside of the shorts that was natural, that just looked more West Coast, more California esque. In its aesthetic. Alright, so All right, so when did you so you you

Basically Yeah, twenty thirteen you kinda jump into this. to the designs, you bring in Rebecca. Rebecca Bray is her name, I I think, right? Yeah. And how long before

you land on the design where you're like, That's it. That's the one. Do you remember how long it took? We loved the Core Shore. You know, when we brought that short to market, we started showing buyers across whether it was big national chains or it was fitness stores.

They looked at it and they were scratching their heads like, what is this? It looks like a swim short, you know, this isn't activewear. And you know, we I we even had some activewear uh buyers tell us. This is never gonna sell in New York City. um, you know, maybe on the West Coast, but but never here in New York. But that was that was it. It was the core short. That was our first product. We were like, this is the one. Alright, let me let me back up and fill some gaps in before you go to market with this. So you've got a design.

And by the way, were you able to hire anybody else or was it s really in the first year just Bring in consultants. Yeah, so you know, it was really myself and Rebecca initially, and then the first person we hired with the little fundraising that we had done, um,'cause I I chose not to take a salary from the business. Um Just to be able to keep the lights on longer. Um

The first person we hired was Nicki Sakilio. who is our CMO today. And Nicki's been with me since day one. Rebecca's still with us today, but but Nicky had a an incredible marketing background. Um

She was most recently before Viore with a company called Prana. Which is like a outdoor kind of climbing Patagonia esque brand. And then Also, she worked in the surf industry. She worked for a company called and OP back in the day.

And so she had this interesting hybrid background between action sports and surf and beach culture and yoga and performance and outdoor. Alright, so Yeah. sort of land on a Design for the shorts.

Where did you source The place it was gonna make you the samples. So Rebecca Brought in. a gentleman who she had been working with in another business.

That did some golf. type of apparel. He did some surf apparel. And he was an agent. Um and he represented a factory in China. That had some experience with these

types of stretch performance materials. And so that's who we contacted and and started working with on the these first designs. How did the those initial samples Come out. Were you happy with What they made.

No, the first samples, the fabric was way too heavy. the prints weren't executing properly, the liner didn't fit well. And you know, today it's funny, we have these big technical design teams, then they're pattern makers. They're experts in making product fit exceptionally well. In those days it was Rebecca and I, we were winging it. Yeah, we would Get a sample in my size, I would try it on and we would talk through

how to change the fit and we would try to communicate that to the factory and then we would get another proto back. Our vision is to create the best product on the planet, but when we started, the product kind of sucked. And we had a lot of work to do to improve it. All right, and so it took you uh about a year and a half, right, before you were ready to launch that first product, but before we get there. Did it feel Like your

Pace was the right pace or did you feel like it was taking too long? I think at the time it felt like it was taking a a long time. Obviously I was a little naive. I hadn't Built. An apparel brand with offshore production and all the complexity of sourcing these types of materials. And then from product ideation and design through

like delivery of production. It's a long time. And so if to be chipping away at something, to be burning capital and not being in market getting real time feedback can feel like a a slug. Can feel like a really long time. So what were the biggest I mean the biggest obstacles presumably were just

I mean uh there was everything, but what do you remember uh in that first year and a half just getting frustrated over You know, w what kind of things like were driving you crazy? Well There were other brands that were launching. around the same time that had similar ideas or similar

takes on this category, whether they were women's or men's, But we were we were hearing that Some of these brands were having a lot more success raising capital than We were. And so I developed a complex that

Man, these other brands have a lot more money. They're gonna outspend us, they're gonna outmarket us, and ultimately just beat us to market with a similar idea. Um, because you know, here we were, we had raised a couple hundred thousand four hundred thousand dollars. Um, I wasn't paying myself. We were working in a garage. Um from one of our investors that that uh didn't require us paying rent. It was a true bootstrapped business.

And and I had a you know, a little bit of an insecurity around whether or not we could go out and compete with these brands that were raising a lot of institutional capital and getting big kind of retail names on their boards. And that was really nerve-wracking. Well we come back in just a moment. How Joe and his team embark a risky new strategy.

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Hey, welcome back to how I built this. So it's 2015, and with dwindling cash and an eye on competitors with a lot more money. Viore launches its first products into the world. The initial idea was that we would sell through Gyms and Yoga Studios.

