By Jason Tatge, Farmobile co-founder and CEO
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Every day at Farmobile, we talk with farmers, agronomists, innovators, and entrepreneurs about the enormous power in “truthing” hunches with data. The value is clear when the incentives are properly aligned.
While we believe in using innovative technologies to directly support our farmer customers, we also know that’s not the true game-changer for the industry. The bigger story is really about ownership: we allow farmers to own and control their data.
The implications of that ownership are not lost on the farmers we speak with, because they understand that when you own an asset, you have the right to sell it.
We are working side-by-side with farmers to create a new revenue stream for their business. It’s a novel idea that we think represents a new era for digital agriculture.
This century we’ve witnessed entire businesses being built from their users’ data, yet those businesses rarely give the data creators a share of the profits. Tech giants like Google have turned ‘data sales’ into a billion dollar industry before consumers were wise to the idea.
Many suggest that agriculture is the final frontier for digitization. Farmobile stands alone in our desire build a business where users are rewarded for their digital creations.
Rethinking the Google Model
Just two decades ago, Larry Page and Sergey Brin, the creators of the fastest and largest search engine in the world, knew that data was powerful. They built a multinational technology, and became masters of the universe by collecting more information than had ever been thought possible. Their success blew the lid off traditional marketing and launched transformational information sharing in the digital age.
Over the years, they “truthed” a lot of hunches. And they made a fortune.
Having amassed a ton of user data, the Google team created AdWords, an online service that allowed marketers to display ads linked to keywords in user’s search requests. Advertisers loved the idea that they only paid when consumers clicked on the ad word. In addition, the analytics provided by Google gave marketers never-before-seen insights and results about their customers.
Google revolutionized advertising. They forever altered an industry by changing the way companies marketed products, brands and services. They digitized advertising. Google’s growth skyrocketed, generating billions in cost-per-click revenues. The company grew to $90 billion in annual revenue and a $580 billion market cap.
Ironically, Google — which initially prided itself on never “selling out” to advertising — actually flipped the model on its head by turning its users’ interactions into the product. But, like most modern technology companies, Google alone benefitted from the monetization of their users’ data.
Now this has become a generally accepted practice for the search business, as well as social networks and other internet services.
That model of selling customer data is a problem as it begins to move into other technologies and industries, like your internet service provider, cell phone and television manufacturers, John Deere tractors, and farm management software.
Too many of us are blindly accepting this practice as standard, but why?
Defining the Line: More Equitable Terms of Service
We believe that the time has come to update the thinking behind how customer data is used, and create a more equitable model. In this way, Farmobile’s business model is disruptive, potentially beyond even agriculture, because our focus is on sharing the revenue return from monetized data with the content creators themselves (i.e. farmers).
Profits generated from buy-sell transactions are split evenly with farmers.
Also, with Farmobile’s business model, data buyers (such as research, sales, or marketing partners) can measure the quantifiable results of their investment. They only pay for the complete information they desire. This creates an alignment of incentive structures to fuel the digitalization of agriculture.
With this model, farmers have an additional reason to collect and store these digital assets. And for buyers, this approach takes the risk out of their data acquisition strategy and provides a tangible appreciating asset for them to build upon in the future.
Farmobile’s system of collecting, sharing and selling data on behalf of farmers is in fact a much more efficient form of marketing than agribusiness has ever seen. And we are making people in traditional agribusiness companies a little uncomfortable.
Right now farmers have an opportunity to reshape the conversation and determine the rules that govern their business for decades to come.
For traditional agribusiness, that shakeup is a problem. I’m reminded of Mel Karmazin, CEO of Viacom at the time, who pushed against advent new data-driven advertising in a conversation with Sergey Brin and Larry Page. He is quoted as saying: ”You guys are messing with the magic. I don’t want my advertisers to know what works and what doesn’t. I want to sell them the sizzle.”
Moving Digital Agriculture from ‘Sizzle’ to ‘Performance’
No industry has been sold more sizzle than modern day agriculture, specifically in the so called ag-tech movement. Farmers don’t need “sizzle,” but rather “value.”
Don’t get me wrong: many of today’s traditional products generally provide some value if applied at the right time and matched with the right genetics on the correct soils. However, the price or risk associated with them is borne by the farmer, rarely shared by the product manufacturer. As President John F. Kennedy said:
“The farmer is the only man in our economy who buys everything at retail, sells everything at wholesale, and pays the freight both ways…”
The cards no longer have to be stacked against farmers.
Farmobile’s data-driven technology provides farmers with unsurpassed layers of comprehensive, field-rich, real-time agronomic and machine data preserved in digitized layers that allow for easy access from any connected device. The quality of the data collected eliminates guesswork, allowing farmers to “truth their hunches” and improve profitability. We believe that trading “sizzle” for “performance value” through passively collecting field data in an independent fashion will transform modern day agriculture as much as the transition from horse to tractor.
If the Google story teaches us anything, it’s that a revolutionary new business model requires a massively bold vision, enormous intestinal fortitude, and the ability to embrace being called “crazy” for a period.
In the spirit of “truthing” one more hunch, imagine applying the Farmobile model to a Google-like company seeking to be completely transparent with its user community. Imagine the number of users who’d flock to a search engine if they actually shared in the profits of their own data monetization? At a company of Google’s current size, stakeholders would have $45 billion in annual revenue, plus users would have a $45 billion monetizable asset.
What we’re building at Farmobile is not just a place for farmers to monetize their data. Via the principles of free trade and transparency, we’re building a platform that aligns incentive structures and creates value at every touchpoint.
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Read more about our vision for Farmer Power here and be a part of the data revolution in agriculture.