Below is the full interview between Mike Lessiter, editor of Precision Farming Dealer, and Al Myers founder of Ag Leader Technology, in Ames, Iowa. Developing the industry’s first on-the-go yield monitor as the cornerstone innovation of the company, Myers reflects on more than 30 years of sweat equity in the industry and what is left to accomplish.
Mike Lessiter: Thanks for joining us here, Al. I've been looking forward to this one for a long time because when we conceived of this project, we were very much thinking about what you started here in the early ‘90s.
Al Myers: Yeah.
Mike Lessiter: Today, how do you define your scope? How do you define your niche and what you do out there?
Al Myers: Well, over the years, as we saw the progression of things that were happening or were obvious were needed, we recognized pretty early that two things that we needed in addition to the yield monitor, we needed to be selling our own GPS receivers. It became obvious that people wanted the whole system ready to just plug in and everything's ready to go, they don't have to figure anything out. And then the other thing was the, of course, the advanced users were looking for yield maps and some analytics. We had to get into the software.
We initially we marketed a program that another small company made for us and then eventually a few years later developed our own software. As time went on, it became obvious that other things we should move into. We've tried to provide a complete year-around precision farming package for the farmer and what the farmer expects as technology and the industry has progressed, there's more and more every year. And I'm not the person that really decides that anymore. I've got a whole product management department with product managers, products specialists and they do market research. They go out and ride with farmers, talk with farmers, walk in their fields with them and that kind of a thing.
So today we're always trying to figure out, "Well, what's the next thing that the farmer is going to need and want in the area of technologies that we're strong in?" Which is electronics and electronic systems. Basically, we moved into control starting in the early 2000s. The first thing we actually controlled I think was New Leader's spinner spreaders and then of course we moved onto planters and other types of devices. So, you might say the trend has been more from just monitoring in the beginning, and we monitor a lot of different things now like sophisticated planter monitoring. But today it's more about controlling something on the machinery, and of course the data aspect of it has gotten more sophisticated and now we're moving into the realm of which the whole developed world, is moving into the realm of connectivity.
“It became obvious that people wanted the whole system ready to just plug in and everything's ready to go, they don't have to figure anything out…”
In other words, cell phones, that kind of thing. We're in the ag industry, we're kind of saying, "Well, everybody, this is what is involved in the farming, operation, or advising the farming or serving the farmer needs to have all their data any time anywhere they want to look at it."
Mike Lessiter: As a starting point, tell us about your upbringing and through the Illinois years and what happened next?
Al Myers: I grew up in a little town called Watseka on a farm in eastern Illinois, about 90 miles south of Chicago. It was a very rural area, but not too far from the big city. A combination grain and livestock farm like most farms back in those days, and my dad never got to be a very large farmer. I think he never farmed over 700 acres, but he worked to build up several farms during his lifetime. I did a lot of work on the farm, a lot of fieldwork, taking care of livestock, that kind of thing.
I'm mechanically inclined, so I was always the kid who was trying to build their own go-kart or modify his farm machinery and things like that. I took Vocational Ag in high school because at that time like most boys that grew up on a farm I thought I'd be a farmer. Didn't understand what it took to get into it at that point in time. It was actually my vocational agriculture teacher that suggested I ought to look in the engineering, which I really didn't know anything about at that time.
When I was a senior in high school -the high school which is about 500 students — they had a field trip to the University of Illinois to something called Engineering Open House, and I was just fascinated with the things that I saw there walking through the different engineering departments. So I enrolled in engineering the fall after I graduated from high school and never looked back. Once I got into it, even though engineering is a tough curriculum, I realized that I love that kind of stuff and that's what I went into when I got out of got out of college.
I got my BS in 1970 and I stayed around another year to get a Master of Science in Agricultural Engineering.
Mike Lessiter: Initially, you were thinking you might have gone to work for one of the majors?
Al Myers: Yeah, at that time I was targeting a job with either Caterpillar or John Deere. I'd actually had summer jobs. I had one summer job in 1969 at the International Harvester Farm Equipment Engineering Center in the Chicago area. Didn't like the big city coming from a rural area. And the next summer I managed .... Actually, I should say I didn't get it, my advisor (laughs) with connections in industry got it for me. I had a job in the engineering department of the John Deere Harvester Works the next summer. But the year that I graduated was a recession year in the off-road machinery market so didn't get job offers from either one of those and I ended up working for Division of the Sundstrand Corporation in Rockford, Ill. They're primarily aerospace, but I worked in a small hydraulics division that was trying to develop some new high-pressure hydraulics, got merged into the hydro-transmission plant here in Ames, which is now called Danfoss. It went through two or three name changes while I was there, and it's had a couple since then, but they still do the same thing they did many years ago.
