Speed vs. Velocity in AgTech
“I wanna go fast”; a famous line from a popular Will Ferrell comedy, “Talladega Nights”. Going fast is all the rage – it’s fun and it feels like we are being productive, working towards an outcome or accomplishing something. But going fast and travelling at high speeds don’t always mean we are accomplishing anything, or getting anywhere at all. Today, one could argue it feels like we are living in a scene from Alice in Wonderland where the Red Queen says “"it takes all the running you can do just to keep in the same place”, or maybe it just feels that way! This is specifically true when it comes to agricultural technology.
If we approach the concepts of speed and velocity while focusing on agtech it provides a nice framework to view companies so you can see who to follow, or which companies have the highest likelihood of success. Every day, there is new technology coming out; things are changing at speeds never seen before and it takes most of us everything we can just to stay up on some of the basics of the ag industry and agtech as a whole. But are these changes all relevant and do they mean anything?
Just because a space is changing rapidly doesn’t mean it is consistently headed in the right, or a value added direction. Let’s get back to the concept of ‘speed’.
Speed is defined as:
“ the rate at which someone or something is able to move or operate”
Speed is good in many cases. Going fast is valued, especially today. But you’ll note one key point is missing in the definition: Direction. Speed is simply indicative of how fast something is moving, but direction is important.
If we look at the definition of velocity, it is defined as:
“the speed of something in a given direction”
It takes into account direction, and could include an end point or goal. Moving 2x faster than someone or something else, but doing 4x the work without an end goal in sight actually means we are better off going half the speed! This could also be said, that a company may move at 3x the speed, without doing the proper homework to set the business or technology up for success in the long run, meaning they are moving fast, but their lack of understanding is sending them directionless into the abyss and missing the point of adding value to farm managers.
Many of the companies that are launching new technology today in the agtech space have a flimsy direction. They don’t have a “why”, nor do they all have a solutions focused approach. They are applying some technology because it appears there is an application, but there may not be a problem, or the problem may be deeper than they realize.
Lets take an example of a generic company that is working to collect data, store data and leverage machine learning to derive insights for farmers (fictional company for example purposes). The company can actually move very fast, working to get some API’s, align with manufacturer’s etc. But there are two important components here that cannot be overlooked:
1. How are they working to insure the data collected is calibrated, data is input properly, the data flow is functional? This all takes time, but there is such an emphasis on speed that with many companies this can get overlooked or downplayed. In the longer term, the foundation isn’t there to successfully leverage any machine learning or artificial intelligence to derive insight because the data hasn’t been “cleaned”. In this instance, bad data, can actually be worse than no data. They could be traveling at a high speed, but their velocity is going to fall under pressure the further they go.
2. What is the end goal? There is so many companies trying to leverage machine learning that there could be a risk of this company being a “one trick pony” while main competitors had a vision and a direction to encompass more and solve for more pain points (or develop API’s). If they are moving fast just for the sake of moving fast, they may actually end up going in the wrong direction.
There is so much emphasis on first mover advantage and speed that we forget to focus on the other important parts that make businesses and technologies successful – moving with purpose at a high velocity. We can look at this Harvard Business Review article that talks about the half truth of first mover advantage and how it is actually situational. The coles notes is essentially, you will see that in an industry like agtech where technology is leading and the market follows after (eg: technology is ahead of where adoption is) there is actually a lower likelihood of first movers having an upper hand. First mover advantages are actually more valuable in slower moving industries and markets. While lagging way behind can be problematic we can understand that long term success is grounded in adding value and having a product or approach that truly makes money for farm businesses.
An example I look at as a high velocity company is Deveron UAS, a company that started in drones and imagery well after there were many drone companies. But if you look at what Deveron has focused on in the last number of months (and probably before) it has been about laying a foundation for how to obtain data, manage the data, analyze data and derive insights with the proper systems and analytics. In doing so they understood their core competencies weren’t necessarily in the data management or analytics, so they made strategic partnerships with companies like The Climate Corporation and pursued acquisitions such as Veritas to better arm their organization with tools and systems to support customers in the short term and long term. This is a company that to me exemplifies what many companies should look at accomplishing: being grounded in the fundamentals of crop production and working from there to develop an approach that amplifies a farms efficiency and profitability.
To be clear, looking across the agtech landscape, there are MANY high velocity companies, and it’s exciting. But one of the reasons agtech can be viewed negatively by industry is because of the high speed companies that make a lot of noise. Make sure you are looking at agtech companies that have a high velocity, not just a high speed. Understand the foundation they are building their technology on, what the value proposition is and how that enhances a farmers profitability or efficiency. What is the pain point or friction they are reducing and is that a big enough concern with a large enough number of farmers? The closer companies are scrutinized with a lense of velocity vs. speed, the better the one can determine which companies will be successful in the long term.