Back to The Roots | Nikhil Arora

 

About Nikhil Arora

Nikhil Arora co-founded Back to the Roots (Oakland, CA) in 2009 as a senior at UC Berkeley and gave up a potential career in consulting to become an urban mushroom farmer. Nikhil oversees the marketing and product development half of the business and along with his co-founder, Alejandro Velez, has led the company to triple digit annual growth over the last four years. The company now distributes their two award-winning products, the Mushroom Kit and the AquaFarm, a self-cleaning fish tank that grows food, in over 2500 retailers nationwide including Whole Foods and Nordstrom. Back to the Roots was named as one of Forbes 25 Most Innovative Consumer Brands in 2013.

Since co-founding Back to the Roots, Nikhil has received a handful of awards including recognition by the White House for innovation and being named to Forbes 30 Under 30, Inc.’s 30 Under 30, BusinessWeek’s Top 25 Entrepreneurs under 25 and Top 25 Social Entrepreneurs in America. Nikhil also currently serves on the Board of Directors of the Sage Mentorship Project, and Social Venture Network.

Nikhil Arora received his undergraduate degree from UC Berkeley where he double majored in Political Science and Business Administration (Haas School of Business) and spent 6 months studying at the University of Ghana, Legon. Also, you’ll know Nikhil’s controlling the music in the office when you hear a constant flow of reggae and hip hop and the same song is played on repeat for an entire day!

 

Interview Transcript:

Alan
Welcome back. I’m here today with Nikhil Arora. He is the founder and the CEO of back to the roots. Nicole, welcome to the show having me. So Nikhil, tell Give me your background, how you got to where you are today?

Nikhil
Sure. So you know, it’s funny back to the roots as a really interesting start that it was a kind of came out of nowhere for us. We were both Alex, my other co founder and I were both undergrads at UC Berkeley. And, you know, we’re I was a business in poli sci major. He was a business and education major. And we were actually the same classes for four years, but never actually met each other. And we both are actually, upon graduation going into the whole corporate world I was going to consulting, he’s going to investment banking, we kind of both thought we knew we’re doing. And our last semester, we were sitting in this business ethics class, there’s about 150k, tuner Person class and our professor about this looking back now pretty random fact that he could possibly grow gourmet mushrooms on entirely recycled coffee grounds. And something that that one sentence he kept going on and on but that one sentence kind of spoke both of us both or imaginations. We both reached out to him after class were like, hey, it’s kind of a cool fact, you have any more information. And he actually emailed us both back separately, it was like, I have no idea what this other kid asked me about to you guys should link up. So he put the both of us in touch. And we just hit it off and started brainstorming, kicking around ideas. And that’s kind of we first met and had this whole idea.

Alan
Now is the entrepreneur spirit running your family was your father in business or for himself or just?

Nikhil
Yeah, you know, my older brothers. It’s kind of funny actually, to for how it all worked out to Alex and I both have older brothers for three years older. And around the same year in 2009, my older brother started an online advertising company called retargeted.com. And Alex’s older brothers started casting studio down in LA doing casting for movie and TV. So all this weird kind of came across his passions and ideas in the same year. So I remember we would have calls and in a someone in online advertising, mushroom farming and casting and we just had these like phone calls, like pick each other’s brains and brainstorming and it’s crazy how many similarities there are just in going through the process of starting something up, you know, even with these wildly different industries, you know, so, but it’s been a lot of fun. Just the four of us.

Alan
Yeah, obviously, there’s a lot of steps that you take, but what did what did you and Alex start

Nikhil
To be honest with you, we started with a paint bucket of mushrooms. We, we were you know, we heard that idea. And we’re like, let’s just respect we as always, we spent like researching and brainstorming you’re like, let’s just try this thing out. Give it a shot. And it’s right before spring break. We actually planted these 10 paint buckets of you know, just coffee grounds mixes mushroom seed, or called spawn in Alex’s returnee kitchen closet, came back from spring break. And I still remember this so clearly, because out of these 10 buckets, nine of them were just completely contaminated. Nothing had grown. And one of them had just gorgeous crop of oyster mushrooms growing out of it and I’ve asked them hey, Nick, how are you trying those like you? How much are you trying it was a good no backyard and food you know, we we had grown. But that that day, we actually like what’s the best restaurant in town and realize that shape nice wasn’t too far away. And as she walked out one paint bucket of mushrooms into her restaurant and Alice Waters happens to be their, their head chef and she ends up becoming super supportive grabs your head chef over he Saudis have some of the spot and he’s like, Oh my god, Alex, he’s a delicious. And as a first time we actually had someone say they were getting that same day, she walked that same pain bike and minus half of the machine did sauteed over to the Berkeley Whole Foods and just went to the first guy, we saw the produce department, someone just kind of packing the vegetables and said, Hey, we’re trying to go mushrooms on coffee grounds. And that’s really where our relationship with Whole Foods started just walking into that store and, you know, talking to the first go to the produce department. But those are the first first step we took was to see if there’s interest out there.

