Advice Line with Joe Kudla of Vuori

Vuori founder Joe Kudla joins Guy on the Advice Line, where they work through business challenges with three early-stage founders. Today we meet Laurie, a Florida-based physician with savings to invest back into her fashionable scrubs company. Then Brendan, who wants to bring his Irish handbags to the American luxury market. And Steve in Colorado, who’s exploring wholesale opportunities for his colorful skins for ski gloves. If you’d like to be featured on a future Advice Line episode, leave us a one minute message that tells us about your business and a specific question you’d like answered. Send a voice memo to [email protected] mailto:[email protected] or call 1-800-433-1298. And to hear Vuori’s founding story https://art19.com/shows/831bd173-0992-41b7-b1eb-112db904d947/episodes/ba53c3c4-d5b5-48a4-aa14-60b08ce411ef/embed, check out Joe's first appearance on the show in 2023. This episode was produced by Sam Paulson with music by Ramtin Arablouei. It was edited by John Isabella. Our audio engineer was Cena Loffredo. You can follow HIBT on X https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis and sign up for Guy's free newsletter at guyraz.com http://guyraz.com/. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 0:45Guy Raz?

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• 5:07Guy Raz?

  Visit mobili fuels.com for details. Hello and welcome to The Advice Line on How I Built This Lab. I'm Guy Raz. This is the place where we help try to solve your business challenges. Each week, I'm joined by a legendary founder, a former guest on the show, who will attempt with me to help you. And if you're building something and you need advice, give us a call and you just might be the next guest on the show. Our number is 1-800-433-1298. Send us a one-minute message that tells us about your business and the issues or questions that you'd like help with.

• 5:52Guy Raz?

  You can also send us a voice memo at [email protected]. And make sure to tell us how to reach you. And also, don't forget to sign up for my newsletter. It's full of insights and ideas from the world's greatest entrepreneurs. You can sign up for free at guyraz.com. And we'll put all this info in the podcast description. All right, let's get to it. My guest today is Joe Kudla, the founder and CEO of Vuori, one of the best-known athleisure brands out there. Joe, welcome back to the show.

• 6:25Speaker 01

  Thank you so much, Guy. Excited to be here.

• 6:27Guy Raz?

  We're excited to have you. And if you guys haven't heard the story of Vuori, we'll put a link in the podcast description, or you can search for Vuori and How I Built This on your podcast app. It's an awesome episode. Joe, one of my favorite things about Vuori is that it really failed a few times before it took off. It basically started out as a graphic t-shirt brand, and that kind of fizzled out. And then you tried to sell the products to guys at yoga studios, and that didn't quite work. And then finally, you decided to kind of reframe the story. You kind of rebranded it as clothing for all kinds of things: hiking, surfing, working out, running, hanging out with friends, playing with your kids. And that resonated. That's when the brand really started to take off, around 2016, 2017.

• 7:12Speaker 01

  Yeah.

• 7:12Guy Raz?

  I remember you calling this pivot a hail mary. You were like down to your last $10,000 or $20,000. Why do you think that simple shift in how you marketed the product? Why do you think that worked?

• 7:26Speaker 01

  I think it always comes back to being intimately aware of who your customer is and what it is that you're making that connects with them in an authentic way. And so, we had our ideas about who the customer was and what they would like about our product. But it wasn't until we started listening and developing that direct relationship, and just hearing it from them, that it became crystal clear. So I think that's the most important thing you can do in those early days. It's like you have to like develop this relationship with your customer and be open to acknowledging that maybe you don't have it right on the bullseye.

• 8:06Guy Raz?

  Yeah. You know, a lot of startup brands, and even some of the colors we bring on today, may assume that it just takes lots and lots of money. And in some cases, that's true. If you're trying to build a car company like Tesla, you need a lot of cash, right? But in your case, I mean, I think scarcity, because you couldn't raise money. And in fact, you had raised money on previous ventures, and it didn't work out. And you didn't really want to take that risk with other people's money initially. And so, you didn't have a lot of money to work with. But because of that scarcity, I think it forced you to make... Really good decisions, right?

• 8:38Speaker 01

  Absolutely. And those decisions have really become kind of full circle back in vogue. You know, if you think about the businesses that our, our parents and our grandparents built, you know, it was about-

• 8:49Guy Raz?

  They didn't have venture capital.

• 8:50Speaker 01

  Yeah, they didn't have venture capital. It was about the fundamentals, great products, great brands, great, great culture, great relationships with customers, all the fundamentals. And, and I think we've lost a little bit of that because money got really cheap for a while. And it was really easy for founders to go out and raise a lot of capital. And, you know, it's interesting because we're seeing a little, you know, while there's still a big venture community, there's a lot of money out there. You know, in the last few years, people have become very discerning with how they invest. And so people have had to kind of rethink their, their business models a little bit. And, and I think those old, you know, those things that, that were old are very much new again. A return to profitability and generating free cash flow and all those things.

• 9:32Guy Raz?

  Awesome. Okay. Joe, thank you for coming back onto the show to this time as an advice giver. Are you ready for our first caller?

• 9:39Speaker 01

  I am, yeah. Excited.

• 9:40Guy Raz?

  Let's do it. Well, let's welcome our first caller. Hello, caller number one.

