FarMart – building the world's 1st OS that powers value chains

Sudipto Sannigrahi
MANAGING DIRECTOR
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In today’s episode we hear from the founders of FarMart on the ground reality of building a large SaaS led Agri company. Tune in to know more.

Sudipto:          

Welcome everyone to another episode of Matrix Moments. We’re in our Delhi office, i’m Sudipto. Today we have the founders of Farmart, Alekh and Mehtab with us. Farmart as most of you guys will know is a company in the B2B agri space. They have actually developed a very unique business model where they’ve empowered Agri input retailers through SaaS and then created market linkage to build a $100 million profitable company in just over 12 months.

We’ll dig deeper into the business and their model but before that i want to tell my viewers at least that the first time i met Alekh and Mehtab and that was probably ten months back there was something that they said that has sort of stuck in my mind. So we’re discussing and i asked them that i’ve been following agri for 5-6 years and there have been so many companies that have come in agri but very few companies have been able to grow non linearly and do that profitably.

And Alekh told me that, Sudipto, there are two rules in building an agri company. The first rule if you have to build a profitable agri company source from the farmer. And the second rule is if you have to build an agri company never source from the farmer. And i think through the podcast they will share a little bit about how they’ve devised the model that takes care of both the rules. Before going more deeper into the video let’s first get to know a little bit about Alekh and Mehtab who were friends first and founders later. So, guys, it will be great if you can start with a little bit of your journey, how do you know each other and what inspired you to sort of start in agri at that time in 2014-15 when nobody was starting in agri.

Alekh:

First of all, thank you so much, Sudipto, and the Matrix team for having us. We’re a regular follower of the podcast and it’s a lot of learning insights that we generated even during our journey. So super excited to be firstly part of this. And in terms of what we do and our backgrounds so Meftab and me actually have known each other for the greater part of 20 years. We went to the same boarding school and as you know in boarding schools you literally become like friends and then you become brothers.

So that’s kind of who we are and where we come from. in terms of our backgrounds Mehtab and me actually also went to the same city to do college and there was a feeling right from the beginning that we wanted to do a business somewhere down the line. At that time the ecosystem was very, very early, 2008-2009 when we were in college, but as the feeling grew and Mehtab kind of started to work in investment banking and i started to move into consulting we kind of reconvened in Delhi and we started to live together.

And i think the journey of Farmart predominantly started with this idea of doing, attacking a huge space in this country which kind of feeds or gives employment to about half a billion people. And the feeling was very clear in that time. There was massive layers of digitalization happening in the space and given that my background in payments and in consulting i just saw that the rail road for building a digital infrastructure was being laid out and in terms of millions and billions of people started to get access to bank accounts and people started to transact through and get government benefits through that.

And when we saw that once the foundation is being laid which are the sectors which are currently not very sexy and just have massive potential to build multibillion dollar companies and food and Ag was kind of the basic and the most easiest answer. Even though there were not too many companies or Startups that maybe with the 7-10 companies which had raised capital, angel capital at that time, we just knew that two things, one is the market is extremely large. And second is digitalization at a foundation level happening and once that happens we knew there’ll be vertical and horizontal commerce opportunities which is hard to build we call that digitalization.

So that was kind of the first taste of why we wanted to be in the space and you know, we just knew there there’s huge potential for building massive companies. So that was mostly the initial journey of how we thought about this space and how we saw this as a huge opportunity for something to be built here.

Sudipto:          

Got it. Very interesting. So you spoke about obviously very large market about agri which we’re aware of and you also spoke about seeing the digitization happening on the ground. Can you share a little bit about what kind of digitization you were actually seeing on the ground back in 2014-15 and how that influenced your choice of building a SaaS first product to solve in agri.

Mehtab:          

So our journey has been, Farmart as an entity has been alive for the last six years and this is the third pivot that we actually did in our entire journey. We started off with Uber for tractors, then we went on doing agri lending to farmers through the retailers and what we do today the B2B model of linking farmers directly to enterprises is the third pivot.

Back in 2014-2015 when we launched Uber for Tractors, Sudipto, we kind of went to the market with a smart phone. While Alekh is completely right that when he was working at Microsave he did see a lot of digitization but that digitization was kind of also fragmented in various parts of the country. And having sad that the first kickback that we got from our farmer, from our retailer, from a driver of that tractor was that people were not -- were owning smart phones but they were not wanting to take it to the land, to the field in fear that ki gir jayega.

