The easiest way to explain Hello Tractor is to call it the Uber for tractors. As with most easily-digestible soundbites, however, that description doesn’t quite tell the whole story.
At its core, the Nigeria-based start-up is indeed very similar to the popular ridesharing app. Hello Tractor uses mobile technology to connect small-holder farmers with tractor owners who can provide needed services. Both sides benefit financially, as the farmer is able to decrease labor costs and increase production while the tractor owner earns extra money that can help pay off or maintain their machines.
The company’s founder and CEO, Jehiel Oliver, says that while the Uber for tractors analogy is easy to understand it s hardly sufficient.
“To be honest, we have to do a lot more than what Uber has to do, Oliver told the Alliance for Science. Uber is fantastic at connecting drivers with riders. But could you imagine if Uber operated in a market where there were no cars, the roads were kind of messed up, the riders often didn’t have the cash to pay so Uber had to organize financing, and even the car manufactures didn;t have the capability to fix the cars when they went down? These are all of the problems that we have to address in our markets.”
Oliver knows a thing or two about addressing problems. That’s what brought him to Nigeria in the first place.
The 35-year-old Cleveland native, who received his Master’s in agricultural economics and development at Cornell, left behind a career in investment banking to focus on boosting agricultural output and farmer incomes in Sub-Saharan Africa, where rapid urbanization and aging farm populations are creating an agricultural labor shortage.
For him, the solution to the continent’s vast swaths of uncultivated farmland and the looming global need to dramatically increase food production is obvious: tractors.
“Across Africa and really across the emerging markets, farmers often times under-cultivate because they simply don t have the power to work the land. With access to a tractor, that barrier is completely removed,” he said.
Although Africa is in dire need of tractors the continent has just eight tractors per 100 km2 of arable land, compared to the global average of 200 Oliver believes that the solution is not to introduce more tractors into the market but rather to get more out of the ones that are already there.
While Hello Tractor’s original business model focused on selling GPS-equipped smart tractors, Oliver and his team quickly discovered that getting in to the tractor manufacturing business was a nightmare due to the costs and difficulties of managing a small parts supply change.
“Like most early-stage companies, you start in one direction, learn about the market and then you have to pivot to go in the right direction, he said.
“We started with our own tractor with the technology on top of it. What we realized is that there are really smart people already selling tractors. That physical tractor is as good as it s going to be, and certainly a small company like Hello Tractor isn t going to build a better one.”
With the company’s technology already a hit amongst both tractor owners and small-holder farmers, Hello Tractor decided to stop trying to sell machines and instead focus solely on its monitoring devices.
“The way Hello Tractor functions is actually quite simple. You buy a tractor, you put our monitoring device on your tractor and you download our apps. Our apps allow you to monitor your tractor and connect you to farmers in need of tractor services in the vicinity of your machine,” he explained.
By sending their tractors out on various jobs and being able to monitor the performance and output of each individual machine through Hello Tractor’s innovative software and analytics, tractor owners are able to increase their return on investment while collecting valuable in-depth data on what farmers are planting and where.
That focus on tractors as a business is something Oliver says benefits both sides.
“Each individual tractor operating on the Hello Tractor platform services roughly 250 unique farmers every year, and these farmers have anywhere from one to two hectares of land on average, so you re looking at 250 to 500 hectares of area serviced per tractor per year,” he said. “That’s a lot of revenue being generated and a lot of costs being saved at the farmer level.”
See Jehiel Oliver’s September 2017 presentation at Cornell University. Story continues below.
Owning a tractor may not be economically feasible for these small-holders, but they can quickly gain access to one via their mobile phones and reap the benefits of mechanization. According to Oliver, farmers who order tractor services through Hello Tractor pay about $75 for land prep per hectare, which he says is about half the price of manual labor.
Oliver’s success with Hello Tractor has garnered him a number of accolades, including an appointment under the Obama administration to the President s Advisory Council on Doing Business in Africa (a position he recently resigned in the wake of President Trump’s response to Charlottesville).
Not content to rest on his laurels, Oliver has big plans for Hello Tractor. He positively lights up when discussing how the platform might one day incorporate super exciting stuff like augmented reality or eliminate the need for an app altogether as its monitoring devices become part of the so-called internet of things. And he s certainly not content to simply see his business grow in Nigeria.
“In five years’ time, we want Hello Tractor to be on the vast majority of tractors being sold into markets where small-holder farming is the dominant way of farming,” he said. “If we can do that, then it means we ve bridged the gap between small-holder famers who can t afford to own their tractors and tractor owners who would love to serve those farmers but aren’t being connected. If we can be that bridge to connect the two across the developing world, then we’ll be successful and I can pack up and do something else.”