The agtech industry is generating more and more investment every single year, and with that comes increasing media spotlight. What was an emerging category when I started reporting for AFN around 2015 is now a fully-developed, thriving ecosystem of entrepreneurs, startups, VCs, academics, and more. And while I recently reported on a startup that remained in stealth in order to spend time learning from farmers before it announced its business to the world, that’s not been a typical story in agtech. There has been surprisingly little involvement from farmers in agtech development, which many argue is bringing about failures and lost opportunities in the industry.
“My mantra for years was that we weren’t building the right product for the right user,” says Aaron Magenheim, an agtech consultant who’s been around since the beginning. “The user is not the guy singing the check; it’s the migrant worker with a third-grade education riding around on a quad. Technology is not being built for that guy, so it’s getting bottlenecked. In the last couple of years, the tech has changed and people are realizing that it’s not being adopted because farmers don’t have a plan.”
Magenheim’s career in the agriculture industry began with his family’s irrigation business in Salinas, California. Farmers began asking for help with identifying useful technologies, so he launched a company called Signature Agtech that sold a variety of agtech to farmers throughout California before shutting it down after an eight-year run.
His next venture, AgTech Insight, a full-service consultancy largely aimed at learning more about the agriculture industry globally and its relationship with technology.
“About a year and a half ago, I looked at where agtech was really going and how AgTech Insight could play a major role in that. If you look at all the industries, as they grow there’s a niche global consulting company that grows with the industry. Think of it as a McKinsey for agtech.”
AgTech Insight allowed Maganheim to work with large agrifood corporates to better understand their business structure, operations, and strategy to identify where tech can play a greater role. Eventually, while speaking with a few long-standing farmer contacts, the question arose about why farmers remained hesitant to agtech adoption and what needed to be done to truly move things forward.
That’s where the concept for newly-launched Growers Insight was born, a farmer-focused consultancy aimed at helping farmers understand when and where to adopt agtech.
“Everyone gets excited about IoT, blockchain, startups, and VCs, but why aren’t we talking about strategy, planning, and making this stuff work? That’s what we are now bringing to the table,” he says. “We started looking at the problems and identified them over the last year and a half working with some very large growers while testing different processes. We can quickly, efficiently, and very reasonably dive into an organization and understand everything from its culture to its goals and what’s working tech-wise versus what isn’t working.”
Growers Insight starts with a 15-minute “health check” survey on its website that evaluates the farmer’s business. The survey is analyzed to identify strengths and weaknesses. It also benchmarks the operation against other farmers to highlight where they might be outperforming or underperforming. A summary and consulting proposal is generated to help the farmer determine whether moving forward with a one-to-five day onsite Grower Audit makes sense. Consulting fees run between $5,000 and $35,000 depending on the size of the company, the number of sectors in which it operates, and how many days will need to take place on-site.
“We might conclude, for example, that year one needs to be focused on tracking people better. Moving from paper time cards to digital. We will layout the business value of this and a budget of what it should cost, which person in your company should be responsible for it and how much of their time it should take.”
Some suggestions could be as simple as creating an irrigation decision flowchart to establish a chain of command in the event of an emergency. Farmers often lack basic business operations support, Magenheim says.
So far, his team has been testing the model with eight large growers on the West Coast, primarily producing specialty crops over the last year-and-a-half to ensure that the processes work correctly. Roughly 50 farmers have taken the survey so far, including producers in Latin America and Asia.
Taking their time perfecting the model was critical for Magenheim. Farmers cannot be approached in the same way as agrifood corporates when it comes to improving operational efficiency. He recently spoke in front of a group of 250 farmers in Modesto, for example, and only one of them had a five-year plan; one had an organization chart and none of them had heard anything about carbon farming.
Recognizing the triage that farmers must often perform among their operational challenges has also helped Growers Insight refine its approach to recommending technologies and identifying solutions.
“It hit home for me a few years ago when I was with a large farming operation talking about tech. He was interested in technology but he said I have $100 million problems, $50 million problems, and $10 million problems. If you are talking to me about fixing a $10 million problem, until I fix the $100 million and $50 million problems, I can only give you 5% of my time, because if I start focusing on the $10 million problem, the whole company could go in the wrong direction.”