Why product first company?
The vision with which we started this company was to help out the most underserved segment in the whole agri community. However, our market has a high barrier point to entry. That is you need a lot of resources on your hands to make even the first touch.
We did try (business first approach) because it was logical to do, given our target segment. But the thing that hold us down is the runway that we as an early-stage startup can afford. Considering that we have actually facilitated loans of about $100K in the last crop cycle, this should have given us the confidence to continue on our path.
But it wasn’t the case. Why?
Every startup struggle with two things always that, one is to get to product-market fit as early as possible and the second is having enough funds to reach that point. Many startups despite having good products can’t sustain themselves just because funds were over. It might be an exaggeration but valuing the money and devising your best bet on providing a large runway to launch a product that can give us PMF is of utmost importance.
Being a product first company enables us to optimize our runway & product so that chances of hitting our product market are high.
2. First Contact
Based on my experiences so far I can bet a company like agrifi can’t exist 10 years back. The sole reason is reaching customers. Carrying out all these processes that we tried in the last 4 months would be our only best & considering in the initial days the network effects can’t be generated that easily, agrifi would have been closed.
But in today’s scenario, despite running a business first company we did take a bet on running things like a product-first company. Through KrishiKhata we were able to achieve a CAC of ₹1.5. That it is at least 100 times cheaper than a physical model.
Just think, with so little money the first contact with our customer was made. Although I agree the chance of it converting it to a customer with a CLTV > 0 is very less compared to the physical model but it is definitely much more in terms of cumulative number.
5% of 100 people is just 5, 0.1 percent of 14000 is 14.
3. Rate of experimentation
Whatever we build is a means to an end, i.e to reach the Product-market fit. Being a product-first company provides a low barrier to entry(RUNWAY) along with allowing us to test out various features/functionalities(FIRST CONTACT) in a super fast & efficient way. Consider this, doing simple A/B testing of ads through an offline medium is super expensive & time-consuming compared to ads published through an online medium. Moreover, we can build a feature on a running basis to test it out & make the changes on the fly. This allows us to take a calculated bet on the product-market fit considering our available runway.
The road ahead
To be very frank I also thought that going a business-first approach is a good idea. But the thing that was holding us down was the rate of growth.
The above three reasons are what help us to survive the whole journey to reach the PMF. The startup can’t reach there if it doesn’t grow.
4. So for us what is growth?
For us – Putting it simply, the number of farmers in our ecosystem.
The growth rate in our previous way was very low and we have would not be able to sustain that growth rate. Just to survive we have increased our growth rate manifold by being a product-first company.
It might be possible that initially we can’t do things that an Agri fintech is supposed to do and it is completely okay.
I believe until we have our destination very clear, we can take any route to reach there.
And that is what we are doing.
I believe we are at a very critical juncture at this point. The environment would a little chaotic as a lot of things would be happening at the same time. But what gives strength to me is that all the members agrifi believes in the mission.
Here is to hoping that we achieved what we set out to achieve and succeeded in our mission to bring prosperity to the Agri community of India.
In end I have just one thing to say to you: