 All right, thanks So yeah, there's been a whole bunch of good perspectives presented today I'm gonna try and present a little bit of a different one and this is the perspective of the US based Silicon Valley investors So how do they think about you know, the whole agricultural space agricultural technology? And That's gonna buy us a lot of the things I say so it's in that lens So there's there's all these different ways to go about making change This is in the perspective of we want to make an investment in a company. How do you think about what? The right company to invest in would be how do you think about making big impact through companies? How do you do this through capitalism given that it's the current system? How do you do this in the absence of? wide-scale behavioral change So I think pushing for behavioral change for example is like really good whether it's water conference conservation teaching a kid about agriculture Just like re you reduce reuse recycle reduce meat consumption But if you assume that that's not going to change or at least not going to change tomorrow How do you build a business today given that and so you know just to wrap this thought up one example of the meat side? That we invest in is a company called Hampton Creek Foods And so the way they're going about it as they're saying well, you know eggs are a problem both for animal cruelty and for You know all the climate change that they cause we'd a lot of eggs. What if you could do it plant-based? No behavioral change people don't even know the difference. It's cheaper. It's healthier. It tastes the same So that's kind of the the lens that we put on things Cool so I'm curious to get your perspective on even at a bigger picture level. How does Silicon Valley approach Agtech? Yeah, good question. So I think one of the lenses that Silicon Valley usually uses is What has this company developed that can't be copied? So let's say you you make something really good It's going to make a huge difference. Why should we invest in this company? What if what if next month another one comes across that sees the good thing? This one just did and copies it and so one big question is what about this is really defensible and because of that question we often invest in Technology companies or things where there's you know, they're kind of owning a little piece of the whole value chain and so one thing Brian talked about which I think was really interesting is kind of system-level farming and I think there's actually ways to do that in a really defensible way Which we can talk about but but I think at a high level you kind of break down The pieces into more of the linear farming approach, you know, what can you do on the seed side? What can you do on the nutrient side? What do you do about infrastructure and land? How do you get that more cheaply or like finance that? What can you do in financing? Can you do things with insurance? Can you do monitoring with drones? Maybe? All these sorts of things precision agriculture robotic farming Really a wide range. I think it's it's all those different pieces and I think Usually in Silicon Valley their company or founder tries to really take one of those pieces that they think they can own and Improve in a big way Sometimes it's that 10x thinking And sometimes it's just you know 10x return for the farmer Can I do something that maybe improves yield a couple percent, but for every dollar they put down? They're gonna get 10 back this year So it's usually really focused on one specific thing and saying what's the innovation or the insight that we have they can They can build a big company there So we talk about Creating new technology and also application of existing technology Yeah, sure. So I think one one big space where people have been talking a lot about it is drones I think everyone's heard a ton about drones and I've actually met with at least four or five companies that are using drones for agriculture and the specific application of that is I Think it's there's probably ways that's applicable in New Zealand It's highly applicable in the US where there's lots of grain and corn production And so the question there is you've got this huge cornfield. How do you monitor it? How do you know where you're over and under watering? Let's use a drone to go out and take that imagery and then using that plug it back into the farm management system and Figure out where can we water less? Where should we water more to get higher yield? So it's all about that, you know yield per acre sort of question, but I think that's one place Let's see so drones are one I think just general robotics is one Whether it's harvesting or planting That's all very conventional I think there's also just in the farming industry wide-scale applications of IT that can be done. So farm management software And you know, I think farm management software is actually a great place to start thinking about permaculture So, you know, if you if you're the world expert in permaculture Maybe the way to get that just really widespread across millions of acres of farmland Is create the best farm management software and maybe there's a drop-down You know, which what sort of farm management do I want to do? I want to do permaculture and just has all the details of what you need to do and everybody Just immediately knows what to do and they're hooked up with all the suppliers. So I think Just general IT is actually probably a huge opportunity area Are there Certain ways investment communities can be thinking about measuring impact so societal and and ecological impact that are Spanning beyond just the immediate financial returns Yeah, yeah, I think so. So, you know, I think it would be on an investment by investment basis I think that would be the right way to think about it and Maybe you take water for example, so Most freshwater use as we just heard is for agriculture 70% and I think something like 90% is industrial plus ag so You know, I think an investor and a company could think about what's our actual impact on the environment by saying Let's say they had a water reducing technology, whether it's on the crop side that lets maybe you know cornfields go unwatered and sell of similar yield or Just much more efficiently applies irrigation and so I think they