Coming from a farming family in Mildura, Dale Schilling saw firsthand how severe weather can have a devastating impact on farmers’ livelihoods. Today, as CEO and founder of Hillridge Technology, he hopes to ease their financial pain through a novel approach to weather insurance.
- The origin story
- Hillridge Technology: Breakthrough in agriculture
- How Asia fits in the picture
- The business outlook
When bad weather strikes, farmers are often the hardest hit. That’s something Dale Schilling knows all too well having grown up on a farm in Mildura, Victoria.
“During school holiday visits to dad’s farm, I often found him looking up at the sky hoping for the next rain. He’d pore over the farm’s accounts late at night, brow furrowed,” Dale says. “He had a big weight on his shoulders, so he was always preparing for the unforgiving nature of droughts.”
Lacking any reliable form of weather insurance, Dale’s father was perpetually pained by the thought of having to negotiate with banks for loan extensions following incidents of extreme weather.
“He wasn’t that great with numbers, either,” Dale recalls. “He had a hard time figuring out what to do.”
A newborn Dale Schilling in his father’s arms
The problems faced by financially vulnerable farmers continued to stay at the back of Dale’s mind, even as he set about pursuing his career. His ambitions took him first to Japan, where he worked for Mitsui in the oil and gas sector, the US to study, and later in Sydney, Australia —where he landed a job at the multinational management consulting firm the Boston Consulting Group. He would stay at BCG, in the natural resources sector, for the next twelve years.
However, six months ago, a friend had approached him with an unexpected business offer. He asked Dale to become his chief operating officer in his new blockchain startup. Although he declined the offer, it got Dale thinking.
“The truth is, I’ve always wanted to be an entrepreneur,” Dale says. “I’ve just felt like I lacked a decent business idea.”
It was during this time though that Dale decided to familiarise himself with this new idea of blockchain, coincidentally also stumbled across a case study about weather insurance.
“I actually had a dream about my dad that night. I woke up thinking, what a brilliant idea but surely, weather insurance must already exist though, right?” Dale laughed.
After doing some research he found that it did exist. But it was only practised in small pockets, not really in any systematic way which was meaningful and valuable for farmers.
Then came the light-bulb moment.
Dale began to see the potential for farmers to benefit from an organised blockchain-type weather insurance, which offered farmers payouts whenever a severe weather event occurs, based on what the weather bureau says happened.
In the past, when farmers were hit by devastating environmental events, they sought out to receive an insurance payout, in proportion to the assessed damage. However, this process often took months and meant farmers were pushed to extremes of financial desperation, struggling to keep their business afloat. The frail relationship between big banks and small farms often receiving very little empathy was a difficult reality Dale did not want to accept.
It was these realisations that helped Dale see a great opportunity. It was an opportunity to give back to the farming community he grew up with and give back to people like his dad and grandfather with a real business solution.
A few months ago, Dale founded the company Hillridge Technology and is currently the CEO, excited about revolutionizing the way insurance is offered en masse to Australian farmers.
The name Hillridge originates from Dale’s grandfather’s ram breeding farm. Years ago, when Dale’s father was a young man, he was in the market for a single sheep. Venturing onto a local ram farm, he managed to find one and it was there that he met Dale’s mother.
Even before Dale was born, it appeared that farms played an important part in his life.
It’s always been a passion he’s held close to his heart, which explains why he really hopes that Hillridge Technology offers a real breakthrough for Australian farmers.
Rams stationed at Dale’s family farm
“All farmers need to do is rely on the weather bureau to state that there was a catastrophic natural event like a drought or cyclone in the area,” Dale explains. “They won’t need to actually explain the damages incurred on their crops.”
With the help of blockchain organising the weather data information transmitted, farmers will later be able to receive payments, without question.
Simple yet innovative.
Dale’s business venture sees the integration of new technologies with well-established farming, hoping to cut down on overheads, costs and time taken to settle a claim or finalise negotiations with insurance companies.
“Timing-wise, it just felt right too. Machine learning and mass-personalisation through advanced analytics is something we are just seeing emerge now, it wasn’t even possible two or three years ago,” Dale highlighted.