Alan
You had a job offer offered to you after graduation, but instead of taking that offer, you opted to go out and do business for yourself. Why?

Nikhil
Yeah, you know, looking back of why we ended up starting back to the roots. A lot of it was obviously idea, but I think the biggest thing was our partnership. You know, Alex and I just, we were having fun working together, and we had so much respect for each other. And we both like, you know, he’s a smartest kid. I knew accounting and like, if he’s crazy enough to do this, you know, I’m gonna run with this too. And I think that’s just looking back probably the biggest thing of business, it’s just the people you deal with, because that’s what makes all the difference. And you know, we spent six or eight months after we graduated, just literally the two of us like knee deep in coffee guys everyday trying to figure this thing out. But I think we got us through all that it was just having fun on the way and enjoying the people you’re working with. So that’s probably the biggest reason to be honest.

Alan
I’d be sitting here today with Nikhil Arora. He is the founder, I guess a co founder. Back to the Roots is a company focused on or Ganic mushrooms and also you have another product out called the Aqua farm. Yeah, Nick Cal, we need to take a quick break. And we’ll be right back after these messages and I want to talk more about the process of selling mushrooms. We’ll be right back.

Alan
Welcome back. And with Nikhil Arora he is the co founder of back to the roots, a company focused on selling organic mushrooms and also you have a new product called the Aqua farm. How did you decide? Once you once you prove the concept that yes, you could grow the mushrooms on and scale that? How did you decide to? Yeah, how to market this you go to the gourmet restaurants you go back to the consumer What was your process there?

Nikhil
Yeah, so you know a lot of it initially was selling the bulk mushrooms to grocery stores and Whole Foods is the first kind of people give us support and realize that was an awesome opportunity to kind of leverage their distribution, their net worth their customer base to kind of build our brand. So we started off with with whole foods and then a ton of farmers marketers out there every weekend just learning from our customers. And at that point, we’re selling the fresh kind of loose oyster mushrooms still. But it’s funny because through that process, though, especially about doing tons of demos in stores or farmers markets, we had all these people kept on asking us to show them how we grew the mushrooms. Like they were like oh, that’s kind of cool. But you know can’t do that at home actually. Like I take one of your big coin inoculated bags to means the roots got taken over the substrate, the coffee grounds and they’re ready to start growing mushrooms. People ask us, Kay, take one bag, tell them to do it myself. And we start getting a ton of these questions and realize people actually more excited about trying to grow their own food and thereby necessarily buying just our fresh food. And that’s really inspired us to start creating this idea that garota home mushroom kits. And you know, it’s funny when we first launched the mushroom kit was a big, almost basketball queers bag of fungus that we took to Whole Foods and buyer Randy and we were super excited about it was like Hey, really get check out this new product. This is growing a whole mushroom kit. And I remember he saw that big, literally basketball sized clear bag of fungus. And he was like, Oh my God, it was disgusting. ever seen. No one’s gonna buy that. What do you think it’s kind of a cool concept. And he really taught that first lesson about like the power of design and Simplicity’s. Like, if you want to get people to try something new, you got to make it look good and be easy to do. And through that feedback, we ended up launching the mushroom kit.

Alan
Now, what is the vision that is you sell the masters? What are you trying to accomplish here? I mean, obviously, masters have been in storage for a long time. So how do you differentiate yourself?