• 9:44Speaker 02

  Hello.

• 9:45Guy Raz?

  Welcome. Please tell us your name, where you're calling from, and a little bit about your business.

• 9:50Speaker 02

  Hi, Guy and Joe. I'm Lori Boje. I'm in Miami, Florida, and I am the founder of Green Cloud Apparel, which is an elevated medical apparel line for women.

• 10:02Guy Raz?

  Cool. And tell me what, what, what your question is today.

• 10:06Speaker 02

  We are at two and a half years in from opening and we will be profitable next year. And I'm wondering what to do as we become profitable to grow. So thinking about putting it more into marketing, maybe hiring a co-CEO, maybe going for a VC.

• 10:26Guy Raz?

  Got it. Okay. So let's start with the product. These are scrubs, like medical scrubs.

• 10:33Speaker 02

  Yes.

• 10:33Guy Raz?

  And scrubs have been, I'm assuming, basically the same probably for the last 50 years. It's the blue or, you know, that kind of poly cotton material that just is kind of loose fitting and with the drawstring and that's it, right?

• 10:48Speaker 02

  So Guy, scrubs were created by and for men solely for the operating room. I am myself a physician and so we've just sort of stayed in that box this entire time. And it is, it's just the right time to branch out and make them fun, super comfortable, but like totally boss. So every day I go to work, it's a very important day and I want to set that attitude and tone for the day. And when I put these scrubs on, I stand a little bit taller, I maybe speak a little bit louder, my patients notice, my colleagues notice, and it makes all the difference.

• 11:26Guy Raz?

  Yeah. By the way, I'm seeing here, you actually served in the US Army. You were, you're a combat veteran.

• 11:32Speaker 02

  Yes. I know the uniform very well from that end too. I know what it's like. I was the only female in my group of physicians that deployed to Baghdad to serve our soldiers and Marines.

• 11:46Guy Raz?

  Wow, thank you for doing that. That's incredible. I spent some time there as a reporter back in the day and was at the field hospital in Balad, at Balad Air Base. I met some incredible doctors back, you know, 20 years ago. All right, well, first of all, congratulations on your road to profitability next year. And you're going to have some profits and you want to know how to spend that money. Can you give us a ballpark of how much money we're talking about? I mean, is it, is it under $50,000, under $25,000?

• 12:13Speaker 02

  It will be about $100,000 that we will, that we will have. And so, you know, it takes a while to figure out product and get proof of concept and find the right manufacturers and material. So that was where I was spending. Most of my money. And I, along the way, I did try a few ads on Meta. But I felt like I was just getting swallowed and it was so painful to, you know, to put $2,000 for this month and, and just not see the return. And so I'm wondering, do I need a, a marketing person? Do I need a, a co-CEO that is more in the business world than, than I have been? Although I've learned so much.

• 12:58Speaker 02

  Do I need extra help from outside?

• 13:01Speaker 01

  Yeah. Joe Kudla, what do you think? Well, first of all, congrats on the, like I said, the road to profitability. That's not easy to do. So I think you have an awesome product. And what I love about you is this really does look elevated. Like to me, this feels, you know, very different from anything I've seen before, which is awesome. You know, what we, we always said at V R, we brought a new perspective to the activewear market. And I really feel like you're bringing a new perspective to the healthcare market. And I guess one of the questions I would have is like, is there any roadblocks like at hospitals? Like, do they have dress codes at all? Or are, are people free to wear? Like, there's no, no resistance for somebody to wear like an elevated look like this in a, in a hospital?

• 13:44Speaker 02

  No. The only, the only roadblock may be the color. So every hospital seems to have a different color. So I get messages every day. We need Seal Blue. We need Burgundy. You know, and so, you know, I'm trying, but I'm also like wanting to create the colors that I love. And, you know, I, I recently released Pinstripe and I, I really wanted to add a little bit of fun. And so I'm kind of going back and forth between what hospitals require and then what, what I want to do.

• 14:13Speaker 01

  Yeah, yeah, absolutely. Well, thank, thank you for that clarification. I, you know, tho- those kind of things are, are just important to think about. But the healthcare market's so big and there's so many one-off offices where people are wearing scrubs that like, even if the big hospitals have, you know, color restrictions, like there's just such a massive market here. But, you know, to answer your question, you know, where to spend money to grow. You know, when I reflect back on Vuori's journey, I, I always thought about three things. And, and that was like, number one, like, do I have the right people on board? And you mentioned, you know, do I need a CEO or a marketing person? For me, it was a marketing person. Like, the number one thing we were trying to do in those early days was define an engine of growth.

• 14:59Speaker 01

  Something that you can take to investors and say, look, we have a proven recipe. And with more investment, I can go out and do this all over the country. So I think a marketing person is really helpful in thinking about that. You know, the second thing is product. I mean, product is everything in this business. You know, you just always have to be asking yourselves, is the product amazing? And make sure you are getting honest feedback. Like, is the product good enough? And if it's not, I think your best money is always going to be investing in like your supply chain and making an amazing product that people just love. You know, then it's like, okay, what is your sales and marketing strategy?

