Software for Farms: The Next Big Start-Ups?
The food industry is one of America's biggest sources of emissions. That's why some greentech insiders think food's the next frontier for innovators in Silicon Valley. One such person is Benzi Ronen, who co-founded Farmigo in 2009. It's a Palo Alto-based start-up that provides an Internet platform for farmers and CSA members. He took a few minutes to answer questions:
Q: How did you come up with the idea for Farmigo?
A: Agriculture is the number-one climate hazard that we have. The healthcare costs associated with food-related diseases in the U.S. is more than $150 billion per year. That includes obesity and diabetes. Some estimate it will double over the next 10 years. These are real issues.
The ability to buy directly from the farmer solves all of this. It gives us fresher food and changes our diet. It's better for the environment. It eliminates food miles. As long as we can scale this model and do it as convenient, if not more, as going into your supermarket, then we can achieve a better alternative food system.
Q: What's the future of food and greentech?
A: The food industry has lacked innovative software solutions. There's a perfect storm happening right now with people wanting to eat healthier and locally and the maturity of the Internet. There's a growing trend of farmers' markets and CSAs out there. A lot of that is a result of Food Inc. and various books. The awareness is already happening. We think we can be a catalyst in making it happen faster. And there will be more start-ups that address the food industry and revolutionize it.
Food is almost a $1-trillion industry. CSAs are at half of a percent of all households. That's nothing. Small farms don't have the marketing power to really get out there and make a lot of noise. There's plenty of room for start-up companies to come in, disrupt the existing food system, and offer truly alternative choices.
A: Farmigo tries to solve two issues. First, consumers who want fresh, tasty food also want convenience. The Internet provides convenience. For example, instead of going to a bookstore hoping your book is in stock, you can get it online. It's becoming the same in the food world. Through Farmigo, you can pay your farmer online. If you go on vacation, you can put a hold on your CSA subscription. You can order add-ons, like an extra basket of strawberries. You manage your account, access your history, and make payments.
For farmers, their expertise is to grow the best produce. They didn't become farmers to sort through personal checks and deal with customers who want to make a change or complaints that they didn't get what they wanted. Issues like that pull farmers from the field and lock them in an office. Farmigo's software alleviates all those issues. It tracks CSA customers' needs, keeps track of what farmers need to pack, harvest, and load onto trucks, and monitors where and when they need to deliver.
Q: How widespread has Farmigo become?
A: We're now in over 20 states. We're dramatically growing. We have about two or three farms joining us each week. We're hiring constantly. It's catching on pretty quick.
Q: How did you get it off the ground?
A: The first year, I met with over 100 farmers. We surveyed consumers, and we talked with those who had once purchased from CSAs but then stopped because it was too inconvenient. It was difficult logistically for them to pay farms. They wanted to do the right thing and get fresher food, but they needed more convenience so that it could work with their busy schedules.
Farmers were saying that they loved their relationships with customers. It's better than selling through a wholesaler and not knowing what price they were going to get. But they didn't like the administrative stuff. And how do you get new customers and market to them? How do you get search optimization so that people can find you on the Internet? These are things that farmers are not experts at, nor should they be. Farmigo addresses all these needs. And in September, we're going to launch a marketing platform for farmers, a way for them to get their messages out and build their brands and reach many more people.
Q: Where does your passion for food come from?
A: My wife is a big cook. She started a food-related business. We've gone through this journey together. As we're bringing kids into the world, the importance of what we're putting into our bodies is much more of a focus for us. The idea was to do something that would not just be a profitable business, but would also have a positive and significant impact on the world.
--interview by Brian Foley