284 Abby Rose - On raising non-extractive funding and the power of AI to help farmers with observation

A conversation with Abby Rose, co-founder of Vidacycle and Farmerama, about the role and potential of AI in observation, alternative investment, the power of transparency, why regenerative viticulture is so interesting, and more.

Why did someone who didn’t really need the money and had serious and reasonable questions about the tendency of startups, both in and outside the regenerative space, to keep raising money, ended up raising funding? Not in a traditional, potentially extractive way, but a revenue share, and service fee, and a cap.

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Transcript

Speaker 1: 0:19

A lot of updates with Ebi Rosovide cycle on the role and the potential of AI in observation for farmers. And why did someone who didn't really need the money plus had serious and reasonable questions about the tendency of startups, both in and outside the region space to keep raising money, ended up raising funding, not a traditional, potentially extractive way, but a revenue share and a service fee and a cap. We unpack this slightly alternative and unusual investment vehicle and we talk about the power of transparency within a company and why regenerative viticulture is so interesting. The wine industry is lagging behind in regenerative practices, but has the potential to leapfrog ahead. This is the investing in regenerative agriculture and food podcast investing as if the planet mattered. Well, we talk to the pioneers in the regenerative food and agriculture space to learn more on how to put our money to work to regenerate soil, people, local communities and ecosystems, while making an appropriate and fair return. Why my focus on soil and regeneration? Because so many of the pressing issues we face today have their roots in how we treat our land and our sea, grow our food, what we eat, where and consume, and it's time that we as investors big and small and consumers, start paying much more attention to the dirt slash soil underneath our feet. To make it easy for fans to support our work, we launched our membership community and so many of you have joined us as a member. Thank you, if our work created value for you and if you have the means and only if you have the means consider joining us. Find out more on comroadcom slash investing in Regen Ag. That is, comroadcom slash investing in Regen Ag, or find the link below Welcome to another episode Today with the co-founder of VidaCycle and Farmerama and, of course, friend of the show.

Speaker 1: 2:26

We have had two interviews before and a webinar, and we searched out many times. So welcome back, abby. But it's been a few years. We just counted 2022 with Nicole Masters was the last time. So as we didn't talk online on air, let's say last year, we had to have this discussion early, early 2024. So welcome back, abby.

Speaker 2: 2:45

Thank you, cohen. So good to be here and yeah, it's been exciting to follow all of all of the episodes and happenings in between since 2022. So thanks for having me back.

Speaker 1: 3:00

Absolutely, and we've. We were pre-show discussing as well Farmerama, which we're going to discuss as well, and you just launched. I still have to listen to the first episode, but when this is out, there will be multiple episodes already out on the roll. Or the big question, or one of the big questions of our time in food and ag of meat Sound very curious. I'll put a link below for anybody interested in that. Definitely go and check it out because it's a it's a deep dive which is needed, but to for somebody that didn't listen to our first interview, which was in 2019, so I can completely understand that In a short, I mean intro is always such a shitty word, but if you sit in a plane or in a train next to somebody and they ask what do you do at the dinner party, maybe in a few sentences, how do you? How do you describe? And then we're going to unpack VitaCycle, of course, a bit more and everything that has happened over the last couple of years.

Speaker 2: 3:54

Yeah, okay, I always love this question, but I guess at VitaCycle we make apps to support farmers to make more regenerative decisions on farm. They're very much focused on the power of observation and then really using those observations to learn from and improve on your practices, to essentially improve outcomes from a regenerative perspective.

Speaker 1: 4:28

Which is fascinating because the title yeah because, the title of the first interview was please don't do another random technology which is going to save us all and yet you're building technology which is an interesting tension. We unpack there or not, a contradiction, but an interesting balance, because this came out of your it is a tension need for technology, like you need your need for technology running a vineyard and much more in Chile, like there's.

Speaker 1: 4:53

We're not anti technology here, but we're appropriate and applicable and enabling technology, and I think that's exactly when they say, oh, tech for everything. What do you answer to that? Or how do you? How do you? How do you return that ball of in a tennis match?

Speaker 2: 5:10

Yeah, I think it's about being super clear that this is technology to enable I think enable is the right word.

Speaker 2: 5:18

It's about enabling those on the ground who are doing the work to to learn from and build on their knowledge as they go and to really learn from patterns, essentially over time and and between plants.

Speaker 2: 5:37

And because I think you know a lot has changed in farming in the last 50, 50 years, just in terms of literally how what it looks like on the ground.

Speaker 2: 5:49

You know there's not many people who grow up on a farm, inherit that farm and spend their whole life living on that farm and working on that farm anymore, because that's, you know, that's a certain type of knowledge that you gain, and so then you have like 40 years experience being in one place and of course, you know that it's really buggy in that corner and and the week goes really well over here. That's not really how things happen anymore, or it's not as common that it happens like that. And so what are two apps? So let's soil, mentor and segment, or what they're really about is like helping to bring that kind of knowledge and information together in a digital form so that as people come and go or you know, things change, ownership changes, all these other things that kind of come into play and are more frequent that that body of knowledge can remain and that people can still learn from it, and it almost is like an asset or a part of the land more than it is the people, in a way does that make sense?