would just say we have, you know This many acres and we know that it reduces water consumption from this to this And so we through our technology basically just saved x million gallons of water and had this impact and I think that's the quantitative way that That they would probably think about it in general and then I think there's a separate question of what's that worth? and I think You know somebody somebody else mentioned in one of the audience questions Basically, you know, this is great if you're making things sustainable How do you capture that benefit that you're bringing to the world a lot of its you know? Secondary costs that are not borne by the company just by the consumer at the end of the day or by people aren't who aren't even consumers And I think that the way to do that is often through branding You know in the absence of policy change So if you know so I guess the point is If you're a company that's making a huge difference like a triple bottom line company I think it's it's beholden on you to actually try and bake that into your brand and make sure that that's Perceived by the customer so you can make sure that you're actually capturing some of that value So you can then pump it back into doing more good And when we were talking earlier you mentioned Quite a few companies active companies that have approached you guys What are some of the things that you're looking for and innovations in this space and What would be an investable? Actek project Yeah, good question. So I Touched on one of them before Defensibility if you do this and it works why does no one else just copy you and then just try and undercut you on price That is a real question. That's what's going to determine if the company can make money over the long term This is simply the this is the investor perspective If we don't do a good job making money Someone else is going to get that money to invest so we need to balance both of those things Luckily at Founders Fund what we really believe is that if we solve the world's biggest problems Or are we investing the companies who are solving them? That's going to be worth a lot And so these two things of like do good and and make money are actually aligned And there's companies that that make money that aren't doing good. We try to not invest in those But what was the original question is that does that answer at all? It does. Well, okay So, yeah, what do we look for? So we look for companies that can really make a meaningful impact on a big industry. So You know, I think most investors say that but when we say that we really mean can this company Come to do something better than anybody else in the world and just own that function of AgTech Where they're not, you know, they're not trying to block others out They're just continued continually doing it doing it better and better and better and with the money They make putting it back into the business so they can improve their products So we we require that we want to know they're going to be around for a while And we want to know that they're doing something good And so it's got to be something that if it works it really moves the needle on on civilization overall And have there been any trends that you've been noticing Over the last few years in terms of the amount of talent and energy that's going to that take space Yeah, definitely. So there's probably two side. There's at least a few sides One is definitely drones a lot of people are asking themselves. We have drones now. How do we use them? What are they good for? What's the what's the first best business case? I think it's imagery plus covering a lot of land and that means ag in a lot of cases I think we're seeing stuff in the bio side Creative plant breeding How do you track what what plants you bred and what output they give just basic it software like that? How do you do things with plant supplements that are not fertilizer? How do you you know? basically breed plants that are very Stress-hardened for drought conditions so that you don't have to irrigate And so it's it's things like that But I'd say there's been a big increase both on the bio side on the it side There's a company in the u.s. Called farm logs We're not investors in it, but from what I hear they're doing really well of what they do is farm management software for u.s Grain and corn growers. So this is definitely a big big Focus area for Silicon Valley. I think one of the one of the ways that startups are thinking about things in the valley is what industries just feel really kind of unchanged by Information technology and software and how can we kind of modernize them by applying that and so that's I think people are systematically going through these different industries whether it be Energy production agriculture, you know We saw with the taxing industry with uber and Lyft and a few others And so I think ag is one of those that people are really focused on I think it's also because of the sort of stats we saw earlier Which is that if people don't change their meat Consumption and a lot of the developing world does choose to eat meat. It's gonna be a problem And so you know whether that happens or not whether or not we can change people's perspective to eat less meat I think it's in people's minds that this is an issue and therefore we need to focus on ag And so I think you know, it's an area that a lot of people are passionate about and they want to they want to do things in and earlier on Brian brought up the concept of the 10x of Improvement or impact in types of activities DC Potential of that in the act tech space as well Yeah So I guess probably two ways to think about that one is that yes in certain cases you're gonna have the 10x So I think in some ways, you know Hampton Creek Foods egg product is 10x Not because it's 10x cheaper. It's not it's a little bit, you know, it's a bit cheaper Not because it tastes 10 times better. You can't really tell the difference But the animal cruelty is way over 10x less There's none and the the healthiness of it is it's probably 10x higher And so the question is does that 10x matter to consumers and I think for that product it does And I think going back to the cases where you can't get 10x, you know, you're not gonna probably get 10x yield per acre by putting down