Carolina Medina found herself in a paradoxical place after competing for the 2013 Hult Prize, a million-dollar seed capital competition. Her team, which came together for the contest, finished in second place. The paradox for such a great result? The winner took the entire purse. Undeterred, Carolina pressed forward with a company that leverages technology to empower mom-and-pop food vendors by providing them with produce at wholesale prices, eliminating many of their usual barriers. After a successful pilot in Kenya for the Hult Prize, Carolina and a partner brought it back — rebranded as Agruppa — to her home country of Colombia. Six months after Agruppa took a Silver Prize at the 2016 Food+City Challenge Prize, we checked in with Carolina to hear about their progress.
Food+City: What sparked the original idea for Agruppa?
Carolina Medina: It came about while I was doing my master's degree at The London School of Economics. A colleague asked me to join a team that was going to apply for the Hult Prize. In 2013 the Prize challenge was food security in urban slums. I had previously worked with the Food and Agriculture Organization of the United Nations, so a colleague invited me to contribute my knowledge about food security. He brought together other people with different backgrounds, a multidisciplinary team. That's how we got started, inspired by a challenge that someone else put in front of our eyes, and bringing knowledge from different areas to solve it.
Describe the problem you were addressing.
CM: The basic issue was the cost of food — not really the availability of food — in low-income neighborhoods. In other words, it wasn't that the apples weren't arriving, it's that they were arriving at a very high cost after going through the hands of numerous middle men, each of whom were taking their cut. We knew we wanted to make a mobile-based solution where the small shops could order directly and bypass the middle men. Our system aggregates demand for fresh fruit and vegetables from small vendors, creating daily collective orders that add up to wholesale quantities. As a result, vendors are economically empowered, and those living in low-income communities benefit from sustainable access to nutritious food at lower prices.
After piloting the idea in Kenya for the Hult Prize, how did you make the move to Colombia?
CM: I'm Colombian, I studied political science here and I’ve always been interested in social problems. I was actually quite amazed to see how my knowledge of the food system in Colombia had made something happen in Kenya, halfway around the world. So I convinced one of the original co-founders, Verena Liedgens, who is my co-founder here in Colombia, to join me to get SokoText, which was the original name in Kenya, started in Colombia. We eventually switched the name to Agruppa, which means “to group” or “to aggregate” in Spanish. It's a great incentive to think that it is replicable everywhere throughout the developing world.
What surprised you as Agruppa evolved?
CM: The fact that at some point our mom-and-pop shops started using WhatsApp to order from us. One of our biggest assumptions was that people at the base of the pyramid don't have a smartphone or don't know how to use it. And we were positively surprised that more than 50 percent of them do have a smartphone. Organically they chose to use a more advanced technology to order from us, which is what led us to think that an app was a good idea.
What did you have to let go of as Agruppa moved forward?
CM: One of the biggest pivots we had here in Colombia came from the realization that we are a very large city, and distances are too long to pretend that mom-and-pop shops will come to our warehouse and pick up what they ordered the night before. We realized that we needed to become a heavy logistics company and incorporate daily deliveries to the small shops — Monday through Saturday — into our model. It was a great pivot, though, because I realized we could be a lot more cost-efficient: It allowed us to increase the capacity of our warehouse rather than create multiple little warehouses all over the city where people would come and pick their orders up.
What’s the biggest lesson you’ve learned?
CM: The most important lesson is to build the right team to make an idea happen. Everyone can have a great idea, but it's only if you execute it properly that it becomes something. If I ever start another company, that's the first thing I would do: get the dream team together for the idea before anything else. I can now say I'm super happy with the team, but it took a while to get it together. At some point you're able to learn almost everything, but it just consumes so much time and energy that it's not efficient. It's a lot more efficient to find the right person who already has the background to come fill the knowledge gap, rather than pretend to learn everything from scratch.
What did the Food+City Challenge Prize experience offer you?
CM: We had some great mentors. John Doggett, a professor at The University of Texas at Austin, was super helpful in focusing the seed pitch, bouncing potential questions, and helping me structure it properly. He was super encouraging as well. Eduardo Wallach was a virtual mentor, and we still keep in touch with him. He works at a company that does fruit bouquets, and he's helped us re-think our logistics and what our core value proposition is to our mom-and-pop shops. He made us realize that we were trying to offer so many good things that we might be over-promising. He asks the right questions, and comes from the right background to give very useful insights. And then he challenges you to carry out tasks that make you test and experiment — that will make you realize on your own what the best way forward is. Mentor-wise, I think the Food+City Challenge Prize was awesome.
How did the winnings help you?
CM: At the time the money that came in was super useful because we were facing a really tight cash flow. It helped us go on for almost a month while we opened space to make more money come in. It was like a breath of fresh air, because we could come with that money and not have to be stressed out about it all the time until the next launch came in.
What’s your advice for someone considering applying to Prize?
CM: I was super grateful for the mentors. They're very well tailored to what a food startup needs. I've been in a bunch of competitions with Agruppa, and you usually get allocated to mentors just because. Here I felt like there was a reason, and the advice we've gotten from our mentors has been great, so I'd definitely recommend it for the advice that you can get.
What’s next for Agruppa?
CM: Tech comes next! After bootstrapping with our current ordering channels — WhatsApp, SMS or phone calls — we’re ready to build and implement three more sophisticated channels for vendors to order their stock: a personalized app, an integrated voice recognition transactional system and a simple call center for those who are less tech-savvy and for customer service in general. This should also help cut down customer ordering time as well as optimize the logistics behind it all. And on the horizon is breakeven! Hopefully by 700 mom-and-pop shops — which we should arrive to by mid-2017 — we should become self-sustainable!
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