About Smallhold

Website | Instagram

“Smallhold wants people to eat more mushrooms. We are mainly just trying to get mushrooms on people's plates in any sort of way possible. We want them to be grown locally, so they're fresh and enjoyable.” – Andrew Carter

Andrew Carter is co-founder and CEO of Smallhold, which is upending the food industry by growing their mushrooms in Michelin-star rated restaurants, grocery stores, and through their network of onsite and macro farms. Smallhold is inverting the way food is traditionally grown and distributed. Today, 68% of all mushrooms consumed in the United States come from a single town in Pennsylvania called Kenneth Square. 400 million pounds worth of mushrooms per year, to be exact.

This means that most mushrooms are transported across a vast distribution network to reach stores all around the United States. Smallhold knew there was a better way, so they spent years creating a proprietary set of technologies that allows them to grow mushrooms in an incredibly small footprint, about the size of a small standing cabinet.

The first Smallhold onsite farms went up in restaurants around New York, which was followed by onsite farms and grocery stores, including Central Market stores across Texas, where these onsite farms sit right next to where the mushrooms are sold in the grocery store. Smallhold is an incredible example of what the future of food looks like. They're inverting the single farm approach, and pioneering a footprint of small onsite farms and regional macro farms.

They've created a whole slew of proprietary technologies to automate the process and help restaurants and grocery stores grow the same amount of mushrooms every single week, and they're just getting started. In this episode, we cover the wild world of mushrooms; from the Netflix documentary, Fantastic Fungi to the book, Entangled Life, to Mushroom People. We go deep on how mushrooms work, why most of us have eaten only a single variety of mushrooms our entire lives, and why we should all be eating more mushrooms.

Andrew covers why the modern food industry is broken, from why most apples you eat are nearly a year old, and why most fish sold in the United States, even if it's caught in the States, is sent to China to be processed, and then back to the US to be sold. We cover the technology behind Smallhold, from the incredible number of sensors embedded into their farms, to how much data they crunch every day, to grow incredible mushrooms reliably 24/7, 365. And all of the lessons Andrew has learned along the way, from how they built a new direct to consumer side of their business during the pandemic, to how they've iterated and refined their business model over the years.

‍

Chapters

This episode is our definitive guide to growing the world’s best mushrooms in high-tech mini-farms. In it we cover:

00:00:00 – Introduction
00:02:51 – The move from hydroponics to mycology
00:13:34 – How Smallhold is getting people to eat more mushrooms
00:19:02 – The science and complexities of growing mushrooms
00:24:02 – The decomposition cycle and mushroom growth technology
00:32:13 – Revamping the food industry
00:37:47 – The concept of distributed farming
00:41:56 – How branding fresh produce is different from other products
00:45:19 – Smallhold’s presence in local restaurants
00:51:52 – Fantastic Fungi from Netflix has increased interest in mycology
00:54:33 – The importance of letting go as a founder

Listen to the episode on Apple Podcasts, Spotify, Overcast, Google Podcasts, Amazon Music, Castbox, Pocket Casts, Player FM, Podcast Addict, iHeartRadio, or on your favorite podcast platform. You can watch the interview on YouTube here.

Our Favorite Quotes

Here are a few ideas we'll be thinking about weeks and months from now:

“A lot of people in developed countries are living on a global diet, and mushrooms just have so much opportunity with health and nutrition and all of that, but also just so much opportunity in that people don't know what you can do with them.”
“Fungi is its own kingdom and they are more like animals than like plants.”
“If you're buying an apple, a lot of the time, it's a year old. There's an amazing innovation in making it feel like it's a fresh apple.”
“We can grow outdoors and actually feed people, but my opinion is more that the climate is changing so fast that a lot of the organisms that we grow can't evolve fast enough for the environment that we're going into, and so we need to figure out these solutions now because in 20, 30, 40 years, it's likely that we're going to be relying more on these things to have at least a somewhat similar diet that we have today.”
“There are so many different paths to get to success, even at the same milestone that you want to get to, and sure you need to track it appropriately and you need to communicate that in the right ways for your team and your shareholders, but trusting your team as long as they're motivated is the most important thing you can do.”
“The world is scary and we need to worry about sustainable food and all this kind of stuff and Smallhold can really help with a lot of that, but at its base level, you should have fun while you're eating and you should really enjoy eating and feeding your family because it's one of the most enjoyable things you can do. Try to try mushrooms out because they can be a lot of fun and they can help the world at the same time.”

