Ep. 052: On Launching a Performance Apparel Brand — The Joe Kudla Interview
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.
(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.
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 advertising in kind of the way that we told the story of Vuori. We open the aperture up a little bit to let more people into the tent so to speak. And that change was really instrumental in us. Getting all out of the gates and, and starting to grow really fast.
John Benzick: Yeah. And that's, that's not as easy as it sounds either because getting the messaging right is sort of tricky. I mean, there's three or four different ways that you can do that and you know, like the 80, 20 rule, most of them are going to be wrong. So that takes some real insight into how to present that 100%.
Joe Kudla: I mean, I think the Internet for giving us the opportunity to learn that lesson fairly inexpensively. Right. You know, in the olden days, you know, you'd have to take out a billboard or a full page ad in a magazine and you wouldn't really have feedback until the end of the season on how that marketing message resonated. Whereas now you can really learn those lessons fairly quickly without a lot of damage to your brand online.
John Benzick: So Joe, let's get personal on a few topics. Many aspiring entrepreneurs don't know what they don't know before starting a business. They sort of unconsciously incompetent in certain areas, not as fully prepared as they thought they should be in starting a business. Before you started Vuori, to what extent were your previous career skills and knowledge aligned with your task of launching an apparel brand? Let's say on a scale of one to 10, 10 being very aligned, how did your previous skills and knowledge fit with your new startup?
Joe Kudla: Well, I would have to say they were on the low end of that scale. Yeah, I'd give myself maybe a three, three and a half. You know, I started my career in public accounting, working for Ernst and Young and I got my CPA license and I would say, you know, to any kid who wants to go into entrepreneurship but doesn't really know what they want to major in in school, accounting is a great major because, and going and cutting your teeth at a CPA firm is a great start because you get to go out and learn on other people's dimes and you get exposed to so many different businesses. And how they generate and the types of agreements that they enter into. And you know, whether it's an inventory model or a software model, you really get exposed to a lot of different things and it kind of rounds you out as an entrepreneur. So from that standpoint, I would say I was very prepared, but going into an apparel industry that has so many moving parts is so challenging. I didn't have that type of life experience, which like I said earlier, I would never change that about my experience because I think it gave me the courage to step into the unknown. And take this, this beast of a project on with enthusiasm and optimism, which I think is half the battle in entrepreneurship.
John Benzick: What's so interesting about you, at least from my perspective, Joe, is that you, at least on paper, are sort of a left brained type of guy being a CPA, but yet clothing, apparel, fashion design is very right brained. What sort of thoughts do you have on that and about yourself?
Joe Kudla: Well, I'm a Pisces, so if you ask my wife, I'm always swimming in two different directions at the same time. But I mean that, that I think is me in a nutshell. I love diving into a spreadsheet. I love numbers, but at the same time, if that's all that I do, my soul really isn't fed. And I have a creative side of me that that is, you know, constantly thinking of new things. And you know, I love aesthetics and I love the tactile nature of things. I love touching fabrics. And so I kind of live in between those two worlds, which I do think serves me well in this industry.
John Benzick: What's the number one lesson you've learned since starting the Vuori?
Joe Kudla: Great people. I've learned so many lessons across operations to product to finance, but surround yourself with great people. I love the quote, it's amazing what you can accomplish when you, no one cares who gets the credit. But as soon as I was able to get out of my own way and check my own ego and trust other people and bring in expertise, it's made a huge difference in my personal life as well as the business.
John Benzick: Joe, many entrepreneurs, including very successful ones, have regrets in doing things incorrectly early along their entrepreneurial journey. I think those regrets can reveal valuable lessons to aspiring entrepreneurs. And since you started Vuori would you have approached the business differently if you could go back and do it over again?
Joe Kudla: Well, they're always the lessons that we learned about finding that right product market message fit, but you, it's hard to say that I would go back and make changes per se. I mean, we, we've been very fortunate that everybody for the most part is still here with the business contributing. We've been fortunate in building what we like to call more of a family than a business. And you know, we haven't made any big mistakes that have cost us tons of money or put us on the verge of bankruptcy. There was some early days that we were very scared when we were looking to define that engine of growth. We had went out and raised a little bit of capital and we were struggling to find that engine of growth that was going to propel us forward.
Those were very, very scary days for us. And so it would have been nice to have defined that engine of growth earlier. I might've added a couple more years to my life and got a couple more good nights of sleep, but you know, there's nothing that in our path, you know, I, I don't like to look backwards and it sounds Cliche, but I, but I really don't like to look backwards and reflect on, you know, things that I would change. I, I feel like everything happens for a reason and as long as you have awareness and you're willing to learn from your, you know, quote unquote mistakes, you know, you're going to keep moving in the right direction.