• 15:39Speaker 01

  And it is important that, that you have a presence digitally, that you're showing the community that you're building. You know, like, this is something that I think women are going to get excited about. And, you know, if I, if I reflect back on my journey at Vuori, it's old fashioned, but we promoted product. We identified people that live in our product. You know, for us, that's trainers and yoga teachers and Pilates instructors. For you, it's healthcare workers. And it might be difficult to do, you'd have to get creative on how to do it. But identify those influential tastemakers within every healthcare office setting across your geography and seed them product, make them ambassadors of the brand. And hopefully they'll post about it on social media.

• 16:24Speaker 01

  Then you have UGC that you can repost and you start to build a community around the brand.

• 16:28Guy Raz?

  Love it. I totally agree, Joe, and I think that you have an opportunity. You know, I think about the brand Bumble. It's a completely different brand. It's a dating app, right? But how did Whitney Wolfe launch that product? She went to Southern Methodist University and brought it to sorority sisters. And she had them use it. I mean, I feel like you're in Miami. There's tons of medical schools around there. I feel like one of those pathways is to get it on the bodies of female medical students. I would imagine that they have a little bit more flexibility in what they can wear. And that, to me, is an opportunity to really generate buzz. To me, it's about trying to get it on to people at the beginning of their careers.

• 17:10Guy Raz?

  Joe, a question for you about looking for a marketing person. How would Lori go about that? I mean, she's, you know, got a really prominent position in her field, but probably doesn't come across a lot of marketers unless, I guess, unless you're like operating on them in the middle of the night. You know, like, how would she find that person?

• 17:29Speaker 01

  You know, if it was me, I would probably be looking at companies that are in your space, maybe other scrub companies that have had some success, even though it's, you know, maybe they're more centered right down the aisle, but they understand the market. They understand the customer. And look for somebody that's, you don't need somebody who's at a VP level. Find somebody who's young and hungry and wants to go show up at conferences and put up the booth and talk to people and has a passion for what you're building. You know, and in the early days, you know, you might want to think about granting a little bit of stock options or some equity to somebody to motivate them to join you. I mean, in my early days, our head of marketing took a 50% pay cut to join us because she

• 18:14Speaker 01

  believed in what we were building and she had some skin in the game. They're not going to be co-founders technically, but they're going to be right there alongside you in these really early formidable years. And you might want to motivate them with some upside via equity.

• 18:27Speaker 02

  Okay, no, that's a great idea.

• 18:29Guy Raz?

  For sure. Lori, thank you so much for calling in. The brand is called Green Cloud Apparel. Lori Boje, congrats on getting close to profitability. Thanks for calling in.

• 18:40Speaker 02

  Thank you so much. What a lucky day.

• 18:42Speaker 01

  Congratulations, Lori.

• 18:44Guy Raz?

  Good luck.

• 18:44Speaker 01

  Good luck to you.

• 18:45Speaker 02

  Thank you.

• 18:47Speaker 01

  I think it's really cool.

• 18:48Guy Raz?

  Yeah.

• 18:48Speaker 01

  I think she has a shot. She could really up level the look and feel in healthcare. I think that'd be, it's an awesome mission.

• 18:55Guy Raz?

  And this is something that looks nice, that you could actually walk out of the hospital and maybe just go out to dinner and not have to change.

• 19:00Speaker 01

  Yes, absolutely.

• 19:02Guy Raz?

  Yeah, what do you, wow, look at that outfit. It's so nice. These, these are my scrubs.

• 19:06Speaker 01

  Yeah. It's cool. Like, it should spark conversation, you know? And, and that's what I'm saying. Like, if, if the product is good, this should work.

• 19:15Guy Raz?

  Yeah.

• 19:16Speaker 01

  And I'm excited for her.

• 19:17Guy Raz?

  I mean, think about it. 20 years ago, nobody would have worn Vuori joggers to a nice restaurant. Now it's normal.

• 19:25Speaker 01

  Yeah, the world has changed. I mean, I think there is a return in the world to people want to look nice. They've come out of COVID and they've been living in, you know, casual clothing and like, they want to look good, but they still want to be comfortable. Like, nobody is walking away from comfort. But figuring out ways to merge like the feeling of a sweat pant with like a more elevated look, I think has a lot of potential. So I think she's right on the bullseye.

• 19:52Guy Raz?

  Yeah.

• 19:54Guy Raz?

  Okay, Joe, we're gonna take a quick break. But when we come back, an Irish luxury handbag maker trying to create an international brand. Stay with us. I'm Guy Raz and you're listening to the Advice Line, right here on How I Built This Lab.

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• 22:53Guy Raz?

  Welcome back to the Advice Line on How I Built This Lab. My guest today is Joe Kudla, founder of Viori. All right, Joe, let's take our next caller.

• 23:02Speaker 03

  Hi, Guy. Hi, Joe.

• 23:03Guy Raz?

  Welcome. Tell us your name, where you're calling from, and a little bit about your business.

• 23:08Speaker 03

  So I am Brendan McEvoy. I'm calling from Ireland. I am the co-founder of My Name is Ted, and My Name is Ted are Ireland's first heritage luxury handbag brand. It was inspired by my grandfather, Ted Carberry, who made leather bags using his mouth and left hand in the 40s, 50s, and 60s.

• 23:27Guy Raz?