Speaker 1: 6:57

that's a fascinating way, absolutely a fascinating way, of painting the picture. So I think now it's super clear and I think it makes an excellent point of the power of observation, which will come back, I think, multiple times in this conversation. But the power of being in the same on the same land for 40 years and potentially 40 harvest obviously depending on what crops you grow but to be able to observe every year the same place, at the same moment, in the same moment, in the season, etc. Etc. That is just very rare or is getting even rarer over time. So how do we use technology I think is what you're saying to sort of replace that or at least hold it connected to the land so if another land steward comes in, he or she can access that without having to build up their own 40 years, which of course we don't have that time. Is that a? Is that a fair description?

Speaker 2: 7:51

exactly. Yeah, that's exactly kind of where I see the the role of technology can be incredibly helpful in this space.

Speaker 1: 8:02

So it's very different than technology being the answer is much more about technology being the enabler and so when you think about that and all the hype we've seen recently on AI I think everybody puts AI now in their in their title somewhere just to help, like, how do you think about that? Just to throw in a deep one, in a rabbit hole. And how do you think about, how do you think about that power that seems to suddenly be there, although it's not so sudden, but still it seems to be, have arrived relatively recent, like how could that help or hurt what you just described as an enabler and not taking over?

Speaker 2: 8:44

yeah, yeah, it's definitely something. I think you know. A meter cycle we're always thinking about and, I guess, hopefully more broadly in the regenerative agriculture and technologies worlds. Hopefully we're all thinking about that. But my, I've talked to quite a few farmers about it, to quite a few regenerative farmers, and my instinct at this time is that there's lots of little ways that AI can actually be an enabler in this context.

Speaker 2: 9:15

So, in the same way that you know, in a way, our apps are very low tech, you know they're, they're allowing those observations to be stored and then some analysis of that, and in the same way, it's like almost what are some of the the simplest uses of AI? So, for example, one thing we're currently investigating is you know, can we use AI to help? Auto label isn't quite the right word, but let's just use it here auto label photographs of land, so that when a farmer is out there and they're wanting to understand you know the impact of the grazing, after and before putting animals in a field. If you could just take a photo and the AI could help, you say, okay, well, you know, 30% of it's bare ground, 25% grasses I need to remember the numbers. I've said 45%. You know, residues, something, something like that. So to me that's a very simple application that is potentially, you know, supporting the person in the field to make that quick assessment and, in a way, what I'm excited about is that it could act as like a confidence builder and that might seem quite a weird thing to say, but one of the because it does potentially take away a bit the observation piece away from them, or not a little bit enable more observation

Speaker 2: 10:55

but I think actually. So one of the issues that we found, you know, I've been working to empower farmers on the ground through observation for, you know, five, six years now, maybe even longer, since the idea had come into play, and one of the biggest challenges I find is actually the confidence of the person on the ground, the Lansdorwood, whoever it is, to actually say, well, this is what I'm seeing, and to back that because for so long that that power and it's been taken away from them, I've been, you know, considered they needed to defer to an expert to really assess that kind of thing. So that's where I'm what I mean by a confidence builder. It's like, of course, the farmer can make the assessment in the moment and they can use the auto assessment to help kind of back up. You know, is that, is that reasonable, of what they're seeing? So, yeah, but I do agree there is a risk that it can actually facilitate less observation.

Speaker 2: 12:07

So, yeah, that's where for me, it's like you know, what are the ways that we can make it? Still having the farmer actually be in the field to be there at the point of observation, but just making that observation somehow enabling them more in those observations. Sorry, that seems I don't. You can see I'm not clear cut on it. It's really not obvious to me exactly where the line is, and maybe there isn't a line, maybe it's actually real spectrum of what is reasonable or possible, and it will be different in different cases. Yeah, so we're feeling into it, so let's see where this goes. I mean, there are other applications that are much simpler as well.

Speaker 1: 12:55

And let's unpack this, but I think it's a feeling into it and I think there's a general generalization that can make that most farmers are not observing enough and anything we can do to enable, make them feel more confident, store more of that, because we just don't have enough eyes on the land to really understand and I think we really don't understand a lot. And the more eyes we have on the land, probably the more we will realize we don't understand a lot.

Speaker 2: 13:25

And so what are?

Speaker 1: 13:26

other simple applications or other things you are investigating or are looking into where this discurrent boom can help.

Speaker 2: 13:37

Like. Another example is you know the auto analysis of written material or scanned documents, being able to quickly turn that into digital information. Or you know, yeah, numerical information. So drawing numerical information out of old documents, that is something that you know. I mean that's not just a farming specific application, but you can see in farming, you know how many farmers have scans of all of their old results from different fields and you know being able to bring that data into the store of information previously seemed like an absolutely massive undertaking, whereas now it could be quite quick and that's something that AI could really help with.

Speaker 1: 14:35

And then, when thinking about, like this power of observation, what are some stories that come to mind? Or some farmer stories you've seen over the last years where that really where, of course so mentor help, but also in general, just that triggering of we need to observe way more, partly through our phone camera, but definitely also through our eyes and our hands and our smile, etc. Like, when I say the power of observation, what is the story from the field that comes to mind?

Speaker 2: 15:06

Yeah, good question. So I guess one that immediately comes to mind is Claire Hill at Plant and Farm. She used to work at a farm in Oxfordshire, fai.

Speaker 1: 15:22

Shout out to Claire.

