Kerryne Krause-Neufeldt was on a roll. She founded her first beauty product business at 23 and was turning over $45,000 in the dying months of her company. But she lost it all on her worst day.
“I never thought in my wildest dream that anybody would steal my company from me. Seriously, how would they get that right?” she says.
Born in Pretoria, she was raised by a single mother who ran a hairdressing salon.
Krause-Neufeldt worked odd jobs while paying her way towards an Honours degree in marketing at the University of Pretoria. From working as a sales lady at a small outdoor store, she packed her bags and left for London on a two-year working visa, to toil for a sandwich making store, Pret A Manger. She was training to be a manager for one of the stores the company was going to launch. It was here that she learned how a well-oiled, structured company functioned. But after three months, she returned to South Africa on the promise of a job.
“The difference in having worked for Pret A Manger in London and coming back to work for this company was a culture shock of note and it was a defining moment for me. I realized there was no vision. I was never going to see this marketing position,”
She resigned after five weeks and decided to start her own business – a distribution company, supplying cheap eye masks that rejuvenated the skin and removed puffiness. She called up the principle office for the eye masks in Switzerland which did not have a market in Africa.
They offered 10,000 eye masks to sell in South Africa but Krause-Neufeldt needed funding to start this business. One of her mother’s customers was a lawyer who dabbled in business from time to time. He wanted to start his own business but Krause-Neufeldt convinced him that her business idea was more viable. But he wanted 51% of the business.
“He knew I was caught between a rock and a hard place. He said, ‘I’ll give you the money but its 50/50 for the business,’ and in that moment I was relieved I could get started on the business but somehow I knew it was the beginning of the end,” remembers Krause-Neufeldt.
The lawyer funded the first 2,000 units. She hired around 12 sales reps and did all the training and focused on the administration. She also hired Peggy, her best friend, who would distribute the units to the sales reps from a factory. The sales reps earned commission on all the stock they sold, while she earned a mere salary of $275, which she felt was too little.
Business picked up and more stock was brought into the country and South Africa became one of the biggest markets for eye masks.
After running the business for close to two years, Krause-Neufeldt told her business partners that they had to inject more money into it to meet their side of the deal. They were reluctant and felt she was becoming a problem.
Then, at peak season during November, three of her sales reps picked up units worth $91,000. Peggy counted the stock and gave it to the sales reps. They should have delivered the products and returned with the cash, but they never came back.
When Krause-Neufeldt approached her business partners about it, they said that the sales reps gave them the money and that they were investigating her for fraud.
“I asked them how much the reps were giving them and they said R30,000 ($2,740). I said they have R1 million ($91,000) worth of stock. I told them they were getting nailed, but I was the enemy,” she says.
Her boyfriend was a director in the company.
“I was fighting with my boyfriend at the time and I told him he can’t be playing golf all day and take a salary. I told him to do something and he said he’d be a sales rep.”
While in a meeting a few days later, the partners asked Krause-Neufeldt’s boyfriend whether he was earning commission. According to the contracts, it was illegal for directors to earn commission as part of their pay package unless the board of directors approved it.
“We went into a meeting and that’s the only dirt they could find on us,” says Krause Neufeldt.
The partners said they were going to open a criminal case against her and the boyfriend unless she signed over her shares and released the company to them. She tried to get lawyers in but had to fork out around $3,600 upfront. Krause Neufeldt couldn’t afford this with her small salary.
“I signed my shares for nothing and handed my company to these people. I didn’t have a choice in the matter,” she says.
Krause-Neufeldt lost everything. She also signed a restraint of trade agreement. She lost her distribution agency and a local market she had personally grown.
“It was the biggest trauma of my life. To be betrayed by everyone and you know I’d get calls from salons that would complain about my reps and I wouldn’t believe them. I lived for my staff. It was devastating.”
Krause-Neufeldt, however, refused to lie down.
“I just believed failure was the inability to get up again. So I resolved to get up the next day and start another company to show them,” she says.
She immediately started working on her next business, I-Slices Manufacturing. She had come across an Italian eye mask but it wasn’t in line with the quality she wanted. So she decided to develope her own product.
She needed the technology that would make the base of her product, Eyeslices. A friend introduced her to the Council of Scientific and Industrial Research (CSIR), a research and development organization. Here she found the department that worked on a hydrogel treatment pad for burn wounds but the idea was shelved in 1993 because it couldn’t be developed further.
One day, Krause-Neufeldt met Avie Kruger, a scientist who had worked in the CSIR polymer department, and helped her to develop her products.
She started her own laboratory in a cottage on a plot in Midrand, outside of Johannesburg, but there were no standard manufacturing methods or equipment available to produce the product she wanted.