In addition, it’s been found that by 2050, the agricultural sector will need to be producing 70% more food than we do today to feed the world. However, one of the main problems for Australian farmers is that there is no new land and so we’re forced to increase effective use of the land we already have.
It means farmers have to take out a lot of debt to invest in their land, technology or equipment for their businesses. When they take on such a big loan and face fluctuations in revenue due to the weather, it means that they become very dependent on the big banks, who often mistreat them.
This makes them very vulnerable.
“We’re trying to give farmers like my dad some financial freedom from banks, so that even if bad weather hits them, they will still be covered,” Dale elaborates. “We want to make sure they can still meet their loans, send their kids to school and not have to be worried the banks breathing down their backs.”
Dale sees huge potential for his business idea to help many farmers across the country.
“The agriculture sector here produced around $60 billion of farmgate revenue last year,” Dale comments. “That’s incredible, yet China is 20 times that size.”
It’s one of the reasons why Dale is committed to first proving the business model in Australia, before later expanding to Asia.
“The thing is, when you can successfully automate weather insurance, it makes it possible to insure farmers for not just large amounts, but also small amounts too,” says Dale.
This will be a great opportunity for farmers in China. Whilst the average farmer in Australia earns closer to $1 million per year, the average Chinese farmer only earns around $5000 per year. By building something automated and scaleable, Dale believes that his business can be taken to China, to India, anywhere where farms are subject to lower revenues, and fluctuating weather conditions.
Dale’s family farm
Although still at a very early business stage, Hillridge Technology’s expansion into Asia is something that Dale has always been excited about.
It’s not just China and India that Dale sees potential in, but also Japan.
“During my high school days, I had the opportunity to study in Japan. It was beautiful, I loved it very much,” Dale said.
His desire to familiarise himself with not just academic Japanese, but also the Japanese business culture, led him to a five-year journey working with the mega trading house Mitsui.
At present, Dale says that it were these positive experience working in Japan which has made him consider how Japan could be a great target market fit for his business.
“They have a really firm understanding of how and why insurance is important,” Dale commented. “The farms in Japan are typically quite small too, and so weather insurance seems to be an amazing, supportive opportunity for these farmers.”
Interestingly, Dale added that although Australia generally seems to view the Japanese as slow decision makers, he believes they’re actually building consensus, testing the idea.
“Once the Japanese make a decision to do something, they won’t back away,” Dale said.
It’s something he’s learnt to appreciate and hopes to apply in his own business, for the benefit of farmers.
Currently, the business is still at an early stage. Dale is focused on building a good custom profile and testing the market to see if there is actually a need for this product before building a prototype. For startups, this is known as product validation.
“Without a doubt, we believe the need for this product exists, but there is no substitute for proper market research!” Dale laughs.
Dale Schilling, founder and CEO of Hillridge Technology
He aims to conduct market research interviewing and surveying farmers till mid-November 2018, undertake some actuarial modelling for the insurance companies, and also visiting banks, insurance companies and investment banks to find a corporate partner who can underwrite the insurance.
Dale aims to then develop a viable product and launch mid-2019 after he gains regulatory approval.
“I move fast. I’ve only been working on this for six weeks, but I’ve already got a team of interns, and a survey and website up and running.”
For startups, it’s all about the planning process too.
“2018 will all be about proving the market fit and finding a corporate partner. 2019 will be about proving the business model in Australia, whilst 2020 will be focused on business expansion into Asia.”
Dale says expanding into new foreign markets will require a sensitive awareness though, with each geography treated accordingly and differently.
“Farmers need to be re-engaged with,” Dale says. “Their values, distinct to each region, must be respected and understood. You can’t just assume foreign farmers will just roll over and buy your product because it worked in your home country.”
In the meantime though, it appears Dale is focused on Hillridge Technology’s endeavours for Australia of course.
Although there is still a lot to be done, he is confident he will get there.
A young Dale Schilling on his family’s farm
Dale is currently undertaking market research for Hillridge Technology’s future, having recently created a survey for farmers. He aims to get survey responses from over 1000 farmers and also conduct interviews with 100 farmers. So far, he’s found very positive strong signs of interest for his business idea. Dale mentioned that if any of our readers know of any farmers who wish to share their opinions, he’d love to hear from them. Send HHQ or Dale an email (firstname.lastname@example.org.