Berkeley grads grow mushrooms for cash – legally!

Imagine you are in your last semester at college. You’ve done well academically, studied business, and you have a job offer lined up. Your parents are letting up on the constant brow beating about expectations and preparing for the future. The light at the end of the tunnel that opens up to the real world is as close as you have ever seen it. Just a few more classes to get through and you are home free. But, say, during one of those classes the professor says something that catches your attention.

“And believe it or not boys and girls, you could potentially grow gourmet mushrooms from recycled coffee grounds.”

You sit up, stop your doodle and look around. Did everybody just hear that? The professor just told us how we could make money on waste! Free money! Mushrooms! You approach the professor after class as all but one other student in the lecture file out of the auditorium. Though you probably wouldn’t know it at the time you are looking your future business partner in the face. Another light blinks on in the tunnel, and this one is green.

Sound far-fetched? It’s not. That is exactly how “Back to the Roots”, a startup enterprise centered on bringing consumers in touch with their food in a sustainable way – all while turning a profit and benefiting their community of Oakland, California – began. Nikhil Arora and Alejandro “Alex” Velez met for the first time after a lecture at UC Berkeley during their last semester in college in which the professor made the same proclamation I wrote above. Just as the professor had said, you can grow gourmet mushrooms off of waste like used coffee grounds, which is exactly what the pair did. First by experimenting in a frat-house kitchen after watching videos on YouTube on how the process should go, then to selling their mushrooms at a farmers market in Berkeley, California and eventually to their debut product the Back to the Roots at-home mushroom kit which features coffee grounds collected and re-purposed from Peet’s Coffee & Tea, a Berkeley based café, into do it yourself mushroom kits. Just add water at home to grow over a pound of gourmet mushrooms ready to eat!

Mushroom-Kit-2

The Back to the Roots grow-at-home mushroom kit

Within three years of their founding in 2009 Nikhil and Alex who are self-described “urban mushroom farmers” have secured distribution deals with massive retailers including Whole Foods, Bed Bath & Beyond and the Home Depot. They went from collecting coffee grounds headed for the landfill to being paid to haul it away by Peet’s Coffee & Tea, an early supporter of the young startups. As of 2012 they had diverted millions of pounds of coffee grounds destined for landfills. At roughly 3.6 million pounds in 2012 alone, that’s the equivalent of 175 dump trucks of material.

I first became aware of Back to the Roots through their recent Kicstarter campaign to launch a new product – the Aquaponics Garden – which like the mushroom kit is a “grow-at-home” concept herb garden using hydroponics. Growing herbs at home using this method is an old trick, but the mushroom wielding duo (Mario and Luigi?) added an interesting twist of a live fish in the nutrient bath. In this way, feeding the fish encourages it to… “feed” the plants which in turn clean the water for the fishy. The Aquaponics Garden has the same closed loop low waste ethos as the mushroom kit and is thus very much in line with the mushroom kit using recycled coffee grounds.

But I couldn’t avoid the nagging feeling that there was more afoot than delicious herbs and modern architecture inspired fish tanks. Around the same time that the Berkley grads were gearing up to take the DIY culinary world by storm, I began my PhD studies in Atlanta, GA. My new apartment with sweeping views of the side of a building and a dumpster covered in puke didn’t produce the kind of urban living I had expected when moving from rural Virginia where I went to college. Determined to spruce the place up, I wanted some potted plants. After all, there was a spacious balcony from which to enjoy to aforementioned scenery with a cool glass of sweet-tea (Atlanta, remember?). But lo – no direct sunlight. My first batch of plants withered soon after sprouting and becoming spindly, yellowed baby plants.

I turned to the internet – the font of all knowledge – to seek a remedy. Hydroponics was the logical solution. With hydroponics I didn’t need sun or warm weather. Hell, I didn’t even need soil. I settled on one branch of hydroponics – pardon the pun – called “aquaponics” in which the roots of the plant are interwoven into a passive binder, usually clay pebbles, and dangle into a nutrient rich solution. Through my research I found an easy design using a spray-painted plastic storage bin with holes drilled in the top and a fish tank aerator hot-glued to the bottom, a few feet of aluminum flashing to make a reflective enclosure, and a couple of 20 watt CFL bulbs plugged into the sockets of a “make a lamp kit”. Make a lamp indeed. A grow lamp.

Unfortunately, some of the critical supplies I needed couldn’t be found anywhere. I remember inquiring in the garden section of a home improvement store for things like “netpots” and “hydroton” and “rock wool” and  “grow max powdered plant nutrients”. After a few minutes of listing name brands to a dumbfounded employee in an orange apron, I told him my intended application.

