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Amanda Yu Fu

John Howard
Sebastien Lasfargues

Executive Summary
Our team is committed to creating an online community where rural farmers can connect
and share information. Our business model centers on revenue from advertising and we
will attain significant profitability within one and a half years. We will begin in India
because of the large number of farmers and current rapid diffusion of technology into
many rural communities.

Market Research
India
India is the second most populous country with over 1 billion people in an area slightly
smaller than the Unites States. It has the fourth largest economy in the world (using PPP)
but per capital GDP ranks 125th. Economic reforms in the last 15 years have cleared the
path for capitalism, and in some markets like information technology India plays a
prominent global role. Indian culture is very diverse with over 22 languages and varying
customs and traditions across the nation.

Farming in India
Agriculture accounts for about one third of Indias economy and employs nearly 700
million people. Nearly all available farmland is currently being used. However, farming
in India is not static and had been changing dramatically in the last 40 years.
During the 1970s Indian agriculture underwent a Green Revolution in which farmland
increased, double-cropping (having two growing seasons) became possible using new
irrigation methods and genetically enhanced seeds became widely used. India reached
self-sufficiency and is now a net exporter of agricultural goods. Today new varieties of
generically modified crops are being introduced that have had huge impacts on farming
practices. As an example, a survey found that farmers increased their profits by over
75% when they switched to a new variety of cotton called Bt cotton released just a few
years ago, and many farmers are now switching to Bt. This success has also been seen in
other crops. In addition farmers are experimenting with ecological farms, superfarms,
and contract farming. There is talk of India being on the verge of a second Green
Revolution, lead by new advances in biotechnology, transgenic research and Indias
increasingly export-based economy.
Despite all these advances, most farmers are still poor and many are desperately poor.
Indian farmers work on small plots of land and largely still use traditional farming
methods. Soil has degraded from chemicals and salinity has changed from the new
irrigation practices. Farmers are underserved on the supply side and usually face a
monopoly channel on the demand side, often with an over dependence on intermediaries
who dont contribute to the value chain. Literacy rates are low and suicides are not
uncommon. Clearly, much remains to be done.

Internet Access and Use in Rural India


Rural access to the internet is limited but increasing very rapidly. Mission 2007 is an
ambitious program with many corporate partners and government support which plans to
install a village knowledge center - an internet kiosk - in all 600,000 rural India villages
by 2007. The program is lead by the MS Swaminathan Research Foundation and has
built considerable momentum over the last year. To our knowledge they have not yet
installed any kiosks. However, other programs are already underway, including the
successful Akshaya Project in the southwest Indian state of Kerala. Akshaya has trained
over half a million people in internet literacy and plans to blanket Kerala in internet cafs.

Another large program called e-Choupal was initiated by the India Tobacco Company
(ITC). It is the most successful program of its kind, last year winning the inaugural
World Business Award for its contributions towards the Millennium Development Goals.
e-Choupal currently reaches over 2.5 million farmers in 25,000 villages and plans to
reach 100,000 villages by 2010. The program generates US$150 million in revenues
annually and is profitable.

Figure 1: Farmers using e-Choupal

Figure 2: e-Choupal equipment

The e-Choupal business model is to install kiosks in villages that are run by a local host
farmer called a sanchalak. The sanchalak receives a commission on all sales through his
e-Choupal equipment. Farmers can sell their crops to ITC at market prices through the

sanchalaks and then take their crops to the nearest ITC to complete the transaction. This
market scheme bypasses the government-mandated trading marketplaces (mandis) and
significantly reduces middlemen fees.
Why have all these programs started in the last 5 years? Its a combination of many
factors falling computer prices, a realization that there is money to be made in rural
India, and recognition from both the government and the social sector that for rural India
to be competitive on a global level it must modernize.

