July 26, 2016
Word came out last week that Farmigo – an e-commerce farmers’ market platform meant to help ease distribution challenges for farmers while getting more ‘direct from farm’ produce into the hands of consumers, announced last week that they will be pivoting. Basically, this means that they’re shutting down their online store and refocusing their efforts. This follows on the heels of Good Eggs who also couldn’t make their business model work on a larger scale and had to cut back operations drastically.
It’s worth noting that both of these companies had significant funding behind them. Good Eggs was reported to have raised $56 million for their platform while Farmigo had raised $25 million. That’s not chump change and more than most of us have to work with. So what went wrong?
While by no means an expert in either company, in both cases it seems like they had built companies based on solid customer research and understanding about what the customer needs and wants. They also applied incredible tech knowledge to these problems to try to figure out how they could ‘disrupt’ the industry and provide better service to both the farmers and their customers. So how come it didn’t pan out?
Despite all of their knowledge and incredible expertise, an interview that Farmigo’s CEO Benzi Ronen gave to Food+Tech Connect pointed to one main challenge that the company struggled with – how to overcome logistical challenges. It is definitely worthwhile to take a moment and read the full article in Food+Tech and then ask yourself, even if you haven’t raised $26 million or more – what are some of the logistical and operational challenges inherent in your business and are you addressing them or are you just hoping they’ll go away? Because these issues won’t go away and simply having a great product or wonderful idea isn’t enough to overcome these. All of us food entrepreneurs face operational challenges and if you hope to grow in a profitable and efficient manner, you need to be very clear on what those are before you can begin figuring out how you’re going to resolve them.