  Okay, a million questions for you, but before I get to them, what question do you have for us?

• 23:31Speaker 03

  So we're finding it challenging to scale the business internationally with international retailers, US retailers, and we'd love to hear from you guys on how you feel the best next move would be to try and scale sustainably, but also at a really good level to make an impact to the business.

• 23:50Guy Raz?

  Okay, cool. Let's start with this story. So your grandfather was a leather craftsman who sewed using his mouth?

• 23:58Speaker 03

  So he was originally a saddler, and in 1959, he lost his speech, his memory, and the use of his right hand side.

• 24:06Guy Raz?

  He had a stroke?

• 24:07Speaker 03

  He had a stroke and complications during that. But he had 11 kids, so he had to find a way to get back on the saddle, excused the pun. So he taught himself while getting treatment on how to make small leather goods, satchels, really useful products, and was very successful, had two workshops, had some wholesale accounts, and everybody kind of went to him, whether it was you wanted roller skates fixed, or you wanted something for somebody starting school, et cetera.

• 24:38Guy Raz?

  So wow. So you came across a story about your grandfather inspired you to start a business around leather goods, and I'm looking at your website, and mainly what you sell are handbags, are beautiful handbags. I mean, tell me about how you even came up with the design, or how you even start, like, because now I see you make them, and they're made in Italy, and they're handmade. Like, how'd you get to Square One?

• 25:01Speaker 03

  So by being patient, by allowing the thought of how do we start here? So the fact that Ted crossed from right-handed to left-handed to make his products and get through life, our product initially was a men's product, we thought, but actually more women bought it than men, either for themselves or men. So it was like satchels, briefcases that would convert to backpacks so cyclists could, commuters could use them, but very formal. The CEO of Irish Fashion Council compared them to Hermes at one point. So really high-end, but eighty percent of our customers were women and they were saying, when are you going to do some ladies' handbags? And through a chance piece of inspiration, on a rainy night in Dublin, sitting in traffic,

• 25:44Speaker 03

  I got the inspiration for the doorbag collection. And that just elevated the brand at a totally different pace than what was happening with the wallets and briefcases and satchels.

• 25:54Guy Raz?

  Okay, so to clarify, because I'm looking at the site, the doorbag, it's this sort of brass buckle on the, on the bag that looks like a door frame. Like, if you've ever gone to, anybody listening, if you ever go to Ireland, you always see these posters of like the doors of Dublin, right? Like you, or the doors of Ireland, and it's like a bunch of doors, so cool. And, and this is like a door, a beautiful brass door frame as, as the logo on the bag. Is that a fair description?

• 26:22Speaker 03

  That is a perfect description. And it was like sitting there looking at the doors, they all looked that they were built at the same time, but tell totally different stories. And that just led me to think, wow, why has nobody incorporated a door into a bag? You open and close them, you secure your belongings, you live in them. Everybody has a door that is nostalgic or creates good memories for them. So it's kind of like the Henry Ford model. It's any type of bag, as long as it's inspired by a door, is where it's ended up going.

• 26:56Guy Raz?

  You're selling in like boutiques throughout Ireland?

• 26:59Speaker 03

  Yeah, so we would be seasonally in like Brown Thomas, which is like Sax Fifth Avenue, Burkeoff, that type store. We have a number of five star hotels, which are excellent for us in their boutiques. So lots of tourism does really well. So Drummoor and Castle, Trump Doom Bag amongst others. And then we've some boutiques, we did go to New York to Cotry back a year and a half ago, and we met some boutiques there. And we've had good success with them from Philadelphia, Boston, New York. The sell through has been good. They're continuously reordering. But yeah, we want to try and scale that side some more.

• 27:41Guy Raz?

  So you're trying to figure out how to get more retail partners in the US and beyond. Joe, let's bring in the expert, Joe Kudla. What do you think?

• 27:51Speaker 01

  I mean, first of all, this is just so cool. So congratulations. I love the novelty of your product. I love the heritage. I mean, you have something that I wish that we had, you know, at Vuori, and that's just this connection to this heritage, this story. It's really awesome. And so I do have a couple of questions, and I'm just curious, like, who do you perceive your competition to be? Is this, because I think it plays into distribution in the US in a big way. And I'm not an expert at the luxury market. I want to disclaim that. But I'm curious, like, do you see this as like a Louis Vuitton or Hermes competition? Or do you see this as more of like an accessible luxury? Like, I see the price point-

• 28:32Guy Raz?

  Like Kate Spade?

• 28:33Speaker 01

  Yeah.

• 28:34Guy Raz?

  Yeah. Because the price point is closer to Kate Spade's, maybe a little bit higher.

• 28:39Speaker 03

  Yeah, so we work for Eileen. And where we want to be is we want to be that when anybody is considering rewarding themselves with a luxury purchase, that we come into the reckoning. So whether that is Loewe, Gucci, Chanel, et cetera, we want to be in the thought process. But like Kate Spade, Anya Hint March would be price point wise, where we would be in that space.