5 Ways to Dive Deeper

Want to dive deeper? Here the best content we've curated on this subject:

Fantastic Fungi: This documentary from Netflix gives a beautiful, in-depth look at the wonders of mycology. (1 Hr 30 Min)
The Future of Restaurants and On-Demand Food with Michael Joseph of Scratch Kitchen on Outlier Academy: In this episode, we discuss an entirely new approach to restaurants that offers multiple brands and food types—from salads to sandwiches and burgers—all under one roof, along with Michael’s views on the future of food delivery. (1 Hr 38 Min)
Creating a Healthier Coffee Alternative with Lopa van der Mersch of Rasa on Outlier Academy: In this episode, we discuss a brand of adaptogenic tonics (most featuring chaga mushroom) often used as coffee replacements. (52 Min)
6 ways mushrooms can save the world: This TED Talk with Paul Stamets (who has authored many of Andrew’s favorite books) introduces the many ways mushrooms can benefit us, such as by cleaning polluted soil, making insecticides, and even treating smallpox. (17 Min)‍
The Nutrition Source – Mushrooms: The Harvard T. H. Chan School of Public Health provides a thorough overview on mushroom nutrition, types, and even recipes;. (10 Min)

Books Mentioned

The following books came up in this conversation with Andrew Carter:

Filipinx: Heritage Recipes from the Diaspora by Angela Dimayuga, Ligaya Mishan, and Alex Lau

Selected Links

We covered a lot of ground in this interview. Here are links to the stories, articles, and ideas discussed:

Transcript

Daniel Scrivner (00:00:06):

Hello, and welcome to another episode of our Outlier Founder Series, where we dig into the ideas, frameworks and strategies used by the world's best founders.

‍

Daniel Scrivner (00:00:14):

I'm Daniel Scrivner, and on the show today, I'm joined by Andrew Carter, co-founder and CEO of Smallhold, which is upending the food industry by growing their mushrooms in Michelin-star rated restaurants, and grocery stores, and through their network of onsite and macro farms. Smallhold is inverting the way food is traditionally grown and distributed. Today, 68% of all mushrooms consumed in the United States come from a single town in Pennsylvania called Kenneth Square. 400 million pounds worth of mushrooms per year, to be exact.

‍

Daniel Scrivner (00:00:43):

Which means that most mushrooms are transported across a vast distribution network to reach stores all around the United States. Smallhold knew there was a better way, so they spent years creating a proprietary set of technologies that allows them to grow mushrooms in an incredibly small footprint, about the size of a small standing cabinet.

‍

Daniel Scrivner (00:01:00):

‍

Daniel Scrivner (00:01:24):

‍

Daniel Scrivner (00:01:51):

‍

Daniel Scrivner (00:02:26):

You can find the show notes and transcript for this episode at outlieracademy.com/120. That's 1, 2, 0. And you can learn more about Smallhold at smallhold.com or by following Smallhold on Twitter. Please enjoy my conversation with Andrew Carter of Smallhold.

‍

Daniel Scrivner (00:02:44):

Andrew Carter, thank you so much for the time, and for joining me on Outlier Academy. I am thrilled to have you on to talk all about Smallhold.

‍

Andrew Carter (00:02:50):

Thanks for having me.

‍

Daniel Scrivner (00:02:51):

We're going to spend the next hour-ish, talking about a business you've been building since 2017, you're founded in Brooklyn, and you grow mushrooms, and you're using basically mushrooms to upend the food chain and to rethink how people consume food, how food is sourced, how food gets to consumers. Before we get all of that, can you just share a quick sketch of your background?

