This interview is all about farming analytics. For this interview, I was lucky enough to talk with Sid Gorham. Sid is the President and CEO of Granular. Granular is focused on making farms more efficient by leveraging data intelligently to help farmers make better decisions about their farming operations and crops.
I invited Sid on the show to tell us more about his background and exactly what they’re doing at Granular. It’s also quite relevant to Flyover Labs. We’re based in Madison, WI so we’re in farm country here.
Here are some other things we talk about:
-What type of data do you bring into your platform?
-How are farmers more intelligent using Granular?
-What’s been your experience working with and selling to farmers?
Dave Kruse: Hey everyone. This is Dave Kruse with Flyover Labs and today we are lucky enough to have Sid Gorham with us. And Sid is the President and CEO of Granular. And Granular is focused on marking farms more efficient by leveraging data intelligently to help farmers make better decisions about their farming operations and crops. So it’s quite fascinating. So I invited Sid on the show to tell us more about his background and exactly what they are doing at Granular. And of course Flyover Labs is based in Madison, Wisconsin, so we are kind of in the middle of a farm country here. So I’m excited to learn more. So Sid, thanks for joining us today.
Sid Gorham: No problem Dave. Glad to be here.
Dave Kruse: So let’s start off by learning a little bit more about your background. Could you tell us, your background and how you eventually got to Granular?
Sid Gorham: Yes. So I grew up on the East Cost, so not in a farming country and I moved to San Francisco in the mid-90 to come – to go to business school here and I got, that was right when all the internet and technology stuff was really getting started. And so I got swept up in that and was involved in a bunch of early stage internet startups and have stayed here ever since. A couple of the companies I have been involved with, one was OpenTable, which is a, even now which is online reservation platform for restaurants and then another one was a company called Telephia that helped companies like Verizon and AT&T and Sprint use data to understand their customers better and be more effective marketers. So I have done different software companies in different industries. I was attracted to Granular and the Granular opportunity when I met my Co-Founder who is a guy named Mike Preiner. He grew up in Minnesota on a farm and he and I looked into the state of technology in farming and concluded that it was a big opportunity to build an important company and to help an industry that’s super important to the world. So that’s really a brief, how did I get here, story.
Dave Kruse: I like it, no that makes sense and so in your past, what were some of your roles? Like at OpenTable, what did you get involved with?
Sid Gorham: Yes, as long I was there, I was Chief Operating Officer and I ran sales and marketing and a number of those options. Some in the early days of the company, so it was kind of out on the front line, pitching restaurants and taking on partners to work with us, which is the top game. There are actually a bunch of parallel restaurants owners who are really strong business people, who you know run complicated businesses based on intuition and you know the gut feel experience and farmers are actually pretty similar where they are very good business people and very smart land owners, but aren’t fully making use of information technology to help them make decisions and kind of control some of the chaos that’s in their business. So kind of both cases I felt like what the table brought, some structure in the organization and leverage to the restaurant owner and sort of the same thing for farms.
Dave Kruse: That’s an interesting pair and I wouldn’t have thought about that, but yes, you are exactly right. And can you tell us a little bit more about Granular, what you guys do and maybe some overall stats. I know you have like the who of who was for investors. But just give a little overview.
