The Startup Whose Name Nobody Can Pronounce

So I’ve been building a startup called Ohna. (As more and more people ask me how to pronounce it, I’m beginning to think the name is not ideal. But because everyone else choosing their business name realised this before me, the SEO potential is great haha).

Ohna started during covid when I ended up quarantined at my parents house. As everyone remembers, there were general shortages of food and supplies during this period as our supply chains struggled to manage the impact of a pandemic. Then a little after the pandemic began to ease, flooding and a cold front in Australia’s growing regions caused shortages of fresh food.

I started doing research into our food supply chains, both in Australia and globally. What I found concerned me. A huge proportion of global food is grown in a relatively small number of regions. In Australia, the long train lines that are used to transport our food are a particular vulnerability. Our rural and remote areas often experience food shortages because of flooding or other disruption on those train lines. Our cities are mostly insulated from this effect, so the majority of the population has never noticed, but when an unexpected event like covid or a major weather event hits, it is possible for our supply chains to break down.

Being in Australia, living through simultaneous droughts and floods and events like the Black Summer, we’ve all lived out the effects of climate change. It’s possible to argue about what to do about it, but it’s pretty clear that we are seeing increasing rates of unpredictable catastrophic weather events. And having seen the pandemic and the war in Ukraine, it’s also clear that our country’s stability can be affected by external events. I worry that our food supply chains aren’t resilient enough to handle these types of simultaneous shocks.

This triggered a bit of an obsession with food systems - how they started, how they’ve evolved, where they are now, and where they should be in future. Our agricultural industry is currently consolidating into a few big growers in a few big growing regions. There are good reasons for this, primarily leveraging economies of scale. But we sacrifice resilience. I believe a truly resilient food system should be a much more involved network of smaller growers, and that as robotics and renewable energy technology progresses, it will be possible to grow and transport food at much lower marginal costs than ever before, reducing the need for these huge economies of scale to generate affordable fresh produce.

In a world where transport has near-zero marginal cost because things are moved by autonomous vehicles running on renewable energy sources, and plants can be tended by robots, then I don’t believe we’ll actually require supermarkets. At least not in their current form. When this time comes, it will be valuable to be the point of connection between a network of growers and consumers.

To this end, I started visiting local farmers markets in the Canberra area (I was released from quarantine at that point and back home in the city) to get a sense for the local growers. I realised that the food they were selling was both much better quality and much cheaper than the fresh food at supermarkets. Not only did I think it was important, but there was arbitrage in connecting these growers directly to a wider range of consumers.

I started building an app to be this point of connection. After a long time building the MVP on my own, I recruited a small team of developers. I had no money to pay them, but it turns out that talented student developers in Australia are starved of interesting projects to work on. Many more people than I expected wanted to join the journey, to the point where I (very unexpectedly) found myself running interviews and having to turn some people away. I am incredibly grateful to everyone who expressed their interest, and even more so to the crack team who ended up volunteering their time to work with me.

Around this time, I also built up a network of 17 local farmers, and started running fresh food deliveries ordered through the app. Initially I ran this as a click and collect at the local farmers market, and then began proper deliveries to ANU students. We received some media attention and a government grant for our work, and I started paying the dev team for their time and renting out a van for deliveries (at this point the number of orders was beginning to exceed the space I had in my car).

While all this was happening, the Australian government began an inquiry into the supermarket duopoly over price gouging. This validated what I had noticed about supermarket prices being so much higher than buying direct from local farmers. It also meant that Coles and Woolworths quickly dropped their prices following widespread consumer outrage. The arbitrage was gone.

I’m now thinking through what to do from here. I still believe completely in the vision of a more distributed, resilient future food system. However, I realise that the tech that will enable the economics of that food system isn’t yet ready, and might not be for another 10 years. Without that tech, I’ve learnt through many visits to local and wholesale farmers throughout Canberra and NSW that economies of scale do make a huge difference to the efficiency with which food can be grown. We were offered a six figure contract for food delivery to an institution, but making the economics on that work would now require buying from wholesalers and marking up the price; essentially becoming one of the distributors I set out to disrupt.

The conclusion I’ve come to is that, until the technology change I based this whole theory on actually occurs, I can’t force the economics of an alternative food system to work. This is a valuable lesson in building a product based on the current technological wave rather than going into a market too early. It is also a painful one to learn after 2+ years; but I’ve learnt so much in this process that I don’t regret any of it.

We’re currently pivoting to take the logistics software we were using for packing internally and productise it into something we could sell to other distributors. We’ll see how things progress!