What’s the Egg in Your AgTech Product?
What’s the Egg in Your AgTech Product?
What agribusiness professionals can learn from ready-made cake efforts.
In 1929, a breakthrough came in the form of a powdered cake mix containing flour, dried molasses, dried eggs, and a few other ingredients. This mix, sold in a can, allowed home bakers to quickly make a cake just by adding water. The concept caught on slowly, with companies like General Mills launching their versions after World War II with more fierce competition in the space by the 1950s. However, despite initial interest, sales plateaued as many home bakers preferred baking from scratch.
One issue was that cake mixes needed to deliver perfect results because cakes were seen as a heartfelt gesture, and any imperfection was glaring. Another key issue was an emotional barrier; baking from a mix felt like cheating. Ernest Dichter, a psychologist and marketing consultant, suggested putting the eggs back into the hands of the baker to increase emotional investment.
The egg adjustment was pivotal, marking an inflection point in the acceptance and success of ready-made cake mixes.
This has come to be known as a form of The IKEA effect. The cognitive bias named after the Swedish furniture giant, that describes how people tend to value an object more if they make it themselves. More broadly, the IKEA effect speaks to how we tend to like things more if we’ve extended effort to create them.
Application to Agriculture:
There are several considerations for agribusiness professionals.
A challenge in the utilization of technology on-farm is the psychology of the farmer. How in control farmers feel, the pride they take in their decision making, how tangible an action and outcome are and solving for cognitive biases like loss aversion.
When it comes to agtech like autonomous tractors and irrigation technology for example, there are risks to over automating, not because it isn’t beneficial, but because it has psychological implications for farmers— removing their ability to feel in control or to take pride in an outcome they enabled. Just like apprehensive bakers in the 1950s.
I have talked about the need for friction reduction in agtech products and input commerce. I believe this is a useful frame for many aspects of customer engagement. However, as Shopify’s Alex Danco has talked about surrounding strategic friction in online shopping, there is a similar need for enabling control for farmers throughout the workflow of a product.
Looking beyond farmers, LLMs in agribusiness professional software run similar risks when we start to think about agents vs. copilots.
Last year I talked about an agronomist LLM agent workflow for automating discovery and reach out to customers regarding a phosphorous solubilizing product:
The agronomist could then review the LLM created e-mails, marketing ad created, and customer list before sending it out, and after the conversations with the farmer, simply go into the ERP and adjust the product order accordingly.
The key takeaway is that it doesn’t remove the agronomist or their judgment from the process. The e-mails aren’t necessarily automatically sent— they are created to save the agronomist time in not only searching for which farmers to approach but also with the message creation and order creation, which could all be adjusted later.
Food companies shifted to some friction because it increased the value the baker put on the product, increasing sales. Ag companies that best understand the workflow and journey of the customer, as precisely as possible, along with how each step makes the farmer feel, will be in the best place to understand where to ensure the “egg” remains, or gets added in.