In May, Flagship Pioneering invited the CEOs of its companies to the Wequassett Resort in Harwich, Mass., to discuss how the enterprise could best support their collective efforts. The job of a CEO can be lonely: Flagship’s partners encouraged the assembled executives to share best practices and their common experiences. As part of that dialogue, Flagship Founder and CEO Noubar Afeyan and Managing Partner Stephen Berenson spoke with David Perry, CEO of Indigo Ag and one of the most admired chief executives in Flagship’s ecosystem. The two discussed the creation of Indigo, Perry’s career path, and his role as CEO.
Indigo, founded in 2013 as a prototype company called FL24 inside Flagship Labs, initially analyzed genetic variations in the microbiota inhabiting different crop species, and sequenced the bacteria inside high- and low-performing plant specimens. The company’s first CEO was a Flagship partner, Geoffrey von Maltzahn; Perry was hired in January of 2015 to grow the scientific venture into a real business.
Today, Indigo is transforming agriculture: More than one million acres have been planted with the company’s microbiome-coated crops; Indigo is advancing new lines of business such as Indigo Marketplace, a platform on which buyers and growers can purchase grains with specific sustainability goals; and the company is approaching a billion dollars in revenue. A few weeks after the retreat, Indigo announced the Terraton Initiative, an ambitious project to remove one trillion tons of carbon dioxide from the atmosphere, returning atmospheric CO2 to pre-industrial levels through a process developed by Indigo Carbon.
How has Perry achieved so much so quickly?
Stephen Berenson: Describe your relationship with the founding team of Indigo.
David Perry: Geoff, David Berry, and Noubar [Afeyan] came up with the concept that became Indigo. Geoff was running the company when I arrived, and we immediately developed a good working relationship. But we never found the right person to replace Geoff in his role as the head of R&D, and Geoff is now spending half of his time with us again as our chief innovation officer.
Berenson: When a new CEO shows up to lead a Flagship company, it may be our idea at the start, but somehow the company has to become the CEO’s idea, too. How did you become co-owner of the Indigo idea, as opposed to somebody who was just asked to execute that idea?
I just can’t imagine doing it in any other way. As CEO, if you don’t own the strategy and vision, then you’re not in the right job. It’s almost impossible for a CEO to execute somebody else’s strategy.
When I joined Indigo, there was a promising and powerful technology, but we also needed to build a business. First off, there was the question of mission. What was our end goal? What was our new vision for agriculture? I knew that everything else would derive from our mission, so I was determined to get it right.
“Agriculture is the most important industry in the world, and it is dead last in terms of its adoption of new technologies and business models. If we figure this out, we can make an enormous positive difference in the world.”
I came to Indigo believing that agriculture had four big questions: How can we feed a growing population? How can we make it more environmentally sustainable? How can we improve the health and nutrition of what we grow? And how can we make farming more profitable for farmers? Everything that we have done at Indigo since I arrived is focused on solving those questions. Those questions suggested our mission: “Harnessing nature to help farmers sustainably feed the planet.”
Noubar Afeyan: How do you know what you’re doing will work? Do you think more about destinations or directions?
I almost never know if something’s going to work. And I don’t believe the uncertainty goes away: As long as you’re pushing the limits and trying to grow, the uncertainty won’t get any less.
So I begin with strong hypotheses, which we constantly test. From an organizational perspective, we do three things. First, I try to hire really talented people, because you can’t scale if you have to manage through rather than with people. Two, I try to set a really clear mission, vision, and goals, so those talented leaders know what we’re trying to accomplish. Three, I try to give them guidelines and processes so that we can work together to get the job done. And then I get out of the way—so it’s much more directional than specific.
Afeyan: The general practice for a fast-growing company is to first figure out something that works and do it really well until the company scales, and then to deviate into new opportunities. But you’re choosing to pursue very different business lines all at once. How do you think through the logic, impact, and timing of your approach?
We’ve described what we do as “systems innovation.” Our foundational belief is that the global agricultural and food system is broken. Agriculture has known problems, and technologies are actually available to solve those problems. But there is a bigger economic problem. Most farmers get paid to produce commodity crops; they get paid for volume. They don’t get paid for quality and sustainability. And as long as that continues to be true, they’ll be slow to adopt technologies that can improve quality and sustainability. So it doesn’t do any good to have, say, a single innovation that decreases herbicide use, because farmers don’t have any financial incentive to decrease herbicide use. Therefore, you have to change the system.
