Reported by Maggie Van Camp (Senior Business Editor CountryGuide)
Agriculture is constantly moving the yardsticks, which means there’s always a new business opportunity on the horizon. So, asks Rob Saik, founder of Agri-Trend: What are you waiting for?
This fall Country Guide chatted with Rob Saik founder and CEO of Agri-Trend as the innovative coaching company celebrates 20 years in business. He talked about the struggles of being and staying ahead of the innovation curve, the stumbles and wins, and what it was like to sell Agri-Trend to Trimble, the U.S. precision agriculture company.
“Often innovation doesn’t come from thinking outside the box; it comes from having a really small box,” says Saik.
The particular “small box” Saik is talking about right now is the tight window f
or producing crops in Western Canada, with only about 35 days to get the seed in the ground and under three months to grow it, followed by a quick harvest before winter sets in. Then, to top it off, we have to store our own grain and get it to export markets across a mountain range.
“Limits tend to spur creativity because we have to find solutions based on the constraints of the box,” says Saik.
Back in 1997, the box was smaller, but transformative production techniques were emerging. No till, glyphosate-tolerant crops and GPS were gaining a toehold in Canada.
That was the year Saik started Agri-Trend, a new concept born from the need to make decisions based on data, not guessing or estimating from previous years. He had seen this knowledge-management gap play out in his Two Hills, Alta. fertilizer business with many farmers simply asking for last year’s blends or what their neighbours were applying. Quality soil information was seldom available, hard to understand and difficult to put to practical use.
A year earlier Saik had been returning from a trip to the Middle East consulting on the use of sulphur for production of irrigated tomatoes grown in the desert. As he flew over the patchwork of the Prairies toward home, his heart stirred. This was home. He loved Canada and the farmers here. Then it struck him: Why wasn’t he helping Canadian farmers do better?
When he got home Saik pulled out a sket
ch of a business model he had created a few years earlier while attending a coaching program for entrepreneurs. The program, which he still attends, is about leadership and how to switch thinking from the selling of products to building a relationship business tied to processes and data management.
It was a rough map of a coaching/data management concept for farmers. At its core was a team of highly qualified, respected coaches who would give advice based on collected individual farm data, such as connecting fertilizer recommendations to soil sampling and yields. The coaches would operate their own separate businesses in various locations throughout the country, although all would use one data platform, under one administration and one brand.
Most importantly, their recommendations would not be linked to selling products, but to simply providing good service and to help farmers be more profitable and more sustainable.
“I wanted to design a business that was not based on the sale of inputs but rather used data such as soil or tissue tests interpreted by professionals to help famers make better decisions,” says Saik.
At the time, this was definitely out-of-the-box thinking. Large volumes of data were hard to manage, especially in remote farm areas. The internet was still in its infancy, although connectivity was slowly growing.
Additionally, government extension services were being reduced, which created opportunities. However, a big question remained: Would farmers pay for advice they had previously received for free?
“I like to be an early adopter,” says Saik. “I’ve always been good at connecting the dots, listening to other industries, other businesses and bringing ideas back to agriculture. I thought we could build a business using the internet to connect coaches and farmers.”
Saik’s own experiences farming and working in the industry meant he knew firsthand the potential value of systematically tying decisions to data backed by professionals.
It started with soil testing, fertilizer recommendations and crop rotations. Saik created a 10-Step Soil Interpretation Process that is still in use today, tied to a Strategic Crop Plan that would be customized by Agri-Coaches for each individual farmer.
Saik also envisioned a model that could eventually be replicated through specifically qualified people into a fully integrated system connecting all aspects of a farm using an online, internet-based platform effectively to help farmers grow the crop, sell the crop and manage the money.
Making a start
Saik started with a challenge. How could he make people understand the concept — a unique agricultural business with no products to sell, no assets, and a model never done before.
He quickly found how important it was, when he started looking for a startup loan to get the business rolling.
Saik walked out of the bank with only a $35,000 limit on a business credit card. But it was enough to get started. “One of the most difficult parts was trying to explain that it was a data-based system and we were using the internet… it was just starting,” he says. “Very few people got it.”
