The Hyperconnected Bushel Economy

[The reader will see differences in this ‘first run series’ (one of five), than the articles that follow. We have chosen to maintain them because the content is still relevant, despite some links degrading and the level of acumen contained within…]

An open letter to farmers.

Farms are Big Raw Data Generators creating more economic value than just raw agronomic data that drive today’s big ag data platforms.

Are you playing to where the hockey puck is going? Or just chasing yet another silver bullet?

April 11, 2016

Dear Farmer,

Where to turn? Commodity prices—for grains, oilseeds, wheat, and more—have tanked. The Ag input bundles you have relied on for so long to ‘keep you safe’ are not sufficiently doing so.  Members of your old ‘team’ are introducing you to new data and tech-centric team members, while at the same time new data and tech-specialized teams are directly and indirectly signaling that their silver bullets and shortcuts are the safety you seek.

On top of all that, the more you try to follow the tried and true rule of Keep It Simple, Stupid, the more things seem to get away from you and even more out of control. For example, you are hearing news of 13,000-acre farmers reducing their acres by half due to lack of funding, and more.  Entire farming operations are coming on to the market at the same time, for purchase or lease (±4,500 acres in one Illinois county alone).

Consumers are putting more and more pressure on how you should be farming. One example is Walmart’s recent announcement that 100% of their eggs will be raised cage-free. And the folks who are supposed to provide you markets for your commodities are themselves collapsing under the weight of all this change. (See these articles about processed food, assembly-line styled, commodity food supply chain chokepoint controllers getting chocked themselves: here, here, here, here, here, here, here, here, here, here, and more. And Google ‘acquisitions of food companies.’)

Wow!  What a time to be a farmer!

So what is our point? Maybe you should start to consider stopping what’s not working. Doing so will free up time, talent and treasure for what does work every time. It won’t be easy. There are no silver bullets. There are no shortcuts. Not in a natured-based system. But if you are ready for something different, read on.

This blog, in an ongoing series, is dedicated to bringing forth key economic, biological, logistical and social insights that will help Growers, Eaters, and Market Makers grow out of the above malaise.

Market-making Insights Every Grower and Eater Should Know:

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 The “Simple as Possible, But No Simpler” Principle.

Big Data has disrupted traditional channel marketing strategies (Link 1, Link 2) used to sell products and services to farmers. In other words, the economic model you are used to, with you at the center[1], has moved to a platform economic model (or a channel-less model) where the focus is your data.

 

Your farm data is important, but the economic power lies in how your farm data is hyperconnected to other data.
Is your farm leaking economic power you don’t understand?

 

Regardless of their channel marketing message to farmers (The 4 Rs[2], prescriptions, whatever), today’s channel managers are leveraging farmers for the cash and raw data flow that data managers need to set up their economic platforms.

This goes against the hyperconnected platform economic logic played out successfully in other economic sectors[3][4][5].

 

Doing business in today’s platform economy is fundamentally more complex and different from just buying and selling stuff (ag inputs and equipment, commodities, etc.).

Relying on product trading (inbound inputs and outbound commodities) is no longer sufficient. One has to be able to tap into hyperconnected  economic platforms.

 

Hyperconnected economic platforms generate complementary product or service innovations that go beyond what farmers can do directly themselves[6]. See, for example, network effects.

What you don’t know can be used against you and will hurt you.

 

Growing your own economic platform, with you and your data at the center, is what you can do today. We suggest you use a Team of Teams structure to bring more economic power to your farm.

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While the following statement may seem outlandish, we’d like to point out:

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Farming today just entered into an anticipated historical event, known as the ‘inversion cycle.’ For farming, this is where the product being produced—whatever it might be: seed, fertilizer, herbicide, insecticide, bushel of corn, wheat, beans, etc.—while still needed, takes a back seat to the real power: Hyperconnected Data.

Once harvested (extracted from the farm), raw data can be monetized again, again, and again in an ongoing monetization cycle … a cycle of making money that, as of yet, does not fully loop in farmers as co-equal economic developers.

