In an agriculture that is struggling to figure out what its future will look like, Wade Barnes may at least know how to get there. And, as his example seems to promise, knowing ‘how’ may put you on the path to knowing ‘who,’ which in farming is the question that will eventually answer all the others.
In Barnes’ world view, the farmer today has the opportunity to achieve more than ever before. If you bring the right juice to the game, and if you run with the right playbook, the possibilities can be incredible, whether on the farm or in partner businesses.
“I’ve seen things other people haven’t seen yet,” says Barnes, CEO of Farmers Edge, the Winnipeg-based variable-rate technology (VRT) startup that now has 190 employees in five countries.
Launched in a Manitoba basement by Barnes and co-founder Curtis MacKinnon in 2005, Farmers Edge today has its eye on global leadership in precision-farming technology and management.
But the technology is only half the reason for his excitement. Barnes has also seen the application of Silicon Valley’s corporate strategies to the world of farming, and it has changed his outlook permanently.
Can his playbook work on your farm? Would you even want it to?
Barnes is convinced that variable-rate technology and “big data” are revolutionary, not just evolutionary. “This will change everything,” Barnes says. “This is the next Green Revolution, this is the next GMO moment.”
His belief is making all the difference for his company, Barnes says, and it can make that much difference for farmers too.
Nothing is more important for young and mid-career farmers to understand, and to engage with, he says. “Nothing.”
Barnes wants to be understood exactly. He doesn’t want any of us to hear it wrong, only partly because it could be so easy to dismiss what he says as the kind of pie-in-the-sky thinking that agriculture can seem particularly prone to.
“I was born and bred in the field,” Barnes begins, talking of his early days on the farm near Pilot Mound, Man., after which he did a university degree in agriculture and became one of the hundreds of company agronomists across the West. It was a job he loved. He was even named a Certified Crop Adviser of the Year, and he bought fully into it the prevailing ethos. “If your nose isn’t in the dirt,” he remembers thinking, “you’re not going to make good recommendations.”
But that was then, not now.
Today, Barnes says with even greater conviction, “Agriculture is all math.”
When he and MacKinnon got their first taste of variable-rate technology a decade ago, they immediately saw it as a game changer. Until then, farmers aimed to make the best average decisions, an approach Barnes calls the soil-sample philosophy. You take cores across the field, but instead of analyzing those cores separately and using them for localized application rates, you dump them all into a pail and blend them before sending one sample to the lab to represent the entire field.
The goal was to fertilize at the best average rate, the same way you’d spray a fungicide, for example, picking the best average day for the entire crop.
Barnes admits that he and MacKinnon weren’t the only ones a bit star struck by VRT’s potential, yet few others quit their jobs, as he and MacKinnon did, when their boss refused to charge forward with the new technology as quickly as the duo wanted. And few others set up business, as MacKinnon and Barnes did in his basement, with no money, little credit except their personal lines, and almost no income.
Today, Barnes admits too that he and MacKinnon probably did jump a bit too early, in a way. Results in those first years were mixed. Technology and science still had to catch up. But the early start meant the two got in at the ground floor, and it gave them a chance to immerse themselves in the concept and to figure out its implications for the farm.
By 2012, when crop data was being successfully paired with localized weather instrumentation, Barnes was seeing, time and again, that analysts with remote data access could know more about what was going on in the field than local scouts, even though the analysts never left their offices.
However, what set the growth of Farmers Edge into overdrive was their leadership in understanding of what precision agriculture will mean for farms as businesses, not just as production units.
To this day, if you want to see Barnes bristle, tell him that VRT is a niche sector. “No one in agriculture will think that,” he snaps back.
Barnes sees the technology rewiring how farm business is done. “The farmer is the only person who makes a huge amount of decisions — million-dollar decisions — based on gut instinct,” Barnes says. “He’s got a great gut to do it, but in five years, that will change. He’ll rely on data generated on his farm to make decisions. That’s where I want to see us.”