Speaker 2: 15:23

Yeah, and she, like, they're one of the. So one of the 10 region indicators which is part of our what we offer is something we developed with Nicole Masters. One of them is what we call the basal ground cover transect horrible name but essentially it's looking at what is the ground cover over a 60 meter walk and you stop every half meter or so and you look at the ground level and see what kind of ground cover is there. And so I always remember Claire, you know, saying it was all very well. She, there were some meadows that flooded each winter and were grazed in the summer and they were having real issues kind of with burn off of grass in the summer and then obviously inundated with water in the winter. So it just it just seemed like an impossible situation and she or maybe I'm, yeah anyway so she went out and it was kind of early spring I think, and it looked to her like the land had a full cover as far as she could tell, kind of from the standing perspective. But when she actually did the basal ground cover transect, it turned out that it was about 50% bare soil or some.

Speaker 2: 16:51

It was quite a high number and I think it was just like totally taken aback by that close, you know, on closer observation, on just taking, it takes, you know, maybe 10, up to 10 minutes to do that, but it's a completely different story when you actually look to to that quick drive by. Oh yeah, that field looks the same as last year. Let's do this Very, you know, it takes time. I think observation and just taking that time and doing that slightly more focused observation means that, you know, then she started to think completely differently about how to manage that area. Then it became about how to increase ground cover and how to graze in a different way, you know, to allow those grasses to really establish better. Previously I think they'd been more tightly grazed. So longer rest periods and, and, yeah, changing grazing management, so that, yeah, those are the kinds of things I think we're talking about.

Speaker 1: 17:58

And did you see changes year over year?

Speaker 2: 18:01

Yes, well, she's no longer at that exact farm, but I'm I'm pretty sure she told me the story after she'd started to see the changes. So within two years I think they did start to see changes on that farm.

Speaker 1: 18:14

And with those 10 indicators because I think they were just launched with Nicole the last time we talked in 2022, how has been the development or what have been? I mean, first of all, they've been put in practice and many farmers have used them, played with them, probably potentially criticized them, what, what has changed or how have you worked with that over the last the almost two years?

Speaker 2: 18:39

Yeah, yeah, I mean it's been really exciting Because obviously when we launched them, when we last spoke, we just launched them and it was somewhat of an unknown, so it's been what we've worked with quite a few.

Speaker 2: 18:52

What we've seen is really that we've worked with quite a few different farmer organizations and and that has brought well for me that's brought a lot of joy to see that you know they're really the 10 region indicators really speak to a need on the ground which is enabling farmers to just like the example with Claire, it's like to be able to make observations that really count and that they can feel more confident in. That also the organization can feel more confident in and then everyone can kind of learn from and that's really the space it feels like they're holding and that's quite unique, you know. It's different than, for example, satellite data, which actually usually is really only helpful to organizations. Satellite data doesn't often tell the farmer much that they don't know because they're there on the ground. So so that's the space the region indicators are holding. And yeah, so I can give some examples like we work with one maybe you've had them on the show actually regenerate outcomes do you know them? Or regenerate ventures.

Speaker 1: 20:11

I think is no venture Okay should I.

Speaker 2: 20:13

No, well, I don't know.

Speaker 1: 20:15

Yeah.

Speaker 2: 20:16

Anyway, they offer a program in the UK where it's a carbon essentially carbon credits program. But the way that they offer it is they partnered with Understanding AG in the United States and they have actually a UK arm now and they are not a bad group, yeah.

Speaker 2: 20:40

Yeah, they're providing the coaching to support farmers in building more regenerative methods on their farms on the ground and at the same time they're using soil mentor to kind of document their observations in the day to day and, as well as doing the 10 region indicators, ideally twice a year, focused in certain fields, to really learn more about what's going on underground in those fields. And this all complements the. Then you know, the actual carbon verification is done. I think it's once every three to five years where the verifier, you know an outside, external company, comes in and essentially extracts information about the carbon in those soils. But I think to me that's it's so much more exciting, I think, both for the farmers but also, let's say, from the land's perspective, to have those people on the ground gathering the information, sharing it and learning from it through that kind of coaching cycle and from the training perspective.

Speaker 1: 22:00

I think yeah, because instead of getting WhatsApp updates and maybe Facebook or whatever, the feedback loop but it's mostly WhatsApp, I think is in this case you get structured observations that can, really, even if you're not there every day or every week or every month as a trainer or as a consultant, you can really. It doesn't replace being there, but it gets pretty close and you can actually probably help if you get these observations in a structured way.

Speaker 2: 22:31

Yeah, totally, and you know it allows the farmers to communicate their point, you know, to people who aren't necessarily there, because that's the reality, is that those that coaching team, obviously they do visit but they're not able to be there as often as they're I think. I think farmers are able to have eight coaching sessions a year, so they're not visiting eight times a year. So allowing that kind of the visual, the both the visual and the context-based structured setting when having those coaching sessions, I think is really, really important. And also it turns out that that data, the carbon verifier, does want to see evidence that farmers are taking actions, you know, in between these three to five year test, official testing periods. So it just feels like it's a win-win-win. You know the farmers are learning through developing these observations on the ground.

