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  • Writer's pictureMatthias Hilpert

Erez Galonska - Founder & CEO, Infarm

Founded in 2013 by Osnat Michaeli and the brothers Erez and Guy Galonska, Infarm combines highly efficient vertical farms with IoT technologies and machine learning, to offer an alternative food system that is resilient, transparent, and affordable. The company distributes its smart modular farms throughout the urban environment to grow fresh produce for the city’s inhabitants. Infarm has raised more than $600 million and employs more than 1.000 people.

On sales strategy:

I’m not a great believer in reaching out. We work 100% from inbound leads. This works because our product itself is so phenomenal--so outstanding. You can literally taste it! And when you see our farms, you feel like “Wow. The future is right here.” So for us, the challenge isn’t generating leads, it’s converting them into paying customers.

After we passed the very early stage, I felt that it wasn’t appropriate anymore for me as a founder to continue to sell in the day-to-day business. I needed something more scalable: having a professional sales team drive all aspects of the sales process, like setting up contracts with retailers, working with legal and so on, felt like a better recipe for long-term growth..

Our strategy is to enter into long-term relationships with retailers. So at first, we only sell about half of what we could potentially offer, just to get a foot in the door. Then we expand the relationship from there. This strategy allows us to grow much faster.

You need to understand what you are selling beyond your actual product. If your product is good, it will speak for itself--our basil simply tastes the best! But also putting the effort into building and sharing your company's story and values, and painting the big picture of what you want to achieve, will help you stand out in the larger market. People really are buying into the dream.

On the business model:

We decided early on that it wouldn't be a great idea to sell our farms. If we were to go that route, establishing a production and sales channel would be a big investment. We'd have to invite a lot of people into the process to make a decision of that magnitude, potentially involving our board of directors. We were afraid that our focus would no longer be on growing high-quality, fresh and tasty plants. So we said: Let’s forget about the farms as a product and focus on selling the plants. We felt that that is what all of our clients want - the plants themselves, not the farms. This decision alone cut 3 months off the sales cycle.

On the sales process:

In the early days, our sales cycle took 6 to 9 months. Once we had defined and optimized the building blocks of our process, we were able to cut the time from first contact to closure down to 3 months.

Our sales process has 4 stages:

  1. Tasting event. We organize a tasting event for our prospective clients to experience our products. We also invite employees from different parts of the company to the event: buyers, software engineers, create an amazing tasting experience for our buyers. You might call this approach: "event sales".

  • Commercial stage. This is a meeting where we present our offering and ask our customers what they want: Which plants from our catalogue? How many? When do they need them to be in the stores? With this information, we can configure our farms based on demand and coordinate the distribution of the plants. It’s a very straightforward step because we have everything ready: our unit economics, the logistics, and studies on quality of our produce, if the customer needs this information as well.

  • Legal stage. In addition to prospective buyers, the attorneys involved in the sales process typically haven’t experienced our product. In order to pass this most difficult part of the process, we started to consider the lawyers as our clients, too. We’ve created an onboarding process specifically for them, during which we present our overarching vision in addition to our contract model. And it works--lawyers have become our fans!

  • Implementation stage. After the deal is signed, our operational team sets to work to get the plants ready for the agreed-upon harvest dates.

Emotions and emotional intelligence are a big part of sales. The process itself is important but it's not the fundamental part - to sell is to build relationships, establish a connection and to capture the imagination. The sale is the effect; not the cause. People need to get excited in order to buy.

On cost of sales:

Our cost of sales is negligible in view of the long-term relationships we aim to build with our retail customers. Assuming that these relationships last for at least 3-5 years, we have already signed €400 million worth of client contracts --with just one salesperson.

For us, the cost of capital for the farms is more significant than the cost of sales. This is because our business model to own the farms ourselves and sell the plants needs to be fundable by some kind of debt-based financing.

With our farms and our vision, we aim to create what I call a “Tesla effect”: we sell the produce before we build the farm... And it has worked: infarm customers' demands cover our investment in farms 3 years in advance, which is a great way to raise working capital.

On hiring:

When we started hiring sales people, we didn’t want people who were good at making easy sales, like burglar bars to the people living on the first floor. We wanted the people who could sell burglar bars to the people living on the 7th or 8th floor!

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