Equipment Lifecycle Economics with Ben Voss

Welcome to another edition of SFTW Convo. This week’s edition features Ben Voss. Ben was raised on a farm in Saskatchewan. He spent a lot of time developing and modifying farm equipment in his family’s workshop. Right after college, he launched his own company focused on farm equipment design. He spent 10 years in finance and venture capital, ran a PE fund, and then helped a short-line agriculture manufacturer for a few years.

He spent time with Raven and worked through Raven’s acquisition by CNH. He is now a freelancer and is working with a Canadian company called Calian on Agtechnology in a contract role. He wrote two articles on Ag equipment resale values, and what it means for the future of agriculture. The two articles (Part 1 and Part 2) from Ben sparked this SFTW Convo series.

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Summary of the Convo

Ben emphasizes the importance of long-term thinking in equipment design and the need for a deeper understanding of market dynamics in agriculture. He highlights the significance of life cycle economics in the agricultural sector, advocating for a shift in how companies approach equipment design and investment strategies.

Ben highlights the importance of consumer confidence in resale value and the need for a decoupling of technology from machinery design to ensure longevity and adaptability in the agricultural sector. Ben and I explored the evolving landscape of agricultural technology, focusing on the depreciation of farming equipment, the potential of smaller autonomous machines, the need for retrofitters, and the importance of open-source ecosystems.

Rhishi Pethe: You launched your own company, focusing on farm equipment design and manufacturing. How has equipment evolved since the 1990s? How have the ways you design, build, and sell that equipment changed over the last 30 years?

Ben Voss: Since the 1970s, equipment has consistently grown in size, tractors, combine harvesters, planters, tillage equipment, all of it. And that growth has mostly been driven by the increase in farm size. As farms got larger, farmers needed to cover more land in the same amount of time, so they turned to bigger equipment to stay efficient.

But that shift also meant fewer and fewer people stayed in farming. As farms scaled up, the number of farmers kept shrinking, even though the overall land base stayed fairly constant. Globally, we’ve seen some land reduction, though places like Brazil are still expanding.

In North America, though, the pattern is clear: bigger farms led to bigger equipment. For example, in 1990, a typical planter or air seeder might’ve been 35 feet wide, maybe 49 feet if you were a large operator. Today, machines commonly span 80, 90, even 110 feet. And modern combines? They’re now 10 to 15 times more productive in terms of bushels or acres per hour compared to what farmers used back then.

It didn’t all happen because of the equipment. Farm sizes and equipment size grew together. If you’re a farmer and you say, “I want to scale up,” and then ask, “Can you build me bigger equipment?”, sure, those conversations happen. But the equipment companies mostly respond to what the market asks for. They’re reactive.

They rarely think beyond that. Most R&D cycles for equipment run about five to seven years. So if you start developing something today, you’re expecting to sell it in five years. That makes it easy to get fixated on solving the immediate problem. Engineers design to the specs they’re handed. They usually don’t factor in the commercial or financial implications, they leave that to the CEO, CFO, and other execs to sort out later.

And when leadership finally steps in, they mostly look at trends and historical context. Most companies just want to say, “We grew 5% or 20% year over year,” and hit that number. But if you ask, “Okay, what if you could grow 20% for the next five years, but then collapse after that, would you stop what you’re doing?” Almost no one says yes. No one stops to think, “Wait, maybe I’m creating a long-term risk for short-term gain.”

I’ve seen that story play out hundreds of times. A classic example, not from agriculture, but still relevant, is the story of the ice industry. Before refrigerators, we had a massive industry that harvested and sold ice. That’s why we called them “ice boxes.” When refrigerators came along, those companies were the first to be offered the chance to sell them. They already had the distribution network. But they refused. They said, “Why would we sell something that cannibalizes our own product?” And they stuck with ice, until the industry disappeared.

And in agriculture, we’re kind of famous for that, for being our own worst enemy sometimes. We focus too much on individual competitive strategy and not enough on the bigger picture. That’s part of why I felt the need to do some deeper analysis, to help the industry step back and really think things through.

Power law for VC investment

Rhishi Pethe: VCs usually take a long-term view, right? A fund typically runs for 10 years or so, depending on when you join. So as a VC, do you think about problems differently than, say, an Ag equipment company would? What kinds of decisions do you make as a VC that are fundamentally different from the ones you'd make in an operating company?

Ben Voss: There are really two kinds of VCs. First, you’ve got purpose-driven VCs, they manage money with a mandate. Someone gives them capital and says, “Invest in startups or companies because I want to achieve a specific outcome.” Then there are VCs focused purely on wealth creation. They invest in high-risk ventures with the hope of generating big returns. Their goal is simple: make a lot of money from a few breakout successes.

You can think of purpose-driven VCs as somewhat similar to corporate VCs. A corporate VC might invest in startups not just for financial return but for strategic benefits, like gaining insight into innovation, shifting company culture, or tracking emerging trends. Financial leadership still tells them not to lose money, but those non-financial outcomes carry real weight.

When I worked in VC, I managed purpose-driven money. My goal was to find startups that supported local economies and economic development. Later, in private equity, the capital still came with a strategy, every investment aligned with a larger purpose.

I’ve played a role in the Ag economy and continue working with startups. What I’ve noticed is that money flowing into AgTech has often been driven by the dream of finding the next big exit. Investors hoped to back a game-changing company that would get acquired by a major corporate player, delivering a huge return.

And yes, a few companies did pull that off. But 98% didn’t. Instead, speculative capital flooded the space and, in many cases, distorted the fundamentals. Startups could raise money during boom cycles, and that fundraising alone was often treated as validation that they were solving a real problem. But when the time came to prove their value, many just didn’t measure up. That disconnect led to a wave of failures, and in my view, it’s because speculative money outpaced real business logic.

Rhishi Pethe: It’s all about the power law, you make 100 investments, and maybe just a handful deliver those big returns while most fail. So is AgVC really any different from other types of VC? If that’s the case, why do people complain so much about AgVC?

Ben Voss: I agree, it’s similar. But placing bets in AgTech is completely different from investing in consumer goods, electronics, software, or other high-tech sectors. In those spaces, you’re marketing to the world. If you launch a new AI software product in Silicon Valley, there’s a potential global consumer market waiting for it.

But that’s not how agriculture works. You can’t just say, “I’m going to start an agronomy company and reach millions of customers worldwide.” You have to ask: is this for row crops or permanent crops? Are we talking about zero-till farming? What geography are we even targeting? The problem you're solving is usually narrow and deeply contextual.

And once you do land on a real commercial opportunity, it’s usually very specific, often tied to a particular country or a small group of countries. You can't apply the same venture model that says, “I’ll invest in a hundred startups and hope that two become unicorns.” That approach doesn't work in AgTech.

You have to be a specialist. If you’re a VC in this space, you need to be scientifically literate. You have to truly understand what you’re investing in. You can’t just listen to a pitch, you have to dig deeper. You need to know how the solution works, where it can realistically scale, and why a customer or acquirer would pay for it. That’s what smart money looks like in AgTech. The best investors bring in partners and research teams who can evaluate technologies and opportunities with that level of depth and clarity.

Rhishi Pethe: It’s tough to find cross-cutting technologies. With equipment, it often has to be tailored to specific crops or regions, because of all the variation. But if you do find one, it could become something really big.