In order to highlight the opportunities of agritech start-ups in the Indian context, Mr. Hemendra Mathur was the speaker for MentorED, our weekly live 45-minute workshop where industry veterans share their knowledge and experience and discuss topics that are apt and relevant to the start-up and small business fraternity. A PGDM from IIM Ahmedabad and Bachelor in Engineering from Rajasthan Agricultural University, Mr. Hemendra Mathur is currently the Chairman, FICCI Task Force on Agri Start-ups and Venture Partner of Bharat Innovation Fund. He is the co-founder of ThinkAg – a platform for accelerating the adoption of innovations in the agriculture space. He has authored many papers on the subject and speaks regularly at conferences pertaining to the food and agribusiness sector as well as the start-up ecosystem.

In brief, the session had the following takeaways for the audience:

• Current status of Indian Agritech
• Ecosystem support available for start-ups
• Innovation themes and opportunity areas
• Learning from other agritech entrepreneurs

Innovation and Young Entrepreneurs: Key Drivers for Growth

Mr. Mathur started his highly informative presentation highlighting the status of agricultural sector in India, “It is a very vast area, as we know agriculture is one of the key pillars of Indian economy contributing to almost 15 to 17 percent of the GDP and almost 50 percent of the population continue to depend on the agricultural sector. I think one of the key drivers for growth in agriculture at least for the next decade or two will be innovations and these innovations are going to be driven by young entrepreneurs who are joining the sector.” In an encouraging ecosystem that has picked up momentum in the last three to five years, the agritech start-ups have come to the aid trying to solve problems across the value chain from pre-production to production to post harvest.

Although the Indian agritech start-up space is almost a decade old now with the first names popping up in 2011-12, several of them are building interesting models considering the needs of small and marginal farmers who constitute eighty-five to ninety percent of the farming community in the country. As of the present day, there are more than a thousand agritech start-ups in the country and Mr. Mathur is hopeful of that figure to grow to ten thousand in the next ten years. Terming the sector as a resilient one that had even bowed down unlike several others during the pandemic, the perception of investors has also changed. “I think investors are becoming more and more amenable to invest in the sector and as we speak about more than a billion dollars has been invested in the sector in the last eight to ten years. Out of that maximum amount has come in the last 18 months. I am sure as we go along this number is going to change and again my prediction is, we are going to get at least a 10-billion-dollar investment in the next 10 years.”

How was the response from your first set of customers?

When we started off, this was not a very famous brand. It was just a start-up and we had a shop which was just across the road to a very famous western burger joint. It wasn’t that he wanted to go head-on with them but there was a very simple ideology:

We already have people who are interested in eating a burger around. We just have to pull them to our store, so the task becomes half easy.

We did some marketing trials known as a ‘Burger Trial’. We would slice a burger into four halves, put some toothpicks around and ask our team to stand outside making people, who are walking around, to taste them. The simple offer was – if you like it, you come to the store and order. If you still don’t like your meal with what you have ordered, it is absolutely free and on the house.We ran this campaign for almost 4 months and there was not even one bill that was asked to be reimbursed!

It was an extreme hit and now you see that even some of the major brands are now making their focus towards shifting the basic taste and feel of a burger or a western food into an Indian flavour-based product. So we did that well in time and we did that much ahead of everybody else in the market.

In your journey, from ideation to a successful brand, what were the challenges?

Setting up a restaurant has its own set of challenges including setting up the manpower, handling your capacity, handling your quality, maintaining consistency in your products and product delivery, managing the brand, making it famous. However, when you are making something which is to be scaled to a brand like Wat-A-Burger, there are other problems also at hand such as brand adaptation or acceptance of the product as a brand.

We started with one store. From one store to a level where it is seen as a brand was a big walk. Our biggest hurdle was how to do this.

Our primary mode of expansion has been franchising. You select the person who’s fit to run a restaurant, who are of the same ideology, who love food, who want to run their own places. They have to perceive your product as prime and supreme as something which is a brand. This was challenging.

With just one or two outlets, when you start franchising, the first question people ask you is: Is this a brand? Or Can you actually scale to 100 restaurants? That question has to be answered. So, every single deal that we cracked, every single contract that we signed, every single product that we had on board was all done with the concept of 100 clusters.

We had that vision when we started – five years ago. Gradually, as we started growing, post 8 – 10 stores, that vision started turning into a reality.

Scaling Up is Always a Right Option: Bursting the Myth

Elaborating with a powerful example, Kaul says, “If Harvard Business School or if Oxford University were to open 100 campuses all across the world, recruit 1000s of teachers, 1000s of professors, would their quality be better? Would they do a better job? Definitely not. 

Why is scaling up not a right option for Harvard Business School?

The mentor explains the shortcomings of plans to scale: The focus on quality, the focus on exclusivity, to focus on building a brand gets diluted. 

