"You never change things by fighting the existing reality. To change something, build a new model that makes the existing one obsolete."
- Buckminster Fuller
At its core, if AquaponicsOS is going to succeed, it should make sense within a new high-tech food supply chain. From food production to consumption and logistics, we should have a hypothesis of how every piece will fit together, and most importantly, how it will beat the conventional food-chain at its own game. The key player in this new supply chain will be the Vertical Farmer.
Vertical Farms are capital intense investments and are by no means a "tree-hugger" idea, the only green the people signing the checks are thinking of are dollars. The RBH Group, Goldman Sachs Urban Investment Group, Prudential Financial Inc. and AeroFarms have signed a $30 million deal with Newark city officials to renovate an old industrial site into a vertical farm. Other pioneers include FarmedHere, which has closed deals with grocery stores and food chains such as WholeFoods. As people become more ecologically conscious of the food they eat, not only companies such as WholeFoods are becoming more relevant but also ones that are higher in the supply chain such as Chipotle. Even small restaurants with roof-top farms are the new must for eco-conscious hipsters.
Although such sector still represents a niche market, the potential impact on the existing agricultural supply chain is huge. I'm referring to oil, ammonia, pesticides, water usage and labor. The new vertical farm supply chain turns these inputs obsolete. Oil, which is currently used mainly as transport is no longer needed. Rather than transporting food, the only thing to be transported are electrons for LED lighting (ideally harvested by photovoltaic panels). Ammonia, derived from the Haber-Bosch process, requires natural gas as input and would no longer be needed. Tilapia fish and bacteria can produce ammonia and nitrate without any need for heavy industry. The same is true for pesticides, which are no longer needed because, well, there are no insects in the first place. So, by building this new infrastructure, the bottom line of companies such as Exxon, Monsanto, Dow Chemical and DuPont would be directly affected. Furthermore, there wouldn't be demand for low-skilled low-wage labor industry that takes advantage of human need in poor areas (paying below subsistence wages for physical labor is not my idea of "employment"). A closed and controlled environment makes automation easier and less expensive.
Aquaponic systems use 10% of water as conventional agriculture. Agriculture represents 80% to 90% of water usage in many Western States. As people start taking shorter showers in California they might as well demand a smarter use of water in their food. There might even be new legislation, such as France, which recently decreed that rooftops must be covered in solar panels or plants. In any case, throwing water in the desert, drying rivers and forcing the people who live downstream to pick up vegetables while disrupting the Earth's Nitrogen and CO2 cycles doesn't seem such a good idea.
Back to our customer, the Vertical Farmer. Although today's new incumbents such as AeroFarms can afford to invest in technology, there exists an opportunity to generate a space for medium and small scale vertical farmers. These players wouldn't have the resources to invest in R&D, however, as a group it would make more sense if they could generate a platform over which to build their infrastructure. They would only worry about leasing a warehouse and finding the resources with which to build the aquaponic stacks. In turn, big Vertical Farmers that invested in technology might be able to contribute because they are competing against conventional agriculture, not small sized vertical farms. Design and software would be open-sourced and thus, their entry price would be lowered. A good analogy might be how Google shared their BigTable experience and allowed Hadoop to flourish. Similarly Amazon turned their server farm experience into a business, allowing anyone to use their infrastructure. Today's real opportunity lies in building the service infrastructure on which the new food supply chain will be built (which in turn, is built on top of AWS, Watson).
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