Feb 6, 2023·edited Feb 6, 2023Liked by Janette Barnard
Great piece here. Thank you for these words, Janette. I just felt them like razor blades trying to get inside out of my heart. But, drama apart, there is also this great article ---How Silicon Valley Set Agtech Back A Decade, from AgThentic--- which you may have read.
I'm one of the co-founders of Aegro, the largest (but far away from the only winner in the space) FMS in Brazil. During the last ten years, investing a significant amount of capital, we could build a 4x our largest competitor client base (around 2k farmers today, +- 8M acres). There are around 200k soybean and corn producers of this kind in Brazil, and we (and everyone else) it's still far away from them.
For such a long time, I deep dive into "Crossing the Chasm" by Geoffrey Moore to estimate when we would face such a chasm and what we could do to be majorly adopted by dozens of thousands of farmers.
We have many companies (in my context, company = having a profit to live) with 25/30 years in the management space here in Brazil, especially helping with taxes and other legal documents mandatory by gov. So we entered start in 2014, which to do different, bringing tools to support the operations in the fields other than just invoicing soy from the office. Then years later, we are much more similar to the average, simply because it's what pays the bills.
Speaking with Brazilian knowledge, agriculture is that Im-always-crying-for-prices-but-one-year-pays-five bad years kind of business. Margins, when everything goes right, are tremendous. So how can you convince someone who i) does not have an available intellectual management workforce in general and ii) sometimes have +100% profit to optimize their business? You just can't.
Sometimes I think that's why we have "only" 2k subscriptions. We have 2k farming nerds, who take pride in having everything organized, every crop season history two clicks away, etc. Is this bad? No, it's awesome. Is this bad for someone? Sure, for those (VCs, coff coff) expecting triple-tiple-double-double-double grow.
Farm administration from Silicon Valley perspective is almost a scam. But, if you look it from the SMB software business (Basecamp founders mentality here), it's a great business. We will build momentum (technology, infrastructure, GTM, UX...) for decades to come, when (maybe) the company will be as competitive as e-commerce or other industries. I'm pretty confident that farmers, the ultimate entrepreneurs, will know when it's time to really do FMS at scale --- and only them.
Agtech 1 was invariably solutions looking to solve non existent problems or no market demand.
Basically 1 was a total fail for all.
Worked with a 2.0 IP in dairy sector relating to cow health and productivity, that failed to gain leverage due to distributors demanding to own/control/charge back to the farm businesses what data they collected. No interested in the right to use and leverage that for their own platform development.
As a funder in the input to plate agrifood sector I'm exceedingly wary of the build to flip model that has invaded the space
I think largely the problem with most of these scenarios is that VC applies the same thoughts and metrics to farmer-facing companies as it does to any other companies, and, as someone that is materially invested in helping growers day-to-day, there's a whole subset of emotions and decision-making processes, some rational and some not so much, that farmers employ in their dealings that make businesses that seem to "make sense" from the outside, unappealing to farmers. I see this often with products, programs, and ideas that are pushed top-down to growers that a grower never wants or needs. A good marketer can convince someone that isn't in the field regularly that something is a great idea because it makes sense in the "non-farmer" world, but for most farms and farmers, it just isn't.
FWIW.... I have been saying this for years. All this deal on tech in ag (dairy is me so my mind) is great but what do we do with it? Like too much info, too much isnt good in my mind. I dont have time or patience to swim in the ocean to find a water bottle floating i can use. So much is ,"who asked for this?", imho
Great piece here. Thank you for these words, Janette. I just felt them like razor blades trying to get inside out of my heart. But, drama apart, there is also this great article ---How Silicon Valley Set Agtech Back A Decade, from AgThentic--- which you may have read.
I'm one of the co-founders of Aegro, the largest (but far away from the only winner in the space) FMS in Brazil. During the last ten years, investing a significant amount of capital, we could build a 4x our largest competitor client base (around 2k farmers today, +- 8M acres). There are around 200k soybean and corn producers of this kind in Brazil, and we (and everyone else) it's still far away from them.
For such a long time, I deep dive into "Crossing the Chasm" by Geoffrey Moore to estimate when we would face such a chasm and what we could do to be majorly adopted by dozens of thousands of farmers.
We have many companies (in my context, company = having a profit to live) with 25/30 years in the management space here in Brazil, especially helping with taxes and other legal documents mandatory by gov. So we entered start in 2014, which to do different, bringing tools to support the operations in the fields other than just invoicing soy from the office. Then years later, we are much more similar to the average, simply because it's what pays the bills.
Speaking with Brazilian knowledge, agriculture is that Im-always-crying-for-prices-but-one-year-pays-five bad years kind of business. Margins, when everything goes right, are tremendous. So how can you convince someone who i) does not have an available intellectual management workforce in general and ii) sometimes have +100% profit to optimize their business? You just can't.
Sometimes I think that's why we have "only" 2k subscriptions. We have 2k farming nerds, who take pride in having everything organized, every crop season history two clicks away, etc. Is this bad? No, it's awesome. Is this bad for someone? Sure, for those (VCs, coff coff) expecting triple-tiple-double-double-double grow.
Farm administration from Silicon Valley perspective is almost a scam. But, if you look it from the SMB software business (Basecamp founders mentality here), it's a great business. We will build momentum (technology, infrastructure, GTM, UX...) for decades to come, when (maybe) the company will be as competitive as e-commerce or other industries. I'm pretty confident that farmers, the ultimate entrepreneurs, will know when it's time to really do FMS at scale --- and only them.
Agtech 1 was invariably solutions looking to solve non existent problems or no market demand.
Basically 1 was a total fail for all.
Worked with a 2.0 IP in dairy sector relating to cow health and productivity, that failed to gain leverage due to distributors demanding to own/control/charge back to the farm businesses what data they collected. No interested in the right to use and leverage that for their own platform development.
As a funder in the input to plate agrifood sector I'm exceedingly wary of the build to flip model that has invaded the space
The perspective is excellent. Same can be said for “environmental technology”.
So when do we call it on “climate tech”? It’s always fun when the enemy is invisible.
I think largely the problem with most of these scenarios is that VC applies the same thoughts and metrics to farmer-facing companies as it does to any other companies, and, as someone that is materially invested in helping growers day-to-day, there's a whole subset of emotions and decision-making processes, some rational and some not so much, that farmers employ in their dealings that make businesses that seem to "make sense" from the outside, unappealing to farmers. I see this often with products, programs, and ideas that are pushed top-down to growers that a grower never wants or needs. A good marketer can convince someone that isn't in the field regularly that something is a great idea because it makes sense in the "non-farmer" world, but for most farms and farmers, it just isn't.
FWIW.... I have been saying this for years. All this deal on tech in ag (dairy is me so my mind) is great but what do we do with it? Like too much info, too much isnt good in my mind. I dont have time or patience to swim in the ocean to find a water bottle floating i can use. So much is ,"who asked for this?", imho
I think you should use more direct points - say the names, use examples. It will help people understand better.
This is such an epic write up - SPOT ON. Thanks for sharing - would love to connect soon and chat