You know, and studio fitness was exploding. So these concepts, whether it was Soul Cycle or it was CrossFit or, you know, Orange Theory or Equinox, there were studio fitnesses. uh concepts popping up everywhere. And so you were seeing a lot of women's brands that were popping up that were selling in these studios and gyms and building great little businesses.

But there was never an offering for men. Of any nothing really. Substantive. Yeah. And so Viore felt like

Well, we can be that brand. And you know, it may not be a huge business, but a great jumping off point um to kind of get started. All right, so you start to roll it out like Do you remember how much money you guys spent on your first order? From the factory in China, was it? You know

Half a million dollars? I mean, was it a was it a big purchase? I think it was less than that, um, but we ordered five hundred units. Per colo. of uh I think like three items. It was the minimum order quantity.

But it was maybe like a I don't know, a hundred thousand dollars worth of inventory. Yeah. And You ended up getting them into Places like Equinox and Core Power.

From the get go. Not initially. We we're selling into a lot of more independent uh yoga studios. Yeah um you know your one offs or s or chains that had three or four doors. Um

I don't think the product was quite ready for national distribution with core power equinox at that time. But Presumably, I mean this is the way to go, right?'Cause you're kinda expose Your brand. to your audience.

You know, we got some sell through, but it was typically when a guy left his short at the office. So he didn't have something, he would buy a pair of our short. Um so there was that. And it wasn't just yoga studios. We were selling into some surf shops, some outdoor shops. we were calling on the big guys and trying to get meetings and we we actually did get a lot of meetings. I remember the first trip I took was to New York and I just packed a suitcase and I toted my my products around walked into a bunch of different gyms and and talked to some more sophisticated buyers at specialty shops and And people just looked at the product and they didn't really get what we were trying to do. Again, it just looked very different. It didn't look like activewear.

And therefore we got a lot of passes. And and keep in mind, this is at a time when premium active or wasn't a category that was sold at Nordstrom. It wasn't sold at REI or outdoor shops. So Well if you explained to somebody that you were gonna build this premium men's activewear brand, people just were like, that's not a top priority for our business. You know, right now we have a challenge where everybody's wearing Lululemon. All of our female c customers are wearing Lululemon. If we're gonna get into active where it's gonna be a women's brand to address The need for

To service that woman. Yeah. So yeah, that that was a really low point for me. Because um You know we

We just didn't know if our business strategy was gonna work. Did you think that maybe you were wrong? Maybe guys. Aren't looking for this.

I mean I knew that our community was I I just I saw it so clearly and I believed it wholeheartedly. But Of course, you know, there was definitely That

You know, a lot of self doubt. I would go home to my now wife at at the time she was my girlfriend and You know. I had some really long nights and um You know, it was just doing a lot of self reflection. Here I was somebody that had thrown away a career.

At a company that I had built. Um to pursue something, you know, with a lot of friends and family money. And it wasn't going. really well. And so

Yeah, those were those were some dark days. Mm. And and I I s I mean, I guess pretty much within a year. after you launch you you sort of realize that your your strategy isn't working and

And so you guys. I I you do like a major pivot and you just y I guess you decide to start selling Direct to consumer. I mean at that time Um, you know, DTC was starting to take off.

So was it clear to to the team like, you know, we gotta go do this, we gotta just t try and and sell through websites? I think it was scary. You know, we had a little bit of capital left. And so we we did take some meetings with Digital agencies.

That would help us with our advertising strategy. And What we understood was that you had to spend A some a certain amount of dollars in order to get enough data pushed through your website so that you could then be responsive. and and make adjustments and ultimately find

your customer online. And so the idea of taking the little precious capital that we had left and investing it into What appeared at the time having no experience in digital advertising. It just appeared you it was like you were just blowing it into the wind. Yeah. That was really scary because if it didn't go well and we didn't define this engine of growth quickly.

We were gonna be out of business and that would have been lights out game over. Who who who is the marketing strategy? I mean, how did you find the right'cause There are hundreds of digital marketing companies that were pitching you. And How did you f land on the right one?

Well, you know, it's so interesting'cause back in those times my reflection was that Advertising on search was very much a proven industry. But social advertising was very new. And we got a list of names and we ultimately landed on a a digital agency that Um You know, we trusted.