“I am trying to make an herb garden in my living room. Like basil and stuff.”

I felt it was a reasonable claim. After all, I had just put a few packets of seeds for exactly that – basil and stuff – in my basket.

A knowing look came over the clerk’s face.

“Oh. We don’t have that here.” he said with a little grin.

Back to the internet. It had to be done. A specialty store. I searched everywhere I thought was reasonable – head shops with fluorescent posters and glass “tobacco” pipes, local hardware stores serving as fronts for the mob, Jerry who lived behind the dumpster. Nobody had even heard of the stuff. When I finally found what I was looking for  it was on the edge of the city in a run down industrial park. I called the store.

“Do you guys have…” I paused, remembering the clerk at the home improvement store, “Net pots?”

The clerk, “What size?”

This was the place.

When I arrived I found a brightly lit sign over the top of a small warehouse. Inside was every manner of tubing, pots, nutrient and testing apparatus that I had never heard of. They also had camouflaged “grow room tents”. It was an odd mix of completely legitimate looking industrial equipment – hydroponics is a great choice for farming organic produce in otherwise unsuitable locations – and everything I imagine I would need if I was looking for a great way to get kicked out of school.

I bought my supplies and a small booklet on hydroponic gardening. I paid in cash.

Is this aquaponics garden thing legit? I interviewed Nikhil, one of the co-founders of Back to the Roots to learn more. Nikhil and I discussed their recent success with a Kickstarter campaign to raise capital for production of the Aquaponics Garden, lessons learned from development of their grow-at-home mushroom kit, and the business philosophy that has helped them gain recognition.

Charged Magazine (CM): So, How’s it going?

Nikhil (N): Doing good. Just wrapping up the year so it’s been crazy. Comes to an end all of a sudden, Ya’ know?

CM: First, I wanted to congratulate you on the Kickstarter thing. You guys were asking for $100K and I think it closed a little less than week ago and you guys cleared almost two-hundred and fifty thousand dollars?

N: Yeah. Two-forty-eight. Almost 250 but it was crazy. It was really cool seeing the response from the community. It was the first time I’d really done something like that, the whole crowd sourcing thing, it just works! People we’ve never met before and don’t know who they were just coming out with their support. It was really cool.

CM: I think you’ve hit on something important – you’re talking about, I guess, the community involvement in your project. Is that the reason you guys decided to go with something like Kickstarter?

N: Yeah. I think we knew had a lot of support for the mushroom kit from our community and we felt that the aquaponics kit could be something similar. And I think to do really well on Kickstarter, and we were like studying it for a while before, you have to try to hit people on a different level. It wasn’t just a transactional thing. People felt more like they were supporting a movement, and they were supporting something bigger than themselves, and that’s why when we launched this product we felt it was something like that. It was something that inspired people and hit the right chord on Kickstarter so it kind of took on a life of its own. It was really cool to see and we got our product improved so much man, the 30 days from where it started off we got thousands of messages from people just out of good will giving us awesome ideas and suggestions. We just signed off on our final design yesterday to send off to the manufacturers and we made so many changes based on feedback we got from people.

CM: Right. And uh, speaking of that feedback, I read in a little bit on your Facebook page regarding this particular product and I definitely see what you mean as far as people who are very interested and passionate about the idea – but of course there was a little bit of negative feedback as well – specifically regarding the fact that you guys would have a live fish in the Aquaponics Garden. But you guys handled it surprisingly gracefully. You know, you said “yeah, we are definitely aware that this is something we need to build into our design” and it seemed you owned it right off the bat and the product is not even on the shelves yet, so I have to commend you on that.

N: Thank you man. It was a big design constraint for us. According to PETA and the most common standards, 1” of fish needs 1 gallon of water. That was our reasoning that for our 3 gallon tank you could have one beta fish in there or two smaller fish so we kept to that. One cool thing about aquaponics and why it’s totally different is that most of the time the health of fish is determined not by the size but more the toxicity of the water. You’re supposed to change the water in regular tanks really frequently, like once a week, to make sure it’s clean and ammonia is not building up but the cool thing with aquaponics is the plants are constantly cleaning the water out so it’s more about the constant quality of water for the fish.

CM: And definitely having the opportunity to grow yourself some fresh herbs at home is a driver.

N: Yeah. I think when you put something like that out into the world, on that kind of platform, we knew were going to get a lot of feedback, and we got some negative feedback and we got a lot of positive feedback that we were able to apply and make changes from. Overall it was a really cool experience and it would have taken us so long to get this data back if we had just launched into retail, because here you have such a direct communication with people I thought it was an awesome way to launch a new product.