However, the most difficult part was trying to explain the financial risk to his family and friends. “I had five sets of eyes staring back at me over the kitchen table wondering how we were going to make it,” recalls Saik. “It was kind of scary.”
The key to the model was the development of the Agri-Data platform (now Trimble Ag Software) enabling connectivity to farmers everywhere at any time. “In 2001 we went into the cloud, before there was a cloud,” says Saik.
He says timing played into the successful launch of the concept. The downsizing of government extension services loosened up a lot of talent, and farmers were looking for unbiased advice. Plus, no till and GMO seed technology were enabling larger-scale production units, and GPS and field mapping were just starting to be used.
Darren Howie, Elston Solberg, Kevin Pattison and many others began to build the coaching network. Other well-known, trusted names came on board, including retired professors, former top extension staff, and well-respected farmers and agribusinesses.
In the early days Saik travelled across Canada using his comedy alter ego, Steve Stubblejumpski, as a way to talk to farmers, and then he’d quickly explain and sell the new service. Slowly the ones who wanted a systematic process to making decisions came on board. Word spread about the service, and Canada’s first agricultural consulting business was born.
Many of Agri-Trend’s first clients are still using their services today, and several of these farms have transitioned to a next generation. “It was coaching, not consulting,” says Saik. “We wanted a long-term relationship and that’s what we got.”
But it wasn’t all smooth sailing.
The cash balance
With a grimace, Saik remembers one of many cash crunches as they were building the business, adding services, adding coaches and expanding across the country. In April 2005, they had maxed out their operating line. He was having lunch with a friend sharing his worries that the company couldn’t keep going. “My buddy asked me how much I needed and right there wrote me a cheque for $70,000, saying, ‘Pay me back when you can.’”
It was a pivot point. Agri-Trend continued to expand, and today offers Agri-Coach, Market-Coach and Farm Business-Coach professionals who deal with everything from business transition to grain market strategies and the integration of precision management.
Not everything they tried has worked. For example, livestock coaches and coaches to help manage oil leases didn’t work. On the other hand, the carbon trading division took off and now the Agri-Trend Aggregation is the largest trader of agricultural carbon credits in Canada.
Further afield
While growth in Canada was on track, expansion south of the border was proving to be a challenge. North of the border, the majority of coaches are independent entrepreneurs who built their own businesses while being connected to Agri-Trend. However, health care considerations in the U.S. impose a different dynamic there, making it riskier to go independent, so Agri-Trend had to look for a different model.
In 2008, Saik was approached by a group of John Deere dealerships looking to fill the gap between technology, hardware, agronomy, data and the equipment. That conversation was the start of a distribution relationship Agri-Trend has with John Deere and Case dealerships throughout the U.S., and now globally through
the Trimble Vantage dealer network.
Continued growth requires continual capital and in 2014 the Agri-Trend board of directors suggested Saik work with a New York investment banker to seek a significant equity injection. “We just could not find the capital pool we needed in Canada,” explains Saik. “For me, this was a major frustration but the process led to our discussions with Trimble. We locked eyes, and the deal made sense, so we moved forward.”
In November 2015, Trimble acquired privately held Agri-Trend to complement their precision agriculture hardware and software company. Trimble gained a strong network of professional coaches to expand services and Agri-Data, which Saik says is “one of the most elegant and strongest data platforms on the planet.”
Agri-Trend was kept intact and the people and systems could be taken internationally. Today it is expanding across continents, finding its way onto farms in South America, Africa, Europe and Australia, exporting Canadian-made technology globally.
“Trimble doesn’t sell inputs, they don’t buy grain and when it comes to equipment they are colour blind and they have a global vision,” says Saik. “As a business person, you want your business to outlive you.”
Considering Silicon Valley’s current interest in agricultural technology, Saik admits that maybe he should have paid more attention to the broader investment community. When he was looking for suitors he was surprised at how limited the pool of venture capital is in Canada for medium-sized businesses and how most of it is Bay Street-based, which has less understanding and appetite for agriculture.
Now at the precision agricultural conferences, many deep pockets are buying agricultural technology start-ups and those companies are going to be pressured to flip and give big returns.
It’ll be tough going, predicts Saik. “We are going to see plenty of blood on the walls as this ag tech sector sorts out the surviving players.”
The Agriculture Manifesto 