How to launch lean

It has been a little while since I've given updates about the business that Aaron and Jefferson are launching here in Nicarauga, and a lot has happened in the past month! First, I came up with a cool name for the business and Aaron came up with a neat logo (a work in progress still). 

Our business objective is to address climate change in Nicaragua by supporting farmers to maintain agroforestry systems on their farms in an economically viable way. Doselva is a nice play on words:

• Dosel means canopy (like a shade canopy)
• Selva means jungle
• Va stands for vanilla, the first crop we will use with farmers to help them maintain their farms as agroforestry systems.

Nobody else seems to have used this name and the websites were available, so with three meanings in one word, an environmental message in place, and access to websites, we were all set to launch!

All three of us have been going through the Social Entrepreneur's Handbook and working through exercises to determine if our business idea, launching a vanilla supply chain in Nicaragua to help address climate change and improve incomes for farmers, is realistic. The Handbook has been very helpful, but we were refining our idea without getting out into the field, something that we became increasingly aware we should do.

Aaron received an email from Acumen about an online course about Lean Startup Principles for Social Impact. The course sounded interesting, and let's be honest, I've got time, so Aaron and I signed up and started using Lean Methodology to assess our social enterprise plan. 

1. The first step in the process was coming up with hypotheses - assumptions that we have that we will need to test out. We came up with hypotheses about our farmers and their circumstances (that they are suffering due to climate change, that they want to continue farming, that they would be interested in new solutions) and about our product (vanilla will be a compelling new crop, farmers will want to add it to their ecosystem). 
2. Our next step in the process was to get out and interview people - come up with questions that will help us assess our potential audience, and learn from their feedback to refine our business plan and figure out if our hypotheses are accurate.
3. The third step was to come up with a Minimum Viable Product - the minimum item or experience to share with our potential users to assess their reaction and interest levels. With that information, we could then update our hypotheses and business plan. 
4. The fourth step in the process is to take information from our interviews and MVP feedback and iterate or pivot (redesign or totally redo) our product and then get more feedback.

The Lean Startup Methodology helps businesses launch faster and more cheaply than traditional businesses because it is all about getting feedback from potential customers as quickly as possible. Rather than spending time and money to establish a fully-developed business, the Lean Methodology is all about failing fast and failing forward - using insights from potential and actual customers to innovate and update our business plan until it fits the market.

This last week, we headed out to apply what we had learned in the course with three different groups of farmers - two with in-person visits on Jefferson's farm and one field trip to Boaco.

The first group we met with were members of Carazo Sostenbile, the group we met in this post from last month. The group included Sergio Baltodano (see previous post) and two representatives of the national union of farmers and cattlemen who work at the state level in Carazo. With time constraints, we did not have a chance to do a formal interview about their situation with climate change (an issue, we will be interviewing them this week even though it is out of order), though we did get some questions in, but rather we started off the meeting sharing some visual imagery of vanilla cultivation and processing and a brochure about what our organization was all about (our Minimum Viable Product). If you are interested in learning a bit more about vanilla, this website has some good info about the basics.

Discussing vanilla

We got good feedback from the representatives, mainly about concerns about where financing for a new crop would come from, heard some stories about other crops that farmers have not had much luck with, and then took them on a tour of the farm to see the vanilla plants that Jefferson has had growing.

Jefferson with UNAG representatives and Sergio looking at one of his farm's old growth trees

Jefferson has different types of vanilla growing on his farm, so taking people on a tour was a great way to show what vanilla cultivation looks like. Jefferson found vanilla pampona, which is less sought-after on the international market, here in Nicaragua a few years back and it is thriving with very little care all over his farm.

Juan Ramon of UNAG with vanilla pampona

Jefferson also has vanilla planifolia, which is the most sought-after breed of vanilla, on his farm. He has had this vanilla since 2015 and it has another two to three years to grow before it flowers and has its first crop. Vanilla planifolia is smaller than vanilla pampona and can be looped in between two support trees for easier management and harvesting.

