AgTech Unicorns, Show Ponies, and Gazelles...What?
5/3/2024: My 47th Newsletter Edition now called Ag Uncensored (formerly Easy Observations)
Opening Thoughts:
Happy Friday! First off, while I know most like my writing and while the podcast is growing which are most of the posts I’ll just say I’m going to shoot for a monthly post like this. It’s all I got right now. (Don’t forget to subscribe to my channels at www.aguncensored.com btw)
Back to it…
I was scrubbing Twitter (or X for those that care) yesterday and ran across a very interesting article by a guy named Jed Sundwall, Executive Director of Radiant Earth. For those that don’t know what Radiant Earth is it’s a Non-Profit that works with in the geospatial community to help expand it’s use. In a nut shell.
What Jed proposed at least in the mapping and geospatial world is thinking of a new way to handle and utilize the gobs of data that exists in the world. Here is a statement from the beginning of the article here.
As we enter 2024, it is clear that 20th century institutions are not able to create, manage, or share the data needed to cooperate on the global challenges we face in the 21st century. While many governments, research institutions, civil society organizations, and some commercial organizations have opened up data in hopes that it will be put to good use, there’s little evidence that this is actually happening. We lack institutions capable of consolidating and harmonizing data at global scale, and it’s time to fix this.
Where it heads is that we are creating the wrong types of organizations to handle these mass amounts of data and the solutions tied to them. As he sets the tone for that he sections the types of orgs we have and what we may need below…
The Unicorn
A Unicorn is born when a company consolidates enough data to connect two sides of a market. Amazon connects sellers and buyers. Media platforms like Meta, TikTok, and Google connect consumers to advertisers. Uber connects drivers and people who need rides. AirBnB connects people with beds and people who need beds. All of these businesses used capital investments to create technologies like apps, devices, and even entire operating systems that serve to gather data that they can use to generate profits for their investors. While Unicorns show us how valuable data can be, their rarity highlights how expensive and difficult it is to create great data.
The Show Pony
A term he uses to describe most of the data platforms created by public sector institutions. Show Ponies have cool websites. Some of them boast portals or application programming interfaces (APIs). Sometimes they have mobile apps. They’ll often feature an interactive dashboard, sometimes with a beautiful map. They look great. Show Ponies are typically built with limited grant funding that is allocated on a project basis. Sometimes they’re created merely to be a proof of concept. In other cases, their funders hope that “if you build it, they will come.” But because Show Ponies are usually funded by governments or non-profit organizations, they rarely have a revenue model. So even if they do gain traction and users, a Show Pony’s continued existence depends on continued support from governments or philanthropy rather than their users. This is a fragile existence, and the Internet is littered with neglected Show Ponies that aren’t being maintained.
The Gazelle
He states, “We should know by now that grants rarely produce durable technology services and that equity investing isn’t the only way to finance technology. It is time to blaze a middle path in which philanthropic capital funds a variety of data service providers that are accountable to paying customers but aren’t owned by anyone. I call them Gazelles.” They are small, fast, wild, and travel in herds.
Continued…
More or less, while the geospatial community and AgTech have many crosses between them they are also very different. My main thought though is there is something to be said about how he described these different animals and what they mean. I think my point here is that these descriptors can be matched in thought to the AgTech space or maybe the entire Ag industry.
My AgTech version of this:
To start off, while the Unicorn version above can fit Ag in much the same way the others are a little different, though I like the way it’s all put forth in general. Here is my thoughts on them and attempts to change it up a little to make more sense in Ag.
AgTech Unicorns:
Pretty self explanatory, but we also don’t have many of them or at least we used to. You could almost say an AgTech unicorn isn’t really a Billion dollar valuation either, maybe more in the 250 million arena. Either way, sematics.
What he described though fits the general narrative of the problem which is money doesn’t necessarily solve the problem. We’ve seen this a lot lately, like a lot a lot. The theory has been tested and the result is it’s a lot more complicated so while money is needed for many big things to happen properly and they are needed, we need other pieces to the puzzle.
AgTech Show Pony:
I’m going to change this one up a little, but I do think his explanation can fit in some ways especially when it comes to University based built technology from robotics, biologicals, and gene editing type solutions. This is quite common and many times Universities or special organizations funded by grants create the starting tech to these things to get them going. To his point though there is a problem to it in this quote below…
The way we fund Show Ponies also hampers global cooperation. Show Ponies produce data that reflect the biases, capabilities, and priorities of their funders. They produce data in different formats, with different quality standards, on different time scales, under different licenses. This variability makes it prohibitively expensive for most organizations to consolidate and harmonize data from Show Ponies to produce intelligence they can use.
