Interview with AGXactly CEO Russell Cole

My name is Dustin Betts. I'm the content editor at the Founder Institute, and I'm here today with Russell Cole. He's the CEO of Agzactly, an agriculture informatics company that's using aerial imaging to help row crop farmers reduce their losses. Russell Cole, thanks so much for joining us today.

Thank you, Dustin, and Founder Institute for having me. It's a pleasure.

Yeah, so before we dive into your company, Agzactly, can you first just tell us a little bit about, you know, yourself or your personal startup story. What were your experiences, professional, personal, that led you to founding this aerial and informatics agricultural startup?

I'll give you a very funny beginning origin story. I don't share it as often anymore because it's 4 years ago, but I was called one day by my brother-in-law, and my brother-in-law has always supported me becoming an entrepreneur. I was a corporate sales executive for a cybersecurity company at the time, And he called me and said, "Hey, I just did an interview." He was a journalist and said, "I just stumbled upon an enormous pile of bug shit." And he called and said that this farm that harvests crickets for edible production had a huge byproduct of their process and that they were storing all of this bug poop, which is actually called frass, in big freight containers. And they didn't know what to do with it because they felt it could be valuable for farming, but that wasn't their main focus. They kept it and they avoided paying for the fees to dump it, basically. And then I got this phone call. It inspired some research, some NASA studies in the '70s came up. Frass has a molecule called chitin in it, which is super valuable for farming. And it's really how this business 4 years ago began, was that phone call. And ever since, I mean, you know, I've learned agriculture, I've seen technology, I've seen the limitations in the field. I've spoken to a lot of farmers who want more from technology. And that's what inspired us to go from bug shit to informatics and drone imagery. So there's a bridge that I could share more about there as well, but I'll leave it at that for now.

Perfect. Yeah, no, that's perfect, like by way of introduction into the ag space coming from a background like in more sales and IT. So yeah, it makes sense. I think serendipity and those sort of things are kind of common in the beginning origin stories of people's startups. Really, really cool. I know because I'm, you know, somewhat familiar with AgXactly as an FI portfolio company, but for those watching, never heard of you before, please give us kind of your short pitch. What is AgXactly? Great.

You nailed it, by the way, when you opened the chat. Basically, we're an informatics company that focuses on helping farmers currently of specialty crops like salad crops, broccoli, cauliflower, lettuce, reduce their crop losses, and also we guarantee that our farming clients will improve their operational efficiencies when working with our technology. We provide essentially just counts of crops at its most simple form in a very simple dashboard for farmers to know at a glance how their fields are performing compared to their targets so that they can speak to their farm managers and, and really dive into if they're trending in the right direction and be able to forecast their sales, be able to forecast their inventory, their packaging requirements, their storage requirements, whatever it is operationally. But most importantly, the value that we've been told we bring, and as a startup, we're always looking to find that, that what's the biggest value, it's that the fields that we've been helping have improved year over year dramatically. And we've saved our early adopters, or we've earned them more than $1 million for every 1,000 acres that we've flown. So It's been quite exciting. And that's in a nutshell what we do.

Awesome. Yeah, that seems like a really nice metric to like hold on to, you know, for 1,000 acres, $1 million. Yeah, so that's really cool. And we'll include that for sure in the follow-up stuff that we do with this. But tell us a little bit more, I guess, about the full scope of these challenges. You kind of touched on it, this operational efficiency and like sort of how I guess that the farmer works with their managers, and it seems like, you know, people think of farming, I think, maybe incorrectly, where they imagine like the small family, you know, the thing that's painted on the side of the butter container, but actually like this is really operational efficiency is like what this business is about when you're talking about these large producers, right? So what are the scope, I guess, of if you want to kind of run through them or a little bit deeper, that the challenges that these specialty row crop farmers faith in their operational efficiency and tracking all of this data that you help them with?

