Agtech Pitch Night at SproutX

Judging by some of the news coverage, last week’s pitch night showcasing successful applicants to the SproutX agtech accelerator suggests that this will be a program worth watching. (Look out for the demo day later in the year…) With an initial cohort of 11 participants, this recent addition to Melbourne’s startup scene is showing there is an audience and a market for smart farming solutions. Founded by Findex and the National Farmers Federation, SproutX also enjoys support from Ruralco and Artesian, as well as the Victorian Government.

Given the number of pitches, my comments on each startup presentation are necessarily short:

AgriLedger

This project is driving social impact by focusing on farmers in the developing world. It offers a smart phone app that helps deliver products and services direct to farmers, such as solar power facilities and micro loans, and enables them to plan better and to share equipment with other local farmers. Currently active in Papua New Guinea, Kenya and Myanmar, AgriLedger has been supported by some high-profile NGOs and attracted some impressive backers and advocates.

However, the judges felt that the pitch didn’t contain enough of the story, or explain how it actually works.

Applant

With a tag line of “aTree in your home”, Applant has come up with a novel design for a vertical gardening system that uses aeroponics. The idea is to help people “grow more with less”, and to grow food where we live, work, eat and even play. With an underlying concept for modular food systems, Applant is about to launch a Kickstarter campaign.

The judges had hoped to learn more about the customer demand and the proposed
customer subscription model.

Bloomboxco

Delivering locally sourced and farm-fresh cut flowers direct to customers, my immediate thought was “flower miles”. Launching just recently with a monthly subscription model, Bloomboxco has already attracted around 35k followers on social media (mostly Pinterest). By its own admission, the service appeals mainly to women who enjoy contemporary design and lifestyle trends.

But the judges wanted to know what makes this business different: given that the current supply model for cut flowers is built on margin, how does Bloomboxco aim to compete?

Farmgate MSU

With their mobile slaughter unit (MSU), the team from Farmgate want to “open the gate to on-farm abattoirs”. Many farms do not have access to an abattoir thanks to industry consolidation and contraction. The MSU is designed to cut production costs, minimize animal stress, and reduce waste. While still relying on central butchery services, the MSU has the potential to add value, especially for premium products, as it can operate at smaller scale. Farmgate also benefits from having a team drawn from across the meat supply chain.

For the judges, the pitch could have done more to demonstrate the capability, and to explain what happens to waste and by-products.

Farmapp

Farmapp has developed a digitized and integrated pest management solution for greenhouse crops. Using data collected from various sensors and stored in the cloud, Farmapp uses visual analysis, helping farmers to reduce their use of pesticides and increase productivity. It is currently installed in 1200 greenhouses (mainly Columbia and Kenya).

The judges wondered about the competition, as they were aware of a number of other similar solutions.

iotag

This “fitbit for cattle” uses long-range GPS monitoring to track and manage livestock health. In addition to the setup costs for network base sensors, there is a monthly subscription fee to manage data.

There were no comments from the judges, apart from the representative from the farming community, who claimed to hate subscription services.

Smart-Bait

Smart-Bait uses sensors, cognitive APIs and programmed alerts to track feral animals. Current solutions (baiting, fencing, shooting) are either unreliable, inefficient, or non-selective. Instead, Smart-Bait is leveraging IoT and AI, and can be used offline giving further flexibility. Currently conducting farm trials, the founders say that there is government interest in the data.

For their part, the judges wanted to know if there were other applications for this technology – but more importantly, they wanted to know how it actually works.

Snaptrap

This product enables remote pest monitoring and control, especially fruit fly. It retrofits to existing systems, and has established a successful proof of concept. Snaptrap is targeting research, government and industry users, appealing to both growers and the bio-security market. Another subscription-based product, the founders claim there are many use cases, and the solution is scalable.

The judges asked about the data (what happens to it), and our farm rep again queried the use of a subscription model.

