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Opening Thoughts:
Well hey I’m back. Now as you might have seen I’m not necessarily going to be talking about just Earth Observation in Ag in this addition. I actually might be spreading things out a little going forward as I also have plenty to say about the AgTech industry in of itself which is also heavily apart of my background. It’s still and Easy Observation though so it hits the narrative.
As for this addition specifically I was inspired by another colleague in Rhishi’s Newsletter Software is Feeding the World with this specific recent article. Specifically the last thought and comparison he had in that addition. Also, in talking with another colleague in Shane Thomas in some of his thoughts directly about the Theranos of Ag I figured I would write more about it. While naturally this thought is quite controversial, both those guys heard back from many with their own thoughts and with myself being one of them. That was enough for me.
With that said, I figured why not tackle this and write my general thoughts considering I’m a pretty open book and people what more. Then again, I’m also not here to crap on any specific group or harm them in any way. I usually don’t like to call out names of companies but it’s really hard not to if I’m going to talk about this comparative subject. I’m not going to dive into each of the groups too much as I think for the most part you readers can figure it out for yourselves, but I also just don’t want to as it could become monotonous. Here we go and in no particular order…
Current Potential Theranos like groups in AgTech
To start, these groups clearly have had some success, popularity, and usefulness. I can’t say exactly if they’ve screwed over most investors too much and lied about their products, but I’ll dig in a little into why I perceive these to be on the edge of becoming like Theranos if they are not careful. Mainly, I put them on here because they just are not making the money, the tech they are claiming, or something just seems off. So just like the comparison to Theranos some former employees, clients, and investors are getting screwed and I’ve talked to many of those connected. Also, these groups are not just my opinion I can trust in that. In any realm, time will tell what happens with them all.
Indigo: So they’ve raised like over a billion, are apparently worth a few billion and they’ve changed there main product like 10 times it seems from seed genetics to Carbon stuff. Not to mention they’ve had a lot of employee turnover and just seem like they are chasing the next big thing before they know what the next big thing actually means. Probably my largest worry with them is their Carbon side now as it seems it requires way too much data that growers need to give up just to pay a generally small nominal fee of around $20/ac. Seems like a weird data play to create something else they won’t talk about. I’ve heard this from friends and colleagues too in the same sentiment. They just don’t see the allure and value yet. Can they make whatever they are selling work, maybe. Will they, I don’t see it now and much like the title suggest I bet there is a lot more funky stuff going on in the back ground.
Farmers Edge: There is so much I could say here, much of it I won’t as my past with them went back to their founding when they came to my dad (Satshot) in 2005 to get help expanding and scaling their small agronomy company into Precision Ag. Not a story they’d tell you but trust me, it’s very true. It was rocky near the end to say the least. Anyway, I’ll talk more about the current sentiment. Mainly they just don’t make money. You literally can see it in their quarterly reports and they’ve also gone through so many employees over the years it’s almost laughable. For one, I’ve heard the stories from these past employees directly many times. One guy I knew (who by the way had a family with special needs) who was a great person got fired by them (not enough sales quick enough) and they made him sign a Non Compete for working for two years in the entire Precision Ag industry. Who does that? It wasn’t valid with him being a North Dakota resident, but still that’s a Theranos move right there. In any fact they’ve raised so much money while constantly saying they are changing the game. They just aren’t and there’s always something missing from what they say or it seems to be more fluff than real. The recent “stepping down” of many leadership roles also shows something plus the former lawsuits with Farmobile. Also, don’t get me started when they tried to sue everyone with a patent they bought from Mosaic that they themselves had to battle to fight Mosaic and with the help of my families company. What a mess. In any realm, this group maybe can come back and do great things. They have powerful tools and plenty of good people there, but can they get past their past?
