Impact Hustlers - Entrepreneurs With Social Impact

15: Kenny Ewan of WeFarm - Creating The Largest Network Of Farmers

November 08, 2018 Maiko Schaffrath Episode 15
Impact Hustlers - Entrepreneurs With Social Impact
15: Kenny Ewan of WeFarm - Creating The Largest Network Of Farmers
Chapters
Impact Hustlers - Entrepreneurs With Social Impact
15: Kenny Ewan of WeFarm - Creating The Largest Network Of Farmers
Nov 08, 2018 Episode 15
Maiko Schaffrath
Kenny Ewan, CEO & Founder of Wefarm talks about how he built the world's largest network of small-scale farmers in the world and gives advice on how solving developing countries problems can become a profitable business.

Support the show (https://www.buymeacoffee.com/impacthustlers)

Show Notes Transcript
Kenny Ewan, CEO & Founder of Wefarm talks about how he built the world's largest network of small-scale farmers in the world and gives advice on how solving developing countries problems can become a profitable business.

Support the show (https://www.buymeacoffee.com/impacthustlers)

[ 00:22] Maiko: In today's episode, I'm joined by Kenny Evan, CEO and founder of We farm, a social network for smallholder farmers that allows them to exchange knowledge and help each other grow more food more sustainably. And Wefarm has been spun out of a non-profit organization in 2015. and has since attracted about 900,000 farmers to its platform. And you have been backed by some pretty prominent investors by now, London based, Local globe, True Ventures and Silicon Valley. Skype founder Nicholas Enstrom and WordPress founder Matt Mullenweg. So, some really prominent faces backing you definitely. It's great to have you, Kenny, thanks very much for joining.

 

[00:59] Kenny: Oh, thank you. It's an absolute pleasure.

 

[01:01] Maiko: Thanks very much. So, my first question is around what motivated you to set up Wefarm in 2015? What was the problem that you saw back then? And why did you tend the setup Wefarm at that time?

 

[01:13] Kenny: Sure. I mean, I think the core, the core problem that we tackle at Wefarm is lack of access to knowledge and information for small scale farmers. So, about 500 million small scale farmers globally, mostly in Sub Saharan Africa and Southeast Asia. That's about one and a half billion people that live and work in those farms. And the vast majority still have no connection to the Internet. So, obviously a big knowledge gap and how they find that information, about planning a new crop, battling a disease, but it's also a big problem for everybody else. I mean, this is our global supply chain, it's 80% of all the food we eat on earth. And I think what we kind of brought differently to this problem was, I think the desire to do a peer to peer, the desire to create something sustainable, and actually trust people to share knowledge with each other, I think overwhelmingly in the space that status quo was the kind of people just needed to be told what to do. And governments and NGOs at very much tackled it in the top down way. And I think what we try to do, definitely, uh, we foreign was, you know, connect the one farmer, he's got a problem with the other one farmer who's been dealing with that, you know, same problem for 20 years, and has really relevant knowledge to share with them.

 

[02:21] Maiko:  And so, as I said, you about 900,000 farmers strong, I think your main user base at the moment is in Kenya, but you're expanding bit by bit through other countries as well. So, how can this be possibly a profitable business to help farmers in rural Africa, where they might not be paying you a lot of money? Right, so, how can this be? How can we find be a profitable business?

 

[02:42] Kenny:  Yeah, so, I mean, the Wefarm platform itself is entirely free, you know, farmers mostly use our services through SMS, and they don't even pay for the SMS, we zero rate that. Our business model is based around, I mean, we're building an ecosystem that we farm, not just a question and answer platform. So, a lot of the things that we're working on now is allowing farmers to actually start accessing markets, products and services through the Wefarm platform. We kind of find organically that people were trying to use Wefarm to trade with each other to get access to services, like loans or insurance for their crops, obviously, to do things like buy seeds or fertilizers. And we're really not allowing people to start doing that through Wefarm. And that's obviously one way we make money. We also look at the data side of what we do, you know, we have 10s of thousands of conversations a day. And the aggregated data from that is a really powerful, both social and commercial product, giving insight into disease patterns, drive patterns, and lots of other things within the agricultural space. You know, that's valuable for, you know, obviously the multinationals that are buying this product, but also, you know, local governments and NGOs that are working with the farmers.

