The founder of Vuori, the activewear brand valued at $4 billion, started his career interning at EY, on track to become a CPA. On a recent episode of The Accounting Podcast, we delved into Joe Kudla's fascinating journey.
While interning at EY, Joe received an unexpected invite to model in Europe for the summer—and he took it. That experience sparked his interest in fashion, but not so much in modeling itself. Instead, he was captivated by the process of making clothes. When he returned, he thought, "I can do this here."
Joe started two fashion brands, but both failed. Vuori is actually his third startup. By then, he knew he had to be extremely careful with his money because the first two hadn't worked out. This is where his accounting background made a significant difference.
He started with a $400,000 convertible note and, over the first two years, only borrowed about two million more—an incredibly small amount for an apparel company facing huge costs like manufacturing, shipping, and marketing.
Joe developed a working capital model to fund Vuori's growth using revenue from sales rather than borrowing huge sums to create inventory. They kept inventory low, stayed lean, and focused on profitability—the opposite approach of many startups today.
Initially, they sold their apparel in yoga studios, but that was capital-intensive due to inventory sitting on shelves. So, they pivoted to a direct-to-consumer model, selling online, which required less working capital. Advisors told him, "You can't charge premium prices for men's activewear; men won't pay that much." But Joe believed otherwise. He was right—men are willing to pay $100 or more for Vuori pants, contributing to the company's massive valuation.
I credit Joe's accounting background for helping him build a sustainable, profitable company. He understood the importance of keeping an eye on the numbers. As I've said before, getting an accounting degree, regardless of what you do in life, can make you more successful. If Joe had studied fashion instead, he might not have had the financial acumen to make Vuori succeed.
As an entrepreneur myself—this is my second business—I find understanding my cash flows, income statement, and balance sheet to be incredibly helpful. It's what has allowed us to bootstrap Earmark. Being lean means you've got to know your numbers.
We need to find ways to make accounting courses more interesting to attract more entrepreneurs. Accounting is a great major if you want to run a successful business!