some chemical. That's those days are probably long gone The gains today would probably be a few percent maybe 10 20 percent in the most extreme scenarios And so the question there is is this 10x for the person buying it? And so I think it goes back to like what's the return on investment for a farmer Can you can the cost of doing making the thing be one-tenth of the benefit? And I think that's that's the other way of thinking about it And our our sort of methodology is if you've got a 10x product then you can get behavior change You can get people switching if you don't have a 10x product. It's much harder So I like to open it up to the audience to ask questions But before I do that, this is the second time we're hosting you here. You came and visited us in December And just so happy that that you came back. Yeah, what are some of the opportunities that you see in New Zealand? We talked a little bit about the concept of incubation nation, but in relation to innovation in the Arctic space Yeah, well first of all, thanks for the invite back. It's great to be back Let's see so I think the the question if I were if I were New Zealand the question I would be asking is Probably what areas do we have expertise in that the world does not have expertise in So we can just you were just way ahead of the curve already and everyone else is gonna be playing catch up and what structural differences do we have that others can't compete on and I think Historically the first the first category is probably, you know, it sounds like dairy Sheep maybe a few other spaces and you know, I think the pastoral farming piece is probably really interesting So is there a way given that the industries here are very focused on pastoral farming right now? grazing basically Are there insights that have been gained from Animal grazing over the last few decades like systems for doing that very effectively That could be transferred elsewhere. And so could you create, you know grazing software to help you? You know end up in a situation where the grass is this high And you have all of your animals grazing around and you're rotating them in a way that they're not eating the grass down to the Down to the very bottom. So that's probably, you know, the sort of thing that you could imagine Or things in milking, you know milking robotics or I know that that's an area that people have done a lot of work in The other area would be the structural things. So I think New Zealand is a huge advantage over other countries and the US specifically in less regulation You know, for example on drones. I know the FAA just reads the US federal aviation administration just released new guidelines for drones But I still think New Zealand is a much better place to be testing that sort of thing. How can we use drones for agriculture? It's not illegal here. I don't think not to my knowledge and If it were illegal in certain ways, the New Zealand government seems much more approachable and open to doing things Revisiting regulation, you know, it's much smaller and less bureaucratic than the US And so I think there's a way to get things done here that there isn't elsewhere And so you can push harder on new technologies that are beneficial And as you're talking about drones one of the concepts that we've been playing around here is with beehives, so creating smart beehives that are Tracking the activities of the bees, especially with the fast spread of mites But all these hives are spread around a whole farm. And so how are you able to? Collect that data and drones could be an interesting way of application of that technology In in areas where we're practicing sustainable agriculture or other sensors in there Yeah, like temperature sensors noise sensors, whatever it might be. Yeah Questions from the audience. Hey, thank you So I'm curious about the behavior change thing. I totally agree with you Like how is it profitable assuming that people don't care and don't change. I think that's really important But also I'm really curious if there's anything that you guys have invested in that It's something that makes like I look at uber uber is a technology that changes our behavior It changes my behavior. I live in London. I don't drive anymore Like at all because I have this little app on my phone and someone will instantly come pick me up And it's cheaper than a cab. So I'm thinking about In what ways could technology software innovation some of these new things that are emerging be applied To help people shift their behavior And maybe you're seeing things in the quantified self movement like the Fitbits and things like that like for people to have a Better understanding of what they're eating and and how it affects them and like simple behavior change types of Technologies that then shift behavior of millions of people. Yeah. Yeah, that's a great question So we have invested in a couple of behavior change companies Airbnb is one of them, you know instead of going hotels you you rent out a room Or rent out your house to help pay for the mortgage where investors and Lyft, which is You know like uber going after the same space I mentioned Hampton Creek in some ways that's behavior change because now you're buying, you know products without eggs The cookie dough is very good if you if you've had it But let's see I think let's see in ag well, I guess going back to the health question We're investors in one company that is combining health insurance for individuals in the US with activity trackers and They're doing things like you know if you get X amount of exercise every day And you can prove that through your activity tracker You're going to get some dollars off your monthly premium because we know you're going to be healthier And so a lot of it is figuring out how do you close a loop on the behavior so that you are actually incentivizing the behavior through the cost structure of your product somehow so you could see that exact same application for Reducing meat consumption if the insurance companies thought that was an important priority and if you could prove it If you could if you could somehow track it in such a way that it was it seemed provable So yeah, there's probably ways to do it with water with energy use And then I think one thing actually to a point Brian brought up