In other words, Big Agronomic Data is just another bushel or raw ingredient farmers need to monetize for themselves, not just others.

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The Internet of Things—all the new sensors on Ag equipment and the linkage to cloud computing, and more—has fundamentally changed the way decision-making power gets done in farming, economics, politics, government, and more.

Fortunately for those on the farm, decision-making power changes have already happened in so many other economic sectors, we can use a few rules of thumb to stay viable—by capturing power flows to the farm not previously available.

Here are a few of those new rules of thumb:

∞  1 The network effect all platforms rely on is only as good (scalable, profitable, powerful) as the raw data that feeds it.

∞  2 Scale, the bigger the platform the better, increases the platform’s value to investors and others who want to buy the platform.

We’ve seen this already with Monsanto’s analytical domain moves (purchases and reorganizations relating to Precision Planting, Inc., Climate Corp., and recent leadership shuffles[7]), as well as countless others seeking to leverage agronomic data for their platform investors.  (For more, we suggest Googling ‘precision ag data management.’)

∞  3 Growers, market makers and eaters will have to proactively adapt risk-management strategies by growing new working relationships with each other. And no, this is not a ‘cut out the middleman strategy’ that others have used in the past and new market entrants are trying again. In today’s vocabulary, think of this as moving beyond traditional ‘identity preserve grain programs,’ and into hyperconnected bushel economies.  It’s more than you think, less difficult than you fear.

So, what is the meaning of hyperconnected bushel?  We expect its meaning to grow substantially in the coming near-term.

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Much like all the other hyperconnected stuff in our lives today—phones, automobiles, Ag equipment, bank accounts, video and photos, accounts payable, accounts receivable, investment accounts, robot vacuums, home thermostats, computers, tablets, doctor records and more (Google ‘Internet of Things’)—the hyperconnected bushel’s definition and its role in the economy is expected to invert in meaning several times before it lands on a common understanding.

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Today, for now, in our systems design viewpoint,

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The hyperconnected bushel is simply a meeting place for those growers, market-makers, and eaters who are interested in proactively shaping its meaning. It’s for innovators who realize the only way mankind can successfully interact with nature to feed herself is through innovation. Not just any style of innovation, but innovation the good old-fashioned way: Collaborative innovation among co-equal designers.

For us, one very effective way to do that is by way of a Team of Teams.

Our business model holds open space for others. If you are looking for something different in the food and Ag space, this is it. What can we do for you today?

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[1] If you are a farmer, especially a large farmer who spends millions yearly for products and services, you may not realize the degree you are overprotected by your suppliers. But coddled you are.  A farmer-client of ours developed a way for you to test this notion for yourself. We suggest you call your FSA official, banker, grain merchandiser, equipment supplier, accountant, seed salesperson, agronomist and the representative from the organization you trust to be ‘the voice of the farmer’ all to the same table on the same day, at the same start time. Without telling any of them of the others are due to attend the same meeting. We suggest setting up the meeting table in your machine shop. The test is to see how long they all stick around at your table when you tell them, “I’ve gathered you all here today to help me lower the cost of my farming model.”

[2] Popular among those selling products to farmers, and presented as a shortcut or silver bullet used to obtain prosperity, the 4 R’s are: 1) The Right Product, 2) The Right Placement, 3) The Right Rate, and 4) The Right Time.

[3] The Rise of the Platform Economy, wsj.com; February 12, 2016; accessed April 11, 2016.

[4] The Rise of the Platform Economy, Irving Wladawsky-Berger’s blog; accessed April 11, 2016.

[5] The Rise of the Platform Enterprise, A Global Survey; accessed April 11, 2015.

[6] As structured today, Big Data management offerings that take in your farm’s raw agronomic data and hand back to you so called ‘prescriptions’ may be a platform, but not one allowing you full value for your data. This is similar to previous extraction economy marketing messages (channel marketing) from Big Seed, Big Equipment, Big Ag, and more. Not presenting to you where all the power is, is what they have in common.

[7] Monsanto’s Data Unit Gets New CEO, Wall Street Journal, March 24, 2016 issue, p. B2; accessed March 24, 2016.