This CEO's first 2 side hustles failed—then a simple decision helped him build a $4 billion company

Vuori was CEO Joe Kudla's third attempt at a startup — and could have easily been his last.
Source: Vuori

Failing is never easy. Learning the right lessons from a failure can help set yourself up to succeed in the future.

Look at Joe Kudla, the 45-year-old CEO and founder of Encinitas, California-based Vuori, a fast-growing athletic apparel startup most recently valued at $4 billion in 2021.

When Kudla launched Vuori in 2014, he'd already tried and failed to get two other apparel brands off the ground. One was a contemporary women's apparel brand called Sammy Jo. The other was a T-shirt startup he'd also called Vuori, the Finnish word for "mountain."

"In the back of your mind, you don't want to fail three times in a row," Kudla tells CNBC Make It.

To avoid a repeat collapse, Kudla studied his previous two attempts. He'd launched both as side hustles while working a full-time job as an accountant, first at Ernst & Young and later with San Diego-based staffing consulting firm Vaco.

His biggest takeaway: Remove the safety net, quit your job and go all in.

"The lessons that I took from those early businesses was that for me to build an apparel brand, I wasn't going to be able to do it on the side, as a side hustle or out of the garage," Kudla says. "I was going to have to jump in with two feet, and become obsessed."

Launching the current version of Vuori as a side hustle wouldn't have worked for two reasons, he says. First, it would have been harder to convince investors to back him if they knew he wasn't devoting all of his focus to the company.

Second, he knew from experience that he might want to throw in the towel and return to his full-time job if Vuori struggled early on.

"As soon as things got hard, I would have said, 'It's not working,' and just gone back to the easy path," Kudla says.

So, aiming to build an activewear brand that could compete with the likes of Lululemon, Kudla quit his job at Vaco and raised $700,000 in a "friends and family" funding round to begin making and marketing Vuori's first products.

The company struggled intensely in its early days. Less than two years after launching, Vuori came within four weeks of running out of money, Kudla says. But without an obvious fallback plan, Kudla felt he needed to double down and find a way for Vuori to make money.

His eventual solution — switching to an e-commerce sales strategy with lots of social media marketing, instead of selling clothes in gyms and yoga studios — worked, saving him from a third failure that would have left him without any income at all.

Kudla's first two attempts helped him in another way, too. The CEO says he's always been drawn to the idea of designing and marketing clothing, but he had little-to-no experience in the field, contributing to those businesses' false starts.

The startup failures essentially served as his design school, he says: "They taught me so much."

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