10 reasons AgTech sucks right now
September 21st, 2022 - My 19th addition of Easy Observations in Ag
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Opening Thoughts:
Cleary a fierce opening statement wouldn’t you say? For one, what I’m about to talk about isn’t to say that AgTech is bad or does a bad job. I’m also keeping this week pretty short and to the point, hence also the title. More or less, I plan to explain why it sucks to be in AgTech right now. The other truth is it doesn’t suck for everyone in it for many different reasons. These are just general points on why it can suck to be an AgTech group or even user of it to a degree.
One of the issues I see is that there are many in Ag that actually will be doing great the next few years. Especially in the Ag Inputs and Machinery side as I highlight in the opening meme. Why? Well they have well understood and addressed markets in their sectors. They provide fairly black and white services and products that farmers and businesses need in Ag. AgTech, not so much at this point beyond a few specific types of groups.
I think a lot of people are feeling this for many different reasons so I thought maybe I can articulate those feelings somewhat. I hope this won’t apply completely to any group as if it does they are in trouble. It will for some though and while I could say who I feel those groups are, I won’t today. All in all, I just want to highlight what I’m hearing, where the fears and feelings lie, plus some extra takes I’m starting to see as well. By all means, tell me I’m wrong if you feel that way or heck even add other pieces if I’m missing it.
10 sucky things about being in AgTech:
To start in explaining the meme above, I think there are still way too many people in Agriculture that don’t or can’t really understand what technology in Ag represents or what it means to them. The entire industry I feel has really just confused famers around it for decades. This is part of my reasoning to put out this top 10 list too. It’s hard to explain why it’s happened, but I see many just saying F*** it and doing what they’ve always done. That might mean they are even using the tech, but they only do cause it’s just there. Not because they actually care or want to use it.
Most farmers just don’t really care about software and data and what it can do. They want black and white situations and answers.
Many in Ag are just tired of the hype and don’t care to listen about what the future of Ag can bring and all the tech around it. They just want reality.
So many overpromises and under-delivery by others has killed the optimism many farmers and businesses had around using certain tech in Ag. They are more or less burnt out.
Grain prices are relatively good right now and whether you like it or not when that happens many just don’t feel like they need to invest in things that can make them more efficient like AgTech usually promises.
There are so many semi similar competitors in the AgTech space that being unique and different is just a tough proposition.
The money is drying up in the AgTech world right now since many companies that have got money from the past are just not meeting expectations financially. Plus the general world of investment in companies and evaluations is being rethought.
There just isn’t the amount of money many thought that there was in Agriculture beyond the staple products like Ag Inputs, Machinery, and similar items. Tech is looked as optional or a novelty.
Many large companies that bought AgTech groups or created their own solutions are almost giving it away for free either directly or by “tying” it to another service to gain grower confidence and use. Hard to compete with free or very cheap for some.
Everything is becoming more expensive especially building tech based tools like software, apps, data science, and beyond. It just is really expensive to traditionally do it.
Based on other poor IPOs or failed acquisition expectations and reality with AgTech groups, the groups that usually would help others either in buying services or potential buy other AgTech groups just are scared to do so right now unless the financials and ROIs are incredibly sound. Most don’t have that.
Closing Thoughts:
There you have it. While I very much hope these listed items are not part of any AgTech groups right now I know that it is for some. It’s not to say these negative connotations are going to be prevalent for some time, but they could too. Also, there are plenty of good things going on in the space as well but I’ll say I’m just not hearing or feeling it as much as I used to.
While it is an odd time for Agriculture right now and also AgTech in general things always seem to change pretty fast. That doesn’t mean either good or bad, but just fast relative to Ag. Year to year is so different and consistency isn’t a thing Ag in general for most. This is part of the problem with using tech in Ag.
It’s one thing being in an industry that relies on just the general economy, but Ag works beyond that in so many ways. Mainly weather and then geography on top of that. I could go on and on. As I’ve wrote before Agriculture is the most complex industry in the world for various reasons and finding success in different niches can be hard.
If you are one of these AgTech groups reading this and nodding your head thinking, “I’m definitely going through this” don’t fret quite yet. You might just need to rethink what you are trying to do and what your product can do towards the groups of people or businesses that actually need something you’re providing. Sometimes you just need to sit back and look at what doesn’t work.
I don’t have the answers for anyone really as it’s complex, but I will say this list isn’t to deter people or call out certain groups. It’s to say that this industry is tough yet very important and if there’s any guidance I can provide on the generalities of issues that exist is that don’t stop and stay in the game while figuring it out. You’re needed, but you can’t do necessarily what others have done either that have gotten purchased or similar. Those opportunities are changing and you need to change with it.
The 10x plus deals for some in AgTech while still possible are not what they used to be. The hype is over and reality is setting in. Work with it and change your vision if you haven’t yet or else you might become dust in the wind. My thoughts for the week.
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What are your thoughts about AgTech in Asian countries such as the Philippines?
In my perspective, the reasons stated above only apply to AgTech in the West?
Absolutely!