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Mazarine has watched money go into early-stage companies with innovations that help 'smarten-up' farms. The founders are well-intentioned, as are their venture backers, and while a logo wall of famous commercial-scale growers that have piloted or bought sensors and software is impressive, most growers are unable to even begin their 'smart farm' journey. Mazarine is skunkworking a possible solution in our Lab, the following offers a high-level summary.
Impressive on the surface
If we have learned anything about efforts to modernize farming it's that entrepreneurs, and their financial backers, are clearly able to develop sophisticated tools for getting key farm equipment, irrigation infrastructure, and even the plants themselves in the cloud. There is no shortage of innovation, and the market need for these innovations is clearly there. From Israel to Illinois, ag-tech companies are sprouting up offering venture investors a robust dealflow.
Yet below the surface
Most growers (aka: farmers) remain unable to vet and onboard such offerings, not to mention pay for the necessary up-front commissioning and integration. The ag-tech companies themselves will claim that their tools/services provide an impressive ROI, and are actually quite easy to use; however, the so-called 'smart farm' remains elusive for all the largest commercial farms, and a handful of tech-savvy growers who may in fact run in the same circles as the start-up execs and their venture backers.
He wants to smarten-things up around the farm, but the way 'digital farm' or 'smart farm' tools/services are sold he can't really find an on-ramp. He is told he needs to "change his mindset', or "farming culture needs to change". There is essentially no effective path forward.
They are looking to sell their sophisticated 'smart farm' sensor and/or software solution to farmers. It works, but how do get tens of thousands of farms to adopt it?
What are the barriers for early-stage ag-tech companies?
There is only one.... sales. Generally speaking, ag-tech start-ups raise money from angel or venture capital and burn through that money on sales and marketing, hoping to grab market share. They are keen to get a logo wall on the website with some brands we all see in the grocery store, and knock out a deal with a major, but as the years roll on, the promise of the market rarely materializes. The tech typically works, the issue is that the market they envisioned, and promised their venture backers, remains elusive.
What are the barriers for the small farmer?
Smaller growers face 4 primary challenges when considering innovations to help them 'smarten' things up around the farm.
Vetting: Trying to decide which sensor to go with, or which earth observation solution fits their needs is daunting. A quick online search will result in too many options for a grower to vet effectively. The solution is often to 1) hire a consultant, 2) work with the state university ag-extension, 3) google search, 4) try this and that, or 5) just do nothing.
Onboarding: Once a farmer decides to go with this or that smart farm tool, the solution provider often seeks to schedule an onboarding meeting, which can take hours or even days. Even if a farmer is comfortable with the solution that came out of vetting, this onboarding step is an obstacle,
Integrations: So a grower has found the right suite of solutions to realize their vision of 'smart farm', now there is a need to integrate the data from multiple sources. This is often complex and requires someone with a background in software, computer engineering, or data science. The cost and complexity of integrations alone is a major barrier to adopting smart farm innovations.
Help Desk: So if a farmer has got the right digital tools integrated, there is still the challenge of managing multiple help desks for each sensor and/or software.
Generally speaking, these 4 barriers are preventing smaller growers from the benefits offered by Industry 4.0.
So, what's the fix?
Our vision is that this industry (ie: smart farm, digital farm) needs a new platform for buying and selling so-called ag-tech solutions. In order to help more farmers begin their journey to 'smart farm', Mazarine's Point of View is that we should leverage a Platform as a Service (PaaS) entirely focused on making it easier for tools/services solutions providers to sell, and farmers to buy, innovations that help 'smarten-up' the farm.
Thumbnail of this PaaS
No studies, no consulting fees. The envisioned cloud-based platform company, which we are calling "Project Bushel" in Mazarine Labs, ushers in a new era of affordable modernization for farmers by bringing them the power of a Platform as a Service solution. But this solution is actually not the solution…it helps other solutions work together.
On one side of the platform you have small and medium-size growers, on the other, you have sensor and software providers. They are both looking for each other, but the inefficiencies are slowing everyone down.
We are bringing connectivity without the big price tag of custom integration, resource investments in deployment, and the complexity associated with technology. We are taking the complexity of data integration out and turning it into something that works for growers out-of-the-box.
Digital tools that enable farmers to start their digital journey
Soil and water quality testing: Sending soil and water samples to environmental testing labs has never been easier, and due to breakthroughs in AI, understanding the results enables farmers the ability to take action without the help of an agronomist.
Soil moisture sensing: A very crowded market includes a wide range of solutions, but the affordable ones are high-resolution enough to inform irrigation decision-making.
Weather forecasting: There are many high-resolution and affordable weather forecasting apps, but on their own they are merely interesting. They need to be integrated into the farmer's planning. Temperature, precipitation, wind, barometer etc.
Pumps & Pipes: Getting pumps and pipes into the cloud to monitor asset health (eg: pressure) has never been easier and more affordable.
The toughest corner of ag-tech
A couple of McKinsey studies (here and here) offer an academic 'survey' of the challenges faced by both farmers and ag-tech start-ups. One McKinsey insight pointed to the 5 prominent investment themes in food & ag today, which are: 1) alternative proteins, 2) sustainable materials, 3) controlled-environment agriculture, 4) digital and precision agriculture, and 5) sustainable inputs. Of these 5, the most challenging has been selling digital and precision ag tools to farms. Mazarine is turning our attention towards this 'inability to modernize' challenge and incubating a PaaS solution for farmers much like we did for small water utilities in WaterClick.
Start with the small/medium size farmer, then build
Mazarine's PoV on ag-tech has been inspired by Ben Williamson (General Counsel at Invest Nebraska and Managing Director of the Burlington Capital Ag-Venture Fund) who said in an official announcement: “There’s a graveyard full of AgTech Companies from the last decade [that] have failed because of lack of understanding of their customers: agriculture producers".
Mazarine's PoV is that a PaaS offering will accelerate the modernization of how growers begin their journey to smart farm.
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Contact Mazarine if you are interested in the investment thesis we have built around this PoV, which is: the most compelling opportunity in ag-tech is to own/operate the platform by which ag-tech is bought and sold.