Innovative products may get a lot of attention in the consumer space, but for fields such as farming, they can be viewed with suspicion. After all, why take a chance on a new solution when you can just stick with what has worked?
This was the issue Pivot Bio faced when introducing its product that aims to replace synthetic nitrogen fertilizer. Karsten Temme, the company’s CEO and co-founder, tells Inverse how the company overcame credibility issues in the Q&A below.
Tell me what your company does.
Pivot Bio is an agtech company founded in 2011 with an ambition to replace synthetic nitrogen fertilizer with a more sustainable, productive, and safer alternative. We are laser-focused on workable, sustainable solutions that improve farmer economics and the health of the planet through scientific innovation. Our product, a new crop nutrition solution called Pivot Bio Proven, is the first and only nitrogen-producing microbial product that helps farmers grow high-quality and sustainably focused crops without the waste and negative aspects associated with synthetic fertilizers.
At what point did you scale up, and what did that growth look like?
Since the inception of our company, our team has worked hard to bring our vision and technology to life. After years of lab and greenhouse trials, we launched a beta testing program in 2018 to trial our first product on large-acre plots with some of the most innovative corn growers in the US. We started scaling in late 2018 with the close of a $70 million series B round, then rapidly followed with solid performance data from the 2018 trials. The compelling performance data from our 2018 intent to pivot on-farm trials and the infusion of series B funding fueled our growth throughout 2019.
As 2019 came to a close, we celebrated a year of tremendous growth — selling out of our product during our first commercial year. With an increased quantity of product available for 2020, we were on a path to sell out again through an independent sales network of about 150 representatives, and we had doubled the number of people on our team — primarily in R&D, commercial, and product development.
What went wrong when you scaled up?
Agtech adoption rates are historically slow, and understandably so, when traditional practices have worked to produce farmer ROI. Earlier biological products were used by farmers with varied success rates, and adoption of these early products didn’t get any traction. We had to demonstrate the efficacy of our product against a decades-old approach while overcoming the memories of how past biological products performed — even though these earlier products were vastly different than ours.
Packaging and distribution also became a scaling challenge as our customer base grew and they were purchasing higher volumes of product for their farming operations. As specific growers expanded use of our product from hundreds to thousands of acres, this meant a shift in how we delivered Proven to fields. With the product being distributed in larger quantities, we had to determine the right packaging that was easy and fast to use during planting. We needed to deliver our microbial product in a ready-to-use formulation to make sure we didn’t slow down the spring planting process.
How bad did things get?
Like many businesses, we experienced disruptions to our supply chain as a result of the pandemic. When it first hit, restrictions were set in place — right as most US farmers were beginning to plant. But farming is considered critical infrastructure in the food supply system, as is our product, so production and selling could not be halted. The difficulty we faced was how to get our product into the hands of farmers as supply chains across the world broke down.
Our direct-to-farmer method with fewer growers in the early stages of our company was manageable, and as we began to scale, we faced challenges in reaching growers with a limited sales force. We strive for close customer connections, so reaching farmers face-to-face becomes a challenge with growing appetite for the product.
How did you fix the issue?
With herculean effort and a nimble supply chain, we met our customer delivery timelines during the Covid-19 shutdown by leveraging the professional network we’d cultivated the year before. This network of independent sales reps, the warehouse team, and our employees quickly came together to ensure every customer received the product they ordered. In many cases, it was our rep network and sales team delivering products that “last mile” to our customers.
Our attention was equally focused on how to keep our employees safe during the pandemic and was an opportunity to re-focus on the work that was most important to scaling our business. Everyone stepped up to be part of the solution. We banned travel, canceled events, and implemented mandatory work-from-home practices before most other businesses. This allowed us to create a schedule for lab and greenhouse work to ensure we had only a few employees at work at any given time. We called our customers instead of making in-person visits. We worked hard to maintain the level of trials we needed. While we are still months away from returning to normal face-to-face interactions and travel, we have emerged a stronger company, learned new ways to work, and appreciate everyone’s contributions even more.
As sales of our product increased — and farmers had orders to cover thousands of acres — we had to scale packaging to distribute our product. Through innovative partnerships and the expertise on our team, we improved how our product was supplied to farmers. For 2020 planting, Proven was delivered in a larger container, which improved product efficiency for the grower, making it “ready to use.” This meant the farmer had to simply add the product to a tank of water when they were ready to plant.
Where did you get the idea for the fix?
In any business model, more times than not, a direct-to-customer approach that creates a more personalized experience is an optimal route to establish a strong customer base. Since the inception of our company, we have stayed true to this belief, which has helped us on the journey to establish trust amongst growers. The availability of data around our product to show the results and efficacy of our product played a key role.
Specific to the packaging and distribution pain point, as we continued to scale our product, it was critical to identify the right partners with the skills, speed, and agility we needed to scale packaging and meet the demand. As we continue to scale the company, partnering versus building in-house will be a key decision to work through.
Pivot Bio’s unique farmer-to-farmer business model — selling directly to corn farmers through a combination of ecommerce, farmer referral programs, and a network of professional independent sales representatives — presented a solution during the pandemic. Since we already had sales reps in place across the US and throughout our key markets, we had the ability to shift more reliance on them to distribute our product in a timely manner.
What do things look like now that you’ve corrected the problem?
Demand outpaced supply in 2019 and 2020. With orders already coming in for 2021, we have booked nearly double what we sold in our first two years of commercial availability. Building trust with growers and providing them with a product that’s essential to their operation in a way that’s convenient to them will likely drive our 2021 sales volume to another sold out situation. Demand from growers demonstrates how open they are to adding a new technology that helps improve their bottom line and fits into their on-farm sustainable practices. We plan to eventually reach all cereal crop farmers across the globe to achieve the most impact for both the industry and the environment.
What did you learn from this experience that other business leaders need to know?
Commitment to our company purpose has been critical to the success of Pivot Bio. Building and maintaining trust with our key customers has been our north star. We deliberately partnered with the best when we needed to, and at other times, made strategic decisions to build the capability in-house. We hire the best, most experienced people for the job and let them do it. For any startup or business with an idea they believe can make an impact on society and the world, they should stay focused and continue to push through. With any growth company, hurdles that can be overcome will only help make a business stronger in the long run.