Sid Gorham: Yes, maybe I’ll start with the industry, because not everybody might notice, because you are in Wisconsin. So farms in America are almost all family owned businesses, and what is happening now and has been happening for generations is that some families are able to attract their kids back to the farm to take over the business and some are not, right. And so what’s happening is, in cases where the kids don’t want to come back to the farm, the parents when they retire will sell the land or more often will just lease the land to other farms that want to operate it. So you get a situation where it’s still a very family owned industry, but what’s happening are some family farms are getting bigger and some are retiring and leasing out their land. So that trend like I said, it’s been going forever and it used to be that like two-thirds of the country was farmers and now 3% of the country is farmers. But what’s happening as farms, as these – the ones that are getting bigger, they end up with like really much more complicated businesses, because they are spread out over in some cases 200 square miles or over multiple states and they’ve got, teams running all over the place and very expensive equipment, trying to get their work down efficiently and then they just got a lot of money at stake, because farming is a pretty risky business where there is lot of exposure to the weather and the markets and you know diseases and all kinds of other things. And so as these farms kind of get bigger and bigger they have what I would describe as more enterprise level needs, right and less like small business needs. Like they really need to have a bucket and a plan that they can share with their bank and they really need to have control over where is all the labor going, where is all the inventory going, do I think where all the money is flowing and so they just generally have a bigger process in data management and people management challenge the small farm would have. And so what Granular is trying to do is give them software that allows them to run the business more efficiently and easier every day and also collect the data they need to analyze the business and make decisions about it.
Dave Kruse: Got you.
Sid Gorham: That makes sense.
Dave Kruse: Yes, so it’s almost like I guess an ERP system for farmers would that be a…
Sid Gorham: Totally.
Dave Kruse: Okay, yes.
Sid Gorham: It would – I mean I think we are the just – the most accurate way to describe what we are doing. We cannot do immediately do the results, like a company, like an ERP systems like…
Dave Kruse: Yes, what’s that?
Sid Gorham: SAP or whatever,..
Dave Kruse: That’s true.
Sid Gorham: So we are trying the make ERP software for farms that people actually want to use and its really primarily used on their mobile phone. I guess that’s another big difference, like farmers aren’t in front of their computers all day, farmers aren’t in front of their computers all day, so we are really trying to help them use – everyone has got a Smartphone in their pockets and we are trying to help them really use that as business tool that can make their lives easier.
Dave Kruse: Yes, that makes a lot of sense. So when did you start Granular and how much money have you raised and how many employees do you have now?
Sid Gorham: Yes, to where – I think it’s about 2.5 years into it. So we started in early 2014, January 2014 and we’ve been around for about 2.5 years and really only been selling the product for the last year or so.
Dave Kruse: Okay.
Sid Gorham: The early days we are kind of in. We recruited this group of farmers who were super excited about what we were – our mission and where we are heading and they were really generous with their time and feedback and they helped us architect the product and figure out what it had to do. So kind of, it’s been around for 2.5 years. The first half of that was heavy, heavy product development and data assessing and in the past year or so we’ve started to market the products more broadly. And then on the money raising side, we’ve raised about $25 million to-date and really that’s been from not really investors from inside farming, but people from Venture Capital firms with no specific interest in farming, but who recognized it. This is a huge industry in the U.S. and globally and there is no kind of income in depended software provided to the industry. So this same thing that Granular is doing has happened in many, many other industries where people build these vertical specific companies that get really good at supporting the needs of a specific industry with their software product and so that’s the features that all our investors have gotten me on.
Dave Kruse: That makes sense. And did you have relationships with some of these VCs and I mean, at least especially in the Midwest Madison, that’s a good chunk of money to raise in two years. I know it’s a little different out in the valley, but did you know some of these investors from prior companies.
Sid Gorham: Yes.
Dave Kruse: Yes.
Sid Gorham: Yes I mean that’s – I’ve been in Venture Capital funded companies my whole career so I have them pitch. You know I didn’t have close relationships with any of Granular’s current investors, but I have done it before and now, I guess I now talk to those folks and know how to get them onboard with our vision and set the right expectations.
Dave Kruse: Yes, yes, makes sense. And so could you kind of paint the picture of – you know you talked about some of these larger firms spread out and how they were managing. Maybe give an example around inventory or their financials or something and how they are doing it before granular come on.