So they always had a smart phone and they had a feature phone. So like that was the first learning that we had where we had to actually adapt technology based on the resources that people generally in those villages or in those rural areas had. So imagine this, i won’t get into detail but think of it this way you could actually as a consumer and as a driver book a ride on the tractor without owning a smart phone. Everything used to happen on iVRS.

Those are the kind of learnings that we had and we kind of i would say adapted, we were very agile and we took those learnings over the last six years with us. Even today when we’re building tech for B2B market linkage we rely on those kind of insights.

Sudipto:          

Got it. And i think for the viewers as well, the grit and perseverance that you guys have shown as you mentioned it pivoting three times and i know there was a time when you probably had money for only a few weeks. Going through the grind but being truly passionate about the problem that you wanted to solve when coming here i think that’s one of the great things about you guys.

But staying a little bit on the digitization point as you moved from model one to two and then finally to this model, right, what gave you conviction, what was the insight that led you to building a SaaS product first and that too for Agri input retailers and then build the market linkage on top.

Alekh:

There was actually this entire journey right, we were married to the space. And entrepreneurs i feel whenever i come across they get married to idea. So our thesis was very clear that we wanted to build a massive company right from day one. in the first and second business we would have built a $100 million company in maybe 5-7 years but we just wanted to redraw the entire thing but you’re not able to actually build something massive.

So our idea of getting married to the space was more obsessive than basically married to idea. And all we did was kept on iterating till we got that PMF ceiling. And a lot of entrepreneurs who’ve hit PMF it’s generally a feeling where you think the house is on fire because you can’t control a lot of the things digitally. So that feeling when we kept on talking about it as you know, and we should be pulling strings to slow. And that is where we kind of first time saw the scale when we started to shift our thesis that we maybe the smartest way to do this is not the farmer first simply because they’re very small, firstly.

And second is even though we think that they’re a homogenous group they’re extremely different in their viewpoints. So whether their social differences, whether their economical differences, whether it’s the viewpoint of language, whether it’s the difference of where you come from there’s even if there are 140 million farmers each of them almost in small subsets who are part of a very, very different group.

And when we had that insight that okay, who is the person who is maybe the person who can actually give you the indirect scale but yet be focused toward farmers we just had that Eureka moment that this guy whose sitting in a village like the kiranas of india they drive business. So similarly kiranas of agriculture who sell seeds, fertilizers, agro chemicals to the farmers we started to realize that there are two three things they’re extremely easy to work with. Most of them are very business oriented, second, third generation entrepreneurs.

And we kind of got the inspiration that if we’re able to capture their business and digitize their business and you were just able to basically digitize entire value chain whether it’s upstream or downstream. And that was the first Eureka insight we started to get --

Sudipto:          

So pausing Alekh, right, for our viewers we should take a few minutes to explain the model and why you believe that we need to source from farmers and instead of farmers why you believe agri imputers are the right person. if you just spend a couple of minutes on the model that will be helpful.

Alekh:

Sure. So what Farmart does is we basically are a B2B SaaS platform that enables large enterprises to source high quality produce from farm gates. And the way we do it very differently than all the market players is that we don’t target the farmer directly. We actually work with people who are the most trusted confidants of the farmer which are people who sell seeds, fertilizer, agriculture inputs to the farmer which is the kiranas. We basically build a tool which was a software salesforce kind of a platform that could help them digitize their business, optimize their work flows and connect more efficiently with farmers.

So that is the tool which powers and cleans a lot of the traction on the platform so which helps us create massive layers of distribution across the country at extremely low cost. Now once  we have that distribution network and we basically have a massive level of like penetration in markets we’re able to use that distribution network to reverse engineer and enable them to source an aggregate produce from farmers. So think of it like they become the one stop shop solution or the local mandi for both the input and the output for the farmer.

And then we basically ship the produce directly to large enterprises whether it’s food companies, whether it’s processors, whether it’s B2C companies who want to do direct to consumer without any warehousing or infrastructure in the middle. So that is overall what Farmart does and what we are all about basically in terms of our business model or the approach to solve this problem.

Sudipto:          

Got it. Understood. And you obviously spoke about why the input retailers and your insight – lets stay on the SaaS for one more question and then we’ll move to market linkage. But when you build a product for these agri input retailers and i know that SME tech it’s very difficult, it is very easy to create a product that SMEs use but very difficult to create a product that sticky and has retention the way you guys have, right, you have probably more than 50 percent in fixed retention. So how do you build such a sticky product, what goes into building that?