And so that's a great question, and it's— I'll just kind of say to start that because ag technology is more of a newer segment of the industry, if I asked a farmer what your challenges are, many farmers would not immediately respond with, "We just don't have the right technology." Many farmers— and I spoke with somebody in Pakistan today who actually said that they have faworms on their corn. And they really focus on the kind of pests and, you know, disease that occurs in the field. And that's for good reason. I mean, that kills crops. And there are new pests and new diseases, you know, every few years that farmers have to deal with and put their entire crop at risk. So I think that as we continue to move into the world of technology, farmers around the world will start to see that technology is really a challenge because they'll have started to overcome the other more organic biological challenges of farming and really start to realize that, you know, this type of tech is great or this one's not, but we're just not there yet. I'm excited to get there. And even taking a step further back around the world, it's all different. If you ask farmers in California what their biggest challenges are with tech even, Many farms in California don't use drones at the same rate as farms in, call it, Indochina or Europe or different parts of the world. And I think that awareness is also something that we're looking to bring forward. So challenges are vast, usually relate to disease and pests. But when it comes to financials and data and statistics, it's collecting the right data that you can simply make use of very quickly and not be overwhelming or inundating. And that's more what our company focuses on when it comes to data.

Yeah, I think that makes a lot of sense. And sort of like you spoke to like these different geographic regions, as well as obviously differences between different types of farmers, but that sort of that it's like it's at the leading edge in these different geographies. And I think the other thing that you mentioned about making the data that they're collecting like usable in some way, shape, or form, I think like Yeah, that simple dashboard, I guess, is what we'll get more into the product details. But I think like having too much data, sometimes you, maybe the farmer maybe wouldn't know what to do with it. So yeah, we'll discuss more of that. But I want to kind of zoom, talk about the solution, like so new steps from a new user or customer farmer new to working with AgXactly. What does that customer journey look like? Or is it very different for different types of the specialty row crops that you, that you work on?

Yeah, I think we'll save the what type of crops are easier or hard to work with as the next part of the question. But a very simple overview of how we work with clients, if you can imagine you're a farmer that doesn't really know technology or doesn't use drones or imaging, we would literally just walk up to their farm or call them or get a referral and say, we'd love to fly your field for free. We'd love to show you what kind of crop counts you have and see if it brings value, see if you could extract value from the data that we give to you. And that's really the first step. I mean, very few farmers— actually, I'd say a lot of farmers still say no to that. But if you have a warm reference and somebody who's trusted that introduced you, then you'll end up flying that field. It's really at your own time and own expense, and we do that. And then once the farmer sees the value, they obviously realize that there's something worth paying for here to use the service. We also have reference stories, so it's not an incredibly lengthy sales cycle from a sales perspective. It just requires trust, open communication, and sometimes those things are actually hard to find in any industry, but farming in general, very, very difficult to earn trust. Luckily, we are, and we're helping quite a bit. I think that it's interesting, moving away from, call it the sales process, our, as an entrepreneur, our vision and what the company was trying to accomplish was this huge, you know, boil the ocean, kind of approach where we felt we could start in one place and then, you know, land in another that was very big and exciting. And, and that's what keeps me going as an entrepreneur. I love thinking big. Um, but the feedback we've actually gotten from our clients was that, you know, we have a roadmap of 1.1, 1.2, 1.3. Our clients have said we really, really like version 1, and we— it's not that they're not certain that there's value in 1.2 or 1.3, but they've continued to push us into serving them version 1. And again, I only share that because it's part of my journey as an entrepreneur where we want to do a lot more and spend money on those things to do more and develop, but it's just fun to hear that feedback. And version 1 is simply, like I said, providing the statistics in a very simple fashion as quickly as possible for farmers to just look at and know how they're doing.

Yeah, yeah, that's really— I think it's good feedback, and that's why you like talk to your customer, is to hear that the version 1 is what they see a lot of value in right off the bat. And so I think that could be good to hear. And so the insight that you sort of alluded to at the beginning, it's like basically there's expectations about like their yields and what they're going to see. And so in this version 1 where this is your premium, I guess like, hey, we're going to do a flyover and And see, they'll find something like, okay, this part of the field is like not performing. And that's like an insight that they didn't have before because they can't see it 'cause it's like a large area, right? So that's kind of just an example. I don't know, I'm trying to just tease it.