Speaker 2: 23:31

So you have both your more general observations which are just like oh, you know there's, I don't know, the grass is doing better over here than it was last year or less reads here, these kinds of things. But alongside that they're being, you know, getting new skills by being able to go and dig holes and start to learn. What does it mean to have riser sheets on your roots? You know that's one of the regen indicators, or why would I be interested in rooting depths, another of the regen indicators? You know, going and looking at these things and starting to understand why those are helpful indications of the performance of that field and how, how effectively you're able to build soil health in that field and hence potentially, carbon levels. Kind of bringing that all together is really what I see the regen platform is doing and the space that's filling. So, yeah, does that make sense?

Speaker 1: 24:37

absolutely and actually the question that came up, or the the inside, like is it being used in in ag school and education at all? Because this sounds the 10 indicators, what they mean and why they're important, etc. Sound like really, really important to learn when you're learning to become a farmer, which, of course, is you do on a job. But let's say, in a more structured education scene where most farmers complain about, or at least the regen farmers complain about, they want to send their children there because that's not where you learn, like the cutting edge of farming or modern farming at the moment. But have you been engaging with with any structured education organizations on the farming side that that want to use this or are already using it?

Speaker 2: 25:20

yeah, as I mean, it's a great question and my experience so far has been certainly not the the kind of the standard ones. There have been a few more, actually from the market gardening perspective who have gotten in touch and been interested, but, yeah, it's definitely much slower to change there in my experience. That's where I think what, where we do have interest is well, yeah, from coaching programs like the, the roots to regeneration, one that Claire the Hutz-Claire Hill and Caroline Grindred launched. That's due to start, I think, next, oh no, in March, starting in March.

Speaker 2: 26:03

You know those kinds of educational journeys, let's say, definitely soil mentor. You know that that's where we definitely see an interest and it's just such a perfect fit because it's like it's a partner on that journey of learning and it provides, as you say, you know, it provides that structured way for people to understand what does it mean to build soil health and to be able to access that visually for themselves. And yeah, so that's where we've seen it has fit in very nicely and seamlessly. Yeah, in terms of the more conventional institutions, I mean I haven't reached out to them either, so not yet.

Speaker 1: 26:50

Watch this space yeah, but I think they should be, they should, they should come to you anyway. But let's shift gears a bit, because then you decided to raise some funding. Actually, for some you raise a significant amount of money, more money than most people will ever see in their lifetime in one one chunk, maybe when they buy a house. But you're sort of not really seeing that money and the bank is wiring that. So you decided and that wasn't that, that is attention actually to decide to raise outside funding. We've discussed it the first time and you were on. We've discussed it offline quite a few times on the role of money in this space, in regeneration space.

Speaker 1: 27:31

What, what made you decide to, to, to take on outside funding, to to grow, to grow faster, to do more, even though probably organically you would have got there as well with the video cycle because you have a lot of customers, you're growing, you're doing something extremely useful for the space, so it wasn't that you needed the money to to stay afloat no, um, here's a good question why we went.

Speaker 2: 27:57

I think I think in the end it was a little bit about experimentation for ourselves as well. Well, um, uh, yeah, I think I've been clear before that I definitely the ethos at beta cycle has been about organic growth and, um, I've always been reticent to push too hard because I think that you know, you and I, we've been around here I mean nowhere near as long as some people, but certainly a good six odd years, um, and the space does change. But it takes time for people to come in and and for things to shift and and and for farmers also. They need time to to, you know, recalibrate and and get on board with some of these ideas and and. So, for me, just pumping money in, although it can speed things up from a tech perspective and a business perspective, uh, you know, the the farming world isn't always able to, it can't, it can't just speed things up. So to me there's always been an underlying tension in that and that's why I've resisted going down the kind of large lump sums of outside investment route.

Speaker 2: 29:08

But at this point it did feel like there is a surge in interest and momentum is shifting at a pace that we hadn't seen previously.

Speaker 2: 29:20

I don't know if you agree, but certainly that's been my experience in the last two years, um, and maybe three. And so there, suddenly, it did become apparent that actually it felt like demand was rising faster than we could potentially fulfill on it. Um, and so let's, let's explore what it means to to take some outside funding and I mean it wasn't a huge sum, uh, like business, in business terms it's not a huge sum, um, but it felt also, you know, uh, it was from Be the Earth and A team. They actually did it together and they we talked to them for like at least a year and a half or maybe more, about different ways of doing this, and and when they came to us with the revenue backed loan option, it just that just felt like a really positive way to go about it. Um, and so, from our kind of regenerative business lens, that felt like an opportunity to do this in a way that aligned with you know what we were about, and so for people that are like what does that mean?

Speaker 1: 30:32

um, can you unpack it a bit?

Speaker 2: 30:34

yeah, I mean I have to say I um, I guess maybe some of my resistance also is that I don't have a background in finance and and so I find a lot of the financial world uh well yeah well, a lot of jargon, um and, and somewhat intimidating at times because people, you know there is a lot to understand.

Speaker 2: 30:55

It can become quite complex quite quickly. But I'll talk about it in my terms and you can help me if I need it. Um, but from what I understand, the revenue backed loan, uh, essentially what it looks like is that we are paying back the loan based off of a certain percentage of our revenue over over the years that we take to pay back that loan and and and. So there's no interest on the loan. We, we, there is a service fee for each year that we take to pay back. Um, but, yeah, essentially there's not kind of this looming pressure of a set amount that we're going to have to pay back regardless of our revenue. Or you know what, if COVID hit, or the year COVID hit and suddenly your revenues plummet, it's not like you're going to have to face defaulting on the payback. Um, it feels much more like there's a shared risk between whoever's giving the loan and whoever's taking the loan, in that it all depends on the revenue. That's what is determining how much is being paid back each year.

