Cross-Industry Agriculture Pitfall Guide: Common Risks and How to Deal with Them

In the second decade of the new century, cross-industry agriculture set off a wave of enthusiasm. Looking at how it has developed over the past few years, some cross-industry entrepreneurs have found themselves trapped in a strange logical loop: the biggest features of agriculture are that it requires relatively large capital investment and has a relatively long product growth cycle, both measured in years. Cross-industry capital, however, mostly comes from the internet industry, which is used to making quick money, and its requirements for the commercial cycle within a profit model are often measured in months or even days. At the same time, the huge cross-industry gap means entrepreneurs have to pay relatively high learning costs and time costs. As a result, patience for "trial and error" has become a bottleneck that is hard to break through.

Liu Da, founder of the "Egu" rice brand and a cross-industry agricultural entrepreneur known in his circles as "Dage," went into agriculture less than five years ago, built a rice product into a roaring success, and then, relying on the appeal of that rice, gathered more than 10,000 internet distributors in just 48 days. Now he has shifted his focus to building a community platform. How did he get around and break through the pitfalls of cross-industry agriculture?

You Must Endure Loneliness and Have the Courage to Refuse Capital

"My first takeaway is to hold firm, to be patient, to endure loneliness, and when it is time to go, never be in a rush to run. This point is especially important," Dage said. In his view, cross-industry agriculture must necessarily follow this path: first settle down and make your core product solid, then use the appeal of the product to gather a group of people, and finally study the characteristics of that group to innovate a platform, so that the group, like seeds, can continuously take root, grow, bloom, and bear fruit on the platform. Only at that point can one basically be considered to have completed a new model of agricultural development for the internet age. "These three big steps cannot be skipped, and their order cannot be scrambled or reversed."

"This first step of making the product is the most critical, and many people may fail at this stage." People unfamiliar with agriculture must learn during this process and form their own core value. And this process is bound to be very long, which is determined by the nature of agriculture, so one must hold firm.

"During the stage of brewing and building the product, you must not think about financing, because once capital gets involved, it will speak up and will take charge, and the rapid profit-seeking nature of capital is very likely to greatly interfere with or even damage the building of the core product," Dage said. In fact, during the years he was involved in agriculture, capital repeatedly showed interest in him, but he always politely declined on the grounds that things were not yet mature. The tens of millions of yuan already invested all came out of his own pocket. "Focus and devotion are very important; you cannot let other forces that do not understand agriculture dictate your entrepreneurial thinking. Compared with other industries, there are far fewer chances for trial and error in agriculture. Making products in the manner of spiritual practice is the proper path of taking root in the fields." he said.

As the rice became recognized by more people, friends all felt that Dage could make money from it. But unexpectedly, he instead increased investment and put many free products into the marketing platform, and at one point even briefly faced a tight cash flow situation. "If you only think about earning back tomorrow the money you put in today, then such a person is not suited to doing agriculture," he said.

Have an Open Mind and Operate by Optimizing People's Lifestyle

In his view, catering to product quality can attract people, but only catering to the building of a lifestyle can retain them. Almost all products on the market now say they are green, environmentally friendly, and safe. Dage's experience is: not only must you say this, you must also live your life this way; not only must you live this way yourself, you must also gather a group of friends to live this way together.

So Dage first used his own green lifestyle to influence others, and then used the lifestyle experts he gathered to influence and bring together more like-minded people. "Our rice grows in the finest air and soil, is irrigated with first-run mountain spring water, uses original ecological farming methods, and passes testing under the EU's most stringent standards, meeting the quality-of-life requirements of me and my friends. This kind of transmission then carries a human touch and expands to the level of constructing a modern lifestyle."

"Rice is our core, but we absolutely cannot have only rice. So many supporters should be able to give us greater confidence to build a broader lifestyle platform and, relying on the power of the internet, let more people find a higher-quality life with us." Dage believes that when cross-industry agriculture reaches the platform level, one must have an open mind and operate from the level of optimizing people's lifestyles. Only this is the cultural realm of the future agricultural internet.

"The core of the internet is sharing, and its foundation is trust. When applied to agricultural products, this is even more important. So if sharing and trust are injected into the brand at the product stage, things will go more smoothly at the platform stage." In Dage's company, almost every employee is a person who loves to share, and this is also a kind of corporate culture he values greatly.

Cross-Industry Agriculture Is Not "Internet Plus," It Is "Plus Internet"

"For cross-industry agriculture, it is not 'Internet Plus,' but 'Plus Internet.' That is, you must first use agricultural thinking to do the things of the agricultural stage well, and then use internet thinking to build an innovative platform. In other words, you must first clench your fist before punching out, and only then will you have power. If you open your hand first and strike with greater force, the more likely you are to break your fingers," Dage said.

When choosing products, he has one core idea: not every agricultural product is suitable for internet marketing. "For small and medium-sized cross-industry agricultural entrepreneurs, choosing the product most suitable for internet marketing and focusing on building it is probably the decisive factor in whether one succeeds. This is the one of the undertaking; only with this one does adding zeros afterward have meaning."

Dage summarized his criteria for choosing products as the "three highs": high quality, high frequency, and high profit. Good quality and high profit need no elaboration. Being able to make the largest possible number of consumers repeatedly consume at high frequency is also very important. Over the past few years, Dage considered many agricultural products, but in the end chose only this rice. On one hand, because this variety is not only exclusive but also excellent in taste and quality, with very high cost performance; on the other hand, whether in the south or the north, rice has the highest consumption frequency.

Liu Da believes he has already reached what he understands as the ultimate stage of the agricultural internet, and he is preparing to move as quickly as possible from a solo dance into a whole new era of dancing with capital.