My darkest hour as an entrepreneur

As I write this article, we are heading into year´s end. I´m looking forward to it. It´s been the most distressful year of my career, and it all happened so fast that I had to spend the last 2 months gathering my existential leftovers. Pieces of me all over the place, as if my entire professional life was a puzzle. I managed to put it back together again, and now I´ll frame it in rubber, so next time it falls it doesn´t break apart.

I went on holidays in September, back to Geneva, Switzerland, where my wife and I spent 7 of the most amazing years of our life. We´ve got good friends down there and the greatest memories. Our children were born there, so we owed them this recognition trip to help them trace back their identity. When we arrived there, I had a solid 10 months´ runway for my startup. Had nothing to worry about. 3 days before coming back, that runway collapsed to 3 months, due to 2 investors stepping down at the very last minute.  So here´s the first lesson: don´t expect others to share your sense of morality, honor and ethics.

I´m a responsible risk manager and I´ve never in 3 years had any less than 6 to 9 months runway. Let me tell you what 3 months runway looks like in Argentina: It´s just 1 month, because if you don´t manage to find fresh money, you don´t get to pay your employees what they are legally entitled (and deserve) to receive upon work relationship termination. Time was a luxury I suddenly didn´t have any more. As soon as I set foot back on Argentinian soil, I started working around the clock on designing a gameplan to rebuild the runway. I came up in record time with a very concise A plan, a contingent B plan and 7 candidates to pitch. I had all October to fix the situation, and I was sure it was going to work out, but it didn´t. Even when I was ready to take the pill and absorb the damage giving away a chunk of my equity, that wasn´t enough. There wasn´t either enough equity or time to straighten the path. My second lesson is the following: in desperate times, there´s not such a thing as “enough”.

It all happened so fast that I´m still processing it, but out of the blue, I was navigating C plan waters. I didn’t have a C plan, so I was uncharted. The rock was giving away a lot of equity for peanuts, no clear course of action and having to dilute investors with whom I had committed not to dilute in this first round. The hard place was to let people go, freeze sales and ensure the ongoing customers´ experience for a year, preserving the company for the future. I really didn´t have any other choice, so I picked the hard place.

The hard place was extremely painful, and it required mostly 3 things: Pragmatism, psychological coaching and emotional containment from close people. Those are 3 other lessons in one: 1. In hard times, pragmatism hurts but rules. 2. If you want to ride a startup, get yourself a good therapist that understands which levers to pull inside your brain, and 3. Look for advice and emotional containment in those that love you for who you are, and not for what you do.

I´ll reinforce this concept in a separate paragraph: I probably could have not made the right decision in due time if it wasn´t for my wife and 2 of my closest friends supporting me emotionally.

That happened 2 months ago. Let me tell you where I´m standing right now.

I had to find a second job, because we just have money to ensure service to those customers that happily bought the product. I reached out to all of them personally and made it clear that I will myself provide the best experience they can get.

We had to pause sales and change the go-to-market strategy, because we don´t have the structure we need to provide the proper customer service moving forward from a B2C angle. We redesigned our business model with a B2B approach, using a white labelled scheme that allows to replicate the Hedgit experience with some carefully selected market players that we like to call “strategic alliances”. We have already started getting good results out of this new approach, with a confirmed very big customer and half a dozen other interested partners.

We didn´t have to give away equity.

We didn´t have to dilute investors.

We sadly had to let valuable people go, but I hope we can hire them back soon.

I´d like to be objective about our achievements in 3 years with a very tight budget. Hedgit is the only and most precise AI driven digital pricing advisor for the agricultural farmer on the planet (at least, that I know of). We have launched more than 80 advisors that have shown superb performance at advising customers when to sell their grains and we also have a proven track record and outstanding customer experiences on those that have tried the product. Believe me when I tell you that there´s nothing more satisfying than facing a farmer who´s telling you, over and over again, that this is what they need and have been waiting for a long time. In the Startup universe, frustration comes in many different shapes,  our share comes from validating our product with the end user but not having enough money to reach them all in due time. The other side of the coin is not being able to convince those who do have the money to support us. Neither institutional investors nor big market participants see value in helping farmers sell their crops better... yet.

The good news is that farmers do see value in it and there are millions of them around the world. Yeah, I know It won´t be easy to reach them all out without money, but now that I made painful decisions (that are healing pretty fast), time started being again a luxury for us. We´ll wait for timing to catch up with our vision, and it certainly won´t be the first time in the history of startups that investing in time is the best course of action to maximize long term value. I tend to see these types of situations with pragmatism. What really doesn’t make sense in agribusiness is that farmers continue to sell their crops in the exact same way they did 25 years ago, when I started my career and digitization was just a promising path to the future. Well, that´s the present now, and from where I´m standing, there´s an outrageous, almost unbelievable opportunity in providing farmers with an AI driven digital pricing tool that allows them to improve the way they follow up markets and optimize the margin of their business. In Hedgit, we already have that, and we are pretty much alone with it. I´m looking forward to the day the competition will show up so I´ll stop being a dreamer to start being just another solution provider.

Now that my darkest hour as an entrepreneur is behind me and I´m heading into a promising 2025, I have clarity about where I´m sitting: it´s a gold mine. For now, I´ve just managed to get a pickaxe and a shovel to dig, so I´ll keep digging. I have all the time in the world to dig, and that´s not all I have. I also carry inside a superpower that has accompanied me all my life and has already proven to be the key of long term success: I don´t ever quit (except for smoking, which I already did).

If you got to this point, thanks for reading. Best wishes to you all.

Marcelo Artal

CEO and CO FOUNDER at HEDGIT.