IN the fast moving, exciting new sector that is agtech, where and who do we look to for the next great innovation?
It’s an emerging, and immature sector, with great opportunities lurking, but the reality is we need to exercise some caution and manage our expectations on who’s actually going to deliver the goods.
Farmers wouldn’t know life without it and startups live and die by it. Researchers are immune to it, and most corporates dodge it. What is it?
Skin in the game.
Innovators in the fast-growing agtech startup world are, like farmers, fueled by purpose, conviction and in the end, are absolutely attached and accountable for the risks they take. This defining feature of the startup space completely segregates itself from ag research and development on this point alone, an area of growing concern in the agricultural innovation community.
But like any new business that’s trying to grow, startups need your support. Whilst they lack deep pockets (or any pockets in some cases), and don’t boast widespread distribution or connections in the industry, what they do have is hunger, speed, agility and the bittersweet fear of failure pushing them. This is where farmers and startups align, and leave the academics and researchers for dead.
Why the mention of academics and researchers? Well there’s a common, justified and growing level of intolerance to the combined round-a-bout $1 billion per year that is spent on agricultural research across RDC’s, universities and national science bodies.
The bang for buck the industry is getting in return is similar to buying a bottle of water from a hotel mini-bar. Extortion. But unlike a mini-bar, where you experience instant gratification, many of these researcher types think in ‘dog years’ – where one year in their life is seven in ours.
Whilst I’m not suggesting these institutions be replaced with just startups and venture investment, we should question the disproportionate amount of cash splashed on people who have no skin in the game and therefore, are unanswerable to any downside on wasted money, useless technology and failure to hit the market with anything more regular than a blue moon.
This is, in essence, why farmers have been and will increasingly be sceptical towards research institutions, and why startups and farmers will in time, share a long, strong and valuable relationship.
Corporates and large organisations are also in a similar situation. Bureaucracy exonerates skin in the game, and there are few who have put their money where their mouth is and invested into the agtech ecosystem or directly into startups.
These standout companies exhibit a behaviour that is distinctly un-Australian in their resistance to our common conservatism, but absolutely in-line with international best practice, so all the power to them. They understand that the corporate world is moving quickly to a time where a large company’s average lifespan is similar to that of a kelpie.
Necessity is the mother of innovation – farmers know this – and startups feel it every day. The hunger to win bread and go big by fixing problems to attract revenue and investment is the sword startups live and die by, and it’s simply an incomparable world to the comforts enjoyed by the thousands who feast on the $1 billion a year levy and tax-funded research pie.
Startups have created trillions of dollars in value around the globe in the last decade and have changed the way we do a lot of things. So I have no doubt that as support grows for Australia’s agtech sector, we’ll see more disruption across the industry by startups who will drive real change for farmers at an unrivalled economic rate of return, better than that of R&D ‘investment’.
So when assessing a tech, team or innovation, ask yourself, will they personally feel the downside of not getting their product right? Because it’s that mutual existence of constant skin-in-the-game that is the bedrock of a relationship between a startup and a farmer. So where possible, embrace startups who just like you, have something to lose and are having a crack.
Isn’t personal accountability a beautiful thing.
About Sam Trethewey
Sam Trethewey is from a farming family and has worked across Australia and overseas on most major commodities including beef, wool, lamb and cropping. He co-founded SproutX, Australia’s first and largest agtech accelerator and investment fund where he spent nearly three years developing an ecosystem of support for agtech startups. He has been a regular commentator on agriculture through print, radio and online and has recently started his own food production company whilst also working as Head of Brand for Redhanded, a rural and regional communications specialist.
Questions? If you’ve got an agtech topic you’d like Sam to tackle, please email [email protected]