Mehtab:          

My answer might sound very simple but we’re actually very customer obsessed, very, very customer obsessed. We still as founders we go to the field, at those times we used to stay nights with retailer trying to understand not only his business but also his life. Right, what does he do when he gets up, you know, what does he do during lunch time. What is the problem in his business.

So we were very focused on that retailer’s life per se. And today when anybody comes into the organization too that’s the first thing that we do that you need to know the retailer be it tech, be it HR, be it finance, be it anybody. So you need to know, you need to first understand this retailer. So what you actually get doing that is you get to understand the nuances of the retailer, of his life, of his business. i’ll give you some examples here.

Everybody was already building something around dukaan model, where you can go online. You share a link online and go online. We tried to do it but we had this thesis in mind that retailers if could create their own catalogue and share it with farmers and would share that link through Whatsapp first the question comes is how many of them have Whatsapp.

So sometimes you don’t really have access to those kind of data but what you can do at best is use proxy indicators. What we did here is we had at that time around 600k, 500k farmers on to the platform, we put it on the Whatsapp APi. And we found out that around 83 percent of the farmers were not having Whatsapp which i come into my point is that proxy indicator you can use because they don’t have smart phone.

So therefore we never thought of building a communication channel between the retailer and the farmer on Whatsapp or never thought of building an application for the farmer. That’s our thesis, that is the way we kind of think whenever we try to build for the retailer and retailers come back with some feedbacks. You know, again a simple anecdote. Who kehte hai sms sab farmer karte hai i said why, ki unke any bank withdrawals sms pe aate hai, for them 100 rupees matter a lot, 500 rupees matter a lot. That communication is communicated through SMS, so they would never have an SMS which is unread, it will always be read.

So if we could communicate through SMS perhaps our communication, our CTR is what we kind of track in our digital marketing campaigns could be better. So these are some of the examples that led us to build great features and if we have a great feature that is required for a retailer retention, you don’t really have to chase retention, it automatically comes to you.

Sudipto:          

Got it. Great to sort of hear the on ground insights and i know because now i’ve spent time with you guys closely that every employee that comes also has to go throughthis and get indoctrinated into the Farmart philosophy. So i think till this part it’s clear that you have this now really strong retailer base who uses your product and uses that to communicate to the farmers using SMS and increase their own sales because of which you have 20,000 odd retailers, you have access to more than a million farmers.

Mehtab:          

30,000.

Sudipto:          

Okay, 30,000. it keeps on changing week on week. So there are 1 million farmers and through that you have access to supply of produce across different states and different categories. So you’ve solved for supply in a very non linear manner. But the question still remains who are your buyers and why do they want to buy from Farmart when Agri is a sector where people have like hazaar saal se business chal raha hai so what value add do you bring to your end customer that people want to buy from Farmart.

Alekh:

Yeah, so it is very clear – there’s a saying “roti, kapda makaan” so the space we’re in we’re the rotis of the world. And in india it’s basically B2B which is B2B i mean people who are processors, people who are basically food companies who basically go into FMCG production, people who are basically also like B2C companies direct to consumer in terms of whether it’s retail or offline. All of them basically have failed to create a supply network. There is not a single company maybe except in some categories where there’s a high margin they’ve been able to source from the farmer.

So and the reason when we went to them and kind of asked them like why have this failed it’s simply because there is too much capex infrastructure, there’s too much time investment that goes into acquiring a farmer basically. And when we basically asked them that we would be able to source produce across the company at very low cost directly to your warehouse or processing units they basically care about only two things, which is quality, are you able to give me high quality produce directly from farmers because it’s more fresher.

And second is are you able to ship me larger quantities because at this point of time the market is so fragmented that they have to work with 20-30 brokers to be able to source the same shipment. What we potentially have a vision to solve for them is quality and quantity. So first tech enable QC and also are you able to ship 5-10 times larger quantity on a month on month basis or a quarter on quarter basis which increases their uptake and also appetite for the raw material.

This is the current vision but we see this vision evolving to a pure play traceability and transparency model because the world as a food unit based on what’s happening with all the disease and so on and so forth people are very, very conscious whether in the West or india where are they consuming their food from. And the latest government of india regulation is that you have to specify the location and the source of your food produce. Eventually it happened in five years.

