Team:Tec-Chihuahua/Entrepreneurship
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Overview
By the 1990s, cotton production in our country was at point of disappearing due to a high incidence of crop pests, said problem caused the government to approve the introduction of biotechnology for its cultivation and since 1996 genetically modified cotton has been farmed. The variety of cotton grown today is FiberMax. This variety has the ability to resist insects, so it is used to control "acorn worm" and the "pink worm"; it also exerts some control over other worms like the "soldier" and the "false meter"; likewise, it is resistant to glyphosate herbicides and glufosinate, being useful for managing weeds without affecting cotton cultivation.1 However, resistant varieties that are currently used are susceptible to other diseases such as Verticillium wilt. This is the most important disease in the main cotton producing regions because it affects 20% of its production and decreases product quality.
The most serious symptom for this disease is the irreversible wilt of the whole plant after several weeks of vegetative growth, followed by death of the plant. Sometimes wilting only affects some stems or leaves, causing visible symptoms such as sectoral chlorosis and tissue necrosis.2 The spread of Verticillium dahliae, fungus responsible for the disease, is through currents of air, irrigation, tillage instruments or insects. Some methods proposed to control the pathogen include a deep plow of the earth, rotation of crops using non-susceptible species and balanced fertilization avoiding excess nitrogen or lack of potassium.3 Currently there is no chemical control that is effective against Verticillium dahliae.
As a result we firmly believe that it is an important issue and that it must be attended because despite having high yields in production, the state of Chihuahua still imports 50% of national demand, a percentage that can be lowered if we manage to combat Verticillium dahliae. This is where V-TION, a preventive and treatment fungicide comes into play.
Design Thinking
Empathize
In order to know more about the current situation of cotton farms, we had to contact people who worked on the industry. We visited local government associations as well as agricultural engineers in several places around our region. We found that they struggled with Verticillium wilt in every farm that we visited. When we told the producers and engineers about our project and our potential solution they were immediately interested to know more about how we were going to deal with this illness. Some of them even offered us part of their crops for testing our product once we had the final result. This experience was exhilarating; not only did we learn about the illness's effects, but we also felt committed to keep in touch with them in hopes of solving this problem.
Define
By exploring the cotton industry and its whole process, we were able to define our target market. Based on what the producers told us about Verticillium wilt and its effect on their farmland we were committed to adapt our solution to their needs. This meant that the application method and overall use of the product had to be adapted accordingly. We found out about how we can distribute our product, and even made connections for potential customers.
Ideate
By now we had a solid idea of what we wanted to accomplish. Our goal was to create a product that was specialized for Verticillium wilt in cotton crops. Now we had to visualize how the final product would be fabricated. For this we began researching about nanoencapsulation.Our product now began to take shape. The next step was to define the amount of ingredients per package, the application method and the infographic for how to apply the product. For the ingredients we based our implementation on similar products. The application method was defined to be through irrigation. This decision was based upon the interviews we had with the engineers. Finally the infographic was developed and the overall product was almost done. Now all we needed was the design.
Prototype
For our initial prototype we decided to look into the legal aspect of our product packaging. After researching and consulting we found that our product package had to comply with certain legal regulations. In order to ensure that everything was in order, we implemented this as part of our legal plan. We aimed at designing the most realistic prototype possible so that there was no room for doubt. This included complying with safety regulations, ingredients of the product itself, instructions for appropriate use among many others. Scroll down to the product section of this page to see our final result.
Test
We are able to test our product in selected farms that the producers we interviewed offered to lend us. That way we can test our product in the real world and see how it would react in different environments such as weather, temperature and soil. It is a great opportunity that we weren’t even counting on until the agricultural engineers suggested it. The other benefit this kind of testing is that our potential customers can see the results for themselves.
Implement
Once our project is more developed and our product has proven functionality, we plan to implement it in the cotton crops that we visited during our investigation. The producers were invested enough to sign a commitment letter that allows us to work with them in the future.
