A star Silicon Valley investor puts his money where his mouth is for sustainable ag
As antidote to those who argue that the future of food is all about technologies like genetic engineering and new pesticides, I refer you to entrepreneur Ali Partovi (full disclosure: Ali and I are acquaintances) who has an Earth Day post over at Silicon Valley’s Techcrunch, one of the most influential tech-entrepreneur blogs around. Partovi, a former Microsoftie, is a cofounder of the music recommendation service iLike and was an early-stage investor in such online successess as Zappos, Dropbox, and that social network site a few folks use, Facebook. And now, as evidenced by the title of his post — “Food Is The New Frontier In Green Tech” — he’s discovered the investment possibilities of food:
As an Internet entrepreneur and investor, my interest in food and agriculture began at home, taking care of my body and my kids. In 2008, my wife and I decided to adopt a healthier and more sustainable diet for our family. We switched to exclusively grass-fed meat and ate a bit less meat altogether, added more vegetables, and began raising egg-laying chickens in our backyard. That enabled our seven-year-old daughter to run a startup selling our egg surplus.
I was pleased to lose about 35 pounds within six months. But I was also surprised to find how inconvenient, obfuscated, and expensive it was simply to eat healthful, natural foods. I began studying the business and politics of food, convinced there must be investment opportunities that align with improving the system. Surely, I thought, there must be healthful, sustainable, yet scalable and profitable alternatives to our unsustainable food and agriculture sectors.
As a student of the space, I’ve seen enough parallels between food and energy to posit that food may be the next frontier in green tech. Like energy, food and agriculture are big, slow, and highly regulated sectors. But also like renewable energy, there might be opportunities for innovation and profit in “renewable food,” fueled by consumer preference today and by shifts in policy tomorrow.
I know what you’re thinking. You’re thinking that Partovi, like another Microsoftie of some note, is obsessed with GMOs and other high-tech toys. Well, you’re wrong. What’s in Partovi’s investment portfolio so far?
- Farmigo, a company that allows “consumers to purchase directly from local farms, removing middlemen and reducing food transportation. Farmigo’s Web platform enables buying directly from a farm while simplifying logistics for farmers.”
- BrightFarms which “aims to eliminate shipping costs by building greenhouses on the roofs of supermarkets, producing the most ‘local’ food imaginable”
And here’s his take on the Bay Area’s meat- and poultry-producing Marin Sun Farm, which “enjoy[s] an enviable combination of high-margin sales and exponential growth.”
The biggest obstacle impeding Marin Sun Farms’ growth today is inadequate capital. It cannot secure land, water, and animals fast enough to meet the growing demand. This dynamic reminds me of the early days of Zappos, when Tony Hsieh was desperately seeking capital to secure shoes fast enough to meet the growing demand.
One might ask, is this scalable, or is it an anomalous niche? As it was for Zappos, that is the billion-dollar question, and I don’t know the answer. But it certainly makes basic economic sense. Feeding livestock on grass is patently efficient. The animals convert inedible, naturally occurring vegetation to human food, while recycling nutrients to sustain the grass, without requiring costly fuel-intensive chemicals or machinery.
In fact, his article mostly consists of a detailed and well-considered analysis of the unsustainability of our current system and the need to move to a regionalized, truly sustainable one that ends its reliance on corn and fossil fuels. In a phrase, the guy gets it. He even has a new website called FixFood where you can offer and vote on suggestions for improving the food system.
So while he’s not alone in his understanding of the problems in our food system and the desperate need for reform, unlike most, he’s willing — in both the literal and metaphorical sense — to put his money where his mouth is. To him, sustainable agriculture and regional food system businesses aren’t just worthy, they’re profit-worthy. And as someone who has proven his ability to see billion-dollar potential in small startups, his peers in “the Valley” might just want to pay attention to this particular investment advice.