Podcast #169 Agtonomy

Ken:  Today, I'm pleased to host Tim Bucher, CEO of Agtonomy, a company building a sustainable future for local farms. Momenta's a proud investor in Agtonomy. Tim's a high-tech serial entrepreneur. He has created several successful companies over the last three decades- taking one public and selling others to tech giants like Microsoft, Apple, Dell, and Seagate. He has served in executive roles directly for Bill Gates, Steve Jobs, and Michael Dell. Learning how to span from high-level vision to hands-on implementation, always focused on innovation and creating new markets and growth opportunities from existing ones. Tim is also a gentleman farmer, having built successful olive oil, vineyard, and wine businesses over several decades. Tim, welcome to our Digital Thread podcast.

[00:01:34]

Tim: Thanks, Ken. It's great to be here. And thank you so much for investing in Agtonomy. It's wonderful to have you guys along for our journey, and thanks for believing in us.

[00:01:43]

Ken: Well, yes. We'll talk about it in a few minutes. But you guys are dead center where we think the industry is going in terms of Agtonomy and agronomy, if you will, altogether. So we always like to start with one's digital thread. What would you consider to be your digital thread? In other words, the one or more thematic threads that define your digital industry journey.

[00:02:04]

Tim: Well, I think several themes came up during my digital journey, but there's one in particular that when I look back on the first half of my career and then the second half of my career, it was always present, and I call it just 'digital vision' because when I first got into high tech, I got hooked into digital media, which was all about capturing things digitally and then I spent years and years in encoding technology for video and whatnot. And so, the first half of my year was digitizing the world from a visual standpoint. And then, I did a company many years ago called Lyve Minds. We indexed consumers' videos and photos which we take millions of these days. This was well before the era of Google Photos and many other technologies today. And we started to do object recognition in photos. But more importantly, we started to use AI in its nascent state, automatic editing of videos. And it was then that I realized, wow, it's not just about digital vision capturing. It's about what you can do with that, and that's what I've spent the second half of my career doing is focused on understanding what it is you're capturing digitally. Thematically, in my journey, as I look back on the decades- I'm a well-traveled entrepreneur, if you will. I think digital vision is the theme that summarizes not only my passion but where I've seen the digital world going and continue to go in the future.

[00:03:38]

Ken: So, in essence, a digital vision of vision systems digitally, I guess. That captured both angles of it. Yeah, very much. Look, you have an impressive background; I always like to do a little research. You've been at the forefront of Silicon Valley innovators since 1986. So let's say Sun, NeXT, 3DO, WebTV, Microsoft, Apple, Seagate, etc. What would be the three key learnings if you had to synthesize your tenure at these companies?

[00:04:09]

Tim: Well, I think if you look back on my history, it's filled with start-ups and then typically acquisitions into larger companies. It's both small companies and big companies. And I think the things that I learned apply to both, and the top three things are, first and foremost, focused on leadership versus management. I learned to focus on leadership, not management. Management's about doing something right, dotting the i's and crossing the t's. And that's great. But when I started to let those things go and focus more on doing the right thing- and sometimes the right thing is not always politically correct. Sometimes it's not conducive to efficiency or whatnot, or it's very, very much taking risks, but it tends to yield better results. And I always tell people, especially new people that I work with, I always tell them, "Hey, look, I want to tell you something. I'm not a great manager, but I will lead you." I think always providing that guiding light for a team, whether you're leading the team officially or an individual contributor, I think it's super important. And it always pays off.

The second thing is about creating value for a company. I think it's the start-up experience that I've had where it's brought that into focus more than anything. And what I mean by that is that you can do so many things. If you're in technology, you can do just about anything. Still, you must think about it in the context of creating the most value for the company. And what that does is it helps you prioritize things very crisply, which I think also is critical for success in a small company and in a big company. I've seen this in my start-up days. I saw this when I was working for Michael Dell- think about what would be in the company's best interest and what can create the most valuable value there. And the last thing that I've learned is that there's a lot of evangelism and whatnot in technology. But I like to say, show me versus tell me. That drives me and has driven me in big companies and small to focus on proof of concepts, whether a new software algorithm or hardware device. Always work on prototyping and show me versus tell me. I think I only do PowerPoint for investors these days because I believe in demonstrations and real-world kinds of things. But that's something that has served me well, and I think it has served others well that I've worked with in my journey in small and big companies alike.