Potential Market
While we believe that nearly all rural farmers will be able to benefit from the services and
information provided by our website, only a small fraction of them will actually be able
to use the website. Our users must be literate, computer literate, have internet access, and
extra time to spend online. In 2001 71% of rural males and 46% of rural females were
literate, but most only speak the local language. Internet literacy is on average very low,
but growing quickly - reported 10 to 15% per annum in Kerala. Internet access is also
growing quickly with projects like Akshaya. In the far future it is conceivable the most
farmers will be modernized and computer literate. In the near future we are limited to the
places that have installed computers and e-trained farmers. About 3% of Indians speak
English or about 21 million rural villages if the language spread is even. Since it
probably is skewed towards urban areas we conservatively discount this number by a
factor of 2, and again by 4 since all villagers arent near computers. Our estimates give
our website an initial market of between 1 and 3 million people, a number which is
growing rapidly. These people will likely be the most educated and influential farmers in
the farming communities.
Beyond farmers, agricultural university faculty and professionals in other agriculture
businesses can provide valuable insights and solution to farmers inquiries, while
connecting and sharing information with each other. Also companies marketing products
to farmers will want to use our website both to promote their product and to search for
new markets they might like to enter. The number of these users will likely be small
compared to the number of regular farmers, but these groups are perhaps more reachable
and will be some of the early adopters of the website.

Marketing
We must market to two different groups our target users and our target advertisers.

Marketing to Farmers
Online social networks gather momentum through word of mouth. When someone finds
a cool new website, he tells his friends, who tell their friends, and so on. This method has
the largest amount of persuasion and costs the website nothing. Its certainly our
preferred way of marketing, but we need to build an initial user base before the website
can take off.

We think the early adopters will be university faculty, professionals, and young farmers.
On the average young people are going to be more computer literate and more willing to
try new things and ideas. Its crucial for us to try our best to get at least one of these
groups on board early. For university faculty and professionals well appeal to them
directly they are already plugged into the internet and we believe university faculty in
particular will be helpful with user feedback and suggestions. To make the site attractive
to young farmers, we may try to appeal to their non-farming interest, but at first we will
try to acquire users without any additional features.

Strategic Partners
Strategic partners could be extremely useful in getting our message to the farmers. The
partners we seek are well respected and have the marketing channels to reach places we
cant.
The MS Swaminathan Research Foundation (MSSRF) is leading Mission 2007, the
largest internet push in rural India. RV Bhavani, of MSSRF, writes that a project of the
kind you have in mind would indeed be very useful and his organization is looking
forward to working with [our] team. We hope that our website can be promoted along
with the Mission 2007 kiosks.
Infosys Technologies Limited is a world leader in consulting and IT services. Company
representatives from both India and the US expressed great interest in our project and
they suggested we connect with the Infosys Foundation. They may be able to help us set
up servers in India and provide IT expertise.
Agricultural universities are a natural partner. They are operated in part to help farmers
and could benefit from using the website themselves. Ideally the universities will spread
the word about our website to their students, who as educated farmers can take that
information back to their local village. We are in contact with the Kerala Agricultural
University.

Advertising
Why would advertisers want to advertise to poor farmers? There are a few strong
reasons. Rural India is not quite as poor as it first appears. About half of the villagers do
not farm and some of these comprise a growing rural middle class. Rural India actually
has more disposable income than urban India, although it is spread over many more
people. Companies recognize the market potential and many are desperate to break in.
Only a few have been successful and they have relied on massive ground-based
advertising crusades visiting countless villages with demo vans. Examples of success are
Coca-Cola, Colgate, and Eveready Battery. But most companies cannot afford such an
expensive campaign, and they are left with TV advertisement, which have been fairly
successful, and internet advertisement.
Another reason advertisers are excited about rural India is that the farmers who are now
poor will someday probably be wealthier. The success of small test programs and larger

scale programs like e-Choupal demonstrate that it is possible to pull many farmers above
the poverty line and with increased wealth comes increased spending.
Finally there are already many companies who sell products to farmers. Fertilizers,
pesticides, biotechnology and other agricultural businesses will all be facing new
competition as Indian agriculture opens to world markets. They will want to continue to
advertise and build their business.
Our marketing strategy for advertisers will be to show them the win-win situation of
advertising with us. We expect that getting advertisers will be difficult at first until we
have shown the promise of high user growth, but after this we expect they will be much
easier to obtain although it will still take some work. We will produce advertising
brochures and compare our click rate/advertising dollar to other advertising options.