Mike Lessiter: I saw your Sundstrand Aviation ID in Washington D.C. this summer-
Al Myers: Oh (laughs).
Mike Lessiter: ... at PrecisionAg. They had a great display on-
Al Myers: Yeah, yeah.
Mike Lessiter: ... the company and you personally.
Al Myers: Yeah.
Al Myers: That was my first day at work, believe it or not (laughs).
Mike Lessiter: So that job had brought you to Ames.
Al Myers: Mhmm.
Yeah. I only worked in Rockford, Ill., for less than a year and then I was transferred out here. And if I had remained in Rockford ... I was to the point of thinking about, "Well, could I go interview with somebody like Caterpillar, which was the company that had engineering operations closest to where I grew up. But then I think it was only probably nine or 10 months after I started there, we were told that we could transfer out here, and I thought, "Well, I don't know much about Iowa (laughs), but it sounds interesting." Because I knew that their products went into all kinds of off-road equipment, farm and construction equipment.
Mike Lessiter: So, tell us what was happening leading up to 1986 when you started playing around in the basement?
Al Myers: Well, where I ended up today basically is a product of the terrible recession that happened in the 1980s. That was the farm crisis of the '80s, and although there wasn't a name, there were crises in the automotive industry. It was the first time the U.S. government bailed out Chrysler Corporation, and it was a real crisis, even probably worse for some of the construction equipment companies in the 1980s. The first 10 years that, I worked for the Sundstrand Corporation was a lot of fun. The division I was in was doing new things, expanding, got to develop a lot of new products.
And once 1981 hit and the big slide started, because I recall, I think in ag, sales of their products went down like 5 or 6 years in a row because their customers' products were continuing the sales or continuing to go down year after year. You can't blame them because they had to do the things to keep their doors open, but it was just not as much emphasis on new product development. I got to the point that … I always like to develop new products and I wasn't really happy with my job so ... I had a young family then, so I couldn't really just up and decide, well, go and do something completely different. The machinery manufacturers, they weren't hiring anybody, they were getting rid of lots of people.
I always like to develop new products and I wasn't really happy with my job so I just kept thinking about, ‘Could I start a company to create a product, to start my own company?…
I just kept thinking about, "Could I start a company to create a product, to start my own company?" And over a period of years, I brainstormed a lot of ideas and finally by mid to late 1985, I got motivated enough to say, "You know, I think a combine yield monitor would be something that would be useful to farmers. Of course, my dad was still farming then. So, I asked him if I tried to develop one would he field test one for me, and of course he said yes. And so, I started working on one and he had a crude prototype in the field in the fall of 1986 on his combine. And then kept refining it over several years and it was a tough thing to develop something that worked accurately enough to be a sellable product.
Mike Lessiter: How did you recognize that opportunity to really bring about this kind of sweeping change in the industry? What was it that was the genesis of that idea?
Al Myers: Well, looking back you have to keep in mind that I had no idea what precision farming, as we call it today, would become. I decided to focus on the yield monitor because yield is the farmer's paycheck. It's the number one thing he's interested in, and I just thought, "Well, if a product can be developed that works accurate enough, why wouldn't a lot of farmers buy that to be able to get a better read on their yields, easier to check hybrids, know what's coming off different fields and that kind of thing." I had the vision to make yield maps, but when I started developing the yield monitor, I did not even know that the GPS system existed.
That really wasn't out there in the general public yet. I'd anticipated making maps with dead reckoning compasses, that kind of a thing. But of course GPS came along, and a couple years after I started the business, it was starting to become usable and that's kind of what the GPS technology - the ability to know exactly where you're at - and the advancement of electronics, technology and so on has really allowed precision farming to become this huge broad ranging type of products and industry that it is today.
Mike Lessiter: We have a whole generation of people who, well, farmers, dealers and manufacturers-
Al Myers: Mhmm.
Mike Lessiter: ... who may not even remember what it was like harvesting prior to the yield monitor. Can you answer that question for those who have never done it any other way?
Al Myers: Well back before yield monitors, some farmers might, I mean they would have an idea of their yield by how full their bins got and what they took into town, into the elevator if they weren't able to hold it and so on. At best, farmers knew, unless they were running, some would run small strip trials, using a weigh wagon from their seed dealer or that kind of thing. I'm not sure how far back that goes, I'm sure well before I was trying to develop the yield monitor.
One thing that I do recall very vividly is I don't think anybody really realized the yield variations that you found going across a field. The yield monitor certainly was a big revelation to farmers that it would show them yield differences across their field that were not easily visible. Obviously, 200 bushel per acre corn versus the wet spot where you're getting nothing, you can see that, but it was not at all uncommon for most farmers to see, even in a good year, could see up to 2-to-1 yield variation across their fields. So, they were surprised by the highs and surprised by the lows.