Yeah, version 1. And then you can get into the other ideas of where we're headed as a business in version 1. It's the nuances of being a drone imaging company. We don't like to consider ourselves a drone company because truthfully satellites, are going to advance enough over the next 3 to 5 years where they will displace the value that drones bring. And drones are a cumbersome logistics-heavy, labor-intensive type of product, to be honest. You need a pilot's license. You can't just fly them if you're a farmer that doesn't have a license. So I think there's a lot of different facets to the business that I think are continually changing and advancing. And then the question is, well, how far involved would we like to become in those advancements? Or would we still just want to maintain our position as just informatics and data science. And I've continued to just maintain that and really avoid the distractions, if you want to call them distractions, but they're really exciting. I'll just mention one. We will one day see boxes in fields where drones just fly out of the box, gather data, and fly back to the box. They exist today. They're not used widely, or if at all, in agriculture right now, especially in California, but A fantastic company that I'll mention is Skydio. They're building a fantastic product for a lot of different industries. Public safety is one of them, just inventory management for manufacturing. And that product alone is something that we feel is very useful for agriculture in the short term before satellites can really do a lot more. And I think, again, that's where the future is going.

Yeah, yeah, that's so interesting, like how you frame it. It's more like aerial insights, basically, because the expectation is that, yeah, you move from like drones to satellite data. And yeah, that makes sense to me. But yeah, for people who have never thought about satellites in the context of farming, it probably seems out of left field. So that's a mix of fun, but very cool. I want to ask you about your impact, or like social environmental impact. Founder Institute, we have this For Progress initiative about making impact accessible even for early stage for-profit companies, or those that are not exclusively focused on ESG. My question is, how are you as a founder thinking about your company's social environmental impact today?

There's so many ways, to be honest, and I'm trying to be as candid as possible, so I'll just think of 2 or 3 off the top of my head. So imagine you're a farmer and imagine you have, let's say, 1 acre. Let's just say 1 acre, and you expect 50,000 or 40,000 heads of lettuce or broccoli, and traditionally, you know, you're losing 20%, call it. So, you know, let's say 8,000 crops, or so, and with our technology, you lose 9% or 10%, right? Because you've made that improvement. So if you're applying the same amount of pesticides or the same amount of water or the same amount of nutrients and fertilizer and labor and gasoline costs to drive tractors, and you're getting 20% losses versus if you work with us and you're getting 10% losses, that 10% delta is that savings for the planet, to be honest, and the business. So I think that, you know, it's such a shame Truthfully, and this is coming from a layman, like wasting anything is shameful, especially at this point in our human existence and civilization. I think that that's where we're focused on bringing value, is just understanding you can still do the same amount and get much more output. Another really interesting area that we're looking at is just understanding the trends and demand of certain crops in the marketplace, and being able to count those crops and knowing for certain how many crops you have, to fulfill the demand so that you're not over-farming a specific crop and having to waste crops. That's the other really good example I could bring up that's more future. You need to be able to count a significant number of crops, and we need more clients to do that. But overall, if you know that the demand is X for one crop and Y for another crop, well, you don't want to 2X that first crop and under X or under Y, that second crop, it's wasteful. And truthfully, that's another way to save and maximize every acre of land. That's really what it's about.

Yeah, yeah. I like that operational efficiency, like pointing to these examples in the context of, as you said, it's just a shame that it's a waste. And yeah, and that's what this like big data analytics is about, is minimizing that waste. So yeah, I like that perspective. It's a very quantitative kind of way to look at impact. So that's cool. I want to ask you also, 'cause I'm a little bit intrigued by this just from your website. I don't know anything about it, but the Fly an Acre, Give an Acre kind of model, can you tell us a little bit more about that initiative or what inspired that, how that works? I love that.

I love that you're bringing that up. It's something that we haven't executed on yet. We're basically banking as many acres as possible that we fly for first world countries, for farmers who have access to technology, for farmers who have capital to spend on technology. We're banking those acres. So if you see on our website, there's a number that we've accrued, and we're planning, and we've found partners already to discuss this with, to bring essentially that number of free-flying acres to underserved, undercapitalized, under, you know, just less fortunate communities and communities that could really benefit from technology, but otherwise wouldn't have access to it. So I think that that in and of itself is just an initiative that everyone at our team really believes in. You know, I think the world has shrunk considerably, especially things like COVID, and we've all come so close together that personally my journey has brought me to meet so many people in several countries, you know, around the world. And one thing that really hit me once was when I asked somebody why they're doing what they're doing in agriculture, And they said, I want to make sure that my children can choose what food they want to eat. And I want to make sure that my children can go to school, right? And our technology can help them earn more money and do those things. So to me, that's where I thought, and the whole company, our team thought, we have to provide as best as we can, you know, to whoever can benefit.

