Square One hosts “Startup Stories” on the third Wednesday of each month at the Greater Des Moines Partnership offices in downtown Des Moines.
The 90-minute event features a lunch and question/answer session with an Iowa entrepreneur.
Stephen Brockshus—CEO of Terva, a web-based marketplace for buying, selling and renting farmland—was the featured entrepreneur last Wednesday.
Brockshus spoke with Square One Executive Director Mike Colwell and took questions from the audience about Terva.Ag, its business model and the future of the Ames-based startup.
The interview is posted below:
Talk about what Terva is…
SB: In essence, we are building a nationwide database of farmland sales transactions. And with that database, there’s a lot of opportunities that open up when that data is accessible, whether it’s data analysis or farmland appraisers, and farmland investors. It’s all around having access to information at the same time.
On the other side which is really intriguing is an online marketplace for farmland real estate. So all this data in one easy to access place, make that buying experience really easy when you have all the listings, auctions in one location. So we are testing this winter to see if there are landowners who are, “For Sale By Owner” post their land online to find potential buyers.
It’s a time saving on the farmland data side of things and making those connections happen online for agriculture real estate.
Why pursue this?
SB: I grew up on a fifth-generation dairy farm in Northwest Iowa and going to land sales with my family. And really the idea came from going to land sales with my father and I’m the pestering kid asking questions. So my dad told me to go talk to our broker and that’s kind of where I got started.
Having access to information is something that as a potential buyer, our family was looking for. But talking to our broker he said he spends a lot of time researching the farmland market and trying to understand this information.
SO that’s where it all stemmed from. Then around that same time, I was on an agricultural tour to Japan traveling around visiting rice farmers and business folks. One comment I heard was there are about one million acres of farmland in Japan that sits fallow. So when I was at a land sale that next summer, I was talking with my dad thinking what if there are a million acres of land in Iowa that could better be used if somebody else owned it.
What does your product offer?
SB: If you go to Terva. Ag it looks like Google Maps and you can see every upcoming listing and auction across the state of Iowa. There are currently about 430 active sales across the state so you can browse and search and get connected with the seller of the auction or listing.
Then for a monthly subscription, you can have access to the past sale transactions as well. SO you can see not only what is for sale, but what land is auctioning for in your area of the state.
We have soil maps, we’re integrating crop history right now so you can see what the crop rotation history was and who the landowners were.
Is it just farmers wanting to buy? Or who are your customers?
SB: Really anyone who is a vested stakeholder in farmland. So a lot of our users today are farmland appraisers, professionals, farmland brokers and ag lenders. These are professionals who are the experts in the industry and want the latest information. They are most regularly using our services.
The broader market is the landowners looking to buy or sell and farmers themselves.
Tell us about the technical side of this?
SB: I am a farm kid and did not know any software developers until about a year and a half ago. That’s been the challenges of the business, I have deep roots in agriculture but when it comes to technology I’m very nieve. So when I was in college I went to hackathons and couldn’t code, but I could design for our hackathon team. I attended a startup weekend so I started to broaden that network and meet people.
One thing led to another and we had several different groups of people work on the product. We had students throughout different periods of time, now we have a professional software development firm do the backend and brains.
So not only are we pulling in data and have a regular website, we are trying to correlate about a dozen different layers of geo-spatial data so we can accurately link up the soil productivity of this land, who’s the landowner and what’s the crop history. We’re pulling together different databases and stitching them together.
And since the main delivery is through the web and in different parts of Iowa where our clients are high-speed internet is a challenge. So we’ve had to change some of the infrastructures on the website so that our load times are astronomically long in areas of that slower internet.
What’s the next 12 months look like?
SB: Up until just a couple months ago we’d been bootstrapped entirely. I’ve got some cofounders and we’ve put money in. Then I’ve been able to receive some grants and awards throughout college and a lot of programs in Central—from the John Pappajohn Center, Ag Entrepreneurship Initiative at Iowa State, The Ag Startup Engine—that have been able to provide funds. We’ve been able to receive low-interest loans.
We just started raising our seed round a couple months ago, so we’re in the process of getting that last quarter to a third of our money in our seed round brought in and help us get to our next set of milestones.
To get at scale, across the country, that’s going to take some capital and right now we’re just raising enough to hit some milestones that give us thumbs up or thumbs down indicator on parts of the business model. Once we get to about Q2 2018, we will take all of those that have thumbs up, come up with a full-fledged plan and start raising capital to scale outside of Iowa.
What’s been the hardest thing on this journey
SB: There has been a couple hard things.
Finding the team, because I’ve always wanted to find people like me and work with people like me, but to start a technology business, I need to find someone, not like me.
And another thing we’ve gotten some pushback on as well from incumbents in the industry who see what we’re doing as competition. There are some people who are really excited about it because if my listing is up there, more people can see my listing. But there are other people who see us competing with farmland brokers online. So why use them as a broker?
So we’ve gotten a good little bit of pushback from some brokers in one camp and others are for us. So that’s been interesting to navigate and understand that dynamic side of things. They all have relationships with each other, so trying to understand that market.
The way we see it is online versus a broker could be competing but really today in Iowa it’s about 70 percent of landowners who don’t sell their land using a broker. So there’s a good chunk of folks who aren’t using brokers today, so our philosophy is whatever is happening in the real world, let’s replicate that online.
Is most of the data you pull in public data?
SB: Yeah 100 percent of it is public data. It’s all in different buckets, one has slope data, one has crop history, one has land ownership. Then one bucket in every single county and there are 99 of those. Then 250 websites of farmland brokers with active listings, so there’s like 350 buckets and we are pulling from every one of them each week in an automated fashion, stitching them together and presenting them in an easy format.
ISU graduate starts Terva.Ag to answer the questions on land sales, values – July 5