Nikhil
I think that’s obviously you know, where we found our passion with with regard to home motion kids, we realized that our true passion wasn’t necessarily becoming the largest mushroom farm in the world was like, creating really, I think inspiring experiences that we could get an every single kitchen or classroom across the country. And, you know, we realized that at one point, we were doing both the fresh mushrooms and the mushroom kits. And we honestly almost learned a business because we realized, even they sound so similar. They’re two very different, you know, business just concepts and strategies, ones like a fresh wholesale produce, and once a branded consumer good, but we realized that our true passion is trying to build a brand that could inspire people across the country, not just in our backyard with a fresh produce. And we decided to you know, drop the fresh mushrooms and run as fast as we could with the mushroom kits. And it’s been a lot of fun since then seeing it grow from just a couple farmers markets and Whole Foods to reselling it nationally now at Nordstrom and Home Depot and Whole Foods. So that’s really our vision that was like connecting people to their food.

Alan
You know, the interesting thing through this process is neither you or Alex, you know, we’re agricultural majors. You know, so So, but but the mushroom kits that you are making are absolutely remarkable. How did you figure out that you could produce these kits on a large scale?

Nikhil
We are, you know, honestly, it’s been so much time there. And we’ve been really fortunate actually, this year was a big transition year as a business just strategy shift was we used to do all the farming ourselves had a big warehouse in Oakland, a 10,000 square foot facility where we were growing all the mushroom kits and we were just going through so many ups and downs of just learning as he went and first and last time when we overheated. 1000s of kids in the summer just because we didn’t know how to properly adjust for the temperature and just kind of issues like this Catholic coming up. But you know, we were still growing and figuring out but Along the way, we were being mentored by this really cool farm up in Sebastopol called gourmet mushrooms and these are the first guys like 25 years ago to go shoot taki machines in North America so like the best of the best and we finally got to a scale last December where they were like a it might make sense for us to you know make these guys you know these bags for you. And we try it out early this year and just the consistency of quality which is night and day from where we’re able to do and actually move all of our production up to their farm this April and it’s been by far the biggest shift and such a big lesson learned of like find people who do what they do best and partner with them rather than try to you know, reinvent the wheel so that partnership has led us to scale to much larger distribution this year.

Alan
I’m with Nikhil Arora he is a co founder back to the roots company in some focused on selling the gourmet mushroom at Great rameshan distributed through whole foods you have noticed trims and Home Depot Home Depot. They can we need to take a quick break. And we’ll be back after these messages. I want to talk more about the building up the company Okay.

Alan
Welcome back, I’m here with Nikhil Arora he’s a co founder of back to the roots a company focused on growing organic or gourmet mushrooms. You can pick it up at Whole Foods Home Depot or at Nordstroms. And, you know, it’s an interesting concept about, you know, the the organic notion here and also about sustainability of a product by recycling, you know, what we use? What role do you feel that sustainability will play in society? For the future?

Nikhil
You know, I think sustainability is its word, not only we’re going where we kind of have to go as a society, the way we’re using our resources right now. It’s just, it’s not going to last. And I think the coolest thing, the most exciting thing about now is everything businesses are realizing that you can do good and do well, at the same time. That’s it’s such a powerful concept and, you know, looking after the environment, or, you know, creating products in the right way, they’re gonna last for a long time and not just be discarded after one time you so just thinking through the next few steps, doesn’t have to hurt your bottom line. And there’s so many companies that we look up to just like Patagonia and that have just been wildly successful in terms of business and profit and revenue, were still so committed taking care of their communities. And I think we’ve been fortunate to have some computational models now to show us there’s a kind of new way of doing business.

Alan
You know, you mentioned the oyster mushroom coming kit, or the other mushrooms that you can grow there too, or?

Nikhil
So right now we actually just focus on the oysters. And the main reason is they just didn’t grow so fast in 10 days, you this massive crop of mushrooms right out of the box. They’re delicious and gourmet. So we should talk ease, for instance, actually take about 90 days to grow. So we were like, Let’s focus first on getting creating a pie that anyone can enjoy, you know, no matter if you’ve agreed with them or not. And then we can start developing kind of different varieties.

Alan
You have a product down here, you brought into this. Yeah, let’s see this.

Nikhil
So these are actually ones are just starting to grow. Okay, so this is, this is my day six or seven right there.

Alan
Okay, this is seven days of mushrooms. And so what do you do you you just break the.