Perfect. I like the idea of like banking it, especially for early stage and like thinking about your impact and say like, this is how we're going to execute on it. And so we're like tracking the quantity. Quantity, and when we get there, like, then we'll actually, like, execute it. But, yeah, I really like that model a lot. I think that's really, yeah, an interesting approach, and obviously, yeah, it just resonates a lot because we talked about earlier about how, like, with this aerial crop analytics, like, right now you're at the very leading edge, and so these people who would benefit more are definitely behind, I guess, the curve on the technology adoption of this, and that's what this initiative will help push forward in the future. So, that's wonderful. I wanted to ask you, this is where I have you go out on a limb and make a prediction, thinking about 5 years in the future. What do you think the biggest changes that are coming in agriculture, remote aerial monitoring, future positive impact? I guess we kind of talked about satellites a little bit. So yeah, any other predictions for how this basically area of technology is going to change in the near future?

I'd say, and this is something farmers would probably like to hear the most, is that I believe that the technology, not all of the technology, but a significant portion of what's out there today is going to be very, very low cost to farmers to gain access to, I think, in 5 years. I think the value that they'll receive from the technology will be exponentially greater I think there's just an enormous amount of consolidation that's going to be happening in this industry and space. And I think that that will weed out, for lack of a better word, the businesses that just don't potentially or don't exactly get what value they're bringing. And it's a startup journey, and I think there's a lot of new companies in this space. I think that the industry, again, will just shrink quite a bit. I think there are a few really strong players, but I believe there's a really big opportunity for companies like Exactly and other companies that we're working with in partnership to bring tremendous value at a very reasonable price for farmers. And the truth is, there's no sense of truth. So the truth, there's no sense of truth today for a farmer. When a farmer is approached by a company like ours, and all of our competitors, there's so much skepticism. Okay, so the real answer I'll give you, but aside from affordability and accessibility, is that that veil of skepticism from farmers will be so far drawn back in 5 years because of companies like ours that are collecting data and making things evident through statistical and factual validated evidence that the technologies that they're considering using, which, you know, a farmer could say, oh, well, it could have been this that was the outcome or the reason for the outcome or this that was the reason for the outcome because there's so many factors in farming. Whereas our technology and the type of data we're bringing forward will eliminate that skepticism and pinpoint exactly where and why things are improving for a farmer to truly, you know, finally feel like they're getting something from that claim that those companies make, which is, "We'll improve your yields by 20%." You know, we're not talking about yields today. We aren't. Exacta is not, but many companies are. And that's a challenge because Farmers, they are hearing that every day from every other company saying, "We'll improve your yields." All Exactly is saying is that we will ensure that your productivity goes up 100%. Not 100%, but a 100% guarantee. So that's really— those are some of the quick thoughts I have. I think it's really exciting. Really, really exciting.

Cool. Yeah, I really like those predictions because I always ask founders to make these predictions in interviews and Strangely, I don't hear people say that much, but I believe my industry will like consolidate. But I think all the reasons that you gave, like, make a lot of sense. And just to reiterate, like, because you said it before, like, farmers are naturally like very skeptical, I think. And so, yeah, all of these, these reasons with how the cost curve and the technology adoption will lead to like, like an industry consolidation through like those who can validate, you know, what their claims actually are. Yeah, I think that's all All makes sense. So yeah, nice. Thanks for going out on a limb. I appreciate it. What advice would you offer? Well, actually, first, there's another question I wanted to ask you first, which is that you've obviously made a lot of progress so far at Exactly. What are the biggest challenges first that you feel that you've overcome so far in your journey in building this company?

I think it's finding focus, and this might lead into your next question. What can I share with other entrepreneurs? I started my entrepreneurial journey 4 years ago with bug poop, as I mentioned, and you know, there's so much opportunity in agriculture, it's overwhelming, and farmers are equally overwhelmed. There's just too much to think of doing, and you can't boil an ocean in a month or a year or a few years. So I think that really dialing into one focus, once we did that about a year and a half ago, just said about the start of COVID maybe about a year ago, we just became a newer company in my opinion. We passed this hurdle of being a little confused, and you're always a little confused as a startup, but we passed this hurdle of trying to figure out what to do, and we really found our groove, and we said we're going to stick to this, and it's now been a year, a year and a half of sticking to it and driving value, and, you know, a lot of people might give you negative feedback or criticism, but you really need to listen to those who are, A, giving you negative, but the ones who are giving you positive feedback and really digging into why. And that's the hardest thing to do as a founder. I think for me, as a part of this business, it's figuring out why your tech is so useful. People are paying for it and they are thinking of it being useful for many reasons. But you need to get that understanding as quickly as possible and efficiently as possible.