Speaker 1: 32:04

And just to like when does it stop? Is there like a cap return, or is the return the service fee? Or how does that work compared to a normal interest payment or an interest payment or like where? When is it done, or are you going to be paying this for a long time?

Speaker 2: 32:23

Yeah, good question. I mean it's a small amount. It was only £50,000. So I certainly hope we're not paying back for a long time, but then we didn't actually have a cap on it, so maybe that was something I a good thing to think about if we were to go for more. So we pay back 5% of our revenue annually and the service fee is £2,500 a year and the only restriction so we can pay it back in full. The only restriction on it actually was that we have to pay back at least three years of the service fee and we did have a payback holiday To not have it like returned immediately.

Speaker 1: 33:09

Yeah.

Speaker 2: 33:11

And we had a payback holiday of 24 months actually, so we haven't had to pay back any of the loan yet because it was issued in September 2022. So first payback will be September 20 this year. So, yeah, the return for them is the service fee.

Speaker 1: 33:26

Fascinating, and then however long it takes, basically.

Speaker 2: 33:30

Yeah, yeah, but I mean.

Speaker 1: 33:33

Which is interesting from an incentive perspective, because they sort of want you to go longer.

Speaker 2: 33:37

Yes, they do.

Speaker 1: 33:38

And you want to go faster, but of course that also incentivize. But it incentivize I mean longer would also mean a higher chance of default and shorter, of course, a smaller one. So there is mixed incentives there for the investor or the funder. And so what did this funding enable you to do? And compare, to just continue like talking to funders for a year. Setting this up, negotiating, takes a lot of time. So my second question will be was it worth it? But for now, like what? What it enabled you to do that you wouldn't have been able to do otherwise?

Speaker 2: 34:13

Well, I guess maybe, just to be clear, it didn't take that much time because it wasn't like we were spending all our time on the funding. It just maybe I had three conversations over that year and a half, so it definitely didn't take much time. But what it enabled us to do was hire a good salesperson and to hire a salesperson who was aligned with our regenerative business principles and values and and to offer a salary that you know them. Yeah, it was basically to offer a salary that meant we could get a great person, whereas previously we hadn't always had that option. And I would say, you know, obviously I had done a lot of the sales in the past and as a found, a co founder, my remuneration was always look different than hiring someone who's not a co founder and therefore doesn't have any vested interest necessarily in the business. So it allowed us to kind of make that leap. And the other great thing about hiring salespeople obviously is it's kind of easy to see if it paid off and yeah, I'm happy to say that Definitely paid off.

Speaker 2: 35:34

Yeah, so that was, yeah, that was really great to just see the have the experience of, of that being such a positive contribution to what we were doing. And yeah, we've learned a lot from it as well. Just in terms of you know, I guess as a co founder, you can always take on certain things Because you think it's sort of your responsibility to do that, and that actually sometimes, in a way, that's what the, the loan kind of enabled was this ability to just take a step back from, from taking on all that responsibility of sales and saying, actually let's invite someone else in who who can do a good job on this, and and and give me some space to to focus on other things as well. So that's been really, really positive.

Speaker 1: 36:37

And then the like. Was it worth it? I think the answer is yes, and are you considering because it seemed also like a pilot or like I mean it's. It's a lot of money and in business world, not a lot at the same time but are you considering to do that again and if so, why? Or if not, why not?

Speaker 2: 37:01

Yeah, good question, I mean at the moment. So one of the things this might be new since we last spoke but one of the things that we've put in place in our business is that we now have everyone in the business is able to read the profit and loss and read the balance sheet. We all check in on those basically once a month in our our objective key result updates. We all look at cash flow. We have different metrics that we're all looking at an understanding, and so it's been really interesting for people to really understand what it means to have a loan on the balance sheet and and so a lot of our conversations have One. I would say changing that setup of our business has been also one of the most important things we've done in the last two years, because it completely shifts everyone's relationship to the role they have and how that's supporting the objectives that we have you mean to the transparency?

Speaker 2: 38:18

piece, but also, you know, the business itself. Yeah, the transparency is unbelievably powerful. I just I was kind of scared to do it Before we did it. I mean, I wasn't kind of I was really scared to do it, and then now I've done it.

Speaker 1: 38:31

What was the most scary piece?

Speaker 2: 38:32

that is so.

Speaker 1: 38:34

What was the scariest piece of that?

Speaker 2: 38:37

Well, I think the scary thing is that a lot of people who haven't had to manage the business side of things actually have very little idea of you know how much cash you might actually have at any one moment, or you know there are you know?

Speaker 2: 38:58

this or how little exactly like these things. You know, in the startup world is very common to have a three month runway, three to six months runway, and that still be reasonable, whereas I think for most employed people who work in a business, if they really faced the reality of that, I think that it's really shocking. For a lot of people it's scary.

Speaker 1: 39:27

So I don't know if you agree with that or not.

Speaker 2: 39:30

That's how I felt.