Thingc

With the goal of producing “intelligent orchestrated things”, Thingc aims to reduce the number of manual tasks and alleviate animal stress in livestock management. Using the notion of precision management, it takes data from monitoring sources and applies it yield forecasting.

The judges wanted to know “where’s the tech?”, who is the competition?, and what exactly is the end game?

TieUp Farming

TieUp uses an algo-based solution to compensate for the lack of data available for yield forecasting in horticulture. The data is being made available to farmers, industry and banks, using an aggregation of different technologies. The founders claim it to be both practical and customizable, while they see significant opportunities in South East Asia.

The judges wanted to know how it actually works, and to what degree it can support traceability of produce?

Water Save

As the name suggest, Water Save is designed to reduce water and power consumption on farms. With increased concerns about water efficiency and environmental impact of run-off on the Great Barrier Reef, Water Save uses existing irrigation monitoring systems (micro weather stations, sensors) and connects them into an integrated and networked solution. The system involves set up costs, hardware costs, and subscription fees, but a key goal is to reduce the use of fertilizers – creating both economic and environmental savings.

The judges wanted to know more about the solution for linking individual sensors, and whether it has the capability to monitor nitrates.

 

For most of these 3-minute pitches, the challenge was to tell enough of the “story” while still explaining how it works – and there was a sense that the audience understood the context as well as the problem, and probably didn’t need too much background explanation. Instead, they would have appreciated learning more about the technology and the potential to succeed – i.e, “why you?”.

Farmgate MSU was declared the winner by the judges, and voted the people’s choice by the audience.

Next week: ASIC updates – Sandbox and Crowdfunding (plus #FinTech hub)

The convergence of #MedTech – monitoring, diagnostics, remediation

Earlier this year, I participated in MedTech’s Got Talent, a competition for medical technology and biotech startups, organised by STC. Now, HCF in partnership with Slingshot have announced a similar accelerator program, called Catalyst. Launched at a recent meetup event hosted by Startup Victoria*, Catalyst is the latest industry initiative to lend support to the growing #MedTech sector. It’s fair to say that the sector is not without its challenges (regulatory compliance and IP protection being foremost), but there is substantial investor interest given the potential for growth and widespread application of the resulting technologies. I also see that there is increasing convergence in respect to some of the digital products being brought to the market – through the use of wearables, mobile apps and analytics to deliver monitoring, diagnostic and remedial solutions.

Screen Shot 2015-11-22 at 8.10.47 PMAt the Catalyst launch, three #MedTech founders discussed their startup experiences and offered some insights to budding applicants. Jarrel Seah (Eyenemia), Phil Goebel (Quanticare) and Leonore Ryan (Cardihab – Cardiac Rehab Solutions) covered the product development process, being part of an accelerator program, and the specific challenges of medical technology.

There was  broad agreement that Australia (and Victoria in particular) has a strong and successful history of #MedTech development and innovation. There was also a sense that the future funding of telehealth services will be key to the sector’s development, especially the shift from “fee for service/solution” to “fee for value” models.

Aside from the regulatory and IP challenges, two of the biggest hurdles for #MedTech are the customer complexity, and procurement models, which can be summarised as follows:

Who Pays? Is it the clinician, patient or carer? Who, in effect, is the customer?

How Do They Pay? Each State has its own procurement and hospital funding models, plus there is the interplay of private health insurance and providers.

During the product development process, the founders stressed the need to manage expectations for an MVP, the use of customer discovery interviews, and the importance of making clinicians part of the solution. There is also a problem with data gaps (e.g., hospital re-admissions), and the requirement to establish patient trust: while the software, data and apps can support more meaningful consultation, there still has to be some human component to foster behaviour change. There was also a comment about marketing for tomorrow’s market, not the current state.

