Published On: 12/31/2019Categories: Economic Development, Industry News

How Indiana is building a bridge between Silicon Valley and the Midwest

Reading Time: 9 minutes

There’s no question that Silicon Valley is touted as the epicenter of innovation and venture capital in the world, but a few folks are starting to question whether the agri-foodtech investment ecosystem needs to plant roots elsewhere. A handful of startups have recently told AFN about their decisions to establish headquarters beyond the bounds of Palo Alto, and California altogether.

The Bay Area offers the 19th largest economy in the world-beating out Switzerland and Saudi Arabia, according to The Economist, and it’s home to some of the most influential and far-reaching companies in the world. But when it comes to agri-foodtech, food consumption happens everywhere and shouldn’t most of the innovation be happening where most of the farming is happening?

Although agricultural production happens in all 50 states and California leads the country as the largest producer of agricultural products, according to USDA ERS data, the Midwest boasts a massive epicenter of production sprawling across a number of states including the Dakotas, Nebraska, Kansas, Minnesota, Iowa, Indiana, and Michigan. Just look at this map:

And when it comes to livestock production, Texas, Iowa, Nebraska, and Kansas are among the top five producing states, with California included in the pack.

The juxtaposition of where farming is happening in the US with where agri-foodtech innovation is mostly originating from leads one to ask an obvious question: Why isn’t the Midwest the Silicon Valley of agrifood tech?

“I think in some ways the pace at which the innovation economy blew up on the West Coast just candidly outpaced tech in the heartland,” AgriNovus Indiana president Beth Bechdol tells AFN. “The emergence of Silicon Valley, the work of Stanford building entrepreneurs, next-generation tech giants – the way they took the whole space to a new level. We just weren’t keeping up – at least from the pure tech/innovation side of the equation.”

Not to suggest that Silicon Valley and West Coasters, in general, may have a more outspoken vibe (okay, maybe I am suggesting that but I’m from California so it’s fine) but Midwesterners are characteristically humble when it comes to bringing attention to themselves (and I live in the MidWest now, so this isn’t merely hearsay).

Bechdol sees the infamous Midwest Nice persona as being a strength in some ways, but a definite weakness in the fiercely competitive race for being placed on the tech pedestal or seen as a go-to hub for innovation.

“We don’t always pull our shoulders back and put our heads above the noise and really promote or talk about the work we do. Sometimes I have to tell startups to be bolder, amp up their pitch, and speak up,” she confirms.

Bechdol, AgriNovus and the Indiana Economic Development Corporation (IEDC) are on a mission to build a bridge between Silicon Valley and the Midwest, an endeavor which could exponentially increase not only the rate at which technology is applied to farming’s pain points, but improve the accuracy and value proposition that some of these technologies can offer farmers. Having covered this space for five years, I’ve seen far too many startups that have conjured a new tool in a Silicon Valley lab without having ever set foot on an actual farm.

AgriNovus is an Indiana state initiative dedicated to promoting and accelerating the growth of the agbioscience community in the region. It’s part of the Central Indiana Corporate Partnership (CICP), which is an effort dedicated to the region’s continued growth. The chief innovation officer for the IEDC, the state’s lead economic development agency, and the director of the Indiana State Department of Agriculture also serve as AgriNovus board members.

As part of its founding guidelines and mission statement, AgriNovus focuses on cultivating relationships and innovation among industry players, including executives of other industries, innovators, and other industry professionals as opposed to operating as a consumer-facing entity.

How do you build a bridge between Silicon Valley and the Midwest?

Bechdol doesn’t just have a multi-faceted approach to making the long-discussed bridge between the world’s innovation and investment epicenter and America’s heartland a reality; she’s braced for the challenges that lie ahead.

First of which is turning the warm, fuzzy feel-good discussions about uniting Silicon Valley and the Midwest into more than just a conference call or board meeting chatter.

“John Hartnett of THRIVE and I talk often about our collaborative opportunities and this hand-in-glove concept of the West Coast meeting the Midwest and how our two organizations can perhaps be anchors or bookends to a concept like that,” she explains. “At some point, it has to move from concept to tactical, executable activities or programs of some kind. This involves figuring out what those steps are and who the right partners are because this is the kind of effort that really takes buy-in from the whole ecosystem — industry, VCs, and civic leaders.”

Bechdol has identified three ways to start building the bridge between Silicon Valley and the Midwest.

First, leveraging the Midwest’s geographical location and creating ways for tech entrepreneurs to reach a major contingent of their ultimate end-users.

Second, a talent exchange.

“There are a lot of young people in each place who I think would very much benefit from exposure to the other region and the opportunity to cross-pollinate, to have some exchange style opportunities. A lot of our students are eager to really steep themselves in an exciting, emerging startup ecosystem with high-intensity tech innovation, but they know they want to live in the Midwest ultimately,” she explains. “It may be a combination of sabbaticals, internships, or other types of short-term exchanges.”

The talent pipeline goes both ways, she adds. Startups in Silicon Valley are likely eager for a chance to bring a Midwest native who has grown up in the farming industry to their office. That kind of institutional knowledge and cultural experience is hard to Google.

Finally, AgriNovus has its sights set on a variety of industry partnerships including research, tech licensing, tech testing, investment, or other endeavors tied to commercialization.

But another challenge lurking in the Silicon Valley Meets Muck Boots dating game is a grim one that is perhaps more difficult to swallow than turning intent into action.