And so I remember, you know, we got started in this advertising and we started paying a lot of attention to the ads and what was kind of getting a better response than others. And you know, after an okay response, like I remember our first month, we invested$5,000, we got$5,000 back. And so we were like, okay, we just gave away essentially a lot of product, but we got some new customers wearing the brand. Yeah. The next month we invested maybe seven thousand dollars and we got eight thousand dollars back. And it was like that kind of a build. We were like getting our product back for our inventory or getting our money back. And it was these were static ads that you would see on Facebook or were they videos? Yeah, they were static ads. Oftentimes they would have a guy doing A yoga pose.

And then we would have a message on that image that said something like, versatility is a virtue or one short every sport. You know, this is men's yoga, you know, things along those lines. We were testing a lot of different copy. It was a really defining moment for me. I remember I was sitting. Uh on my couch on a Sunday. And I remember I just I pulled up Photoshop. And I I lined up all of

our different colors and prints of this core short, the short that we had launched with that was the the differentiator, it was our reason for being. And Then a across the top. On a white background it just said Run.

Surf, hike, train, travel, chill. And the idea being conveying like that this isn't to be put in a box. Like we're not gonna tell you one specific end use. This is a versatile athletic short. And that ad started to get Really awesome traction.

And it was like before you knew it, we were putting $10,000 in and we were getting$2,000 back in a month. And then we were putting$20,000 in and we were getting$60,000 back. And All of a sudden we had this engine of growth. that we could take back to investors and we could show them the data.

And You know, while some guys were wearing it to yoga. What we heard loud and clear was that what What people really loved about the brand was the product and its versatility. Um And so wonderful

How like It seems like from the really from that moment, right, when you go DTC. It's working. But you also decided to work with retailers, brick and mortar stores as well. And a lot of DTC brands then, even now, won't do that because you can make a lot more money just selling direct to consumers.

Can you kinda give me wanted to work with brick and mortar and do D T C. I think partly. Because we had to out of necessity, you know, we weren't

Mm. Flush with the capital. And so keep in mind like over so over the first few years of the business, we raised two million dollars of of capital from friends and family. No financial institutions. Some of our competitors had raised twenty, twenty-five, upwards of fifty million dollars. We couldn't compete with them solely on The social

playing field. Um so we knew that we needed to complement what we were doing and we needed another customer acquisition vehicle. And we knew that wholesale could be a a critical component of that. So after kind of hitting the pause button on wholesale while we were developing and building our digital community.

Once we established an engine of growth and we got out of the gates, And these wholesale accounts could s take note of what we were doing. A lot of the nose that we originally got when we first showed the samples to these buyers turned into yeses. Were you under pressure to sell at different price points? I mean

W was it the same price in those stores as it was on the website? It was the same price, but because we were a premium brand, we sold a little bit higher than where the market existed for wholesale. So activeware in the wholesale market. historically was dominated by Nike and Adidas and these big brands. And they really didn't have a premium offering. So

Their athletic shorts might have been. fifty two dollars. Ours were sixty eight. And so When we first launched, before we had built a direct community on our website. Buyers would just say, We don't sell active work at this price point. Um

Not only does this not look like activeware, but this is priced out of our Range. For for our consumer. So what'd you do? Well, after building that model online and people started seeing that we were getting momentum, they were they started changing their mind. And

We ended up getting a call from REI. Um, which is a really fun story. Nikki worked with a gentleman from Prana, her Prana days. He was in their marketing department at REI, but She introduced me to him. I I connected with him when I went out to outdoor retailer, which is a big

Trade show. But he took a meeting with me and just talked to me about REI and the inner workings, and I brought him a bag of clothes and I just said, This is for your time. I just wanted to thank you. We had didn't have any expectation. There was no ask of giving him that close. We got a call from him. And he asked if it would be okay for him to connect us with the buyer, the activeware buyer at REI.

Because he was wearing the hoodie that we gifted him in the hallway. And the active war buyer asked him what he was wearing. She said, I really like that hoodie. Who makes that? And uh he said, Oh, these are this is this startup down in San Diego called Viore. And the next thing you know, we were on a plane up to Seattle to present the line to REI. And

And that was really the first big wholesale partner that we had as a brand. So Uh one of the things that happened during you know, sort of as you're building,'cause you know, you're still a small company, right? But um and by the way, do you remember? How long before you reached

A million in revenue. Did that happen in in twenty sixteen or did it not happen until later? Yeah, that happened in twenty sixteen. Let me ask you about competitors at that time. Ron. outdoor voices. They were raising money doing deals with private equity, bringing in

big executives. Were you nervous when you were seeing the kind of money they were attracting and the deals they were doing at that time where you like, God, we're in trouble. They could crush us. Absolutely. And I felt like others might beat us. in in the market, they might end up just beating us to the ultimate goal that I think a lot of us saw. in the market.

