“For startups, 2010 – 2020 was about disrupting, 2020 – 2030 will be about augmenting. Its saying here’s what you as incumbents do well, here’s what we as tech startups do well, here’s how we combine the two to provide a better customer experience.”
This is a quote from a financial technology (fintech) founder talking about how fintech startups have/will interact with incumbent banks.
My bet is that we can apply that quote to the ag industry for the next decade also.
Over the last several years Farmers Business Network and Indigo Ag collectively raised over $1 billion dollars to “disrupt” ag incumbents. There’s so much Silicon Valley lore wrapped in the word “disrupt”, which can lead to the assumption that to build a big business you have to do what Uber did to the taxi industry.
Upend, eliminate, replace.
But disruption in the traditional sense is not always necessary to drive innovation and create new value. Look at Visa’s recent $5B acquisition of Plaid, a financial infrastructure software – think of it as the pipes that connect our accounts where we want them to, or the pipes that connect incumbent financial institutions with fintech startups. Plaid didn’t disrupt the financial services industry by eliminating, they’re actually enabling growth of the pie.
This idea of innovating with and for incumbents makes even more sense when you look at the agriculture industry. Agribusinesses have grown and consolidated because these businesses are often enormously capital intensive and operate in wildly volatile markets so scale is a prerequisite. They may be hated by some almost as much as the taxi industry was, but there are legitimate reasons these companies have evolved as they have.
With that pragmatism in mind, what could the next 10 years of ag innovation that improves existing supply chains look like?
On the row crop side, look at AgVend and Bushel, two startups with the express objective to AUGMENT the ag incumbents’ offerings. Ag input retailers looking to add an online buying channel? AgVend. Elevators looking to digitize communication processes with farmers? Bushel.
Not disrupt, improve.
Not eliminate, augment.
Or look at animal protein. Over the last several years a lot of money has been raised and invested in plant based or cell cultured meat companies. But recently, it seems there is increasing attention being turned to innovation that will help players throughout the supply chain improve the process of raising, harvesting, distributing and marketing animal protein.
What’s interesting about this type of worldview is that it unlocks….the world.
Not only will this likely lead to more innovation funded in more realistic ways (meaning, more realistic expectations on company outcomes) but it should also lead to better outcomes for customers and ultimately for consumers whether in the form of improved quality, traceability, etc.
But the really exciting thing is to think about how this type of approach grows the pie, grows the ecosystem.
Here’s an example from the world of insurance technology (insurtech) and fitness tech (umm FitTech?).
Axa Singapore is an online insurance company offering life and health insurance. ClassPass is a global company connecting ClassPass members to sign up for fitness classes across an entire network of fitness providers. (It’s Airbnb but for unused capacity in a fitness class instead of a spare bedroom…and its a genius customer experience, 10/10 recommend.) These two seemingly disparate companies just announced a partnership that would give Axa customers access to ClassPass studios. Absent ClassPass’s network of all kinds of fitness studios, how would you give a customer access to so many studios and options in one shot? You wouldn’t. The rationale of the partnership isn’t what’s interesting here, its the fact that a technology enabled businesses can aggregate market players in unique ways that unlock entirely new value. Which unlocks new alignments among companies to create new value.
This is an unrelated-to-ag example of how technology begets new business models which can beget new partnerships. And that’s what’s exciting about the potential of a decade defined by innovation that improves the agriculture ecosystem.
We’ll see more of this across all segments of agriculture as new business models are unlocked, now connectivity established among market segments, and more value chains align virtually.
- What are some non-ag examples you’ve seen?
- What are some problems in animal agriculture where you’d like to see an augmented approach to innovation?