We feel we’re in the strongest position because of this digitization tool and the infrastructure which we’re building. And that will actually lead to you’ll be able to scan your barcode on whatever product you want and you’ll be able to know which farmer it was sourced from, which retailer kind of shipped it, what is the time in warehousing, when was this processed and eventually when does the consumer receive it.

So the idea of building this traceable quality driven high transparency model is not possible without this digitization which we’re building. So i think we’re just in day zero what we’re building. The future holds this massive opportunity just because we’re able to digitize the retailer, the farmer and all the data. We call ourselves actually a product data company. This is what the DNA of the company is basically.

Market linkage is the monetization of the first layer we’re building. This just can build into massive, massive outlays whether its input, output, whether it’s quality, whether it’s logistics, just a massive behemoth that eventually we build or someone else builds. So hopefully we’re the one who go out there and attack this and solve this. But the vision is much, much larger than even today what we’re able to do.

Sudipto:          

Got it. interesting. Fair, so obviously the market linkage because of the digitization obviously you’re able to, A, solve for QC, B, solve for traceability and obviously have economics of scale because of spread throughout the country. i also know that you do reverse bidding which also it helps you get the best price out there in the market. So you’ve solved supply, you’ve solved demand, there’s market linkage happening but traditionally companies in B2B agri it’s a very thin margin business, people have not been able to build profitability in the past.

And you started market linkage last April, we’ve not yet completed 12 months and we’re at a $100 million run rate, you’re CM2 profitable and you’ve burnt less than a million and a half to get here. So what did you guys do in terms of designing the supply chain that you could scale from 0-100 at only spending 10 crores for that?

Alekh:

i actually have to thank Mehtab for this, he is the DNA of basically building very strong profitable companies and based on which we as founders start to realize how strong processes in a company whose very fast growing is required. And based on which basically we were able to just build a check and balance. So it’s literally like per truck worth order getting to truck ship to basically getting a repayment it’s like a conveyor belt in our company. And Mehtab can obviously talk more about it but that’s the core DNA that we do things fast or we don’t do it at all, that’s like the motto of the company.

And the second thing is we do everything profitably because that is where in eventually value is created for every stakeholder whether it’s our buyers, whether it’s our farmers, whether it’s Farmart, whether it’s our shareholders and eventually whether we go for iPO or things like that.

We have a very clear roadmap and vision that we have to do things fast, we have to also do things profitably. So it’s more of a DNA and once as founders you have that DNA the entire team falls in the same line and you’re able to push everyone in the similar direction of thinking and once from two people it goes to hundred to two hundred people thinking in the same direction you are able to build massively profitable companies.

And there’s a notion that you are not able to obviously build profitable companies in the agri space. The problem is no one is going to the farmer, the delta between the farmer and the mandi is 7-10 percent, 15 percent, right. No one is able to solve for the supply chain issues now will someone make margin in this. And that’s where we thought like if we reverse engineer the entire process we’re able to build a very strong reverse bidding engine the entire product is basically a conveyor belt on the operating auto manual system.

You build the right checks and balances everything falls in place in a very quick amount of time and that’s where tech plays like the core role of everything we do at the heart of things. Like for example there’s a notion that if a transaction is not profitable Mehtab has like built a rule based system it will not take an order basically. So, you know, that’s the level of like obsessiveness you have to have around profitability in a company that today or tomorrow or ten years from now you will still be who you are without sacrificing on the growth.

Sudipto:          

So on that every time i talk to you talk about behemoth iPO and 10-20 billion and every time i talk to Mehtab, Mehtab, you only say risk. And most B2B businesses are also risk underwriting businesses, right?

Mehtab:          

Yes.

Sudipto:          

So as Alekh mentioned, right, if you can go slightly deeper into what processes have you built because i’ve heard you guys say oftentimes, Sudipto, we can grow 2.5x faster than what we’re growing but Mehtab does not allow us to grow fast. So what are the checks and balances you’ve put in place to ensure that this is profitable growth and also in terms of credit underwriting, collections, it is also good growth versus not so good growth where later in the future realize that your balance sheet is not that strong.

Mehtab:          

i’ll come to the question but i want to add to the question that you asked Alekh.

Sudipto:          

Sure.