• 29:06Speaker 01

  Yeah. Yeah, I ask because, you know, we do business with Nordstrom. We don't do business with Neiman Marcus or Saks or, you know, those, those kind of higher end wholesale partners. But, you know, I, I, I'm a student of retail. And so what I, one of the things that I've heard is like, you know, at Neiman Marcus, for example, it's like a war, like that these luxury brands are at war for, for space, you know, and, and, and so if you're Neiman Marcus's buying group, you're looking for, if you're going to give space to a brand, they need it to be at a $3,500 price point, because they're going to move those units. So you're going to have, I think, a harder time at those accounts at the price point you're at. So I think aligning price

• 29:51Speaker 01

  point and distribution is really important. I think whereas like Nordstrom and Bloomingdale's, this feels very approachable and, and, and very aligned. So I think just getting clear on that and like who your competitive set is and, and aligning your pricing strategy with that in the US is, is going to be really important. But even at Nordstrom and Bloomingdale's, you know, it's, it is a competitive space and, you know, but that's, that's all apparel. We're all in a competitive space. We, when I entered the market at Vuori, people were like, how are you going to compete with Nike or Lululemon or Adidas? Like, the market is so crowded. And, and we had to figure it out. And so what, what I reflect on is our journey, it was really about

• 30:33Speaker 01

  building a community. Like, if we wanted to get the attention of, you know, Nordstrom and REI, which were, are two of kind of our larger national partners, they weren't going to just buy it without a lot of brand awareness and put it in their store and assume it would sell through. We did get a small test. We sold into five doors at Nordstrom and it didn't do well, you know, and, and it didn't do well because we were just too early to market and we hadn't built a community around the brand. We didn't have like a group of advocates and influencers and celebrities that were really getting behind it. We weren't showing up in the media in a meaningful way. So they liked the product, but they didn't give it the preferential merchandising and it didn't

• 31:18Speaker 01

  really sell that well. So we were just kind of waffling along. And it wasn't until we really started to build our direct community. And, and, and once, once Nordstrom saw that, they got really excited about what we were doing. They could see the potential. And then they got their executive team involved and they wanted to get behind it. And that just meant that unlocked the power of their marketing. It unlocked better positioning in their stores. And, and, and it was like night and day, like selling into an account that has your back and wants to see you succeed versus an account that's like, you know, yeah, we'll try it. It's a very different thing. And so I would always start with your community and make

• 32:00Speaker 01

  sure that like you're starting with press, creating that demand so that there's pull through at these accounts. I really believe in product seeding, you know, getting your product on the right influential people and, and letting that create hype and momentum and excitement. And then you will get the attention of those bigger specialty accounts in the United States.

• 32:21Guy Raz?

  Joe, I also feel like there's an argument to be made about location here. And you know this well, because you started Vuori in Southern California. Southern California is where trends begin in the United States and then internationally, New York as well. But I think when you talk about hotels, you've got to be at, you know, the boutique at Casa Del Mar in Santa Monica or, or, you know, Fiena Hotel in Miami. You know, this is where like massive celebrities go and stay and, and they will stop in those shops. And I feel like that's a small marginal tactic, but it could actually be, you know, Much, much more impactful than taking out Facebook ads. I don't know. What do you think about that, Joe?

• 33:04Speaker 01

  I agree. I mean, I think wholesale is a very good channel. I think, you know, you know, advertising online is challenging. It's hard to cut through in today's environment. So I really am a much bigger believer in the right wholesale partners, the right activations at those wholesale partners to build awareness and getting the staff excited and, and, and, you know, press and influence our strategy to build excitement and community around the brand and then really create hype and, and then, then you start getting the attention of the bigger accounts. But I'm a hundred percent a big believer in that. I think it is important that you geographically look at where you want to be. I think Los Angeles, Miami has become a very influential market in the US and then New York.

• 33:48Speaker 01

  You know, I would, I would really focus your attention on those three markets.

• 33:52Speaker 03

  That's amazing advice and I love the idea because we're very much a step by step business. You need to be able to measure it. You need to be able to ensure they're going in where you're trying to get to and bite sized chunks. So you can say we're going to be bigger than the Beatles in the US, right? But it's how do you start? So really breaking it down. So thanks so much for that advice.

• 34:12Guy Raz?

  All right, cool. Brendan McAvoy, my name is Ted. Beautiful bags. Congrats on where you are and, and good luck. We're going to be following you.

• 34:21Speaker 03

  Guy, Joe, thank you both so much. Hopefully as this evolves, I'll be buying your lunch in the US sometime because I owe you one. Keep up the great inspiration. Thanks, guys.

• 34:30Speaker 01

  Thank you, Brendan. Good luck. I love what you're doing.

• 34:33Speaker 03

  Thanks, Joe. Thanks, Guy.

• 34:35Guy Raz?

  Thank you. Yeah, really, really cool handbags. So, but as you know, Joe, building a brand, especially a luxury brand is hard, you know, when you're building it from scratch. You know, you look at these brands like Hermes and Prada and Gucci. I mean, they've been around. So, I mean, Hermes has been around for over a hundred years and even brands like Chanel, which are post-war brands and they've been around for 50, 60, 70 years now. So.

• 35:02Guy Raz?

  It takes time to build that, you know, that luxury idea in a consumer's mind.

