Saturday Sprouting Reads: Thinking in First Principles to Transform Agricultural Value Chains
Can we think like Aristotle to transform agricultural value chains?

Dear Friends,
Greetings from Hyderabad, India! Welcome to Saturday Sprouting Reads!
About Sprouting Reads
If you've ever grown food in your kitchen garden like me, you would realize the importance of letting seeds germinate sooner than later. As much as I would like to include sprouting as an essential process for the raw foods that my body loves to experiment with, I am keen to see how this mindful practice could be adapted to the food that my mind consumes.
You see, comprehension is as much biological as digestion is.
And so, once in a while, I want to look at a bunch of articles or reports closely and chew over them. I may or may not have a long-form narrative take on it, but I want to meditate slowly on them so that those among you who are deeply thinking about agriculture could ruminate on them as slowly as wise cows do. Who knows? Perhaps, you may end up seeing them differently.
[Subscriber-Only]: Why did Google Invest in Cropin?
In a legendary article on his blog, investor legend Bill Gurley once recounted the fascinating history of SaaS software:
“About this same time, the rise of the Internet gave birth to the idea of an ASP – a model where the software would be delivered as a service over the web, and customers would “subscribe” to the software. Analysts raved at the genius of the idea. With this model, the customer would pay an incremental fee each month, therefore eliminating the “start from zero” sales game inherent in the software model. Assuming no loss of customers, the revenue from last quarter is already booked for this quarter – all new sales theoretically represent incremental growth.”
But here is the thing.
In a complex-to-digitalise domain like agritech where Ashby’s Law of Requisite Variety makes it difficult to aggregate and commoditize data at scale, as you scale up with an increase in acres/hectares analyzed, you should ideally move towards Law of Increasing Returns. What happens, in reality, is that you often tend to move towards Law of Diminishing Returns.
Perhaps, this could be the reason why Cropin has been focused only on projects, talking of ‘clients’ (and not ‘customers’) with a stronger emphasis on channel sales and channel partners, more so, after deploying their COO Kunal to the Netherlands with a permanent office address in March 2021.
Essentially, we are looking at a project-led, IT partner for agribusiness clients’ play, and not a pure-play agritech SaaS.
Perhaps, this could be a valuable proposition for Google, which has recently partnered with Telangana State to do digital agricultural experiments at scale, partnering with Cropin, as Google puts it, ‘a global ag-ecosystem intelligence provider, to improve applications that can track land use and bring digital services to farmers nationwide’.
In this subscriber-only article, I dig into the agritech gameplay of Waycool Foods, Arya.Ag, Agribazaar, and Cropway in order to arrive at a definition of full-stackers and super-full stackers. I also dig into why Google invested in Cropin and why Bharat Krushi Seva could be the next Bharat Agri
[Subscriber-Only]: Making Sense of a Godzilla Problem called Food Loss and Food Waste (courtesy Mill, the new startup from Google Nest Founder’s stable and Greenpod Labs)
When we closely examine the forest of data on global food systems, a contrarian insight emerges: Food Loss is a production system problem rather than a consumer mindset problem. And hence my criterion for evaluating startups aiming to tackle this Godzilla problem is thus:
Does the solution speak to utopian ideals and nudges us to be socially responsible?
In the case of Mill, the answer is Yes. Unfortunately, this is a huge red flag when you think from a food systems and system design perspective. Any system that expects you to be responsible is not a well-designed system.
In the case of Greenpod labs, the answer is No. Which is exactly how it should be, if you ask me. Unless food waste is treated in ground reality terms, we wouldn't be able to crack it.
Does the solution speak to the ‘convenience-focused median customer'?
In the case of Mill, the answer is No. It doesn’t with the amount of initiative required to pay 33 USD per month AND mail one’s own waste that sits in a “food-shrinking, de-stinking Mill kitchen bin”
In the case of Greenpod Labs, the answer is Yes. This is ideal, as you don’t want to treat food waste orthogonal to their underlying existential production system problems.
In this subscriber-only article, I make a strong case for why food loss and food waste are production system problems and I also start my coverage on the irrigation tech domain in agritech. Why is Irrigation Tech in smallholding countries like India a no-go-zone for venture capital activity? Can we, umm, <cough> <cough> irrigate irrigation tech’s parched fundraising climate?
Thinking in First Principles to Transform Agricultural Value Chains
It may seem light years ago.
But there was a time when Elon Musk’s “Iron Man” aura was intact. Back in those days, in one of the chat events organized by the folks at Reddit, Elon Musk offered an interesting piece of advice on learning any subject well. Amidst frenzied fans worshipping the archetypal super-human tech genius, he proffered:
“It is important to view knowledge as sort of a semantic tree — make sure you understand the fundamental principles, ie the trunk and big branches, before you get into the leaves/details or there is nothing for them to hang on to.”
As we enter a new technological era with AI answer engines and large language models, I cannot emphasize enough how important it is to examine the trunk and big branches - preferring steep, foundational questions over GPT-able answers - of agriculture.