“There is a challenge when it comes to getting over the mindset of feeling like we are competing with each other. At some level, from an economic development perspective, we each want new businesses to establish headquarters or research centers in our cities for our own benefit,” Bechdol explains. “Indiana is starting to move away from that with the way we have looked at partnerships globally.”

But for many West Coasters, pinpointing the Midwest on a map can be challenging. Most of them know it’s a big chunk of land somewhere east of the Rockies but also before you hit the Eastern Seabord, and isn’t part of it near Canada?

“It’s a pretty nebulous space. I’ve heard this from a lot of colleagues in the Bay Area. They don’t always distinguish between Kansas, Missouri, Nebraska, Indiana, etc.,” Bechdol says. “That’s an important component for AgriNovus. How does Indiana get its head above the others and take a leadership role?”

Will Silicon Valley cross the bridge?

Voted as the most valuable agri-foodtech accelerator in AgFunder’s AgriFood Tech Innovation Awards this year, THRIVE recently launched its first Midwest-focused program in partnership with AgriNovus Indiana, the National Pork Board,  Elanco Animal Health, Purdue Foundry, and long-term partner Land O’Lakes.

But building a bridge between Silicon Valley and the Midwest isn’t like Field of Dreams – just because you build it, it doesn’t mean they will come.

“It’s a two-way thing,” THRIVE founder John Hartnett tells AFN. “It’s not Silicon Valley comes to Indiana or the Midwest. I think it’s about making something significant for the agtech sector. I’m a big fan of the saying ‘go fish where the fish are’ and if you are in the world of ag and running a young tech company ultimately it’s goal is to grow and scale. Many companies come to Silicon Valley from all over the world but its customers are in the Midwest.”

As Hartnett points out, however, the Midwest is a much more amorphous region than the neatly defined boundaries of Silicon Valley. Indiana, Iowa, and Nebraska constitute the center of gravity for the Midwest, he reasons, but the broader region can make it more difficult for companies to connect with their target end-user.

The first port of call for a startup from Israel, Australia, or Ireland might be Silicon Valley, but it may ultimately do most of its business in the Midwest. California boasts an impressive agricultural economy, but it contains a hearty swath of specialty crops whereas the Midwest is home to commodity crop production and a large livestock contingent.

“The relationship with AgriNovus puts a center of gravity to the Midwest. It’s a good way to point our startups to a specific location that they can leverage through AgriNovus’ ecosystem of customers and farmers in that region.”

Do farmers want a bridge to Silicon Valley?

Farmers are facing countless challenges including increasing and morphing consumer demand, severe and unpredictable weather, and a depressed market providing thin margins. Although a number of farmers and agricultural trade groups have run in-house R&D efforts, tapping Silicon Valley’s powerhouse of innovation capabilities could offer shortcuts to solutions.

“We represent 60,000 pork producers who are predominantly centered in the Midwest and a little on the East Coast. As a rapidly growing industry, we have no shortage of opportunities, challenges, and problems that need to be solved,” Bill Even, director of the National Pork Board (NPB), tells AFN. “Our board of directors sat down a year ago and said we typically think of millions of dollars we spend on research as being biology research for pigs. We need to expand that to think of how we can use some of our research dollars as seed money to spark innovation and problem solving for our industry. That’s what led us to join THRIVE as a member.”

Evens views THRIVE as a matchmaking service connecting people who have problems and needs that must be solved to the people with the idea and capital to solve them. NPB hosted the Swine Innovation Summit in conjunction with the Forbes AgTech Summit in Indianapolis earlier this year. The inaugural event connected pork producers and food influencers with emergency technology trends.

Some of his priorities include animal health and tools to optimize the barn operating environment. Labor is also a challenge with employment in the US at an all-time low.

“Something as simple as how many hours a year the staff spend counting pigs. It sounds simple, but if you are raising pigs in multiple states and have multiple barns with tens of thousands of pigs, the simple act of how you can automate that to have an accurate pig count or ensuring the number of pigs that come in on the truck and the number of pigs taken to the processor is important,” he says.

As a California native now living and farming in the Midwest, I am often met with a range of outright negative responses when I tell my farming colleagues that I hail from the so-called “left coast.” I’ve heard nearly every stereotype under the sun about my homeland and had to prove on more than one occasion that I don’t keep a yoga mat in the trunk of my car. I’ve finally given into the common trope that I obviously know how to surf — I never did, but wish I was that cool so why not take the street cred?

I often wonder whether this cultural animosity towards the coastal culture is a death knell for any hope of bringing the cutting edge innovation and critical value that Silicon Valley entrepreneurs can offer to the farming community as a whole — not just the open-minded adopters.

Bechdol points to the undeniable generational shift we are starting to see, which has brought digitally native millennials to the helms of many farming operations throughout the country. And where farmers of any generation may still be dubious about rubbing shoulders with Silicon Valley, Bechdol believes a little TLC will go a long way.

“Some curating of those relationships probably has to take place. If you bring farmers the right entrepreneur, the right investor, the right tech innovator, the right product or technology, there will be an openness to that. It’s really about establishing trust. A role AgriNovus plays is putting people in a room together who wouldn’t normally be together.”

Creating entrepreneur-farmer networks could be one way to start overcoming any biases against working with someone from a very different walks of life. Tennessee’s AgLaunch has made strides towards creating farmer networks that provide Silicon Valley entrepreneurs with connections to farmers who are interested in providing farms for product trials and feedbacks, Bechdol notes.

Check out AgriNovus’ video from the Forbes AgTech Summit.