21 Sep, 2021

Building a Successful Agtech or Foodtech Business Can Be Like a Game of Snakes and Ladders

There has never been a better time to launch an agtech or foodtech business in Ireland writes Lorcan Bannon, Senior Consultant with ifac.

There has never been a better time to launch an agtech or foodtech business in Ireland.

With technologies becoming increasingly accessible, government programmes of investment placing an increased emphasis on innovation and resilience within the agri sector and with human capital amongst the best in the world, aspiring entrepreneurs have all the right factors for success within reach.

Building a successful agtech or foodtech business is still not an easy thing to do. There are many ups and downs along the

path to success. This article highlights the most common highs and lows that we have seen working with some of Ireland’s top emerging entrepreneurs in the agrifood sector.

Spoiler alert: The best entrepreneurs that we work with recognise that the journey is not linear and they put a focus on enjoying the highs and shortening the lows to maximise the overall impact for their business.

a. Get your idea right

Before launching into a new business, the top agtech or foodtech founders really do their research. I mean they really do it. They understand the market dynamics and the problem they are trying to fix. They speak with existing market players, speak with target consumers and really grasp their needs. Very often, they identify key trends or waves that are driving these opportunities forward and they focus on these. Armed with unique insights, they set out their version of the future and how their business will succeed in an emerging marketplace.

b. Build a strong team

Speak with any potential investor and “the team” will always be a key area of focus. Strong founding teams very often, although not always, have a balance of experience and a shared passion for their mission. As a founder, understand your strengths and potential weaknesses. Look to fill those gaps and recruit your team as needed while building a strong ecosystem of supporters and trusted advisors around your core team.

c. Get customer validation

Invest your time early on with your customers. Securing early market traction will give you and potential investors greater confidence in your ability to identify paying customers and to grow a scalable business. With a clear vison for the future, don’t be afraid to tweak and evolve your ideas. Without this early customer validation, you are potentially wasting your time unless your project has deep and valuable IP.

d. Understand your funding options

With some market traction, look at your funding options and your growth strategies. Identify the most suitable source of funds for your business from friends or family, to Local Enterprise Offices (LEO) or LEADER and Enterprise Ireland or Angel Investors to secure the initial funding that your business needs to build out your plans.

e. Build a brand identity for your business

Create a strong, consistent brand identity for your business. In a competitive world, even B2B companies need to be able to differentiate and stand out from the crowd. Having a professional, consistent look and feel that will resonate with your target audience along with an ability to deliver thought leadership in your sector will help drive your business forward.

f. Manage your growth effectively
Stay on top of your key business metrics; especially cashflow. If you grow too quickly and don’t plan correctly your business can die from a lack of financial liquidity.

g. Identify the right strategic investors

As you scale and you get to a point where further investment is needed, identify the right strategic investors to help fund your growth. This could be a mixture of debt, equity, venture capital, grants or even crowdfunding. Ensure you have a deep understanding of your investors before bringing them on your journey; once onboard it can be very complex, costly and time consuming to remove them.

h. Stay focused

Focus and motivation can be a challenge for some founders. Things will not always go as you planned. Having a team of trusted external advisors with regular meetings, will help you to prioritise and stay accountable to your business ambitions. They will also help you to realise the progress that you make as you grow your business.

i. Competitors can eat your lunch

We operate in a sector that is changing fast. Incumbents are starting to react to disruptive technologies and new players are constantly emerging. By not focusing on your customer needs or getting the basics right like securing IP protection, executing quickly or having shareholder agreements in place, you can be left exposed to competitive threats.

j. Enjoy the journey

In reality there is not one final destination or trophy moment. Building a sustainable agtech or foodtech business takes time and you will encounter lots of snakes and ladders along the way. The important thing is to keep moving.