Although the pace layers were a good starting point to explore the various trunks of agriculture based on an underlying framework of how societies develop their robustness to change, it didn’t clarify the distinction between markets and governments.
In their fascinating popcorn public policy book, “Missing in Action: Why You Should Care About Public Policy?”, the authors Pranay and Raghu organize their book based on a powerful foundational insight:
“Any invididual is part of three meta-institutions, each with its unique characteristics, follies and strengths. These are the market, State and society.”
When policy outcomes are the result of three important forces: market, society and government, how do we understand the ‘semantic tree’ of agriculture, the fundamental principles, as Aristotle once put it, “the first basis from which a thing is known?”1

Serendipitously, over the past few weeks, I actively took part in two events, marking Agribusiness Matters’ foray into event curation, which set off an interesting chain of events that helped me examine the underlying faultlines of this question deeply.
The first event was the Agriculture Day Conference organized by the Deshpande Foundation to mark the announcement of creating 100,000 farm ponds for the farmers in the rainfed regions of the country, as a part of the “Greening India” initiative, financed through farmers’ joint liability groups, in a tripartite agreement between NABARD, Deshpande Foundation and State Bank of India.
The event brought back a timely global and local question immortalized in India’s pioneering water conservationist Anupam Mishra’s seminal work: Are the Ponds Still Relevant?
Much like Israel, would India eventually climb the paradigm of farmer-owned farm ponds and embrace aquaculture at scale, in a sharp deviation from the community-driven watershed approach that never separated soil and water in the first place?
Honestly, I don’t know.
What I am more certain about is this: It is high time we build a bridge between the Latin of “Development” and the Greek of Agribusiness.
Latin of Development and Greek of Agribusiness
If you’ve spent time in the agritech VC/founder ecosystem, you would have noticed the amount of bashing NGOs/social sector/development professionals get for their “lofty” goals.
Nassim Nicholas Taleb’s tweet is a succinct summary of the mindset I’ve encountered far too often.


The trouble with such well-intentioned 30,000 feet statements is that it is completely untrue when you start to see the reality at 10,000 feet levels.
For the sake of the argument, let’s now assume that Taleb was indeed right. If it only takes a risk-taking business “to save the world”, what would that agricultural world actually look like?
During the panel, I answered this question by examining the role of technology in agriculture in hydrological terms.
Technology is the gushing, unstoppable force of water hitting this old wearied rock called Agriculture that has seen various geological changes over millennia. Water being what it is, chooses the path of least resistance and moves towards trajectories where it can create value for its investors faster.
This will be harsh when I put it this way. But, nevertheless, I will spell it aloud.
Technology has no interest in pure nice things. Technology knows too well to well out a change slightly earlier and venture capitalists are in the business of putting money in the futures they predict. Technology moves in many directions. All of which are potentially profitable. When some of them start earning some profit, they will start moving faster and you will see a whole lot of developments in that trajectory.
In 2021, venture capital investors globally pumped $51.7bn into agrifood technologies, an 85% increase over 2020. Now, where did the majority of these technological waters go globally?
Groceries, of course:)
In contrast, Indian startups were able to raise $4 Bn through 257 deals, with input linkages attracting the largest share (~29 %), followed by emerging sectors such as precision agriculture and aquaculture (24%) and output linkages (19%)
The moral of the story is thus:
If it only takes a risk-taking business “to save the world”, we would be ending up over-optimizing how to deliver groceries better, instead of focusing on foundational capital-driven food-system investments like food waste, farm gate infrastructure, food quality and food supply chains.
Agritech is hard because technological innovations tend to increase the value more at the downstream level than the upstream level. If you take the last 150 years' data, wheat prices have gone down while bread prices have gone up.
This is the Agritech Death Cycle that bears repeating as it is extremely important.
Agritech Death Cycle happens if you are only innovating on technology and not changing the underlying value chain.
In any business, the person who takes the most risk wins the most reward. If that's the case, why is that farmer who takes the most risk and gets the least reward?
Can those of us who are dreaming, breathing agritech break this agritech death cycle?
Can Agritech Be the Perfect Love Child of “Development” and “Business”?

One of my favourite sectoral metrics in agriculture is Gross Capital Formation which measures the flow of capital per unit of time in agriculture and allied sectors over the capital formation in the economy as a whole.
There is enough data in countries with smallholding contexts to show that private gross capital formation in agriculture is low in contrast to public gross capital formation in agriculture, which has also been declining over time.
“The ratio of GCFAGR to the total GCF of economy has decreased with significant fluctuations from over 28% in the early fifties to about 18% in 1980s further sliding to as low as 7.38% in 2019-20. Even though GCF of economy has been steadily increasing along with fluctuations, the same pattern is not experienced in the case of the agricultural sector.” - Agricultural Growth and Capital Formation in Agriculture Article By Palukuru Nikileswari
If you are an investor who is really serious about food system transformations, the metric to measure is this: Can you evaluate agritech startups based on private gross capital formation metrics?
It’s a sunny Saturday morning and the incorrigible optimist in me is optimistic that some of you will:)
So, what do you think?
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“The Metaphysics,” Aristotle, 1013a14–15
First of all, thank you for your writing. It’s well done.
So you know, I’m a 35 yr bioengineering - protein technology executive, in-house seed venture only professional. I have spent more time in biologics - protein manufacturing - food processing - big ag plants than 90% of the entire VC community. Understanding how everything works is base camp. At least for me. From there, different ideas can be formulated and brought into practice.
When I see what is considered climate technology, today, I have look very hard. But the one area that does stand out the most is what you describe as the ag value chain. I don’t call it that but since you do, I’m going with it. That chain is fixable. My newest venture is actually working in that space but what I figured out, it needs to start with the assets we have in hand now. The one most broken. Cow based GHG for example. Sure, Gates is financing a vaccine for it. But that’s 10 yrs out. There are scrubbers, feed additives etc. In my view, you pointed out the most glaring - ironically what I concluded 4 yrs ago - the upstream must be combined with the downstream.
Investing in “futurizing” is the key.
Cheers