• 35:08Speaker 01

  It does. And that's what, you know, I was going back to price point and understanding like, what market are you going after? I think it's really important, you know, Chanel, Dior, Louis Vuitton, all of those brands that you think about in the luxury quadrant of your brain. I mean, they, they sell at quite high prices. And, and that really is like, if someone wants to reward themselves and they're, they're really thinking luxury, it's a $3,500, $4,000 bag. I think there's a, there's a whole nother marketplace in affordable or more accessible luxury that that's a big market. And so I think being really clear on what you're going after, because that might be a different strategy.

• 35:48Guy Raz?

  Yeah. And so much of it is about finding the right people to put that bag on.

• 35:53Speaker 01

  Absolutely.

• 35:55Guy Raz?

  All right, Joe, we're going to take another quick break. But when we come back, stylish skins for your mittens and gloves. Stay with us. I'm Guy Raz and you're listening to The Advice Line right here on How I Built This Lab.

• 36:21Guy Raz?

  Welcome back to The Advice Line on How I Built This Lab. Today, I'm taking calls with Vuori founder Joe Kudla. Joe, let's, let's bring on another caller.

• 36:30Speaker 04

  Hello, how are you?

• 36:31Guy Raz?

  Hello, that's, I believe that's Steve, right? Steve, can you introduce yourself? Tell me where you're calling from and a little bit about your business.

• 36:38Speaker 04

  Sure. Yeah. So my name is Steve Bright. I'm calling from Golden, Colorado. And my business is Skittens. We make skins for mittens and gloves. And these are primarily designed for skiers and snowboarders.

• 36:52Guy Raz?

  All right, cool. And what, what's your question?

• 36:54Speaker 04

  So we're a small business. We just launched this past September and we're looking for advice on how to scale. We're wondering if we should continue with. Direct to consumer sales, or if we should pursue more wholesale opportunities where we might increase our volume and our visibility, but at the expense of significantly cutting into our margins.

• 37:13Guy Raz?

  All right. Perfect question for Joe. Before we get to your question, a couple of questions for you, Steve. Can you kind of describe what are skins? I mean, these are, so they're, they're, they're not ski gloves. What are they?

• 37:26Speaker 04

  Yeah, so they're made of a blend of recycled polyester and spandex. So similar to the type of fabric you might have from a performance cycling jersey. They slide over your glove or mitten. So we're not replacing your glove or mitten. You keep that and it's basically fabric that you put on to change the outer appearance of your glove or mitten.

• 37:45Guy Raz?

  And is there a functional, besides just looking cool? Do they keep your hands warmer or is there any, any, anything else they do?

• 37:52Speaker 04

  Yeah, so we have two lines. We have a, we have our graphic design collection and those have these fun, you know, high visibility colors just to change the, the appearance of your glove or mitten. And then we have our trail map skittens and these have the trail map directly printed onto the fabric. So when you put them on over your glove, you literally have the trail map in the palm of your hand while you're skiing at all times.

• 38:16Guy Raz?

  Oh, so you would obviously work with ski resorts, specific resorts to have the trail map on those, on those skins?

• 38:23Speaker 04

  Yeah, we, we have licensing from, from Vail Resorts and so we have seven of their trail maps on our skittens.

• 38:30Guy Raz?

  Cool. How did you, how did this, how did you start this business? Were, are you in apparel or were you?

• 38:35Speaker 04

  No.

• 38:36Guy Raz?

  What's your, what's your day job?

• 38:38Speaker 04

  I'm an ER doctor.

• 38:39Guy Raz?

  Wow. Okay. Amazing. So, um, so how did you do, how did you even like do it? Did you like sew together your first? I mean, you're, you're probably not bad at sewing, right? Cause you're sewing up skin, you know, stitches. So did you like sew your first prototype?

• 38:57Speaker 04

  Yeah, so I, I hand sewed my first prototypes and they looked awful. It was like a skinny sock puppet. So I asked my mother-in-law to teach me how to use a sewing machine and I was able to sew the body of the skitten pretty well, but I couldn't get the thumb right because we're sewing it inside out and there's a couple of pieces of fabric and it just felt like this kind of like a brain teaser Mensa question. I couldn't get it right. And so I decided to. Take the thumb off and with the thumb off, it allowed for a much more universal fit. So it was actually better for the for the skitten.

• 39:34Speaker 01

  First of all, I'm a huge skier and so I love what you're doing. And number two, I bought a sewing machine when I was in my twenties and I deconstructed my favorite T-shirt and I and I bought some fabric and I I learned how to make T-shirts. And it was so funny because like your your comment on the thumb, it just reminded reminded me of like, I could not get the sleeves right. I could do, I could get the body so I could do like a great muscle tee, but I just couldn't figure out how to sew the sleeves.

• 40:02Guy Raz?

  Don't you feel, Joe, don't you feel like an ER doctor should be a good sewer?

• 40:08Speaker 01

  Well, it's close to home because I just got my foot stitched up and so I watched him do this.

• 40:12Guy Raz?

  Yeah, I mean, I guess you're using staples sometimes, but you're, you know, I mean, you could probably like sew up a kernel of corn if you had to. Like, you've got a steady hand.

• 40:21Speaker 04

  It's true. Well, the the the materials we use in the ER are a little different than our sewing machine.

• 40:28Guy Raz?