And Ran was kind of a com I mean even now, but it was certainly a a a bigger competitor at the time, right? Yeah, the the CEO of Equinox once told me in a meeting that uh Rone was like Biggie and Viore was like Tupac. Because

You know, they they were originated on the east coast at a very similar time that Viore started. They wanted to create a premium men's active or brand. They kind of built it through the lens of the East Coast and that lifestyle. we saw the same opportunity, but we we built our product and our brand. through our lifestyle and our community.

Um Here on the West Coast. But they had an advantage r uh a financial advantage, right? I'm assuming they had raised a lot more money than you had raised by the time. By by twenty seventeen. Yeah.

They had raised a lot more money. And so again, um real real reason for insecurity. You know, when we showed up at trade shows, it was always Viore and Ron as the only two premium men's activewear brands in a sea of women's brands. And so we were very competitive with them. We were very in tune with what they were doing.

And um And yeah, so it was hard to see them have a lot of success raising capital when we weren't having as much luck. Um Were you w when do you remember feeling like Okay. were I mean,'cause I think by twenty eighteen

You are gonna do maybe thirty, forty million dollars in revenue that year. Um, I mean that's a massive Jump from when you first launched in twenty fifteen.

that year do you remember feeling like, okay. We're in good place. Like we are It's all growth from here. Yeah, you know, I think it's two there were two things. We built a really great

business online. The second was when REI called and they wanted to bring in Fiore and they brought in some other emerging brands like Rone and some others, and then they brought in some legacy brands, the big names that everybody knows. And they put this activewear concept together on their floor and they did it in ten of their biggest metro market doors. And

I remember the buyer, the first time that I felt like we might be really on to something here, the buyer called me and said Viore blew out the competition and you guys had the most productive inventory. in those ten doors. And they were they were very surprised. And so they asked us if we wanted to grow from ten doors to seventy doors in the next season. But now this is the first time we had a data point where we sat on a national level.

With virtually no real marketing. next to some of the best brands that we grew up aspiring to as kids. You know and and having Such having so much success in that test really built a lot of confidence. Um In the garage. So we were we were really excited. Around that time got into the blue lemon.

Space well you already kinda were, but you released a women's line. I mean was that because Women were seeing men buying it and they were saying, Hey One of you. Make

Clothing for us. Yeah. It was always a vision to be a dual gender brand. And so we always knew women's would follow. We just knew that men's was the right business strategy to lead with. And so 2018 was when we decided it was time. And we designed a very small capsule for women's and we brought it to market. And today

fifty percent of our business is actually women's. You hit profitability, I think within two years of launch, which is really unusual. I mean, part of it is your your price point was higher. Right, people were willing to pay sixty eight bucks for shorts. But part of that ha had to have been Efficiency.

So what were some of the things that you did? To save money to become profitable like Tell me about some of the strategies you've used to become profitable within two years. Yeah, I mean

I was an accountant by trade. So conservatism I think was just embedded into who I was and as an operator of the business But we I never understood the idea of acquiring a customer at a loss. And that became a very popular trend is to, you know, you spend two hundred dollars to acquire a customer that would only spend a hundred and fifty dollars with you and

So after your margin and everything, you know, you're losing a considerable amount of money. And the argument was, Well, once you acquire a customer, Over time. they'll continue to buy with you and they'll become profitable a year down the road or some sometime in the future. And that really never made sense to me because you always have to market. to your customer to get them to re-engage and buy.

So We're very Particular. about the contribution margin of every dollar we spent on advertising. It had to yield a specific return.

So that was one. You know, number two, I never took a salary from the business. I I I lived very inexpensively in a little tiny apartment. And uh I found ways to make my savings go a really long way. And then I I made requests so the people you know that a lot of the people that joined me in those early days worked for a fraction

of the price of what they were worth on the open market and They believed in what we were building and So we just we were a true bootstrap business. So I mean

Basically This takes you to your first really big fundraise. Which I think happens in twenty nineteen. Which is forty five million dollars. And this is really the first time you brought in a lot of money from an outside investor, right?

