Founder Self-Evaluation: Price Volatility - Surviving India’s Agri-Rollercoaster
(Why Your "Unit Economics" Spreadsheet Lies Until You’ve Faced a 300% Fertilizer Price Spike)
PART 1: FACTOR INTRODUCTION
1.1 India’s Price Volatility Nightmares (2020-2023)
Input/Output Price Swing Trigger Startup Grave Count
DAP Fertilizer ₹1,200 → ₹2,700/bag Ukraine War 82 AgriTech closures
Tomato Prices ₹5 → ₹140/kg Monsoon Failure 15 FPC bankruptcies
Diesel ₹75 → ₹110/liter Tax Changes 37 logistics failures
1.2 Why Founders Underestimate This:
1. Spreadsheet Delusion:
o Assume 10-15% annual inflation vs actual 200% commodity spikes
2. Policy Blindspots:
o Miss how MSP changes alter cropping patterns overnight
3. Supply Chain Fragility:
o 1 blocked highway → 3x transport costs for perishables
1.3 Founder Trap: "Building CAC/LTV models while arthiyas manipulate prices daily in Azadpur Mandi."
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PART 2: VOLATILITY WAR STORIES
1. The Hedging Hero (➕);Case: "KrishiSafe* (Punjab) survived 2022’s fertilizer crisis by:
1. Pre-booking 6 months’ supply via mandi networks (not corporates)
2. Creating "input SWAPs" between paddy/cotton farmers
3. Using WhatsApp groups to crowdsource real-time price alerts
Now trains 300+ FPOs on volatility management."*
Lesson: *"In agri-business, your best CFO is a commission agent with 40 years’ gut sense."*
2. The Burn Rate Victim (➖);Case: *"A VC-backed exotic veg startup collapsed because:
1. Budgeted ₹50/kg tomato cost (actual hit ₹140)
2. Contract farming failed when farmers sold to highest bidder
3. Fixed-price B2B contracts locked in losses"*
Bloody Lesson: "No Indian farmer honors contracts when prices double."
3. The Grey Market Survivor (➗);Case: "Resilient Pulses* (MP) thrives by:
1. Buying 30% extra during glut seasons (stores in matka warehouses)
2. Selling through kirana networks (not modern retail) during shortages
3. Using "satta bazaar" whispers to anticipate spikes"*
Cold Truth: "Sometimes the black market is your best risk model."
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PART 3: SELF-ASSESSMENT (SPREADSHEET VS. MANDI REALITY)
3.1 Context Check
"Which volatility battle have you fought?"
• Hedging Hero: We’ve institutionalized risk management
• Burn Victim: Got crushed by market swings
• Grey Survivor: Playing informal safety nets
• Still Using Last Year’s Prices
3.2 Impact Rating
"How much has volatility actually hurt your P&L?"
[-5 = Near Death │ 0 = No Impact │ +5 = We Profit From Chaos]
3.3 Knowledge Depth
"How well do you really navigate volatility?"
1. ☐ MBA-Level (Understand theories)
2. ☐ Mandi-Level (Know satta patterns)
3. ☐ Jugaad-Level (Have informal buffers)
4. ☐ Crisis Veteran (Survived 2+ major spikes)
5. ☐ Volatility Yodha (Your models predict shocks)
3.4 Gap Analysis
"If we mastered volatility, it would mostly help us:"
• Survive (Avoid bankruptcy)
• Thrive (Exploit arbitrage)
• Both
3.5 Priority Call
"Where does volatility sit on your aaj ki roti vs kal ka dhandha list?"
• 🔴 Hai-Hai! (Losing crores to swings)
• 🟢 Goldmine! (Our edge is risk management)
• 🟡 Chalta Hai (Managing somehow)
• ⚪ Relevant Nahi (We’re insulated)
3.6 Decision Audit *(For scores ≤-3 or ≥4)*
"Describe one volatility-driven pivot:"
Example: *"We switched from fixed-price contracts to %-of-market-rate after 2022’s fertilizer shock."*
3.7 Key Gyaan (100 Characters Max)
"One mandi truth about volatility we’d tattoo on our balance sheet:"
(E.g., "When satta bazaar whispers, Excel models weep")
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Volatility Realities Most Miss
1. The Arthiya Advantage:
o Traditional traders hedge via "udaari" (informal futures) 6 months ahead
2. Policy Shockwaves:
o 2023’s onion export ban wiped out 120 startups overnight
3. Crop Switching Speed:
o Farmers change crops in 1 season; startups need 3 years to pivot
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Why This Module Cuts Deeper
1. Exposes Theoretical Models: No LTV matters when input costs triple
2. Spotlights Informal Buffers: Matka warehouses beat cold storages in crises
3. Forces Political Literacy: MSP changes impact more than "market forces"
Next macro-factor? We’ll strip bare more economic myths.
(Style Note: Using Hinglish like aaj ki roti for visceral impact – specify if formal English preferred.)
