a quick method for value chain analysis of small farmer or shareholder projects

1. Intermodal Farms
Evaluating Farm Growth Opportunities Linking Farmers to Investors:
The expansion of food growth opportunities in the devel- Customer development for farm growth is the most
oping countries of the world has dramatically increased important activity for developing a sustainable farm
in the past few years. Small farmers and cooperatives face enterprise. The simplification of the RFA form can en-
challenges to develop and package food products for sale able investors, NGO’s, practitioners, Food Aid and Farm
in their local economies and to export into developed Development Organizations, the ability to quickly evalu-
countries. ate potential funding of projects based upon the analysis
parameters of the RFA.
Many of these farmers lack the resources, education or
expertise for understanding the dynamics of the complete Business Model Dashboard
food value chain and customer development process. A Value Chain Practitioners Guide
Resource and business management are two of the key
components of sustainable business planning for the food A value chain practitioner provides expertise, computa-
enterprise. The western countries spend billions of dollars tion and analysis of the value chain. This includes travel-
per year in food Aid research and development, conduct- ing to remote areas and performing field studies and
ing studies, writing reports, and establishing small-holder reports. The business model dashboard, provides a metric
projects for poor farmers. With the access to capital and worksheet that can be easily used in the survey field for
a financial market in a downturn, farmers are faced with establishing a reference and development worksheet for
challenges to finance expansion and sales of their food determining the business model of the food enterprise.
resources. Completion of the complete metrics of the Business
Model takes time and thorough research, and resource
A simplified method for understanding the potential of support from the company or organization requesting
farm products has been developed. This process utilizes 3 the analysis. Some of this information may not be readily
basic components for evaluation of the food challenge. available in the field.
1. Customer Development Key elements of the business model are explained in
2. Business Model Categories Simple English. End-to-end value chain analysis and data
3. Cause, effect and problem resolution. provides a starting point for construction of simplified
metrics of the business model. These categories pro-
Combining these subject areas into one form simplifies the vide further understanding of the potential operational
overall approach to farm evaluation by: success, and status of a farming company. Using simple
charts, the practitioner can provide productive recom-
1. Determining the progress in the customer develop- mendations for implementation of customer develop-
ment cycle ment planning for the food enterprise. Departments’ of
2. Listing the hindering causes of a farmer’s inability to Agriculture can also benefit by quickly assessing the over-
sell or process food products all value proposition of their agriculture producing lands.
3. Prioritizing solutions of these categories to establish
an action plan for customer development of the food Small scale customer development services enable
product the farmer operator/owner to validate their resources
through customer engagement and product prototyping.
This method is called the Rapid Farm Assessment. Practitio- Customer Develop provides the entrepreneur an afford-
ners can easily apply this methodology in the field without able pathway to success by prototyping food products
computers, complicated mathematical models or data anal- without financing a full-scale factory to survey customer’s
ysis. This form can be completed on 1 page, and be utilized needs.
as an action items roadmap.

2. Rapid Farm Assessment Prepared by: ____________ Project Name:
Pineapple
Problem Description: A
Farmers in Chibabava district of Mozambique’s central Sofala Province are seeking markets
for their pineapples part of which end up deteriorating due to lack of buyers. Last year the
district produced 50 tonnes of pineapple but only 60 percent of the production was success-
fully sold.
B
Causes and Effects:
Problem Description: C
Summary Description of the Causes:
1. Food Safety Challenge ←No processing facility ←No cold storage ←No harbor warehouse
2. Transportation Network ← no close contract trucking companies←rural roads
3. No established farm cooperative ← no standardized planting or harvest plan
4. No customers ←no niche product ←price competition in South Africa
5. No INTL export cold chain hub ← no Air Transport ←no volume transport commitments
6. No local cardboard supplier, cardboard available at good price from South Africa
© Steve Blank 2003
http://steveblank.com
Proposed Solution:
Main items to accomplish for business opportunity development D
1. Establish uniform planting plan for pineapple farmers through local university
2. Teach and establish knowledge transfer of farm cooperative development through university
3. Finance pineapple harvester for uniform harvesting and packaging.
D.
4. Develop customer development plan and budget for pineapple juice customer discovery and creation.
5. Seek funding source for customer development project.
6. Establish transportation and warehouse once customer creation is accomplished.
800,000 Fruit Value
600,000
400,000 Processed Value E
200,000
0 Value to
Pineapple Farmers