Business Model Canvas
KEY PARTNERS
- Sales agent.
- Freight transport company.
- Packaging and labeling company.
- NGOs for crop and environmental care.
KEY ACTIVITIES
- Product promotion.
- Complying with all the norms and certifications.
- Trade mark.
- Establishing contracts with distributors.
- Generating free trials.
- Quality certifications.
KEY RESOURCES
- Human resources
- Infrastructure Resources
- Financial resources
VALUE PROPOSITION
- Helps diminish losses due to Verticillium wilt, as well as the production of low quality cotton.
- Helps engineers give better advice and avoid producers’ frustrations.
- Improves health of affected crops, rising their production.
- Decreases the use of agrochemicals.
CUSTOMER RELATIONSHIP
- Assemblies
- Presentations
- Meetings with engineers and producers
- Visits to producing sites
CHANNELS
- Indirect
- Physical: Our channels will be through specialized distributors in the sale and distribution of products for the agricultural industry.
CUSTOMER SEGMENTS
- Agronomic engineers
- Crop advising technicians
- Big cotton producers
- Agricultural products distributors
COST STRUCTURE
- Infrastructure.
- Manufacture.
- Nanoencapsulation
- Marketing.
- Administrative staff.
REVENUE STREAMS
- Assets of Sales
- Direct charge for the purchase of V-TION
Key Partners
In order for V-TION to become a prospering company we have to work together with different entities to create a sustainable business. This includes sales agents, who are in charge of establishing valid contracts with providers and/or consumers. We also count with a transport company for our product deliveries to the distributors. Another entity that we are allied with is a packaging and labeling company; that way we don’t have to worry about this process ourselves and we can focus on improving our current products or creating new ones. We must also keep in touch with non-governmental organizations to monitor the activity on crops and be aware of any product trends or new problems that we can potentially solve.
Key Activities
For promoting our product, our team intends to spread the information about it through the media, such as the internet and radio. In addition to this, assemblies and presentations in the main regions of interest will be carried out. Free trials will also be included in order to build trust in our customers. With the legal plan previously designed, it is intended to comply with all the norms and certifications, as well as the trademark registration. Another important point is establishing contracts with distributors to ensure that our sales are made in accordance with the law and for convenience and safety of our relationship with the customer.
Key Resources
In this section we cover each of the resources necessary to generate a sustainable company. Within the human resources we consider all those people who are of utmost importance in our project. This covers both the area of product generation, which includes experts in crop products and experts in bioprocesses, as well as all the people necessary to bring our product to the client such as marketing experts, sales managers, and administrative staff. Within the infrastructure resources we consider the physical resources needed to develop the product as well as to maintain it. Like any company, we need financial resources which are cash, investors or capitalist partners, and bank or private loans.
Value Proposition
Our Biopesticide helps cotton producers diminish economic losses due to Verticillium wilt, as well as the production of low quality cotton.
Our Biopesticide helps agronomic engineers who want to provide their producers with good technical advise to avoid their frustrations and generate a quality product that results in a proper economical income.
Our Biopesticide helps agricultural associations that want to rise national production to decrease the use of agrochemicals and therefore obtain a crop production chemical-free and of better quality.
Customer Relationships
It is of utmost importance to maintain a good relationship with the customers. Our relationships are based on assemblies, presentations, meeting with engineers and producers, and visits to producing sites. Each of these approaches intends to deliver our product’s information to the customers more directly, and also to build trust in them by presenting ourselves more formally, which assures them that we care about them and are interested in keeping contact.
Customer Segments
Agronomic engineers and Crop advising technicians
Agronomic engineer dedicated to giving technical advice to cotton producers in the region of “Nuevo Holanda, Ojinaga”. Responsible for developing agricultural knowledge by providing technical assistance to the cotton producer, from planting to harvest, selection of varieties, machine calibration, fertilizer classification, irrigation scheduling, pest control, crop inspection, problems and deficiencies detection, identification of diseases in all stages, and an estimation of the production yield.