Carlos from UNAG and Jefferson looking at vanilla planifolia

 

Vanilla planifolia growing in rows with organic mulch in between

Crazy lady excited to be on a cool farm

The results from our first visit was mixed - there was some interest in our business idea conceptually, but a lot of concerns about cost and farmer willingness to try something new. With that said, Carlos from UNAG let us know he knew of some entrepreneurs who had multiple business interests along with their farms who might be interested in trying vanilla out, so we'll be following up with him and taking the overall comments in mind for our business planning, all information is good for us at this stage.

Our second visit on the farm was with a group of farmers that all belong to a network of private forest reserves all over Nicaragua. We were able to do our interviews with them before talking about vanilla, and got some great insights into their experience as medium-sized farmers in the region. These farmers were mostly women, and they all are all in the process of getting bird friendly and organic certified in order to both ensure that their coffee sells for a better price on international markets and that their farms are preserving biodiversity and the cleanliness of the water table underground. The second group had done some research about vanilla and were excited about it, but also expressed concerns about the investment needed upfront to get vanilla started on their farms. We learned from this interview round that farmers have a hard time getting loans from banks for known crops, like coffee, so having an unknown crop like vanilla, would be even more challenging. They came up with some ideas for how to make financing more realistic, and we left the interview with more good information about the types of challenges facing our potential clients and questions that we have to be able to answer for them to consider vanilla.

Visiting Jefferson's greenhouse where younger vanilla vines are growing

Two days later, Aaron and I headed up to Boaco to meet with a representative, Ramiro, of UCA Tierra Nueva (formerly COSATIN). UCA Tierra Nueva is a union of six cooperatives that originally formed in 1997 after the world price of coffee crashed. Originally a cooperative of just 23 farmers that got certified organic to get a better price in the coffee market, UCA Tierra Nueva is now a union with six cooperatives (five coffee cooperatives, and one honey cooperative) that has over 670 members. They work in a region of the country that is part of the dry corridor that has been created due to climate change and they are active in looking for solutions to challenges facing their farmers to help them stay on their farms. All members of UCA Tierra Nueva have to go through a process to get organic and fair trade certified, and over the past few years they have started introducing new crops to diversify income streams for their farmers including organic ginger and organic turmeric. All members of UCA Tierra Nueva are small-scale farmers and the union is very focused on environmentalism and representation for their members. 

 UCA Tierra Nueva poster with an image of the famous rock overlooking Boaco

After a comprehensive interview with Ramiro, he and his colleague Edgar took us out to Edgar's turmeric crop to see how it was growing. Turmeric is a crop that UCA Tierra Nueva fell into - at an international fair someone gave them a sample and that sample then attracted a lot of attention from international buyers (more attention than all their honey and coffee samples they had brought along). Knowing that there was market demand, a small group of farmers grew turmeric last year, and this year after seeing the success of the first group, 75 or so farmers are giving it a go. Turmeric takes 8 months to grow and will be ready to harvest in February. The plants do better in the sun, and on Edgar's farm, there were plants already as tall as him!

 Edgar with some of his turmeric plants (in February the roots will be harvested)

 

Aaron with Edgar and Ramiro talking shop

UCA Tierra Nueva knows Jefferson and has also done research already about vanilla and seeing the international market for organic vanilla is big, they are interested in learning more. In the upcoming months, a group of leaders in the Union will be coming down to Jefferson's Farm to visit as well.

These visits with farmers have been super informative and interesting as we continue to develop our business model and move on to Step 4 in the Lean Startup process. As we continue to find farmers to talk to, we are also going to undertake a few research trips! Next week, we are heading off to Veracruz, Mexico to visit vanilla farmers and processors and get more specifics about the economics of our enterprise and figure out if there are any potential suppliers for vanilla vines that we could work with. The following week, a trip to Costa Rica to do the same. Things are rolling, and we'll continue to use new information to influence our next steps. More to come soon!