“Software is Feeding the World” is a weekly newsletter for Food/AgTech leaders about technology trends.

Greetings from the San Francisco Bay Area. I do want to apologize for missing the last two newsletters.

This is the last newsletter of 2022, and I want to thank everyone for their kind support and encouragement.

I want to wish everyone who celebrates a Merry Christmas, and also a very happy, prosperous, and interesting 2023.

I hope all of us get to work on interesting projects.

I want to wish you and our planet the best of health.

I have some domestic and international travel coming up over the next few weeks, and so the newsletter will return on Jan 22nd, 2023.

The last newsletter for 2022 is a review of 2022, and a sneak peak into 2023.

2022 Statistics

2022 was a busy year, though I put out less content than 2021. 2022 saw a significant increase in the number of subscribers, but interestingly the open rate has gone up from 50% in 2021 to 57% in 2022. (Open rate was 55% in 2020) The NPS number had a small dip from 70 in 2021 to 65 in 2022. (NPS was 90 in 2020)

Here are the stats in graphical form for number of editions, open rate, and NPS scores for the last three years.

As I have said before, the newsletter is a way for me to satisfy my own curiosity about the application of technology in solving problems of food and agriculture systems worldwide. I am writing to satisfy my own curiosity and to learn.

As I was going through the 40 editions of 2022, I realized I spent a significant amount of time on robotics, equipment & automation, and platform. Fortunately, I didn’t spend a whole amount of time on carbon markets due to all the irrational exuberance over the last 2-3 years.

It was evident to readers as well, as quite a few of them unsubscribed this year (compared to previous years) as their interests did not align with the newsletter topics. I welcome this and consider it as sharpening the product-market fit for the newsletter.

Favorite editions from 2022 (top 7)

​123. Let a thousand robots actuate (Oct 30, 2022)

Robot platforms provide generic robotic capabilities for hardware and software, without building application specific capabilities. Building robot platforms is equally hard, as your customer is not the end user of a particular application but the application developer for that application.

Platforms are incredibly powerful as they provide the tools (or lego blocks to use Walt’s language) to rapidly build other applications. Imagine how difficult (and inefficient) it would be, if to make accounting software, you had to design and build computer hardware, and an operating system to run on the hardware, before you got to building your accounting software.

​117 & 118. Narrow (thin) markets in commodity row crops (Sep 18 & 25, 2022)

Feedback: “Excellent explanation of “thin markets” and what AgTech entrepreneurs should do about it. This will absolutely inform my decisions and strategies going forward. Thanks!”

US commodity row crop markets are characterized by a few sellers (farmers) and few buyers (off takers) on the output side, and a few sellers (input, OEMs, etc.) and a few buyers (farmers).

The US commodity row crop markets fit the definition of narrow (or thin) markets.

Narrow markets create challenges around transparency and pricing fairness during the product procurement stage. Low transaction volumes and low liquidity in narrow markets reduces visibility on price and volume data.

This makes incorporation about how new data about a commodity is being included in the price quite challenging, leading to price volatility. It is often difficult to figure out what a farmer really pays and how much does a seed company charge for a bag of seed, due to all the different rebates, discounts, and specials. The narrow markets make obfuscation easier than a competitive market. Small producers are at a natural disadvantage in a narrow market. Large producers can spread their fixed costs over a larger area.

To get past the unique challenges posed by thin markets, will require new business models, different partnerships and alliances, and new technology and user experiences.

​116. Infra, Platforms, & Knowledge graphs (Sep 11, 2022)

Feedback: “Great insights into the ag tech space. Something missing or maybe already covered is how a combination of hardware and software (IOT) is doing on a macro level in the ag industry.”

How can knowledge graphs work in agriculture?

Knowledge graphs can incorporate both structured (for example, coming from a spreadsheet, or precision agriculture equipment) and unstructured data (a twitter feed, images, YouTube video, bulletin board information, books etc.) Knowledge graphs can be successful and valuable if they can uncover new insights by automatically incorporating new data sources, understanding the context, finding new connections, and continuously evolving and learning.

Building a data set of crops and varieties is a necessary and an early step to building a valuable knowledge graph in agriculture. It is an extremely hard challenge to go from data, to context, to connections, to new and surprising insights using knowledge graphs. It will take some unknown (aka long) amount of time.

Image source: Google Blog​

​112. Agriculture robotics is difficult AF (Jul 31, 2022)

Feedback: “Robotics is not my area of interest.”

Building an application specific robot is expensive and hard, but the application of the robot can be limited due to the diversity of applications needed in agriculture. This limits the size of the business of application specific robots. Due to this, it is difficult to raise VC funding as the total addressable market of the application is limited.

Robot platforms provide generic robotic capabilities for hardware and software, without building application specific capabilities. Building robot platforms is equally hard, as your customer is not the end user of a particular application but the application developer for that application.

Platforms are incredibly powerful as they provide the tools to rapidly build other applications. Imagine how difficult (and inefficient) it would be, if to make accounting software, you had to design and build computer hardware, and an operating system to run on the hardware, before you got to building your accounting software.

