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The Challenge of Launching a New Agricultural Marketplace

Back in 2020, two Upstate-based businessmen were on the cusp of launching a new kind of agricultural marketplace, aimed at streamlining what had historically been a complex and often archaic system of doing business. This marketplace, developed by Greenville-based tech company Agulus, was a fully digital platform that facilitated the purchase and sale of crops and livestock, as well as countless other transactions – such as renting equipment, contracting agricultural advisers, hiring transporters, and other agriculture-related deals. However, just as they were getting the marketplace going, Agulus co-founders Matthew Sanford and Glen Watson ran into a problem.

“Right as we were launching, there were a couple of monumental announcements in the space with other marketplaces from much more well-funded competitors, including some unicorn startups,” Sanford said, referring to a company with a value of more than $1 billion. While Sanford is coy about naming these competitors, it’s easy to look at an outfit like Famer’s Business Network as a prime example of such a competitor. Originally founded as a small cooperative to help independent farmers compete in an industry dominated by massive companies, FBN is now backed by significant investment from firms like Acre Venture Partners and Google Ventures, as well as investor groups led by BlackRock, a major asset manager.

What this meant for Sanford and Watson was the cruelest of all fates for a small startup: the dreaded involuntary pivot. “We were dabbling with the idea of doing a fundraise, because to date we had not raised capital at all; it was all driven by revenue,” Sanford said. “But eventually we had to ask ourselves, ‘Do we really want to play the startup game?’

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Building the Agulus Marketplace

They already had a working marketplace with a small but loyal group of users, but they soon came to realize this was not necessarily a good thing for a startup. In investor terms, they had moved past the “ideation stage.” That meant they could no longer spin grand fantasies to investors about the potential to launch a marketplace that would immediately take over the world. Instead, they had a solid foundation with plenty of potential – a business model that worked, to be clear – but for investors looking to make an easy windfall of cash, such a marketplace lacked the sexiness of other investment opportunities.

“We viewed it as though we were being penalized for actually building the product and making it work,” Sanford said. This led to a realization that might have seemed obvious to an outsider, but for Sanford and Watson – who had been so immersed in the tech ecosystem over the years – it took some perspective to see. Agulus was not a startup at all, they realized. It was, simply put, a small business.

“We really had to go through this process of self-realization and say to ourselves, ‘You know what? Business is business. We’ve completely gotten off the point here,” Sanford said. “We’re no longer building a high-quality product, because we’ve been so busy building pitch decks and running in circles trying to communicate something [to potential investors] that we don’t even need to communicate. So let’s just get back to basics, forget all this startup stuff, and let’s build our product around the users. Let’s just run a small business.’”

Rather than attempting to launch a massive Amazon-like marketplace that would garner millions from investors and take over global agriculture, they realized the current iteration of their digital marketplace was already undergirded by a sophisticated infrastructure of software that handled contracting and risk management in ways other less-targeted systems simply could not. In talking with their customers, they realized they could carve up to 85% off the time it took agricultural buyers and sellers to complete transactions, and they could integrate these systems into just about any enterprise resource-planning software.

From there, they got to work building on what worked, growing the company not as a startup but as a good old-fashioned small business – a decision Sanford credits as “the best choice we could’ve made.”

“The truth is, most entrepreneurs are really just starting small businesses,” he said. “And that’s honestly great.”

What is Agritech?

Agri-tech refers to the use of technological innovation to improve efficiency and output of agriculture.

Growing Fast

$24.2 billion – the global agritech market in 2023

$54.17 billion – the projected agritech market by 2029

Local Roots

These three businesses have received grants from the South Carolina Department of Agriculture’s Agribusiness Center for Research and Entrepreneurship

Farm in the Wildwood – A farm that utilizes unique eco-friendly methods to grow vegetables.

The Pickled Pepper People – A business that sources sustainable local vegetables for Haitian-style canned-food offerings.

Growing Green Family Farms – A farm that specializes in regenerative growing methods.

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