Mehtab:          

So i will want to go into the fact that we actually focus lot of gross margins,]. We know that we can optimize our transportation logistic cost, today it is around 5.5-6 percent of our topline, take it down to 3.5-4 percent, possible. But we really focus on expanding gross margin, gross margin kaise aayenge, again we don’t focus much on the demand side.

We say that maybe demand is already limited what we try to do is go as deep as possible to farmers, to markets. Explore markets where there’s actually optimum price and i might sound repetitive here but that is where the product helps us. Humare app mein price polling hoti hai we get to know what is the price being quoted for wheat from Gaya, what is being quoted for Jonpur, Mirzapur. That gives us a lot of discovery of prices and therefore when you have great discovery you are bound to have great gross margins. if we have great gross margins you are bound to have great CM1, CM2 business.

On top of that retailer mein koi cost nahi hai we don’t really have any fixed assets, we don’t have the model of hub and spoke model where we have nodes, warehouses, fulfillment delivery centers. Because every unloading, loading you at least lose .5-.6 percent of your margins and that’s a lot in this business. So imagine if you were doing 3 times unloading loading you’ve lost approximately 2 percent. Humara seedha retailer’s warehouse to buyer’s warehouse.

So these are some of the things, the nuances that allows us to not just have great GMs but also have great CMs. And we’re working towards it, you know, trying to improve processes, trying to have a better commodity mix. So just wanted to do a supplement Alekh’s answer…

Sudipto:          

But profitability is not risk, which we were discussing is actually something else.

Mehtab:          

Correct. So in underwriting you have to underwrite the buyer very well and you also have to take care of the risk from the supplier because he can give you something which is not of good quality, so how do you do that. in india -- i’ll start with the supplier first part here where how do we underwrite him. We’re not really lending him any money, we’re giving him capital and taking goods from that person.

The only thing that we need to do is QC, quality control. Tech to some extent can solve this problem which we’re doing. We have a good system that we’re using for maize and wheat right now. We’re going into more commodities where we could identify what the quality parameter would be and going forward have an engine that can map each supplier’s produce to a buyer. So a buyer sitting in Hyderabad might want a different variety or different quality of paddy from Bihar, so that visibility is very important.

But coming to my point is that not everything can be solved through tech, some you have to understand that you have to align with how business in india also functions. So how we operate is if it is a -- we calculate variance at risk of a commodity. Say wheat has a variance at risk of around 4-5 percent with a rolling average day of around 14 days. So i will pay 95.5, my retailers pay 95 percent, 5 percent jab samaan pauch jata hai, with the buyer and he gives me the GRN note and he says that everything is okay, if everything is okay 5 percent released, if not there’s a deduction to it.

Which also tries to build an incentive system that try to give better commodity goods. So that’s how we underwrite risk at least from the supplier side, that’s very important because if you do not give good quality goods your buyers are bound to be disappointed. Moving on to the buyer these people pay us anywhere between 10-15 days, that’s our working capital cycle in our business. And here whenever we onboard a buyer we generally look at various parameters. it’s not very easy to kind of communicate over this thing, we have SOPs, we have a matrix chart.

So for example as an anecdotal example if we’re doing market linkage for onions which we’re doing right now from Maharashtra we have to sell it to a trader. We have kind of reached a saturation point where we’ve already filled up the coffers of modern trade because as you know, right, only 3-4 percent of the market constitutes organized retail. So we have to work with normal traders in the business too. So when we kind of supply them onion we kind of start off with 5-10 lakh of credit limits because that’s where we kind of start off with.

The moment we start seeing what do you say transaction history and even if that person has a lot of transaction history he wants to have a limit of say he needs four trucks on a daily basis then we kind of ask him for more documentation from the client, bank statements, CiBiL check, we look at his GSTR returns. So it’s a lot of work but it allows us to have a good sleep at night.

Alekh:

Adding to what Mehtab said like we’ll just take a minute around this but the point is the buyer or the processor right in our case is actually a player in the value chain. So agar hum uske supply karte hair koi produce, so actually he’s kind of a cog in the machinery so there have been cases where the payments had been delayed, we go to the buyer and say we don’t need a payment we will take processed atta from you. So it kind of hedges your risk in terms of like a complete default happening. Because only if you build processes like this and you have hold over that upstream and downstream will you be able to build a very strong tightknit extremely almost zero default kind of a business.

And these are all just obsessive things which team need to be like -- my sales team is also my recovery team. The point is if you give the sales team a free hand- so they have to be conscious that each buyer KPi is not only just 15 working days they only get paid and they get incentives based on this. So it’s aligning the entire company to think in a similar direction without sacrificing on growth is i think a key parameter.

