An investigation into the achievement of critical mass in digital agricultural startups based on an analysis of German farm management startups

by Anna Iversen née Gubanova
Doctoral thesis
Date of Examination:2019-02-07
Date of issue:2019-08-23
Advisor:Prof. Dr. Ludwig Theuvsen
Referee:Prof. Dr. Michael Clasen
Referee:Prof. Dr. Achim Spiller
Persistent Address: http://dx.doi.org/10.53846/goediss-7607

 

 

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Abstract

English

According to the report of the Food and Agriculture Organization of the United Nations, due to population growth, food production must increase by 70% by 2050 to meet rising demand (FAO, 2009). Digital agricultural startups are one of the main players on the market who develop innovations which should assist in accomplishing this task. However, most of the startups fail during first three years without achieving critical mass. To understand what kind of obstacles exist on the market and what marketing strategies might help in overcoming them, 11 in-depth interviews with international digital startups from developed and developing countries were conducted. The results of the interviews were verified with help of data triangulation.  In the next step, the results of the in-depth interviews combined with the theory about the innovation acceptance and the expert opinion of EIP-AGRI (2015) were turned into hypotheses about the marketing strategies that lead to achievement of critical mass on the agricultural market. To verify the hypotheses, German farm management information system startups were selected. According to the Gartner’s Hype Cycle, farm management information systems are a mature form of technology that could be adopted by the mainstream market. Moreover, this type of technology is one element of precision farming that is actively promoted in the EU (EIP-AGRI, 2015). The marketing strategies from the telephone interviews were triangulated with the marketing strategies of 9 German online marketplaces. Both the online marketplaces and the farm management information systems improve the value chain in the agricultural field and both technologies use wireless connections to fulfill their functions.  Among the farm management information system startups, PEAT had an extraordinary growth rate, not only in Germany but also in India, Nepal and in Tunisia. To explore what kinds of strategies contributed to such growth, a case study about this startup was conducted. The case study revealed a special role that international organizations play in the growth strategy of the PEAT startup. The results of the qualitative investigation into the marketing strategies of digital agricultural startups demonstrated an important role of the technological aspects such as API and usability of innovation, as well as interpersonal communication for the achievement of critical mass. Since the number of startups selected for the research presented here was small, it would be interesting to verify the results obtained with a larger number of startups when the opportunity occurs.
Keywords: startup; digital; agriculture; critical; mass; marketing; strategy
 
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