When University of California Berkley business students Nikhil Arora and Alex Velez looked down into a bucket of thriving mushrooms one morning in 2009 in Velez’s frathouse kitchen, they saw they were on to something big. A few pounds of used coffee grounds they had collected from a nearby coffee shop turned out to be a perfect substrate on which to grow edible mushrooms. After passing a taste test from a chef at Chez Panisse restaurant in Berkeley and receiving positive interest from Whole Foods, Arora and Velez began to realize the enormous potential of growing and selling gourmet mushrooms within a zero-waste production cycle. With the help of a $5,000 grant from the university, Back to the Roots Ventures (BTTR) was launched.

The idea that used coffee grounds could be used to grow mushrooms came from a lecture in a course on ethical business practices and reusing materials. When they tested the concept Arora and Velez were far from experts. While interested in environmental consciousness and social issues, they were preparing for careers in investment banking and consulting. Creating BTTR was a sudden leap into new ways of thinking about business. “We definitely learned along the way,” Arora says.  “Having a bucket of mushrooms in front of us that was made from a common waste stream helped us see that business could be sustainable, profitable, and do good all at the same time.”  

BTTR has since met with great success, attracting the attention of media the likes of CBS, Oprah, and The Wall Street Journal—Arora and Velez have even given TEDx talks. In addition to selling their mushrooms wholesale to Berkeley-area restaurants and Whole Foods, the pair have created grow-at-home mushroom kits that can be purchased from their website. The sales seem to be growing as fast as their mushrooms; in 2012 they project collecting and reusing over 3.6 million pounds of coffee waste that would otherwise go to a landfill. After being pressed into bricks ideal for growing the mushrooms, the newly nutrient-rich coffee grounds are sold as a compost blend for household plants or donated to school gardens.

With the popularity of the mushroom kits, Arora and Velez unexpectedly discovered that their most avid mushroom-growing fans were not local food advocates, but children eager to try their hand at gardening. “We were so surprised when the best response to the kits was from kids, and that they were really interested in learning about the mushrooms, and fascinated by farming them on their own,” says Arora. BTTR has since branched out into education by organizing fundraisers, leading hands-on sustainability workshops, and hosting urban farm tours for schools. They believe it is immeasurably valuable to teach children to be conscious of both their own health and the environment’s. BTTR hopes to see that developing healthy habits now will influence children’s decisions later in life, ideally prompting wider support of local food movements and commitment to environmentally beneficial systems of production.

As their involvement with schools suggests, the effects of BTTR’s home mushroom farms reach much farther than the food community, touching on the importance of closed-loop consumption cycles, recycling and reusing, community development, and using small urban spaces in a productive way. Prior to this adventure, Arora nor Velez had no specific interest in food; in fact, they knew next to nothing about mushrooms. They found, however, that food was at the intersection of progressive ideas and actions they believed in. As Arora says, “[The mushroom kit] has become a medium for much more than just local, sustainable food.”

Though BTTR’s fluid closed-loop system seems elegantly simple, the two business schools graduates had to find solutions to many kinks in the process before perfecting their current model. “Nothing is as easy as it looks!” says Arora, noting that figuring out the best setup for growing the mushrooms alone took a lot of trial and error, not to mention working out how to design and deliver the DIY mushroom kit. Essentially, though, the beauty of their working system is that is it modeled from the world’s most efficient sustainable design: nature. “Our system is simple because it mimics nature, and much of our trial and error has come from learning how to mimic that,” says Arora.

Arora and Velez are keenly aware of representing a new group of social entrepreneurs and setting an example of what is not only possible, but necessary. According to Arora, the most pressing sustainability issue in the business world is transparency. “If businesses aren’t honest about what they’re doing—sustainable or not—we won’t be able to make any progress. Sustainable marketing is not the same as being sustainable, and if there’s no transparency, people will never know the difference,” he says. BTTR aims to inform consumers about all stages of their business cycle in an effort to promote values that will drive social change.

In creating BTTR, Arora and Velez have shown that sustainable and ethical business models are an urgent social responsibility—and that they can work beautifully. Moreover, we needn’t dig very deep to understand the makings of this success story: two passionate individuals, a good idea, and a lot of hard work.