Yuliia Poroshenko, “Agrohub opens a ‘blue ocean’ of opportunities for innovators in agricultural sector”
Recently co-founder of the Radar Tech project Yuliia Poroshenko and Head of Board of the Radar Tech Maksym Bakhmatov, together with agribusiness holding company MHP (“Mironovskyi Khliboprodukt”) have announced the launch of an accelerator of agrarian innovations. It is meant to show that agricultural area, despite the set patterns, is a flagship in their implementation. After all, traditional agricultural techniques become irrelevant, while the IT and agro-industry symbiosis is not just becoming normal, but an integral part of agribusiness. About 30 projects will be included in it, part of which will undergo complete acceleration, while the winners may bring their startups into action together with MHP.
On the 14th of November, Radar Tech, Agrohub and MHP will officially announce the project launch. Latifundist.com had a unique chance to speak with Yuliia Poroshenko and find out how the winning projects will be selected, how to stop the ‘agrarian brain drain’, as well as to ask about her experience in ”UKRPROMINVEST-AGRO” and why it is namely Mironovskyi Khliboprodukt that Radar Tech supports.
Latifundist.com: You are a founder of Agrohub. How did the idea of its creation come?
Yuliia Poroshenko: The idea of Agrohub came to my mind two years ago, and as long as I have been developing it, it has been becoming cluttered with fellow-thinkers. Agricultural sector is very significant on a global scale. Now we face a challenge – to feed the planet population that is constantly growing. The UN estimates that there will be 10 billion of us in 40 years’ time. Ukraine has all the capacities to solve this issue – land, weather conditions and traditions. However, insufficient application of technologies remains a missing link.
I faced this, when I was working with several agrarian projects. That was also when the idea to create a place, which would connect agricultural area with innovations and technologies, has flashed into my mind. There is a quite great number of talented innovators, for which it is critical to have a platform where they could find out about the industry problems firsthand. Agrohub connects business, innovators, media, research institutions, international organizations and finds opportunities for them helping to implement promising projects.
Latifundist.com: Which stage of the project implementation are you currently at?
Yuliia Poroshenko: We are only at the early stage. Now we implement the first project in cooperation with a technology cluster Radar Tech and one of the agricultural industry leaders – MHP. It’s a 7-month program that, I’m sure, will gather dozens of startups. Throughout the program, we will be assisting startups in putting the ideas into practice and getting feedback. Currently, we are finishing to examine the priority tasks of the holding company together with a consulting company Civitta; we are drafting so-called innovating agenda. We are going to speak of its details and the program in general on the 14th of November together with the representatives of MHP and Radar Tech.
Latifundist.com: Were any other holding companies considered as partners?
Yuliia Poroshenko: Many expressed particular interest in working with innovators in one form or another, and we are ready to join them up in the future. We didn’t have any special preferences. We don’t work for one client; on the contrary, we are interested in participation of great many companies. That’s when the maximal effect will be achieved. Besides, we also plan a huge project, which would involve other agricultural companies.
Latifundist.com: Did you feel the interest from the startups after you’ve announced the launch of an accelerator of agrarian innovations?
Yuliia Poroshenko: Yes, every day we receive letters with requests for keeping informed about the project development. We’ve got over 50 such letters.
Latifundist.com: An opinion prevails that agricultural sector is quite conservative and not flexible enough. Did you notice that agricultural companies are willing to develop along the way of innovations?
Yuliia Poroshenko: Indeed, agricultural sector is quite conservative. But this is not only in Ukraine, but throughout the world. Americans have a saying, “A farmer has 40 chances in life.” That means that he may harvest 40 crops on the average throughout his active working life. Naturally, no one wishes to risk even one of these chances. But they still use new technologies and experiment.
Over the course of my communication with farmers and large agricultural corporations, all of them expressed willingness to try things out. Many plainly don’t know that there exist turnkey solutions for their certain problems, since they arise every day. That’s why it’s important to create a platform where these solutions could be concentrated, and the information about them distributed throughout the entire sector.
Latifundist.com: Do you want to create an agricultural prototype of the Silicon Valley, or is it more like a business incubator?
Yuliia Poroshenko: When I was trying to find a definition for Agrohub, I stumbled upon the article from 2011 by the Center for Social Innovation of the Stanford University. It described a notion ‘collective impact organization’. It’s an organization that unites many parties for achieving a common goal. Such goal for our hub is an integration of innovations into the agricultural sector.
And these are not only startups. In fact, we speak about any innovatively thinking professionals who have succeeded in the area. However, for them this area is a ‘red ocean’ (development of the company in a highly competitive environment with lack of significant differences between the competitors – editor’s note). We, however, want to show them agricultural sector as a sort of ‘blue ocean’ with many different tasks of any kind, many opportunities for creative ideas and for unlocking the team’s potential.
One thing is to collect all the innovative solutions, and the other – to coordinate the project participants and to educate them. We will be accelerating certain solutions, i.e. helping the project to grow with a higher speed than it could have done it alone. One needs to provide it with resources of big clients, launch pilot projects together with them, etc.
Latifundist.com: Anyhow, why is it namely ‘Mironovskyi Khliboprodukt’?
Yuliia Poroshenko: What matter is that this company is a vertically integrated holding company, which has an entire range of areas of business, where innovations may be integrated. They include horticulture, animal husbandry and processing. This is a huge space for opportunities. Company is very open to changes; staff and leadership support our idea and are willing to share available capacities, resources and expertise.
