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The rise and fall of drip footwear -How to avoid pitfalls by Vusi Thembekwayo

Drip Footwear, a local sneaker brand founded by Lekau Sehoana in 2019, quickly gained traction and became a popular name in South Africa’s fashion scene. With its distinct, stylish sneakers sold in retail centres across the country, Drip Footwear was valued at R280 million. Its rapid growth and the inspiring story of Sehoana’s entrepreneurial journey became a beacon for aspiring business owners. However, in 2024, the company faced liquidation, a significant setback for the brand and its founder.

The downfall of Drip Footwear was initiated when Wideopen Platform, a company specialising in large-scale advertising, filed a case against Drip for failing to pay a debt of R20 million for advertising services. According to court documents, the High Court in Johannesburg found the company insolvent and unable to service its debts. Despite efforts to save the business, including the involvement of senior political figures and regulators, Drip Footwear’s financial troubles led to the closure of 14 stores and the layoff of its employees by October 2024.

The company’s inability to pay its debts and meet its financial obligations resulted in a liquidation order, and Lekau Sehoana faced personal liability after signing a surety agreement. Attempts to stabilise the company, including irregular salary payments, proved unsuccessful.

In response to the situation, Vusi Thembekwayo, a prominent South African entrepreneur and motivational speaker, shared valuable advice for entrepreneurs to avoid similar pitfalls. While expressing empathy for Lekau Sehoana and the Drip team, Thembekwayo emphasised that the public failure of a brand, especially one closely tied to an individual’s identity, is a humbling experience. He offered three key lessons for business owners:

  1. Seek Mentorship Early

Thembekwayo highlighted the importance of mentorship for entrepreneurs, especially first-generation business owners. He emphasised that many entrepreneurs make avoidable mistakes due to a lack of experience and guidance. Thembekwayo’s own success was supported by mentors like Dr. Richard Maponya. He advised entrepreneurs to seek out mentors with at least 10 years of experience who have navigated various economic and market cycles. Regular meetings, asking specific questions, and receiving honest feedback can help business owners identify and address potential blind spots before they become public failure.

  1. Find Your Community

Entrepreneurship can be a lonely journey, and Thembekwayo warned against the illusion that success means everyone is rooting for you. He encouraged business owners to join communities like the Entrepreneurs’ Organization (EO) or the Young Presidents’ Organization (YPO) to find support from others facing similar challenges. These networks provide valuable insight, camaraderie, and opportunities to learn from shared experiences.

  1. Understand the Stages of Business

Thembekwayo outlined four critical stages of business:

Starting requires innovation and self-motivation.

Running demands grit, patience, and the willingness to learn over time.

Scaling involves clarity, and failure to execute properly can lead to over-expansion or over-trading, as seen with Drip Footwear. Scaling a business too quickly without the necessary systems and controls in place can be detrimental.

Managing a Struggling or Successful Business requires specific skill sets, such as discipline and measured decision-making. In difficult times, bringing in specialists or a turnaround team may be necessary.

Thembekwayo also stressed that business failure is a complex issue that goes beyond simple mistakes. Even seasoned entrepreneurs can struggle with scaling and managing businesses in a competitive landscape. His final advice: stay humble, remain teachable, and continuously seek out learning opportunities.

He recommended reading “The Science of Failing Well” by Dr. Amy Edmondson for further insights. The rise and fall of Drip Footwear offers valuable lessons for entrepreneurs. By seeking mentorship, building a supportive community, and understanding the different stages of business, entrepreneurs can navigate challenges and avoid the devastating consequences of business failure.

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