What if it doesn't work?

Prime Future 143: the newsletter for innovators in livestock, meat, and dairy

97% of why I work out at Orange Theory Fitness is their tech system: a connected heart rate monitor that feeds into a leaderboard at the front of the studio on a scoreboard that shows everyone’s heart rate at any point in time throughout the class.

And I *love* the system. I am not one of those psychos who actually enjoy working out, so I distract myself by doing mental math the entire workout about my heart rate, calories burned, number of reps, whatever. (I mean, tell me you’re a nerd without telling me you’re a nerd…)

But y'all, when I’m working hard and that connected heart rate monitor does not recognize my clearly elevated heart rate? I feel an irrational anger BECAUSE WHY WORK OUT IF YOU AREN'T GETTING CREDIT FOR IT 💀

The reason I hate it so much when the tech does not work properly is that I love it so much when it does work properly.

Now back to livestock.

There's this weird but common objection to <insert any new hardware/software product> that any tech salesperson has heard:

"Sure, this could solve my problem but what if I become reliant on it and then it doesn't work?"

To be clear, that eye roll is not about the expectation that hardware/software has to work. Of course it does, full stop. The eye roll is about the idea that we’d rather struggle with an existing way of doing business in order to not be reliant on technology….

I am 1000% dependent on my iPhone and sometimes the battery dies and it is devastating. But it’s still better than life without my iPhone, ya know?

If the “i don’t wanna be reliant on this tech product” pops into your head as a tech buyer/user/customer, here are 4 ideas to consider:

1. If you don't want to buy the technology, that's cool. But you can find a better reason to justify your decision than the circular logic of "sure I can't find enough people to do x and that technology could help me with x but then I won't have as many people who know how to do x". Bro, aren't you saying that you already don't have enough people to do x?

2. Consider what threshold for reliability would make it worth trying. Get specific and be clear in your mind (and if you want, with the tech co). What threshold would make it worth piloting? Fully implementing? What threshold makes it better than the current state?

3. Identify the broader concerns that might be behind this objection. Maybe there’s something bigger that justifies not adopting the tech, but a lot of times this one tends to be more of a front for hesitation to change. Which is a human thing.

4. Design a backup plan for what you’ll do if you adopt the new tech and there comes a day when it doesn’t work quite right. Ironically, a backup plan usually looks something like your status quo today without the technology. In my workout example, my plan B is relying on my Apple watch instead of the OTF heart rate monitor, and plan C is going waaaay old school and just working out without any wearable device like it’s 1923. The horror.

If you are selling a new technology, it’s only a matter of time until you encounter this objection. 3 ideas for navigating it:

1. Make your product so relevant that it changes the game; make it so good that it IS wildly noticeable when it doesn't work. Make it so that customers are furious when it doesn’t work because it makes their life so good when it does.

2. Ask open-ended questions to diagnose and understand the fear/concern behind the stated fear/concern. “And if that happens, what consequences would you see? How would those consequences be felt? How does that compare to the current consequences of x problem? What are the consequences of not taking action to solve x problem you are currently experiencing?”

3. I hate to state the completely obvious but I’m going to….sell a product that works. Customers don’t care what kind of redundancy you have to build in or what hard things you have to solve to make sure it works, they care that it works. Especially in livestock & dairy where continuity and consistency are foundational to good performance, or in packing plants where minutes of a shuttered line cost thousands of dollars. And if I get up at 4 am for a 5 am workout, I don’t really care what it takes to make the tech work but I expect my heart rate monitor to document said workout 99.9999% of the time, ya know?

But of course there are more & bigger objections to tech adoption than that.

The thing I love about the adoption of technology, and all the commercial dynamics around it in ag, is that it’s this deliciously messy intersection of human psychology and business decisions.

Today’s newsletter was intended to be just that one brief idea related to tech adoption & objections, but then someone sent me an article by consulting giant McKinsey, “Agtech: Breaking down the farmer adopting dilemma.” Much of it is a summary of the obvious, but it includes a few things that kinda can’t be said too often.

Before we get to those, check out this paragraph:

Despite start-up and investment interest in farm-management software solutions, cost is a major barrier for farmers, with 47 percent of respondents citing it as a top concern. In fact, 50 percent of farmers globally are unwilling to pay for these solutions at all—this may be because input manufacturers, distributors, and equipment companies have historically offered deep discounts or no-charge subscriptions to comprehensive digital platforms, leaving farmers to question the ROI of newer offerings.

Remember in the conversation around farm management software and the idea that agtech 1.0 was a wash when we talked about how agribusinesses have trained customers to expect free stuff?! Me too.

Anyway, the McKinsey article did speak to some of the bigger dynamics impaction adoption of hardware & software products in the livestock, meat & dairy space:

“A clearer value proposition that focuses on ROI will likely encourage more adoption—30 percent of farmers cited an unclear ROI as a top barrier to adoption and, based on their responses, the minimum-expected ROI to consider adoption is 3:1. This suggests that the current solutions’ impacts aren’t easily measurable.

Agtech companies are presently trying to move away from one-time purchases and flat-fee annual renewals of software or solutions and focus more on business-model adaptation and exploration. They are also shifting toward monetizing solutions with combinations of hardware, software, services, and analytical innovations to enhance the financial viability of their businesses.

Usage-based models (for example, $/per acre, $/per module/per acre) are by far the most common pricing models, with prices as low as $1 an acre to as high as $60 an acre. Despite the attractiveness of these models to agtech players, even products in the lower per-acre price range have struggled to scale.

Demonstrating the ROI of agtech solutions to farmers is challenging. Productivity gains (such as yield increase and yield stability) are confounded by a host of variables that affects overall performance. For example, external factors (including extreme weather events) often mask any improvements, especially where farmers are only testing the solutions on select areas of land.

Models with fewer up-front expenditures for hardware, such as leasing or renting, and scalable pricing structures (for instance, per acre, module, or sensor) are expected to be the easiest models with which to grow adoption. This may be particularly relevant in the upcoming years where 31 percent of farmers are projecting lower profits than in years before.”

The fact that the biggest barrier to adoption of tech products, generally speaking, is unclear ROI seems like another data point supporting our discussion last week about the tiny number of companies in animal ag that are actually scalable.

That 3:1 ROI thing? Table 👏 stakes👏.

Maybe we should stop talking about adoption problems, which puts the onus on the customer, and talk instead about value problems, which rightfully puts the onus on tech companies.

What’s the most common objection you experience as a customer of technology, or hear as a seller of technology?

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Is animal agtech venture viable?

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