Partnerships as key to success in AgriFood Tech

In the current state of increasing food cost, climate change and, well, no nicer way to call it besides a global crisis, supporting sustainable and efficient food and agriculture technological infrastructure is a MUST.

Transforming, re-inventing and even improving food production usually involves a long process and high risk. I believe that the most powerful way to overcome these complex challenges is #collaboration . As part of my job, I deal with the growing need to improve protein production. On my mission to support #sustainable and #impacting  tech, I implement and advocate the idea of #partnerships  as a key to success .

In this article, I will dive into solving complex projects via partnerships: Recirculated Aquaculture Systems (RAS) as a case study

Nothing I came across so far matches the emerging Recirculated #Aquaculture Systems (RAS) sector. An industry that has taken the role of providing sea-based healthy proteins to the growing human population through creation of sustainable inland production facilities. I learned that beyond the sexy name, lies a universal opportunity but also maybe the hardest challenge of all - "playing God". Making an artificial micro cosmos that will imitate the natural habitat of marine animals. Not an easy task. 

This is why, this industry is a great case study for me to demonstrate how partnerships can help out. I find that partnerships are essential not only in the aquaculture sector but in #agtech and #foodtech sectors in general, in these major aspects:

• Technological solutions - when a RAS project requires the optimal combination of many ingredients like feed, clean water, oxygen, surface, energy, labor and more… a multidisciplinary team will usually do the trick. But to maintain a lean operation and fast progress, partnering with other advanced technologies and other science fields is crucial. In aquaculture for example, instead of adjusting the system to the animals, companies can adjust the animals to the systems by partnering with genetic experts or with different water treatment solutions that can optimize water conditions.
• Reducing cost - growing wild sea animals inland is difficult and making it economically viable is even harder. Creative and collaborative business models can reduce cost. For example, reducing electricity cost by partnering with alternative renewable energy providers, or using anaerobic digesters to restore energy from the waste. Moreover, to reduce CAPEX for the establishment of production facilities, it seems that the most practical way is to collaborate with engineering companies with innovative light structures and additional players along the production chain.  
• Global scaling up - for implementing a technology in destination markets, the most effective way will be to find local partners that will be able to serve as the project's "boots on the ground". A local player will know best how to tackle all local aspects, such as regulatory requirements, site location, distribution channels, etc.

Picture credit: A salmon RAS facility in Poland. www.AquaMaof.com

RAS projects, which are only a fraction of the entire #Foodtech and #Agtech sectors, stand at a crossroad of humanity, while the traditional ways to feed the population are just not enough anymore. But not only such a critical mission is needed to consider the benefits of joining forces. 

The main reasons to create and nurture partnerships -

• Overcome challenges – problem solving for complex technological solutions
• Enable brainstorming, creativity and fun! (If your process is not fun – ask yourself if this is the right partner for you)
• Receive know-how and experience on how things are done in other sectors
• Cost reduction
• Export/ international synergies and scaling

And what about strategic partnerships? Are they different than "regular" partnerships?

While partnerships can be limited to a certain subject or aspect of the company's activities, strategic partnerships start with two companies or more sharing the same vision. If companies agree on the long-term goals, they would usually find a joint interest to collaborate, sometimes even with a joint financial investment, mutual marketing efforts, co-branding and campaigns, long-term product road mapping, integrations and more.

Empirically, we can see that more than 80% of SaaS companies have strategic partnerships[1] . According to a recent study conducted by the CMO Council, 85 percent of respondents  viewed strategic alliances as an essential or important component of business.

Going back to the Agri/Food Tech sector, it seems that almost all of the companies share the same long term goal and vision - saving the planet, so it's pretty easy to correlate in that regard. We are starting to see more and more partnerships in the emerging Israeli sector that will evolve in the future to consolidations and mergers. A great example is The Israeli cultivated meat consortium , that kicked off this year (2022) with a nice governmental support.

Due to the long-term commitment and large spectrum of implications, there are many more considerations prior to deciding on a strategic joint venture.

Here are 5 major benefits that could justify the effort:

• Additional opportunities – if your company has high overlapping prospects with other companies, joining efforts will make it easier to turn them into qualified opportunities.
• New and larger audiences, segments and even markets – Teaming up can make it much easier to turn your prospects into a better match for larger needs and enable access to audiences you had difficulty breaking into on your own.
• Repositioning in the ecosystem – Mutual recommendation and approval by another reputable entity, mutually establishing both places in the ecosystem.
• Additional resources and funds – Easier to raise funds, doubles your track record, financial ranking.
• Shared marketing efforts – wider reach in terms of brainstorming and new ideas as well as larger budgets that allows promoting tools that would’ve been impossible to use alone.