Cotton Producers
They cultivate the land to obtain agricultural benefits and generate, extract, and export its resources. Owners of large hectares of land in the region of “Nueva Holanda” have several crops, among which the cotton is the principal one due to economic remuneration. Their organization of mostly family-wise however, they require technical advice which is provided by an agronomic engineer. They are the ones in charge of hiring people for the care and planting of the crops and harvesting the product.
Agricultural Product Distributors
Companies or organizations dedicated to the purchase and sale of all necessary inputs for the fields, from seeds to fertilizers and pesticides. They have their own sales agent, sales and purchases personnel, warehouse managers, a chief or director, as well as agronomic engineers and technical advisors specialized in each crop of the region the distributor works in. They also count with specialists in the management of each product they offer in their catalog.
Channels
There exist two contact options with distributors: they can contact us through our website, phone calls or any contacts in common, or we can contact them through assemblies, networking presentations, among other events in the business. In one way or another, a direct link is obtained with the distributor and a contract is made to obtain distribution benefits.
Revenue Stream
Strategy: Sales will be made through direct contact of our company with the client. We will try to establish an annual sales contract with financing and credit lines with a payment term of 60 to 90 days. The freight price will not be included in the product’s price, an additional charge would be made for the product’s transport from our warehouse to the distributor's warehouse. Once the distributor sells the product, 5% of the proceeds will go to the distributor and the rest to V-TION.
Cost Structure
Our team will have initial costs, including the rent of an equipped laboratory and warehouse, the cost for the product’s nanoencapsulation, packaging and labeling costs; and we also considered the cost for freight of our product. For this, we established tentative manufacturing costs, such as nanoencapsulation, formulation, packaging, and labeling. Our company also contemplates marketing costs, such as advertisements on social networks and other media, in addition to the necessary investment in human capital.
Competition Analysis
SWOT Analysis
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- Product new to the market.
- Practical application.
- Organizational structure based on teams focused on specific departments.
- Direct communication with the user for feedback.
- Currently there is no product that directly attacks Verticillium.
- Organic product.
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- Costly production.
- Lack of laboratory equipment for mass producing.
- Currently there is no investment.
- The production process is slow.
- Distribution difficulties nationally and internationally.
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- Indirect competitors
- The imminent necessity for a method to control Verticillium.
- Verticillium has been found in serveral places around the world like China and that brings a potential new market for our product.
- Future modifications for efficiency.
- Incrementing presence of Verticillium.
- Global Markets
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- Lower prices in other products.
- Competitions from emergent products.
- Product Requirements not fulfilled.
- Reluctance of consumers to consider the use of biotechnological products.
- Government regulations.
- Exportation political factors.
- Change of regulations on countries.
- Globalization; as other countries are presented with this problem international products might enter the national market.
Application Method
Product
Percentage Composition for determining the concentration of the active and inert ingredients.
Visual safety information according to official normatives.
Detailed instructions and recommendations for appropriate use of the product.
Safety instructions in case of ingestion or inhalation of the product.
Interview Insights
We started by contacting associations in our city in charge of the agricultural sector. These people then led us to more contacts all over the state. Also, taking advantage of the fact our state is an agricultural production leader, we could quickly find contacts in other leading states in cotton production, Baja California Sur and Sonora. With this approach we could extend our proposal to an international level, validating our market opportunity and potential customers in Canada.
Our new contacts allowed us to understand the problem from their point of view and offer them an effective solution especially customized to their needs. This empathy allowed us to make product related decisions that benefited the customers directly.
To conclude our national validation, we received feedback from the engineer Sergio Montijo, who confirmed our hypothesis about our potential competitors and the distribution channel we would use nationally.
As for the International Validation of the issue we reached out to the Canola Council of Canada where they reported to be working with Verticillium longisporum. From there we were able to rectify that Verticillium dahliae affects crops in Canada such as potatoes.