 

[03:47] Maiko: So, are you working with the first multinationals on that aspect? Or is that further down your roadmap? Are you focused on user acquisition right now? What's the focus?

 

[03:55] Kenny: Yeah, so, we've primarily focused on user acquisition of building a really powerful network, you know, we're now the biggest service like this in the world, you know, with 2000 farmers joining us every day. But you know, we do work on our commercial site as well. You know, we did a partnership with Peto Mojaye. Last year, we've worked with some big NGOs, like Heifer International. And, you know, continuing to try and build that side of the business.

 

[04:21] Maiko: What's the interest when you work with Peto Mojaye, for example? What's the interest they have? And this is a, I guess, it's not just a CSR initiative, they're actually interested in learning more about the supply chain. Right?

 

[04:33] Kenny: Right. I mean, I think coffee as a whole, is a really good example of how this works, at Wefarm that, you know, even the really big coffee names are probably buying single origin coffee products, you know, they're selling single origin to consumer, and that has to come literally from one set of farmers in one country. And coffee is a once a year crop, it's highly susceptible to climate change, changing, you know, weather patterns and such like, as well as disease. So, you know, these big multinationals are very reliant on a very small group of farmers to produce the coffee they need to sell, and getting insight into what's actually happening, you know, is the coffee going to ripe in earlier or later than anticipated this year? Are there fertilization problems? Is it going to be a big harvest or small one, I mean, fairly simple, fundamental things that that help people to manage their supply chains.

 

[05:20] Maiko: I want to talk a bit about your funding around. So, you managed to attract quite some capital from prominent investors that many founders dream raising money from and getting their support just beyond the money as well. So, you have both UK and US based investors. Did you find it hard to convince them to invest in a product that mainly has its users or doesn't have any users in the UK or the US, but all the users basically mainly in Africa, I think, had a few Latin America as well. But how did you find convincing investors? Hey, all the users are actually not in your country? Was that hard at all?

 

[05:52] Kenny: Oh, yeah. You know, walking into to speak to a London based V.C and explaining this product that works over S.M.S in Africa with small scale farmers, you know, definitely got a few funny looks. I mean, I think in reality, I think we've kind of find that the really tier one, prominent investors who, you know, we've been lucky enough to back us, they really see the bigger vision of what we're doing, you know, there's a, there's a certain set of V. Cs who probably get scared by everything we've just talked about. You know, we've been told numerous times that the V. Cs don't feel like they know enough about our market to be able to help, but then you get a certain calibre of V.C that is excited about their lack of knowledge about all those things and see it as an opportunity. You know, we're building something for what is effectively the biggest industry on earth, and small scale agriculture. And we're doing, you know, we've got enough traction, though, that we can show that it's, you know, growing, it's a powerful model, it's got a great social mission, have a huge commercial opportunity. And, you know, we've managed to convince some pretty big V. Cs to get on board.

 

[06:57] Maiko: So, what would you advise founders, other founders that are may be based in Europe or U.S, and are looking to solve a problem in a developing economy? How should they tackle this? Maybe from a more business point of view, but, and also, from a fundraising point of view? What are the tips that you can give them to be more likely to succeed?

