The world is changing fast and to keep up you need local knowledge with global context.
JOHANNESBURG — When Nick Dreyer and two of his mates from school decided to start an online business selling veldskoens about two-and-a-half years ago, they were mainly looking for a clever way to enter the burgeoning e-commerce retail market. They launched their business, aptly named ‘Veldskoen‘, as an e-commerce store first and focused on jazzing up the traditional South African attire with brightly coloured shoelaces and soles together with an appealing story. Since then, the business has taken on a life of its own, surging in success and grabbing the attention of top local and global investors. Apart from the likes of Brian Joffe’s Long4Life having invested in Veldskoen, the business this year received an investment from actor Ashton Kutcher and celebrity investor Mark Cuban. The famous pair now effectively have a 50% stake in Veldskoen. In this interview, co-founder Nick Dreyer gives us the backstory to the success and future plans of Veldskoen. – Gareth van Zyl
For years, Veldskoene have been a well-known, albeit quirky fashion choice for many a South African. But now, the famous Veldskoen brand is going global. This is all thanks to a business aptly named ‘Veldskoen’, which this year has received a high-profile investment from actor Ashton Kutcher and celebrity investor Mark Cuban. This pair of investors have taken a 50% stake in the business as part of a plan to sell Veldskoen’s Veldskoene into markets such as the US. And with me now on the podcast is one of the co-founders of Veldskoen, Nick Dreyer, who joins me on the line to tell me more. Nick, thanks for chatting with me today.
It’s a great pleasure. Thanks for having me on the podcast. Very happy to chat about the shoes.
Can you tell us more about the backstory to how your business Veldskoen started?
We’re actually three schoolmates who started it. So, about two-and-half years ago, the three of us were looking to enter into the world of e-commerce and the trick was to find a product. It was in the back of our minds. We were all doing other stuff but the genesis of Veldskoen was that I was driving and a friend of mine (and business partner) was on the phone with me. We were complaining about how bad the South African Olympics team looked when they walked out at the Rio Olympic. They were wearing what looked like cheap Chinese tracksuits. It had just made the news and we were saying, “Wouldn’t it have been really nice if we had something identifiable that was South African, that the team could walk out in?” We then went through a couple of product ideas and I said to Ross, “The one thing we’ve got is the veldskoen” and his response immediately was, “Yeah, but they’re very, very ugly.”
However, I come from a creative space and I said to him immediately, “Look, they don’t have to be ugly”. We had a designer working for us at the time and I remember seeing a shoe with bright yellow laces and bright yellow soles. So, I phoned up my designer and said, “Listen, do me a favour: just get a Google image of Veldskoen and pop a really bright yellow sole on it and bright yellow laces. And do me another favour: get three or four different colour iterations.” He sent it to us on WhatsApp and WhatsApp’s got that thing when you scroll from one image to the next, the same image stayed in place but the laces and the sole colours change. As I saw that, we thought, “Bang. There could be something here.” Within a couple of hours, we decided that we would call the product Veldskoen.
Nobody had done that before — nobody had ever really given it the credibility and the real platform that it deserved, and that’s how it started. We started in e-commerce, hustled to sign a manufacturer and obviously, started making wholesale mistakes as we got out the gate. But two years later, we’re where we are now and it’s a different business than it was two years ago, and we’re very excited.
And where are they sold in South Africa currently? Are they at all major clothing retail outlets; How does that distribution chain work?
It’s interesting. Our company is called DORP (Digital Online Retail Products and Platforms). As a rule, when we launch a product, we launch it online first. We’re very aware that to generate a valuable supply chain you need to make sure that you’ve got a decent route to market first. The key driver for us is always storytelling and making sure that our businesses and our products are relevant, and we tell great stories. We feel that online is the way to go. So, for the first year-and-a-half, Veldskoen was only available online and its digital presence has been incredibly powerful. It’s only in the last seven months where have we ventured out into retail and the retail strategy is currently only relevant to South Africa.
We don’t plan to retail in the US at all but in South Africa — because of the size of the e-commerce market — you have to have omni-distribution channels so we moved into retail and our partners are Long4Life. They took an investment in the middle of last year. In the Long4Life Group, there are companies such as Outdoor Warehouse, which we’ve now partnered with to launch the shoes into retail and they’ve done incredibly well, which is fantastic. We are now branching out into other retailers and we’re currently in talks with three or four major national retailers to get the shoes out into areas that are not necessarily well-serviced by e-commerce or by just us having a farm stand. It just makes more sense for us to be in a big brand support retailer in as many places in South Africa and that’s our current strategy for growth.
And obviously, you’re now taking the brand to America on the back of this investment that you’ve received from Ashton Kutcher and Mark Cuban. Can you tell us the backstory to how that came about? I believe that it was a South African expat who appeared on Shark Tank who apparently sparked their interest?
