Start-up: Tomato Jos (Nigeria)
Tomato Jos believes in the power of making high-quality food products for local consumption. Co-founder Mira Mehta answered our questions.
1. Give us your elevator pitch.
Our mission is to provide locally-produced, high-quality value-add food products to Nigerian consumers in a way that is profitable and sustainable. We are a for-profit social enterprise that will make the first domestic brand of tomato paste in Nigeria. We operate across the full tomato value chain (farming, logistics, and processing) and source our raw materials from smallholder farmers.
2. How did you finance your start-up?
To date, we have financed our company through a variety of channels, including a traditional round of angel investment, prize money from competitions, crowdfunding (using Kickstarter) and our own founders’ capital. Given the fact that Tomato Jos is a social enterprise, we are also exploring other funding avenues such as grants, fellowships, and a social bond. With any outside investment (whether debt or equity), we make sure that the investor is very clear on both the financial and the social goals of our mission.
3. If you were given US$1m to invest in your company now, where would it go?
To quote the Barenaked Ladies: “If I had a million dollars… I’d be rich!” In all seriousness though, Tomato Jos will be raising a $2m-$3m Series A investment later this spring. A $1m injection into the company today would enable us to make a down payment on larger-scale tomato paste processing equipment and get a head start on the land preparations that we will need to make when we expand our farm size to 25 hectares next season.
4. What risks does your business face?
As an agribusiness, the biggest risk we face is the weather – early rains or too much heat could negatively impact our tomato yields, increasing the cost of production. We are mitigating this risk by growing a few different varieties of tomato and by phasing out our farming over a long period of time, so that the tomato plants are not all in the same stage of development at any given time. We also face risks related to corruption and unethical behaviour, but we have established a strong advisory board to help us put into place a corporate governance structure that provides our staff with clear operating guidelines so that they know where the lines are that they cannot cross.
5. So far, what has proven to be the most successful form of marketing?
We are still in our first farming season and have not yet processed any tomato paste, so to date we haven’t yet sold any product. However, word-of-mouth has been a great way to spread the message about Tomato Jos. When we start selling, we will be very selective about the initial markets we enter to ensure that we can make a concentrated marketing effort in those areas and actually have the volumes required to sustain sales over an entire year.
6. Describe your most exciting entrepreneurial moment.
Every day something exciting happens when you run your own company. But the most exciting moments for me have to do with the people. Just yesterday, one of our farm attendants discovered the first tomato fruit growing on our fields. He was so excited that he was speechless, and that got me excited for two reasons. First, having plants in the fields means that we are getting closer to actually producing our product, high-quality tomato paste. But second, and perhaps more important, having a team that believes in the mission of the business and takes personal ownership for the big wins (and the losses) means that this company is becoming more than just my own individual dream.
7. What has been the biggest mistake you have made, and what have you learnt from it?
During our first operating season we have learnt a number of valuable lessons that have helped shape our thinking and our actions as we continue to move forward with the business and refine our model. The biggest lesson learnt has to do with the balance between growing tomatoes on our own farm versus through a network of small-scale out-grower farmers. We had a large amount of interest from many smallholder farmers as we began our “proof-of-concept” pilot on our nucleus farm, and we quickly realised that we would need to develop a comprehensive model for selecting the right farmers and communities to join our network.
The farmers located closest to our nucleus farm were first to approach us to ask about our programme and possibilities to collaborate, but before we begin a large-scale interaction with any farmers, it is important that we take time to iron out the details around our engagement model (making sure we adopt locally acceptable methods such as speaking to local chiefs and leaders first), the educational and input services we will provide, and the nature and length of the relationship between Tomato Jos and any farmers with whom we work.