John Benzick: Joe, it seems that nine out of 10 people just talk about starting a business, but they never start one. Starting a business is pretty special and really unusual actually. What motivates a person like you, Joe, that can go from not just talking about launching a business and to actually go out and start an apparel company.
Joe Kudla: Well that is a great question that I don't know if I haven't an intelligent answer for, I guess I would just share that for me personally, there's really no other way to live. I've always enjoyed, you know, that kind of risk versus reward relationship and you know, I've never been afraid of taking a risk and falling on my face. And I think that, I guess if I was to say anything it's to let fear sometimes guide you. And you know, for me, if I'm afraid of something, I'm typically drawn to it. And 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, 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 all honesty.
John Benzick: That's a great perspective. Did your success with Vuori surprise you?
Joe Kudla: Absolutely. You know, it's funny because you spend all this time building projections and convincing investors that you're going to hit these numbers, but then when you go out and actually do, you know, I think you even surprised yourself. That was definitely the case for me. I mean we're actually far exceeding what we thought was going to be possible with the business at this early of a stage. And, you know, every day I have to wake up and pinch and, and just, you know, I'm really just excited and, and truly just honored to come to work with such an incredible team that's all aligned, fighting the good fight together. And and we're all, we're all just so thrilled with what we've been able to accomplish.
John Benzick: Yeah. Let's get more specific on that. What has been your biggest joy or what are you most proud of since starting the company?
Joe Kudla: It's definitely the team of people that have come to work to build this brand. There was a lot of things, the numbers are exciting, but I'll say that the numbers are only exciting for a short period of time. And then there's another number and then another and another number. So, you know, the things that give me joy is, is the fact that I love coming to work every day and, and working alongside an incredible team. That to me is, is the most rewarding thing that we've been able to build here
John Benzick: What has been your biggest frustration?
Joe Kudla: Oh boy. Well I think that I underestimated how many people it was going to require to run an apparel business successfully. And I underestimated like the complexity of the operational environment. When it comes to managing inventory effectively, making sure you're buying the right inventory to, to accommodate the needs of a multichannel business. I think that it can get very complicated and you can get yourself into a lot of trouble very quickly if you don't bring on the necessary professional help to help you with those decisions early on.
John Benzick: Joe, many entrepreneurs, even seasoned ones, experience self doubt as they go along their entrepreneurial journey. How much self doubt have you had, if any, and what have you done to deal with it?
Joe Kudla: Yeah, I think, you know, self doubt is I think a byproduct of being, living in the unknown. And as entrepreneurs we live every day in the unknown. And so for me, part of what inspired the business is also kind of what I turn to in those moments. And that's, you know, getting on my Yoga Mat taking a class or taking some time to meditate. You know, recently I've been getting into cold therapy, but you know, I, if, if there's one thing that I do that I find a lot of benefit from that I could pass on to other entrepreneurs or other people aspiring to be entrepreneurs is to build practices into your day outside of your, your job that help you to get clarity and help you to tune into your kind of true nature. Because the biggest I think risk is entrepreneurs is that you're moving forward and not being guided properly. And I think, you know, clarity is the best gift that we can get. And I think finding time to build a meditation practice or get on your yoga mat and spend some time in quiet reflection is is, is the best way that I've found to manage self doubt.
John Benzick: Joe, starting a business is difficult, as you know. Has it changed you as a person?
Joe Kudla: Yeah, absolutely. Well, it's definitely checked my ego at the door, so I'm a, I'm much more, I feel like willing to seek out expertise now than I ever was before. And I'm much more patient because I recognize that sometimes taking a longer path to an eventual outcome is the right decision. And I've learned that being patient in business is is a very valuable asset.
John Benzick: In relation to that, what do you think you've learned most about yourself?
Joe Kudla: Well, I feel like I have learned that I have high propensity to deal with stress and the unknown and that I've learned that by holding steady through the ups and downs, I'm able to accomplish my goals.
John Benzick: Joe, who has been most influential to you in your life? Either professionally or personally?
Joe Kudla: I would say my Stepdad, my Stepdad is, is also an entrepreneur, but he lives his life with an incredibly open heart and he's incredibly giving and he looks at he finds a way to look at every situation with optimism. And while I don't feel like I'm quite there, I draw a tremendous amount of inspiration from him. And how he's balanced his personal and professional life and is kind of physical and spiritual life. And I feel like he's been a great guidance.
John Benzick: Joe, here we are in the, tell me how segment of the podcast where we aim to get to the heart of the matter regarding key issues for aspiring entreprenuers. Joe, let's talk about raising capital. Did you originally raise capital for Vuori? And if you did, how did you do that?
