Innovative products may get a lot of attention in the consumer space but for fields such as farming they can be viewed with suspicion.. After all, why take a chance on a new solution when you can just stick to what has worked?.
This was the problem faced when introducing his product that aims to replace synthetic nitrogen fertilizer. Karsten Temme, CEO and co-founder of the company, tells Inverse how the company overcame credibility issues in the Q&A below..
Tell me what the company does for your company.
Pivot Bio is an Agtech company founded in 2011 with the aim of replacing synthetic nitrogen fertilizer with a more sustainable, productive and safer alternative. We are focused on workingable, sustainable solutions that improve the farmer economics and the health of the planet through scientific innovation.. Our product, a new crop nutrition solution called Pivot Bio Proven, is the first and only nitrogen-producing microbial product that helps farmers grow high-quality and sustainably focused crops without the waste and negative aspects associated with synthetic fertilizers..
At what point did you scale up and what did that growth look like?.
Since the inception of our company, our team has worked hard to bring to life our vision and technology.. After years of lab and greenhouse trials, we launched a beta testing program in 2018 to test our first product on large acre plots with some of the most innovative corn growers in the US.. In late 2018 we started scaling a series B round of $70 million with the close of a Series B round then quickly followed with solid performance data from 2018 trials. The compelling performance data from our 2018 intention to pivot on-farm trials and the infusion of series B funding fueled our growth throughout 2019.
As 2019 came to a close, we celebrated a year of tremendous growth — selling out of our product during our first commercial year.. With an increased quantity of product available for 2020, we were on the path to sell again through an independent sales network of about 150 representatives, and we had doubled the number of people on our team — primarily in R & D, commercial and product development..
The new product of Pivot Bio aims to replace synthetic nitrogen fertilizer with a more sustainable approach.
What went wrong when you expanded?.
Agtech adoption rates are historically slow and understandably so, when traditional practices have worked to produce farmer ROI. Earlier biological products were used by farmers with varied success rates and adoption of these early products didn’t gain any traction.. We had to show the efficacy of our product against a decades-old approach while overcoming the memories of how past biological products performed — even though these earlier products were vastly different than ours..
Packaging and distribution also became a scale challenge as our customer base grew and they were purchasing higher volumes of product for their farming operations. As specific growers extended use of our product from hundreds of acres to thousands of acres, this meant a change in the way we delivered proved to fields.. With the product being distributed in larger quantities, we had to determine the right packaging that was easy and quick to use during planting. We needed to deliver our microbial product in a ready-to-use formulation to make sure we didn’t slow down the Spring planting process..
How awful were the things?.
Like many businesses, we experienced disruptions to our supply chain as a result of the pandemic.. When it first hit the US, restrictions were set — right when most US farmers started to plant seeds.. But agriculture is considered critical infrastructure in the food supply system, as is our product, so that production and selling could not be stopped..
Our direct-to-farmer method with fewer growers in the early stages of our company was manageable and as we began to scale, we faced challenges in reaching growers with a limited sales force.. We strive for close customer connections so that addressing farmers face-to-face becomes a challenge with growing appetite for the product.
How did you fix the problem?.
With herculean effort and a nimble supply chain, we met our customer delivery deadlines during the Covid-19 shutdown by leveraging the professional network we had cultivated year before.. This network of independent sales reps, the warehouse team and our employees quickly came together to ensure that every customer received the product they ordered.. In many cases, our rep network and sales team delivered products that delivered to our customers by the last mile..
Our attention was equally focused on how to keep our employees safe during the pandemic and was an opportunity to re-focus on the work that was most important to scaling up our business.. Everyone has stepped up to be part of the solution. Before most other businesses we banned travel and cancelled events and implemented mandatory work-from-home practices.. This allowed us to create a schedule for lab and greenhouse work to ensure we had at any given time only a few employees at work.. Instead of making in-person visits to our customers, we called our customers.. We worked hard to maintain the level of trials we needed to continue.. While we are still months away from returning to normal face-to-face interactions and travel, we have emerged a stronger company, learned new ways to work and appreciate each other even more for our contributions..
As sales of our product increased — and farmers had orders to cover thousands of acres — we had to scale packaging to distribute our product.. We have improved how our product was supplied to farmers through innovative partnerships and the expertise on our team.. The Proven production was delivered for 2020 in a larger container, which improved the product efficiency for grower and made it ready to use. This meant the farmer had to add the product to a tank of water when they were ready to plant..
Karsten Temme is CEO and co-founder of Pivot Bio.
Wo have you got the idea for the fix?.
In any business model, a direct-to-customer approach that creates a more personalized experience is a more often than not optimal route to establishing a strong customer base.. Since the beginning of our company, we have remained true to this belief, which has helped us re-establish trust among growers on the journey to establish trust. The availability of data around our product to show the results and effectiveness of our product played a key role.
Specific to the packaging and distribution pain point, it was critical that as we continued to scale our product, the right partners with the skills, speed and agility were identified that we needed to scale packaging and meet demand. As we continue to grow the company, partnering versus building in-house will be a key decision to work through..
Pivot Bio’s unique farmer-to-farmer business model — selling directly to Corn Farmers through a combination of ecommerce, farmer referral programs and a network of professional independent sales representatives — presented a solution during the pandemic.. Since we already had sales representatives in place across the US and our key markets, we had the ability to shift more to them to spread our product in a timely manner..
What do things look like now that you have corrected the problem?.
Demand in 2019 and 2020 surpassed supply. With orders already arriving for 2021, we have booked nearly double what we sold in our first two years of commercial availability.. Building trust with growers and providing them with a product that is essential to their operation in a way convenient for them will likely drive our sales volume to another sold out situation in 2021.. The demand from growers demonstrates how open they are to adding a new technology that helps improve their bottom line and incorporates with their sustainable practices on-farm.. We plan to reach eventually all cereal crop farmers across the globe in order to have the biggest impact both on the industry and the environment..
What learned did you from this experience that other business leaders need to know?.
Our commitment to our company purpose has been critical to Pivot Bio’s success.. For our North Star to build and maintain trust with our key customers. When we needed it to, we deliberately partner with the best and at other times made strategic decisions to build the capability in-house.. We hire the best, most experienced people for the job and leave them to do it ourselves. For any startup or business with an idea they believe can make an impact on society and the world, they should stay focused and continue to push forward.. The hurdles that can be overcome with any growth company will only help to make a business stronger in the long run..