Yeah, yeah, that's really interesting, kind of just, you know, focusing in down through your customer discovery process and figuring out what that is. Yeah, our co-founder John always talks about the rule of one, like solving one problem for one customer. Yeah, so that resonates for sure as something very broadly applicable. Yeah, my follow-up question is sort of similar or alluded to it sort of as before, you know, what advice would you offer for somebody who's really early stage or even aspiring founders in the agtech or impact tech entrepreneurs more broadly that are just getting started? Would it again be that sort of focus on your customer or any other advice for those at the very beginning of their journey?

Yeah, I would say— and you can hear me? I just changed headphones.

Yep, yep, you're coming in.

Okay. Yeah, I would say the biggest piece of advice I can offer today is that there are so many resources out there about the ecosystem that we exist in. And if you think you can just stay behind a curtain or closed doors and build something so amazing that, you know, you don't kind of bounce off people in that ecosystem, I don't want to say you'll fail, but I think you won't you just can succeed so much faster if you reach out to the people in that ecosystem. I can name some incredible people who have mentored me so far. It took me time as a founder to get past that pride, that sense of pride as well of, I need help. Like you really need help. You need so much help. Reach out to me if you're an early founder. There's FI ecosystems, there's global agtech ecosystems, there's Western Growers Union, there's, you know, just all these accelerators, Cultivian Sandbox. If you can look up their, they're, they're, it's almost like a mind map of all the industry, all the companies in the industry broken down by segment. I think they do a great job of putting good content out. You know, just really ask for help. Be approachable and be driven and be passionate and know that you're not going to have the best idea every single day. But just keep, keep developing your ideas and, and don't stop when someone says no. That's all I can say is really, really go 100 more conversations before you even think of stopping. So that's the last thing I'll say.

I think that's really good advice, yeah, for pretty much any entrepreneur. I mean, we always say that like, yeah, you can't keep your, you know, you can have some secret sauce that you keep in a bottle, but you have to be like fairly open with being able to communicate your ideas and yeah, getting, going out and getting all of that feedback is really where the progress happens. So yeah, totally agree with that advice. I think that's great. The last question I have for you is just, you know, where is AgXactly headed next? If you have any like news or updates with the, for the FI community or any asks for the audience who might be watching here?

Yeah, I can name a couple of things and thank you for the question. We just won a pitch competition with a great organization in California, the Carmel Monterey Startup Monterey Tech Ecosystem, and Our mentor throughout that challenge is— his name is Brooks McChesney, and we are officially bringing Brooks in to be our continued mentor, advisor, and a board member with our business. Brooks has served the technology industry in several companies in that space for so long. Just, we're really, really honored to have him on the team. So that's our latest development when it comes to personnel. Brooks and myself and the rest of the team, we're really focusing on raising our seed round of capital. It will be our first seed round. We've done a pre-seed a year and a half ago or so, and our seed round of capital is, is really exciting to us. I think we're polishing everything up and getting it to market, and we're really confident that with our monthly recurring revenue and the type of IP we have and the people that we have, um, will help us to secure that funding as soon as possible. And then really our ask is if there's any tech developer who loves farming, who loves eating, who just loves food, I really do want to find passionate, intelligent people who can drive our product development forward. I think that will be a much greater need once we are fully funded, but in the meantime, you know, there's opportunities with our business to work with us, get to know us, Our technology development team is very small and there's a lot of opportunity. So we're looking for some really bright stars and people who really love data science and eating food.

Awesome, awesome. And the website, we'll have it obviously here in the link for people who are watching the livestream or watching the video replay, exactly.com, to reach out if you're, you know, potential investor or you're that really passionate developer who wants to get involved. Yeah, great, great opportunities all around. This has been really interesting for me, you know, learning a little bit more about monitoring and data and how these are playing more of a role in agriculture, and as well as the impact in terms of sustainability. And yeah, we at the Founder Institute are all really looking forward to keeping up with AgXactly and where your head is next. So Russell Cole, thank you so much again for joining us today.

Thank you so much, Dustin. It was a pleasure. We'll talk soon.