Market obstacles on the agricultural market from the startup perspective

The analysis of the in-depth interviews revealed three main obstacles on the market, which most of the startups interviewed mentioned: low frequency of the IT solution use, the difficulty to scale the demonstration of the results and lack of trust due to newness of the company. The assumptions made by the startups during the interviews that underline these selected barriers are presented below in Table 5.

One of the common assumptions made by the startups interviewed concerned the low frequency of IT solutions used among farmers. The quotes represented below (Table 5) reveal three main explanations of that phenomena. One possible explanation is that there are not many competitors within the online IT solutions sector. In the developing countries there is an additional challenge that makes the spread of the technology more difficult: restricted access to the Internet and/or scarcity of mobile devices. The third possible explanation to the low frequency of IT use of is the high price of the new high-tech equipment.

The second obstacle to growth on the market appeared due to issues with the scalability of the results demonstrability. As mentioned in several quotes in Table 5, the technology was stated to be used only if neighbors are also using it. However, the adoption of the technology does not spread further and remains a “hot-spot” in certain regions.

The last obstacle is the company’s newness on the market. Farmers are often skeptical about the company and the solution that it offers because, independently of how good it is, if something goes wrong and the company does not exist anymore, it is unclear who should help solve the problem and update the solution.

The feeling of the security according to a quote represented below is sometimes more important than certain software features or the software itself.

Table 5 presents the corresponding quotes from the interviews which underline the importance of a certain obstacle.

Market obstacles Quote from the interviews low frequency of the IT

solution use

“…we looked at what competitors were doing and wanted to undercut them. But that's said, the competitors are no really competitors, because there is so little usage of the software in the space. I mean our biggest competitor is pencil and paper.”- [ I11 ]

“when we started in 2006-2007 there were no software competitors in the agricultural market in Ukraine. We have recognised that there was a huge potential and a lot of space for experimenting.” - [ I2 ]

“There are 34 millions of tractors and only say one million has some navigation systems which help during daily operations.

However, this navigation system only few farmers can afford.

These farmers are usually rich or very well familiar with the technology or both at the same time. Most farmers can not afford this type of the system. Because they are usually too expensive or too complicated or both.” - [ I2]

Table 5: Quotes made by the digital agricultural startups interviewed regarding market obstacles

low scalability of results

demonstrability “When I go to California to sell to a customer. They care very little for me telling them “you know I have this great organisation in Israel, you know who works with me”, because they do not care. But if I tell them you know Tom from Napa valley and Mike from central Valley and this guy from that winery they are very happy with our product so go there and talk to them.” - [ I3 ]

“We are looking on the map of our users und see there kind of hot spots. Usually first appears one red dot that symbolises our first user who started using our product and then some time later we see how his neighbours also starting using our product. Such kind of hot spots is a normal picture of how we gain new customers.” - [ I2 ]

“What we currently see is that there are popping up hot spot.

Probably young people show their fathers or older generation in their companies that they want to use different tools, and probably then those who saw it share it further with their friends and those start working with it.” - [ I7 ]

lack of trust due to the

newness on the market “One of the biggest changes is the name recognition. Now when we go to the trade shows everyone heard of us and people have seen our ads, and people have seen our tweets and be sort of now have this name recognition that we did not have last year.

And that is really important because trust that the company is going continue to exist is really important. In the early days we often had people saying “no” to us because they said “I wanna see if you going be around in six months because I do not want invest in something like this if you going fail.” - [ I11 ]

“Because clients need to understand that what we offer is more than just a software and they usually understand it. They see that this is a team and if something is going to break we will help to repair it. It is a certain level of security, for our clients it is important to know that we are not going to disappear tomorrow from the market, that we already exist for a while and we are going to stay on the market.” - [ I2 ]

Market obstacles Quote from the interviews