[00:06:39]

Ken: Three great lessons: leadership versus management, creating value at each step, and demonstrating that value. It's interesting on your point number two. An early mentor of mine talked about the best way to create value is to look at your company externally. You pretend you're a private equity firm looking at your company in some sense. What would you do? Maybe leaving out the financial reengineering that PE was famous for back in the day. However, still, I think the perspective's an interesting one to look at, especially in larger companies that you're looking at. You've been blessed to have worked for some great legends of technologies, Bill Gates, Steve Jobs, Michael Dell- I could imagine the three of them in one room. What would you say were some of the most actionable leadership lessons you learned from each along the way?

[00:07:27]

Tim: Well, they were all great. And they were all very different. But there was one thing that they all did that I took note of. They all had a mantra. Whether they said it specifically or acted it, I gleaned from each of them that they had one critical thing, and they pushed their organizations accordingly. With Bill Gates- it was funny; I would have meetings with him in his office regularly every couple of weeks. And I would see him in meetings, of course, quite a bit. And he would always almost yell that the world runs on software. For him, it's all about software, like the whole world was about software. It was a very maniacal focus. And at first, I was like, wait a minute; there are other things in the world. But in hindsight, I believe he was right. He drove that into his organization; it was a great guiding light for the company. His leadership style showed that in his direct actions or statements and actions. For Steve Jobs, his mantra was different. But it was also quite maniacal, and it was all about design. And he was right. I mean, there were things that we did at Apple, and even at NeXT, that made no business sense from a cost standpoint, but it made the products look better and feel better. And at first, I was like, well, this is kind of a little bit not in line with what normal companies do. But again, he was right too, so his mantra was all about design for him. And Michael Dell was interesting. I saw him do this all the time. Including in big executive meetings, board meetings, you name it- he could recite costs of anything, like a small resistor's value, for example. He would know the industry costs of that. For Michael, it was all about costs. And you know what, he too was right. When I look back at these three leaders, I tried to absorb sort of the best, some of the greatest hits' album between them and other great leaders that I worked for. And it's interesting. Again, the one thread they all shared was that they each had their own mantra. I'm going to lead by example; I'm going to speak it and show it in my actions. And I think it worked well for not only them but their companies as well.

[00:09:49]

Ken: That's a fascinating insight. And I could see that working where that maniacal focus, to use your term- is long-term resilient and sustainable. So software, good call- design. I don't know when design ever runs out of steam. And certainly, operational efficiencies, at least, are not taken to an extreme. The intersection of all three is very interesting in terms of your experience base.

[00:10:17]

Tim: Yeah. And it's hard to say exactly what the one thing is that does the intersection. When people ask me, "Well Tim, what's your mantra?" I usually go back to what I said earlier, about 'show me.' It's all 'show me.' But I think your comment about these mantras' longevity is clear. Bill Gates hasn't been the CEO or the president for a long time at Microsoft. And, cloud and software, it's their core. And the same thing at Apple. I think that design has continued in everything they do. And with Dell as well. Michael's still there. I think he's helping to continue to foster that one.

[00:10:55]

Ken: Yeah, it's interesting. It creates a culture that transcends the individual or the leader at the time who created that culture, and certainly Apple's great experience test case with that, as well. Let's fast forward to Agtonomy. And I was holding back the mantra question because I was going to ask you on top of the Agtonomy one, but I'm glad you hit it. You co-founded the company in 2020, so actually, fairly recently. Tell us a bit of your origin story?