CM: So, I think you guys mentioned this during an interview or something, but the connotation with two kids from Berkeley trying to grow mushrooms has a certain connotation – so I thought it was somewhat ironic that the second choice you guys pick is something with an equally, somewhat seedy I guess connotation, that is hydroponics and the whole growing plants in your closet kind of thing. I wonder if that thought occurred to you or what you think of that?

N: Yeah, you know it’s funny we never even thought about it that way. We had been kicking the idea around for a month or two before somebody said to us, “First you guys were growing mushrooms and now you’re selling hydroponics systems?” We just started cracking up and it hit us that we hadn’t even considered that both products have that same stereotype.

CM: Regardless of the stereotype though, I think the market you are attracting is a mix of DIY enthusiasts and people interested in knowing their food and on top of that doing something good for the environment and education. That’s the next thing I wanted to talk about, I think it’s pretty impressive what you guys are doing in the schoolrooms. You guys are doing product demos and have a program where you donate the mushroom kit to classrooms. Do you have similar plans to do that with the hydroponics kit?

N: We are. Actually, for the mushroom kit, every kit that you post a picture of on our Facebook page we donate one to a classroom of your choice. With the Aquaponics Garden we are trying to think how we can make that work. Now we’re thinking because we saw such a cool response to the whole Kickstarter idea, we thought, “Why don’t we implement that on our website?” We are thinking of having people who want to get a kit to a school of their choice can post that school on our website and they can get friends and family to pledge a dollar or two dollars and they can crowd source their own kits for schools or something like that. We are trying to think right now how to incorporate that because we are not launching them until late February or early March. We know this stuff would be amazing for schools because with the mushroom kit, it lasts for maybe a couple crops so maybe you get a month out of it, but with the Aquaponics Garden you buy it once and it lasts you for a lifetime, so teachers can have it for like 10 years you know? We want to see it in every classroom so we are trying to figure out what is the best way to make that happen right now.

CM: It’s way cooler than the class hamster.

N: Yeah!

CM: You and Alex are quite young, and I thought what is particularly interesting is that you guys are kind of wrapped up in the era of the startup culture. I would say some of your contemporaries in the tech fields go a completely different direction. It’s basically they have a handful of guys who work until they spin out an idea and they are seeking venture capital for like a million bucks. You guys every step of the way it seems said “How can we not only build our business and build a community involvement in our business? How can we build these connections where things that are good for our business are also good for getting jobs to the Oakland area?” For example in an interview you guys were talking about trying to find a domestic producer for your fish tanks.

N: Which we did. They are like 20 minutes away from us right here in northern California.

CM: Yeah, which I think is fantastic. I guess do you have a comment regarding your own education or maybe people who would be in your age group as far as the typical way of approaching a startup company?

N: Yeah, I just think for us it’s just been the right thing to do based on our values and I think it goes back to the environment we were in, how we were raised, things like that all played a part into that. But it’s hard to just pitch it to everyone saying “it’s the best thing to do based on our values, based on the environment” but at the end of the day it’s the right thing you do for your business too I think. There has been this transformation towards transparency and community in helping companies grow, and if you are not engaged in community from the start and giving back and being a positive part of that community then you are stunting your own growth. There has been a shift in the kind of companies people want to support and people are really looking for companies that are doing good. That’s the one message we really try to tell people. If you are not going do it because you love the environment or something like that then do it because it’s good for your bottom line. Being open to your community is the next wave of marketing and transparency. There is a really cool movie actually called “The Naked Brand” that talks about how it’s not about clever marketing anymore, it’s about transparent marketing and how transparency is the new clever in how to grow a business. It’s something we’ve become really passionate about and I think us being open about our flaws and what we were doing right and what we were doing wrong has actually helped us grow faster. Admitting mistakes has helped us grow faster. We’ve all graduated in the middle of this whole financial crisis, I think with a sense of “there has got to be a better way to do this.” I think people, consumers, are thinking the same thing that there has got to be a better way to do business and are looking to support companies that they feel are doing it the right way. I just think it makes sense all the way around.

CM: Another thing I thought was interesting is that when you guys were talking about originally doing product research for the mushroom kits you turned to YouTube, and when you were trying to find buyers for your leftover coffee grounds you turned to Craigs List. I am kind of going back to what I was talking about before with the tech startups where of course their business wouldn’t exist without the internet but it’s because their business is on the internet. How has the internet shaped your company?

