The problems with a global start-up

September 23, 2017
Market Building

Global Supply was an entrepreneurial experiment that failed—and yielded important lessons.

When iDE began to champion drip irrigation, the suppliers for drip irrigation components were only focused on large, industrial farms or very small household gardens. The first step was getting manufacturers to expand the range of components to meet smallholder farmers' needs. iDE envisioned scaling up access to drip irrigation beyond our regional programs through an initiative called iDEal Global Supply. iDEal Global Supply was an arm of iDE that procured irrigation components directly from producers and then configured, distributed, and resold them to iDE country programs and external customers—both individuals and other NGOs.

Why we felt a global supply was needed

When Global Supply began, none of the countries that iDE was working in had a micro-irrigation manufacturer or distributor that focused on providing kits scaled that met the particular needs of smallholder farmers, who required inexpensive, modular designs based on 100 to 2,000 square meters. Often farmers started with smaller kits that they could expand as their confidence and experience with the systems grew.

Boxes of iDEal drip irrigation kits stacked up in the warehouse in Burkina Faso.

The creation of Global Supply was an ambitious response to this need. Established as a separate division within iDE, Global Supply had a separate operations director and a team of three employees, who focused on quality, contextual design, and efficient distribution. A new business plan was developed that addressed marketing and fundraising strategies to support both product ideation and development as well as a sales strategy addressing other NGOs and interested government agencies. Global Supply worked with an Indian company, Harvel Agua (formerly Harvel Azud) to manufacture kits that had multiple inline drip emitter options and underwent a quality control process to ensure that the manufacturer met iDE standards. At the same time, iDE’s Technology & Innovation group, which included Global Supply, partnered with Toro and USAID to create a small farm kit. A product catalog was published that included new technologies and a bill of materials.

Why we pivoted away from Global Supply

The first couple of years of Global Supply were promising, with sales in the hundreds of thousands of dollars. But a company review indicated that the sales were unlikely to repeat on a yearly basis, and the forecast for succeeding years was grim. The company review also revealed that global drip irrigation companies, such as Jain, Toro, and Netafim, had a more sophisticated manufacturing infrastructure and capacity to serve global customers at scale with higher quality products than Global Supply was able to do through its Indian manufacturer. However, global drip irrigation companies continued to struggle with how to market to customers far away from urban centers and ensure these customers could successfully implement the technology. The review indicated that these companies could easily manage the supply chain issues, but would not enter the market until they had proof that it was mature enough for them to profit from it.

iDE recognized that the real problem was incorporating the necessary technical training, input package, and assistance accessing output markets that last mile farmers needed for drip irrigation to be an attractive investment and effective technological solution in their specific context.

A scalable solution: The Drip+ Alliance

Based on these insights, iDE decided to shift its efforts to encourage these micro-irrigation companies, and others like them, to continue to modify their product offerings to address the specific requirements for small-scale agriculture, as well as create awareness in the industry of the potential for growth among this large segment of the agricultural market. In 2016, iDE discontinued Global Supply and invited stakeholders to jointly research and discover solutions for smallholder farmers by which everyone could benefit.

iDE calls the new strategy the Drip+ Alliance; the “+” represents the training, inputs, and assistance that make the technology successful. Private companies, social enterprises, and governments can work together to address barriers to supplying the smallholder market with drip irrigation that promises to increase their incomes.

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