Sudipto:          

So we discussed risk but i want to move to a different segment from here. Everything that you guys have said comes from years and years of experience in agri. You’ve spent time in this space, you’ve seen risk, you’ve seen how farmers operate.

Alekh:

All from you - building B2B businesses J

Sudipto:          

You guys started at a time when starting up an agri was not that common. Today there are lot of founders who’re starting in agri, there’s still a lot of white spaces of import, export different verticals. And there are lot of -- people want to join early teams in agri, so what has your journey been like, what advice would you give to people who want to start in agri today, what’s the ground reality of building a large agri company either as a founder or as a part of the leadership team.

Alekh:

I completely agree that there’s too many white spaces and one of the reason is there are lot of companies, lot of young people are basically coming into these spaces because a lot of the other spaces have actually saturated in a quick amount of time. The amount of capital that has gone into healthcare, education, logistics has been massive, right, and agri is kind of the space where I feel the market is, everyone knows the market is very large, there’s lot of inefficiency, there’s lot of digitalization happening and so on and so forth.

The one or two traits which we keep on discussing as any entrepreneur should have but in agri specifically is kind of patience. It’s not a game where suddenly you start a company and three months you’ll be able to scale to x number of people and then investors will be lining up to kind of give you term sheets because simple, the inherent nature of the business is that it takes on day zero you --

Sudipto:        

You were raising three rounds in six months.

Alekh:

But that happened after five years, right.

Mehtab:        

Five at the back of the six years.

Alekh:

So if you sow a crop today and it takes six months for the harvest to take place. So anyone introducing any solution in the value chain is going to take time for people to kind of solve this. And whenever time is considered I think in a fast moving world entrepreneurs kind of forget that ek hi saal ka time hai. So I think patience is one thing which agri entrepreneurs or any entrepreneur should have a lot of basically like understanding about. And secondly is just have immense amount of a group of people who support you throughthis journey.

There have been at least three chances where the company we had 100 percent shutdown, we actually had negative cash in bank for like three months, put in our own capital, but the way we talk about it is agar sicha hai toh karna hai. Our motto in school is never give in and it’s actually stayed in our DNA. We don’t know how to say nahi kar sakte We just don’t, I’ve never heard in my life Mehtab or me saying nahi ho sakta hai,  becauseanything is possible just a growth mindset that you have to adopt and along the way you meet a lot of inspiring people like you to tell you that it’s possible.

So it is anything is possible but with that mindset and patience is the only way you’ll be able to pull it off, there’s no other method to it, there’s no other like MBA school you can go to, no other conversation you can have. But you have to go through that journey and have a lot of patience to pull it off to be honest.

Sudipto:          

Thank you so much for humoring us as investors. It has truly been a very special partnership that we’ve had. I think overall we’ve also learnt a lot about the market but how you build a strong DNA in the company and that reflects into sort of the direct output like you spoke in terms of growth and as well as profitability is there to see. On that maybe last couple of questions, we spoke about sort of entrepreneurs and what they should think of before they start in agri. When you are hiring somebody for Farmart, if someone after seeing this video wants to join your team other than patience what are you looking for in them?

Alekh:

I’ll let Mehtab take this because we talk a lot about it.

Mehtab:          

I look for three qualities, it somewhat resonates with what you guys also follow at Matrix. Aadmi bhukha hona chahiye, Alekh and I are very competitive sportsmen, I used to play basketball, he used to play football at national levels. Jab koi match hota tha, itni bhukj hoti thi jeetne ki ki neend nahi aati thi, And the same thing that I just tell them that if you want to deliver update on the app you should be very hungry to kind of deliver it, so that is one. And number two I find is mehnat honi chahiye, hard work. So these two things is hunger and hard work and honesty.

And when I say honesty it’s not about cheating or theft, it is about being honest to yourself and this is something that I have realized in my own personal journey where when I used to study for boards I used to tell my mother that ha padh liya but I used to lie to myself. So I tell people that you know, you must be honest to yourself and I try to ask certain questions even during the -- I never have interviews I have conversations with prospective employees. So during that conversation I try to get an answer whether does he have all these three traits?