Potential Competition
Nobody else has implemented a system like ours, but there a number of organizations
who are well positioned to try to mimic our success. Our technology is fairly simple and
it would be easy for another group to duplicate our website.
e-Choupal already has the trust of millions of farmers and the resources on the ground to
heavily promote any new service. Current government and NGO farming websites carry
static information, but they could also add a forum feature without much trouble. How
can we prevent this?
Our main advantage is that we are the first mover. By the time the large players notice
we are succeeding, we will have built up a large user base and the information the
farmers have already generated. If another company starts a similar service, the farmer
will have a choice between a database and community with lots of information and one
with none. This is the model facebook.com has successfully used to keep its market
leading place. Another advantage we have is we are a small, flexible team with neutral
politics. We wont have any red tape or regulations; we should be able to change the
website at our whim. Finally, our particular advantage over e-Choupal is that we can
spread much more easily. e-Choupal is a ground based solution, and even in five years
will only cover one-sixth of India at best. We could cover potentially cover India in the
next five months.

Technology
Design Considerations and Implementation
Our website must be easy to use and provide quality information.

User Input
All the information in our website will be accessible by clicks. Users might have limited
experience with the keyboard so we cant rely on it as an input device. Furthermore, not
all internet access devices have keyboards, while most have some way to click like mice,

game controllers or touch screens. But users must have some method to enter text to get
the full value from our website. Keyboards are the typical input device, other
possibilities are a virtual keyboard or PDA-like input.

Navigation
Users will be able to navigate the forum using two methods, a structured hierarchy and an
advanced search using tags. The hierarchy begins with state geography and progresses
to type of crop and then to type of discussion. A sequence might be Kerala then
Coconuts then Insects which takes the user to a forum about coconut insect problems
in Kerala. While this hierarchy is easy to use, it does not allow the user to access all
forums, such as a general forum about insects in Kerala.

Tags
The tag feature will overcome this difficulty. Tags are increasing being used in
computing systems as an easy way to sort non-hierarchical data. Each forum is
associated with a number of words called tags. For instance, a single forum might have
the tags Kerala, Coconut and Insect. In the advanced search, a user can select which
tags to search over and will be presented with a list of all forums that match his tag
selection. If he searches Kerala, Insect he will get a list including the general forum
about insects in Kerala, and the insect forums for each crop type in Kerala.

Language
Farmers do not share a common language, and our market will be limited if the
information is only contained in a few languages. Luckily the Indian government is also
struggling with this problem and has invested heavily in machine-aided translation
research. AnglaHindi is an English to Hindi system being developed at the Indian
Institute of Technology (IIT) Kanpur by R.M.K Sinha and Ajai Jain. This system is
capable of generating understandable, but not necessarily grammatically correct Hindi.
Hindi is used by many more people in India than English. Other languages will become
translatable, and we will add that functionality as the technology improves. Initially we
will launch the website just in English.

Loading Times
Internet connection speeds in rural India are not necessarily very good. We must keep
the size of each page to a minimum and this will be accomplished by having few images
and a clean, minimalist look to the page. Large images will be presented in a smaller
form until the user clicks on it. Advertising is graphic heavy and we will have to
carefully consider how many and what kinds of ads to place on each page so that loading
times are not unpleasant. We must also use fast servers so we can deliver the content
quickly.

Registration
In order to build an online community people must be able to have an online identity.
Our model is primarily based on Amazon.com mixed with elements from the latest online
forum technology. Registration will allow the user to post in existing forums and create
new forums. All posts will be marked with the identity of the user who posted, and each

user will be able to quickly jump to his posts. In addition, we will be able to gather
statistics about registered users which should allow us to bring them more useful
information. Registration, however, will require a method to enter text, so it is important
that all content be available to those who do not register.