We also had the chance to contact the president of “Sistema Producto Algodón” and with the Chihuahua State Plant Health Committee. They provided us with relevant data about the annual state’s production, its cost and the economic income to the country through the import and export of cotton.
Through the contact we established with the Plant Health Committee, information regarding the main pests and diseases that affect cotton production was obtained. They also shared a field and national-level validation of the severity of this issue and how V. dahliae can impact the fiber’s quality.
We went to Janos and Ojinaga, major cotton production regions in our state, where we could talk with agronomic engineers. They are in constant touch with the crops and have to be fully aware of the agricultural products in the market since they are the ones who advise the producers in this area. In addition to this, we realized just how much trust exists between producer and engineer which helped us define who are our clients and how our market works.
The interview with engineer Carlos Zabala, who is in charge of the purchase, sale and negotiation of the crops in Janos, made us realize how the product reaches consumers. Fortunately, he knows both the market of cotton crop supplies and how they should be managed.
We learned about the method of application of fungicides, as well as the way in which products reach consumers. Another important contribution was how the finances between company and distributor are managed. This opened up a whole new panorama for our market and financing strategy.
Market Size
Business Model
Company Projection
First Year
In the first year our project has been submitted to the business incubator NOVA ORION in order to receive guidance from experts in both areas: technical development and business. The expression of peptides in BL21 (DE3) and SHuffle has been verified. Our peptides of interest have been purified. The inhibitory capacity of antifungal peptides against Verticillium dahliae has been verified and quantified. We applied to Chihuahua Innova's conferences, to spread our project and get investors to support us. We have updated our legal plan.
Second Year
The corresponding tests have been carried out in the laboratory to demonstrate that our product is safe for humans and is friendly to the environment. Our peptides are now nanoencapsulated through our partnership with a company. We performed tests to optimize the release of peptides from the nanoencapsulation system. We contacted more people involved in the cotton industry. The corresponding tests were performed in the laboratory to ensure the level of toxicity that was determined in our legal plan. The legal group was responsible for reviewing and confirming compliance with the corresponding laws so that our product launches to the market. An exact quantity of grams per hectare was established for the application of our product. Permit management: The Sanitary Registry and the Sanitary License for the establishment of pesticides and plant nutrients.
Third Year
Field tests were carried out in the test hectares of the Buena Vista, Janos, Chihuahua neighborhood thanks to the contacts of our Human Practices. A financial analysis was carried out according to all the characteristics and costs of our product. Constitution of the company and trademark registration has been carried out. We obtained permits and free sale certificate. The export permits were obtained: we registered the exclusive export pesticide then obtained the export certificate. Due to the clauses established in our legal plan, the reformulation of our product in terms of inert ingredients is proposed in order to handle our product before the law as a new product and thus be able to sell both nationally and internationally. A contract was established with a trucking company. A price was established according to the profits necessary for the expected business growth. A contract was established with an agribusiness packaging and labeling company. We have sold the first batch of our product to local and national farmers. Cash flow has begun. We have established our offices in Chihuahua, Mexico. A sales forecast has been made to estimate our sales based on the success of our first batch. We have marketed our product to other countries.
Letters Of Intent
In order to reinforce the potential opportunity to get our product competing in the market and thanks to the confidence we generated with some our main contacts through the development of this project, the following intent letters were written for some our potential clients and a nationwide star-up sales principle was done.
The format of these letters can be found in the legal sectionof integrated human practices, the signed letters are attached below.
ORION Park Acceptance Letter
The following is a TecLean program letter which is our first step to enter the NOVA ORION incubator.
Minimum Viable Product (MVP)
It is a product prototype for quickly discover what the customer is asking for in a simple, visual and easy to understand way.
Activities
Bio Meeting
Monday May 27, 2019
We assist to the event of the entrepreneurship area of life sciences in which we have the opportunity to see in which way the projects of the incubator get evaluate by experts , to see the progress and take reference to develop the entrepreneurship part of our project. Important information was mentioned for making a successful project as are the entry barriers, the market validation stage and the steps that must be taken to follow a good path within the enterprise.
