Mooney: Doing things that do not scale

Very rarely do we build something that assembles its own legs, understands the direction it needs to go, and then moves.

At Nebullam, we’ve built many pieces of growing equipment and business models which never gained a heartbeat. In our first 3 years, we saw our company as a provider of growing equipment, to new and expanding indoor farms. In that world we were building, we would sell our growing equipment and license the software which ran our equipment. At Y Combinator’s Demo Day, we were the John Deere for indoor farming. In this 2-minute pitch, we had focused on equipment payback and the inevitability for indoor farming. Here’s the video.

Since that pitch, I’ve aged what feels like 14 years. We’ve lost a co-founder. We have a 100% entirely different team aside from Danen and myself. And I still have no practical answer as to why I obsessed over LOIs.

We were unable to scale that model because we didn’t obsess over our customers.

Flash forward…

Today, Nebullam is the farm. We’re no longer a B2B technology provider, but a B2C food subscription service. We own the supply chain, from seedling through delivery. And I’m proud to say we’re doing things that do not scale, to build the playbook that allows us to. Community-by-community; Nebullam Farm after Nebullam Farm.

One of our recent tasks in the doing things that do not scale category was to reach out to every one of our subscribers, asking them if they’d have a 5-minute call with us, for $5 in credit. About 1/3 of our subscribers immediately took us up on the offer. That insight, all captured by our customer success lead, Jack, was invaluable.

1. Our assumption for subscribers were that our free delivery and consistent same-day-every-week delivery schedule was the #1 value proposition.

2. When it came to price sensitivity, our assumption was that 1/3 of subscribers wouldn’t mind a price increase, 1/3 would expect grandfathered into new pricing, and 1/3 may look to churn.

3. Our assumptions from what we should grow next were cucumbers, peppers, and kale. On our “how we could improve experiences” radar was the assumption of reducing packaging and reliance on plastics.

Call-by-call, we let our subscribers prove and disprove our assumptions. Here are the questions and results from those calls.

While timing for startups and industries play critical roles, those 1:1 subscriber calls provided us with the next level of authentic value propositions, and they helped us to notice trends.

Now that we had that data, it was time to put it to work.

1. Over 3/4 of our subscribers couldn’t stop talking about the freshness and shelf-life. The freshness comes from our same day harvest and delivery. We accomplish this by being vertically integrated. We own the supply chain, from seedling through delivery. Our average harvest-to-delivery time is 180 minutes. We need to share that statistic more often. For the shelf life, we’re 4x better than most greens you’ll find everywhere else. Why? Over 90% of the lettuce in the US comes from California and Arizona. By time you’re able to purchase it here in Iowa, it’s ~10 days into its 14-day shelf life. Our lettuce has 4x the shelf life than most other lettuces.

2. In a simple equation, if you were thinking about raising your prices by 10% and you assumed you’d lose 10% of your customers, it’s a breakeven Expected Value (EV) play. We knew we were going to raise prices, so instead of modeling our EV, we went straight to the source to make sure it was a +EV decision. After those price sensitivity answers came in, we immediately raised prices for new subscribers and gave all existing subscribers a 30-day grace period (the month of July) before their prices would increase. We raised prices on our products an average of 9%.

If you’re thinking in terms of Average Order Value (AOV), raising prices is one of many ways to increase it, before you can offer more products.

3.  While we were confident that reducing packaging and plastics would be #1 in list of ways to improve, we were wrong. It was the 2nd most requested improvement, right behind offering better delivery updates. Instead of an Ames-area subscriber receiving their deliveries sometime between 10 am and 4 pm on a Wednesday, and only knowing the day of the week they’ll receive delivery, they requested the delivery window. A more specific 1–2-hour time of the day we’d deliver to them. This way they could be sure to bring their fresh greens inside right away, or they could plan around those ingredients for making lunch or dinner, or they could be able to visit with our Delivery Lead, Annie, to offer feedback or requests outside of our feedback forms.

You’d be surprised by the amount of feedback someone will give to a person instead of a computer.

Two weeks after these 1:1 subscriber calls were completed, we implemented the delivery window feature. Now all subscribers receive an email with a delivery window, so they can plan accordingly. Starting in September, we’ll be taking care of the 2nd most requested improvement and introducing compostable packaging for our microgreens. Thanks to an incredible and determined team, we’ll have implemented the 2 most requested improvements in under 6 weeks.

Doing things that do not scale lets you build the playbook that allows you to. Now I hope you steal anything and everything from this post to help your company.

“Enjoy your obscurity while it lasts. Use it.” -Austin Kleon