When we started to look at the agricultural market, we saw many players. We understood that the main developments are implemented by transparent, open and public companies. MHP is such a company. We offered them our project and saw a great feedback. Then we started searching for sample points. Now it transformed into a unique competitive program for startups, entrepreneurs and innovators.
However, that doesn’t mean that we concentrate only on this. We realize that we have come to a new territory, and we are willing to consider different directions now. Thus, in the nearest time we will present a new project for the market, which would essentially follow the essence of this project and slightly expand it. Nevertheless, we will be able to speak about this a bit later.
Latifundist.com: Did you make economy calculations of an average agricultural startup? Roughly speaking, how does it make the life of agribusiness easier?
Yuliia Poroshenko: Everything is quite complicated with the calculations for many reasons. First one is the quality and quantity of data. Even calculating the fuel consumption per 1 ha in a big decentralized holding company, where accounting is maintained at the local level, collecting all this information, analyzing it and making certain conclusions is a great deal of work. This is a big problem in terms of estimation of results of technologies implementation.
The second reason is a large number of factors affecting the result. For instance, GPS tracking is used for fuel saving. If one plows by 10 cm deeper, the consumption instantly increases. It’s often hard to say whether it increases because the equipment is not used properly or because, for example, a combine operator poured out the fuel. Surely, effect from implementation of agricultural innovations is significant, but it is hard to estimate it precisely.
Latifundist.com: How many startups do you plan to pick?
Yuliia Poroshenko: At first, 30 projects will be selected, but we cannot anticipate that 100%. This will be our 3rd accelerator, and we couldn’t guess in the previous two ones. Usually, the trend is upwards. Meaning, when we plan to take 30, we finally take 35, since all of them are equally good. In any case, about 30 projects will reach the semifinals. A pre-accelerating program will be conducted, where the teams will obtain background knowledge. After that, 10 finalists will be selected, which will make it into the main 3-month program. According to the results, there will be an awarding ceremony.
I think that getting such client as MHP and concluding a commercial contract with it for implementation of their own idea will be a grand prize for any innovating team. Each entry-level startup needs funding or a first client, which would provide a first offer and thus establish a portfolio.
Latifundist.com: What are the winner selection criteria?
Yuliia Poroshenko: Certainly, there are sharply defined criteria, which we will speak about on the 14th of November. But I may only share some of them. The major part of success depends on the team. Team integrity and cohesion is a significant factor. How much the idea is elaborated will also matter. This is not a key criterion, but we pay attention to it.
Latifundist.com: Are considering stopping the brain drain from Ukraine in this way?
Yuliia Poroshenko: We indeed open the internal market for talented people. Today we have a huge agricultural sector with its problems, tasks and opportunities, and separately we have IT specialists, engineers and other creative folks. They virtually don’t interact with each other. Our mission is to construct bridges between them and help to translate the agricultural sector tasks into the technical language. This, in particular, will help people to fulfill themselves in Ukraine.
Latifundist.com: You’ve been evaluating Ukrainian startups, which are successfully operating in Canada and the U.S. – what is the main difference in the capacities of the startups?
Yuliia Poroshenko: As I was told by a capital fund manager of Aventrues Capital, Evhenii Sysoiev, if a startup has 10 contacts, in Ukraine they convert into one sale, while in the Western countries – into 3 to 5 on the average. The West has an innovative culture, the understanding of why this is necessary; people think long-term. Our mission involves changing a culture of attitude to innovations, education and awareness. The task is ambitious, but, unfortunately, it would be impossible to ‘espouse’ two worlds without it.
Latifundist.com: Can the agribusiness holding companies emerge as certain ‘change icebreakers’, entailing small and medium business?
Yuliia Poroshenko: It is easier and more reasonable to begin with holding companies. They have more resources to initiate changes, which would later affect medium and small business. For example, the use of GPS for controlling fuel, which is now universally applied in agricultural sector, has firstly been tested in big companies.
Latifundist.com: During the visits by Latifundist.com team to the enterprises of “Ukrprominvest-Agro” we observed a trend for more active implementation of up-to-date technologies (data accountability, tablets integration of agronomists, etc.). Did you take any part in this?
Yuliia Poroshenko: I have been working with “Ukrprominvest-Agro” for some time on implementation of innovation projects. Indeed, strong professionals work there, which are open to changes, constantly search for new solutions to existing problems and experiment.
Latifundist.com: Tell us more about the Radar Tech project.
Yuliia Poroshenko: Radar Tech is a cluster that unites industry accelerators. As I said before, startups need funding or access to a first client. We decided to opt for the second way and are currently working with corporations. Mentors are the most important to us. They are working with startups, speak about company aspects, share expertise, assisting in integrating the solution into corporation. For us it’s the 3rd accelerator already; the first two were with Kyivstar. In the first accelerator, 4 out of 10 companies got commercial contracts, in the second one – 5.
Latifundist.com: Why do you need all this? Besides, how close is IT to you?
Yuliia Poroshenko: I hold a degree in mathematics. I have been studied physics and maths in a vocational school, and I have been learning mathematical methods in the university. During 10 years, I have been working as a consultant, and my task was to seek for opportunities, and later help companies in pursuing them. At first, I did this in General Electric, after that – in McKinsey. When I see so many opportunities in a Ukrainian agricultural sector, I wish to implement a big and, I hope, successful project.
Konstantyn Tkachenko, Natalia Bilousova, Latifundist.com