Why are fragmented markets the next big thing?
The key is hyper as hyphen, hyperlocal community analytics within 10 families living in Ethiopia in a specific area, hyperlocal crop cycle management within a 5 ha area, or a specific time of day or week when crop yields have to be managed for pests or harvest for delivery. The key is micro-analytics. Why is all this a challenge? Centralization of data collation, etc. are not the business models that are scalable and thus presenting themselves as ripe for “Mobility” and disruption.
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The list is growing? Certain industries by their very inherent design are fragmented in scale, scope and commerce and are ripe for disruption in business models and “mobility” is at the heart of this disruption. Healthcare, Agriculture, Retail, BFSI, Education, et al are the prime industries where the Profit Pools are shifting and new business models are disrupting the current models. Why?
Let’s look at some fundamentals as a case in point in Agriculture and then apply the same principles across major such industries.
1. Fragmentation of Demand-Supplychains – Ex, hundreds of millions of farmers globally have small farm sizes of less than 10ha. This fragmentation creates the lack of economies of scale for access to;
i. Crop management inputs due to high costs of IP/ha and thus impact Crop Productivity
ii. Crop Inputs – Cost of customization of hyperlocal crop specific and crop-cycle specific inputs delivered to the farm gate by current business models are not economically scalable
iii. Lack of Access to Markets – Due to the points i and ii above the impact crop productivity. So even farmers have access to crop prices on their mobile phones, it is when they reach the market intermediary that they are not able to meet the MOQ/EOQ and thus loose between 20% ~ 50% of the market price
Thus the need for analytics and converted into IP on the ground measured into the land data, micro-climate date, crop management data, crop input data, et al represent the real market opportunity for scale.
Crowdsourcing from the farming communities themselves presents one such incredibly large global opportunity.
“It is not Mass Production, but Production by the Masses” ~ Mahatma Gandhi
Aggregating small farmers globally to create Sustainable Communities is a killer app!
“Take it to the Farmer” is very timely and I hope it will successfully draw attention to the plight of 400 million of the World’s farms that are less than two hectares. I hope at the end of these two days we will reaffirm our commitment to placing the smallholder farmer at the centre of the development process. I also hope we will use this occasion to finally bring closure to the perennial debate on the viability of small farm agriculture”
Smallholders, Fragmentation and Decentralized valuechains across industries, where the opportunity for new business models driven by social capitalism will create Inclusive, Sustainable and Replicable businesses.
The term ‘first mile’ was coined by Titus Moetsabi, a poet at the Southern African Rural Connectivity Workshop in Harare in February 1997 to demonstrate the importance of people, and to turn on its head conventional wisdom and a new perspective to innovative solutions.
Aggregating small holder farming communities will create the models and solutions for fragmentation and small holding will lead to location specific Precision Agriculture, that is scalable and replicable;
1. Location specific precision agriculture – With the crowdsourcing of aggregated communities with land, soil, water, irrigation, micro-climate and social data, the opportunity to then connect into crop scientists service providers who can provide location and time specific crop types and package of practices for management
2. This then connects the farmers who now connected to markets for demand side contracts creating economies of scale. Instead of one farmer with 1 kg of crop seeds, or 1 ton of crop inputs such as fertilizer, it is 10,000 farmers, 100,000 ha of inputs in one contract that has multiple agri-OEMs bidding in reverse auction for a market of scale.
3. Driving higher Agricultural Productivity through Integrated Nutrient Management & Sustainable Agricultural Practices – Package of Practices that drive sustainable agricultural practices, based on the best crop management and scientific practices in local agronomic and environmental conditions. This is further implemented which enable best cropcycle inputs, crop monitoring and drive at the farm gate, all leading to higher productivity that enable a greater ROI and de-risking small farmers from multiple levels of risks. Crop management – The same economies of scale apply as service providers with analytical ability bid to service and monitor these inputs in real-time, thereby increasing crop productivity, mitigating risks such as pests and climate and impacting predictability of yields
4. Adjacent industries such as Crop Insurance are now viable to deliver with the model as a point 2 above
5. Enabling direct Market Access and Fair Business Practice– When farmers need to sell to market intermediaries, the analytics of location, crop type, yield forecast, social network of which farming community, et. and all rolled into the app as an forward auction has enough scale for a direct bid on a commodity exchange or value added players from processors to large retail chains. Through direct buyback through a Community programs at the Farm gate from farming at the local Fair Market Value (FMV), which means that farming communities get 100% value from the harvest by being part of a large community, in 1 contract.
5. Creating Community Business Hubs as a Marketplace platform with Rural Entrepreneur to drive discovery, collaboration and fulfillment as Community Services – In addition creation of panchayat or village level rural entrepreneurs for local village/panchayat community input, Output, access and delivery of all products and services in the app ecosystem to create value, reduce costs and generate revenue for their communities and themselves model which could tomorrow enable local marketplace services such as a marketplace for discovery and fulfilment of jobs, inventory, idle capacities o delivery and access of critical services such as off-grid energy, banking, insurance, education, ICT, market information, etc.
6. Creating of Rural Entrepreneurs & Equitable gender development (women groups) –. Aggregation of Women CSGs (Community Support Groups) from within the farming communities are created to create access and deliver products and services. CSGs also serve as a community governance platform.
7. Integrating the entire local valuechain- Our focus is to leverage the local footprint of the entire valuechain which includes processors, creation of derivatives and byproducts and all integrated with the local valuechain that t which catalyzes local economies in creating capacity, entrepreneurs and jobs. Our focus is to create products and services which are in turn leveraged by the local communities for their critical necessities from agriculture to mechanization and transportation to Energy services.
8. Enabling greater Natural Resource Management – Package of Practices based on Integrated Nutrient Management enable better soil (use of micronutrients and other organic manure that soils need) and water management over the years based on natural methods that lead to higher productivity and sustainable agriculture .
9. Catalyzing Accessibility, Availability and Affordability of Basic and Critical Services through the Network business model as a Social Network Marketplace to are Adjacencies (Products and Services that are needed and get created only because of a business model) –
This is where the impact of sensors, mobile computing, social networks and human intelligence all connected to markets present a killer app!
- Monsanto’s Billion-Dollar Bet Brings Big Data to the Farm (businessweek.com)
- Precision Farming Market – Global Forecast and Analysis (2013 – 2018) (prweb.com)