Granular: There are not too many people in the industry that didn’t have a giant “What?” moment when they got bought for 300 million by Corteva a few years back. It actually wasn’t the amount per-say or the sale, but the actual number of customers and revenue numbers they revealed to apparently be worth 300 million. Something like 250 customers and 2.5m in revenue. Huh, what I’m I missing here? That’s where my questions come into play. Now fast forward to today, Corteva is dropping the Granular Agronomy service and I feel there is more to come and to it all. They promised a lot going in and not to say they likely couldn’t do it or didn’t to a point, I don’t think the market could just support the value and when that happens people get desperate. I’ve also heard from some others that they have been for sale and it is due to their actual numbers barely doubling in real direct revenue with under 1000 customers since their 300m acquisition. Ouch. Now being under a mega corp they probably won’t turn into a Theranos, but something seems off here.
Climate: So some will bash me here I know but hear me out. Yes I know they got bought by Monsanto for almost a billion like a decade ago and it shifted the entire AgTech industry. That is not my point in the comparison though. If some of you remember, before their acquisition and name change they were actually called Weatherbill selling a sort of crop insurance product. They had some issues I know with that product but tried to turn it into something else by just using big words to get the big payout. Many original employees left after the acquisition too in anger. They really didn’t have a product worth a billion then and even the first product version didn’t do what they said well in predicting nitrogen loss in crops using just weather data. Not only that, they tried to become an AIP (approved insurance provider) in Crop Insurance with all this new fangled stuff and that didn’t work either. It took them a ton of money in development, time, and marketing to get Fieldview to popularity. It finally did and especially when Precision Planting was bought by them, but here is the other thing. They went from wanting to charge $10/ac for an agronomic type product and slowly just started offering it basically for free now. They also after the acquisition were burning so much money I heard it didn’t even make sense. Like under 30m in revenue but with 200m plus yearly burn for a while. WTF? How does that make sense. Now that Monsanto was bought by Bayer things have gotten worse it seems and also after the sale of Precision Planting to AGCO. The Fieldview product is lagging in usability, they lost a ton of their employees, and now they are trying to charge “similar” other AgTech companies to connect to their APIs to transfer the grower data that they don’t even own. I’ve heard up to like $1/ac for the data transfer for other FMIS softwares when its the grower who wants to transfer it. All this is making a case for me that there are some weird things going on and hence the comparison.
Basically any pure ESG/Carbon based and/or new Biotech groups - I’ll keep this one really short, but the amount of money many groups are getting because they say they are going ESG/Carbon or have some amazing new Biotech product in Ag is insane right now. This is a recipe for lies and problems especially in the Ag space and of course much like Theranos the Biotech part of it is the one that really scares me. So much can be said and hyped around that particularly just due to the nature of the type of tech and usually the patents that are connected. Most likely I think the real Theranos of AgTech is in Biotech, but it could also be some Carbon/Sustainability/ESG group too easily.
All in all, these are just general opinions and while I do hope they get some conversations going I also hope people just think a little more when it comes to all the expectations and stuff getting thrown at them from these and other AgTech groups. It’s easy to claim to have the next big thing or be creating it that will transform Ag. The thing is that really can’t exist in Ag and you can’t disrupt Ag either fast. Ag is way too big and unique to both change fast or be generally disrupted in a broad way. Also, for the love of GOD none of these groups are helping feed the world in a dramatic way.
At the end of the day I know I’m not alone in some of these thoughts and hopefully if you read this tomorrow (many of you will at InfoAg in St. Louis) and work for one of these groups you’ll take it easy on me. It’s a free country by the way.
To end my little addition heres another meme to help you get through the day and as always it’d be great if you’d like, share, and subscribe to my newsletter.
Thanks for reading Easy Observations! Please Share, Subscribe, and Comment if you would be so kind. I’d also be happy to get together and meet if you’d like to talk more in-depth about Earth Observation and Agriculture. Feel free to contact me at my website. All the best!
Great observation and mirrors my thoughts for many years. I am amazed at the hype and valuations that Silicon Valley startups get. If you are based there, corporates think you must be a god with a valuation 10x higher than anywhere else.
Nathan. This is brilliant. I used to work for CFV and is totally correct, start offering USD 3/ha and now free? were is going to end that? For giant Bayer it seems do not care if they have the data.
You mentioned something pretty scary.. selling data? what if growers start asking themselves about this? Privacy policy... something I ever had the same question, but never had and answer..