Sid Gorham: Yes, sure. So it’s really – so we sort of, I would sort of describe it kind of medium to large farms. So we might have a farm that’s 3000 acres or we might have one that’s 30,000 acres, but the common denominator is that they are professional and ambitious and understand that to continually improve their business and to get bigger and more profitable, they need to understand what’s going on and constantly get better, right. And so you can think about it in two chunks, like improving what would usually happen in the office and improving what would happen in the field. So in the office its actually pretty straightforward. We are replacing Microsoft Excel typically. So farmers have built big spreadsheets to understand their budget and how much inputs they need and what they intent to pay for them and they have used excel to give projections to their bank and they’ve used Excel to track how much grain they have on hand, and contracts they are entering into to solve that gain or to hedge their price risk. So farmers really farming in the United States today, basically runs in Excel in the office and so what we are doing – and that’s just like super time consuming and error prone. And it’s probably Excel’s biggest downfall in the context is that it’s a one person tool. Like if you can reply to it, share an Excel workbook with, that fully quickly turns into a mess and farms, like they want to be able to operate as a team and say, okay Bob, you’re the expert on what we should plant on what field. Why don’t you decide that and Suzie you are in charge of ordering the inputs and making sure we are getting a good deal from the vendors, why don’t you do that; and Frank you are in charge of the landlords and all that kind of that stuff, you can do that on Excel, because it’s just not a collaborative tool. And so Granular what we did was take roughly that same work flow and put it into a web application that is multi user with permissions and different levels of access to information so that you can have different people interacting with the software and doing their piece and everyone can still see the whole picture So on the one hand competing with Excel is easy because it’s not a great tool for this type of work. On the other hand its free and people have been using it forever. So it definitely takes some doing, sometimes to convince people that its worth spending real more on something that they are kind of doing for free today. But most of the guys see that pretty quickly and are already kind of pulling their hair out trying to keeping things up to date in Excel.
Dave Kruse: Definitely. Especially if they are looking to expand it, yes go ahead. Sorry.
Sid Gorham: Totally. What happens is you get it out there and figure your size and configuration of your business in any one year and then as soon as you change something, right, if you go from 3000 to 9000 acres all of a sudden, there are breaks and your making a bunch of mistakes and have to rebuild the whole thing. So I think guys have gone through a couple of those, sort of like Oh! My God, this is holding me back right, so that’s in the office. And then in the field, the work flow really kind of run for a two way radius. So everyone who is out in the field is sitting on the same radio channel and they are collaborating that way. Like hey, I’m doing this and I’m almost most finished. So when I’m done it’s your turn to come to the field and do this other operation that we are – I’m out of here and I need somebody to deliver me this you know or whatever; I need more seed to plant the next few field, right; I’m harvesting and I need a truck to come pick up the gain or whatever. This is complex, logistical work that’s happening over large distances with sometimes lots and lots of people and the radio is totally helpful and they are going to be great, because everyone can hear everyone and that’s great. But what Granular does is, give everyone an application that runs on their phone that allows them to see, okay, here is the work that needs to be done today. Here are the supplies, we need to do that work; here is the team that’s working today and like just basically use it as a share to-do list in a way to know what every single person is doing and depend and see straight. So that’s a big part of what we are doing, as well is giving them a mobile tool that they can use out in the field.
Dave Kruse: Interesting and do you – you know you talked about how sometimes it’s a little tough to convince a farmer to try your software in his Excel spreadsheet, by itself and its pretty cheap, but I bet the case studies probably helped solve it a little bit. Do you have an example of – and for me it’s hard to put an exact ROI number, but like a good case study where some farmer benefited from using Granular?
Sid Gorham: Yes, so what we tend to do is, say okay, the software, my costs, you know its $15,000 a year right and so what we do is go through, six, eight, 10 examples of ways in which you could imagine making a decision or avoiding a mistake that would payback that $15,000 quickly, and so this whole side of those can be really tangible. Like make sure you’re getting everything you pay for from your suppliers and that there are no billing mistakes which happen all the time or make sure you are getting paid for every load of grain that you deliver to a customer and there are no billing mistakes there, which happen all the time. So those are like super easy if we say, hey your running this big company of operations, you are not really keeping track of it. Your buying millions of dollars worth of stuff and you are selling millions of dollars worth of stuff and you got trucks running all over the place and truthfully, you really don’t know that everything’s feeling where it’s supposed to go and you are charged correctly. So people believe that very easily and that really then speaks to the guys who are more control oriented, like they really want to be in control and I don’t want to give away costs and that kind of thing. I think where the real ROI comes in is like, I think about how much better your decision making would be when you sit down to decide what profit you are going to grow on what field, that’s a really complicated set of variables. So like what do you expect the prices to be, what do you expect the cost to be, what do you think the yield potential is, all that kind of stuff and then I think the people who adopts things most readily are buying it to be better leaders and decision makers in their business and so that type of, that’s like a different angle than the control, make sure you don’t get ripped off, but it’s really a platform here.
