“Cut the middlemen!” said almost every agtech.
“Create the Harvest Moon utopia!”, I said.
In Indonesia, (in my opinion of course) if we look at the agtech company sprawling around the archipelago, we can divide them into 2 categories: the not-so-agtech-more-supply-chain downstream startups and the agtech-wannabe upstream startups.
The downstream one focuses on capturing the demand first by securing B2C fans (help the farmers yeay), push trade marketing for GMV purpose, and establish the distribution and logistic channels.
While the upstream one, they focus on seizing the supply first by equipping the farmers with tech, acquire their data, and shower them with money when possible.
In this writing, I am going to focus on the upstream one because I work in one of the startups there. And this is my main idea: the best vision for us, the upstream agtech, is to create a world that envisioned in Harvest Moon (or Stardew Valley. Or Story of Season. Or any Farming RPGs game. I shortened it to FR for the rest of the writing). Harvest Moon and other FRs put their perspective on the life of a farmer. It’s a form of ultimate empathy that we can have to create a strong vision.
Working onwards, having this vision of empowered farmers might give us a clue on what kind of supply chain that suits the vision the best. So we’re going to create a farmer-first vision while also answering the call to conquer the lucrative market of agriculture.
So, what kind of vision they give us? There are at least 4 main principles that being implemented in FR that I identified. Should you a farming RPG gamer who spots another unique concept, let’s discuss it on the comment.
For the first and the fundamental of them all...
1. Farmer of FR is a seriously agile serial entrepreneur with a lot of product line
Here’s how you start any farming simulation RPG: Start with foraging, they made certain money for your first day. Plant crops, after few days, harvest and groom your capital. Meanwhile, go fishing, the near river and sea provide a lot of stuff to help you gain extra money. Also, go mining, you need the material to upgrade your farming tools and sell the extra for more money. When you have enough, expand your farm, buy more expensive seeds and finally, build your barn and poultry. In less than a year, spread your portfolio into more than 10 product lines from industrial farming to mining SMEs.
It’s theoretically possible, but also theoretically not scalable. You won’t always be lucky to be dumped in a land where every industrial natural resource is available, especially the ores from mining. But let’s catch the entrepreneurial spirit here. By having a diverse portfolio, our FR farmers are the agilest farmer ever in the world. No season can crush them, no middlemen can dry them.
Which leads to our number two…
2. Diversified Portfolio is actually a daily recurring revenue
This what differs most of the ordinary real-world farmers with FR farmers. FR farmers have daily recurring revenue to help them survive every day in every season.
In the real world, for a fish farmer to yield a ton of catfish, they’re going to need averagely 3 months. They need to spend a capital worth of one pond, approximately 15 million rupiahs ($1000), and get the return 3 months later.
So how do they survive daily life? Sometimes they work as labor elsewhere. Or, they may just borrow from the local farm lord (forgive my lack of vocabulary here). The lord is the one who just lent them the money for the capital by the way. Farmers pile their debt, reap small fortune, and put themselves on the risk of crop failure.
For FR farmers with their diversified portfolio, they reap harvest every day. The eggs are produced daily. The fruits from the trees, daily. The diversified crops planned to give sustainable output daily too. The forest also provides forageable stuff consistently while the river is always ready with the fishes except its frozen. And don’t forget the mine too.
With this daily recurring revenue, they can easily grow their capital and expand and expand and expand. Harvest, sell, buy material to build the barn. Milk the cow, sell, buy the machine for artisan goods. This steady source of capital might be the only second-best aspect which makes them thrives and the game is playable.
And this second point is only possible because…
3. They have the best middlemen and the most efficient market in the whole world
You can sell almost anything as long as you can store it in your backpack. Your harvested crop for sure. Your poultry product. The ores you mined from the cave. The canned cola you found in the river when you fished. Anything. Even the twig, rocks, and the batwings you got from slaying the evil bat in the cave.
That’s a reality in the real world too, right. There’s an intrinsic value to anything.. if only you can match a demand. There should be certain someone at a certain time who is interested in a seed of bougainville that you have in your backyard which you never put your attention to. If only you are able to find them easily. As easy as throwing the stuff in a bin. Which is exactly how you sell stuff in FR.
The magic bin we call it. The representative of all the buyers in the world which shows itself as a simple wooden box. It’s the best usability hack for farmers which send a deep message: just focus on extracting and cultivating all the resources you can out there, let us handle the marketing and give you a just price which we will pay immediately to you the next day.
The magic bin is a middleman who:
- Appreciate your work so much they think they need to come directly to your farm so you can sell your harvest hassle-free
- Got the best network in the world as they will effortlessly take everything that you want to sell and put the correct price for it
- Understand that your cash conversion cycle should be put at the fastest cycle possible so you can easily grow your capital
And helped by the best middleman in the world, you as a farmer just need to focus on producing. So then, we go to the fourth principle…
4. Access to production input, tech, and education is the thing that should be ultimately enabled for all farmers
Diversification is only available with good access to means of production. And FR’s farmers are the best-connected farmers in the world.
Every supplier with a specialty that they need is within their reach and steadily available. The woodworker for a new barn, just 2 maps away. The general store with a steady supply of seed. The quirky fisherman who gave them the fishing pole on their third day in the town. And so on, so forth. With this kind of access, the opportunity arises for FR’s farmers to produce just about anything.
They’re also miraculously adept at every art of farming and natural resource extraction. In the real world, you need multiple cycles of success and fail to master certain commodities farming. A strong catfish farmer won’t have the same luck with tilapia. Somehow the skill doesn’t stack. But not the FR’s farmers.
There you have it. Supposedly all the best things possible for better farming and better livelihood of farmers.
Well, not everything. There’s also stuff I neglect to elaborate such as a watering can that can cover meters of tile in one shot. A greenhouse that can sustain any crops in any season. A pig poop that can produce truffle. That’s too wondrous I guess. And some of our stuff is better than them. We have an automatic feeder for fish. Drip irrigation with sensors. So on, so forth.
So, what should be a cool product vision that we can craft?
Let’s answer these How Might We:
- How might we connect farmers with multiple business opportunities that can increase the revenue stream?
- How might we consolidate demand for any rural products and inform it to the farmers so that we can absorb all their products?
- How might we consolidate transactions and create an exchange platform where transactions can be processed much faster so farmers can get their payment almost immediately
- How might we open an access to the best supplier for farmers so they can always get the best support to build their farm
- How might we support the farmers to access the best practice of farming that will help them have the best productivity for their crops and commodities?
Have your startups answered it? Have mine?