[00:11:19]

Tim: Well, the origin story goes way back, much farther back than 2020. But in terms of forming the company, we did it in 2020. As you mentioned in the introduction- which was a very kind introduction, thank you, Ken. My life has been a parallel career in high tech and agriculture. I was born and raised a farmer. I did my undergrad at a university called UC Davis, which was a very well-known ag school. I accidentally took a computer course and got into high tech, but I also had my farming operation. I was the younger male in a traditional immigrant family, so I knew I wouldn't get the farm. But when I was probably about 16, I started my little farming operation on two acres, very small. And continued that and grew that and kept getting bigger and bigger through the years while I was in Silicon Valley the whole time. I had these two parallel paths. And never did I let the streams cross until Agtonomy. What happened in agriculture are tremendous challenges. It's kind of like a perfect storm. And it wasn't that I was reading about it or hearing about it from others. I was experiencing it firsthand in my farming operations. My farm is called Trattore Farms, and 'trattore' means tractor in Italian, by the way. I kind of collect tractors; I'm a tractor buff. And so, as I was continuing to grow my farming operation, one of the things that became more and more challenging was labor. I literally would leave Cupertino when I was at Apple, sometimes at night, and jump on a tractor to do some mowing or something in the fields and returned to Silicon Valley at about 4 am with nobody knowing. And so this continued for years, and it was becoming harder and harder to find employees who wanted to work in farming.

I mean, think about it. There aren't many people who go to college for agriculture and become farmers. It's challenging to buy land; it's challenging to do all these things. It's usually kind of family farmers that passed down from one another. And over time, factory farms have continued to reduce the number of family farms through the years globally. What happened was- probably about five years ago, labor costs were killing Trattore Farms. And I bought this very unusual tractor that had nothing to do with agriculture and reapplied it to an application that was just mowing on hillsides. Because every year, I would spend about $50,000 in labor to reduce the grass and other kinds of shrubbery for not only wildfire prevention or management, I should say, but also to make the place look good too. After all, it's a public place with a tasting room and whatnot. And I saw the impact that a machine could have on that. And I said, my God. There are so many opportunities here for creating solutions that can help minimize, not minimize, that can help close the gap in a labor shortage. Many people say, "Oh Tim, you're working on things that eliminate jobs," it's not true. It's more about closing the labor gap, the labor shortage. Really, the beginnings of Agtonomy were very personal. And I started to play around with gutting tractors and electrifying them. And finally, I called some friends, and I said, hey, I know this is strange. I know that we've been doing companies in high tech for a long time but take a look at this. My co-founders gave me the inspiration for us collectively to go all-in on this, start a company, and focus on our mission, which we'll surely talk about more later. But the history was very personal, and it was real in terms of something that I was experiencing with one of my businesses.

[00:15:06]

Ken: We did some work last year on a big transaction. CNHI acquired Raven on our advisory side of the team, and it gave us a lot of insights. I came from Syngenta and worked on their intelligent Agriculture Initiative before. I saw some of the early, if you will, movement into the digitization of farms and some of the early concerns around data integrity, data sovereignty, data sharing, etc. And this is back when Monsanto was a big force in the industry. You now can understand why farmers didn't want to share data, right?

But there have been subsequent acquisitions now; John Deere acquiring Bear Flag Robotics, etc. How does Agtonomy differ from these other companies and transactions that have happened recently?

[00:15:52]

Tim: First, I want to say that all these other companies that are working, or any company that's working in ag tech right now, I'm just thrilled about because we need all of them to be successful. But there are a couple of differences between Agtonomy and our approach. When you look at Raven- you mentioned Bear Flag Robotics, Blue River, and other companies in the ag-tech space that have been acquired or have had some incredible success. They focus on what I call big ag, in other parts of the world, sometimes called broad ag or factory farming or whatever. But plains farming, flatland farming. Typically, commodity crops, like row crops. And so, one of the things that I wanted to focus on is local ag. When you think about it, even though there's been a lot of reduction in the small to medium-sized farmers every year, it's still the dominant number of farmers out there. About 80% of our food comes from small to medium-sized farms. And yet, they don't have access to the same kind of technology that these large, big-ag farms have. They can afford- like CES, and there was an announcement from John Deere about their autonomous tractor. And it's an amazing vehicle, don't get me wrong, and they're going to be successful. It's all great. But it's focused on tilling flatlands, the plains for corn in certain parts of the country or the world. And the bottom line is not all farming is 10,000 acres at a time. It's 100 acres; it's a couple of hundred acres.

