Example of Applying Our Ecosystem Based Investment Screening Process

by | Jan 1, 2017 | Integrated Capital, Social Innovation, sustainable agriculture, sustainable investing, Uncategorized

Recently there was a very interesting interview we found in an online newsletter from UNREASONABLE.is. For those that are not familiar with this website, you are in for a treat. It is filled with beautiful stories of very inspiring entrepreneurs making a positive difference.  https://unreasonable.is/changing-way-world-grows-food-qa-agrivi/

This particular article called “Changing the Way the World Grows Food” was an interview by Aubrey Sanders (Associate Editor at UNREASONABLE.is), with the Founder of Agrivi, a Croatian man named Matija Zuji.  Agrivi is a knowledge-based solution for farm management. It is cloud-based management software that provides a highly integrated set of tools and knowledge for farmers to run their farms more efficiently, sustainably, and profitably. Farmers get very helpful productivity tools to better plan, run their farms, and buy and sell products.  In addition, data generated results in real-time, evolving, and iterative best practices from around the world. They are building strong trust and goodwill with the farmers and have strong competitive differentiation with their strong focus on helping farmers solve many of their most pressing problems in an integrated, affordable and sustainable way.

We use a systems based investment screening process to look for businesses that effectively and efficiently solve complex societal problems to result in win-win solutions. These particular principles we follow are inspired by nature and, as a result, are highly intuitive. The more you use them, the easier it gets to quickly read something or speak to someone and know very quickly whether the particular business is something you want to study in more detail. Even if you are quickly looking through tens of dozens of potential investment opportunities you will realize these principles are a highly effective screening tool to help you narrow down the list. When your goal is to find businesses that help to manage complex problems in society in ways that have more optimal outcomes for all concerned, there are few systems or analytical processes that are more effective than this one.

Although we have not yet met this entrepreneur or studied his company in detail, we felt this detailed discussion of Agrivi provides useful information to quickly demonstrate the utility of our investment screening process.

You will see for yourself as you read this article and consider the mental filter of the 12 principles of permaculture we apply.  https://pythiacap.com/using-system-design-principles-that-mimic-natures-processes/

Some examples of this process that are evident in this article are: the integrated, solutions-based process this man followed; his passion and purpose; his personal and detailed journey to understanding the problems; the sustainable model he developed for his own company and for his customers; the local and integrated nature of how the company helps farmers; the collaborative nature of the product that enhances the connection of all the stakeholders in the farming industry; the goodwill and trust that is continuously nurtured between the company and the farmers; the slow, iterative best practices that result from ongoing feedback loops; how even a small farmer results in data and solutions that benefit the whole farming industry; multiple layers of productivity enhancements for farmers to help them more efficiently manage their workflow from start to finish…

We have come to view trade-offs in capitalism as necessary and just the way it is. Growth at all costs, the financial reward above all else leads to numerous suboptimal outcomes for our society. Somewhere along the way Adam Smith, many consider the father of capitalism, became greedy and that greed became good and the necessary way to develop our economy. I am confident that if he were alive today he would remind people he was referring to a very ethical, non-monopolistic version of capitalism where special interests had no particular influence or power. Perhaps in his day he would consider the highly ethical, ecosystems based approach we follow to invest in companies to be one that was rather self-evident and intuitive, requiring less explanation. Perhaps in his day, there was a real sense of community, of interconnection to the world around them, a strong sense of place, of integrity to the business process. We can apply exciting new technologies to solve important problems using an ecosystem based business and financial approach and have more win-with solutions (where yes, of course, investors can make good returns). Private industry, innovation, and entrepreneurial solutions are powerful tools for solving problems and enhancing our lives, but we need to start using more common sense and wisdom in our approaches. Fortunately, systems based design approaches to capitalism provide a logical and appropriate process for us to follow.

We also follow the same principles to apply the most optimal financial structure to our investments to make sure all incentives are aligned properly. We will be discussing this more in future blogs.