Building a venture-backable startup in the agricultural technology sector requires more than just innovative ideas; it necessitates a clear understanding of market needs and existing customer bases. This perspective is championed by Jarrod Sutton, managing director of Purdue University’s agtech accelerator DIAL Ventures. He emphasizes the importance of having actual customers, stating that many startups falter by developing products without a defined market. “That sounds like business 101, but the reality is, there are a number of startups that don’t have a customer,” Sutton explained in a recent conversation with AgFunderNews. This issue is particularly prevalent in agtech, where many innovations have emerged as “solutions looking for problems.”
In response to these challenges, DIAL Ventures adopts a venture studio model that prioritizes real-world needs and trends in agriculture. Tim Dixon, another managing director at DIAL Ventures, elaborated on this approach: “By design, it’s a venture studio model that brings in great entrepreneurs and doesn’t try to predetermine outcomes.” Instead of pushing products out the door based on assumptions, DIAL Ventures encourages founders to co-create solutions in collaboration with industry stakeholders.
Launched in 2021, DIAL Ventures aims to address the digitalization gap identified by a McKinsey report, which ranked agriculture as the “least digitized” industry. Dixon and Sutton recognized that the field was ripe for innovation, particularly in software-based agricultural technologies. Since its inception, DIAL Ventures has successfully guided 40 entrepreneurs through the program, resulting in the establishment of several companies that tackle various challenges within the sector. These include Oaken for land management, Croft for labor management, Gripp for equipment maintenance, Nuel for data analytics, and Make Hay for marketing.
The accelerator’s funding model is also noteworthy. Purdue University provided approximately $11 million to kickstart the initiative, which is part of the Purdue Applied Research Institute. In collaboration with startup creation firm High Alpha Innovation, a separate fund named Gold & Black Agrifood was established to facilitate portfolio company exits and create an evergreen funding model. High Alpha Innovation acts as the general partner for this fund, ensuring that Purdue maintains its nonprofit status.
DIAL Ventures operates on a structured yet flexible timeline for each cohort, selecting six innovators with backgrounds in technology and entrepreneurship. Over six months, participants engage in five intensive “sprints.” The first, the Opportunity Sprint, immerses entrepreneurs in the agrifood industry to identify over 100 potential opportunity areas. Following this, the Problem Sprint refines these opportunities into well-defined problems, which are then validated during in-person workshops.
The subsequent sprints focus on developing solutions, defining value propositions, and creating go-to-market strategies. Dixon highlights a key tenet of their methodology: spending significant time in the “problem space.” He notes, “More than half the duration of the program, we’re in what we call ‘the problem space.’ We want to get a full grasp of the problem, and we’ve found that the more time we spend in the problem space, the faster we get to great solutions and businesses.”
The current cohort is particularly focused on climate-smart solutions for sustainable agriculture, reflecting a broader trend in the industry toward sustainability. Sutton noted the importance of diverse perspectives, facilitated by proximity to major agribusiness players like Corteva and Elanco. This approach allows entrepreneurs to engage with different viewpoints on sustainability, enriching their understanding and enhancing their solutions.
As the current cohort approaches its conclusion on December 6, participants will present their ideas during a pitch day, where the DIAL Ventures investment committee will decide which businesses may receive up to $1 million in funding. Looking ahead, the next cohort will explore the theme of “food-as-health,” with plans to deepen collaboration with the Economy Index to identify pressing problems in the agrifood sector.
Through its innovative approach and commitment to understanding industry challenges, DIAL Ventures exemplifies how focused collaboration can lead to meaningful advancements in agricultural technology.