Experienced entrepreneur and investor Nick Evdokimov sat down with part of the team from Pavo, a blockchain and Internet of Things startup that’s bringing fresh solutions to the agriculture industry. Its platform is meant to enable farmers to sell futures on their products. With Pavo they can sell grown crops at their earliest stage.
Founders Erhan Cakmak and Allan Young lead an established business that builds monitoring systems for tree nut growers in the European market. After the incorporation of IoT technology into their services, Pavo saw blockchain as the logical next step towards improving the agriculture industry.
In Allan’s own words, “We help farmers improve their crops, get more out of their crops, higher quality crops, better quantity, and then we help them bring it to market in a way that helps them survive, but also helps the end customer ensure that they’re buying what’s being advertised. Is it truly organic, is it truly natural? All of that data is stored in a blockchain.”
The platform uses blockchain technology to store data gathered from IoT monitored crops. Here, interested parties can use Pavo’s ERC-20 token to participate in the network and make financial decisions based on accurate information about any determined crop. This transparent environment is what allows farmers to sell futures on their production. At the same time, it keeps standards high and optimizes quality control — a common problem in the sale of futures, as Nick explains.
Nick observed that, “Because the investor buys crops at an early stage, he saves a significant amount of money. On the other hand, the farmer, receiving information about the size of demand, can adjust his own purchases, and adjust his own development. It is a very clear, and transparent process.” Furthermore, he believes the price for the platform’s pavocoin will increase by approximately eight times its initial value.
For a blockchain investment expert like Nick, it’s not just Pavo’s proposal to farmers that has to make sense, but also the project’s underlying economics. Understandably, this was his first question when talking to Allan and Erhan.
(N) Please tell us about the economics of the project.
(A) Sure. The economics of our company are such that our cost of acquisition with farmers is not very high. Our hardware is sourced from off the shelf components and then what we’ve built is a very very robust software platform that manages the hardware and helps the farmers make better decisions. Also, our payback to get even is not very long and then they keep using us.
We see this as a land grab, which is one of the main reasons we’re doing an ICO. It’s so we can get the resources that we need to go into the farms and say ‘Hey, we’ll give you this hardware in a highly subsidized manner, and then you start paying in small amounts every month.’ But once you’re in the farm, once you’re in the dirt, once you’re in the greenhouse, you can’t be replaced, right? So I’m very confident that we have a business model that works and will become profitable in a relatively short amount of time.
(N) Thank you so much. Could you tell us more about how the token works, the economic model of the token?
(A) Yeah, about the token economy. We started by focusing on high value crops. For example, our product is in a lot of farms monitoring a major proportion of the world’s hazelnut supplies, almond supplies, and walnut supplies. When our farmer customers use our platform they need to use pavocoin to buy usage and access to the software every month. So there’s a constant demand there. Then there are other customers in our ecosystem: suppliers, distributors, wholesalers, and even retailers who would also use our tokens.
The end user, maybe a family that’s purchasing a produce of agriculture, will not pay to use our software. But everyone else will pay for the access to the data. In order to verify provenance, in order to verify the quality, in order to verify what’s gone into the growing of a crop — access-wise, many people will need to use the token.
But then, according to the roadmap, our next development would be to build a marketplace for suppliers. Maybe it’s fertilizers, farmer equipment, anything. Suppliers put their equipment in the marketplace for farmers, and the farmers can use our tokens to buy it. The marketplace will also be open to crops as well.
Even further beyond that, this is what excites me most. People talk about protocol-level tokens in terms of payment systems and in terms of smart contracts. But we’re, in a way, a protocol-level token for the agriculture industry, because when we have data in real time at the farm, we can then turn around and build a smart contract marketplace. We’re very similar to what you seen in Chicago Mercantile Exchange.
When you apply this to agriculture and crops, it makes total sense, but then you can apply this to other types of commodities as well. And if that’s the case, we’re more than just agriculture. Although, agriculture is big enough, it’s a gigantic industry. Much of the world’s population is still employed in agriculture.
(N) Thanks Allan! We also have your co-founder with us. Welcome, Erhan! Tell us about the team at Pavo.
(E) Thank you for having us today, Nick, you’ve been a great partner to us. One of the most exciting things for me is to talk about the team. I love to build high performance teams. In this case, it was important to add people that would help us build the foundation for our IoT blockchain platform and launch our token to support the agriculture industry.
So what did we need? We needed someone who understands how networks function. Ari Gorman is a world class CTO and that built one of the largest networks in the US. He’s co-founded Novatel and has worked with the Verizons and AT&Ts of this world. He’s able to build software.
Next we have Atakan Cetinstoy who’s worked in product management all his life. He not only understands recommendation engines but also knows how to build machine learning and AI. He was actually part of the original iTunes team at Apple. Former FedEx, former Yahoo, all great brands.
Then we have David Howard on corporate strategy. He was recently at Salesforce and had been with me in an IoT company. We needed someone who could understand IoT as well as customer relationship management software with an analytical background.
We also have Dave Dabbah, who is our chief marketing officer. He used to work for IBM and then worked with New Relic. So he understands how to build such brands and how to help us in the market.
Then we have the part of the team that works around app development. We’re about to launch our app in the Play Store and then the Apple Store afterwards. You need app developers to understand how to make it easy for farmers within the application itself. Things are complex and farmers have their day-to-day life, they need everything on the palm of their hand. We needed excellent web-developers who understand what to do on the web but also how to present it right to the user.
A good pedigree of the team is very important. One thing I learned at GE, where I grew up professionally, is that you need to select the right team. Not just the ones who’ve worked with you for over the years, you need to mix them up.
(N) Tell us about the timeline of the project in terms of the ICO. When do the sale and pre-sale begin and when do they end.
(E) Sure. The private sale has already started. We’re talking to family offices across the globe. As you already know, we’re a Canton of Zug company and benefit from the great framework that Switzerland provides for token buyers to have a secure environment to buy their tokens.
Our presale has started on our ICO site already. Buyers can go buy tokens on our public site. The platform is highly functional. Presale will last until August 6, and the ICO is planned for August, late summer. We believe we’ll be highly successful and have the right funds available to continue to develop our project.
(N) Please tell us about the tactical plans of the project and what prospects you see for the next year in its development.
(E) Tactics always have to do with the strategy and the strategy has to be right. We believe our strategy is to tackle the problem from the agricultural side. The farmer is the value creator so we started the coin with them.
We’ve already deployed to very large farms in California, but we are also adding smaller farms. If the foundation is correct, our goal is to have about 1,500 farms installed within 12 to 18 months that’ll drive the token economy. It will all depend on how fast we adapt. We already have 3 major farms in California that we will add in the summer prior to our ICO, and we’re adding about 10 more in Europe. Our team is very busy.
(N) Thank you so much. It has been really interesting to hear your insights and to see your passion for Pavo. Thank you for coming!
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