Pivoting your business model during a crisis

A conversation with Geert from FarmWall

Geert Hendrix founded FarmWall in 2016. Farmwall is an agrifood-tech startup that designs urban farming technology and experiences to enhance fresh produce accessibility in the city. In our constantly developing world, the need for more efficient and sustainable ways of living is rapidly becoming a must. Farmwall is a response to this call to action.

Here’s what Geert had to share…

Thanks for meeting with us Geert. You’ve recently been working with TDi as you’ve had to quickly pivot your business. So I wondered if you can share your story with other social entrepreneurs who might be in similar situations or to help inspire them to think differently about how to adapt in time like this.  Can you tell us about your experience pivoting your business model during this covid-19 situation?

If you had have told me two months ago that we would achieve this I would have laughed and said ‘are you mad?!’

To think we’ve gone from a B2B company to a B2C content-driven production house that’s engaging people from all over Australia. I think the team can be very very happy. I’m really proud of them and how we’ve pulled this off.

I can imagine! How have you been able to achieve this?

This is where we can see how much we really have learned over the past three years. It took us three years to build the business model that we have, and basically, we’ve done the whole process all over again in less than two months. And we’ve done it well.

That’s where you can see from an entrepreneur’s perspective, that we’ve certainly picked up some skills along the way.

You were part of a TDi Accelerator program early on, how has that helped you?

Helping us believe that it was possible. And helping us to learn all the lean startup methodology, which basically allowed us to pivot over the years. I think that mindset that we were introduced to at TDi turned us from two people with an idea to an actual startup.

That’s brilliant. I’m curious about your learnings along the way, but first let’s get up to speed on Farmwall and the impact you’re looking to achieve?

We wanted to design a social enterprise, a company that can actually make large scale difference in helping to create green futurist cities that were healthier, and happier, but also where our cities are actually feeding our planets. 

You’ve had to pivot and change your business model several times. Can you describe the process you went through?

Initially it was it was going to be like a big indoor farm with a café, restaurant and yoga space or within a brewery. And I did a whole business model around that  – it was only going to cost 20 million!

Then I met Serena, and we came together with a whole group of people and thought, ‘Can we approach this differently, rather than trying to build one big farm with one restaurant? How can we build a small farm for many restaurants?’

So basically, to make a long story short, our business model was then to design units for chefs so that restaurants could provide fresh produce in a sustainable way. We were looking to add value to hospitality but through this it eventually led us into corporate wellbeing. And that’s where we were predominantly working. We went through a two year discovery phase with Mirvac – a big building developer, looking at how indoor farming and urban farming can add value for office buildings and for office tenants. 

We have venture capital with pre-seed rounds that were finalized in February last year. We have a couple of big customers; Westpac, HSBC, Ernst and Young, Melbourne airport.  A good six or seven, big name corporate customers at the exploratory phase of how urban farming can increase wellbeing with their staff.

 

So you’ve stayed focused on the urban farming vision, but your customer and market segment has changed a lot. What led to these pivots?

Yeah, it’s the hardest thing about running a start-up. And that’s what we’ve been learning with TDi, and over the years, because our customer has changed continuously. And because we’re in such a new market there’s not a lot of research available. So there’s huge potential to explore a lot of different areas, from food and hospitality, corporate wellbeing, and now people at home – with a very finite amount of resources, time and team.

I think what we have to do is listen, listen to our customers and that’s what we’re still trying to do. And what was very obvious in working with hospitality, is that it’s a very hard market for a start-up. So we started looking for another direction. Just listening to people, everybody was always really excited about Farmwall. People loved the concept; we always had a lot of traction in the media. One story after another but nobody seemed to want to be paying for it. And even the chefs were like, ‘yeah, love this, it’s great’. But when it came down to it, they were negotiating for every leaf and there was no desire to pay a dollar more for a system like that. Just from a convenience perspective they didn’t want to walk out of the kitchen into the restaurant to harvest greens – it was easier to be in the kitchen and get it delivered to the back door into the cool room. It then became clear that it was the venue owner who really wanted the Farmwall because it looked good, and the feeling that it provided people. Really chasing that feeling got us into the wellbeing and bilophilia – the effects of greenery for our health.

 

Wow you’ve really had to adjust your thinking and pivot a great deal. It takes a real sense of empathy to listen and observe what your customers are saying and doing.

Yes, just knowing what your customer wants takes a lot of research and a lot of time. But what I find most effective? It’s your gut feeling and often just listening in the day to day. You don’t have to go out doing a hundred surveys. In every conversation you have with people, they’ll reveal certain things and keeping track of those and paying attention – you often get a really good feeling of ideals. Having the habit of whenever you hear something, writing it down and being very consistent with that until you get a customer journey map. It can be frustrating though!

So I think what we’ve learned from it all, is to not become attached to a potential customer either, but just to keep validating. And in the meantime, this market is progressing and developing. It’s also about designing a business that you actually want to run as well, isn’t it?

You talk about listening and watching customers, in order to adapt your business model. What have you observed with people’s thoughts and behaviours during this covid-19 time?

