I’m going to be straight up here - this was a problem that it took me three weeks to be convinced was actually real. It has been a long time since I’ve encountered a startup that had so much effort in understanding the market and its dynamics. More on this in a minute.

On October 1st, 2024, I connected on LinkedIn with Lesa Mitchell of High Alpha Innovation. She reached out on LinkedIn with a message that made me lean in:

I was immediately intrigued because the spontaneity of deal flow is what makes venture capital fun and exciting.

Tracey and I exchanged emails and set up a time to chat in a day or two. In the meantime, I also asked for the term sheet of his round.

When I was reviewing the term sheet, I recognize the logo of the investment firm leading the round, Ag Ventures Alliance. Turns out that I had spoken to Spencer Stensrude, the CEO of Ag Ventures Alliance, nearly a year and a half earlier via Zoom on a meet and greet! Ag Ventures Alliance was an angel investor network comprised of farmers from across the country.

Gripp

Gripp is the Slack + Asana of agricultural operations. Users buy have a Gripp tag with a QR code that users put on any piece of equipment or process across the farm. When they scan the QR code, that asset or process is online and can be messaged about, tracked, and distributed to all stakeholders. It also includes neat features such as automatic language translation on text threads to allow for all users to be on the same page, on the same platform.

Primary Reasons That Tundra Angels Invested in Gripp:

A Non-Obvious Insight: A “Wallpaper Problem” in Agriculture

When Tracey talked about the market problem, he spoke about several problems that their now-customers had told him about in their operations.

• Tracey spoke about a farmer who owned a John Deere rock crusher that had to spend $50,000 to replace the engine because the crusher was two years passed warranty. “Something was missed,” the farmer told Tracey.

• Tracey then shared about how another farm had a shared pickup truck for the farmhands. Everyone that used the truck assumed the other person checked the oil or check engine light and did maintenance, until the engine went out and the farmer had to replace the engine which cost him $7,000. This didn’t happen just once, but six times in the last two and a half years!

• Then Tracey shared how an organic farm is using a spreadsheet to track their certification checks that are required for the regulatory body. The regulator told this farmer, “What you are using today will not get you certified next year.” Lacking this would have put this farm out of business.

Those were clearly serious problems, and truly very broad in their use case - a warranty on rock crusher, an engine on a pickup truck, and certification tracking of an organic farm.

I struggled to see the connection. These have nothing in common. But as I spoke with Tracey more , it finally became clear.

Those use cases above were symptoms of a deeper, common denominator problem.

Tracey and Jenkin saw this non-obvious insight in the agricultural market. A insight that no one else had seen. The insight is that all of these problems all traced back to the same atomic unit - the lack of record keeping and communication around that.

But I struggled with something. I didn’t believe it at first.

I didn’t believe that it was a problem to begin with.

Now, I believed that the vignettes were certainly an issue. But I didn’t believe that the market needed a record keeping system. That sounded so… prosaic. There is no way that farmers and agricultural operations have this issue in 2024-2025!

Additionally, my mind was playing tricks on me because these big catastrophic problems seemed like they needed a big, robust solution.

✅ The scale of the problem didn’t seem to match the scale of the solution.

But, the beautiful thing about startups is that, it most of the time doesn’t need to. ✅

But I also didn’t believe the scale of the problem.

I couldn’t believe was that there was this thin, non-obvious problem that extended under the entire surface area of the Ag ecosystem that no one had ever noticed or done anything about to solve. Surely, someone has executed against this opportunity already.

✅ The perilous thing about investing in startups in the boom of AI is that it causes investors to over-think an otherwise very prosaic but large problem in a market. ✅

I am not lying when I say that I literally had to unwind my thinking and slow down the rate at which my mind typically goes when I evaluate startup opportunities.

Frankly, I came to see that this problem in Ag is what I call a “wallpaper problem.” This lack of record keeping been a problem that existed for so long that the market had established a way of coping with the problem of record keeping. I learned from the customer reference calls with farmers that the farmer would keep a blue notebook handy to solve this. The notebook contained all of the important details across the operation. Or, they would do things such as taking a Sharpie and writing the date they changed the oil in the tractor on the side of the tractor. One farmer told me, “We run a multi-million dollar business out of a yellow notebook.” Whoa.

This record keeping and communication problem had become wallpaper on the proverbial walls of the market - no one noticed it was a problem anymore.

But, that why a non-obvious insight is so critical- Tracey and Jenkin saw what no one else did.

Demand Signals: Farmers Giving Over Their Phone Number(s)

One of the things that I noticed is that Gripp’s sales cycle is literally weeks. In the early days when their go-to-market automation is still being built up, Tracey and Jenkin were talking with farmers on the phone. Importantly, Gripp moves from inbound lead to close within one or two phone calls. Potential leads are hitting paid online ads and giving over their phone number, allowing Tracey to call them. So these farmers, which are otherwise very hard to get a hold of, are putting their phone number into the form through a paid ad.

Email is relatively easy to give up in a paid ad. But a phone number? That’s a much more significant level of currency.

