SESO’s Market Entry Strategy: Why They Ignored VCs’ Favorite AgTech Trends

Discover why SESO chose to focus on agricultural labor management over automation – insights on market validation and going against VC trends in AgTech.

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SESO’s Market Entry Strategy: Why They Ignored VCs’ Favorite AgTech Trends

SESO’s Market Entry Strategy: Why They Ignored VCs’ Favorite AgTech Trends

When venture capital flows heavily into certain trends, it takes courage to swim against the current. In a recent episode of Category Visionaries, Michael Guirguis revealed how SESO identified a massive market opportunity by ignoring popular AgTech trends and listening to customers instead.

The Conventional Wisdom

When Michael first explored the agricultural market, the prevailing narrative was clear. “Most venture capitalists think that vertical farming and automation are just going to replace humans in ag in the near future,” he explains. This belief was driving significant investment into robotics and automation solutions.

Like many founders, Michael initially followed this trend. “Before I did what we started doing today, we looked at robotics and automation and strawberry picking robotics,” he recalls. The logic seemed sound – if labor was scarce, automation could fill the gap.

The Reality Check

But when Michael started pitching his robotics idea to farmers, he received a stark reality check: “Nobody needs another stupid robot. There’s a ton of these guys out there. They’re way ahead of you.” This feedback revealed a crucial disconnect between VC perception and market reality.

Instead of looking for automation solutions, farmers were wrestling with immediate operational challenges. “You’ve got payroll software that doesn’t talk to accounting software, that doesn’t talk to your timekeeping software. You’ve got processes that should definitely be done digitally, still being done manually,” Michael notes.

Finding the Real Opportunity

The breakthrough came from understanding the scale of the labor shortage. “Basically, we have two to 3 million ag workers in the US. There’s a demand for at least another half a million,” Michael explains. “And every year, more and more of these ag workers leave the industry, whether it’s because they’re retiring or they go into another industry that is less physically taxing.”

This led to the discovery of the H-2A visa program – one of the few uncapped visa categories in the U.S. that was growing rapidly but remained difficult to access. When Michael’s cousin’s husband mentioned it was “a visa we treat like gold, but nobody knows how to get it,” it revealed an opportunity that VCs had overlooked.

Building Trust Through Focus

Rather than trying to revolutionize farming with technology, SESO focused on becoming experts in labor compliance and workforce management. “We’re staying in our lane and we’re really just maniacally focused on everything related to labor,” Michael emphasizes. “The regulations like what’s happening in DC, that’s going to affect labor policy. What are the different workflows related to an I-nine or onboarding a worker or payroll compliance.”

This approach resonated with farmers who were tired of Silicon Valley companies trying to transform their industry. As one farmer told Michael: “A lot of people from Silicon Valley, they come here and they try to tell me how to farm, and I know how to farm. You don’t know how to farm. But you came here and told me about a program that I’m trying to use that I don’t understand. And I appreciate that.”

The Results

The market validated SESO’s approach. In just three years, they grew from being the 45th largest H-2A agent to the third largest, now serving 22 of the 100 largest employers in agriculture. The H-2A program itself has expanded from about 250,000 workers to 380,000, with projections suggesting it will reach a million workers in the coming years.

For B2B founders entering traditional industries, SESO’s experience offers valuable lessons:

  1. Don’t assume VCs understand market realities better than customers
  2. Look for immediate problems that need solving, not just future technological possibilities
  3. Build trust by focusing on specific operational challenges rather than industry transformation
  4. Validate opportunities through extensive customer interaction, not just market trends

The key insight? Sometimes the biggest opportunities aren’t in creating new technologies, but in making existing processes work better for the people who use them every day.

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