Our year in summary.
It’s been an interesting year for us at Farmula. Even though we are talking of Our year in summary, we haven’t been in operation for 12 months. However, this is our first year as a team and we have learnings we aim to share, multiple highs and lows, but most of all our traction. We were quite happy about moving 0.6 tonnes = 12 bags of potatoes weekly during our market research phase in July. We currently move 2 tonnes = 40 bags weekly and we’ve only been operational in November and December.
We decided to run a Pilot in Nairobi. What we understood early was, in a marketplace that has interaction between on and offline capability, it’s best to select a location in order to figure out your logistics and distribution before attempting scale.
Let’s go into details…
We’ll do this in 3 sections that cover our entire operation in the following order.
- Onboarding
- Distribution & Logistics
- Ops
Onboarding
Come one, don’t come all.
The plan was to target medium-sized food businesses that have a minimum order of 0.2 tonnes = 4 bags a week. Well, Kwa ground vitu ni different for every 100m, there are at least 2 small food businesses with orders of 0.12 tonnes = 2 bags weekly. This changed our target customer and for our pilot phase, we targeted small food businesses due to their proximity.
We used a traditional outreach where we described our business and the benefits we bring to our customers and our conversion rate was
0%.
So, we restrategized and, created a 3 step process;
- Display daily market prices to better inform purchase decisions.
- Give access to Farmula priced produce, no calls or physical market survey.
- Lastly, businesses could place orders via our USSD and in real-time.
Conversion 0%.
Our USSD was designed to bring flexibility to small businesses. USSD codes are super simple you dial a short-code; in our case *483*016# and follow the simple prompts.
Third time is the charm. This time we introduced “sampling” where we show every business we onboard how to use our USSD platform and they get to sample produce from our Farmers.
Conversion 50%
We spoke to 43 businesses on a Wednesday, I won’t lie, Thursday seemed so long because we expected at least one order but none came. The first order came in on Friday of the same week. We went all-in; the order was for 20Kg bag and we were so proud.
Distribution
The soul of the business.
Early on in the business, we realized we had to be innovative with how we stored and moved produce. By the time we received our first order, our house was our distribution center and it was hectic.
This was where we sorted, packaged and dispatched potatoes from. Why? Well because this enabled us to cut down dispatch time by 5 hours. Each time an order was placed, we were able to dispatch it promptly.
Now, we have our 1st distro, which serves our customers in Donholm and it’s environs. When we first moved operations, we would dispatch produce 1hr after customers placed their orders because we had to sort, pack and locate the one delivery guy we were working with.
Currently, we understand our customers better and with the data we have collected we can be able to predict which day our customers will place their next order, cutting down our dispatch time to 15min after customers place their orders.
Businesses want their potatoes fresh and on time. To ensure this, we are improving on predicting demand down to the minute and working on giving our customers access to quality and weight checks remotely.
Logistics
When I move you move…
When you hear logistics. You have 2 options, run or stay. There is no middle ground. Long story short, we decided to stay, and as much as we had figured out onboarding and we are constantly improving on distribution running our own logistics came with its challenges. Fluctuating logistics charges, unreliable riders, and fulfillment to wrong locations became our daily woes.
Our business depends on 2 main logistics.
- From the farm to our distro
- From our distro to our customers.
We started with individual Boda-Boda (commercial bike) riders in the vicinity for our last-mile deliveries. The problem with this was:
- We had to accompany the rider each time
- Riders at times quoted unreasonable charges
- We wasted time while locating and negotiating with riders
We then decided to have repeat riders, but to date, we only have one reliable and affordable rider. Because of this, we paused on taking on new customers. We are in the process of negotiating a partnership with a logistics company in order to tackle sourcing from the farm and last-mile deliveries.
Ops
“You are a Potato fulfillment business”
I remember when we sat across our investor and he told us how much we seemed like a potato fulfillment business, and everyone in the room laughed. It’s important to note this is our starting point and we agree we are a potato fulfillment business for now.
Firstly, we decided to focus solely on potatoes because we aimed to understand customer onboarding, produce distribution and logistics around a crop that is highly consumed. This better informed us on what values we should provide for our customers through our USSD.
Secondly, we aimed to reach product-market fit with one crop. Through understanding our customer needs and converting those needs into features on our platform.
Once we’ve attained this, we will replicate the value we give our potato customers to customers who consume other crops.
USSD — Product iteration
Food businesses can dial *483*016# from a Kenyan mobile number and:
- Check daily produce prices
- Place orders
- Check the status of their orders
Come 2020 our customers will be able to:
- Trace the origin of their produce
- Place a small down payment and get produce at 10% less
- Check for produce quality and weight remotely
To date, businesses prefer to call even though it takes only one shilling to place an order over dialing our USSD code. The human interaction is what they say makes them feel assured. Hence, we have a mini-call center set up for handling orders and feedback.
We constantly interact with our customers and iterate our product as a result of their feedback. We have services exclusively available on the USSD service because this is currently our primary platform of operation.
This has enabled us to achieve the below:
- Over 100 orders fulfilled
- 46 customers onboarded
- 25 active customers: ordering weekly
- 14 tonnes of produce delivered
- Internal Quality Assurance application in testing
In our first 30 days, we had brought forward the learnings from our market research phase to validate the need which exists. In 100 days we’ve learned and grown immensely as a team. We look forward to a year full of more lessons and better innovative solutions from our end.
To our customers, partners and supporters we can’t thank you enough and wish you a prosperous 2020.
