Introduction
I’m currently part of the Future Founder program, where fellows from all around the world and I have been working to develop a specific skill set that will help us enter, adapt, and be successful in the startup ecosystem.
Using the knowledge I gained through the first stage of the StartupReadiness Program. I had to analyze a real startup to showcase my improvement in the strategic thinking skills needed to work in one.
I decided to make my analysis on Júüm, a young Mexican Agtech startup founded in 2021 and looking to create urban vertical farms.
They use state-of-the-art technology and hydroponic techniques to grow a diverse range of top-quality products all year-round. And then, send them immediately to the tables and businesses of their customers, while also being a more eco-friendly option than traditional agriculture.
Conducting a Strategic Analysis
It is essential that, before trying to design a new strategy or come up with a solution for a problem, every business conducts market research to create an effective course of action. The first step was to research the company's business environment using official data, news articles, and papers that analyze Mexico's agricultural context. I used two types of analysis, STEEPLE, and SWOT, to write down my findings.
STEEPLE stands for Social, Technological, Economic, Environmental, Political, Legal, and Ethics; and it analyzes the macro-environmental factors that affect the company’s context. On the other hand, SWOT means Strengths, Weaknesses, Opportunities, and Threats; and it helps understand the complete internal and external situation of a business.
Right now, Júüm is trying to create something out of the opportunities that a changing world presents. Estimations say that by 2050, the world population will surpass 9 billion people, and the demand for agricultural products will increase between 60% and 70%. In this context, only a complex and accelerated development of technology can help satisfy that demand. While we also must find solutions to the increasing water usage, declining soil fertility, and deforestation.
So, why keep farms hundreds of kilometers away from cities?
Using innovative technology, we can plant better food, using fewer resources and space, in a fraction of the time, and have it delivered in less than 30 minutes right when harvested.
Defining a Strategy
After thorough research, I started thinking about possible strategies.
Around 80% of Mexico shows a high amount of erosion and desertification. North, and central areas of the country, are experiencing water shortages due to overexploitation of the aquifer mantles and global warming. Mexico is already losing 600,000 forest hectares each year, and it's estimated to run out of them in the next 40 years. The world is in deep need of an agricultural revolution.
One main concern is the amount of investment that needs to be received to build the urban farms. That’s going to translate into higher prices that will not be able to compete with the prices offered by traditional marketers. Júüm will have to start by targeting a market segment that’s financially capable of paying a higher price for higher quality products. Another option is to aim for an economy of scale approach (if you produce a larger quantity of a product, you can price it down and maintain a certain level of profits), but that'll take more time and resources to achieve.
Either way, their focus should be on developing an almost perfect hydroponic system capable of holding the most quantity of crops and securing its optimal and fastest growth. While also meeting extremely high-quality expectations.
Defining a Strategic Roadmap
With the objective defined, I needed to propose some OKRs (Objectives and Key Results) that specify what key activities need to be done, how to measure them, and what resources are required for each activity. This part is also important because, without this blueprint, you wouldn't have any tool to measure how far, or close, is the objective.
In this case, I focused my OKRs on the hydroponic system construction. I believe that this system is Júüm’s core and, if it isn't right, the startup will fail. Right now, they are focusing on growing seedlings. It's imperative to have the hydroponic system constructed and tested before they have to transplant them.
Strategic Roadmap
Recommendations
I’d recommend Júüm focus on creating the perfect environment for the crops to grow. Not only the hydroponic system, but also the sterile conditions, lighting, and humidity levels of the warehouses. And to make them as replicable as possible.
Other personal recommendations would be:
Refine market segmentation to optimize selling strategies.
Don’t try to compete with low-price sellers.
If Júüm wants to be considered an eco-friendly company, it must calculate its carbon footprint and reduce it to zero or achieve carbon-negative status.
Start selling products on existing delivery platforms to maximize reach but develop its delivery system to control carbon emissions and reduce costs when sales start growing.
Work closely with universities to develop technological innovations.
Key Takeaways
I am lucky to have close friends who also share an entrepreneurial mindset and that are trying to change the world one crazy idea at a time by creating Júüm. The fact that they let me get some insight into their thinking process and organization was a great starting point for my analysis.
One of the things that I appreciated most about this whole process was the freedom that Future Founder gave us to explore and use our critical thinking. By not giving us exact instructions on what to do and letting us fail if we misunderstood something, but letting fellows help each other with feedback sessions, we engaged and learned.
Those sessions were a new challenge for me because I had to learn how to receive it without getting upset and give constructive feedback with clear ideas on the spot. Without peer feedback, my strategic analysis wouldn’t be as it is now.
My advice for someone who's doing their first strategic analysis would be to try and empathize with the founders and their current situation and picture themselves in that scenario because one day they might. Also, try to get as much information from as many sources as possible when doing your initial research. Get ready to read a lot, but only get key information. And finally, when you are working on the OKRs if your objective isn’t specific enough, you will not be able to write down activities, metrics, or resources. Make sure it aligns with the mission and vision.
If you feel that you are not getting around all this information, don’t be afraid to ask for help from other fellows because that might be game-changing.
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