Having each been through some form of accelerator program, there was common agreement on the benefits:

  • Access to networks of mentors and strategic advisers
  • Help with navigating the regulatory landscape
  • Options for one-off funding to help convert trials to customers
  • Ability to focus on the project, along with peer stimulation, and a sense of urgency

Each of the three startups mentioned here deploy some combination of smart phone technology, sensors and analytics – just as Dr.Brand does, which featured at the recent Future Assembly. The notion was reinforced most recently at Swinburne University’s Design Factory Gala NIght which showcased, among others, innovative #MedTech student projects that utilise a mix of digital display/visualisation, wearable devices, mobile apps and analytics to address three key cognitive-related issues: patient falls in hospitals, dementia, and Asperger syndrome.

Previously, I have described health as one of the three pillars of the digital economy. Furthermore, the future of #MedTech (as distinct to biotech) is going to be built on the combined deployment and integration of smart sensors, personal devices, artificial intelligence and machine learning to monitor, diagnose and remediate behaviour – not necessarily to cure the patient, but to overcome physiological challenges and age-related conditions.

 

*Apologies – normally I acknowledge the Startup Victoria event sponsors – but since the team have been doing such a great job in securing new supporters, there are so many to mention!

Next week: There’s an awful lot of coffee in Japan (but not much espresso….)

Are Start-Ups a young persons’ game?

Last week’s Lean StartUp Melbourne meeting was devoted to the AngelCube accelerator program. Given some of the high-profile start-ups that have come through this process, it was hardly surprising that nearly 400 people turned up to hear various AngelCube alumni share their personal experience (as well as to enjoy some free beer and pizza, courtesy of the evening’s sponsors: inspire9, BlueChilli, Kussowski Brothers and PwC).

First up, there were lightning talks by 3 successful program graduates: the team behind fantasy sports app developer C8 Apps, Ash Davies from self-publishing platform Tablo, and Phil Bosua, the technical genius at LIFX who designed the WiFi-controlled LED bulb. All of them vouched for the benefits of the AngelCube program, and offered key learnings – such as “fail hard, fail fast, fail forward”, and the value of having a disciplined weekly cycle of iterative product builds. Access to quality mentors was also a key factor.

Then Indi from OutTrippin joined the guys for a Q&A panel session, facilitated by AngelCube co-founder Nathan Sampimon.

Some of the accelerator program insights on the night were quite revealing –

  • it’s all about product-market fit
  • a solo founder will usually struggle on their own
  • be prepared to either pitch or pivot at the weekly program reviews
  • the $20,000 seed funding (for 10% of your business) doesn’t go far…
  • a B2B concept is less likely to be accepted to the program (due to longer sales cycles)
  • the model is founded on lean methodologies, frequent iteration and getting to an MVP
  • people with at least one start-up project behind them tend to do better
  • the AngelCube angels are investing in the team as much as the idea

But are start-ups really only for young(er) people? This question has been posed by Dan Mumby, from Melbourne’s StartUp Foundation, which offers a different sort of program aimed at would-be entrepreneurs who may have all the trappings of middle age: family, job, mortgage…. which means they have different personal and financial risks to consider.

On the other hand, as at least one AngelCube participant said, if you are serious about founding a start-up, “your first job is to quit your job”.

Another, broader challenge facing the local start-up community is a lack of serious investor interest. According to one panel member, “In Australia, getting funding is a joke unless you are literally digging for gold”. This may change with the launch of VentureCrowd an early-stage equity funding platform. (But it looks like it will be a struggle – at the time of writing, none of the 20 or so deals publicly showing up on VentureCrowd’s website have attracted any funding.)

An alternative funding model, based on the sweat equity principle, is a venture bank, like New Enterprise Services that essentially matches ideas with expertise through a risk-sharing process.

I always recall the advice I was given by one serial entrepreneur when I asked him whether start-ups are for everyone (regardless of age). He replied: “Unless you can afford to invest at least $20,000 in your idea, and support yourself for at least 6 months while you develop it, then maybe it’s not for you.”