I think first of all, people seeing that the supermarkets were running out created fear. Australia has got more food than it can ever consume. So, it wasn’t really about that, but people have seen the empty shelves now and the veggie gardens have come up again. And they were running to Bunnings for seeds and like ‘we’re going to run out of food, we’ve got to grow our own food.’.

People have calmed down again, but it’s created a healthier respect for the value of food and the value of local food and actually having produce nearby, at least a certain amount. It’s convenient and makes us feel better and safer. Like it doesn’t matter what’s happening tomorrow – if it’s climate change or viruses or the meteorites striking. It’s more about the feeling of security.

But what we’ve learnt at Farmwall, beyond the idea of security is that growing veggies is also about learning something new. It’s about developing yourself, it’s about wellbeing and being surrounded by greenery, it about status as well. Like growing your own food compared with your neighbour, showing off your food-growing systems. It’s all of these things.

I think what’s very clear, if we go back to after the second world war and to where we are now and where climate change is heading with food security is that if we’re going to be a resilient species, we need to grow a substantial amount of food ourselves. We have to adapt to grow 30 to 50% of the required food supply in nearby environments, which means in our home or in the backyard. So in the city it’s vertical farms, indoor farms. If we do it in the right way, it will actually be a neutral and positive for the environment. It will be better for our health, our efficiency and for our productivity.

 

Wow. So how did you translate these observations into your business model?

We need a lot of people skilled and knowledgeable in growing food in the city if we’re ever going to bring this picture to life. So everybody from kids to adults to people in age care, everybody should know all the basics of growing food in the city for it to be able to scale.

So we’ve offered a way of actually integrating it into our living environments and making food and the experience of growing part of our ecosystem, of our cities and our buildings.

Looking at the growth of one lettuce – it has educated a child into planting the seeds, looking after it, growing in your home or in an office. As the mum, you’ve enjoyed that lettuce because you’ve seen it grow for three weeks. It’s actually had a positive benefit on your happiness, even though you haven’t realized it, but also provided a conversation with your neighbour and your friends and you’ve made content for social media. And it brought you closer to your kids, but also to your community. You now have a much bigger respect for that lettuce and you actually going to use the whole thing. And there’s no packaging, your bin stays empty.

 

How was TDi supported you in this recent pivot?

Over the past couple of months, Anna has been with us consistently. She’s helped us with cashflow, contingency, coming up with ideas of what might be possible. When you’re going through these journeys, they are often very lonely. It’s extremely helpful and calming to know that there are at least a few people who are looking out for you. It might not be about funding straightaway, but knowing that someone is there asking, ‘are you okay?’ ‘or did you try this, or try that’, it’s extremely valuable. TDi has been really helpful over these couple of months. To think we started our journey with TDi and three years in their role isn’t over yet.

 

If you think back to when this COVID thing all started, what was it like for you?

So we’re a start-up and our cashflow was quite tight, meaning that we had revenue, but we weren’t ready for seed rounds. We had a certain amount of runway with the projects that are coming in from our corporates. And that runway fell away from day one of the COVID-19 lockdown. We have a couple of venues and they had to stop immediately as well. So it hit us hard. But then as a team everybody knew that this could be the end. So we turned our contingency plan into an opportunity and that’s now proving to be the future of the business.

We’d already approached TDi to explore impact investment opportunities this year and just started working with Anna just before all of this happened. And then basically she was helping in the background and pushed hard, helping us to see the opportunity. We are not really considering it a clean pivot because the link between home and office is going to be completely different.

 

So what you’re kind of describing, is that you’ve got a business model for right now as well as developing a continuing business model which seems like it’s been accelerated in some ways.

Yeah, we always wanted to do something in the domestic space, but we never thought that is was going to be within the next three years. We didn’t think that we’d be ready. But what we’re seeing now is that we are. We’ve had the luxury during Covid to spend time designing this with the focus that it deserves to validate itself. And if it proves to be successful, then we can continue to build and scale that alongside our corporate work.

 

I love that your vision is much bigger than you are able to achieve as an individual business. But your potential impact is incredible – to influence and inspire a movement of growing food in urban places.

Any other advice would you give to other social entrepreneurs?

Yeah. Something I would recommend to any other entrepreneur is patience. Things do take time but nothing is ever wasted, either. No. Everything always has its purpose and it always comes back at the right time for some reason.

There’s probably lots more… Collaborate with anybody you can. It’s not a competition, the competitive mindset is disappearing in this world, there is going to be more collaborate mindsets. And don’t be too hard on yourself either. Do what you can with what you’ve got.

 

If you’re interested in finding out more visit the Farmwall website.

Are you a social enterprise looking for coaching, business modelling or investment readiness? Explore how TDi can help.

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Pivoting your business model during a crisis

A conversation with Geert from FarmWallGeert Hendrix founded FarmWall in 2016. Farmwall is an agrifood-tech startup that designs urban farming technology and experiences to enhance fresh produce accessibility in the city. In our constantly developing world, the need...