Market Validation and International Markets

The topic for the first block course, and really the tone setter for Sprout, was market validation and international markets. The reason the Sprout team put these two topics together is simple:

Getting engaged with customers early is important for any new product. New start-ups from any field need to know they have a product that a large enough segment of customers want to buy.  Secondly, thinking globally and lifting your sights above what is right in front of you is critical if you want to make the most of your opportunity.

Specifically within agritech, thinking internationally is about understanding different farming systems and different cultures involved in those farming systems.  Understanding farming systems, and the differences that exist in different regions is so very important.  New Zealand has a farming system and economic environment that is unique and very different to most other agricultural markets. Our pastural based system is relatively niche, when compared to how people farm in the US and Europe.

Case Study: Dairy Farming in Thailand

Some really interesting case studies were shared by guests;  one in particular was regarding a dairy farm in Thailand. Within the Thai dairy industry there have been strong cottage industries developed in both the processing and delivery of milk to processors and retailers. When viewed by traditional western business thinking, it is easy to find opportunity to implement automation and save significantly on the bottom line. However, the Manager's of the milk processors and delivery services, are not interested in implementing automation because it would cost their friends and family jobs. There is no social welface in Thailand, so for a person to be made redundant would render that person unemployed and with no fall back. Therefore managers simply will not implement basic improvements based on economic argument's. The implications for new companies operating in these types of environments means they need to think of other value propositions in order to get their sales across the line.  


One of the sessions we had with the teams was with a Silicon Valley entreprenuer called Matthew Himelstien.  Matthew currently works for Pandora, but has started and sold his own start-up.  Matthew shared a perspective of market validation that was focused around the word 'traction' - how you get it and how you keep it. Matthew shared some examples of how he has helped numerous companies understand their customers better by creating opportunity to 'shadow' them, in an open and transparent way.  Matthew suggested setting up full days, where by you really get into the shoes of your customer and understand how their life works and how your product fits in. He used the example of helping a company with a shopping list app, and deciding to offer shopping vouchers, in order for him to shadow the shoppers and see how they were using the app. This learning then helped the company refine its messaging to improve the conversion rate. 

The other big lesson the Sprout teams took from Matthews session was that your product is not just your product. Instead your product is everything from when a customer first hears about it to when they are finished using it. The whole journey. For agritech start-ups, the seasonality of agriculture means that companies need to get their timing of market validation right, so the farmer is in the right mindset. Matthew suggested companies offer farmers a day of work for free to shadow the farmers and learn about their lives so they can empathise and understand exactly how their product needs to fit into their customer's lives. 


Larry Ellison, the founder of Rural Fuel, that sold to BP, and now a prominant agritech entreprenuer and investor in the Manawatu, joined the block course and shared his experience and his appraoch to market validation and path to market. He encouraged teams to differiente their thinking into the different stages and discussed the different approaches for each stage.  Larry shared some of the tough battles he has had to face in the early stages of his businesses and demonstrated the fighting spirit an entreprenuer needs to be successful.  

Expat enterprenuer Jon Sandbrook, based in Wisconsion, joined via Skype and discussed how to approach creating strong strategic parnterships to assist with market entry.

All in all, teams left the course with a new found passion to get in front of customers and an understanding of the benefits involved in opening up and getting feedback so they can improve what they are doing.