3. Summary Objectives
The documented summary results for the RFA shall: determine the potential success and failure possibilities
for a specific time period of the project being evaluated.
The purpose of the RFA is to document:
A. The problem description of the project
B. The customer development stage of the project
C. The causes and effects of the problem description
D. Proposed solutions to remedy the problem
E. The proposed value of the project.
Rapid Farm Assessment Prepared by: ____________ Project Name:
Pineapple
Problem Description: A
Farmers in Chibabava district of Mozambique’s central Sofala Province are seeking markets
for their pineapples part of which end up deteriorating due to lack of buyers. Last year the
district produced 50 tonnes of pineapple but only 60 percent of the production was success-
fully sold.
B
Causes and Effects:
Problem Description: C
Summary Description of the Causes:
1. Food Safety Challenge ←No processing facility ←No cold storage ←No harbor warehouse
2. Transportation Network ← no close contract trucking companies←rural roads
3. No established farm cooperative ← no standardized planting or harvest plan
4. No customers ←no niche product ←price competition in South Africa
5. No INTL export cold chain hub ← no Air Transport ←no volume transport commitments
6. No local cardboard supplier, cardboard available at good price from South Africa
© Steve Blank 2003
http://steveblank.com
Proposed Solution:
Main items to accomplish for business opportunity development D
1. Establish uniform planting plan for pineapple farmers through local university
2. Teach and establish knowledge transfer of farm cooperative development through university
3. Finance pineapple harvester for uniform harvesting and packaging.
D.
4. Develop customer development plan and budget for pineapple juice customer discovery and creation.
5. Seek funding source for customer development project.
6. Establish transportation and warehouse once customer creation is accomplished.
800,000 Fruit Value
600,000
400,000 Processed Value E
200,000
0 Value to
Pineapple Farmers
Interactive Form
The 4 sections of the Rapid Farm Assessment form are completely interactive.
They are inter-dependent. The form must be reviewed by scanning each section and comparing the dynamics
of each section to the other sections.
A. Resolution of the problem description has a proposed value to food commerce.
B. Customer development stages determine the progress expectations of the company. Proposed solutions
may not be fully realized until the end of the customer validation or customer creation stage. Unsatisfied
or unacheivable proposed solutions can delay or cancel the proposed RFA project.
C. The Causes and Effects section are derived from the documented causes of the problem description of the
project.
D. Proposed solutions must satisfy the causes and effects section.
E. The processed value must be greater than the cost of implementing the proposed solutions.

4. Customer Discovery Stage
Product development and prototyping is commenced and product attributes are deter-
mined for developing the first product prototypes.
Cause and Effects analysis:
The Causes and Effects are compared to the progress of the company. Proposed
solutions of the business model are hypothetically summarized during the customer
disovery stage. A factory or production plant hasn’t been built. It is possible that the en-
trepreneur of the food enterprise is in discussions with a contract factory to make their
B product. A preliminary high level value chain analysis has probably been performed,
but no fixed or contractual arrangements have been made about transportation.
Proposed Solution comparison
Minimal infrastructure requirements must be determined. For example, if no energy or
water supply exists at the proposed production site, these issues must be addressed
and an action plan to satisfy solve these solutions must be determined. Without energy,
clean water, and a sustainable transportation network, customer development efforts
could be in vain. If the agriculture suppliers are not organized or do not have a coopera-
tive established, a plan must be implemented to establish a stable supply and pricing
model for raw materials for production.
Cause resolution
All critical causes limiting the development of the company must be remedied by the
customer creation stage. That is, all supply, value chain, shipping, labor, warehousing
and processing must be continually evaluated against the prototype product for sus-
tainable development of the products offered.
Causes and Effects:
Problem Description:
Summary Description of the Causes:
1. Food Safety Challenge ←No processing facility ←No cold storage ←No harbor warehouse
2. Transportation Network ← no close contract trucking companies←rural roads
3. No established farm cooperative ← no standardized planting or harvest plan
4. No customers ←no niche product ←price competition in South Africa
5. No INTL export cold chain hub ← no Air Transport ←no volume transport commitments
6. No local cardboard supplier, cardboard available at good price from South Africa
Proposed Solutions:
Main items to accomplish for business opportunity development
1. Establish uniform planting plan for pineapple farmers through local university
2. Teach and establish knowledge transfer of farm cooperative development through university
3. Finance pineapple harvester for uniform harvesting and packaging.
4. Develop customer development plan and budget for pineapple juice customer discovery and creation.
5. Seek funding source for customer development project.
6. Establish transportation and warehouse once customer creation is accomplished.

