Loaded up and truckin'

Prime Future 176: the newsletter for innovators in livestock, meat, and dairy

Some folks in agtech are of the "burn it down" persuasion. They say things like "the food system is broken” and other revolution inspiring phrases.

I find it perplexing bordering on amusing since, IMO, the modern food system should be considered the 9th wonder of the world, counting the actual 7 plus compound interest. The modern food system has unleashed health, wealth, and advancement of civilization at a faster rate than anything the world has seen before.

And that in no way minimizes or negates the fact that there is *clearly* both abundant need and opportunity for evolution within agriculture.

Evolution to match production capabilities with the unlimited wants and needs of consumer segments. Evolution to continue producing better (in any of the many ways to define that), more efficiently, more sustainably. Evolution to unlock more short-term value within long-term games.

You see the Evolution v Revolution divergence across agtech and foodtech investors - some have a Revolution thesis, others an Evolution thesis.

Revolution agtech investors tend to take traditional venture capital swings that have super high risk, but if they work out, it would be super high reward. Revolution investors want founders who have a concept that can disrupt and displace incumbents, replacing the old thing with a new thing. E.g., cell-based meats.

Evolution agtech investors, on the other hand, want innovation that unlocks new value along the value chain, that enables existing players to do what they do, but better.

But sometimes, in the venture game, it’s not about ideological conviction about what is true or what should be true about the food system. Sometimes, it’s about math.

The venture capital model naturally pushes venture investors towards Revolution-type investments to generate the scale of returns necessary to justify taking on the scale of risks that venture investments naturally take on.

All this to say, sometimes investors and founders wrong size the opportunity, and evolution innovation gets misclassified as revolution innovation.

For folks in agtech, some company names probably immediately come to mind. But here's an example from our neighbors in the freight tech space that illustrates the phenomenon from beginning to bitter end…