And so, we like to think about local agriculture, which is also a consumer trend. Earlier I talked about a perfect storm. You have a lot of technology moving to Big Ag in ag-tech. But consumers want local products, local farms, the farm-to-table kind of good food movement that's been at play for decades now. And so that's one of the vast differences between Agtonomy and a lot of the other companies you mentioned. And one of the things about that is we talked to some large farmers too, and every time they say, well, can your technology replace this 200-horsepower tractor that I have? And I say, wait a minute, like what is the task you're trying to do? And when we look at it that way, we realize that the kind of equipment that's more affordable by local ag farmers can work for big ag too. It can be more sustainable and environmentally friendly, etc. We tend to focus on lower-priced kinds of vehicles that are more attainable by the smaller operations, call it the 50k range versus the 500k range in terms of dollars for a tractor. The other difference is that we don't believe in going it alone. Growing up in ag and I have been farming for decades, the ag environment is not friendly; machines get beat up. If you think about a bunch of high-tech folks say, oh, I can go and do a tractor. You better be careful with that because companies have been building farming equipment for literally 150 years, and they know how to make this equipment last in these harsh environments.

When we started doing Agtonomy, the one thing the founding group said was, hey, wait, look. We could go it alone and raise lots of money, and we call it the Tesla approach. We could partner with these incredible OEMs that have their global- they've been at this for a long time. We help them bring more intelligence to their equipment to make it autonomous. And again, close that labor gap. So that's the second big difference. And then I think the third difference- I talked about the type of crop, row crops, or commodity crops, is where most of the technology today has been focused. But a good percentage of our food chain comes from specialty crops or permanent crops. People use different terminology but, produce that you plant might take a while to mature. Hence, they're more expensive- the initial investment is more costly. And then they tend to require more attention. You need to coddle them year-round. And those specialty crops consist of fruit trees, nut trees, vineyards, and other things. And so that is the other area that we're focused on versus a lot of these other companies you mentioned. I hope that makes sense. There's kind of three significant differences we feel in Agtonomy versus other approaches.

[00:20:21]

Ken: No, it does very much so. And to put a point on this, let me jump forward and ask you around about some of your early use cases and wins so people understand the value proposition.

[00:20:32]

Tim: Yeah, yeah. One of the things that many people don't realize is when you have a specialty crop, even row crops, any crop- you must do multiple passes. What's a pass? A pass goes through the entire crop and does some tillage, mowing, and spraying, whatever the application is. There are herbicides, pesticides, and other things that people apply to their crops, but multiple passes take a lot of time. And it takes a lot of labor. And it costs a lot. It's funny, many farmers sit there and- farming is like gambling.

I'm sure you've heard that before. Mother Nature, weather, everything comes into play. And if you can time it just right, where you only must do- if you can eliminate one pass, your farm can be profitable that year. But inevitably, you have some mildew or something else in your crop that you must go forward on. One of the areas that we've had great success in is vineyards. We happen to have vineyards in our backyard in Northern California; we have some great test sites, including my farming operation. In a sense, it's been almost like destiny in a way. But what happened was that as we talked to other farmers, including big farmers, we were shocked at how much they wanted these solutions. One of the things that's key in agriculture is sustainability. It's not just helping with the labor shortage but also being a lot more sustainable and looking at alternate types of propulsion, electric being one of the biggest ones. It's been a great ride so far, and we're just at the beginning. And we think there's going to be a lot more applications and other kinds of crops moving forward.