Absolutely. It’s a strange thing with our business. Everything in our business happens…I wouldn’t say magically but, often, when we’re confronted with a challenge, the right thing presents itself and this is a great example. We were sitting in a boardroom, trying to figure out an e-commerce business that we know we can trade abroad and we were really focused on trying to get into America. So, we sat in the boardroom – the three of us – and we banged out like three hours’ worth of work and we had a plan, but it wasn’t a good plan. We were going on our own. We left the meeting and the three of us just had a little dinner together and I got an email from a guy called Steve Watts. Steve Watts goes, “Hi, Nick. I’m South African. I’m from Durban. I was on Shark Tank. Our company, Slyde Handboards took an investment but we’re effectively an e-commerce business. We’d like to get involved with Veldskoen. We love the product.” And Steve just unpacked a really good case for it. I just gave him a call and said, “Look, we’d love to chat to you.” I woke up his wife because it was 3 am in Los Angeles but she gave me his number and I got a message back from him saying, “Listen, I’m not in LA. I’m actually in Durban”. So, I said, “Fantastic. Let’s go for lunch” and we went for lunch the next day. We actually picked them as partners before Mark and Ashton’s entry because the methodology for us is that they’ve got a very niche product in Handboards and they do really well in e-commerce. They were just a really fantastic entrepreneurial couple. They’ve done really well to get a difficult product to market and they’ve made a great success of it, so we felt that they would be fantastic partners.
So, we proceeded to partner with them and, of course, getting all our legal documents in place took a little bit of time. It actually took about eight months to get the commercials right and all the rest of it. Then, about five months ago, they had to disclose their entry into our business with Mark and Ashton because of their obvious involvement in their business. The response was, “Listen. This is an amazing product. Would it be okay if we came in as a group? And that would include Mark and Ashton.” We were, of course, very happy to do that. This is all bearing in mind that to start any sort of fashion product is difficult, especially in the US. Any sort of platform that can give you some more visibility and a little bit more credibility in the States would always be useful, and that’s how it happened. We worked on the deal for around eight months and secured it only a few months ago.
You would have seen the news that had come out from it has been incredibly positive and it’s had a really positive effect in the States, which is what we intended it to do – to grow the buying base, grow the reach of the shoe, which would ultimately stimulate the little bit of manufacturing in South Africa and, I think, help create a great South African business and brand that hopefully we, and the rest of South Africans, will be proud of.
You also plan to use some of Mark Cuban’s distribution facilities in the US as well?
Absolutely. There are a couple of huge challenges in American e-commerce. In a lot of ways, it’s a lot more sophisticated but, for us, it’s a million miles away if you don’t have the correct access and skill-sets to digitally market yourselves abroad, especially in the US. Mark has passed on some advantageous pricing and distribution through his distribution centre in Houston, which is one of the larger distribution centres. We obviously take benefit from that and if you scale that benefit out over time and over volume, it’s substantial. So, we’ve had the great fortune of getting access to that right away. The product has been shipped from that distribution centre which, needless to say, is just absolutely world-class. The execution is perfection and the consumers enjoy that and demand it in the States, so we’re very lucky to have that.
I believe that Americans have a tough time pronouncing the word Veldskoen. What do they refer to it as?
[Laughs] Vellies. They like to call it Vellies. To be honest, they kind of get it, but they’re slower at saying it. It comes out quite easily as Veldskoen. They normally put a big pause between the two so they go Veld…skoen. They sort of slow it down a little bit but once they get into it, they like to call them Vellies. It’s been quite an organic thing. We haven’t really spoken about it being a Vellie but they’ve taken to that so it’s like, “I’m putting my Vellies on to go to the beach. I’m putting my Vellies on to go for a walk, in town.” That’s how they refer to it.
Another interesting character who is linked to your business is Brian Joffe’s Long4Life. Can you tell us the backstory to their stake in your business and how they got involved, exactly?
Absolutely, the initial investor prospectus from Long4Life when they put the news out at their first conference was that they found us – three guys in a three-by-three metre office in Woodstock – and that was absolutely correct. What happened was one of the folks at Long4Life had bought some shoes and were impressed; not just with the product but especially with our e-commerce solution. Selling shoes online is difficult and we don’t sell multitudes of products. We only sell one product so we’ve got to deal with exchanges and all these things. So our execution on that day was fantastic. We got the shoes out really quickly. They loved the shoes. They loved the idea that it was called Veldskoen and the next thing, we got a call from their M&A guys and they asked if they could meet with us.