Nikhil
You ask you when you get a box is open up the front panel with the bag and just water like once or twice a day, and that’s about day six or seven and literally in two or three more days, that’s just going to be a crop this day. They doubled in size every day. So you get out of this that side about a pound of mushrooms in 10 days and you just cut it like a piece of grass off and you throw in pastas or pizzas or soups, just kind of a it’s a really cool way to get fresh fruit at home and put in your kitchen windowsill and start growing.

Alan
Then once this is done when you turn over the the packaging grow the other side?

Nikhil
Open the bag and you can turn it around and get the other side as well. So you can go a couple of crops out of it and it’s uh I don’t know it’s pretty cool to see for us it’s still good. It’s so exciting to see how fast they grow and our customers just get amazed like you talk about for kids that growing tomatoes in 90 days think a lifetime 10 days is.

Alan
Like just just adding water and wow, so So that’s you know, and so then these mini the boxes, I understand you change the packaging size rebates.

Nikhil
We used to have a larger kit that’s maybe almost double the size and that was retail for $20. And yeah, I think real was that, you know, we had a core group of customers who enjoyed that and loved it, he got even more money out of it. But we had more people who were just like looking at like, I It’s kind of cool, but 20 bucks kind of a lot. And we’re like, can we create some, it’s more accessible for people who want to try for the first time and maybe have never even thought about growing mushrooms before? You know, how do you make that experience more accessible? So we launched little mini farms just a couple of weeks ago, actually for the holiday season. And it retails for $12 in stores.

Alan
Wow. So now as you as you went through this process, you got a wide variety of distribution channel from Home Depot, Whole Foods, and Nordstroms. You know, what, what processes do you go through when you’re thinking about how am I going to release product?

Nikhil
Yeah, you know, a lot of is finding people and partners really kind of believe in what we’re doing. It’s not just a transaction, I think it Whole Foods in North America with the Aquafarm now we’re selling at Petco, and companies that I think have really gotten behind our mission. And at our size scale company, we those partners are huge. So but it’s been, it’s, I think the biggest reason we look back and joke around sometimes like, you know, mushroom kid or a fish tank, if you knows basic level, they’re selling clothing retail at a pet store, garden store and natural food company, I think the biggest reasons because I think the products, it’s not about like the what it’s kind of like the why, like, what they’re what the vision is behind them, I think, for all these companies, it kind of hits home with that level of inspiring your customers to kind of get creative or, you know, work with their families to kind of learn more on education. And, you know, I think only Nordstrom is selling it, because of the mushroom kit that they’re selling is like an awesome family project. You know, parents and kids are learning about their food. And so I think it’s one big thing we focus on is like, helping our retailers tell their customers is just the vision behind the products, not just what it is, but why it’s out there, why it’s cool.

Alan
Now, as an entrepreneur, you’re in an industry where every piece of inventory you’re owning until you actually sell. So obviously there’s there’s some costs associated with how do I start this up and launch it? And so when you went through this process of do we due to debt or equity raising, you know, what, what brought you the decision? And ultimately, what was your decision you have?

Nikhil
So, you know, as of now, it’s all been honestly, it’s been a really cool mix of partners have helped us get here. It’s all been through either debt financing credits, if you applied for so many business plan competitions and grant money, probably $150,000 in grant money from business planning competitions, and then crowdfunding, so you know, we first year so before we’re bankable, we’re just trying to create revenue and then applying business plan competitions and finding support that way. So we got like $50,000 for Miller, Coors $50,000, from the Hitachi Foundation, to their competitions, and then start working the really cool bank in Oakland call one one Pacific Coast bank and just recently actually got our first kind of large scale investment. It’s a $500,000 convertible note from a really cool fund called fun good jobs in Oakland. It’s a nonprofit fund. It’s all about like creating good jobs or community so it’s trying to find like mission aligned partners I guess, you know, but it’s all been through debt so far. And with the Aquafarm though we actually did a really is for us is a huge learning lesson super cool experience at crowdfunding on Kickstarter. So we had $100,000 goal to launch a new product on Kickstarter last November in December and European intuited $48,000 in 30 days so it’s just a crazy one month and to So close your community can help you fundraise a product you know.

Alan
The Aquafarm is neat. I want to actually what I like to do is have you over for one more segment can we talk about the SOCO farm because basically it’s a it’s a completely sustainable environment. Yeah, that she created there but we need to take a quick break. I visiting here with Nikhil Arora he is the co founder of Back to the Roots company focused on selling organic mushrooms and also the off go farm. That gal will be right back after these messages.

