Inspired by the financial struggles of America's family farms, local Bostonian Jessica Angell created a business intelligence web application that provides producers with services such as price optimization, inventory management, and analytics. Cabbige, named for a slang term for money from old-fashioned gangster films, is a big step for small-scale agriculture, which often faces challenges integrating into mainstream markets. We talked to Jessica, also a core Branchfood member, about her experience founding her startup from scratch.
Branchfood: What inspired you to start Cabbige? How did you know there was a market for your service?
Jessica Angell: I met a farmer down in Southeast Massachusetts who had a whole cold storage shed filled with winter squash. He was asking me if I knew anywhere that he could offload it -- I mean a large buyer that would buy hundreds or thousands of pounds of it. I drove home that night and I went to Whole Foods, where they had this big bin of butternut squash as soon as you walked in. I looked at the little sticker on it and it said "Product of Arizona." I was like, "What! Why are we shipping in food from thousands of miles away when we actually specialize in winter squash?" It's not like avocados. I know, because I know the farmers, that we actually grow quite a bit of food here. So why isn't it making its way into the places where people spend most of their grocery dollar?
BF: What was the next step?
JA: I started digging and digging and came up with some interesting answers, but part of the challenge was that buyers can't get product information from all of these local farms. Small farmers tend to run their businesses using pens and paper, which makes integrating into our automated mainstream food system quite difficult. That's really the problem we're solving -- we're bringing farmers online with this business intelligence tool so we can move more of their food into the mainstream food supply.
BF: Who uses the service?
JA: Right now we have about 100 farms. We sell through partner organizations like non-profits that specialize in the economic viability of farms in their region, as well as rural economic development offices and extension agencies that educate farms about new tools and practices. We just launched our first program with an organization in DC called Farm Fresh Markets.
BF: What about software development? How did you use your experience in technology?
JA: I was in digital media and mobile payment for ten years. I had worked on platforms called real time bidding exchanges, dealing with price optimization and sales channel optimization for digital media sellers, which was a bit of the genesis for the price optimization in Cabbige. I built the first MVP that was live in 2014. When we ran that pilot with a handful of farms around New England, they ended up making about 9.6% more revenue when they used the optimized price instead of their baseline. So when I saw that, I was like, "okay, we're on to something." I did hire a software engineer to build the real first beta version.
BF: What's the next step for Cabbige?
JA: Expanding on these relationships that we're building and adding functionality to the application based on feedback from our users. We're aiming to be at around 1500 to 2000 users by the end of the year. We're still at the point where we have a lot of great data points that show farmers are signing up for it, they're using it themselves -- a lot of the adoption has come really organically, so that there is a need for this product and this service is really clear to me.
BF: Do you foresee any trouble scaling the business?
JA: Finding individual farmers will always be challenging. These partner relationships we're developing are key to scaling quickly -- that's the strategy that we're going to be testing and experimenting with over the next 12-18 months. It's showing early signs of promise. During the winter season, organizations will have different conferences that cover everything from production issues and new strains of crops to business practices like Cabbige. I spoke two weeks ago at the NOFAMass (Northeast Organic Farming Association) in Worcester on effective pricing strategies for direct-to-consumer markets. That seems to be the way to go about it -- work closely with these partner organizations to get the word out.
BF: What funding did you do to get yourself off the ground?
JA: It was self-financed. To be honest, the first year I did it so lean that I think my business cards were my biggest expense, aside from not working full-time. Building the first version yourself and testing it out -- I'm a big proponent of the lean development methodology, because that's what I did and what I continue to do. It's still expensive, but it's more modest than it might have otherwise been.
BF: Did you have any resources or mentors that helped you along the way?
JA: I went through two accelerators: Social Innovation Forum and Mass Challenge. I thought I knew what I was doing -- I had over ten years of experience, the last five of which were in management roles -- but you don't realize how much you don't know until you're actually trying to get something off the ground yourself. I found people who could tell me, "I've done exactly what you're doing right now, and here are the pitfalls, here's what you don't want to do, here's what you do what to do, here's how I got over this challenge." They help you leapfrog over issues that would take a huge amount of time for you to figure out yourself. The mentorship that I've received -- the official mentors through the accelerators and people who've for whatever reason had interest in this business and let me bend their ear or made introductions or gave advice -- it's the only reason that we have any measure of success.
Jessica spoke at Branchfood's Mystery Speaker Series in Boston, MA on March 9th, 2016. To learn more about Cabbige, visit http://www.cabbige.com/. Interview conducted by Chloe Barran.