 

[07:14] Kenny: Well, I mean, I think number one is that you have to work hard to show why an investor should back you, right. And that's the same wherever you're working. But you know, if you're working in developing economy, if you're doing a product, which by standard measures in the UK is probably considered a little strange, then you have to work even harder to show why it is that you are going to win this space. I mean, in the three, four years that we've been doing, Wefarm and raising money, I think the landscape has changed dramatically. I think three years ago, people looked at Africa, and you know, where you know, automatically suspicious, I think now, there's a growing excitement and you know, the opportunity to get involved in Africa. And you know, this huge emerging billion market, you know, Andreessen Horowitz invested and brand, sure, you know, beautiful, mostly based in Kenya, there's increasing, I think, awareness of this opportunity. So, I think if you are that type of entrepreneur, it's, you're the right time to be doing this. But I think you do have to lay out those metrics, you know, you cannot expect to walk into a V. Cs office in London or San Francisco and want them to know how much a small scale farmers spends on insurance or loans, or what the market globally for, you know, agricultural products, or anything like that. [08:25] So, you have to really lay that out for them, you know, and take your time to show if you are successful. What does that mean? What profit? What impact? What comes out of that?

 

[08:35] Maiko: Did you find it an advantage for you guys to be based in the UK as well as in Kenya, for example, your base there as well, right? Was that an advantage for you? Or, as opposed to, for example, just being based in Kenya only? Right? 

 

[08:48] Kenny: Definitely. I mean, I think yeah, I mean, there's pros and cons, like everything, I think, you know, building a start-up is really hard. Even when you're all sitting around one table doing it split across, you know, for us three different countries, we have offices in Nairobi, Compel in London, you know, makes it even harder. But on the other side, yeah, it's a fantastic opportunity for us, you know, especially from the fundraising point of view, you know, there is still like a real lack of access to venture capital and Africa, had we been purely based in Kenya, I don't think there's any way that we would have, you know, being able to raise the funds that we have, or get access to them, and the capital we have. And I think the other thing is different talent pools. You know, we have a lot of data scientists working here, we find that's a very hard skill to recruit in East Africa. And I think we need access to that kind of Western world pool of talent at this stage. But, you know, ultimately, we're building a global business. So, you know, I think, I hope it, and so it doesn't matter in the future where we're based.
 

[09:46] Maiko: You mentioned you have three others, mainly, you have one in Uganda, Kenya, and then here in the UK. From an operational perspective, what are the main struggles you face? You said building a start-ups hard anyways? Right? So, what are the main challenges you face? And, again, what would you suggest to other founders in terms of a more decentralized model in the early days still, right? Although you've kind of come a long way, you're still kind of scaling up? Right? So, how, how can this work? And what are the main struggles that you face?

 

[10:16] Kenny: Yeah, I mean, the biggest challenges are definitely communication. You know, I think one of our biggest strengths at Wefarm is the kind of very diverse team we have in all aspects, you know, gender, you know, country of birth, you know, whatever way you want to look at it. But there's also challenges in that, right, we have a lot of people, I think we have 19 different nationalities, out of 37 team members at Wefarm, you know, people who've gone through very different education systems. And, you know, there is different understandings of the same thing within that massive kind of cultural mix. And so, we have to put a lot of time and effort into making sure people all understand the same things from the same process. It's very easy to, you know, for somebody to say the same words and you know, two different people to take very different meanings from that, it's something I think all start-ups come across. But when you're split across multiple countries, probably having phone conversations, rather than face to face at all, it just becomes exponentially harder. So, I think really, taking the time to make sure that you get some of those things, right. [11:15] You know, it can take 15 minutes, an hour, whatever extra to have those conversations and make sure everybody understands, but ultimately, it's, you know, it's time saved, from not having to repeat yourself a million times and start processes again.

 

[11:32] Maiko: Back to the product. So, one of your main advantages, you mentioned that your customers often don't have direct access to the internet, or if so, then only occasionally, and it's really not as reliable. So, one of the advantages for the product is that it works over text messages, right? My question is mainly with all the tech giants now investing heavily in internet access, and those areas and like probably in the next 50 years, or well, probably even faster than that, like Internet access will spread out much more, do you see that as an advantage or disadvantage to what you do? How core is the text message element? Is it just a hack right now? Or is it something that really differentiates you from them? Just looking it up on any other platform on the internet?