5. Customer Validation Stage
Product prototypes are evaluated by customer product evaluation. Major and minor
product changes must be implemented until the product features and benefits meet
the minimum customer feature set. Target Customer satisfaction and survey goals
should be clearly documented to establish a customer/product fit of the proposed
products.
What are the minimum amount of satisfied customers or favorable customers of the
product required to establish investors? Although product protype iterations could
B change rapidly, it should be clearly understood and agreed by the founders what the
customer base goals are. How many customers are satisfied with the product features.
How many preliminary verbal purchase commitments been made? There must be
enough commited customers to obtain enough critical mass to seek future investors.
Cause and Effects analysis:
The Causes and Effects are compared to the progress of the company. Proposed solu-
tions of the business model are hypothetically summarized during the customer valida-
tion tage.
All customer feature requests should be evaluated against proposed production, value
chain and shipping costs. Feature costs should be established during this phase, and
should be evaluated on the profit potential versus production and supply chain costs.
Proposed Solution comparison
The minimum proposed solution list must be documented and achieved by the end of
the customer validation stage. Product features must solve a majority of the original
proposed solutions for the startup to continue operation.
Causes and Effects:
Problem Description:
Summary Description of the Causes:
1. Food Safety Challenge ←No processing facility ←No cold storage ←No harbor warehouse
2. Transportation Network ← no close contract trucking companies←rural roads
3. No established farm cooperative ← no standardized planting or harvest plan
4. No customers ←no niche product ←price competition in South Africa
5. No INTL export cold chain hub ← no Air Transport ←no volume transport commitments
6. No local cardboard supplier, cardboard available at good price from South Africa
Proposed Solutions:
Main items to accomplish for business opportunity development
1. Establish uniform planting plan for pineapple farmers through local university
2. Teach and establish knowledge transfer of farm cooperative development through university
3. Finance pineapple harvester for uniform harvesting and packaging.
4. Develop customer development plan and budget for pineapple juice customer discovery and creation.
5. Seek funding source for customer development project.
6. Establish transportation and warehouse once customer creation is accomplished.

6. Filling out the form Evaluation of the Opportunity
A Problem Description-Describe the main cause pre-
venting the farmer or food enterprise that prevents
The Proposed Solution—Item D.
The proposed solution is a action plan list of items that
or hinders the farmer from getting their agriculture must be remedied, established or created to remedy the
product or resource to market. problem description in Item A. If 2 or more items from the
7 Business Model Categories are not established for the
food enterprise, the customer development project may
B Customer Development Stage-Fill in the check box
based upon the following company stage descrip-
not be sustainable. If 2 or more items of the 7 categories
are not established in the local commercial area, infrastruc-
tions.
ture support must be established to continue the customer
development project. The 3 most important infrastructure
1. Customer Discovery—This is accomplished by found- items that must be present are 1. Energy, 2. Water, and 3.
ers of a company. During this stage the founders of the Transportation.
company visit or gather information from customer needs
for product or service development. 7 Categories of the Business Model explained.
2. Customer Validation—Entrepreneurs or product build- 1. Key Partners—suppliers or strategic relationships that
ers meet with customers by presenting product prototypes provide a value added service, raw materials or compo-
and feature concepts to customers. The customer provides nents for the success of the company product offering
feedback to the prototype builders. The product is evalu-
ated to meet the customer needs. 2. Key Activities—Activities in the supply chain that con-
tribute to the sustainable competitive advantage of the
3. Pivot—The entrepreneurs or creators of the product company
utilize these lessons learned to change the product offer-
ing through engineering, re-prototyping, or rebuilding 3. Key Resources—raw materials or capabilities that shape
the product. These are rapid changes to achieve customer the sustainable competitive advantage of the company.
satisfaction of the product offering. This cycle, or PIVOT,
is repeated until a repeatable product feature set is estab- 4. Value Proposition—A description of the compelling fea-
lished through satisfied customers. Once the repeatable tures or benefits that drive customer’s purchasing behavior
product offering is established and a profitable pricing for the product or service offering.
structure can be maintained, customer creation is initiated.
5. Customer Relationships— A description of the ‘custom-
4. Customer Creation— increase customer demand from er satisfaction relationship’ the company’s product and
a few customers to many by filling the sales pipeline support establishes with the customer.
through promotion, advertising and marketing.
6. Channels—Methods, companies, and/or sales activities
5. Company Building—Company building is initiated that connect the factory producer to the sales transaction
when sales orders of the product feature set are repeat- of the product.
able, and believed to be sustainable for a duration of time.
7. Customer Segments—A group of purchasing attributes
6. Market Status- Is the food product or competing food that are common among different customers that en-
products currently being sold in the food marketplace. i.e. able the company’s product to be marketed to a common
is there existing consumer demand for the food product? group of people.
C Causes and Effects—List the main hindering causes
that establish the problem description in item A. 8. Cost Structure—The structure of the value chain costs,
and those that are most important or sensitive to the over-
all competitive advantage of the product offering.
D Proposed Solution—List the main items of the
proposed action plan that must be established to
9. Revenue Streams—A product or product group that are
initiate or continue the sales of the food product.
marketed together for generating profit through orga-
nized company resources and activities.
E Agriculture Value—Plot the value of the annual
food product production, processed value of the
food product, and the monetary value to the farmer For a thorough evaluation of your food expansion project,
or cooperative who grows the product. contact us for more information.
Intermodal Farms
http://intermodalfarms.com/contactus