Joe Kudla: We did, you know, we thought about potentially trying to self fund the business with, you know, lean budget, but we ultimately decided that the best way to get out of the gates for us in our category was to raise money. And so we did that by putting together a, a brand deck with some projections and kind of a visual representation of, you know, the brand that we wanted to create and what we believe to be the opportunity. And we took it out to friends and family and we asked them to, to, to write us a check. And I, I like in raising money in an apparel business to starting a band and trying to get signed. It's, it's a, it's next to impossible. It's very, very challenging. And we heard a lot of nos on that path. But I was fortunate that I had surrounded myself with some other folks that had been in the apparel industry.
One of our board members is a guy named Chris Miller and Chris had started a few brands and you know, Chris was kind of instrumental in kind of joining forces with me from the very beginning and having conversations with investors to where there was some experience in the conversation, some credibility and that really helped us to get our first dollars in. And then once we got our first dollars in by some reputable investors, we were able to quickly round out the round with, with others.
John Benzick: What's your number one piece of advice for finding the right capital for your business?
Joe Kudla: Well, it depends on what you're doing and what your goals are and what the amount that you need to raise is. If you feel like you can get out of the gates and go out and get proof of concept with a small raise, I would, I would focus on that.
The other thing that I think a lot entrepreneurs get hung up on early on is the valuation of their business. And I think that that is such a difficult thing to do. And one way to get around that if you're able to is by offering a convertible note structure and that's what we did. And a convertible note structure allows people to invest in your business without knowing what the valuation is. All that they know is that if the business is successful, that their equity, their dollars are going to get valued at a better number than the professional institution or the professional investor that's going to come in later and value your business once there's enough data to support evaluation. And that, that was one thing that we did where it really took the pressure off of me having that valuation conversation early on in the business.
It really, it worked really well for us.
John Benzick: Let's talk about finding a manufacturer, which is a key topic I think for apparel companies. How did you go about finding a manufacturer for Vuori?
Joe Kudla: Well, I would say this, for us it was a little bit easier because our designer that we brought on board early on had, you know, 20 year working relationships with great factories that we were able to bring this brand to and they had experience making very similar product. So finding the manufacturer for us was, was fairly easy. But I will say that, you know, we're constantly looking to find additional factories that specialize in different things. And the best way that I've been able to do that is by attending trade shows and by calling people that are down channel in the supply chain that, that provide goods and services to those factories.
So, you know, textile companies. For example, if you can find the best textile companies in our space that offer a specific type of fabric, then ask them what are they typically sending this to? Like, do they have any recommendations on, on factories that they should reach out to or, you know, for us it could be call a pattern maker and find out what factories those pattern makers are working with and what, what do they think would be a good fit for you. So there's a lot of different channels, but it's, you know, pick up the phone, call people in the supply chain and ask a lot of questions. And I imagine since your fabric is pretty premium and your product is fairly technical, that you probably have to go overseas for the proper manufacturing of your types of products. Yes, that's true. We, 99% of our product is manufactured in Asia.
We work with very strong factories that are fair trade, fair labor certified. They have environmental practices incorporated into their business. So we're very happy with our production partners in Asia. And then we work with actually a local cut and sew factory in San Diego. That does great work and so we'll bring some smaller batch, local production to them from time to time. I remember visiting one or two of those board short makers about 10 years ago when I was in the business. That was interesting and fun to see in LA.
John Benzick: Let's shift gears and talk about selling the product to retailers. Given that we're talking to aspiring entrepreneurs here early on, how did you learn to do that? What were those first approaches like to actual retailers?
Joe Kudla: Yeah, so for us not not every retailer is open to taking your call, but for us we would find out who, in our case, a lot of yoga studios would have studio managers.
We'd find out who those were through our own internal networks or through LinkedIn and we'd reach out to them and ask them if they'd be interested in, in having a look. That was kind of the most direct path that we took. We'd also just call the studios or call the store that we were interested in and ask who the buyer was and if it, if the stores were in our local area, we would just walk in unannounced and introduce ourselves, drop off a card and a catalog. And and see if they would be interested in having a look. And you know, for the most part buyers are responsible for keeping up to date with what's fresh and what's new and if you can communicate an effective value proposition or brand proposition to them, I think a lot of times they're pretty open to having a look.
And so for us that was the case. You know, we, we got a lot of meetings and a lot of people took a look at the product and we sold in fairly well. There were specific channels that didn't see the turnover right out of the gates as well as we would like. And so that was more of our challenge than it was getting in the door.
John Benzick: Joe, in one of the businesses that I owned, we sold product to salons and spas. And what we were not prepared to find out was that many of these service company salons and spas or not really good at selling retail product, we just didn't know that we would see it on their shelves, but they were not that good at it. Did you experience some of that as well at the gyms, the fitness centers and, or the yoga studios where they're good at delivering services but not competent yet at distributing product?
