Like a pair of ’80s stockbrokers, Nikhil and Alejandro grew their success from the decaying remains of another business. Fortunately, their success was founded in the realization that gourmet mushrooms could be grown from cafes’ discarded coffee grounds, and isn’t leveraged from another’s dismay. Quite the contrary, their company, Back to the Roots, is a testament to a new school of business, where fortune often favours the rabbit and not the wolf.
In 2014, hitting a home run in the world of business requires an entirely new type of game plan.
There is an increasing fascination in career autonomy and many gravitate to the phrase “be your own boss.” So is it really a surprise that during their last semester of University, these two UC Berkeley students became successful by dropping their original offers in investment banking and consulting, to build an enterprise in urban mushroom farming?
They originally got the idea from a passing comment their business ethics professor made about growing mushrooms on used coffee grounds. Borrowing the concept that one could produce food from waste, Nikhil and Alejandro decided to try and grow their own. Six months later, Nikhil and Alejandro were selling do-it-yourself mushroom kits out of over 300 Whole Foods locations nationwide.
How did they do it? It is what Nikhil and Alejandro refer to as “Business 3.0” – a model that requires a divorce from what you may be currently learning in business school.
“You’re taught that to grow your own business, you’ve got to constantly innovate to find ways to maximize your own value. But we’ve learned from Back to the Roots that to grow your own business you’ve got to constantly innovate to find ways to maximize your partner’s value.” Says Nikhil.
Back to the Roots happily collects the waste of 32 coffee shops every morning, a job previously dreaded by the baristas, and a service Pete’s Coffee Shops now pays them to do (instead of paying waste management).
They then use this waste as the raw material needed to make their product—do-it-yourself organic mushroom kits.
Pete’s Coffee Shops puts coffee coupons inside the mushroom kits, and sells them out of their stores. The beauty here is that no one is being stepped on. The two companies use each other as leverage.
Finally, Back to the Roots turns their own waste – the spent coffee grounds from harvesting the mushrooms – into a “premium soil amendment” stocked on the shelves of every Whole Foods location in Northern California.
“It was so fascinating to us at the time that, Back to the Roots was making a business out of an entire industry’s by-product. There is so much more value, and interchange that can be added to that traditional linear business model, that just starts with a supplier and ends with a customer. ” Alejandro explains.
However, one ought to think: instead of enduring the ten day growing process, if people wanted twenty dollars worth of gourmet mushrooms, why not just buy them from the grocery store?
“Sustainability”…the word that haunts the 21st century heart like a Taco Bell burrito. This is precisely why Back to the Roots is so successful.
It’s not always about what the product does, it’s about the idea attached to that product. The fact that you grew these mushrooms yourself or are growing food from what was once considered waste are ideas most of us can get on board with. If it’s good for the people and the environment, it’s good for business.
People like to stand behind businesses with good intentions. Thankfully, the Internet makes it fairly easy to separate the truth from the insincere advertising campaigns of colonizing grease giants like Starbucks’ promotion of (not so fair) “fair trade” coffee.
The good news is there are businessmen like Nikhil and Alejandro who are passionate about an idea first, leaving profit to parenthesis. Remember, “entrepreneur” doesn’t have to be a dirty word. Back to the Roots is living proof that dreams can grow in the least likely of places.