Dave Kruse: Yes, I mean, well its always managed risk and stuff. So I was curious, what type of data do you bring into your platform. Do you bring in or how – what are the data you connect with, whether it’s like commodity data or any other data sets or do you allow for e-commerce on that platform?
Sid Gorham: Yes. So there is a mix of like human entered data. You enter your budget for instance and you now keep track of delivers of supplies and stuff like that. So there is a good amount of data that comes from the systems that’s just entered by everybody on the team as they go through their daily work. And again, this is all typically via their mobile phones. So like you are standing at the warehouse and the supplier comes in with a delivery, you quickly log, we took delivery of, whatever, 10 pallets of seed or whatever it is. So there is lots of examples like that where people all over the organization are basically logging and recording their work as they go through their day and that’s a big source. But then as you point out, there are also a bunch of you know all traffic data inputs that we take in, the weather, the forecasted weather and the historical weather, we take in commodities prices from the reported exchange, we take in data from various pieces of equipment on the farm. So most of the modern farm equipment today logs what it does automatically. So if you are driving a grandeur planter across the field, its keeping track of exactly how much time it spent in that field and how many seeds its planted on that field and how much fuel it burned and all that kind of stuff. So we give that kind of data back and there is a long list after that with things like irrigation equipment. A lot of that equipment has the ability to record how much water is coming down or water scales on the farm also are connected to the web. I mean more and more, almost everything on the farm is going to be connected to the interest over time and so we really want to be the central system to make sure all that stuff connects.
Dave Kruse: Wow, yes that’s impressive, I didn’t know you will be connected to that many data sources by now. You guys have been busy to open all that, interesting.
Sid Gorham: Yes, I mean it’s fun and that’s sort of like another thing that farms buy for. Is there like grounding in data and I don’t know what to do with it and so us coming in and saying, well see there’s this one system that you can store it all in and connect it together in some logical way.
Dave Kruse: Well and if they put in an harvest, I mean eventually you can take the inputs, like the weather and the seeding and fertilizer and see what the outputs are in any field. So they get really smart and really helping farmers in another whole level.
Sid Gorham: Yes, yes, yes.
Dave Kruse: Interesting. And what type of farms do you sell to. Is it any farm that has crops whether its dairy or beef or…
Sid Gorham: Yes, I mean so we don’t do. We do work with a lot of dairies that have crop lands that they are growing the food for the cows on. We don’t do anything specifically with the dairy, like we are not analyzing the possibility per cow or anything like that. But yes, so we put on our way around crops. We started the mid-west with corn and soybeans, which is kind of the two biggest crops in America. And then we spread out over time to do rice and cotton and we move far way in all kinds of things and more recently we’ve expanded to do almonds and pecans and walnuts and stuff like that. So we really work – I guess the type of farms we wouldn’t serve or at least not immediately are things like lettuce and strawberries and things like that. They are super manual labor driven. We need to add some stuff to the product to be really effective and attracting almost hundreds of people employing for the operation doing manual labor. You know that’s very different from the corn farm where everybody has 15 guys on a huge farm.
Dave Kruse: I noticed on your website, I think you had a couple of people kind of under the international later. Are you selling internationally right now?
Sid Gorham: We are not. Well, if you count Canada, yes, but other than Canada, no.