Farmers will test a new combine on the farm, generating data about fuel efficiency, harvest speed, field losses and more to prove to the dealer what the combine is actually worth. They’ll know exactly what fertilizer to apply, what seed to plant, and how to schedule, manage and monitor complex field operations.
More than that, they will use this capability to build new partnerships, bypassing elevators and dealing directly with end-users, providing a General Mills for instance, a superior combination of genetics, climate and soil to grow its oats, together with data transparency so it can know exactly how many tonnes of what quality it will get, and when it will get it.
Nor is that a dream, Barnes says. In fact, the biggest gap isn’t technological. The big gap is in the farms that are ready to make those deals come together.
Barnes is convinced it’s a temporary gap that is already being bridged by innovative farmers around the world, and their success with data-based input decisions and data-based marketing initiatives is going to help fuel the growth of Farmers Edge over the next five years, making it a key player in five core markets — Canada, the U.S., Australia, Eastern Europe, and Brazil, which Barnes refers to as the Saudi Arabia of agriculture.
Along the way, many of those farmers may in turn be watching Barnes and Farmers Edge to learn how to turn their opportunities into modern business realities.
What they’ll mainly see is the critical role that they themselves will have to play.
The higher you go in business, Barnes will tell them, the more you will be judged on whether you bring the right stuff to the table.
Despite all the accountants and all the technical advisers, at the end of the day if you want to partner with even the biggest organizations, you can expect someone in a boardroom to demand a chance to look you in the eye and ask, is this someone I want to do business with?
If anything, Barnes is finding that his personality and his personal attributes grow more important as the company grows and the scale of its partnerships increases.
Barnes points to two Monsanto announcements that helped convince Farmers Edge to get extra serious about growth. “When Monsanto bought Precision Planters (in 2012), I went, ‘The world is going to change,’” Barnes says. “Either we sell right now or we raise capital and we change the business.”
The decision was to raise capital, and Farmers Edge bolstered its board of directors, bringing in key resources including Brian Heywood with his solid background in that arena.
Then in 2013 Monsanto paid $1 billion for Climate Corp., a startup founded by Google employees David Friedberg and Siraj Khaliq that had an income stream of roughly $30 million. Again, the message was to get big or get out.
More than that, the message was also to get big by forming the right partnerships with investors who would open up new market opportunities.
“This is the side of it that a lot of people don’t realize,” Barnes says. “Raising capital is really hard. It’s much more difficult than anybody can ever imagine… not just raising capital, but raising the right capital.”
Soon, Farmers Edge was being studied for acquisition, but Barnes was also making his way to key boardrooms across Canada and in Silicon Valley, netting a deal with Kleiner Perkins after about a year of discussions, and with Mitsui after nearly two years.
In both, the process was similar, starting with a couple of phone calls and the exchange of some initial documents, then followed by extensive due-diligence analysis, followed up with a series of personal visits.
“It’s all about that,” Barnes says. “They’re making a bet on you as the CEO. That’s what it’s all about.” Such investors would rather see the company thrive with its own leadership rather than bring in a new team, which as a strategy has a more mixed track record.
So what did they look for? Barnes has a pretty clear idea. Both Kleiner Perkins and Mitsui wanted a player with entrepreneurial fire and with vision, and a leader able to attract and retain great talent. Critically, however, they also wanted a CEO who was prepared to be tough as well, and a leader who can make change, including in himself.
Barnes thinks the timing is great for farmers to expand into this new era. Not only is the field open, he says, but Canada has a good supply of smart ag graduates who can make great employees for employers who can create the exciting, challenging jobs that they want.
But also make sure you monitor your own performance, he advises. Every business goes through periods of stress, and it is in those times that employees and investors want a sense of structure, and a sense that the company knows how to get the job done.
“The entrepreneurial excitement is infectious, but if you don’t adapt, your people will get frustrated,” Barnes says, adding, “I’m a farm kid, I have no MBA or business training, but I know that if you believe in something, you have to change, grow and adapt. You have to keep the entrepreneurial, renegade spirit, but bring in structure and focus.
“If they see I’m changing, that’s infectious too.”