​110. Analogs: {variable} of agriculture (Jul 17, 2022)

Feedback: “Love your thinking on analogues - bringing concepts from verticals outside ag into the Agri context (like the Android piece today). Thanks for doing this!”

We (including companies) tell stories we want to believe, and want others to believe. This is true in business as well. Businesses have to tell their story (and back it up) to win customers and provide value, attract & retain investors and employees, and create a valuable business for stakeholders.

One common form of efficient storytelling is to use a known analog from another industry. It leverages the mental model of the analog which people already have. Startups use it to communicate their value proposition, and positioning more effectively.

For example, the “Uber for an industry” comes up quite frequently to describe an asset as a service business.

​95. Hub and spoke model for data (Feb 27, 2022)

Feedback: “It was great content this week but I needed my Director of Sustainability to help translate. That's some deep stuff covered! But super interesting and needed.”

Data in silos is not useful. Other industries have faced this problem, and have tried to solve it with data standards (HL7 standards for clinical data) provide a way to exchange clinical and administrative data across different medical software systems).

Agriculture has made progress, with the emergence of standards like ADAPT, FarmOS, etc. The friction in interoperability is a wasted opportunity. It stems from lack of trust, and data exchange infrastructure. It is a tax on the user experience and innovation. When it comes to private farmer data, AgTech companies and platforms should not stand in the way of data movement as desired by the farmer. Collaboration will lift all boats.

Tools like Leaf and others, can reduce the friction in interoperability. The friction is really a tax on the user experience and innovation. Many organizations (especially retailers and cooperatives) might not have the engineering resources to do many multiple point to point integration to create additional value for their customers or members. ISVs like Leaf can provide a valuable service at a lower cost, and unlock the value of data by getting it at the right place at the right time, based on grower permission.

​89. Android strategy for agriculture equipment (Jan 16, 2022)

In the case of agricultural equipment, big companies like Deere seem to follow an iPhone strategy of building their own hardware and software (or acquiring it and running it under their brand). Through its App Store, Apple does allow you to download and run 3rd party apps, but developers have to use Apple SDK, and infrastructure to deploy their products. Apple is a premium product, with high profit margins but lower volumes compared to Android powered phones. Will Deere acquire more “software applications” to run on its autonomous platform?

Another variation for agriculture equipment could be an Android approach. The hardware is inexpensive, and more of a commodity product, the “smarts” of the phone come through an operating system and applications. For example, you can buy a decent Android phone for less than $ 100, and it works quite well for billions of users.

Is there space for a generic sub-$10K tractor, where the hardware is more or less a commodity, and the software on it is what makes it interesting and more useful? There are many types of operations depending on crop type, and so there might be different hardware configurations.

Could some manufacturer provide hardware in large volumes at low cost? Can a strong software and technology provider provide an equipment operating system, with room for application developers?

Themes for 2023

For 2023, I plan to continue to pursue my own curiosity and learning. I am very much interested in automation, robotics, power of big data, machine learning and artificial intelligence, interoperability, platforms, knowledge graphs, large language models like ChatGPT, interesting pricing and business models for product distribution to solve agronomic problems, market linkages, climate change, water challenges, financing, and insurance, cross-value linkages, and smallholder challenges.

I plan to do more long form essays, bring back the “Conversation with Rhishi” series, and do more collaborations with different operators and experts in the field. Depending on time availability, I might record a few podcast episodes on different topics in 2023.

I hope you will join me on this journey in 2023.

For the last newsletter for 2022, I want to leave you with what I wrote in the last newsletter for 2021.

It is still Day 1

Jeff Bezos said in his 1997 letter to Amazon1 shareholders “This is Day 1 for the internet.”

I want to borrow this line, and tweak it to say “This is Day 1 for AgTech.”

Bezos outlined certain principles for success in his 1997 letter.

Focus relentlessly on customers

Create long term value over short-term profits

Make many bold bets

The same applies for the Agtech industry.

We are just getting started on drawing insights from data using tools like artificial intelligence and machine learning, to help make better decisions.

We are just getting started on autonomy & robotics, to resolve human problems of labor, equity, and efficiency.

We are just getting started on new business models like farming-as-a-service, to deliver products and services in new and innovative ways.

We are just getting started on agri-fintech models for the developing world, to help millions of farmers realize their full potential, and be on a path to prosperity.

We are just getting started on full value chain visibility, to find new value pools, identify & eliminate bottlenecks to deliver better products to end consumers.

We are just getting started on climate change mitigation, to reduce the risk to ALL of us.

We haven’t even started on many ideas we don’t know about.

It is still Day 1 for Agtech.

It is important to note that tech for the sake of tech will fail.

Any technology will be adapted, if and only if it solves human and systems problems.

Agriculture and food systems are complicated. You need to understand the economics, history, culture, policy, and other issues to understand how to best apply technology to the given context.

Let us take a long view, understand nuances, and think how best can we bend the arc of our future in the right direction.

What do you think?

Which were your favorite editions for 2022? You can send a note to me at rhishi@rhishipethe.com.

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About me

My name is Rhishi Pethe. I lead the product management team at Project Mineral (focused on sustainable agriculture). The views expressed in this newsletter are my personal opinions.