Earlier I think was the problem in the US. There's these structural problems like water has no price How do you fix that and the reason for that is that? specific plots of land has specific amounts of water allocated to them through water rights and so You know you would you would end up saying there's no way to fix this, but I think I Think that there's one approach which is let's go through regulation Try and change that the other way that we really like is how do you hack the system so that you don't have to worry about the Regulation side just find just find a tiny loophole, and so for the water thing Maybe it's oh, maybe there's some way me with my plot of land of my water rights Can I now use drip irrigation rather than trough irrigation use only a quarter of my water rights And somehow resell the rest off to somebody else, and I think there's probably concepts like that out there that that could work I don't know if that one specifically would work, but There's probably ways to do it. So it's all about it kind of incentivizing behavior through the cost structure Yeah, Brian talked earlier about Open source as an approach, and I'm just curious to to what extent does an open source approach or philosophy work for or against? Silicon Valley investing criteria. Yeah, good question. So I think there's been a bunch of successful open source companies in the valley and My understanding we haven't invested in too many of those because they're a little bit of it's kind of a different sort of beast in some ways But I think let's see I think the structure that most of them the successful ones have used is let's start an open source project We will be the experts on it No one will be able to beat us on knowing this project better than us and many enterprise customers are still going to need support in Implementing that making sure it's like actually carried out throughout the organization And so we will be like, you know, there's the open-source software will have maybe an even more advanced Stack on top of that software that's bundled with a customer service piece or a consulting piece And then that's usually what has seemed to work pretty well So so yeah, I would say that that's one way I think the other way would be you have this open-source project around permaculture or around better more sustainable farming practices And then you somehow bake that into another product So you become world experts in something now if you want to have that just all done for you You know by our farm automation and management product. That's you know, just plain old, you know web-based software and Manage your farm through here and by the way, you're going to get all the open source benefits of of our permaculture research I think when people look at the social impacts of what they're doing they struggle to separate Hey, can I prove that I make an impact from can I monetize this? I'm just curious It sounds like the sorts of deals you're talking about where a monetization might be unproven or experimental It sounds like you really have to have that clear before Silicon Valley are talking I don't know like say you try to substitute something before an emerging economy is eating meat You want to be in front of that hypothetically like how how directly are you pointing at a at a monetization model before you're talking to investors? Yeah, that's a good question. I think it's kind of a Probably not the answer you're looking for but it kind of depends so I think it's all about You know, what level of proof do you need and I think the level of proof can be we're actually monetizing or You know, we have contracts in place that suggests we'll be able to monetize or You know consumers say that they'll pay extra for this all the way down to like Conceptually it just makes sense and I think different investors are willing to buy in at different stages of that and so it's just a level of like how convincing is the narrative that this is going to be monetizable so You know, we were early investors in in Facebook You know back early on they had no revenue whatsoever But I think the premise was if you can get this to be Something that people spend a lot of time on and really value Then you will be able to monetize that and I think that that belief was strong enough that there didn't have to be direct evidence there's already kind of Other evidence in the markets that if you got a lot of eyeballs or a lot of time spent on a site You could monetize that and I think the same thing probably applies To ag and to other spaces too Awesome. Thank you all for for the questions Yeah, no, that's a good question so so let's see our team keeps each other in check that's one So everybody applies a different filter to everything some people are focused on different aspects of the company You know, some people are more focused on is this the team that's going to make this really successful Some people are focused on is this something that and all the other investors are already looking at and we shouldn't be investing in it We're not making enough difference if everyone else is investing We need to do our own thing to make the biggest difference other people are focused on is this good for the world So I think we apply all these different filters. So internally. There's that there's that sort of perspective. I think secondarily We're investing, you know, some is our own capital But most of it is from other investors like pension funds and endowments and things like this And they want to see that we're investing in things that are good too That's that's what they've bought into is returns plus positive impact in some way And so, you know, if we were investing in things that were clearly bad I think we would hear about it and I think the third way is we believe that if companies are clearly doing bad things It will impact them in a negative way because the consumer There's just too much transparency in the world at this point people know it gets out if you're doing something evil It's going to come back to haunt you and so we don't want to invest in companies that have that kind of liability hanging over their heads Yeah, no, that's great, we should probably be looking for even more of those people Yeah, good idea Scott, thanks very much. Yeah, thank you for your talk