Additionally, when I spoke with Spencer Stensrude of AgVentures Alliance, he mentioned that prior to them deciding to lead the round, they brought Gripp through their trial network of farmers. On the other side of it, Gripp is working with 20 out of the 22 trials that were offered. “I don’t think we’ve ever had so high of a percentage of farms seek to use a company in our trial network,” Spencer told me when we chatted.

The two biases about the problem dynamic and the scale of the problem were completely disarmed by seeing these demand signals and having conversations.

Product: A Very Consumer-Feel in Agriculture

Gripp is one of those rare B2B companies that feels way more like a consumer play than a B2B play. The user experience is dead simple, having the ability to get farmers and farmhands using it in seconds either with or without the mobile app.

But clearly, that’s the only way it could work.

At first, I was hesitant about it being too simple. When I had one of my investor due diligence calls with Isaac Kato of Two Ravens VC, when he said, ”You know, I think simplicity is underrated and ignored. If you are really good at developing super simple software, that is a path to win.”

Defensibility: Embedded Product and Network Effects

Embedded Product

One of the things that Tundra Angels looks for before we invest is the startup’s defensible moats. One such moat is the ability of the product to be super embedded in the customer’s workflow.

On my customer reference calls, both farmers unprompted told me how much they had integrated Gripp into their workflows. One farmer said, “I hope [Gripp] sticks around for a long time so that we don’t lose our records.” And another customer, which is one of the largest fruit producers in the world said, “We are way more committed [to Gripp] that we thought we’d ever be.”

Then, the customer said this clinching line when he said, “[Gripp] is slowly becoming the backbone of our operations.”

When investors are doing due diligence, especially at pre-seed and seed stage, there are a lack of quantitative data points. So investors need to find signals of qualitative data points to get insight into the opportunity.

A few weeks after Tundra Angels had committed to invest, I got an email from Tracey that Chris Cunningham and Matt Olivo of C2 Ventures were doing due diligence on Gripp and were looking to speak with other investors. I happily got on the call with Chris. It was a great call.

On the call, when I was relaying to Chris my views on Gripp and I brought up this one quote from the You can from the video and audio clip how Chris, just like I did, immediately noticed the significance of that quote as a statement of Gripp’s defensibility….

Network Effects

Plus, Gripp has robust network effect potential. To sum this up, as Tundra Angels was preparing to fund and close, Tracey emailed me a story that had just happened to him when a farmer called him up.

Tracey relayed his experience with the farmer. “…Within five minutes on our website he signed up for a plan and in another five minutes texted his team the app, then he called me on my cell.  I talked with him for 15-20 minutes. He was a young and growing farmer and he said, “I’m gonna text this to a group of 40 – twenty to forty-year-old farmers that I share information with and we help each other, they are going to love this.”

And the largest producer in the world said, “Pretty much everyone that we have shown it to has tried it and loves it. We are evangelizing it to people.”

A Serial Startup Founder in Farmer’s Boots

You don’t run into many farmers that have raised $70M dollars for their previous startup. But that is exactly who Tracey is.

Prior to pitching Tundra Angels, Tracey and I held a practice pitch via Zoom. During his pitch, on the Team slide, Tracey opened with “Gripp is my journey back to the farm.”

When Tracey said it, it hit me to the core.

He went on to describe how he grew up on a farm in rural Wisconsin, studied computer science at Ripon College, and went into technology. As a co-founder and CTO of a virtual reality startup, he raised over $70 million in venture capital in his startup career. Then, he teamed up with his co-founder Jenkin Lee and brought Gripp to market.

I found that line to be sublime.

Often startups have X factors - a variable of the startup that virtually cannot be replicated but that is critical to the success of the startup.

There are some markets, that tends to be a market where paramount to success is “you’re one of us.” A deep level of trust and empathy is required to sell to farmers and agricultural operations. So, an outsider wouldn’t fit the profile to be successful. On the other hand, solving such a non-obvious problem like record keeping and communication across the Ag ecosystem does require an outsider perspective. Tracey is one of those people with enough insight and empathy to be credible to insiders, but also enough of an outsider that he can think outside of the box and see what no one else sees.

An X factor cannot replicated by an alternative company with money or with time. That X factor just exists - in this case, a product of childhood, upbringing, and experience, and time.

Closing Thoughts

In the past, I have likened startup investing to turning a Rubix cube. It is not enough for only two sides to be all the same color. All sides need to be the same color to be in complete alignment.

Similarly, there are variables in any startup that exist in proportion to another. The market problem is in proportion to the solution/product that is built, which is in proportion to the business model, which is in proportion to the defensibility, and other variables continue. See my article here on “What is the One Thing You Look For in These Startups?”

But then there are X factors, like a CEO with the right skill set, right experience, at the right time in the market, that make one conclude, “I cannot think of a better situation.”

When those variables all align, and the market is aligning itself to the startup, then believe it or not, making an investment no longer becomes a question, but rather a deep conviction.

In the case of Gripp, you can say that this conviction to invest had a Gripp on us.

We are also super grateful to invest alongside Spencer Stensrude of Ag Ventures Alliance, Isaac Kato of Two Ravens VC, Chris Cunningham and Matt Olivo of C2 Ventures, among others. We are excited to join previous investors Tim Dixon and Jarrod Sutton of Purdue DIAL Ventures, and Lesa Mitchell of High Alpha Innovation!

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