That's where I think over the years farmers have tried to understand, "Well, why is this so high? Why is this so low?” And, had to try to address reasons for that. I know I've heard stories that improving the drainage, the tiling on farms, that yield monitors caused a lot of that to happen. Farmer could show his yield map to his landlord - and back in those days I'm sure the sharecropping was much more common. Today it's almost all cash rent today - but show the landlord what profits they're losing through yield because of poor drainage and that kind of thing, and a lot of other things.
“Looking back, I had no idea what precision farming, as we call it today, would become. I decided to focus on the yield monitor because yield is the farmer's paycheck…”
Weed pressure. I know a local farmer who was one of the first ones that he bought one of the first 10 monitors I sold in 1992. He actually figured out that he had one field that he was having poor soybean yields and spots, and he eventually figured out that he had soybean cyst nematode was moving into his soil and he wouldn't have known that otherwise if he was just looking at the averages of the field. In another instance, he grows a lot of seed corn. He found out that the drift from fungicide that he was spraying on seed corn was improving his bean yields in certain areas. Otherwise he wouldn't have known that because it was only on edges of fields and that kind of thing. And in the direction that the wind was blowing that particular day.
Mike Lessiter: Was it about 6 years that you were testing this on your father's farm?
Al Myers: Right. Yeah, I had a couple of other field testers, one of his neighbors that had a newer model combine than my dad had. And then the very last year I expanded to another farmer here in Iowa, but I really only had three field testers before I put the product into production.
Mike Lessiter: You had young children then.
Al Myers: When I started the company, one would have been just a teenager, 13, and the other was two years younger. Yeah, so 11 and 13 they would have been.
Mike Lessiter: Coming out of the '80s, which was a very near memory-
Al Myers: Yeah.
Mike Lessiter: ... at that time. Tell us about the decision to go out and hang your own shingle out there (laughing) and go after?
Al Myers: Well, that was a big step because you didn't know if you were going to be successful. I'd never had the misfortune of being laid off like many people that I knew in those recession years. Because those layoffs continued almost all the way through the 1980s for a lot of companies that were in the off-road machinery business. So I had a secure job, making a good salary and benefits and all that and it was like stepping off of a cliff.
Mike Lessiter: What did your dad say when you told him what you had in mind?
Al Myers: Well, as I was developing it, because it took so many years to get it perfected, he said things like, "Oh, you just got to go sell this to John Deere or something like that (laughs)." But I didn't want to do that (laughs). I stuck to it.
He was neither encouraging nor discouraging. You know, my dad was a good farmer that always tried to do a good job, but he was not the early adopter type; he was a late adopter type of a person. Once I had the product, I mean he used it the rest of his career. He liked to see the maps and the yield on the go, but he never had any interest in really doing much about it. It's just like well there it is (laughs). He felt he was doing everything he could to try to be a good farmer otherwise and he was the old traditional way so to speak.
Mike Lessiter: There's probably some advantage to having your first farm user a late adopter. You had to (laughing), to convince him, right?
Al Myers: Yeah. It was pretty scary and my wife she didn't say no, but she kind of wondered, (laughs) “Is this guy crazy or what?” But I was just so obsessed with, “I think I really can do this,” that I took the big step and man, it was tough that first year. I was the typical startup where I thought I could sell 30 to 40 of these units the first year and I sold 10. And at least half of them were with people that I knew before (laughs), personal connections type of a thing.
Mike Lessiter: Was there some gut check that first winter?
Al Myers: Yeah, yeah. I certainly learned some good business lessons, things like you got to keep your cashflow going because that's the life and blood of the business, and that kind of a thing. And, different than startups today, because there's a whole bunch of them over here in the Iowa State Research Park that go out and get venture capital. Of course, in this part of the country venture capital was an unknown thing but I wouldn't have gone after that anyhow because I wanted to be in control of the company. It was obviously very important to control my expenses in the very beginning.
“My dad was a good farmer that always tried to do a good job, but he was not the early adopter type; he was a late adopter type of a person…”
In fact, the first 6 months of the company I didn't have any employees, I worked out of my house, and when I ... that was the first fall season because I started the company in June of '92, and then going into the mid to late winter I realized, "Well, I got to get some employees." So I rented a small office and garage space and all my employees at that point in time were part-time university students that I could get and come to work, 15 to 20, 30 hours a week maybe if they were in a slow time of their schooling. It was more than a year before I hired the first full-time employee who, by the way, is still with me.
He was hired to be a technician basically to help me put product together. He wanted to get an engineering degree, an electrical engineering degree at Iowa State. He'd been working at Rockwell Collins over in the Iowa City area. He'd actually been building military GPS receivers even though that background really didn't help me for - we weren't into GPS yet. And of course, we don't design them. We buy them and resell them, but he eventually got his engineering degree working part-time and he's an electrical engineer here.