We’re trying to think through what aspects of the system we want in the future and imagine what are the things that need to be in place to make that happen. We’ll create those things ourselves or partner with other people who can do it better. But that means that we’re running ten or 11 different lines of business with a common set of customers. All the different lines of business make sense in the context of the platform Indigo Marketplace, which unifies our activities into a single system. If we get everything right, it’s going to be enormously valuable.
At three and a half trillion dollars, agriculture is one of the largest industries in the world. It’s arguably the most important industry of all, and yet it is dead last in terms of its adoption of new technologies and business models. If we figure this out, we can make an enormous positive difference in the world, and build a very valuable company in the process.
Berenson: You sound like a rational optimist, like so many of our CEOs. For those who don’t know the food system well, make the case that agriculture’s challenges, while real, are not insurmountable in the time we have.
I’m an optimist, because agriculture’s potential solution matches the scale of our climate problem.
Currently, agriculture is a major contributor to challenges facing our environment. But at the same time, it offers the most scalable, immediate, and affordable solution for removing carbon dioxide from the atmosphere. All plants naturally do this through the process of photosynthesis, taking carbon dioxide out of the air and converting it to sugars, ultimately enriching the soil. Farming practices known as “regenerative” can encourage this process by driving carbon into the soil and keeping it there. If growers on the planet’s 3.6 billion acres of farmland adopted these practices, we could sequester a trillion tons—a teraton—of carbon, which is approximately how much carbon has been added to the atmosphere since the beginning of the industrial revolution.
Berenson: What is the most dangerous but commonly believed misconception about agriculture?
The most dangerous but commonly believed misconception is that farmers aren’t focused on sustainability. I’ve never met a group more profoundly committed to its importance. They are passionate about the health of their land. They worry about whether they’ll be able to pass it to the next generation in good condition. Today, though, the incentives are all wrong. We need to turn this system on its head, and I think of farmers as our chief ally in doing that.
Berenson: Personally, what do you know now that that you didn’t know during your first six months on the job? What have you learned?
Two significant things come to mind.
First off, when I started at Indigo, I knew that farmers were struggling both nationally and globally, but I didn’t know quite how bad it was. The continued consolidation of agribusiness and increasingly unpredictable weather have left growers with little to no annual profit. Meeting with hundreds of them in my first years at Indigo, I learned that we would need to be creative with models of shared risk and shared profit to drive technology adoption. And beyond that, I became increasingly devoted to grower profitability, which became a core tenet of our mission.
On a more positive note, in my first six months—and even my first couple of years—at Indigo, I knew that agriculture could reduce its environmental footprint. What I hadn’t yet learned was that agriculture could reverse it—that it could become a carbon-negative industry. Learning about the potential of agriculture as a climate solution has been one of the most invigorating experiences of my career.
Theo Melas-Kyriazi, executive partner: You’ve scaled up the company impressively. Inevitably, there’s been turnover. What is your philosophy about hiring?
Every company is limited by something; ninety-nine percent of companies in the world are limited by opportunity. Most companies are also limited by capital. But if you’re in the fortunate position to not be limited by either one of those things, you are probably limited by execution. Our limitation is how fast can we get talented, experienced people together to be focused on the work. We approach hiring and firing through that lens. We can’t really over-hire: We find the biggest, most talented person we can find. Because we believe that if they allow us to scale faster it’s much more valuable.
Berenson: How would you describe Indigo’s culture?
Early on, we set our mission and core values. You can’t do that too early. You want to do it before you’re 50 people or so, because if it’s authentic, you can incorporate it into your hiring, and performance reviews, and it can become what the company is. Without a clearly expressed mission and values, a company’s culture develops randomly, because pretty soon the people who are hiring new people have only been there three to six months and they haven’t been brought into the fold.
So we spend a lot of time trying to intentionally establish a culture. I would describe Indigo’s culture as focused on the mission we discussed earlier. We don’t really have any room for cynicism. If you are not on board with making farmers more profitable, improving environmental sustainability, improving consumer health, then this is probably not the right place for you.
One characteristic of our culture is that we’re super-transparent: The leadership spends a lot of time communicating. We have all-hands meetings every Monday. We use software so that every day anybody in the company can ask questions anonymously. The questions are voted up or down, and every couple of weeks I answer the top three or four or five questions. People feel there’s a safety-relief valve: They can get a question most people care about answered. For me, answering the questions is not a lot of fun sometimes, but I think it pays off.
Berenson: How do you set your own priorities?
The nature of all of our jobs is that we have more to do than we can possibly get done. That’s just a fact. Now, the best you can hope for is that the things you get done are the most important things. I’ve developed mechanisms for avoiding distractions. Because otherwise you may end up doing whatever is most urgent, rather than what is best to do.
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