  Fair enough, fair enough. All right. Right now, you're selling these direct to consumer. So it's just word of mouth, right? Just whoever knows you guys or who maybe have you taken some Facebook ads out or anything?

• 40:38Speaker 04

  Yeah, we did a couple rounds of Facebook and Instagram ads. They didn't do too much. What's been better for us is giving them away or actually just going out and skiing. Every time I go up on a chairlift, someone comments on them. So I now tend to look for the busiest chair. If there's, if it's a six person chair and there's five people, I want to be on that chair.

• 41:02Guy Raz?

  And just talk about them.

• 41:04Speaker 04

  Yeah, I mean, they they bring it up. I don't even have to.

• 41:06Guy Raz?

  Yeah, because you're on like a 10, 15 minute ride with strangers and people like, oh, where are you from? Where are you from? How's the condition today? Yesterday was better. And but now you can say, people are like, what are those things in your mitt, on your gloves?

• 41:17Speaker 04

  Yeah, I mean, no one has seen these before and and so I usually have to explain that this is skin and and this is a new product.

• 41:25Guy Raz?

  How how much money have you guys put into this so far?

• 41:27Speaker 04

  So a big chunk of our of our budget has been pursuing a patent. So we put in about total of $35,000 and probably 75% of that has been legal fees for the patent here and abroad.

• 41:43Guy Raz?

  And by the way, what are they selling for? What? How much does a pair of these skins cost?

• 41:47Speaker 04

  So we sell them for 35 and we were actually making them here in Denver. So we found a manufacturer here in Denver.

• 41:53Guy Raz?

  Oh, wow. Wow.

• 41:54Speaker 04

  Yeah. So we're trying to keep it local and small and fun. But we are, you know, wondering if it's if it makes sense to continue here in Denver or to go abroad.

• 42:07Guy Raz?

  So all right, the question is like, how do they scale, Joe? Like, should they focus entirely on D to C? As they're doing now, should they pursue wholesale? So let's let's dive in.

• 42:18Speaker 01

  Yeah, I'm happy to provide thoughts and it reminds me of our journey because, you know, when we launched, we thought that wholesale would be our kind of initial entry to the market. And then it turned out that, you know, we didn't have the awareness and sell through was really tough. And our strategy was a little flawed. And then it wasn't until we pivoted to direct to consumer that we got out of the gate. So I'm a big believer in the direct to consumer model. However, I also recognize that one strategy that worked 10 years ago does not necessarily mean that it'll work today. And the landscape has changed dramatically. I think you just mentioned, you know, you'd spent a little bit of money on some Facebook ads. It wasn't really moving the needle. And so when you start a business, awareness is one of your biggest challenges, right?

• 43:03Speaker 01

  Nobody knows who you are. And so I think a thoughtful wholesale strategy where you show up in great accounts can help build a lot of trust. When your product sits alongside some of the great ski brands, it builds a trust with the consumer. And I think that's really important. I'm a big believer in less is more initially. Sell into a few wholesale accounts and really be present. Like, show up, develop relationships with the with the staff on the floor. Get your product on them so they're wearing it and then they get excited about it and want to talk to customers about it. You know, do events, show up and do promotions at the shop. And you'll watch your customer behave. You'll see what other products they're buying.

• 43:45Speaker 01

  You'll develop a more intimate understanding of who they are. And that can really serve you, you know, in all channels that you expand to in the future.

• 43:54Guy Raz?

  Yeah, I agree with that. I mean, I think that this is a product that has to be next to the cash register at a ski shop or, you know, on a display somewhere or near the gloves. I mean, you know, you can imagine like seeing this as a sort of an impulse purchase, right? But I do think it's something that you want to see in like both at the ski shop, but even at a place like Zumiez, you know, these sort of surf and sport shops in shopping malls. Really, as it seems like you're doing, really leaning into the graphic designs. I mean, the trail maps are cool, but that's only going to be a product at Breckenridge or at Vale Ski Shop or at the Heavenly Ski Shop. But really, you know, crazy designs. And Joe, this is what you did.

• 44:39Guy Raz?

  You had a graphic t-shirt company before Vuori switched into athleisure wear. But that, there was success there. People do really love interesting graphic designs on apparel.

• 44:52Speaker 01

  I agree. And I, you know, looking at your product, I think it's really fun. It's reverent, it's like exciting like. And so one of the things that, I know you didn't ask this question specifically, but like what I would really encourage you to think about is how you're building a community around this product. And like your number one marketing channel should be product promo. You know, you should be making these and just getting them out on influential people, people that are out having fun on the mountain. Just get product on people. Get UGC, user generated content. Share it back on social, share it on your website. Like really like demonstrate the power of the community that's coming together around this product. And then, you know, that'll really help sell through at wholesale.

• 45:34Speaker 04

  Yeah, we're going to partner with a couple artists and get their art on the skittens. And what's unique about the skittens is we've got four panels. So two on the palm and two on the back. And we're going to have them design. Uh, one design where when you put your hands together on your palm, you have one uh, continuous design and when you turn your hands over, you'll have another continuous design.

• 45:55Guy Raz?

  Oh, that's cool.

• 45:55Speaker 04

  And then the, the artists are gonna get a percentage of those sales as well. So I think this next season, our designs are definitely gonna be elevated.