[00:22:12]

Ken: It's interesting; you use the term 'perfect storm' a couple of times. And research in PitchBook just recently predicted that ag-tech and AI would lead to emerging technology funding in 2022. And so, I think many were surprised by the list leading with agriculture over AI, interesting enough. So given you operate at the intersection of both, it seems you're well placed, and perhaps our investment in you is equally well-timed. Does the choice of either of these sectors by PitchBook surprise you in terms of investment activity and predictions?

[00:22:45]

Tim: Ken, all I can say is it's about time. I'm so excited about not only what PitchBook has been predicting but what I'm seeing over the last five years in terms of investors. Five years ago, Ken, I think I didn't know any VC who would invest in ag-tech. You're seeing this great migration, if you will, to this segment. And I think one of the reasons is that- let's take autonomous technology, autonomy in general. I don't know how many trillions have been applied to autonomous passenger transportation. But if you think about it, that's a convenient solution. In agriculture, we're in a desperate situation. And the autonomous operation is not for convenience anymore. It's for necessity. And I think people are starting to realize that. There are tremendous opportunities there, and I think you're going to see even more of it moving forward because, ultimately, we have to do a lot more with less. Everyone needs to eat, so- and hopefully, you need to eat good food, which is again why we are focused on the local ag versus big ag. But yeah, I'm excited, and as I said, it's about time.

[00:23:57]

Ken: I'd fully agree. Again, going back to my work in Syngenta- before founding Momenta, it's about ten years now. You can imagine how nascent the world was looking digitally back then. But you're right there; the only investors in the space were those that were maybe more traditional biotech and or strategics, right? Monsanto, Syngenta, etc. And of course, Climate Corp came out around the time, so it was- call it Silicon Valley's first foray, or significant foray, if you will, into the digitization of agriculture. And we know that Monsanto eventually acquired it. What do you see as the greatest opportunities for your ag-tech space in the next five years?

[00:24:39]

Tim: Well, the five-year horizon is interesting because I think beyond five years, I do believe the most significant opportunity will be in data. We always believe in data, and you and I sit there, and we see the application of data and how it can do all kinds of amazing things. But the fact is that at least local farmers don't pay for data. But they do pay for things that help make their operation more efficient. And so, over the next five years, I believe the opportunities in ag tech are about specialty robotics. These machines can help close that gap. And right now, you're seeing machines that do generic things like cultivation or mowing, and stuff like that. I would call it more easily automatable, more easily made autonomous. As we go forward, I believe robotics for harvesting crops A, B, and C- there's been a lot of great activity and success in strawberry pickers, the autonomous strawberry pickers. I think you're going to see more and more of that for different crops. I dream of the day when olives will be picked in an automated, autonomous way. I always tell people, grapes are hard to grow but easy to harvest. Olives are easy to grow but very difficult to harvest. So I hope within the next five years, I'll see a completely autonomous olive harvester. But again, specialty robotics.

[00:26:02]

Ken: I sense the next version of your tractor coming out already. It's funny; we often refer to somebody with your track record as a serial entrepreneur. I think that's akin to calling a machine gun, simply a repeater, if you will, because you've been quite proliferating in your innovation. To what do you owe your ability to constantly be at the hotbed of innovation or on the forefront of it?

[00:26:27]

Tim: Well, I've always asked myself that question. And honestly, Ken, I don't think I've ever come up with a great answer. I do know one thing. I'm curious. And I think you must be curious to look for or automatically piece together trends. But if I think about my background, and what might have triggered me to be a- you call it serial entrepreneur, right? I sometimes refer to myself as a diseased entrepreneur. I keep at it. But when you grow up a farmer as I did on a family farm, I mean, you must come up with incredibly creative solutions immediately. Whether it's- you have a big water leak somewhere. It's like, "Well, how do you fix that?" And you're just constantly coming up with solutions to things that you never actually thought you would encounter. I believe that growing up- by the way, as a farmer, you also have to survive. That's another thing that helps foster innovation, looking for solutions and consistently finding something that can help you. I would say those two things, a baseline of curiosity and upbringing on a farm, probably make me a diseased entrepreneur.