Alekh:

And just to add to that I mean two things is part of hunger only is the person needs to be an underdog. And those people are actually the growth mindset people. Unko zindagi mein aag lagti hai mujhe kuch mila nahi  because people who are high achievers and got everything in life, best colleges, best everything aake bus gyaan denge. But people who are hungry and people who are underdogs unme kuch fire hoti hai we’ve at least seen a lot of our team members grow phenomenally over the last 11 months only not us and we’re super proud of it.

Like today being Mehtab and me don’t dothe  day to day. If you ask six months back we were like doing every ops call, we were doing everything. So it’s a lot of ownership that team makes but underdog’s ticket. Not a lot of other people, they will tell you lot of gyan but living is different.

And second is mission orientation. Mission orientation is simply that are you connected to the problem in the space, is your family member koi kisaan tha, nahi tha,  because if you don’t have mission orientation eventually there will be good times, right, but there will be very harsh times. And then are people going to run to the door or they’re going to stay with the team and also stick together and kind of move in a direction. Only when mission oriented people come along with like that kind of mentality you’re able to build a very solid strong team.

The quality of your team will determine on these three qualities that Mehtab talked about and eventually mission orientation becausethis is a long game., hum koi ek saal ki game nahi khel rahe hai. and you have to have long term vision to be able to pull this off.

Sudipto:          

As I was hearing your answer about the underdog podcast ka naam hona chahiye apna time ayega. One final question, what is your vision for Farmart, where do you want to see the company say in 5-10 years time?

Alekh:

So we as a company have a simple mission statement, right, so we’re actually building the world’s first operating system for food value chain. It’s a very expansive term and market linkage, you know, the product, retailer, everyone is kind of at the center of the team. So retailer at the center of the team because we believe digitalization can only happen through this person because there’s a lot of data that the person holds whether informally or formally.

And we believe that the operating system of the food value chain can be built through this person and then eventually this will turn into a massive layer of products, layer of services, layer of opportunity for different, different of these services to kind of fit into this expansive region. We’ve just actually started I think 11 months have been phenomenal but it’s just the first step of where we want to get and how big can this get. And we actually talk about it within the company that the company needs to outgrow everyone.

It needs to outgrow Mehtab, it needs to outgrow me, it needs to outgrow all the people to actually leave something behind where we’ve actually made impact, built a great business and there’s economic value unlocked for everyone whether it’s employees, investors, ourselves. And yet also create massive like legacy of this business. And that is the day when we feel I think we have done something huge and humungous.

Mehtab:          

Yeah, I completely agree with Alekh here. And maybe just to go a little more micro to what he’s trying to say here operating system everybody knows, right, Google Android app stores. So they’re all OS and they are able to kind of unlock various opportunities in the entire value chain. So value chain is not just linked to output, we may be called B2B food supply platform today because that’s one of our monetization avenues.

But on the input side we capture a lot of data. Har roz 50,000 enquiry ek retailer karta hai, we know in different districts what kind of urea is being sold at what quantity, what kind of seed is being grown at what village, which farmer produced, bought what agro chemical. So it’s actually a powerhouse of data and it can be utilized in various avenues in the entire business. And today you just see market linkage today when you think of Farmart it’s like how maybe Ola, right, one of your portfolio companies.

If you think of it the key driver here is the car, right, a driver. On top of that there’s delivery, there’s transportation, well, there is ride sharing.

Sudipto:          

And now even the car EVs.

Mehtab:          

Cars EVs, right, so the core is this end of day, that’s the android for maybe this company, maybe I could be wrong but that’s the way I see it and that’s the way I see Farmart too.

Sudipto:          

Excellent. Thank you, guys, foremost for taking the time out. At Matrix we’re extremely privileged to be part of your journey and getting your insight into how you’re building the company. And it’s actually truly inspiring the mission and the dedication of the hard work that you guys have towards building it. And hopefully as you solve this problem it’s not only value that you’re creating for yourselves but you’re actually creating value for so many people, so many farmers, so many agri input retailers, so many mills who are essentially the backbone of the country.

And which is why at Matrix also we’re passionate about B2B and solving problems there. So great to have you guys here and we hope this is the first of many, many more Matrix Moments that we shoot with you. Thank you everyone.

Alekh:

Thank you.

Mehtab:          

Thank you.

Salonie:

Thanks for tuning in. For more Matrix Moments episodes, you can head to www.matrixpartners.in/matrixmoments . You can also follow us on Twitter, LinkedIn, and YouTube for more updates.

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