By Matt Kamphoefner, VP Sales & Business Development
Editor’s note: VergeHQ is a tech-nurturing community which showcases startup entrepreneurs with business leaders via “shark-tank” style pitch events in cities across the U.S. Recently, Farmobile was invited into the “tank” for a 5-minute pitch in front of business professionals, who don’t necessarily know farmers or understand production agriculture. It “went down” something like this.
. . .
Jason Tatge, Farmobile Founder and CEO, is the usual pitch man for Farmobile; but on this evening, we decided to give Jason the night off. Dealing with a mostly non-ag audience, my first goal was to establish the challenge of the ag landscape.
The more things change, the more they stay the same.
September 22, 1960. We are a few months away from a presidential election, and John Fitzgerald Kennedy is speaking to a group of farmers in Sioux Falls, South Dakota, when he says:
“For the farmer is the only man in our economy who has to buy everything he buys at retail — sell everything he sells at wholesale — and pays the freight both ways.”
At Farmobile we have a more personal but similarly principled story that we like to tell. You see, Jason Tatge comes from farming roots. When he was a kid his grandfather used to tell him, “Jason when you grow up, don’t become a farmer… because the farmer always gets screwed.”
But we think the game today is changing — that a new opportunity is emerging for farmers. The game today is data — it’s the digitization of agriculture. At Farmobile we are building a company that aligns our incentives with those of the farmers. Practically speaking, we help farmers to collect, share and sell their digital assets. But it’s more than that — at Farmobile, we are advocates for a digital strategy. And, we are passionate about providing farmers with the opportunity to own and directly monetize their digital creations.
It’s going to be a race.
Data and analytics are disrupting and changing most industries. From grocery shopping to political campaigns, the world is forever changed by data. Farming is no different, although we might be a few years behind. Big ag certainly agrees we are going digital. Look no further than public statements made by ag business giants framing this opportunity to their shareholders. And they absolutely know it will benefit them to own the digital content coming out of the field.
Practically speaking, we see a few blockers that are slowing things down:
- Incentive. The sensor networks and electronic technology exists to create fully connected machines, but incentive is lacking at the farm level. As such, the majority of generated data is locked in the machine’s cab; it just never leaves. Farmobile believes that by providing the correct incentive structure, farmers will be properly motivated to be better stewards of their data.
- Thumb drives. Thumb drives remain the number one transport mechanism for data leaving the tractor cab. Especially in a rugged environment, this is full of fail points. Too often it just does not work.
- Mixed fleet incompatibility. Even when a farmer is motivated to collect data, mixed fleet compatibility issues can make this a challenge. Different machine types and varied brands or equipment, as well as various after-factory electronics, lead to incongruent data sets.
- Trust. In rural America, relationships matter … values matter … showing up matters. But as an industry, trust has been eroded. So called “ag tech” has oversold its current abilities, and the American farmer is worn out from unfulfilled pledges and empty ROI promises.
So, what are we doing at Farmobile?
Fundamentally, Farmobile is a “Data as a Service” company with an intentional focus on overcoming these blockers. We manufacture a small piece of intelligent hardware called a PUC. You can think of this as a “fitbit” for farm equipment. The PUC plugs into the machine’s electrical system and streams data in real-time — both agronomic data sets (e.g., crop yields) and machine/engine information (e.g., fuel usage). Farmobile technology provides for data in one place across a mixed fleet of equipment without ever needing a thumb drive.
- Collect. Like any business, access to high quality information precipitates better decision making. Our real-time data is collected from a mixed fleet of equipment and delivered straight to the hands of the farmer. The PUC’s innovative hardware solves for blockers #2 and #3.
- Share (if they choose). This is really all about portability. We take data, standardize that information and make these assets portable with an Electric Field Record (EFR). This creates shared value with trusted partners like an agronomist or crop insurance agent. Relationships are strengthened when trusted partners can provide better service to the farm. Our shared value approach to data is aimed to build trust and solve blocker #4.
- Sell (if they choose). Farmobile offers a digital marketplace. Think about this as iTunes for farm data where a content creator — the farmer — can choose to “‘publish” their digital assets into a store, and a third party can make offers for that data. The entire business model is farmer-centric and provides the necessary incentive to resolve blocker #1.
A radical idea: Create direct ROI for farmers.
As I travel around the country and speak with farmers, there is a prevailing sentiment that new ag tech lacks ROI. Farmers commonly ask: Where is the ROI from all this data I am collecting? How am I able to evaluate all the different choices from new ag tech providers? Who can I trust in this era of digital agriculture? Farmers are savvy business owners and are, indeed, asking the right questions.
I would suggest that most new ag tech cannot pass the ROI test — it’s part of the reason that we are still in the early adopter phase. The industry has taken a concept that should not be overly difficult and made it confusing, perhaps in an attempt to own the farmer’s data. Now, I completely believe that digital agriculture will drive the next generation of yield gains. In some instances, I think we are well on our way.
I have seen the best success where:
- Data is kept independent. Don’t lock your data into a company’s silo. Own the data and deploy it as an input to use a given tool or analytics package.
- Pilot different programs. A benefit of owning your data is that you can test more than one technology or analytics package on your farm in the same year.
- Local knowledge is also utilized. There are some good ‘digital agronomists’ out there, who are skillful with software tools and have local field knowledge. These are generally the types of folks that ‘iPad agronomy’ would like to disintermediate.
Finally, our answer to the ROI question is really straightforward — Data Store. The opportunity to sell digital content is appealing to most farmers with whom I speak. The key points are:
- Ownership provides choice. With Farmobile the farmer is empowered to accept or reject offers for this data.
- Disintermediation is NOT our value proposition. The farmer should continue to share data and create value with their trusted partners.
- 50/50 split. Our incentives are completely aligned and we both have an important role to play. Today we are taking the risk, building the Data Store infrastructure, developing buyer-side relationships, and subsidizing the seller-side through our guarantee. Farmers are subscribing to a Farmobile PUC and utilizing their data content. This is a revolutionary idea that could possibly change our relationship with online content.
When you don’t know where to go, go to the farm.
At Farmobile, we are super lucky to have some really engaged customers. One great example is Seba Brothers Farms. David Seba was in the audience the night of our pitch. He is a tremendous ambassador for agriculture; you can read more about his story here.
In closing, I want to thank David and our farmers everywhere. I ask you to remember one thing as we all take a moment to celebrate our independence and the tremendous opportunity and responsibility that our freedom provides. Our number one national security measure is absolutely the fact that, as a nation, we are able to feed ourselves. And with the productivity of modern agriculture, we delegate this responsibility to a relatively small number of folks.
May we always support our farmers and never delegate this massive responsibility outside our great nation. God Bless America! Have a terrific Independence Day.