Speaker 1: 39:31

I don't know, I haven't taken a salary. I mean now I am, but from ourselves, so it doesn't really. I know, I know the runway, but yeah, so you were scared they would take it the wrong way. We're like oh, we're actually. It's a super shaky, potentially shaky thing, even though it's very normal. And it's been like that for a long time, but it just never knew. And did that happen, or did it go a different direction?

Speaker 2: 39:57

No, no, it didn't. I mean, I think at first people did one or two people did say like wow, I really had no idea and I'm, you know, wow. But then they very quickly acclimatized to it, like literally within hours, and then it was from there on out, it was just like suddenly it felt like a team effort to have to have the business side of things flourish as well as all the other things, because already we already had transparency around objectives and key results. On many other things. It was just like the pure, you know, the real nitty gritty of the profit and loss imbalance sheet wasn't kind of exposed in that way or wasn't transparent.

Speaker 2: 40:47

And so, yeah, the team, we've really taken it on together and we really look at it together. So I guess the reason I'm bringing that up is that with the idea of you know, a next round of investment, external investment, right now, okay, we could grow our sales team, but we can do that. We're now in a place where we can do that ourselves. So and I don't feel so we will be doing that, but ourselves, and it doesn't feel like we absolutely need a huge or an injection to get there. So, yeah, that would be my answer to that right now, but I mean, there's nothing to say that won't change in the next 12 months, and I feel like it is something that you know. As a team, we're discovering and exploring.

Speaker 1: 41:48

And or is there the pressure on the other side now because of the transparency and the weight, let's say, of the loan and the service fee on your balance sheet and your cost? Is there the pressure of the team like, let's get rid of this as fast as possible, how do we pay it back?

Speaker 2: 42:04

and clean it up. Yeah, there is a bit of that, but I think it's. It's all relative, isn't it? Because there's, you could also argue like you know, was that loan actually a really good deal compared to what we could get today, potentially, and therefore, why would you be in a rush to pay it back? So you know there are discussions to be had, and I think no one yeah, I think that's what the transparency has brought is discussions. I mean to be totally clear. You know, the decision making does still ultimately lie with myself and into the, my co-founder, so it's not a completely like completely flat structure in that sense.

Speaker 1: 43:01

Are you planning to change the?

Speaker 2: 43:02

transparency provides power in terms of discussions. Say that again, sorry.

Speaker 1: 43:09

Are you planning to move there eventually?

Speaker 2: 43:12

to move where Sorry.

Speaker 1: 43:14

To a completely flat structure in terms of first, transparency, thinking of steward ownership, how is that a step you envision at some point happening?

Speaker 2: 43:26

Yeah, I'm definitely interested in steward ownership. Yes, and definitely we are having conversations about moving. We're still in a relatively conventional ownership structure. It's a company limited by shares and NT and I are the shareholder. Yeah, it's kind of like that, but what I would say. So we have a discussion about that and we're just feeling into it.

Speaker 2: 43:55

On the other hand, I have to say I'm not really pro a totally non-hierarchical structure in terms of decision making. I don't know that, just as some. In my view, sometimes you need to have some sort of structure. I mean, of course there's many different ways governance can look, but in a small business like this, it feels like having a few people who can just make a decision is a really helpful thing to have. And as we grow or our team gets bigger, of course that I could start to feel differently about that, and I am part of other organizations that use, you know, Sociocracy as a mode of governance, and so I have seen that work as well. But yeah, for now it does feel like in the business world sometimes it can be really helpful to have some people who are going to just make the decisions for certain things.

Speaker 1: 45:07

And what would be your tips to other entrepreneurs on the funding you raised, or like a crucial thing to remember when you go down potentially this path? And also the transparency piece, like what do you tell fellow entrepreneurs in the space or outside the space about this process?

Speaker 2: 45:27

Well, on the funding side, I mean, for me what was really really important is that I really trusted my relationship with the people who we ended up getting the loan from. So I mean that was the most vital bit, I would say. I built a relationship with them. I had a relationship across multiple in multiple different ways. They have a philanthropic arm to what they do and I had also supported them on some of that stuff. So I really knew what they were committed to and I really knew it was aligned to what we were committed to. So for me, that made the whole process so much lighter and, yeah, the power of trust there is huge.

Speaker 2: 46:13

Obviously, not everyone is in that position, but that was where that was, I guess, also part of what enabled me to just say, okay, yes, we'll take the outside investment. And on the transparent in business operating, I would say that I mean we're relatively small. There's only six people in our team right now, so it wasn't the biggest logistical nightmare to do, but I mean the payoffs have been huge. So I would highly highly recommend it and I think from the team's perspective as well, I think they all feel like a whole new level of connectedness to what we're doing, and I'm just at a new level of empowerment, like people are making decisions in totally different ways than they did previously, and I'm always I'm kind of in awe of everyone.

Speaker 1: 47:17

It comes back to observation as well, there, yeah.

Speaker 2: 47:20

Absolutely. And yeah, it's, and it's really practicing what, what we preach.

Speaker 1: 47:25

And just to shift gears again a bit, because I also want to touch on on wine, actually, and the viticulture space, because since we last talked, you like so mentor has been and you've been working a lot more in, let's say, the wine quote, unquote the wine industry. Why is that and what have you seen there? Can you report back to people that are not walking on vineyards every every other day? I mean, you're working on one, of course, you've been working in one, but actually many others besides your own vineyard. You have been, have been, engaged with the cycle.

