Midway through their final semester at the Univeristy of California, Berkeley, Nikhil Arora and Alejandro Velez were getting ready for life in the corporate world. Despite the sluggish economy -- this was the spring of 2009 -- they had attractive jobs lined up, Nikhil as a consultant at PriceWaterhouseCoopers, Alex as a banker at Credit Suisse.
Two years later, they have no regrets. Their startup, called Back to the Roots, is literally a growth company: It sells mushroom kits that enable people to grow and harvest up to 1.5 pounds of gourmet oyster mushrooms in as little as 10 days, out of a cardboard box filled with used coffee grounds. Out of the box thinking, you could call it.
Despite a stumble or two, the company’s doing well. Back to the Roots sells the kits online and at Whole Foods Markets. It employs about a dozen people, most at a 10,000 square-foot warehouse in west Oakland, CA. Every day, they turn trash -- about 20,000 pounds a week of coffee grounds, collected from Peet’s Coffee & Tea outlets in Northern California -- into cash.
I spoke with Arora this week via Skype because I like businesses that find a way to extract value out of stuff that would otherwise be thrown away. That idea was what intrigued Arora and Velez, too; they were taking a class in business ethics when the professor, Alan Ross, mentioned that mushrooms could be grown from coffee grounds. After class, Nikhil and Velez -- who, until then, didn’t know one another -- approached him to learn more.