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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

Mooney: Doing things that do not scale | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at
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