INPUTS is an online marketplace where local retailers make bids to farmers looking for the best price for agricultural products and services. INPUTS’ mission is to become the de-facto e-commerce platform for any web-enabled transaction within the agriculture value chain.
INPUTS CEO and co-founder Daniel Cathey is an agronomist and Certified Crop Advisor (CCA). He recently shared his startup story with us.
Your website says you came up with the idea for INPUTS in an orchard while employed by a fertilizer company. Tell us about this and your first steps towards executing the idea.
At the time I was a Farmer Engagement Manager for Yara, working to drive product demand at the field level. In our sales meetings my boss would often say that every time a retailer wanted to close a sale, we needed to make sure that Yara was called last before a decision was made. In reality, I would watch my coworkers take an unending number of calls to try to close deals from retailers that were price or terms shopping. I thought, clearly there must be a better way to do this. One day while out in an almond orchard, I conceptualized the innovation in the procurement process that is now INPUTS.
What led you to partner with your co-founder, Sean Kammerich?
Initially, I thought I would teach myself coding. I took some online classes but soon realized my project was too complex to scale quickly and I needed help. I decided to partner and not outsource. I had already heard too many horror stories about firms hiring overseas coders and things simply not working out.
So, I found Sean, our CTO of Business Operations, through CoFounderLabs, which is kind of an online dating platform for founders. Sean is a senior full stack developer with extensive domain knowledge who was looking to work in a startup. We messaged back and forth and met a few times to discuss the idea. In 2017, we teamed up and founded the company.
Trends point to ag retail moving online. What are the main drivers here?
There are three main drivers – the demographic shift on the farm, grower demand for price competitiveness and transparency, and the ability and need to manage financial data and product traceability.
The ag tech renaissance we are experiencing is making people more open to digital solutions which includes online transactions. The younger generation is taking over farms and decision making. They grew up with cell phones and doing things online. It’s ingrained behavior and I believe it’s the future.
For example, a recent survey of midwest commodity growers showed 37% were moving to e-commerce. This will only increase at a more rapid rate. In an environment of shrinking margins and looming tariffs, growers are looking for opportunities for better prices.
What is your e-commerce strategy? Are you kind of like an eBay for ag or an Amazon for ag?
I guess you could say we are a mixture of a reverse eBay and Amazon for online purchases of products and services. Our retail partners provide prices and we simply let buyers know what that price is on a real-time basis. Growers can also name their own price, which a retailer may agree to. Our online retail location is much closer to Amazon, but we do the shopping for you.
We are building functionality that will allow ag tech companies to sell the suggested inputs for recommendations that their tech creates. This same functionality will also work for independent crop consultants and PCAs. We want to create e-commerce opportunities for 3rd parties that could benefit from access to a functioning marketplace.
Our long-term plan is to include insurance, loans, consultant services, price analytics for buyers and sellers, and automated regulatory compliance for farmers.
How do I sign up as a seller? And how “local” is a local retailer on your site?
There is zero barrier to entry. All you do is sign up, put in the address of your retail location and create a radius of business. Then you start to get bids from farms within that radius. If you want to sell through our online direct marketplace, that requires a bit of discussion on how you want to handle inventory, but it’s easily workable. All that to say, we have an automated ordering process that makes it easy for a farmer to click and buy, or submit a listing for bid while directing sales to retail partners.
Why does our model focus on local businesses within a defined radius? We wanted to fit within the existing local retail structure. There are other firms, like FBN, which basically exclude the local ag retailer, implying that they have no value. We don’t agree with that premise. We think that there are plenty of opportunities for local retailers to provide value to farmers while we provide some price transparency to our customers. We have created an ecosystem for retailers to define exactly where and how they want to do business.
How does the platform work for a buyer?
Buyers, whether it be a farmer or buying group, create a profile in as much detail as they want. For example, a buyer can enter addresses or drop a pin for all of their different field locations and use those addresses for different product or service deliveries.
Simply stated, a buyer creates a list of products and services required and retailers provide anonymous bids. Once you select a bid and pay for it, the retailer is disclosed and the transaction closes. The other option that will be available soon is our direct retail marketplace, where you click to buy. We are close to making our online direct buy marketplace live – it’s currently in demo stage.
Is your revenue model fee-based, ad-based, or both?
Both. Our model is designed so it costs nothing for a retailer to join then review and bid on grower submitted listings. With every transaction on our platform, we add a small fee that gets built into the quote. Our transaction fees are low because we want to promote a large volume of purchases, where value is realized by both buyers and sellers. We provide value for the grower through automated real-time competition, ease of use, and price transparency. We provide value for our retail partners by allowing them broader market reach, reduced sales costs, reduced operational costs, faster sales cycles, and a system that removes brand risk from uncompetitive bids.
We also provide a premium advertising platform, including video chat and other interactive ads. Sean has expertise in smart advertising, so sellers and manufacturers will be able to capitalize on individualized ads with analytics.
How are you marketing your platform?
We currently have 14 retailer partnerships. We’re doing outreach to potential users through all kinds of events, such as association meetings. We’ll soon have advertising on local ag radio stations and social media.
We have a farmer to farmer referral program built and almost ready to roll out, which will provide a monetary award to a buyer who refers someone to our platform. We are developing a similar product for independent consultants too. Soon we also will have some reliable buyer savings data from using our platform.
With the next buying season coming, we want to get significant traction in California and then move on to Washington and Oregon. We want to lock down California first, which is a very unique and sophisticated market.
Who is your competition and how do you differentiate yourself from them?
I would say our direct competitors would be Agrellus out of Texas and AgVend. I have also seen a direct copy-cat version of INPUTS out of North Carolina. This company was able to do that because we are still developing our IP.
I’ve seen our competitors mimic what we are doing, so that says to me we are an innovation leader. My vision and understanding of the future is that we will eventually outstrip our competitors.
From your experience as an entrepreneur, what is the most critical element for the agtech innovation ecosystem in California?
The most valuable elements are mentoring, referrals, and networking. I am a member of AgStart and I really appreciate the help I’ve had in getting connections to mentors and potential customers.
Having a network of farmers who are willing to be a resource would add even more value for startups in the state. A startup looking to work with farmers may have a solution to a problem that the farmer didn’t even know existed, so making those connections is very important.
Your logo is really great – is this your design?
No, a very talented friend took me through a creative process and used her graphic design skills to turn out our logo. We think together with the business name “INPUTS” it speaks very clearly to farmers what we are all about.
I see INPUTS has committed to donating $1 to the Farmer Veteran Coalition for every transaction.
I have a lot of friends and family that served, so I know it’s the right thing to do to support vets who farm or want to get into the business. They are a great organization.
INPUTS is an example of the synergy that comes from the merging of ‘Silicon Valley’ tech and ‘Central Valley’ ag expertise. We look forward to seeing the firm tackle this huge market.
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