Usefulness Rank
When a user searches they should ideally be presented first with the best information.
Our model is once again Amazon.com users can read book reviews by other people
which are sorted based on how useful other people found them. After reading a review,
users can vote if it was useful or not. We will employ a similar scheme, coupled with the
freshness of the information. While book reviews do not go out of style within a few
weeks, information about crops might. We will develop a Usefulness Algorithm (UA)
that determines the value of the searched information.

Targeted Advertisements
Advertisements help connect buyers and sellers and they are most useful when each party
has potential interest in each other. On our site advertisements for fancy cars will not
make any money for the car company, for us, or be of any use to the farmers. We need to
carefully select our advertisers and figure out the best way to bring the right
advertisements to the right people. If a user searches for Kerala, Coconuts, Insects
then we could present ads about coconut farming products, distribution channels in
Kerala or insect spray. The advertisements must be visible, but not detract from the ease
of navigation or loading time. The user shouldnt have to spend time closing pop-up ads
or dealing with annoying flashing colors. We may try sponsored links which appear in
context and do not have a commercial feel to them. These could point to a companys
website or an online store where user could purchase products.

Positive Information
We will strive to display positive information information that is within the scope of the
website and is not offensive or rude. This is especially important since we expect many
users to be young farmers. During the registration process we may have a check box
which users must check if they agree to abide by our content rules.

Product Architecture
There are three levels of implementation for this project an internet connection level, a
website structure level, and low-level website implementation. At the highest level, our
product architecture is fairly simple.

Figure 3: High level architecture

Internet kiosks in India connect to our webpage which is hosted by a server located
somewhere in India.
The webpage is a front end for our large, interactive
knowledgebase.
We already have a barebones working prototype website. The interface is clean and
simple, and navigation is easy. An image from the front page follows.

Clicking on the map takes the user to the start of the structured forum hierarchy which
will allow him to access most forums with simple click navigation. The most popular
topics are listed in the upper right; the size of the text indicates how popular the forum is.
A sample forum topic is Demand of Bean Sprouts users who clicked on this link
would be taken directly to the forum about the demand of bean sprouts. The search bar
allows users to search using tags or via other methods.

Our final website will be a highly iterated version of our initial prototype. We are going
to keep our eyes and ears open and redesign the site until it meets the needs of the
farmers. Instead of trying to hit the final design correctly the first time, we are just trying
to get close enough that someone who knows the market better, like a university
professor or farmer, can make suggestions that steer us closer to a valuable design.

Implementation Strategy
We will begin by completing a prototype website. This website wont be perfect - it will
likely be far from it. However we will get it online quickly with a server in India and
begin testing it here and ask our contacts in India for user feedback. After we are
comfortable with our product and made necessary changes we will officially launch the
website and begin our marketing crusade. We expect user numbers to grow slowly at
first but increasingly rapidly. As more information is online the website becomes more
useful. And as more users use the website, they will tell more people about it and the
network should grow exponentially.
After we have a solid core of users we will push our marketing to advertisers. We plan to
be in discussions with potential advertisers by the official launch.

Timeline
Here is our project timeline.
prototype website working.

We are currently on track and have already a basic

Important dates are the prototype launch in late February 2006, our first user sometime
during the testing period in March 2006, and the official launch in early April of 2006.
After the website is online we plan to grow rapidly with a marketing campaign beginning
at the same time as the official launch in April. We have set a goal of 1000 registered
users by August 2006 and 100,000 users a little over a year later in November 2007.

