Pheronym identifying the beachhead market at the NSF I-Corps Teams
It’s incredible how much the insight from one hundred interviews can focus your market entry strategy and position your startup for success.
Pheronym develops pheromone products from microscopic roundworms, nematodes to control agricultural pests. By controlling nematode behavior, we can control both pest nematodes and insects. Our goal at the 6-week NSF I-corps team program was to identify the beachhead market for our product entry.
The first week we interviewed Land O Lakes. We were shocked to learn the number of acres infested with soybean cyst nematode, a microscopic roundworm that parasitizes plant roots and reduces yield. We learned that farmers need eco-friendly solutions for soybean cyst nematode, and seed treatments are an excellent solution. We immediately realized that seed treatment was our ultimate market. However, it requires a long time to get to market. Just the field trails need 2–3 years for the channel partners to conduct. Luckily, the second week, we identified our beachhead market, organic specialty crop growers.
Focus on the crop or the pest? For the past three years, whenever we have talked to agriculture investors, they always asked, “Which crop are you targeting?”. After talking to many growers, pest control advisors (PCAs), university extension agents, and subject matter experts, we learned that the many crops have different pests in different parts of the state, country, or the world. For example, Strawberries have plant-parasitic nematode problems in Florida; spotted wing drosophila (SWD) pupae, thrips (depending on location), the Lewis spider mite (high temperatures), whitefly, aphid, and mildew in California; white grubs and fungus gnat in Mexico; and western flower thrips in greenhouses in Ireland. Turfgrass is another excellent example. First of all, turf grass seems like the same plant everywhere, but it has special varieties for different parts of the country and various applications. On top of that, turfgrass had different pests in northern and southern US. White grub was a common pest and significant problem for the eastern US, but not important for California because it is too dry. Mole cricket and plant-parasitic nematodes (sting, lance, root-knot nematode) are major problems in the southeast US. Billbugs, caterpillars, cutworms, armyworms, and cranefly are problems for the northern US. Even within the same state, a crop might have different pest problems. In California, Argentine ants were a problem for Citrus in Riverside, but not in the San Joaquin Valley, where growers had a problem with citrus thrips. The variety of specialty crops makes choosing a specific crop very difficult. There are many specialty crops, each with their farming practices which could easily affect the pest control application procedure, hence the success of the product entry. As you are guessing, our choice is the pest.
Like the crops, there are many pests. Which one? We developed criteria to select a pest that can enter our product to the market and scale simultaneously. The pest should be challenging for organic and conventional farmers in the specialty crop and row crop markets. The pest should be a generalist, meaning it is a problem for multiple crops. It should also be a problem in numerous locations. Finally, our product should offer a solution to this unmet need. Based on these four criteria, we analyzed our 100 interviews from NSF I-Corps Teams and 30 interviews from NSF Beat-the-Odds Boot camp. Two pests jumped at us: thrips and plant-parasitic nematodes. Both thrips and root-knot nematodes are generalist pests that attack many different crops and have very few effective treatments. Thrips is an insect pest, a vector for many viruses and resistant to many conventional pesticides. It is also a global problem for conventional and organic farmers. Plant-parasitic nematodes, particularly root-knot nematode (RKN), attack many different crops. The chemical nematicides are heavily regulated. RKN, a sedentary nematode like soybean cyst nematode, presents a tremendous unmet need. Both conventional and organic farmers are looking for alternative solutions.
We still have one more hurdle on our way!
Agriculture is seasonal! Everyone remembers our plea for the interviews on social media (Twitter, Linkedin, Instagram). We had a difficult time talking to growers in August and September because it was harvest time. That also means they do not use pest control all year around. What can we do to strengthen Pheronym against this seasonality? This time we get lucky. Our first product, Nemastim TM, targets beneficial nematodes’ efficacy to control insect pests. Beneficial nematodes are microscopic roundworms called entomopathogenic nematodes (EPNs), which are safe to other biocontrol organisms and humans. Environmental Protection Agency (EPA) considers them so safe that they do not regulate them as biopesticides. EPNs already have a market in the greenhouse growers’ market, which is in the same space as indoor agriculture and has a problem with thrips. To top it off, we have done successful greenhouse trials with third parties on two agriculturally important pest insects (pecan weevil and citrus weevil) using two commercial EPNs, Steinernema feltiae and S. carpocapsae. Using beneficial nematodes to control thrips in greenhouses and indoor farms allows us to get into the market within a year for thrips control instead of 2–3 years for plant-parasitic nematodes. So our beachhead market is organic specialty crops in greenhouses and indoors to control thrips.
While scaling thrips control, you can already predict what is next in our product pipeline; pheromones for plant-parasitic nematode control for seed treatment.
Value proposition. Even though efficacy and cost-effectiveness are the top two in everyone’s list, they meant different things to the specialty crop and row crop markets. Stay tuned for the value proposition in our next medium article.
Authors: Dr. Fatma Kaplan is the CEO/CSO of Pheronym, an entrepreneur, and an accomplished scientist with experience in both biology and chemistry. She has a Ph.D. in Plant Molecular and Cellular Biology and postdoctoral training in Natural Product Chemistry with a focus on isolating biologically active compounds. Dr. Kaplan discovered the first sex pheromone of the nematode Caenorhabditis elegans and published in Nature. Then she discovered that pheromones regulate other behaviors in both parasitic and beneficial nematodes. Dr. Kaplan conducted the first agricultural biocontrol experiment in Space at the International Space Station in 2020. She has very high impact publications and her dissertation (beta-amylase’s role during cold and heat shock) was cited in textbooks within 5 years of publication. Dr. Kaplan worked as a scientist at NASA, the National Magnetic Field Laboratory, and the US Department of Agriculture — Agricultural Research Service.
Mr. Karl Cameron Schiller is the co-founder and COO of Pheronym. He is an experienced entrepreneur with a BA in economics and an M.Sc. in pharmaceutical economics. Mr. Schiller along with Dr. Kaplan conducted the first agricultural biocontrol experiment in Space at the International Space Station in 2020. Prior to Pheronym, he co-founded Kaplan Schiller Research LLC. and volunteered as president of a not for profit organization. In addition, he was a freelance consultant in pharmaceutical product development, cost-effectiveness analysis, modeling, and statistical analysis. His clients include the University of Florida, the University of Alabama, Florida Medicaid, and Pfizer. Dr. Kaplan and Mr. Schiller co-founded Pheronym to bring nematode pheromone technology to the market and to provide effective, non-toxic, sustainable pest control for farmers and gardeners.