Uncovering Pheronym’s value proposition during NSF I-Corps Teams

Karl Cameron Schiller
Oct 9 · 8 min read

Nothing clarifies your value proposition like one hundred customer interviews.

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To our surprise, neither conventional nor organic growers of specialty and row crops were satisfied with the current pest management tools. Regardless of their pest control practices, conventional, organic, or integrated pest management (IPM), growers are looking for new solutions to persistent pest problems. Even though our beachhead market is organic specialty crop growers, we noticed early on that many conventional growers also had organic farms and utilized IPM, which integrates biologicals. Therefore, we included all of the specialty crop growers, regardless of their pest control practices.

Pesticide resistance can be a big problem. One example in turfgrass is the annual bluegrass weevil. There are a plethora of insecticides available to control them. Then one day, they developed resistance, rendering the insecticides obsolete. In another case, one greenhouse grower told us that he used to have a spray program to control spider mites until one day it stopped working. The more he sprayed, the more the spider mites’ population grew. Now he uses IPM and avoids synthetic pesticides that kill the biologicals or beneficials. This grower was not the only one concerned about the compatibility of the pest control solutions with IPM. One citrus grower told us that the products controlling citrus thrips is old, and they see resistance emerging. They choose not to use pyrethroids, which are synthetic insecticides because they kill beneficial insects and cause flareups of mites and other insects. The problems do not end there. Some pesticides kill one pest but promote the fertility of another. Some synthetic pesticides are so hard to use or so heavily regulated that the distributors do not carry them. Or they have to get permits, which takes time and money. One orchard grower had to wait one season to apply Telone, a soil fumigant, due to regulations.

We also had an important insight from the three of our interviews; one with the executive director of an organic farming foundation, one with a farmer, and one with a researcher who works with farmers. The organic farming foundation surveyed 1,240 organic farmers, including 150 conventional farmers transitioning to organic farming. The question we had was, “Why? What was the driving force behind this transition?” It turned out that farmers had increasing concerns about their own and their families’ health. One farmer we spoke to also had concerns about the health effects of conventional pesticides, as did the farmers that the researcher we interviewed works with. Furthermore, while they were pursuing consumer preference, they also saw economic opportunity in organic farming.

Organic farming and challenges. Everyone we talked to (distributors, growers, PCAs, seed companies, or subject matter experts) unanimously said that organic farmers had minimal tools to control pests. One of the major pain points was that they could not use systemic pesticides, which limited them to contact pesticides. The problem with the contact pesticides, based on their observation, was that above ground, the insects hide under leaves and avoid contact with the pesticides. Below ground, the pests go deeper into the soil where the pesticide can’t reach.

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Healthy carrots (left) and carrots infected with RKN (right)

Furthermore, plant-parasitic nematodes were a problem with limited organic solutions. For example, carrot buyers have zero tolerance for root-knot nematode (RKN) in carrots, forcing growers to treat for RKN. Conventional pesticides are not the solution for the plant-parasitic nematode problem, either. A turfgrass researcher told us that they use three different products to control plant-parasitic nematodes. First, Fluopyram works well on sting nematode, okay on RKN, but has no efficacy on lance nematode. Second is Abamectin products, which work best on RKN, but are only effective for the top 3/4 inch because they don’t move well in thatch, where they get bound up. The third product, 1,3-D (Curfew, 1–3 dichloropropene), is a rescue treatment that the European Union (EU) is phasing out. Returning to conventional pest control does not solve the pest problem. Farmers need alternative solutions.

Organic growers are looking for scientifically backed products and information on efficacy and mode of action. They told us that people often try to sell them snake oils, so they are very sceptical of new products. Safety was another concern for pest control products. Even though the Organic Materials Review Institute (OMRI) assures the suitability for certified organic production, handling, and processing, OMRI does not provide information about efficacy or safety.

What are the decision criteria for adopting a new product for growers? Efficacy and cost-effectiveness! It seems very straight forward, right? As we interviewed more people, we realized that efficacy and cost-effectiveness did not mean the same to specialty and row crop growers. Efficacy in the row crop market meant a yield increase. In the specialty crop market, it was not. In specialty crops, the quality was more important for the value of the crop. Sometimes yield increases reduced their crop quality; hence, their income. One PCA told us that chemical company salespeople kept calling him and telling him they could increase the crop yield. He said he was working with table grapes and increasing crop yield means smaller grapes, which was not what their customer wanted. One of the nursery growers we spoke to told us that they care about not losing the plants because every plant was unique and precious. So overall, they measured pest control as the decrease in insect pest number. They prefer that the insect never gets established on their farm at all.

For plant-parasitic nematodes, measuring efficacy was different. The growers and PCAs looked at the root galls in the roots even though they cared about the yield. For example, when an orchard is established, it does not produce any fruit for the first 3–4 years. However, the yield in orchards that were not treated for plant-parasitic nematodes was lower compared to the ones that were. Understanding the fine details in the decision making helps us develop a value proposition and prioritize must-haves vs. nice-to-haves with respect to efficacy.

Cost-effectiveness was not just the cost of the product for specialty crop growers. It was the cost of the product and cost of application, including the labor. Applying pest control products requires time and labor, which we repeatedly heard from many growers, was a significant cost for them. We also learned that specialty crop growers have multiple pest control applications in a growing season, unlike seed treatment for row crops. It immediately became evident that reducing the number of pest control applications was a value proposition for reducing the growers’ cost.

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Many pest control products reach growers through distributors or channel partners. The next question was, “what were channel partners’ criteria for adopting a product to provide t farmers. As you can guess, efficacy and cost-effectiveness were their top two, but they had other features they were interested in. Efficacy was the same as that of growers. However, the cost-effectiveness was the manufacturing cost or how much they can sell it to their customers. They also had additional criteria such as protection of intellectual property (IP), shelf life, storage, and some specific to beneficial nematodes (EPNs), which infect pest insects and are used as biocontrol agents. Can you reduce the cost of EPNs? Or reduce the density in field applications? Make them infect faster? Can you reduce the water usage with EPN applications? This was a new insight for us. We never associated water shortage with beneficial nematode applications.

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What does all this mean for our value proposition? Pheronym develops pheromone products from microscopic roundworms, nematodes to control agricultural pests. By controlling nematode behavior, we can control both pest nematodes and beneficial nematodes, which control insects. Our first product, Nemastim, modifies EPN behavior to improve insect pest control. Our beachhead customers are organic specialty greenhouse growers. For them, pest control is about damage control. They don’t want their crops to lose value because of insect damage. Since our customers are organic, they can’t use systemic pesticides that are absorbed by a plant and circulate through the plant’s tissues. So when an insect feeds on the plant, it consumes the pesticide and dies. They are restricted to contact pesticides that insects can avoid. Our solution is to apply pheromones to EPNs so they will seek out insects to kill. Nemastim makes the EPNs up to 78% percent effective with just one application. It does this by dispersing them better; three times more EPNs go 35 cm deep in the soil, providing greater coverage. Nemastim also makes EPNs three times more infectious. This is even better soil coverage than the conventional chemical pesticide Abamectin. In short, EPNs with Nemastim actively seek out and kill insects in the soil that can avoid contact pesticides. The increased efficacy improves cost-effectiveness by reducing the number of applications; hence, reducing the labor cost for growers. We can also provide farmers with the science behind our technology with peer-reviewed publications.

You probably noticed that we might have some overlapping value propositions with key resources and channel partners. Still, they also have specific must-haves suggesting that we will have a different value propositions. Stay tuned for our new interviews with key resources and strategic partnerships.

Authors: 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. 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. 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.

Pheronym

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