Financial Projections
Our financial projections show we will attain profitability within one year of launch with
a cumulative loss of between $30,000 and $40,000 USD before then. After one year
profits will grow rapidly following the exponential growth of our user base.
First 1.5 years

$40,000

USD/month

$30,000

Profit
Revenue
Costs

$20,000

$10,000

$0

Nov-07

Oct-07

Sep-07

Jul-07

Aug-07

Jun-07

Apr-07

May-07

Mar-07

Feb-07

Jan-07

Nov-06

Dec-06

Oct-06

Sep-06

Aug-06

Jul-06

Jun-06

Apr-06

May-06

Mar-06

-$10,000

Date

Figure 4: Financial Projections

Revenue Model
We based our revenue model on a conservative online advertisement model. The key
parameters are
Number of page views / month
Number of ads / page
User click-through rate
Revenue / ad click

50
1
0.03
$0.10

Page views per month were calculated from the number of users per month and we
conservatively estimated that each user would use our website 4 times per month and
look at an average of 10 to 15 pages per visit. The click-through rate is the probability a
user will click on any given ad. We used a user click-though rate of 3% - slightly less
than the standard click through rate in the developed world, but a conservative estimate
because our ads will be targeted. Revenue per click in the developed world can vary
between a low of 5 cents to a high of 13 dollars for specific targeted ads like radiology
equipment. We estimate 10 cents per click, even with targeted ads, because we are not
yet sure how much advertisers are willing to pay to advertise to poor farmers.

Cost Model
Costs were calculated using models and information from facebook.com a somewhat
similar online community website with six million users. We took into account marketing
costs, server costs, bandwidth costs, and salaries as we expand. There is a distinct
difference in our first year and our second year. In the first year of operation we will
spend mostly on marketing. We can purchase a single server for a few thousand dollars
and because our user base is small bandwidth costs will be low. As the website grows in
the second year people will quickly dominate our costs.

Concluding Remarks
There are numerous challenges when working on a project that will be implemented in
another country. This project has exposed us to many of them, and we have been
challenged every step of the way. Our prototype website met our design goals, and our
financial models predict a successful business, but actual implementation will bring
countless new difficulties. We have learned so much already that it would be foolish for
us to stop, and we plan to push forward with a firm commitment to connecting rural
farmers in a socially and economically beneficial way.

Acknowledgements
We could not have gotten this far without the generous help of others. E 105 Professor
Ken Pickar and his teaching assistant Mary Ollenburger provided limitless valuable
suggestions. Caltech freshman Michael Huynh is leading our website development and
recently graduated Parth Venkat has provided business strategy advice. We also received
advice from many others in the United States including Siddharth Dasgupta, Sabir Bhatia,
Rama Menon, Adam DAngelo and others. In India weve had the pleasure of
communicating with Sujit Sinha and RV Bhavani also among others. Thanks to everyone
who has helped us!

References
What Works: ITCs E-Choupal and Profitable Rural Transformation
Case Study, World Resources Institute, Digital Divide, August 2003
Kerala Agricultural University
http://www.kau.edu/Default.htm
MS Swaminathan Research Foundation
http://www.mssrf.org/
Infosys Foundation
http://www.infosys.com/infosys_foundation/
ITCs e-Choupal
http://www.itcportal.com/ruraldevp_philosophy/echoupal.htm

India on Wikipedia
http://en.wikipedia.org/wiki/India
BusinessWeek: Why Advertisers are Sold on India, Dec 5, 2005
http://www.businessweek.com/bwdaily/dnflash/dec2005/nf2005122_5254_db053.htm?ca
mpaign_id=search
Bridging the Digital Divide, Grameen Sanchar Society, Kolkata
http://www.bridgingdigitaldivide.org/
AnglaBharti Machine Translation
http://www.cse.iitk.ac.in/users/langtech/anglabharti.htm
BBC News, Getting Connected in rural India, Oct 21, 2005
http://news.bbc.co.uk/1/hi/programmes/click_online/4364168.stm
The Financial Express Empowering Rural India, APJ Abdul Kalam, August 15, 2005
http://www.financialexpress.com/fe_full_story.php?content_id=99278
Indias second Green Revolution orphaning crops for poor
http://www.peopleandplanet.net/doc.php?id=2482
Business Line Does rural India get your brand message?, RV Rajan
http://www.thehindubusinessline.com/catalyst/2005/02/03/stories/2005020300100200.ht
m
Rural India getting richer? You bet! RV Rajan, June 02, 2005
http://www.rediff.com/money/2005/jun/02inter.htm
And many other articles