Back in 2011 Marc Andreessen (founder of Netscape, for those of us who can remember that far back), proclaimed “software is eating the world.”
By that time Marc had become a VC and was right in the middle of the post .com bubble software resurgence. From this vantage point he could see whole industries being transformed overnight by software.
In the same way that mechanisation brought massive efficiency gains to industry during the industrial revolution, companies like Amazon, Uber and AirBnB were leading the way in deploying software to create hyper efficient businesses that out-performed their antiquated predecessors in every way.
Even looking at value chains with inherently physical propositions, like the automobile sector for example, software is replacing physical components making manufacturing processes quicker and cheaper, and enabling companies to iterate and deploy enhancements to legacy products at the push of a button. Then there’s the huge race towards autonomous vehicles which will completely alter the way we own and use cars.
Walmart in the US has famously managed to buck the downward trend of traditional bricks and mortar businesses by deploying software and data to optimise its store locations and logistics. Similarly FedEx is now essentially a software and data business that just happens to have planes and trucks to interface with the physical world.
These businesses typify what is increasingly known as the 4th Industrial Revolution (the third being the digital revolution beginning in the 1980 but still ongoing), which is characterised by “cyber-physical” systems.
These systems use software and data to iterate and optimise their offering at huge pace and scale. The vast quantities of operational data they are collecting and processing give them deep insights into their business meaning that decisions are entirely data driven. Lower level transactional decisions are handed off to increasingly intelligent software.
For these companies, and all those companies capitalising on the 4th industrial revolution, data is now their primary asset.
However, not all industries have been consumed by this revolution yet and Agriculture is one such industry. It is only a matter of time though, and investors see huge opportunity in the sector.
In 2017 venture capital companies invested over $1.8bn in the agricultural technology sector, (Finistere Ventures 2018 Early Stage Agtech Report) and in 2018 that figure crossed the $2bn mark.
While many agri-food businesses have adopted ERP and accounting packages to help track produce through their warehousing, most still rely on data in spreadsheets and notebooks for in-season on-farm progress data.
The benefits of digitising this information can be widespread. A single source of truth for organisations and their partners, immediate access to aggregated analytics and statistics at a range of scales, and being able to run performance comparisons across time, crops or other factors to name a few.
In the coming years (months, even), more and more companies in the agriculture sector will be leveraging data and technology to get a better handle on their operations, reduce costs, add value for their customers and gain competitive advantage.