Agricultural entrepreneurs, in the emerging field known as agtech, are beginning to sprout from all corners of the world. Technology is transforming every industry, and agriculture has yet to reap the full benefit on the horizon.
As TechCrunch contributor Dr. Robyn Metcalfe explains, “We have yet to see the full impact of today’s technologies on agriculture. Despite all the innovation and investment, the most promising early stage technologies are having a hard time finding their place in the market.”
According to Kauffman Foundation reports, “given the size of the agriculture industry – global net farm income is $120 billion and farm assets are around $2 trillion – there is a huge opportunity for investments in AgTech (Forbes).”
In the process of building Farmia, an online marketplace for trading in livestock with more than 10,000 actively participating farmers, our team has discovered five lessons that can aid any young entrepreneur to capitalize on the rapidly growing agtech market.
1. Think simple from the start.
“Our life is frittered away by detail,” philosopher Henry David Thoreau once suggested in his observation on the complexity of life. But there’s a way out. “Simplicity, simplicity, simplicity.”
The truth is, failure is a natural part of the business cycle. Yet, contrary to popular belief, failure is often not due to poor ideas. The single biggest lesson we’ve learned along our way is that simplicity is often at the heart of the solution.
Consider: It would take 159,817 years for all the farmers in the world to sell all of the cows residing within their farms, assuming that each animal could be sold in an hour. Make it a point to fix the mess already present in agriculture. Don’t add to it. By making simple, yet intelligent technology solutions, you’ll soon make waves solving bigger agtech problems.
2. Turn a challenge into opportunity.
As an entrepreneur, you are probably already aware that solving problems is what a business should all be about. Since it is in your interest to enable scaling and growth, you should also be aware that problem-solving never ends.
Given the global food system will need to be capable of producing food for a projected 9 billion people by 2050, AgTech is precisely all about creating sustainable and transparent agriculture growth. Sounds daunting, doesn’t it?
The first thing is to identify an existing problem that needs a creative solution and build your product around it. Be sure to talk with people from different backgrounds. They will give you a valuable insight into the potential value of your idea.
Don’t be afraid to get your hands dirty doing some work. Visit farmers to gather objective, unbiased feedback. It’s important that you understand the problem from their point of view.
3. Do your research and be mindful of data.
Agtech startups need unique research techniques. When conducting market analysis, observe, engage, and listen continuously in order to identify and cater to unmet needs of agriculture professionals.
Be adaptable, and open-minded when analyzing agtech trends, which we usually define as technology increasing the efficiency of farms, in the form of software, sensors, aerial-based data, and internet-based distribution channels (marketplaces).
High quality data will lead to valuable information and insights for your agtech business. Manage your data correctly and ensure their quality. Only in this way they will become your valuable asset in the emerging agtech space. Once you are armed with high quality data, you can start revolutionizing not only your agtech business, but the entire community.
4. Be disruptive.
The first half of 2015, saw a jump in deals and dollars going into the agtech space, with more than $2.06 billion invested across 280 deals spanning in the agriculture value chain. This space is ripe for disruption.
What makes your agtech idea stand out? Can you articulate, in 20 words or less, why you are uniquely valuable? Sustainable competitive advantage over other agtech businesses is key to success.
The best thing you could do for your agtech is to focus on one key feature that truly makes you stand out. Be careful, though, when comparing yourself with other disruptive startups. Are you sure you want to follow the latest craze and be the Uber-like startup for everything? Ideally, you want your agtech to stand on its own two feet.
5. … But, don’t forget to delight.
Turn your data into a source of customer delight. It’s the cherry on top of the cake. This is Farmia’s way of doing agtech. We firmly believe that the underlying blocks of livestock trading are inherently delightful: for the farmer, it’s about receiving compensation for their hard work, and for the buyer, it’s about recognizing those incredibly important contributions. Have you found the source of delight for your target market, yet?
This article has been edited and condensed.
Maja Zikic, B.A in English Language and Literature, frequently addresses lay and professional audiences across Europe. Her articles have been published in the Farmia Blog, she is an animal lover, who enjoys writing about the current state of agtech business in Europe. Connect on Twitter with @farmia_co, an innovative online livestock trading platform, and read more articles written by Maja.