An idea maze
finding the right path
We’ve just gone into fundraising mode here at Nebullam.
The conversations I am enjoying with investors are the ones where we talk about how we arrived at where Nebullam is today. These conversations have reminded me of a blog post from almost 10 years ago, from Chris Dixon.
Then, in today’s Milk Road newsletter (written by Shaan Puri and Ben Levy) the idea maze was referenced again.
So, how did Nebullam arrive to where we’re at today.
In 2017, Danen (Co-Founder, CTO) and I had a thesis that the answer to consistent food production and food security was indoor farming. And we knew indoor farming was antiquated.
a. Most indoor farms think in terms of square footage instead of cubic footage. That’s bad because you’re heating and cooling ALL your space.
b. Most indoor farms have little to no software applications. That’s bad for reducing labor and prevents you from making more data-driven decisions.
This combination amounts to indoor farms taking upwards of 7 years to reach profitability.
We thought we could build better growing equipment. With Danen’s prototypes, we established a paid beta program 3 months after launch. Farms could rent our growing equipment and software from us, for a monthly fee. The paid beta program helped A LOT, because the direct feedback (and $) from our customers allowed us to build a better product.
a. We stacked our growing equipment, to take advantage of cubic feet.
b. We focused our software on basic tasks at first, such as water sensors and lighting schedules, to reduce onsite labor.
We thought this combination could help an indoor farm become profitable in less than half the time.
In 2019, we were struggling with fundraising to bring our prototypes to commercial scale. We had reached out to over 300 investors and decided to apply for Y Combinator. We were accepted and joined the Winter 2019 batch. Y Combinator partners are phenomenal at helping founders simplify what they do. By Demo Day, we were the “John Deere” for indoor farming. We wanted to eventually sell our growing equipment, and then have recurring revenue from the software that runs our growing equipment.
a. We made it back to Iowa in April and established manufacturing partners and our own space, to build a model farm to showcase Nebullam technology growing food in real time.
b. We started to subsidize costs by wholesaling the produce our equipment grew, to local area grocers and restaurants. We saw it as an opportunity to prove out unit economics, and to better understand what chefs and produce managers are looking for.
We spent as much time as possible trying to get in front of decision makers.
In 2020, our own revenue from selling our food was growing by just a few % every month. Then the pandemic happened. We lost almost all our revenue overnight.
a. In a span of 6 days (leading to our next harvest), we decided to try to sell our food directly-to-consumers, to keep the lights on.
b. We knew recurring revenue was a must, so we implemented a subscription model near the end of 2020.
c. By offering a subscription model, we had to build our own fulfillment technology stack.
In 2021, we realized we had the opportunity to become the only vertically integrated indoor farm.
a. We own the supply chain.
b. We know our subscribers better than grocery stores know their customers.
c. With a mission to grow what people want, our new vision is to replace the produce aisle. We’re exactly where we’re meant to be.
And it’s working.
Nebullam subscribers through April 2022