N: Yeah. That’s dead on. We graduated having no clue about anything to do with mushrooms so we just watched every single YouTube video and found all these articles and books on different websites. It’s just cool how you can teach yourself anything now. There is no longer an excuse of “I didn’t know that, or I didn’t know how to do that.” You can just log on and teach yourself anything. We taught ourselves mushroom farming on coffee grounds from YouTube. It democratizes business and startups and education because you can go to a library and long online and just figure it out.

CM: What are your goals for the launch of the Aquaponics Garden?

N: For us, so much about the Aquaponics Garden has to do with inspiration and education. Our big vision is to see how many classrooms we can get this into. We’ve taken it to some classrooms right now, this one prototype we have, and honestly it is incredible the response you get from kids. I think it’s maybe the combination of the fish, the bubbles going up from the pump or the sound of water coming back down, but it’s so stimulating for them that they just rush to it and ask all these questions. It’s crazy how fast they understand what’s going on with the whole ecosystem. That’s our biggest goal. We want to build this thing out so we can literally get this into every classroom. We feel like for every classroom you can get this in, you are changing 30 kids perspective on food and the environment. You are teaching them that things work together and there is no such thing as “waste” because the fish waste is making the plants grow. That’s our big vision. We really want to get this into schools.

CM: Sure. So my background is in engineering, and actually I have attempted to do my own hydroponics before. I moved into an apartment that had no sunlight, so I really couldn’t do any window planters so I made the whole enclosure with some CFL lightbulbs. When I was building my own design I spent a lot of time online to see what other people had done but I ran into a lot of kind of technical hiccups that I had to work through. So out of curiosity, I’m wondering what are some of the biggest technical issues you guys have run into trying to bring something like this to market?

N: The biggest thing for us has been bring this whole system down to a smaller scale – aquaponics is normally done on a larger scale – we took months of experimentation into how to get the ratios down, looking at flow rates to make sure the system was still functional at such a small scale, how many fish do you need, how many plants can you grow, things like that. It was constant learning, and we finally got to the point where we had produced a ton of these and put them in different households and it we had functional prototypes. Once we saw the basil popping up we got so pumped because we had figured it out. We were always tweaking along the way and we wanted to encourage communal learning around this where people are sharing tips on what worked. We want this to be a platform for people to get really creative with it – people want to try and grow flowers, different foods. One guy emailed us saying he wanted to put shrimp in there. It’s like people hacking into their own creativity.

CM: I’m interested in some of the manufacturing aspects. You mentioned you were able to find a local provider. Was that difficult given the way that everything – at least when you are trying to do it cheaply and in huge quantities – goes overseas? What did you learn from that experience?

N: It was a big learning curve all around. We talked to dozens of manufacturers. It’s funny, because you design something, and then you realize the first go-round when you take it to engineers who tell you “you can’t do this, you can’t do that” or it’ll cost you thousands of dollars so there was a lot of back and forth between design and engineering.

CM: Did you find a lot of pressure from existing industry to abandon your business philosophies as far as sustainability and local design are concerned?

N: We had a really good design partnership and at the end of the day I think Alex and I knew what we wanted to do and we wanted to keep it domestic – we wanted to keep it local – and there is kind of a statement about that so we shopped around until we found a partner who believed in that same vision. It’s tough. It is cutthroat, because every dollar of cost (in manufacturing) ends up being like 4 more dollars of retail because of markups and stuff like that, but we really wanted to keep it at a $50 price point. That was our big goal and we are working our butts off to do that. With that we had to compromise a lot, because we could have added a lot more features, but for us it was more important to get something out of $50 and leave room for people who really want to get into it with add-ons, but we wanted it to be available and accessible to everyone, at least to a lot wider market than having like a $100 price point.

CM: When you project into the future, how do you guys imagine you are going to maintain the regional impact you have in the Oakland area. Eventually you are going to need more space. What’s the plan?

N: Yeah, we are looking at a new space now but we want to stay in Oakland. We see a massive opportunity to connect people to their food and we want to work our butts off to take that on and be the brand that people think about when trying to connect to their food. We want people to feel good that our company is doing stuff in the right way. For us, were not afraid of scale, were not afraid of size so we are working to grow and meet really ambitious goals along the way. The more we grow the more good we can do in the world is how we see it. The more we can develop a platform for our products the more capacity we have to do good and I think the community is going to help us get there. We’re maintaining an open door policy. I’m really pumped. I’m excited for this new year.

For more information on Back to the Roots products, and a look at their growing list of accolades, you can visit their website: http://www.backtotheroots.com/