Engaging with the Food Start-up Community: A Conversation with Manuel Gonzelez of Rabobank and FoodBytes!
Wherever you look, innovation today is largely led by start-ups. They are nimble, flexible and insurgent to make changes. Many companies are viewing start-ups as threats, while others are turning them into partners and establishing a mutually-beneficial relationship. Manuel Gonzelez, North America Head of Start-Up Innovation (STI) at Rabobank is a forward-looking thinker who has gained valuable insights on how to leverage innovation from start-ups.
In early 2015, Rabobank founded FoodBytes! with a simple mission in mind: to find the most game-changing concepts in food and agriculture, and pair those creative ideas with the capital needed to bring them to market. FoodBytes! has taken place in New York, San Francisco and is headed to Boulder this October on Wednesday 26th. It has been a wonderful platform for many start-ups in the food, agriculture and technology space to shine.
I recently talked to Manuel in his San Francisco office about how Rabobank started FoodBytes! from a simple concept, the recent launch of Terra — The Food and Ag Tech accelerator, and his perspectives on corporation-startup collaboration.
You founded FoodBytes! by Rabobank in 2015. Why did you want to start such an event, and how this event was conceptualized?
Manuel: There are so many reasons. One of them is our mission of Banking for Food, a key initiative at Rabobank. The mission challenges us to think about important questions, such as how can we increase the availability of food, how can we improve access to food, and how can we advocate for better food. We found that we were doing very well with big enterprises, but not enough with emerging and innovative small companies.
The questions I found myself asking were: how can we communicate our mission to small food companies who are already doing such great work, and create a program that allows them to showcase that? We didn’t have an answer. So we asked ourselves: what could we create?
The inspiration for FoodBytes! came from watching a technology pitching event. We found that in all of the pitch competitions, people were not really listening to the little food companies. They just wanted to find the next Uber or Amazon. We thought, “why don’t we do something like that, but with a focus on food and agriculture? Why don’t we simply create a space just for food and ag people?” We knew that we also wanted to bring start-ups who needed capital and investors together to create a network. We decided to launch FoodBytes!, and just see how people responded.
The first FoodBytes! took place in February 2015 with the thought that we would keep it simple, short and small. From day one, it was an explosion. We saw more than 100 applications within 2 weeks! We were very surprised by the number of applications and the innovation we saw from those applicants. With the success of the first event, we did another one in June 2015, which turned out to be even more impactful. I realized that we were on to something — there was a need for a platform like FoodBytes!. We were in New York in March and back in San Francisco in June of this year. We just continue to evolve and expand -in a nutshell, it is a platform for us to deliver value to new audiences.
Do you think there is an opportunity for FoodBytes! to expand to other cities or other regions in the world?
Manuel: Absolutely, you are reading my mind! It was just announced that in November, FoodBytes! will be heading to Sydney! Next, we will probably head to the Netherlands, where our global headquarters is. Asia is another region we’d like to explore. I truly believe that FoodBytes! can be a global platform for Rabobank and our Banking for Food strategy.
What benefits had FoodBytes! brought to Rabobank, both internally and externally?
Manuel: First of all, we are learning a lot.
When we see interesting ideas, we want to know what problems they address, what they envision for the future, etc. We have a very large sector research group with 90 people around the world, and we’re able to bring this new information and these new findings to them. We are getting to know the investment community on different levels. For entrepreneurs, it is a very challenge time when they just have first revenue stream. We are trying to understand that more to help them with access to finance.
We also realized that the world is changing much faster than we thought and we need to adapt. We need to find new platforms and work in different ways. We need to engage with emerging customers and deliver new value to them.
What about employees outside of the research group? Do you also encourage them to pay close attention to the start-up world?
Manuel: Internally we are creating the “buzz” as well. People hear about it and they can sense the excitement. They ask questions, they come to the events and they want to be part of it.
Do you still keep in touch with the pitch competition winners after the event?
