One of the criticisms laid at the door of agtech startups is that they doesn’t interact enough with the farming community they are trying to serve. Farmers and venture capitalists alike express concern that there is sometimes too much focus on the technology at hand, and not enough on the immediate value it will provide farmers. Farmers also say the design of some products does not seem to have the farmer in mind; what’s intuitive for a Silicon Valley developer is not necessarily so for a farmer.
There is a group of innovative MidWest farmers that are interacting a lot with the agtech startup scene, in an effort to engage with innovations coming down the pipe, but they are having mixed experiences in terms of the time commitment involved, and the value they get out of the process, they tell AgFunderNews.
We caught up with Scott Henry, business development manager of one of the more innovative farming groups LongView Farms in Iowa, to find out more about his experiences.
When did you first start engaging with agtech startups?
Over the last five years it’s really picked up. As an operation, we’re doing a lot of beta testing on the product side as more and more Silicon Valley startup groups try to do new things on the farm. Some of it is equipment related, but more of it is around data collection, analysis and overall farm management. We’ve also been testing new technologies from the equipment manufacturers like Deere and AgLeader.
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What does it involve for you to do a test?
Typically you’re a beta tester and you are given access to the software or hardware that’s involved. Then you go through it as a user and give them feedback as far as what works, what didn’t, what changes you would want to see, and generally what you think of it. One thing we’ve noticed with Silicon Valleys groups is that there are some aesthetic things that don’t look like they should if they’re trying to appeal to a farmer. That would give them more value.
Do you pay to be a beta user?
That depends on the company. There is some free beta testing, but there are others where you have to pay to be a best tester, which is typically a turn-off for us. I understand where they’re coming from; they want invested value on users partaking in the test. But we don’t get the equivalent value back. We give our time away too much as farmers and operators, so our operation specifically has shied away if there’s a cost to being a beta tester. Once the product is fully developed and operational, then we’re much more willing and interested in paying for the service.
How would you describe the cost of being a beta tester?
The bigger thing is the time lost. We have operators with multiple levels of technology adeptness and ability, so a lot of times we may be doing a good job for the product itself, but we’re having to take a lot time to train or go back and correct information. For many of these data products, it’s “garbage in and garbage out”, so we need to get it right, but there comes a reality at some point; we might have guys working for us that are not comfortable with switching from pen and paper in the cab, to entering data into an iPhone or iPad. As inherent as the process is to the developer or entrepreneur, some of our guys might not even have the technology to do it like a smart phone or tablet, or the data plan to support it. So there are barriers to entry.
What improvements have you seen recently among agtech startups?
There were a lot of tools we tested that meant we needed to enter our data twice: in the monitor of the cab, and then again on the accounting software. Our biggest argument was that we wanted to enter it just once in the cab’s monitor, and we are now seeing that more and more thankfully with open sourcing between agtech companies like Climate Corp with equipment manufacturers. Climate and Deere coming together with Precision Planting makes things real easy and we can see them in real time; that’s where cloud-systems work.
What technologies have you adopted?
We are a paying customer for some accounting software that’s been around for a long time. It’s not cloud-based, and is not easily accessible wirelessly, so we’ve been looking for a new option, but it’s been frustrating. We look at the efficiency ratio: how much are we going to use of what you’re offering? Is it worth what we’re paying for it? We struggle to see how we’d use the majority of the options offered on a system, and then equate for the cost. We got burned on a couple of data tests, and what they said would happen didn’t, and this made us realize how much we were on the bleeding edge of all this new technology. We like to say we’re on the cutting edge of it still, but we have taken a step back, and now we’ve hired a college kid to program our own web-based app that does what we want it to do. Our philosophy is that even if we spend $15k to $20k on building it — which is equivalent to an annual subscription for some agdata services — use it for three years, and then choose to subscribe to a new product, we’re still ahead of the money side of things.
One company we do pay for and have just started working with is Farmers Edge. What we really liked about them is that it seemed like their software was built with a farmer in mind. Also the price they were asking seemed more in line with the value they were providing today. I think a lot of these companies are asking for a price that’s not realistic compared to their value; it’s based on value they could provide later. With Farmers Edge, we feel we can get that value back, and probably the piece that made us more willing to sign up with them was that they were tying it all into the cab, and pulling information from monitors to take back into their system. That allows us to get our information and equipment efficiencies, plus fuel consumption, on an acres per hour basis, all in one spot. Farmers Edge also seems to be more agronomic focused than others.
What does your software do?
We looked at our operation and worked out what information we’ve been tracking for 15-20 years on pen and paper that’s not been captured on our monitors. Part of our operations are custom farming services, where we do an operation for a landowner and bill them later, so we want to track our activity and accurately bill them for the service. We also want to track how much product inventory we’ve used. That’s where I think Granular and Conservis are doing a good job, and that’s essentially what we’ve built for ourselves; an app to help with custom billing, tracking in-field activities as well as product application. It spits out a report when I go to do my billing.
Which technologies will be worth it for farmers to adopt in the long run?
As farmland consolidation hits, as with in livestock, the power of information will be much more critical and valuable, especially in a commodity-based business. Low cost is the measuring stick for success and we’re trying to keep our costs low, so the better the information we have, the better we are able to discern what’s worth spending money on and what’s not. I definitely see that aspect of it. I do think there is some efficiency gain for collecting and analyzing data, and probably the bigger value piece is going away from excel and pen and paper. But we also need it to also be time saving for us, and we haven’t seen products that are yet.
In my experience, and I’ve sat across table from a lot of agtech startups, is that they often struggle to define a realistic and defendable value proposition so that makes all of this a bit more risky.
What about drones?
We’ve looked at them and were even part of a couple of Kickstarter campaigns. I think that drone technology could be really beneficial for famers if it’s done right, but there’s still so much confusion about what can and can’t be done with a drone technically, and farmers probably don’t really care as long as they’re getting what they want out of it.
We see the value in being able to get eyeballs above the fields every day and it’s a lot cheaper than flying a plane up. The question becomes: who’s best to provide that service? Is the farmer investing in a drone himself, or is it a cooperative, or a seed dealer doing the agronomy service? I can see both sides. For us, a more progressive operation, it’s a marketing piece for us too, and allows us to be more transparent about how things are being done. Spending $1,200 on a drone is not much in the big scheme of things. At the end of the day, will you remember you have it and will you actually use it or not? Is it a luxury and a toy that works great the first two weeks and then you never use again? That’s a question we ask ourselves!
Are you worried at all about data privacy?
I think this worry is overblown. I think some farmers have this “gotcha” sense that input suppliers are going to take our data and increase the price of seeds as a result. I think if a farmer knows his numbers and what he should be paying, he shouldn’t be concerned. We’ve never really been concerned about what’s hidden in the language of a tech agreement we’re forced to sign. Maybe we’re too naive, but I think it’s a bit overblown.
Is this the role you are playing in the agtech startup sector? Get in touch with your experiences on [email protected].