The 2 most soul crushing words an innovator can hear 😳
Prime Future 025: The weekly newsletter highlighting tech trends throughout the animal protein value chain.
You describe a concept for a tech solution to a prospective customer or show them an early version of the product. What’s the worst response you could get?
"That’s interesting.”
It would be better to have a full cup of lukewarm coffee thrown in your face so at least you know definitively that you need to go back to the whiteboard. An enthusiastic YES or a crystal clear NO….anything is better than the apathy and politeness of “that’s interesting” or the equally damning, “neat.”
There are 2 scenarios where these reactions are common:
(1) Unclear business case for IoT products:
With the simultaneous drop in the price of sensors and increase in data capture capabilities, Internet of Things (IoT) plays are popping up everywhere. IoT solutions hold the promise of enabling precision management of individual animals such as in large scale swine barn or a cattle feed yard, which should drive efficiencies. But these IoT solutions will only be adopted when they are centered around a clear and compelling value proposition for producers. In most cases, that means the business case needs to be built around solving one of the producer’s top 3 most vexing problems. “Interesting tech” applied to a producer’s 45th most vexing problem does not scale.
(2) Undefined opportunity cost for SaaS analytics products:
With more data being captured than ever, an obvious high value tech play is a SaaS analytics product to turn all that data into something useful for decision makers.
Aside: A simple guide on types of analytics is a progression of value moving from descriptive (what happened?) to diagnostic (why did it happen?) to predictive (what will happen?) to prescriptive (what should you do about what will happen?).
There are multiple decision points that livestock and poultry producers of all stripes face with every turn of a facility that drives profitability but one of the single highest impact decisions is when to send animals to the processing plant. The answer, & its importance, can vary based on the system. (In pigs, is this a fixed time or fixed weight system? Or in poultry, is this a big bird complex or is this a small bird selling a very tight weight spec to a KFC or Chick Fil A?)
But think of a feed yard where timing it right such that cattle stay on feed just as long as they are converting to gain efficiently and profitably, and not a day longer. There’s a fine line between shipping animals too early (leaving money on the table), and shipping animals too late (meaning they ate your profit). Just ask feeders who had to keep cattle on feed longer than intended due to the COVID plant disruptions this year.
It’s an example of a really difficult decision but one that successful cattle feeders have been forced to get good at making.
I once asked a feed yard manager if this was a decision where analytics could help drive a more precise & profitable decision. His reply was “probably not, we’re good at this decision.” I asked how they know if they made the optimally timed decision and he replied “well, did we make money?”
And THAT is the fatal trap for any SaaS analytics product. If there’s no control to compare against, how does the user know what money has been left on the table? If the opportunity cost is undefined, how does the prospective user determine if an analytics tool makes them any better at making the difficult decisions than the hard earned insights from the school of hard knocks? The burden of proof rests on the innovator.
In my experience, its really hard to build a company around an “interesting" product. Successful companies get built around an absolutely-necessary-now-let-me-get-that-deployed-immediately product.
Let’s face it though, these principles hold true for product categories beyond IoT and SaaS analytics, whether its a non-antibiotic feed additive or a genetic offering. In livestock & poultry, like all B2B markets, an absolute minimum hurdle for proving a value proposition is that it has to at least be more than…interesting.
I’m talking with 25 investors & 25 producers to dig deeper into the dynamics around animal protein and tech opportunities. One of the best quotes this week came from Rob Trice of Better Food Ventures:
“There tends to be a cowboy culture in animal ag where they feel like they can do everything with duct tape and baling wire so they don’t need (digital) tools. They can do it by look and feel.”
Message me here if you’d like to share your view.
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About Janette
Janette Barnard is Managing Principal with Rock Road Consulting, working with animal health, animal nutrition, producers and processors to launch, source, and fund innovation. She leverages her commercial experience with agribusiness (Elanco Animal Health, Cargill, and McDonald’s Global Supply Chain team) and her entrepreneurship & strategy experience with tech startups.