• 46:02Guy Raz?

  Um, we've had these stories on the show where it's, um, you know, there's a seasonal product like zoomies, you know, and then they could sort of say, well, maybe we need to think about how we can sell these year round or a product that, you know, is there a world where you, I don't know, where you bring back like the finger gloves, you know, like a skin for like skateboarding or cycling or something like that? Or do you wanna really focus on, on winter sports?

• 46:26Speaker 04

  Yeah, I think for now, since we're so small and this is all new to us, we're gonna focus primarily on skittens, but we do have other ideas about, you know, could you make a skin for a hat or skin for shoes, um, something where, you know, it is more year round.

• 46:40Speaker 01

  Yeah, it's exciting to think about the possibilities, cause you know, to Guy's point, there's a lot of applications for these. Um, but I do think it's really important to stay really focused in the early days, you know?

• 46:52Speaker 04

  Yeah.

• 46:53Guy Raz?

  But you think, Joe, he's gotta be in shops. He's gotta be in the stores, especially ski shops.

• 46:59Speaker 01

  I think it's really important. Um, I think it's very expensive to build a brand just purely direct to consumer. I mean, if it was me, I'd be selling into wholesale. I'd take an allocation of that to start building my awareness online through some ads, very, very targeted, but I would only do that if I'm really specific about who that aspirational customer is. You're not marketing to the person that's buying your product necessarily. You're marketing to that aspirational customer that's influential to the people, um, that are all, that are, you know, maybe more commercially buying it. So get clear on who that is, spend a little money on targeting them on social, but then build the brand at wholesale.

• 47:37Speaker 04

  And would it be okay if we went into wholesale where we're almost breaking even or even at a loss? Is that okay to do that if we're, if we're building the brand? Or should we focus much more on direct to consumer if that's generating much more of a sustainable profit?

• 47:52Speaker 01

  I think it always depends on your capital situation, you know? And what's tough in the early days when you're produced, I know you're making your products right there in Denver. You know, I would always encourage entrepreneurs to build a cost structure to their business that is scalable. And so while you may not want to go overseas, I mean, so many of the competitors that you're going to be competing with for shelf space are made overseas. And margin is what empowers you to go out and market the brand and build a community. And so if your cost structure doesn't support you selling into wholesale, I would be looking really closely at that to see if there's a new supply chain that could give you that margin that would make it more appealing.

• 48:33Speaker 04

  Yeah, that makes a lot of sense.

• 48:35Guy Raz?

  Cool. Steve Bright, the brand is called Skittens. Good luck, thanks for calling in.

• 48:39Speaker 04

  Thank you so much.

• 48:40Speaker 01

  Thanks, Steve, good luck.

• 48:41Speaker 04

  Thank you, thank you.

• 48:43Guy Raz?

  Joe, thanks so much for coming on today. Did you get a little nostalgic thinking about talking to these people and thinking about like, or did you get back to like a traumatic place in your mind where you're like, oh my God, I don't want to relive that?

• 48:57Speaker 01

  Yeah, absolutely. I mean, going back in time and just, you know, I love talking to founders that are in these early stages because, I mean, I just, I'm such a fan of the human spirit and the resilience and the devotion that it takes to break through. I mean, it is not easy. I just think about all those things that now I don't think about raising money, you know, like, you know, setting up your margins. It's like, it's all so, it feels like a long time ago, but I can so easily go back and just remember, oh my gosh, I remember when I was grappling with that. And so anyway, I'm just, I'm rooting them all on because I just, I think there's nothing quite like the entrepreneurial journey to just teach you a lot about yourself.

• 49:41Speaker 01

  It's a really, it's unlike anything else.

• 49:44Guy Raz?

  Yeah. And by the way, if you guys haven't heard the Vuori episode, you have to go back and check it out. You can find a link to it in the podcast description. Here's one of my favorite moments from that interview.

• 49:56Speaker 01

  You know, I think some people saw the opportunity, but maybe questioned whether I was really going to 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.

• 50:09Guy Raz?

  Yeah.

• 50:09Speaker 01

  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 kind of like starting a band and telling your friends you're going to be the next Rolling Stones. People are like, yeah, good luck.

• 50:24Guy Raz?

  Thank you so much for listening to the show this week. Please make sure to sign up for my newsletter. You can sign up for that for free at guyraz.com. And every week we put in tons of insights from entrepreneurs, my own observations and experiences interviewing some of the greatest entrepreneurs ever, including Joe Kudla. If you are working on a business and you would like to be on this show, send us a one-minute message that tells us about your business, the issues or questions that you'd like help with, and hopefully we can help you with them. And make sure to tell us how to reach you. You can send us a voice memo at [email protected] or call 1-800-433-1298 and leave a message there and we'll put all this in the podcast description as well.

• 51:09Guy Raz?

  This episode was produced by Sam Paulson with music composed by Ramtin Arablouei. It was edited by John Isabella and our audio engineer was Sina LaFredo. Our production team at How I Built This also includes Alex Chung, Carla Estevez, Casey Herman, Chris Messini, Elaine Coats, J.C. Howard, Catherine Seifer, Kerry Thompson, and Neva Grant. I'm Guy Raz and you've been listening to the Advice Line on How I Built This Lab.