Picture: Shared booth example (ECOshrimp, Agrotop)

Speaking about marketing is always a favorite for me, so let’s elaborate a bit on the major tools you can use while co-marketing with a partner

Marketing, mainly if you are a young startup, is expensive and requires a lot of work. One of the most cost-effective ways I found is teaming up with the right partner and joining efforts. Here are five practical tools I personally used with other business partners and we all enjoyed great results with relatively small budgets:

• Share databases - for a joint campaign - email marketing, newsletter
• Double budgets - for co-branded campaigns on social media makes much more impact than 2 campaigns with smaller budgets (social medial algorithms like bigger budgets)
• Create joint content - articles, podcast, a blog post interviewing each other or even joint efforts and resources to produce a professional white paper or an Ebook that you wouldn't have the capacity to produce alone
• Joint events - organizing events is hard. Utilizing the support of another team makes it much easier to produce a webinar, a live event, professional small conference or a private dinner.
• Case studies and testimonials – share each other's reputation and with time, share the success of joint projects

Picture: Joint event example (Credit: Galleria investments)

 So, you have created a partnership, how will you make it actually work?

No two partnerships are alike. As demonstrated above, there are many tools which are easier to activate together, but it can also be hard to agree on the way to actually do things. Also, it is not easy to measure who did what and what brought the results. If you don’t play your cards right, the entire thing could be a big waste of time. In business relationships, there is no fool-proof process or formula for successful partnerships but there are basic principles that can help it work:

• Stepwise – teaming up with a potential partner should not be taken for a long-term commitment right off the start but built slowly, taking one pilot after the other.
• Remember the difference – Each company has its own history, culture, budgets, customers and products. Be attentive to each side’s constraints, goals and background. Mere awareness can help! Your partner might think or react completely different than you.
• You are dealing with human beings – true, it’s business but it’s not just computers and spreadsheets. Never allow business goals to get in the way of your humanity.
• Stay updated – everything changes so quickly these days, keeping a constant communication channel and ongoing updates is key to prevent problems. 

Overall, to create a successful collaboration, the most important tip is to choose the right partner - not only on the business side, but also on the personal side. During COVID, I had a meeting in a potential partner's house. Once I entered, his very big dog instinctively started barking but within a few seconds we became friends. Well, I LOVE dogs. The guy immediately said "OK, I know we can do business together". So, I'm not telling you to go get a dog (although it's great), but you get the idea.

Another aspect is to look at the broader implications before you jump into a Joint venture. In one of my ventures, we signed a joint development agreement with a certain supplier that was excited to develop a designated product for our needs and we agreed to co-sell the improved version. We happily launched the press release and no one in the industry missed this promising new upcoming product (double impact remember?). What we didn't foresee was that until we had the improved product, other suppliers will refuse selling us the competing ones… overnight we turned from their client to a competitor. So, in some cases, I would recommend keeping your partnership under the radar, at least in the beginning.

My last advice, since my legal experience is always lurking nearby, is - be gentle on legal affairs. A delicate line goes between a collaboration, based on clear joint interests, reputation and trust - and - the legal team's need to secure your share of the deal with guarantees and wrap everything up with a 30-page binding agreement. Keep the balance by mediating your risk while giving your partner the full trust they deserve. However, don't get me wrong, by all means, always use an experienced legal team and don't deal with the T&Cs by yourself. From the same reason that couples don't like to deal with a prenuptial agreement when they are in love, it's not easy to deal with the things that could go wrong when you are starting a mutual business journey. But it must be dealt with. You must at least know your penalties and consequences. If you don’t want to spend money on legal costs in the initial stages, you can start with an MOU to define the first pilot period and leave the hard commercial, IP stuff to a later definitive agreement. 

  Conclusion: Creating a partnership is not easy, maintaining it and overcoming hurdles is even harder. Partnerships are complex, yet, offer so many advantages - faster development and problem solving, double marketing impact, global scale up, cost reduction and easier funding, etc. All of these make partnerships so rewarding.

There are so many reasons to play it safe in a world recovering from social distancing, ongoing European war and the markets’ slowdown. I find it super important to encourage people in the AgriFood Tech sector to join forces for the sake of solving the really big problems together.

[1] (Source: Crossbeam 2021 State of the Partner Ecosystem Report