Organic products are now available in nearly 20,000 natural food stores and nearly 3 out of 4 conventional grocery stores, according to the USDA. So how can food manufacturers go about finding the ingredients they need at the price they can afford? Well, before Kellee James launched Mercaris–an electronic platform for trading organic goods–it required a lot of leg work, word of mouth and cold calling. Processors had to search through a multitude of directories and databases of certified food associations, an effort which may or may not result in the best prices possible.
[RELATED: Mercaris Gains Ground with Organic Goods (Part 1)]
“People have built successful organic businesses without Mercaris,†says James, 39, a Crain’s Chicago Business Magazine ‘40 Under 40‘ rising leader. “Our job is to show them how much more efficient and profitable they can be by tapping into our services.â€
In Part 2 of BlackEnterprise.com‘s interview with James, we learn more about the organic food industry, her mentors, and how she brought this exceptional product to the market.
BlackEnterprise.com: Why is Mercaris important? What need does it fill that wasn’t filled before?
James: The growth of the organic and the non-GMO food sector is a result of consumer demand for more sustainably grown food and information about that food. As organizations, from farms to food companies, adjust to meet that demand; we noted a lack of information, transparency and support along the supply chain. We’re helping to address that need. Overall, Mercaris helps to increase the efficiency of that supply chain, which should ultimately benefit everyone ‘from farm to fork’.
Explain how the technology behind Mercaris works.
Customers access either their trading account or market reports via a password protected portal on our website. We are a technology-enabled business, so all of our technology is designed to support price discovery and to make data accessible to our customer base.
Who will benefit the most from Mercaris and how?
Although ultimately consumers will benefit from having a wider variety of food choices, our own customers are generally closer to the base of the supply chain; growers/producers, mills, food processors, and food companies, in addition to organizations that support growers like agricultural banks, coops, or associations.
What challenges have you faced in growing your product and bringing it to the market?
Overall, the challenge is to be able to do many
things well, at the same time. That meant building a great product, acquiring customers, and raising venture capital nearly simultaneously. Any one of those things is a business challenge, but conducting all three with a very small team meant some long hours and epic multi-tasking. We still challenge ourselves every day to get better product-market fit, and to keep learning from our customers.How will you make money from the platform?
On the market data side, we charge a subscription fee that varies based on the amount and type of information the customer needs to access. We charge a per bushel transaction fee based on the amount traded on our platform.
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What criteria did you use to find the right technical talent?
Chris Duesing, my co-founder and CTO, is leading all of the coding in-house. Chris is a serial entrepreneur and he and I worked together for five years at another startup. Our skill sets and values really complement each other.  He has about 15 years of experience in software development, has built several trading platforms, and has worked on terabyte scale data reporting, streaming order processing and other projects that are fundamental to the work we’re doing now.
Have you participated in any incubators, accelerators, hack-a-thons, competitions or other organizations that helped you with building your business plan, technology, or capital?
We have taken advantage of several invaluable programs targeted to startups. I’m a Focus Fellow with Digital Undivided, a program that supports black women founders, and Chris and I went through Excelerate Labs (now Techstars Chicago) Accelerator program. We’ve also entered and won several great pitch competitions: PowermovesNola, a pitch competition and network for minority entrepreneurs; the InvestMaryland Challenge, and the StartRight Women’s Pitch competition. Together we’ve won $130K in pitch competition awards.
How have the cities that you’ve worked in supported your endeavors?
We have offices in Chicago and in Silver Spring, MD. Both places have been incredibly supportive–Both cities recognize that fostering entrepreneurship is a very healthy thing for the local economy. In Chicago, we’ve been able to locate our offices at 1871, which has done a great job of building a startup ecosystem by offering the type of office space, with the community and flexibility that a growing startup needs.
Has the tech community been supportive? In what ways have they provided mentorship, advice, and practical assistance?
I have many mentors in tech, each with different experiences that have been invaluable. I’ll highlight two here: Kathryn Finney, the founder of Digital Undivided, has done great work in supporting and raising the profile of black women founders. Steve Farsht, formerly a managing director of Techstars Chicago, is a serial entrepreneur and gives realistic, practical advice. We also have a great board with Sanjeev Krishnan, of the Agriculture Investment Fund ‘Seed 2 Growth,’ Kirsten Tobey, co-founder of Revolution Foods, and Will Babler, principal of AttenBabler Commodity Risk Management.
What are your plans/goals moving forward?
Our plan is to build on our early success and continue to grow Mercaris. That means launching new data products, new analytics tools, and covering additional agricultural commodities. It means continued outreach to potential customers who are part of the food supply chain. Also, on a personal note, it means continuing to provide a good example that a black woman entrepreneur can be successful in a non-traditional space.