 

[12:14] Kenny: I mean, I think we would look at it as a bit of both, I don't think it's a hack necessarily, but it's a means to an end for us. It's not about the channel, it's about the content, I guess what we do is built a massive trust and confidence in our network from people that aren't using any other service. And we hope that, you know, to your other question, we hope that internet access eventually provides a greater opportunity for us to provide even richer and better content for people that have already been using us for a number of years. So, I guess the analogy I would use in this is Netflix, right, where, you know, Netflix built an incredible brand and trust and loyalty and confidence by sending DVDs through the post to people. And they, you know, saw the future coming, and we're able then to transition that brand and that loyalty into you know, what we all know is a massively successful online platform. And I think we would look at doing something similar with Wefarm, Over the next few years, we will have, you know, tens of millions of farmers using us as their first real service that's been built for them. And even when they get their first smartphone, or you know, the internet comes, and it is coming. [13:16] And we hope that they'll transition that into using Wefarm to do even more things. But I think the other the other thing about the you know, Google putting hot air balloons in the sky and all these things is showing just how important this market is. You know, Google talk about this as a as a social project C.S.R thing, but really, I think it's about acquiring the next billion users. And they're so keen to get the users that we're acquiring that they're putting hot air balloons in the sky to do that. So, you know, I think it's a really interesting frontier.

 

[13:47] Maiko: You have a lot of farmers using your service, I can imagine that they're obviously primarily using your service to access information about farming. Are there any other areas that your users frequently asked for that might be completely different from farming, but challenges they face in their daily life, which they can't solve without the internet, which they're trying to solve? Is there anything else that you see a service like Wefarm could expand to, or where people are having problems that are trying to solve with your platform?

 

[14:18] Kenny: Yeah, I mean, so, obviously, it's, you know, we're dealing with a level of content now that we see just about everything, from time to time. And, you know, we deal with about 15,000 questions and answers a day now. So, yeah, we get some, we get some left field content at times, but we really do try to moderate it into a discussion about agriculture. And, you know, I mean, it's 70% of the economy, the GDP in countries like Kenya and Uganda, you know, there are small scale farmers who they're both, you know, they're semi subsistence. So, it's extremely important for them and their family, but it's also their business. And so, it is really a lot of their life. So, you know, the vast majority of our content started, you know, is on agriculture, but across a huge range of things. I mean, there's almost limitless questions or specifics that people have about different forms of agriculture, from, you know, chickens that aren't laying eggs to, you know, coffee plants with certain diseases to a lot of farmers who wants to try planting a new crop, I want to try planting passion fruit, you know, what sort of soil do I need? How do I start doing that? [15:24] And then obviously, the kind of the business side of that of, you know, I'm looking for a market for my honey or, you know, can somebody help me create a label to market it? And, you know, I mean, virtually everything.

 

[15:33] Maiko: On the journey to really scaling this, to make this really a billion dollar company at global scale. First of all, what is the kind of end goal? What's the big vision behind this? And secondly, on this journey, what do you envisage as the main challenges that you will face, and they still have to solve?

 