Yeah the business was growing really fast. And so we weren't in a place that we needed capital. And I think that's you know, the funny the funny thing uh about this entrepreneurial journey is like when you need it desperately, it it wasn't available, but But as soon as we didn't need it. Um You know, there it was.

But we chose to partner with Norwest Venture Partners because they were really supportive. They saw the vision for the brand clearly. They believed in us. They believed in the management team and they they wanted to be invited guests. They wanted to be a line along for the ride. be helpful where they could be helpful. But not really. disturb the creative nucleus that we cherished so much at the brand.

And so yeah, we we raised uh our first round. A lot of the money ended up going to shareholders because the business didn't need capital. So We didn't go out and put a bunch of money on the balance sheet. at that time because we didn't want it to create bad habits. We were very proud of the discipline and the financial rigor with which we were building the business. So we didn't want a big check. to sitting on our balance sheet to disrupt that.

So essentially a lot of early investors got some liquidity. Yes. So You are now I mean you've got some

the you've got cash flow coming in. I mean you you're able to kind of Grow. simply f through sales. Um And You know?

from everything I've read, I mean you hit two thousand nineteen, twenty Um are going great. And then You've got The pandemic which

Of course would Yeah. Was the one of the scariest moments of my professional career. We got calls from all of our wholesale partners that said, you know, don't ship us any inventory. But we had inventory that was on boats or was already in our warehouse.

that was dedicated for them. When we got those calls, we it was had a downstream effect. We called all of our suppliers and we said, Please hold the production lines. Don't make us any more inventory. We've got to work this out. And then quickly as people started getting comfortable with their new lifestyle. They started shopping online.

And All of a sudden what I thought was a panic. And and Yeah, calling my suppliers and telling them not to make inventory, I called them back and I said, you know what? I don't think we're making enough.

And that was a roller coaster. um of emotions over a couple month period. And Coming out of the pandemic. You Well I guess we're approached.

By Softbank. the giant Japanese investment bank stopping to Maybe make an investment. Do they come to you unsolicited? Yeah. We weren't looking for capital.

But you know, we had ambitious plans for Viore. And That was a really big moment for the brand because short of an IPO. I think it was the first time that Maybe the market

Understood. How special this business is that we're that we're building. And it wasn't just an investment, it was a four hundred million dollar investment. The valued Yori at Four billion dollars. One of the largest

investments and valuations to be made in a non public apparel company ever. And for some people That was the first time they heard of Euri. Like some people were like V what? What who? Four billion dollars, what is this company? Yeah, we didn't have a real big share of voice in the media. We we were kind of overlooked and so

That was a really special moment for our team because we all got to celebrate this this incredibly special thing. um that we all built together. Um Joe when you think about You know, growing up and Mm.

Sean Island and then That's out of Seattle and then Trying modelling and And then really

really working hard to t to get traction with this brand. How much of where you are today do you attribute to to how hard you worked? And how much do you think had to do with luck? Just luck of people being interested in this product of

the weird, odd look of the pandemic, um just all those things. Do do you think that they matter? I think Every little piece of that is a part of a big equation. I don't think there's one thing that defines our success. All those things that have maybe have felt like defeat in the moment when I look back.

With hindsight. I realized they were the biggest blessings. And I I didn't do this alone. You know, whether Nicky and Rebecca in the early days, you know, Chris Um and the formation of the idea. Like

so many incredibly talented human beings that are still so close to me today. I think it all plays a part. Um The one constant is you have to work hard because luck might open a window or a door. but it's the hard work and the preparation that allows you to walk through it.

That's Joe Kudla. founder and CEO of Viore. By the way, his founding partner, Chris Miller, still sits on the company's board and If you get a chance, check out some of the videos of Chris skateboarding. He's won a ton of international awards and in 2015, he was inducted into the skateboarding hall of fame. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's totally free. This episode was produced by Ramel Wood with music composed by Ramteen Arablui. It was edited by Neva Grant. Our audio engineer was Gilly Moon.

Our production staff also includes Casey Herman, JC Howard, Sam Paulson, Alex Chung, Carrie Thompson, Elaine Coates, John Isabella, Chris Massini, and Carla Esteves. I'm Guy Raz, and you've been listening.

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