Speaker 2: 48:02

Totally, yeah, yeah, well, I think I think one of the things, just to give a bit of context, we so we have this app, sector mentor, which is much more focused on vineyards and a bit on agroforestry as well, and we actually just released the 10 region indicators and the region platform with Nicole masters. We released that into sector mentors. So now that framework is available for viticulturists and agroforesters to use in their soils, alongside their, their crops, their plants, and, in a way, that's a culmination of many years of being part of and helping to build this regenerative viticulture movement and I think it has reached it's reaching a new, just just like the more general regenerative agriculture, regenerative viticulture is now kind of having more of a moment. It's a lit. It is definitely lagging behind the wider movement, but it's happening.

Speaker 2: 49:07

So like, for example, in the middle of last year, I spoke at the international master of wine symposium in Wiesbaden, germany. I was part of a regenerative viticulture panel and it was I mean, I was kind of scared to go, because master of wine is obviously a very well respected qualification in the wine world and it takes many years to acquire it, but actually it was amazing to see the reception and it felt like the wine world is ready for this communication about the importance of the soil, the importance of the water sources and water and how that's connected to wine, and I think that's something that has been missing from a lot of the wine conversations from well, it has been missing is that actually wine is connected to the changing climate and wine is connected to carbon levels and it's connected to water cycles and it's connected to the health of our soils. Somehow they've avoided that for many years, but suddenly it feels like they're starting to cotton on to that.

Speaker 1: 50:28

Which is interesting. It's really exciting to see, and it was so well received. Sector with terroir, with flavor and story and selling soil are almost like the word sort of comes from there, but yet you're saying they're lacking behind and they're starting to catch up.

Speaker 2: 50:47

Well, it's very interesting because I would say one of the when I started talking about regenerative in the viticulture space, one of the biggest barriers was that there was already a conversation about soil, but it's very much about the geology of the soil. So is it basaltic, Is it granitic? And it's actually nothing. Or the conversation has been nothing to do with the biology of the soil and there's been no acknowledgement of biology until very recently, and actually that that's interesting. That shift has been interesting to see is like I'm starting just starting to hear viticulturalists and some communication on bottles about the biology and health of the soil. So although it had been about soil, actually quite often people would talk about that. The poor soils created some of the best wines because it like stressed the vine, and then you got better grapes.

Speaker 2: 51:55

So actually I think that the fact that viticulture already had a connection with soil could have been one of the things that's actually held it back in terms of entering this other conversation around soil as a living kind of breathing organism or ecosystem that's connected to so many different cycles and that the vines are part of that. I think that they've resisted that conversation for a while.

Speaker 1: 52:28

Which is fascinating because, if you see, I'm absolutely no wine expert, but I think a lot of the top wines, from what I hear, are applying a lot of biodynamic practices. In some cases they're fully certified, even though they don't put it on the bottle because they're scared of selling less. And of course, we've seen the whole natural wine move and popping up. But it's much more about what happens in the canteen. So just to bust potentially a myth do you need very poor soils or can to get a really good wine, or can really healthy, biologically active, thriving soils also produce a very nice wine?

Speaker 2: 53:06

Yeah, definitely. I mean I have to be clear I'm not a wine expert either, so we should really talk to the masters of wine or the masters of Melliers to get their opinion on that. But certainly that was what I heard coming back to me at that conference was that more and more it's being understood that one of the reasons biodynamics there were a few presentations at the conference and one of the reasons biodynamics could potentially be. It's often said that people can, or it's reflected in the experience of the wine you can taste when a vineyard turns biodynamic and that's reflected in the wine. I have to say I might taste buds.

Speaker 2: 53:52

I'm pretty good, but I'm probably nowhere near that good. But anyway, when they look at some of the research around the microbial life in those wines and then the microbial life in the soils, there's certainly evidence that shows that the biodynamic wines and the biodynamic soils have a different makeup of microbial life, which of course is what we would expect from a biodynamic farming perspective. But it's interesting to also understand that potentially that's reflected in the through the fermentation process and then potentially that is what is affecting the flavor and the experience of the wine itself. I don't want to make any claims around that, because that's the bit. I know much less about Someone like Mimi Castile or Justin Howard Snire. They're more able to speak to that side of it than I am.

Speaker 1: 54:50

But it's fascinating because the other side of the wine industry at this time I don't have to do air quotes, which nobody sees anyway but is that?

Speaker 1: 54:58

it's a massive pesticide and herbicide, a fungicide user and mostly, especially the industrial side of things. The soil is definitely poor or is in a monoculture space and nothing is growing around it. That seems to be changing slightly a bit now, but it's not the beautiful pictures you see in the advertisement or on some of the websites all the time. They're beautiful examples and exceptions, but the general commodity, wine, is probably sprayed more than you want to know.

Speaker 2: 55:37

Yeah, 100%. I think the viticulture industry is a great user of pesticides and different applications. 100%, I think they are vast monocultures. In a way, one of the issues also with the viticulture industry is that those monocultures, the visual, is celebrated. I know a lot of people who they have this vision that they want to vineyard, they plant that vineyard and then they want to make sure that there's no weeds anywhere, because that's their vision of this perfect vineyard.

Speaker 1: 56:17

That's messy.

Speaker 2: 56:18

Which is exactly the opposite of what would really help. Those wines flourish and the soils flourish. Yeah, it's an interesting world because, in a way, in most of the farming world there's very little space for aesthetic considerations.