He's been here for, coming up on, I guess he'll have his 25th anniversary then very shortly here. I actually talked him into coming in and working the Labor Day weekend because I needed help so badly (laughs) and he did.
Mike Lessiter: That first yield monitor '92, was that about a $2,000 investment?
Al Myers: I think that was about $2,200. It didn't have the moisture sensor, that didn't come till the second year. In looking back and that's one of the kind of things we pointed out in this little skit we did last year. When I go to farm shows and it was me only doing that the first, I don't know, 2 or 3 years of the company, probably participated in the years 4 and 5 even after I had one person to help me out on that. Farmers were used to buying some pretty low-cost pieces of electronics like a thing that would count your acres for $295 and that kind of thing. And when you tell that this yield monitor, well, the second year out, I think it increased in retail list prices to like $2,250 or $2,750 and they went, "What (laughs)?"
Al Myers: I never spent anything for an add on piece of electronic equipment and that kind of money before. And these days you get farmers equipping their planters with all this fancy stuff we've got now. Sometimes they're spending $60,000 or more to retrofit a machine.
Mike Lessiter: So back when you were getting going, you sold 10 that first whole season?
Al Myers: Mhmm.
Mike Lessiter: So we're talking less than $30,000 in revenue from that product the first year?
Al Myers: Yeah … yeah, less than $30,000.
Mike Lessiter: Was there other products or parts or that was the-
Al Myers: No, that was it period, yeah. Yeah, obviously, I didn't make money that year but well that first six months it was just me so, my expenses were pretty low. My overhead was really low (laughs).
Mike Lessiter: How did you go to market in those early years? How did you get the product out there?
Al Myers: Well, that's something I had to learn a lot about. I didn't know much of anything about sales and marketing and it reminds me of a manager that I'd worked for off and on because in larger companies you tend to move around, working for different peoples over the years. But once he knew I was leaving, and I hadn't told anyone there what I was doing, but I remember him making the comment about, "Well, you don't know anything about sales or marketing (laughs), do you?" Or he was telling me I didn't know anything about sales and marketing. And I kind of blew it off (laughs), typical engineer. “What's involved in that?” But certainly, I had a lot to learn there ...
“Farmers were used to buying some pretty low-cost pieces of electronics like a thing that would count your acres for $295. The second year we sold the yield monitor, it increased in retail list price $2,250 or $2,750 and they went, ‘What?...’”
I made all the sales directly that first year when I started the company, when I introduced the product, that I only had it for John Deere Combines because it's what my dad had, it's what these other two guys had that I'd used for testers. They had the newer model combines. So I went around and talked to all the Deere dealers within about 80 miles of Ames and took a monitor to show them some pictures of the flow sensor installation and that kind of thing. I was trying to do it myself, but I knew that I couldn't sell direct long-term, I had to have a dealer network. And I really didn't know how to do that until the first farm show I went to was actually over in Peoria, Illinois in 1992, the year that I started, so it was just after harvest season.
And people started stopping by when they saw something new they'd never heard of, and it turns out they were independent manufactures’ representatives, which I didn't even know those kind of people existed at that point in time. And so, I started hooking up with some of those folks which were good for me in the beginning. They had the connections to the implement dealers which the implement dealers were the dealers that sold most of my product in the first few years because the OEMs were not yet in the business with their own yield monitors.
Mike Lessiter: That's the show that you had the 13-inch colored TV hooked up in?
Al Myers: Yeah, in fact we even had our 25th celebration last year, we even, I found that TV and I found the tape that sort of played. It was a little, a (laughing) little messed up but it played enough, you could see what was on there. It was actually some video of one of the first guys close to here that body yield monitor and I had taken, I had done this just with a regular video camera in his combine, taken some video of the yield going up and down. And we did a little skit at the 25th anniversary. I and an internal sales guy that's been with me over 20 years now. I played the farmer and he played the salesman (laughing).
Mike Lessiter: So when you ... it would be fair to say that you are the largest independent supplier …
Al Myers: I would say we're the largest privately owned supplier. I think we've officially defined independent as not being captive to an agricultural OEM. There are three that are larger than us. None of them are privately owned but they're not captive to an OEM. I'm talking about like Trimble or Raven or Topcon in particular would be the three notable ones.
Mike Lessiter: In your business today what's the percentage of aftermarket versus OEM?
Al Myers: For a long time we've maintained about 75% aftermarket and about 25% OEM. And the bulk of our OEM is yield monitors too. The American big three combine manufacturers. But we do supply some application controls to New Leader on their spinner beds to some of the smaller sprayer manufacturers and other fertilizer applicator manufacturers and that kind of a thing.