#IBuiltThis: Latino Entreprenuer Goes Back to His Roots

Alejandro Velez and his business partner, Nikhil Arora, were undergrads at University of California, Berkeley, so the story goes, where they were taking a class in which they learned that mushrooms can grow on coffee grounds. It was, perhaps, an unlikely “A-ha!” moment; at an age when many college students’ experiments with growing are limited to yeast cultures required to make beer, Velez and Arora were experimenting with mushroom farming… in the kitchen of their frat house.

Velez already knew a thing or two about agriculture. His uncle and cousin run a fertilizer company in Colombia, where Velez was born and from which he emigrated when he was 10 years old. But he wasn’t exactly intending to turn into a farmer himself; Velez, like Arora, was on track for a successful career in finance. As it turned out, his professional journey would draw heavily on both skill sets.

Velez and Arora founded Back to the Roots in 2009, the same year they graduated. Their first product was a small box—not much larger than a brick—packed with the substrate any amateur farmer would need to grow their own mushrooms at home, in just 10 days. It wasn’t long before the dream cooked up in their frat house kitchen took root. “The idea that we could turn a waste product into food fascinated both me and Nikhil,” Velez says of the grow-your-own mushroom kits. “Not only were we able to turn a waste product—the coffee grounds– into our mushroom substrate, we were able to sell the waste from the mushrooms to local farmers and gardeners who were taking our waste product of a waste product and turning that into food.”[pagebreak]

But when they launched, Velez admits, they weren’t entirely sure that selling DIY mushroom-growing kits would actually be as lucrative as, say, a finance job at a big Silicon Valley firm. Their hunch, though, was that the market for food was changing rapidly and the moment was right for them to stake their own corner of the market. “Organic food was more popular than ever,” Velez says, “and we realized that people were paying more attention to what they were eating. We anticipated that there would be a shift beyond organic that is really starting to take hold today. It’s no longer enough just to say that your food isn’t sprayed with chemicals. Consumers now want to know where there food comes from and be able to name all of the ingredients in it. They want simplicity and transparency.” And what offered simplicity and transparency more than customers growing their own food?

To be sure, the business partners were entering a market dense with competitors, if not offering the exact or similar products as Back to the Roots, chasing the dollars of consumers with a disposable income but also one that was finite. Yet, Velez and Arora made a few key decisions early on that have served them well. First, they attracted a roster of heavy-hitter investors, not just obscure angel investors, known only to the Silicon Valley entrepreneurs eager to find funding, but those with general name recognition in the key areas Back to the Roots wanted to own: organic food and conscious consumerism.

Among these investors were David Barber of Blue Hill Farm, Blake Mycoskie of TOM’s, and the widely known food author, Michael Pollan. These supporters weren’t just a source of start-up cash, Velez is quick to point out; “they are our mentors. Each and every one of them helped us build our business before they gave us a single dime.” Velez says it’s the parity of their vision that makes them natural supporters of Back to the Roots. “They were attracted to us because they believed wholeheartedly in our mission of changing the future of food,” he says, acknowledging that most of them were doing the same kind of work themselves, if in a different segment of the food chain. [pagebreak]

The other key to their success—and to their growth—has been making aggressive inroads into the market. While many other organic brands focus on getting before buyers at Whole Foods and similar higher-end food retailers, Velez and Arora realized that the opportunity to reach their target consumer was actually much broader. “We’re in 14,000 stores across the country, “Velez explains, “from Nordstroms to Urban Outfitters, from Target to Petco.” They’re also, of course, available in grocery stores, and online through Amazon and Uncommon Goods. 

The strategy has paid off– literally. Even though they only had two products in their inventory until this year—the DIY mushroom kit and a grow-your-own herbs item– they’re on track to generate $8 million in revenue by the end of 2015. Velez is slightly incredulous when he thinks about how far he and Arora have come in such a short time. “We were in a fraternity kitchen five years ago,” he says, “and this is the second year in a row that we’ve been listed as one of INC. Magazine’s 5,000 fastest growing companies in America.” Before year’s end, the dynamic duo will have added seven more products to their inventory, including cereals.

Financial success, though, isn’t Velez and Arora’s only goal, or even their primary one. “Our mission is to undo the future of food and teach people about where their food comes from. One of the most important things that we can do is to teach younger generations about the importance of healthy food and teach them about what they eat,” Velez says. To do that, he and Arora have to keep dreaming big. “In the long run, we’d like to hit more and more aisles of the grocery store. Our goal is to become what Kraft foods would have been had it been invented by Millennials and built on radical transparency.”