Dossier

ICT4Ag start-ups: Building a better e-agribusiness

The recent boom in ag-tech start-ups has helped to further agricultural transformation and improve farmers’ access to valuable ICT-enabled services. But to continue this progress it is pertinent that entrepreneurs design sustainable business models.

The mAgri mobile app developed by Brastorne Enterprises has over 300,000 active users © Brastorne Enterprises
The mAgri mobile app developed by Brastorne Enterprises has over 300,000 active users © Brastorne Enterprises

Thursday, 26 April 2018

Martin Stimela, co-founder of Brastorne Enterprises, which provides ICT solutions for African agriculture, shares his insights on some of the core components that make up a successful business model.

What is the key to creating a sustainable and scalable ICT4Ag business model?

Obviously, to make a business more sustainable you need to provide content or services that are localised. I don’t just mean services that respond to the demands of the local context, but also in terms of language. As you know, most people who work in agriculture are underprivileged and underserved, and the majority of them will not speak English. So when I say that the content of your services has to be localised, this extends to having it translated into local languages.

Crucially, the business also has to be social – I think this is really the key ingredient. In ICT4Ag, even though services are usually provided on mobile phones, agribusinesses forget to make them engaging but rather focus on commodity pricing, access to markets, early warning indicators etc., which means the products often become really boring. The minute you make a business social, so that people can interact and chat about their produce, as well as learn and share ideas, that’s when you create vitality and traction in your target market – that’s what we found anyway.

Why is it important for ICT-enabled agribusinesses to consider different business models?

So businesses can either be B2B or B2C. B2B is business-to-business, whilst B2C is business-to-customer or a ‘direct-to-farmer’ model. The reason why you would integrate both models is again for sustainability reasons, as it gives you multiple income streams and multiple partners. The key to success is designing a business model that has multiple income streams. I believe that the magic number is at least eight different income streams, just to make sure that if one stream proves not to be fruitful you can still sustain the business.

Working with corporate companies in a B2B model will often mean that businesses get paid in bulk for their services, whereas customers in a B2C model will usually pay for subscription services in smaller amounts or on a ‘pay-as-you-go’ basis for individual calls and SMS services. Businesses are also interested in paying for access to customer data – for example, we can supply de-identified aggregated data on over 500,000 users on our platform – which provides another source of income that can be harnessed.

How can public-private partnerships (PPPs) benefit ICT-enabled agribusinesses?

If you are part of a PPP you don’t have to do everything yourself, which helps to reduce the cost of capital. For example, in the development of our mobile app, mAgri, we partnered with mobile operators. This means we do not have to go out there and build our own user base – the telecommunications company that we have partnered with already has a large database of users that we have been able to tap into. PPPs also help new businesses to gain credibility and customers’ trust. As a new guy coming off the block, partnering with a huge company that is already known, allows you to ride on the consumer loyalty for that brand.

Why is effective marketing and extension training in the use of ICT4Ag services so important to increase uptake among target end-users?

I think it’s really important to help shorten the learning curve for target consumers to use the ICT-enabled services being provided. A lot of end-users in the agricultural sector need education and training in terms of using the ICT itself. Extension training is not just about teaching consumers how to use the service, but about training them how to use mobile phones or the USSD (unstructured supplementary service data) technology that we use.

Additionally, having face-to-face customer care helps to build users’ trust in service providers. With on-the-ground marketing and training, users see the people behind the services and can better relate to the company, which gives them a bit more trust in the product and helps to encourage adoption of the services.

Stephanie Lynch

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The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). CTA operates under the framework of the Cotonou Agreement and is funded by the EU.