Dave Kruse: Okay, all right.
Sid Gorham: It’s a super interesting opportunity for us, because there are farms in Brazil and Australia and Argentina and South African and some of the places that are super big and really professionally managed. So we want to get after that, but kind of doing it one step at a time.
Dave Kruse: Well, there is – sometimes there is so much opportunity just in the United Sates and there’s a few farms here, so it will probably keep you busy for a while.
Sid Gorham: Yes.
Dave Kruse: And so where do you want to take Granular’s platform. I envisioned some of the guys sitting at the computer and they will be telling robots what to do and you’ll have all the inputs and outputs and maybe that’s the way down the road and maybe that’s not what farmers what to hear, but what’s your vision for the next five years, let’s say.
Sid Gorham: Yes I mean, I think we want to. Our first goal was to help make sure that all the data on the farm was being captured in a digital format where it was useful and a lot of our early farm development that’s been around is really tactical mundane stuff like tracking inventory and now we are kind of turning the corner to do more decision support and more analytics that helps farms. We don’t want, we don’t want the software to make decision for people, that’s not where we’re headed, but we want the software to guide people to the best decisions possible by giving them the right data and allowing them to look at scenarios and allowing them to look at probabilities. And like I said at the beginning, farmers are good business people, but they are highly driven by their own experience and intuition as opposed to possibility in data. And so we want to help guide them in that direction and I think there is a lot of opportunity there, both by helping farms use their own individual data, but also by looking across all Granular customs and saying, hey, this practice is more profitable than that practice or this product is more effective than that product or you know. This way of selling your grain has a higher bid act on this other way. So we think farming is somewhat unique in the sense that you know farmers are competitive, but they are not, they are open to benchmarking and comparisons in a way that some other industries wouldn’t be open to.
Dave Kruse: Yes, that’s a good segway into my next question around benchmarking and so yes, you kind of dropped to my question exactly is – are most farmers open to sharing their data, maybe anonymously sharing their data with other farmers and what type of indicators are you benchmarking and sharing with farmers.
Sid Gorham: Yes. So farmers are, if you and I were farmers who were right next to each other, we would – we’d be pretty competitive and we might be friendly at the coffee shop, but we’d be competitive because I would want you to, I’d want your land and that’s how I would want to expand in a way that was as adjacent as possible to a land I currently operated. But if you and I, if you were in Wisconsin and I was in Iowa, probably they are from opposite corners of Wisconsin, we really wouldn’t be super competitive. And because if you produce a lot of corn, you are not going to move the global price of corn. It’s such a deep commodity market that it’s not really – no individual actor has the ability to change the market and so yes, farms by and large are pretty open to benchmarking and particularly this class of medium and big farms that really wants to compare themselves to other likeminded people, like sized people. So they are pretty open to it, and really encouraging us to go fast in the direction. Some of the early days, like early examples of some of this are when you are go in to the software you are budgeting and planning for what you are going to buy, and so that involves saying I’m going to buy X, Y, Z seed from this vendor at this price and so we see that across all our farms and it’s an opportunity for us to provide data that’s says, okay, everybody else is buying it, but your price compares. You are in the 80% of all farms who are buying that same product. So you are paying more than the average farm, that’s something that you might be able to haggle a better deal on and so that’s super easy from a software perspective and totally non-threatening to the farmer in the right way. Like anything they can do to gang up on [inaudible] whomever it is, it’s all good. It’s not a competitive things at all and so they are really totally up into doing that. It’s not individually identifiable, so it doesn’t say farmer Sid is paying this, but it does day farmers in Iowa are paying this or farmers in the Central Cornwall are playing this or whatever it is. And so that’s like a really early slam-dunk opportunity for us and we did it for the first time last year and it was super exciting for the people.
Dave Kruse: Yes, I mean it’s a great idea. You think all farmers will benefit from doing that. I mean that alone could justify the cost. Well in many ways it will justify the cost of the product. So we are almost out of time here unfortunately, and I was curious what’s been some of the maybe one or maybe multiple or some of the hardest things you had to face starting Granular? Yes, since the beginning.
