Family Farmers Breathe New Life into Direct-to-Consumer Online Agricultural Marketplace
August 2, 2012 | Noelle Swan
Landon friend was about ten years old when his parents first started Horsepower.com. As longtime farmers, they wanted to find a way to market their crops directly to consumers. Rather than hiring a broker to find buyers who would receive a portion of the proceeds, they decided to establish a way for farmers to advertise their crops directly to consumers online. What they came up with was a web-based application that gives farmers a forum to advertise their produce directly to area locavores. Think Craigslist for farmers. Users downloaded the application to their desktop computers and the application refreshed itself by connecting with the online database each time a user opened it, similar to Quicken.
It was 1998 and the Internet was just taking off and investors were eager to sink their money into new ventures. Horsepower found funding relatively quickly, but investors grew scarce when the tech bubble burst a few years later. Horsepower lay dormant for nearly 10 years until a not so little Landon Friend revived it as a senior project for his undergraduate work at Cal Poly in 2010. He decided to capitalize on the growing locavore movement and take a second stab at making Horsepower.com a viable business, an effort he refers to as, Horsepower 2.0.
The website currently looks a lot like the original, though it now exists entirely online and doesn’t require users to download software. Here’s how it works: Farmers register a profile and start listing their crops and when/where they will be available, similar to classified ads. Within the site, buyers can browse through a variety of products or search for a specific item or farmer. So far, many of these categories remain empty as Friend is still in the process of growing farmer membership.
Over the coming year, Friend says that Horsepower will aggressively pursue farmers around the central coast and San Joaquin Valley and up into areas of Northern California. “There are a ton of farmers here using ecommerce tools from websites to social media and this area has become a real hotbed of the locavore movement,” Friend says. Several years down the line, Friend hopes to build tools that work for not just small family farms, but larger farms and agricultural organizations as well. “We’d really like to revolutionize the ag industry.”
When it comes to selecting farmers to participate, Friend says that Horsepower strives to remain “size and practice neutral.” He adds that the family hopes that doing so will contribute to the transparency of the industry while encouraging meaningful discussions about food. “Our real desire is to be able to put people in the same room so that they can talk about agriculture and food.” The finished site will have space for buyers to comment publicly on their interactions with farmers. “The main thing is we don’t want to get in the position of being a broker, that’s what we are trying to get rid of.”
Ultimately, Friend envisions a three-tiered subscription service. The first tier, the classified listings that appear on the site now, will remain free. This level of service will be geared toward the small family farmer who sells goods at farmers’ markets. The second tier, a commercial-scale subscription will offer a customizable storefront and a shopping cart feature. The third and most expensive tier will serve agricultural retailers who move larger volumes of products, such as fertilizers, seeds, jams, or nuts. In addition to subscription services, Horsepower will offer small add-ons a la carte. For instance, a farm or vineyard that uses the free level of service could purchase a $0.99 PDF of their listings to email out to their mailing list.
So far, the business is still in fundraising mode, trying to secure enough money to build the revenue driving features. The Friends hope to raise an additional $500,000 by the end of this summer. This is no small task considering the Friends intend to retain ownership of the site. “My parents are farmers and are passionate about keeping that down-home farmer mentality.” For the most part, Friend says that they are not reaching out to as many venture capitalists as they did the first time around. Right now they are reaching out to friends and family, working with CAL POLY on an investor strategy, and looking into establishing a crowd funding campaign.
Other than funding, Friend has found the biggest challenge so far to be the level of technological literacy found in the agricultural industry. “We’re dealing with a demographic that is really a lot different than other typical Internet users.” In his experience, farmers tend to be male, over 50, and have limited experience with the Internet. This was a major challenge the first time around, as few farmers were early adopters. Still today, he says a large part of his conversations with farmers revolve around convincing them that the Internet does not have to be a scary place.