[15:50] Kenny: I mean, so, the big vision for us is to create the global ecosystem for small scale agriculture, and, you know, on behalf of the hundreds of millions of farmers in the space, and I think really do it from their point of view, and their site, as it were, you know, and I think there's obviously tremendous opportunities for us to facilitate the global supply chain, and that and, you know, aggregate crops on behalf of the farmers and, you know, really mediate that supply chain, you know, if you think about the average dollar of coffee sold in a US supermarket, you know, the farmers probably getting one cent of that, and probably the supermarkets only getting one cent as margin and you know, 98 cents in the middle is middle people, traders, etc. You know, I think there's a huge opportunity for Wefarm to disrupt that, and do it more favourably, you know, probably for both ends of the of that supply chain. On the other hand, we can also then help farmers to access the products they need, whether that's fertilizers and seeds, or loans or insurance, and again, do that favourably on their site, which is not always the case at the moment. [16:50] So, that's really the big vision to provide all of that across agriculture. I don't think there's any lack of challenges on the way for us, you know, going into new markets and different countries, you know, at the potential for launching in India next year, you know, potentially China and you know, very different economies, very different markets, very different ways of communicating. And, you know, as a business, we obviously have to be able to adapt and do that globally, not just in East Africa. And really, I think our number one focus and challenge is making sure that we do continue to do this on behalf of the farmer, you know, trust is the most important commodity we have. And I think we're very lucky to have you know, very high quality V. Cs on board with us, they get the bigger picture that, you know, there's ways that we can make a lot of money in the short term by sacrificing that trust. And really, no one's interested in that, we're interested in building a massive global business that really has the buy in from this basket of farmer is ecosystem.

 

[17:46] Maiko: Do you see, and with your big vision, do you see anybody trying to do that already, or doing it already through other means trying to really kind of unify farmers and giving them more leverage in the end on the global markets?

 

[17:58] Kenny: I mean, I think yes, I mean, I think there's massively more interest in this space in agriculture in Africa, especially than there was a few years ago. And I think most people are coming at it from the other side of Wefarm. So, there's all sorts of people trying to build marketplaces, or, you know, financial systems for small scale farmers or ways to aggregate and export crops, you know, all of those different bits and pieces. And I think, where Wefarm always come at is from the other end, let's just build a platform that farmers use and join, and this, on massive scale, and then we'll start to introduce those kinds of services once we have, you know, 1 million, 2 million,10 million farmers using it. And so, I think we're kind of coming at the problem from a very different angle than a lot of other people. And, you know, we hope that that's the strategy which will, you know, will take us a lot farther, but, you know, there are increasing, I think there's going to be much increasing competition for us over the next few years. And, you know, ultimately, that's a really good thing. It's, you know, great the people are, you know, starting to provide services to, you know, the kind of forgotten billion.

 

[18:59] Maiko: I think that's great about you guys and I have one last question about that, is that you're attacking basically, a sector that has been deemed in the past as unsexy or, you know, why would I want to get involved in farming, and then especially farming outside of the UK or the US? So, I'll turn you off of, a kind of Western view, right? For any entrepreneurs that are looking to get into the sector, do you see there's a lot of opportunities for solving issues using technology? And if so, do you see anything else that if you weren't running Wefarm, you would text right away?

 

[19:37] Kenny: I can't afford to think like that. It's, you know, we've certainly got enough on our plate building one organization. But yeah, I mean, it's, it is a space, I think, with a massive amount of interest in it, you know, I meet a lot of young entrepreneurs that are now looking to tackle things in agriculture. It's becoming sexier, I think over the years. And there's some really cool stuff that we do. I mean, it's taking it beyond just agriculture, we're building some of the first N.L.P libraries in the world, and some African languages, you know, we're bringing kind of machine learning to even the unconnected, you know, we use some really sophisticated machine learning things, but ultimately, have people access that through a text message. And that's kind of a sexy angle investors, and the public get interested in that kind of idea of, of this kind of mix of technologies. And, you know, it's kind of old school platforms. And there's no lack of, I think, challenges to be faced in the sector. You know, small scale farming is, as I said, before, the biggest industry on Earth, I think, and there's really very little there. You know, there's been a lot of big fancy farm management systems for, you know, what we now, see is that the massive farms in the US or in Western Europe, but the reality is that 99% of farms on Earth are tiny, and there are no sophisticated systems. There’re no really great supply chain systems, and there are a lot of things to be to be fixed.

 

[21:02] Maiko: All right. I wish you all the best on the journey to fix at least some of those problems. And thanks very much. 

 

[21:09] Kenny: Thank you. It was a pleasure.