This is pretty spot on in my opinion, but I do see another angle to Show Ponies in AgTech beyond the above.
Another take on the Ponies:
In AgTech the other side to this maybe are Startups themselves and beginning their funding through Seed or similar means financially, say incubators. To the main description above they are cool and all and show some interesting ideas, but lack the money to really make them into much beyond a proof of concept many times.
Now that isn’t the case all the time and even as my colleague Walt Duflock has stated before sometimes that is good as it helps showcase a more pure product market fit if you start small and build it up organically with a little money instead of big money. The problem though is that hasn’t really been the plan by most as of late. Most have started in this way in order to just raise more money after their MVP is good enough to sort of work within confines of interest to the public.
In any realm, Show Ponies while great and all are having a tough time doing all the great things we want and need in AgTech beyond showing that there are cool things to build that should help in Ag. It’s hard for these groups to turn into a pure play positive value based product. Not impossible, but hard and weird at times too.
AgTech Gazelle:
Now this one is new, his concept is new and so will my version of it in relation to AgTech and Ag as a whole. While I do like the philanthropic idea around it and being the main driver of money to develop core pieces to start the greater good, we all know Ag doesn’t really work that way like other industries.
Maybe that has to change and the main theory is sound in that major groups that raise funds for philanthropy need to look towards AgTech further. You could say that Bill Gates and his minions of Billionairs with the Gates Foundation is doing these types of things. They are and some others are as well to an extent. Maybe that just needs to be expanded and focused further.
While that is great and all I do have another way to think of the Gazelle model. There really are two parts or options to it and I’ve sort of talked about these things before. Here is how I see it below in two ways…
Public
Much like crop insurance works through the USDA and RMA or larger orgs like NASA or even the DOD operate, we have many public/private partnerships. Items are put up that are needed and people bid on the projects. It’s not like grants, but there are similarities to it I spose. Where I see it fitting is to help fund larger initiatives that are spendy, time consuming, and hard to create but that are very much needed by everyone as a whole. Many times you also have a major and minor private partner in this process to help the little guys as well.
All in all, I think there is something here that needs more exploration and thoughts to formulate it. I do believe it is one way.
Private
Now with this one I think you could use a similar formula to the public/private partnerships in the bidding process. Instead of the government pushing the funds through bidding processes, maybe corporates and large companies or other large Ag based orgs are the ones paying for it through the same mechanics?
They have the money many times and while most try to do things like create projects and pay through contracts, it’s not done very efficiently and can become very fragmented and bias towards certain other groups.
Think of it this way, say a group like John Deere says we have 10 different initiatives and 1 billion dollars to solve and build them and each one we feel will cost X. Others bid on them to try and win them and sometimes that might involve more that 1 group bidding together with large and/or small types in one batch. Something like that.
What it does is allow the larger groups to create the vision that is really needed and wanted and instead of making it a mess internally (which we all know happens many times) they well “farm” it out. How appropriate…
Anyway, another way to think about how to progress AgTech further with current methods but also in typical capitalistic ways many want still. You could probably write a book on how those things would all work and function, but we are just shooting out ideas here to ponder. Take it for what it’s worth.
In Closing:
I’m no wizard here of answers and solutions, but I do think there is something here to be said on trying to change up the narrative and ways we fund many of the larger items needed in Ag and especially around technology.
We also need the market to figure things out itself while not relying on the government to control the narrative. We really need both. Hell, just look at the Carbon space write now and one that I’ve created fun memes about. While we don’t want the government to create all the rules around it, we need their intervention to guide us to in how it fits the larger frameworks of society.
We need balance and right now I don’t think we have it. To add further, if you look at the USDA as it sits and what it does the future looks weird. From delays in the Farm Bill to a growing population within it and other Ag orgs that will be retiring very soon. We need to fill the gaps and let’s just say younger people are not clamoring for jobs at the government right now.
To my point earlier, this is what NASA is starting to do and other orgs everywhere. Giving the private sector a little more give into their influence in how things progress. While there is danger to that at times and lobbying internally can make a mess of things through politics, something has to change right?
So from here we need to turn the old noggin on and figure some shit out that is different and new with a dash of tradition. Maybe the Gazelle path is well, a path to look at. Maybe it’s something else like a Donkey or more appropriately termed, an Ass.
I can tell you one thing. Unicorns aren’t real, Ponies are small, and Gazelle’s are elusive. Let’s maybe make an Ass out of ourselves.
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