At last year’s F&A Next, Adam Anders, Managing Partner at Anterra Capital, talked to legendary entrepreneur and Principal at Future Shape, Tony Fadell about why the agricultural sector is increasingly capturing investors’ attention and why we need to unseat the giants of the agricultural industry to empower innovation to flourish.
Tony shared a host of interesting insights throughout the discussion, ultimately diving into how “Agtech is a collision of the old world and the new world. The sector is on the cusp of a wave of disruption as smaller innovative companies begin to unseat the industry giants, much like we saw in the tech world in the late 70’s and early 80’s.”
“The future of agriculture is going to be driven by the innovative small and midsize farmers. There are millions of family farms around the world and in countries with varying economic circumstances, which is why it is paramount for start-ups to think regional from the onset and to build products accordingly- designing differently for different areas around the world. By investing in these up-and-coming businesses, we can empower farmers with the tools to democratise the sector and drive real disruption and change.”
Here are the key takeaways from their discussion.
The old world vs the new world
Agriculture today is a collision of the old-world with the tech world. The power currently sits with the industry giants who control the market, but who are slow to innovate. As a result, things tend to move at a glacial pace. The innovations are largely happening below the surface in the smaller, more nimble companies who are using tech to shake up business models and processes.
Capital isn’t enough to drive innovation
While the recent influx of investment is helping to address some of the major challenges facing the industry, capital alone can’t drive innovation. In order to unseat the industry incumbents and drive innovation, investors need to identify small-medium businesses which are offering a disruptive technology and a disruptive go-to-market, and give them the tools they need to disrupt the industry.
Agriculture’s Silicon Valley moment
There is a parallel to be drawn between agriculture today and Silicon Valley in the late 70s and early 80s. Back then, you had the mainframe businesses, and then the smaller upcoming players, like Microsoft and Apple. And in agriculture, as happened in tech, things are about to flip.
The next ‘big idea’
The agricultural sector is currently underestimating the impact of the exponential growth that is already occurring in previously niche sectors, like cannabis, let alone the impact that one small but strong idea can have on an entire sector, bringing to mind Tony’s role inventing the iPod, leading the iPhone project and then founding Nest. Investors and agriculture incumbents should watch this space.