They came around to our little 3 x 3 office and we explained that we weren’t just a shoe company, but that we were building platforms. We were going to launch a flip-flop and, to be honest, I think they left not 100% sure what is we were and articulated it to me. They said, “Listen, guys. We’re not 100% sure what you are but we like what you’ve done in the brand space and especially in the storytelling space.” They could see that if we could build a good base for Veldskoen digitally, then their support network in terms of their retail and their retail ambitions as well as that sort of grown-up business reporting and just basic business infrastructure speciality – that that could be a real value to us. We then carried on speaking.
The three of us (founders), Nick, Ross, and myself; we’ve always been of the mindset that we’re the custodians of Veldskoen and that we wanted to give it the best shot to grow – like literally, the very best shot to have serious growth and to set out on a lofty ambition to create a global South African brand. When we had made the decision, taking on board a partner like Long4Life was relatively easy as long as our ambitions were aligned and there’s no doubt that Brian Joffe and at the team at Long4Life are passionate about Veldskoen. They’re super supporters of the brand. They’re incredibly supportive of us as young entrepreneurs and they give us great assistance and help. Once we realised that we were going to be good partners, we were very happy to partner with Long4Life and take them on board as a shareholder. So, it is on the back of wanting to make sure we could do the best we could for Veldskoen and grow it to a point where we could have a real shot at creating a global brand.
Veldskoen have obviously been around for a very long time in South Africa – produced by various brands. What has been the difference in your approach that has made the famous veldskoen appeal to international investors and even consumers?
That’s a great question. I think there are some similarities with the Ugg Boots in Australia, which is… you know, it was a very niche product for many years – decades. The bottom line is that veldskoens had all the ingredients of a great product. It’s always been known as hardwearing. It’s always been known as incredibly comfortable. But it wasn’t relevant in a fashion sense. Even though it was worn by all South Africans and enjoyed and loved by all South Africans, it had the stigma that it belonged to a farmer, out on the dust road. All we had to do was not to tell a different story but to rather tell the real story about Veldskoen and tell it well, and make sure that people understood that this is a beautiful product from South Africa and that you could wear it every single day.
When you added a little bit of design to it, which is some colour and we made sure that we had a really good unisex shoe, it meant that it could speak to quite a broad audience. One of the tricks that we think have worked for us is that we’ve never, ever tried to make a niche out of the product. We have always set out to sell Veldskoen to every South African and to everyone that arrives in South Africa as opposed to looking for a niche. It would have been very tempting to go for the sort of hipster fashion space because we would have been cool and we would have been on all the hipster fashion blogs and all the rest of it. But the truth is; that wouldn’t have worked because, again, it’s too small a market. Veldskoen needed to have an impact in South Africa to all South Africans and that was the big driver for us – to make sure that our market was as big as possible and to make sure that we told a really, really good and happy South African story and make sure that the product could carry that story.
So, I think that’s the difference between us and maybe all the other Veldskoen manufacturers. Just incidentally, we’re trying to grow Veldskoen in South Africa – not just for us. We’re so grateful for the work that other manufacturers have done in South Africa and we hope that the light that we shine on Veldskoen is not just going to benefit us but hopefully benefit other manufacturers. If you want to go out and buy those incredible shoes from Wupperthal, then we invite you because they are fantastically made and they’ve been around forever, and you should. We just try to do our thing, sell our product, do it well online, and then our ambitions are not just in South Africa. They’re global, as you know.
How do you see the next five years panning out for Veldskoen? Could we see it on the fashion runways of Paris and Milan?
Yes, that is exactly our ambition – to create a highly visible South African brand and a South African fashion product. We are hard at work. Obviously, the world moves quickly these days, especially in fashion products. You know this concept of sneakers and the fact that they drop. There’s this hype created from them and it’s weekly, so you’re under pressure to gain relevance in a very short space of time. So, for us, we’re definitely benefiting from some of our high-profile exposure through Mark and Ashton and there’s some more of that coming. I don’t know if you read in the UK; The Times published a piece that Prince Harry was wearing our shoes, which is great. There’s some more of that coming but the truth is that this is the time for us to try and get the shoes available – even if it’s only online – in as many territories as we can, but strategically and without putting the business in any sort of danger.
We’re first consolidating the UK and Europe, followed by a release and launch in Australia, and then we’re targeting South America – specifically Argentina. I think that is what our goal is for the end of the year and to create very quickly, a shoe that you can buy globally and where we have a really beautiful fashion following. So, we’re working hard on content: we’re working very hard on our storytelling. I think we’re starting to get there now. We’re getting some really nice response all over the world. We’ve got some very good data analysis coming out, so we think we’ve got a shot at it. That said, none of these things are guaranteed so it’s going to take a little bit more work, a big team, and a hell of a lot of luck so we’re up for the ride.
Nick Dreyer, thank you so much for telling us more about Veldskoen and all the exciting news around it. I wish you the best of luck with it.
That’s very kind of you and thank you so much for having me on.