Economy of Community Part 2: An Interview with Farmigo CEO, Benzi Ronen
A couple posts back, we introduced you to a new concept which underlies our vision and mission. For those who missed it, we are set out to bring the power back to the people and build up local, healthy food systems through the “Economies of Community”. Helping small farms promote the community supported agriculture (CSA) model and providing a platform for customers to share information are some of the ways we enable individuals to join forces and create a different future. This week, we were lucky enough to sit down with Benzi Ronen, CEO and Founder of Farmigo, and hear from him how merging internet networking platforms with back to the earth organic farming can inspire a food revolution.
What would you say is the number one factor that differentiates the Economies of Community from the traditional notion of the Economies of Scale?
Economies of Scale is built on the premise that the more you can centralize, the better off the “system” becomes. Economies of Community is the complete opposite; the more you can decentralize and empower individuals, the better off everyone is.
From an economic perspective, economies of scale is based on a very high fixed cost for the system and a low variable cost per unit. The fixed costs are then shared by the large number of units being manufactured which is why the more you produce, the cheaper each unit becomes. Economies of Community has low fixed cost and high variable costs. This is why it is easy to start new communities since there is a low cost to get started. Each community sources produce directly from local producers which removes the need for warehouses and retail stores resulting is cost savings.
It is important to note that there are “side effects” resulting from a centralized system which are often not taken into account when comparing the two systems. The centralized system relies on huge farms that use chemical fertilizers and pesticides which have a deteriorating effect on our environment. Food travels thousands of miles before it reaches its target retail store which reduces its freshness by the time it reaches the consumer. The environmental costs and lower quality food which raise our health care costs are usually not taken into account when assessing the efficiency of a centralized food system.
How did you come up with the concept?
I have been part of the Internet revolution which has been disrupting almost every industry. The Internet is the ultimate equalizer using the following techniques:
- **collapse a supply chain (disintermediation)
- **enable peer to peer sharing (collaborative consumption)
- **source from the community (crowdsourcing)
The more I learned about our food system it became clear that we need a dramatically different way to source our food and that the Internet could facilitate this change.
Farmigo has built Internet software that enables communities across the country to create their own decentralized food system and source directly from local farms. We stand on the shoulders of giants since we could never have done this without learning from farmers who have pioneered selling direct to consumers for a decade as well as other Internet businesses who have been building similar systems in their respective industries.
Are there other examples of industries or brands that you consider part of the Economy of Community?
While Farmigo is one of the first Internet companies that is enabling the “Economy of Community” to disrupt one of the most traditional industries – food, I think we will see many more companies tapping into the power of the community to disrupt other industries. Another opportunity is aggregating neighborhoods via the Internet to provide them with group buying discounts.
Are you looking to reverse the negative effects of the industrialized food system entirely? Is that conceivable? What is your long term vision of Farmigo, both in terms of its growth as a brand and of its effects on agriculture?
By enabling organic farms to sell direct and getting higher margins than selling wholesale, we shift the economics in favor of sustainable agriculture. Consumers like buying direct from harvest and from the grower and value the authenticity and stories of the farms. Farmigo’s role is to elevate the farm brands and give them a platform to build richer relationships direct with the consumer.