Sid Gorham: Yes I think we are a small company, we are about 50 people and we need a mix of talent that is what Silicon Valley is really good at and then people from within agriculture and like getting that balance right, and getting the right people in both, from both pools has been tricky, because we don’t have enough farming expertise and industry insight knowledge that you are not making much stupid mistakes and learning everything all over again. Like you also said, there’s a reason this hasn’t happened already and it’s that people within the industry didn’t have the vision or the technology or the talent to get it done and so we don’t want to be too many farming people. And so getting that balance right, is tricky and particularly because all the sort of kind of Silicon Valley people tend to based in our San Francisco office and all the farming people tend to in our Champaign Illinois office or working currently from their homes. And so culturally that’s, not super easy configuration. We have two different pools of talent, one of them is remote from the other and so that’s been something I’ve been really focused on as far building the team’s culture and both such people being able to learn from each other really quickly. So that’s been a challenge and then, let’s see on the sales side, whether the – one of the things that I think when we went into it, we said okay, we know this is a new thing for farmers to be investing in and they are not anti-technology. They buy approximately $1,000 sell like ether tractors, so if the buy really advanced bio tech seeds and stuff like that, so farmers in no way afraid of technology or skeptical of technology, but they haven’t really viewed software as a class of technology to invest in historically. So we knew that would be a challenge. I think one of the, additional challenges we run into is just what happens when we try to sell into a family business, where there might not be really clear decision marking structure in place, right, if its two brothers and a cousin and a sister-in-law and you know and they are at the management team. Sometimes we run into situations where it’s just not clear to anybody who gets to make the decision about Granular and so it takes a bit of a rangling sometimes to show, to guide the sales prospect through some process where they either buy or don’t buy that make a decision in a timely manner.
Dave Kruse: Yes, I guess.
Sid Gorham: So that’s one of the big challenges we run into.
Dave Kruse: No, that makes sense. You have different layers of management; it’s just a little different. We have more like potential relatives as the different layers of management. You have to work though to get a sale instead of the different levels of a large company.
Sid Gorham: Yes, I mean in some ways it’s the same thing, but in some ways it isn’t. It’s like a big company; it’s like there is a VP of Finance, there is a VP of Operations, there is a VP of Technology and they are what their title says they are. But in the family it’s something hard to know whether like does dad have a vote or is dad retired or what’s going on.
Dave Kruse: That’s quite interesting. I never thought about that I guess. Yes and everyplace is going to different. It’s not like you can learn one from the next. Well, that’s nice when dad was. That’s awesome, I like that.
Dave Kruse: Yes, oh man, I mean that’s why I like farms, because I like the family own aspect. It must be a nice – often a nice environment working in that type of space.
Sid Gorham: Yes, I mean I think it’s been at times frustrating to sell into this industry, but once we get them as customers they are just really wonderful people to work with, very generous with their time and really appreciative of what we are building and you know super nice people to work with. So it’s been at least having only been in farming for 2.5 years, it’s been a wonderful, wonderful industry to be a part of and certainly fair to restaurant or telecommunications or other industries I’ve been in, its way, way nicer people.
Dave Kruse: Nice, nice. Well, that’s the Midwest. If you ever stop by Madison you can make sure you look me up.
Sid Gorham: Great, no I would be glad to.
Dave Kruse: But now I think unfortunately, I think that does it for us. So I really appreciate you coming on. Like I said, we are in a farm country, so we don’t talk a lot about farming, so when we do its really interesting to hear kind of what’s the cutting edge and where things are heading. So I really appreciate you telling your story.
Sid Gorham: Yes cool, it was really nice talking to you and we’ll stay in touch. We’ll let you know how the story unfolds.
Dave Kruse: That sounds great and thanks everyone for listening to another episode of Flyover Labs. I hope you enjoyed it as much as I did. We’ll see you next time. Bye.