Speaker 1: 56:41

There's not that much excess cash around.

Speaker 2: 56:45

Oh yeah, it's huge. Yeah, no, in the wine world.

Speaker 1: 56:48

I remember visiting two vineyards in Tuscany, once to pick a location for a friend's party, and she couldn't visit the owner or the person that showed us around one of the organic vineyard was apologizing for the messiness Like between the rows. Yeah, there are all these cover crops, but yeah, they're organic, so it's okay. Like she was really and we were like, don't worry, that's a good thing, but we know there's not been, at least not been extremely bad stuff being sprayed, which probably is a good thing if you want to have a party nearby outdoors, etc. But she was apologizing because it didn't look in that super visual clean, which is very similar to row cropping, I think at the end of the season. It's not like the season is not done until the plow is cleaned and stored in the shed and everything is nicely turned. Yeah, we can see the same dynamics there.

Speaker 2: 57:41

Let's say, Totally, totally, yeah, and I think the other thing that's actually changed things in the wine world in recent years, just to say, is that they have had to start focusing on resilience Because if you look at, like California, australia, chile and New Zealand so key wine making regions and vineyard regions they've been affected by serious fires, serious floods and so suddenly these vineyards, these monoculture vineyards that have really poor soil, are being washed away.

Speaker 2: 58:23

Essentially, they're feeling the effects of the more extreme climatic conditions or they're being washed away or they're being burnt, and so it's forced the viticulture world to think differently about how they're managing things on the ground and to focus more on resilience. And often, if you think about what's the first thing to think about when you're thinking about improving resilience, really soil is the ultimate Provider of resilience in a farming operation and if you can build your soils, and build healthy soils, then that really will support you through those more extreme moments as best as possible. So I think that also has had a big impact on, certainly from the vineyard perspective. We need to think differently about how we're doing things here. So that's been obviously devastating, but also catalyzed things into a certain direction, which has been good to see as well.

Speaker 1: 59:25

And there's so many other rabbit holes we can go into in the viticulture one we will save that for other episodes but the big difference it feels like as well, as you mentioned before, there's cash in this sector compared to the potato industry or the grain industry, et cetera. This is where not everybody's making cash. There's a lot of outside cash, like whole be cash, let's say coming in, but there's definitely money going around in the wine industry and that should. Could that help, or do you see signs of that? That could fuel this momentum that's there and the aesthetics might help if we change our vision of aesthetics. But do you see this? They could leap in front compared to the rest of the region space.

Speaker 2: 1:00:11

Yeah, I think the opportunity is that, exactly as you said there is, there's a lot of almost hobby money, you could call it, or I would say there's a lot of people with money who desire to be part of the viticulture industry in some way, and so I think there's opportunity there in terms of for those people.

Speaker 2: 1:00:31

Hopefully some of those people are listening to your podcast and they are excited about regenerative, and if those people start to invest in the viticulture industry and world, I think it could change really quickly.

Speaker 2: 1:00:49

Because I don't know why I actually don't know why this is, but it does feel like in my experience I, the people on the ground in the viticulture industry often, often they are more open to well I shouldn't generalize like this, but this has been they for the vineyards that I visited people are quicker to be able to shift practices, and maybe that is just because there's more money, so it's quicker and easier to like change your equipment, you know, seed different covers, but it does feel like once people get going on this in the vineyard, it can be a shift that happens more quickly.

Speaker 2: 1:01:36

I guess also it's because their crop, you know, is a perennial crop and so you and vines are pretty resilient often, so they keep producing even as you're making the changes, whereas sometimes, when you're transitioning in a row cropping situation, you're having to make some more extreme changes to your actual cropping situation than you have to in viticulture. So in a way, some ways maybe it's easier to start to experiment and shift things. I haven't really thought that through, though, so maybe that's you know, I could easily be. Someone could contest my point there, I think.

Speaker 1: 1:02:19

No worries, no worries, you can share it here and we'll see if we get a lot of pushback, and I think it's a perfect end to this conversation and this check-in conversation we've had. It's been almost two years and a lot has happened, but it's good to see a lot of things has stayed the same as well, and so thank you so much for, first of all, the work you do, obviously pushing this space on so many different levers. We didn't even touch on Farmerama and the podcast you help manage and obviously also run, but that will be for another time. So thank you so much for the work you do to push this space and, of course, we're coming on here to share about it.

Speaker 2: 1:03:00

Yeah, thank you. Thanks so much for the work you do, cohen as well, and just, I'm excited to be part of all these conversations and I also I forgot to say, but I did want to have a shout out to I really enjoyed your podcast with Reginaldo Haslott-Marroquin the other day and the the distinctions he was making around tree range farms and chickens and the indigenous and colonizer mindsets. I really really appreciated that. So, thanks so much for sharing that conversation and, yeah, I'm excited to have those kinds of narratives appearing in this world.

Speaker 1: 1:03:37

Thank you so much. I will definitely put a link to Reggie's conversation, or the conversation we had with Reggie, in in the description below. Thank you so much for listening all the way to the end. For the show notes and links we discussed in this episode, check out our website investing in regendaregarchulturecom. Forward slash posts. If you liked this episode, why not share it with a friend? Or give us a rating on Apple podcast? That really helps. Thanks again and see you next time.