Most startups open their doors desperate for customers.
But after the 2013 I-Corps™ cohort in Washington, DC, Nicholas Brozovic, then a professor of agricultural economics at the University of Illinois, and graduate student Richael Young, found themselves with the opposite dilemma: During their I-Corps™ legwork they had amassed plenty of interested customers before ever hanging out a shingle.
And all of this seemed worlds away from where they started just over a year before.
Brozovic, an economist specializing in water resource economics who is now at the University of Nebraska, had been studying the potential for trading groundwater permits among farmers, essentially building a market around the highly-regulated use of groundwater for irrigation between farmers in a geographic region.
After extensive research funded by the National Science Foundation and the U.S. Department of Agriculture, Brozovic and Young realized such a trading market could work in practice.
“It would give farmers more money and at the same time preserve water resources,” Brozovic said. “Everyone wins, and yet no one was doing it.”
“In Nebraska, water is a limited resource, and some farmers have more permits than they need and others not enough. These permits can be monetized and exchanged,” Young said. But since farmers don’t have the time to navigate the bureaucracy required for such transactions, Brozovic and Young created an electronic clearinghouse that covered all rules and provided automated regulatory compliance, enabling farmers to buy and sell permits on a centralized hub.
“It’s basically eHarmony for natural resources,” Young said, with a proprietary algorithm that matches buyers and sellers.
The pair had set up a pilot program, but realized they didn’t have the business or institutional experience to expand further.
And then fate took a turn. In August, 2012, Brozovic received an email from an NSF project manager soliciting participants for next year’s I-Corps™ cohort. Although Brozovic had heard that the I-Corps™ process “could be brutalizing,” both he and Young received encouragement and support from the university. They put the requisite team together, applied, were accepted, and left for Washington, DC, in January, 2013.
The team was not disappointed with the rigor they encountered. As the entrepreneurial lead, most of the burden of meeting I-Corp™’s requirement of 100 new customer contacts fell on Young.
“The faculty was not shy about questioning you and your statements. You had to have evidence straight from customers’ mouths about value propositions,” she said. To find these leads, Young hit the road and went back to the Midwest, going farm to farm to gather feedback.
“Farmers can be pretty hard to reach. I had to spend a lot of time in person in western Nebraska, Kansas, and Texas. I met farmers wherever they would meet me: in their fields, at local bars. Sometimes there was no cell service, no street signs. I had to follow directions using landmarks. Some roads weren’t passable in the rental car. But in the end it was great to get out of the classroom and get in front of potential customers.”
“There’s an enormous focus in I-Corps™ on getting out to talk to people and to listen and understand their stated problems rather than going out and talking about all the great work you’ve done and what you can do,” Brozovic said.
“At the end of I-Corps™, we emerged from the rubble and the process led us to identify a value proposition and business model we could not have done before,” he said. “It made us realize that we were looking at the issue as a research project, and that customers would see it differently. It helped us build trust with our customers.”
With some additional financial help from the State of Illinois, Mammoth Trading was born, and not a moment too soon. Coming out of I-Corps™, the team found they had plenty of customers ready to sign up. “We had to rush to incorporate. We had customers before an actual corporation,” said Young, who is now President of the company.
In the last business cycle, Mammoth Trading had a dozen farmers trading through their site. Future plans include expanding geographically and even expanding to different resource markets.
In the end, Brozovic and Young say the I-Corps™ crucible was invaluable in getting their company off the ground.
“The teaching faculty were very, very hard on people, but there was a payoff to that,” Brozovic said. “They pushed everyone out of their comfort zone and did so very deliberately. They did it from start to finish, and the result was very uplifting, not easy but positive.”
“The whole time I was intimidated by the teaching faculty,” Young said. “I was a grad student and had been good at school for a long time, but I felt I was failing at everything. But afterwards they were all very supportive and kind, and I realized they were doing this for our benefit. In the end, it was transformative.”