Manuel: Yes. The winners each year are invited to an invitation-only event that Rabobank hosts in New York where they get to network with large food and ag companies. This is very helpful because they get to meet executives from the most renowned food companies in North America, Canada and Mexico. We also love to have alumni to come back to the stage and present, as you saw at FoodBytes! San Francisco in 2016 we had Kuli Kuli and Back to the Roots give us an update on where their businesses are now. We have also been developing an advisory relationship with some companies. We are still thinking about how we can do more or even create a platform to help for different start-up stages.
You announced the launch of Terra — The Food & Ag Tech Accelerator in June 2016. Can you tell us more about Terra?
Manuel: Terra is an accelerator that focuses on companies that already have a product-market fit and that have already gone through a funding round. We see Terra as another avenue for assisting start-ups to succeed. And it is very tied to our mission of Banking for Food, which revolves around providing access and knowledge in the food and ag space. We can also spend more time with start-ups via Terra. FoodBytes! is an exciting event but it is a half-day event. At Terra, we can really observe how start-ups grow and can foster a stronger relationship with them over a longer period of time.
An important element of Terra is to allow the start-ups to collaborate with large companies and learn more about what it takes to work with them on different levels. This can help us deliver the Banking for Food mission in a more powerful way.
We also believe that putting food and agriculture start-ups to work in a technology campus like RocketSpace is going to be very interesting from a collaboration point of view. Too often we see that people are very brand focused and may not know what’s happening in the agriculture space. Or people who work in agriculture for a long time may not know what consumers want. The idea with Terra is that startup companies are immersed in all tenets of business.
How long are the start-ups going to stay at Terra?
Manuel: There are two parts. The first two months is the curriculum which is intensive learning. The other two and a half months is the piloting phase. That’s the time for start-ups to test their idea, product and business model. Then there will be a demo day.
You made a statement at FoodBytes! San Francisco that food is not over-invested. Why do you think so?
Manuel: Agriculture investment is 3% of the total investment, but the GDP contribution is 10%. In other industries, you find the investment percentage to be equal to GDP contribution, or even higher. And food is food, people will eat no matter what. There might be an over-investment in certain areas such as food delivery, but it doesn’t mean it is the same case in all of food.
What are two to three trends in food that excite you the most?
Manuel: I do think that robotics and self-driving cars can change the food delivery landscape because one of the critical things about delivery is the last mile cost. Vertical farming and local food is another area. How can we get food produced more locally so we don’t need to transport a lot of food? The other trend I would say is waste. How can we eliminate more waste and be more efficient?
From your observation, what are some of the common mistakes that entrepreneurs make?
Manuel: The number one mistake I have seen entrepreneurs make is not understanding the business model in and out. People may understand their revenue side but not know enough about the cost or supply challenges as they scale. A lot of the entrepreneurs think they will scale and money will come, but many times they are not clear how long that will take.
Secondly, different start-up stages will need different capital structures. Third, choose the right investors who understand what you are doing. Those are some of the things that I see entrepreneurs having challenges with.
There are many companies who want to engage with or invest in start-ups. What’s your advice to them?
Manuel: My advice would be really understanding what you want. Do you need a new technology, a new business model, or maybe just a new idea to build up the current business model? This is very important to answer because the way you engage with start-ups should be driven by what you are looking for. If you want a new business model, you probably should leave the start-ups alone and let them grow. If you just need ideas for strengthening your business model, you probably can absorb them.
What’s your advice for start-ups who are looking for help and resources in this community?
Manuel: Again, be very clear about your goal. Whoever you are bringing to the board or as an advisor should be somebody who shares your same vision. When you determine who to partner with or sell your company to, make sure you know what they want from you. If they want your company to be part of their business model, they might absorb you — is it OK with you to become part of another company’s culture? Think about the consequences very hard.
FoodBytes! Boulder will take place on Wednesday, October 26th at the University of Colorado Boulder, Byron R. White Club. For more information, or to purchase your tickets, please click here!