Her mentor suggested she look into the food industry and she came across a machine which had oval cut outs, similar to those of Eyeslices. She contacted Ulma Packaging Solutions, a company that packages products such as yoghurts and meat. The next morning, they arrived at the cottage and started to help Krause-Neufeldt customize her machine.
It took about one and a half years to create the perfect Eyeslices products following the seven years of research. Today, Eyeslices is a reusable stable water-based hydrogel eye mask manufactured through a physical process of freezing and thawing.
Instead of placing cucumbers on your eyes, Eyeslices does that job better and it’s a product many beauty salons have stocked on their shelves.
The United States was I-Slices Manufacturing’s first distribution country. Today, the company boasts 19 other export markets including and hopefully followed by Morocco, Kenya and Nigeria.
Krause-Neufeldt says the challenge with exporting products on the continent is that Africans want brands to be successful in the overseas market before they buy. Regulations can also be a problem.
“Every single country in Africa, the regulations are different and they’re very onerous. They’re incredibly expensive,” says Krause-Neufeldt.
But she is not giving up just yet, she plans to grow the product and take it to many countries on the continent. She hopes it will be one in the eye for cucumbers.
My Worst Day with Ghana’s Waste Management Mogul
Ghana’s waste management mogul, Joseph Siaw Agyapong has built one of the most innovative enterprises in the country providing employment for over 250,000 employees in Ghana.
Everything was going well until an accounting error led to the worst day in his business life.
Watch the full interview with Forbes Africa’s Peace Hyde
My Worst Day With Atedo Peterside, Founder Of Stanbic IBTC
Atedo Peterside is one of the most respected bankers in Nigeria.
At 33 he built a billion dollar business and became founder of Stanbic IBTC Bank Plc.
But it has not all been smooth sailing.
Just at the apex of his success, his organisation was hit with a scandal that threatened to not only upend his impeccable reputation but that of the bank he had spent his whole life building.
Catch this exciting episode in an all new season of My Worst Day with Peace Hyde.
Watch the full video below.
Burned But Not Broken; The Tale Of Fiery fashion
Don’t be fooled by his infectious smile and designer clothes; beneath his tough exterior is a layered story of depression and despair.
On a rainy autumn morning in Johannesburg in March, we meet Adrian Furstenburg in the small affluent suburb of Parkhurst.
Ironically, he is dressed in black – a symbol of grief – to recount the day when his design studio, including stock and equipment worth R70,000 ($5,800), burned and was razed to the ground.
“The damage was so painfully clear in the bright, winter morning light,” says Furstenburg.
To get to this story, it is important to start from the beginning.
Furstenburg was only four years old when he first said he wanted to become a fashion designer.
“I was at my granny’s house and we were watching a fashion show on television, and as we were watching, that is when I decided that this was what I wanted to do with my life,” says Furstenburg.
However, his father, a farmer, had, other plans – he wanted him to pursue law.
Somehow, Furstenburg found a way to persuade his father to allow him to enter a career not so distant from the fashion industry.
“It was the early 2000s and it was pretty cool to study graphic designing, so he said ‘that’s okay, I will pay for you to study graphic designing’,” he says.
In his last year at college, he specialized in textile design, which led to him crafting a career as a handbag designer.
“I think that is one of the wisest decisions that I have ever made, there are definitely no regrets,” says Furstenburg today.
As part of a college assignment, he was required to do a practical project.
“I weaved this beautiful piece of fabric and then I actually made a handbag. This project is where my passion for handbags started,” he says.
After he graduated, he started freelancing as a designer and stylist, set on his journey of one day being a fashion mogul selling swanky handbags.
But his worst day was lurking around the corner, ready to throw him into a state of melancholy.
It was June 6, 2012.
“The day isn’t etched into my memory. I recall it from a much deeper, more visceral part than that,” he says.
He and his business partner at the time, Nkululeko Msibi, of 2souls clothing, had recently set up a small studio just off Gandhi Square in central Johannesburg, where they produced every kind of clothing and accessory to keep their bank balances and ambitions afloat.
“We landed one of our biggest projects producing costumes for a major dance production. We spent hours planning, designing, sourcing, selecting, sewing, stitching. Their budget was strict and the schedule was even tighter with virtually no room for error,” says Furstenburg.
But a disaster that would discredit him and Msibi was about to blaze through their studio.
Furstenburg was picking up materials from a supplier before heading to the studio that Wednesday morning when he received a frantic phone call from Msibi.
“Fire was really the only word I got from the conversation,” says Furstenburg.
He describes how surreal everything felt in the bright, winter morning light when he arrived at the studio.
“The thick smell of smoke hung throughout the building. Inside the studio, sooty black licks ran up the walls where the fire had devoured our machines, stock and the rails of costumes for the production,” says Furstenburg.