[00:27:42]

Ken: It reminds me that I worked on flexible manufacturing systems early in my career. I had an opportunity to spend several months at the Bobcat tractor in North Dakota. And this is a company town. And what was interesting was seeing the best-in-class manufacturing capabilities they had, which was probably circa the late '80s, early '90s. I'm dating myself, but they were able to benchmark themselves and show better quality and better costing than the traditional offshore Asia PAC, if you will, manufacturing back then. And they attributed to the fact that most of the people working at the plant were farmers working off-shift from farming. It was interesting. They brought a lot of that commonsense capability to install a flexible manufacturing system in a large aerospace company. And it was, in some sense, almost over-engineered in terms of how it was put in. Bobcat would get it running the first day and then pragmatically operate it to get the best use out of it. So, it was an interesting, early insight for me about the value of farmers and that common sense, if you will, that they apply toward everything they do.

[00:24:48]

Tim: I think that's a great comment. And it's funny, Ken, you mention that because, in my high-tech life, I have visited factories all over the world, building everything from iPhones to computers. You name it. You look at automation and high-tech manufacturing. But on my other parallel path, truth be told, I've toured the world and visited many tractor manufacturing facilities. And I couldn't agree with you more. The level of high tech and efficiency and creative solutions to problems, like the Waterloo factory for John Deere, where they build their biggest tractors, I've had the pleasure of going through, and the way they paint the vehicles is like nothing I've ever seen before. I think you're right. They're all from that farming background and are very passionate about it. But you must be creative if you're a farmer, that's for sure.

[00:29:38]

Ken: Pragmatic, I guess, is probably the right term.

[00:29:40]

Tim: You're right.

[00:29:43]

Ken: In closing, where do you find your inspiration?

[00:29:46]

Tim: That's a layup question for me. Anybody who knows me knows where I do all my thinking. First, I want to be clear that I read a lot. I love reading history. I love reading fiction, and I love reading about technology. But ultimately, I get my inspiration- drumroll- from driving tractors.

[00:30:10]

Ken: I love it.

[00:30:11]

Tim: Every single start-up I've done, I guarantee you this- every single start-up I've done, the ideas have come to me while driving a tractor. There's something about being on a piece of equipment- having to be focused because you're doing some precision work, and if you go off track, some bad things can happen. And yes, I've had a few accidents and damaged a few olive trees and grapevines here and there, but it just puts me in a trance. And I think about problems, I think about new things, I think about- the mind goes to some amazing places. For me, it's all about driving the tractor. And I will tell you this, at Agtonomy, we have lots of prototypes now. And if you ask any of my colleagues, "Who's your number one tester?" I can almost guarantee you they would all say, Tim. Because we have a new version of the- whether it's the autonomous stack, the remote-control stack, or another version of the EV, we focus on EV exclusively. I'm always the first to say, "Okay, I'll do the field testing of that one." And it's because I also get incredible inspiration from doing that.

[00:31:13]

Ken: I recall Mike Dolbec, who, of course, leads our ventures team going over to visit you guys the first time, which I understand your office is not too far from where he's at, in Menlo Park. And he talked about going out there and being able to drive some of the tractors, and he said that was an absolute blast. Again, going back to my Bobcat days, they let us drive the new tractors on their tests- they have an outside test strip they put all new tractors through. So, of course, it was an absolute blast to do it. I can appreciate your influence. I haven't quite the time and seat you do, but I enjoyed it. And Mike did as well. Tim, thank you for sharing the time and these insights with us today.

[00:31:54]

Tim: It's been my pleasure, Ken. Thank you for having me.

[00:31:56]

Ken: This has been much fun, and we're very proud to be investors in you guys. This was Tim Bucher, CEO of Agtonomy, a company building a sustainable future for local farms. Thank you for listening, and please join us next week for the next episode of our Digital Thread podcast series. Thank you, and have a great day. You've been listening to the Momenta Digital Thread podcast series. We hope you've enjoyed the discussion, and as always, we welcome your comments and suggestions. Please check our website at momenta.one for archived versions of podcasts, as well as resources to help with your digital industry journey. Thank you for listening.

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