Alan
Welcome back and with the Nikhil Arora. He is the co founder of back to the roots and it’s a company that has two products now they have the organic mini mushroom farm and also the Aqua farm and the kalam wanna talk about this soccer farm, but I can do Just get the you brought one here. And so once you explain to me what what exactly this is sir.

Nikhil
So the Aqua farm actually uses the signs of aquaponics we combined fish and plants that are really cool symbiotic relationships so you can just put a little beta fish or any kind of small fish in your tank, and then all that fish waste is normally kind of builds up and it is why to clean your water and so often the fish tanks actually in this case gets pumped up to fertilize your plants and you can go fresh basil or we say there’s a little pump in here that pumps water, okay, you have the water is pumped into fertilizer plants and the plants in turn are cleaning the water for your fishes in some sense, just like a self cleaning fish tank that grows food where the fish are feeding the plants, the plants clean the water and just a little ecosystem you can put in your kitchen countertop and your kids classroom and have a pet fish and fresh food at the same time.

Alan
So the what is the fish eat in here.

Nikhil
So you actually do feed the fish you feed the fish and then okay. But the cool thing is you never have to change the water, which is one of the kind of most annoying things and most fish tanks because the plants are constantly breaking down. The fish waste the ammonia in it as amazing plant food they need to grow. So it’s really cool the symbiotic relationship and it says that really like cutting edge can you sustainable farming technique of aquaponics and we visited this big aquaponics farm about a year and a half ago now. And it was just this isn’t Milwaukee and this guy will Alan had 1000s of tilapia fish growing tons of fresh food. And we just both left that place totally inspired like this is a cause we have grown food. How can we do we deal with the mushroom kids like shrink this concept down to be a tabletop educational experience?

Alan
Where do you get the Aqua farm here?

Nikhil
So we sell the Aqua farm now at Whole Foods Nordstrom and Petco nationwide and then on our site back to the roots.com.

Alan
So as you’ve grown this company, you’re one of the top 10 I think you’re number seven on the list for fastest growing companies in Silicon Valley. What have you what challenges and setbacks Have you experienced along the way?

Nikhil
Yeah, you know, the biggest, the biggest challenges for us and I think a lot so many small companies faces and it’s been a huge lesson we’ve learned to is just around this idea of focusing, I think when you’re a small company, there’s so many different ways you can go here so many different ways you advisors and mentors are telling you, oh, you should do this, you can do this. And I know for a while we were doing fresh mushrooms mushroom kits were selling soil amendment like soil, fertilizers, just all these different things. And I think we realized that we almost wanted a business trying to do that, because in some way, not putting all the energy you need to one of these things. And it was a rough first year and a half, we went through a point where we were literally almost at a cash and no cash flow because all our products are kind of just not as good as it should have been. weren’t really selling. And we kind of learned a lesson like we got to pick one thing and just commit to it focus in on this make that one product the best thing in the world, you know, and it’s not the best honestly, the best piece of advice I’ve heard yet it’s every day I focus on I listened to it is that true focus is saying no to the things you really want to do. And I don’t know why either lie just stuck with me. And it’s really helped, I think to find a company where like, we’re going to not have 1000 products out there. Each one we do is make sure it’s done right and has a purpose to it. And but yeah, we were spread way too thin early on.

Alan
Now if that person is interested in getting your products, how would they go about that?

Nikhil
Yeah, so they can visit our website back to the roots.com or ticket your local Whole Foods Petco or Nordstrom, or Home Depot. So it’s really sad this holiday season just says like kind of fun, green gift ideas for the whole family. So if people want check them out, that’d be that’d be amazing.

Alan
And what is the mini farm retail for so.

Nikhil
The mushroom mini farmers is $12 So kind of cool under $20 gift idea and then the article fire aka farmers $60 aka from actually it comes with everything you need to come to their gate exceeds a coupon for your fish, the pumps Our goal was to make that Oxfam as kind of self sustaining. So once you buy that give us a gift they have everything you need.

Alan
Amazing here today with Nikhil Arora, the co founder of back to the roots, McHale, thank you for being here today.

Nikhil
Appreciate it.

Alan
Thanks for joining us here in America dreams. Join us next week on AM 12 20k d o w

 

 

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This transcript was generated by software and may not accurately reflect exactly what was said.

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