“In certain businesses, in certain business situations, bigger makes sense. But in all businesses bigger may not be the right strategy for a company. So that’s the first myth I wanted to burst,” he states. Once this perspective is set straight, entrepreneurs can take the right decision, identify the right time and the right plan to scale.

How to Structure the Right Scaling Strategy for Your Business

Kaul affirms that the purpose of business is to scale. The purpose of business is to grow. But the parameters vary for each business.

“A size which is right for one company may not be the size which is right for some other company. Sometimes we have even heard big businesses saying that they always wanted to be more flexible,” he adds.

Have an opportunistic mindset

“The first thing of a business when they’re scaling up is to have an opportunity mindset.” Entrepreneurship is a learning process. The mentor guides that all business owners must “start learning to get lucky. There is nothing called luck in business. But there are ways of becoming lucky in business. And that’s a mindset, an opportunistic mindset. 

First is to create the conditions, the groundwork or the platform for attracting opportunities to you.

Second is to spot those opportunities.

Third is to assess the opportunity. Just because there’s an opportunity, it doesn’t mean that’s the right opportunity for you.

Importance of Business Strategies

You cannot achieve your dreams without a plan to achieve them. After you set your business objectives, you must focus on strategies to achieve them lest your objectives end up being a dream. When you are investing large amounts of money into your ventures, it is necessary to implement smart business strategies that up your game and help you become successful. 

Choose strategies that make you stand out from the crowd and increase your revenue traction. With more and more people venturing into the business landscape, it is becoming increasingly difficult to come up with newer and better strategies. However, we still have not reached saturation in the strategy market. There are several reasons why business strategies are important.

Knowing your Strengths and Weaknesses

While formulating your business strategy, you can focus more on your strengths and weaknesses. This helps you optimise in areas where you excel and figure out ways to cope with your weaknesses so that your chances of success increase.

Planning

Business strategy is a part of a business plan. Business plans help you analyse and set your goals and objectives while strategies will help you figure out how to achieve the said objectives. 

Efficiency and Effectiveness

Strategies help you allocate how much resource should be allocated at every step, assigns jobs to every person in the company, and ensures smooth functioning of the business. This increases efficiency and effectiveness of the business operations especially in the long run. 

Competitive Advantage

As mentioned above, business strategies focus on optimising and playing on a company’s strengths thus giving them a competitive advantage that helps them stand out from other ventures. This also helps in brand marketing and advertising giving a unique recognition to the brand and creating traction amongst consumers for the brand.

Levels of Business Strategy

Although it may seem like there is only one solid set in stone strategy for the entire business, there are multiple tiers at which multiple strategies work simultaneously to run the business. Business strategies usually pan out to three different levels:

Business level strategy: 

Strategies related to any particular business are known as business-level strategies. They are developed by the general managers who transform the company vision into realistic strategies. These act as the map to success for the entire business. These strategies are unit specific strategies which differ for different units of the business.

Corporate level strategy:

These are long-range, action-oriented, integrated and comprehensive plans that are strategised by those sitting in the top tiers of management. The corporate level is the highest and most broad level of the business strategy. They set the mission, vision, and corporate objectives for everyone. They focus mainly on ascertaining business lines, expanding, scaling, growth perspectives including takeovers and mergers, diversification, acquisitions, integration, investments and more.

Functional level strategy:

These strategies are developed by the first-line managers or supervisors, and help in the decision making at the operational level. They focus on day-to-day business issues around certain functional areas like marketing, production, human resource, research and development and finances. They are needed to deliver unit level and corporate level strategies. These strategies also help maintain relationships between different departments and help the business move forward as a whole. 

Key Components of a Business Strategy

Strategies answer all the what, why, whose, when, where and how of reaching your business goal. The key components of any business strategy include:

Vision and Business Objective

As we have discussed before, the main duty of any strategy is to help achieve a business goal or objective. They set the stepping stones that lead up to fulfilment of the company goals with a clear vision or blueprint that tells us what and how things need to be done and by whom. 

Core Values

Business strategies are the perfect embodiment of a company’s core value. They reflect all the dos and don’ts of the business and highlight the morals and visions of the business. 

SWOT

A SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is a rundown of the company’s current situation. It forms a core component of a business strategy as it highlights the strengths and opportunities which the company can optimize on and the weaknesses and threats which the company should tread carefully by. 

Operational Tactics

Unit and functional business strategies delve deeper into how the work needs to be done such that the results obtained and the process involved take place in the most effective and efficient manner. Since everyone knows what exactly needs to be done and how it should be done, it saves a lot of time and effort. 

Resource Procurement and Allocation 

Business strategies also imply from where resources will be procured from across the landscape and how these resources will be distributed for various functions between different departments. And who will look into procurement, allocation and distribution of said resources.