It is not just bottom of the pyramid, but in reality it’s a “Pyramid Parallax”. The two ends of the long tail separated by concentration of tens of trading desks and platforms that connect buy-sell markets, disconnecting the two ends. This is where the greatest disruptive opportunities exist across industries as we are witnessing today with tens if not hundreds of billions of dollars locked or lost in translation of inefficiencies from the upstream to downstream. The Shell Foundation on agriculture highlighted the concentration which is a brilliant illustration of concentration (H Grievink (2003), The Supply Chain ‘Bottleneck’ in Europe) of agriculture in Europe where 110 trading desks determine what 160 million consumers get and 3.2m farmers produce! It’s the same globally! The gap today globally is over $450 Billion in just agricultural inputs alone and this is just one end of the pyramid.
450M SMALLHOLDER FARMERS AND A $450 BILLION MARKET! IT’S ALL MOBILE, SENSORS, ANALYTICS AND MARKETPLACES.
So what are we attempting. Behavioral supplychain optimization of the “Pyramid Parallax”. There is much to be learnt for how people’s behaviors when aggregated into market signals connecting the Pyramid Parallax is disrupting concentration in industries as we have seen in SolarCity, Uber, Airbnb, etc The impact of the Pyramid Parallax is multiple levels of intermediation that just pass on the signals without real value addition, often between 1:6 to 1:10 end to end benefitting no single stakeholder in the ecosystem. A direct access platform as a single intermediary would collapse inefficiencies, create economies of scale and scope, transparency with end to end better value capture, resulting in new behaviors commoditized by technology.
So why is “Access” such as critical component of food security? Because demand side of 7B people today and slated to reach over 9B by 2050 by the UN estimate, 450m farmers who are increasingly not generating profits and have to rely on very expensive government subsidies, increasing water scarcities and climate change, increasing costs of supplychain, warehousing and distribution, combined with concentration of trading desks that focus on a few commodities that don’t connect the long tail of the “Pyramid Parallax” have all combined to create an incredible challenge of a broken ecosystem that is ripe for disruption.
These images I saw the last weekend on my way back from a meeting at the Ferry Building in San Francisco which reflects the real challenges of small farmers in North America, no different than the ones across the world.
Everyone from the USDA to the Bill Gates Foundation to Shell, KPMG and a whole host of companies, organizations, academia and others are attempting to solve this super critical challenge that is hurting what we do today, whether we live in North America or Europe, Asia, Africa or South America. The impact is the same. So is the model to disrupt and hack this incredibly important market signal, “Access”.
Agriculture Deputy Secretary Kathleen Merrigan, April 19, 2011. “As I talk to farmers across the country, regardless of what they produce or where, they all share one common challenge: how to best move product from the farm to the marketplace. This is especially crucial for small and midsize farmers who may not have enough capital to own their own trucks, their own refrigeration units, or their own warehouse space. They might not have the resources to develop sophisticated distribution routes, build effective marketing campaigns or network with regional buyers and customers.”
Our work is in optimization of platforms that enable direct trading via aggregating connecting adjacencies with a key pivot. Interplay of behavior-supplychain-capital- technology. Potential impact across the “Pyramid Parallax”
- Greater predictably form behaviors
- Enhanced efficiencies in supplychain management with optimized inventory, logistics and supplychain management
- Greater profit margins for both ends
- Higher quality
- Locavore food behaviors
BEHAVIOR IS THE NEW WEATHER CHANNEL!
DISRUPTING MEDIA, CROWDSOURCING SIGNALS INTO MARKETS.
ACCESS OF BEHAVIORS AS UNITS, DISRUPTING OWNERSHIP?
Conclusion: The fortune is at the edges of the “Pyramid Parallax”, Direct Access for all, inclusive by design and sustainably around triple bottom-line metrics.