Joe Kudla: Absolutely. And that's still the case today. Some of them are better than others, but we do notice that, you know, as a general rule of thumb, a service business, like a yoga studio or a gym, you know, their primary business is offering the great experience to those people that walk in the door. It's not selling them product. And so that falls by default that that's a second. It falls in second place. And so we, we definitely noticed that. And I'll add to that, I would say especially when they're talking about men's apparel, you know, at a yoga studio, a women, a woman might hang out afterwards and kind of browse the racks to, to find some new apparel for our next class. Whereas men, you know, they might be a little bit more uncomfortable just being there in the first place.
And so right after class they're hightailing it out to their, to their car to get out of there. Yeah, that's a good point. And so we definitely recognize that early on, which was part of our, our pivot to, to approaching those guys online.
John Benzick: Let's talk about pricing. It's a really crucial decision. How did you go about setting the price for your product and what would you recommend to people that are considering getting in the soft goods industry?
Joe Kudla: Well, it starts with brand. So for us, that's what kind of a brand do we want to build? Are we a premium brand? Are we a juniors brand, are we a luxury brand? And so any kind of had a vision for who our customer was and what type of apparel, what type of other brands that customer is wearing. And so we would start by doing a market study and looking at competitive brands in our space and where they're selling their product for.
And you know, for example, Lulu Lemon sells x, y, z pant for $100. Do we want to be perceived as equal quality and value to Lulu lemon or do we want to be 10% cheaper? You know, that's just an example. And so for us, it started with a market study, but then you have to, you have to take that and you have to marry it with what your true costs of building product are. And so, you know, you need to make sure that you leave enough margin in your product so that you can sell in all the channels that you want to sell in. You know, for example, if you build something and it costs you $10 to build it and get it delivered to your warehouse, you need in our business to be able to sell that item to a wholesaler and make a good margin.
So if you want a 50% margin, you need to be able to sell that $10 item for $20 and then they need to be able to sell that for $40. So you need to therefore sell it direct for $40 so that you can price match your wholesalers and not compete against your wholesalers. So you need to combine kind of what the truck cost of building the product and there's an art and science to that. And then marry it with kind of your market and brand analysis and, and make sure that the, the two meet in the middle.
John Benzick: Let's talk a little bit about marketing your product or more specifically creating awareness and demand among consumers. Most startups have very small marketing budgets. How are you creating consumer awareness and demand for your product, especially an apparel brand. And I find it absolutely fascinating that you got into those 10 and then 70 REI stores and did very well as a startup such as yours that doesn't have a lot of money to market. So your product must have been so great that it was sort of in a way selling itself or how are you going about marketing the product to get it pulled out of the store?
Joe Kudla: Well inherent in what we do, our product just looks and feels different. So encourage your listeners to check it out on our website. But you know a lot of people question is this a performance apparel brand? You know, and I grew up wearing Nike and Under Armor and all the big box athletic apparel brands and they just weren't resonating with me as a guy in my mid thirties now, I'm more, my priorities are staying pain-free and chasing my kid around the house. I'm not trying to be the next Tom Brady or Walter Peyton or Joe Montana. And so my interests have changed and the way that I dress has changed as well. And so I'm looking for product that merges effortlessly with my lifestyle and allows me to wear it across multiple active disciplines. And so our product, it looks a lot like lifestyle apparel. So inherent in what we do, we look and feel differently.
So I think that's the first thing is like when you're analyzing starting a new business is like being really honest with do I have something that's uniquely differentiated in the marketplace because the cost of marketing is getting so high and competitive now online that if you don't have something differentiated that will truly sell itself and and build some sort of a viral kind of following, once you get it into the marketplace, you might have a harder time getting out of the gates or you'll just have to raise a lot of money and look at it as a over a long look look to getting the profitability over a longer term horizon. So that's, that's one thing, kind of the inherent nature of your product differentiation. And then the second thing from a marketing standpoint, you know for us we leveraged the influencer community and we are fortunate to live in a world where everybody has an Instagram account and you can really go out and build relationships with people that you think are great matches with your brand or your product or your service. And you can gift them product in exchange for a review or just in exchange for building a relationship and seeing what they think and getting good, useful feedback. So for us, you know, we reach out a lot of influencers on through social media and we build relationships with them and we see how they like the product and that's really helped us to, to kind of build this, the snowball effect.
John Benzick: Finally, Joe, did I miss any questions that you feel like you'd like to provide answers to or do you have any closing bits of advice for our aspiring entrepreneur listeners?
Joe Kudla: I guess my closing advice would just be, it's not easy, but if you love what you do, make sure you're doing it for the right reasons and if you are, you won't have the inclination to give up and surround yourself with great people and make sure you take time for yourself to reflect and have moments of quiet to make sure you're staying on the course that, that you have intended for yourself.
John Benzick: A great way to close with some good bits of useful information. Joe, you've been a fantastic guest offering some great stories and advice to our aspiring entrepreneurial listeners. I want to remind our listeners to visit your website for the 25% discount by entering into the product code.