This was just three days before they had to deliver the costumes to their client. They were also not business savvy-enough at the time to have insurance.
“We sat sobbing on the ashy floor. The nausea swam in my stomach as the reality of the situation gained momentum in my head.”
“I called the client, trembling. The shouting started on the telephone and didn’t stop until they left our charcoal pile with a few pieces that had escaped the flames while stored in another studio,” Furstenburg recounts.
They were livid – understandably so.
“They were so outraged, because I was dealing with their dream as well. It was a costume production. They had a look of utter hatred and disgust on their faces,” he says.
They lost the clients.
“I spent two weeks in a blur of fear and guilt… Almost no one trusted us with their work and the landlord suspected that we were to blame for negligence,” says Furstenburg.
He went home, depressed for weeks, not knowing what his next move would be.
“I don’t have children but my business is my child. I have fought very hard for it. Seeing it die was the worst day of my life. I took about two weeks where I didn’t know if I was going to be able to do this anymore,” he says.
Fortunately, it was soon established that the fire was caused by old wiring. They salvaged what they could and Furstenburg decided to change his focus from production to styling – that is how he slowly managed to recover from what was his worst day.
He started from scratch, working on freelance projects making very little money.
“It was far from ideal and barely sustainable but somehow my resolve strengthened not to allow this incident to raze me permanently,” says Furstenburg.
The passion for designing handbags ignited within, in 2013, he equipped himself with business training at the Branson Centre of Entrepreneurship.
When he completed the three-month training, the center placed an order with him for 70 small, original-design messenger bags to be given as gifts to guests at an event held during one of FORBES AFRICA cover stars Richard Branson’s visit to South Africa.
“It could be said that someone else spotted what I had to offer before I had known exactly, and acting perhaps more in response to a veiled instruction than personal confidence at the time, I started making bags,” he says.
“Amusingly, whatever I might have lacked in self-belief was effectively offset by a desire to wow anyone and everyone and so I almost simultaneously entered the Independent Handbag Designer Awards of that year [in New York],” says Furstenburg.
It took four years of applications before he was accepted in 2016 into the All About the Logo by Guess Handbags category. He was the first South African applicant accepted – and the first to win. This opened doors for him locally and internationally.
Furstenburg is currently working on a procurement deal with an international airline. If successful, it will be the golden game changer that takes his business to the goal of netting an annual profit of $1 million by 2019.
Six years after his worst day, Furstenburg is not without challenges. But he is continuously taking it one step at a time, ensuring that the fire he has for designing world-class handbags never burns out.
“I must admit that I get a little breathless reflecting on the trajectory that the business has followed in the last 15 months, not least because of the risks we’ve survived and the gratitude I feel to those who’ve guided and supported me,” he says.
Download issues of Forbes Africa
- Single Digital Issue: Forbes Africa June/July 2020 R50.00
- Single Digital Issue: Forbes Africa April 2020 - 30 Under 30 R50.00
- Single Digital Issue: Forbes Africa March 2020 R50.00
- Single Digital Issue: Forbes Africa February 2020 R50.00
- Single Digital Issue: Forbes Africa December 2019/ January 2020 R50.00
Subscribe to Forbes Africa
Ronaldo’s $105 Million Year Tops Messi And Crowns Him Soccer’s First Billion-Dollar Man
Separated By The Pandemic, United In Pain And Hope For Tomorrow
Covid-19: Beyond The Lockdown: What Big Business Is Doing Now
Duolingo Founder: What I’ve Learned Since Our Billion Dollar Valuation | Forbes
Covid-19: The Ultimate Disruptor
- Health2 days ago
[IN NUMBERS] Coronavirus Update: COVID-19 In Africa
- Billionaires1 week ago
The World’s 25 Richest Billionaires Have Gained Nearly $255 Billion In Just Two Months
- Entrepreneurs4 weeks ago
Nerves Of Steel: This Ambitious Property Tycoon Is On A Mission To Transform Accra’s Skyline
- Current Affairs3 weeks ago
WITHOUT UNIVERSAL HEALTH COVERAGE WE ARE SITTING DUCKS WHEN THE NEXT PANDEMIC STRIKES
- Entrepreneurs4 weeks ago
How This African Animator Is Handling The Virus
- Current Affairs4 weeks ago
VE DAY MARKS THE END OF THE SECOND WORLD WAR-BUT THE WORLD IS STILL AT WAR
- Brand Voice3 weeks ago
Focus on Mauritius: Promoting Sustainability Through Perseverance And Policy
- Current Affairs4 weeks ago
The Number Of Mothers Reporting Food Insecurity Has Jumped More Than 200% Since Start Of Pandemic