Startup Profile: From Performance Art to Local Food Systems Technology
May 24, 2011 | Robert Puro
Local Orbit, an Ann Arbor, MI-based tech startup that facilitates the distribution of local, sustainably farmed food, is the brainchild of Erika Block, a trained playwright, theater director and technology consultant whose interest in food systems traces it roots to a performance art piece that never was called A History of Eating. “While doing research for the project I started to learn about food systems,” said Block. “I said ‘hey, there’s some fundamental infrastructure problems and through the work I’d done (on other art projects) I’d become pretty engaged with mapping and social technologies and ways that you can connect people to collaborate in terms of storytelling online.”
So Block set aside the cross-disciplinary art project on eating to pursue the development of a technology product to help solve the infrastructure issues present in local and regional food systems. To determine which problem(s) to solve within the food system and formulate her product idea, she set up “brainstorming sessions with farmers, food systems people and technologists, policy folks, and funders.”
Her research and interviews uncovered a common set of communication and transaction headaches faced by farmers markets, producers, coops, food distribution entrepreneurs, community organizations and institutions. Working from this data, Block and her team developed a versatile web platform that provides customizable business and communications tools to facilitate local food distribution, that is, direct sales from growers and food distributors to consumers and wholesale buyers.
“We essentially are a back office in a box and we provide ecommerce, marketing support, inventory management, logistics tools,” said Block. “We also handle payment processing and transactions, and provide dedicated customer service.”
[pullquote]“One of the things we’ve learned is that local systems aren’t one size fits all. What we’ve done is built technology so that the business rules can be customized to the particular needs and logistics of a region or a site.”[/pullquote]
Users of the Local Orbit platform run the gamut from farmers markets that want to offer presales to retail customers and wholesale buyers (restaurants, retail stores, etc.) to a group of farmers that wants to set up an ordering portal for their customers, to an institution that wants to use Local Orbit as an ordering portal for a school district.
The platform is very customizable and, according to Block, can effectively meet the diverse needs of its customers. “One of the things we’ve learned is that local systems aren’t one size fits all. What we’ve done is built technology so that the business rules can be customized to the particular needs and logistics of a region or a site.”
How the Local Orbit Platform Works
First, Local Orbit tailors its web platform to accommodate a seller’s (farmer, coop, food distribution entrepreneur, et al.) unique business processes. After business rules have been clearly outlined, it takes approximately one day to get the seller’s site up and running.
Once the site is up, the seller can list the products that he/she wants to sell. Local Orbit helps with marketing and buzz building to drive buyers to a seller’s online listings. Buyers arrive at the site and select products (fruits, vegetables, etc.) that might come from several different producers, add them to a shopping cart, check out, and receive a single invoice. Local Orbit then handles the payments and communications to help the seller fulfill the buyers orders.
Buyers are then directed to pick up their orders from a local marketplace, or hub (typically a farmers market) with which Local Orbit has partnered to ensure fulfillment. Depending on the area, sellers will deliver wholesale orders directly to the buyer’s place of business.
After delivery has been made to the local marketplace or to the wholesale buyer and confirmed by the on site market manager, Local Orbit releases funds to the seller.
The Local Orbit Business Model
Local Orbit employs a marketplace model in which it charges the seller a per sale transaction fee that ranges from 8% – 15%. In addition to providing Local Orbit with revenue, the fee covers credit card processing and a revenue share to the local marketplace partner.
According to Block, Local Orbit will have eight live local marketplaces in the next month in Michigan including Detroit Eastern Market, the largest public market in the US.
Supporting Sustainable Agriculture
Local Orbit’s business model allows sustainable farming operations that do not have the resources to invest in websites and large technology projects to save money and time and focus on what they do best: growing crops. Providing tools that allow sustainable producers to more easily maintain direct relationships with local and regional customers has the potential to increase the farmer’s profits, improve local economies and even reduce dependence on fossil fuels.
Block expects to roll Local Orbit out to many more markets nationwide by 2012 – 2013. Of her long-term vision for the company, she said: “I want to see the company having provided new marketplaces and new business opportunities for farmers and entrepreneurial food producers and I want to see us providing business tools that have demonstrably supported local economies.”
Performance art may suffer in Block’s absence, but as Local Orbit continues to grow so too will sustainable agriculture, local economies and people’s perceptions of the connection between food, agriculture and communities.