Matt Waits, CEO, SST Software, completed a recent interview that the planners of the World Agri-Tech Investment Summit distributed to promote the March 3-4 event in San Francisco, where many ag industry leaders, innovators and entrepreneurs will speak.
What role do you think advanced agricultural technologies have in achieving world food security?
Food security has at least two meanings, one relating to providing sufficient quantities of food and the other relating to the safety and nutrition of food. Agricultural technology will increasingly make an impact in both of these areas. While improved inputs like seed, fertilizer and crop protection products will continue to make a huge impact in yield gains, they will not be sufficient in achieving the gains needed for global food security. In my estimation, better decision making is at least as important in achieving this goal. To accomplish this growers must begin to document the activities on their farms, as the old adage goes "You cannot manage, what you do not measure. So it starts with record-keeping but a single grower's data is not sufficient to tell the full story. If we are going to truly improve decisions about varietal selection, input rates, and application timing then we need to leverage the power of big data systems that make use of the data from many farmers. Diligent, standardized, geo-spatial record-keeping is also the foundation to improve food safety concerns. By collecting and sharing data with agronomists, food processors, and others we can ensure that best practices are used and when they are not we will be able to easily identify the source of problems.
Are there any sectors within agriculture where you would like to see more innovation? In your opinion what's ripe for disruption?
There are companies investing in UAVs, satellites, and modeling for crops, inputs, and pests. Many of these technologies have the potential to make a big impact in how growers manage their farms, but most of these products are being brought to market in isolation from the larger data ecosystem, and that will cause them to fail. Well, actually the problem is that there really isn't a larger ecosystem today. Almost every company bringing a product to market today, stands on an island. This is going to be the largest obstacle to success in the ag technology space. There is not a company in this market that provides the whole solution, and growers are not going to be willing to re-enter data across multiple systems, so in my opinion, those that stand the best chance of winning are not necessarily those with the best products, it is those that take part in a larger ecosystem that ensures synchronous data across many providers.
Which types of ag-technologies are currently generating the most interest amongst the investment community?
The investment community knows that, as in every other industry, the winners tend to be those that influence daily decision-making. So they are looking for those that use data, and usually big data, to provide decision support tools to agronomists and farmers. This is why when you get under-the-sheets on almost anyone's business model there is long-term desire to provide big data decision support tools.
What is the potential of big data in agriculture and how could the future look?
In my opinion, the majority of the value from all of this technology will be realized by insights gained from big data. There are many obstacles to overcome to achieve this but I see a future where virtually all decisions a grower makes will be heavily influenced by quantitative results from statistically comparable fields and/or models that make use of large scale aggregated data.
In your opinion what is the biggest challenge facing agriculture technology companies in taking their solutions to market?
Many of the new players coming to market have good ideas and have identified true needs, but as I said above, not many will survive as a stand-alone product. They must find ways to create seamless and synchronous work flows across other decision support tools. In addition to this obstacle, many of these companies are coming from outside of the ag market and they therefore don't understand the underlying dynamics between manufacturers, ag retailers, agronomists, and farmers. This is leading them down business model paths that aren't sustainable. On the technical side there are also a lot of challenges facing start-ups. It's the boring stuff like geo-spatial rules defining how field boundaries are managed, how to pass data between parties while maintaining security, and how to spatially standardize data while dealing with overlapping polygons within yield and as-applied data. These sorts of issues blindside many startups, blowing their budget and releasing timelines. The seasonal aspect of precision ag also makes it tough to get established within the industry. If you miss that period of time, you have to wait another year. The revenue stream stops, but the expenses don't. A downturn in commodity prices also hurts adoption of new products, and a company needs to have enough liquidity and patience to weather the storms.
How does your company specifically approach the challenge of taking advanced technologies to commercial scale?
Firstly, we have partnered with the growers' trusted advisors as our channel to the market. Agronomists, whether at ag retail companies or independent consultancies, play a huge role in the adoption of on-farm decision support tools. We have built a technology system that allows agronomists to provide tailored solutions to the needs of their farmers. Secondly, we take a long term view of adoption. Sometimes even our most loyal and longstanding clients take 5+ years to adopt some of our technologies. For example, we built our first variable rate seeding tools 8 years ago, but today, in 2015 we are still in the Innovators portion of the adoption lifecycle. Technology has to overcome two major challenges. First, it has to find a way into an organization's workflow, established I.T., and budget. Then, it has to establish confidence and credibility among the growers and their trusted ag service providers. This may take a decade, so an organization has to adopt a long term view and have a lot of patience.
What is the single most important thing that a government can do to stimulate the adoption of advanced agricultural technologies?
The government currently helps in two ways, one is the carrot approach with programs like EQIP (Environmental Quality Incentives Program) that subsidize the cost of precision ag tools in return for improved environmental practices. Then there is the stick approach, that encourages the use of record-keeping and precision ag tools in order to comply with environmental regulations. I don't think we need the government to do anymore that it is doing right now. Growers are not waiting around on government incentives to adopt technology, they are waiting on the market to provide products that deliver clear value.
How do you as a company identify potential partners or collaborators in the agri-tech space?
Over the last 15 years, SST has built a standardized and automated set of software and data processing services. Through this effort we have developed standards for data collection, data security, and data sharing. We are now offering APIs that allow third parties to leverage our infrastructure and standards in an effort to provide synchronous connectivity to other applications. This offering is what we call The agX Platform, and through it we offer a Store that allows our partners to sell their products and services to the 100 million acre footprint currently on the platform.
If you had to name a company as "one to watch over the next 12 months, who would it be?
Adapt-N. This company grew out of Cornell University and has done an excellent job of connecting solid agronomy with technology. Nitrogen is extremely important and today it not being managed optimally from either the economic or environmental perspectives. Adapt-N is providing a daily N model that will improve application rates and timing, and in 2015 they will offer their service through The agX Platform.
Matt will be discussing these ideas in more depth as part of a panel focused on at the World Agri-Tech Investment Summit in San Francisco on March 3-4 2015. www.worldagritechusa.com.