Innovation Week Pt.1
Tuesday May 28, 2019
8 AM - 2 PM
We assist to Innovation week event on May 28th , an event oriented to promote and strengthen entrepreneurship through the identification of creative projects, based on technology and with social impact. In which we acquire important advices and acknowledges from the different discussion panels we heard of entrepreneurship. In the first discussion panel the most relevant advices for us were:
- Go to programs like Chihuahua Innova and be alert of different programs that can help us make interpersonal connexions.
- How to assemble a good team work because we learn that is something fundamental and difficult so the project work.
- Take advantage of the resources that our school offers.
- Be organized in all aspects.
The second panel was about success stories of a technological base in which the entrepreneurs talk about the customer segmentation, the different types of needs for each client, but also they explain that exists different profiles and markets.
- Convince with arguments and information the validation of the problem.
- Consider the entry barriers of the project we want to develop.
- To have well studied the market validation of our project.
- Be organized in business model and value proposition.
Innovation Week Pt.2
Wednesday May 29, 2019
3 PM - 6 PM
Within the framework of the innovation week we attended the pitch to sharks where different entrepreneurs from the state of Chihuahua presented their projects to five investors. The investors of that module are currently directors of important companies in the country. The main knowledge we acquired was negotiation strategies and at the same time the requirements to win an investment. We understood that it is important to have a scalable project, have a well-validated business model know clearly and precisely the market you wish to enter and have in mind strategies to avoid competition to your market.
Social Entrepreneurship Seminar
Friday May 31, 2019
9 AM - 4 PM
On May 31 we assist to the Social Entrepreneurship Seminar in which we have the opportunity to meet an expert of the area name Christian Salazar, who was our mentor during the day. He guide us through the process of: involved persons in our project, important variables, description of the product, value proposition, interviews and findings of the interviews, market segmentation and operational feasibility. Something that was very important for us on this seminar was to learn the difference of social entrepreneurship and conventional entrepreneurship, he make us think different and open our minds to a new kind of opportunities of market. We have the pleasure of being working around social organizations that share with us their project and ideas so among all think about social strategies that can have a positive achievement. During the day we elaborate deliverables for the different validations of the project and at the same time we receive feedback of each part we develop. He explain with examples of different social projects how social entrepreneurship can be apply in business and how we can take advantage of each characteristics of the customer segmentations we define.
Value Proposition Workshop
Thursday October 17, 2019
We participated in the value proposition workshop, in which our entrepreneurship advisor was the main expositor. This workshop consisted of the explanation and the foundation for the correct design of a value proposition.
Thanks to this activity we were able to validate our value proposition and our customer segmentation which are two of the most important sections of our businesses model canvas and our business model as such. It was also verified that our proposal was well-justified thanks to the activities carried out to corroborate our proposal, we received feedback and listened to the value propositions of other projects and even companies so we manage to work and improve specific details.
References
- Villalba, A., & Mendoza, A. (2018). El algodón transgénico en México. Retrieved from: https://www.uv.mx/cienciahombre/revistae/vol31num1/articulos/algodon-transgenico.html
- BAYER. (2010). Verticillium spp. (Cotton). Retrieved from: https://www.cropscience.bayer.com/en/crop-compendium/pests-diseases-weeds/diseases/verticillium-spp-cotton
- Instituto Valenciano de Microbiología. (2018). Verticillium dahliae y otras especies de Verticillium – Marchitez por …, (Verticiloisis) – Diagnóstico molecular cuantitativo y cuantitativo (PCR Y qrtPCR) e identificación molecular (secuenciación). Retrieved from: https://www.ivami.com/es/microbiologia-vegetal/2173-verticilliun-dahliae-y-otras-especies-de-verticillium-marchitez-por-verticilosis-diagnostico-molecular-cuantitativo-y-cuantitativo-pcr-y-qrtpcr-identificacion-molecular-secuenciacion