‍

Andrew Carter (00:03:15):

Yeah, totally. I grew up in Los Angeles in California, I wanted to get as far away from there as possible when I graduated high school, and so moved to Vermont where I actually met my co-founder. We were roommates in college. We did not make... This is not a college project. That was a long time ago, but I studied bio remediation technology, essentially. It was heavy chemistry and biology, and couldn't find much work doing that out of school, but very excited about it. I ended up finding a way and a career in the indoor agriculture space.

‍

Andrew Carter (00:03:48):

I've had the opportunity to work on some amazing large scale commercial, indoor operations, mainly doing hydroponic leafy greens and herbs. And what that is essentially like tons of control, tons of climate control, which enables you to grow produce year round in places where you normally can't grow year round. I Visited some amazing facilities and helped people build stuff all around the world, and so it's been a really fun adventure doing all of that.

‍

Andrew Carter (00:04:19):

I'm very much a science guy and kind of an operator guy, and eventually kind of got a little burnt out on the leafy green space, and wanted to grow something differently, and I was kind of exploring all these different kinds of things that we could grow indoors, and found mushrooms, extremely fascinating. I always have, but after spending so much time growing indoors, I really thought there might have been some parallel and it would've been easy for me to figure out, but I was completely wrong.

‍

Andrew Carter (00:04:50):

Fungi are it's own kingdom and they more like animals than like plants, and so growing them in the ways that we grow them, that took a lot of work and a lot of new R&D, and a lot of new development that we've been doing over the years.

‍

Daniel Scrivner (00:05:05):

You talked about starting in kind of leafy greens and then this indoor farming, and then moving over to mushrooms. I'm not aware of anyone else that really specializes in mushrooms. What does that space look like, of people who focus just exclusively on mushrooms?

‍

Andrew Carter (00:05:19):

Yeah, the mushroom space is very interesting. There are people who focus on mushrooms. I mean, there are mycologists that are out there. I am probably a mycologist to a bunch of people who aren't mycologists, but I don't really consider myself a mycologist. I'm more of like a cultivator or a grower, farmer. There are people who go and get PhDs in this kind of stuff, and you would not want to forage with me. I do try, but let's not do that.

‍

Andrew Carter (00:05:45):

The mushroom industry, commercial cultivation wise, a lot of it is centralized in Pennsylvania, in the United States. About 80% of it is in that region, and a vast majority of it are button mushrooms, and so white, brown and Portobello mushrooms. They're all the same mushroom. They're Agaricus. Grown in similar ways and they're a fine mushroom, we talk lot smack about button mushrooms.

‍

Andrew Carter (00:06:13):

They're not bad for you. They are very good for you actually, and so if it's the only mushroom you can get, that's great, but there's just so much more out there. When you get into specialty mushrooms, there are some larger commercial growers who are becoming one of them, but most of the time people are either sourcing them from farmer's markets, like smaller growers and sell locally, or at restaurants, or they import them.

‍

Andrew Carter (00:06:35):

There's a much larger industry that exists in Asia, mainly in China, Japan, and Korea about, I think it's estimated like 80% of the global mushroom production is in China. It's a way bigger kind of industry out there. There are pros and cons of those kinds of production. Every region has their own sort of way of doing it, in the mushroom area. It's similar to kind of leafy greens in that a lot of the emerging technology, originally came out of the Netherlands actually.

‍

Andrew Carter (00:07:08):

So when you're looking at greenhouse stuff, a lot of it is Dutch technology. They've been doing it for a really long time, but a lot of the newer tech is coming out of Asia as well, which, because there's so much more interest there. The US is very young, which I think is really exciting, and I think a lot of people from overseas think is really exciting. The average consumption here is like two to three pounds per person per year. In China, it's estimated to be like 20 to 30 pounds per person per year.

‍

Andrew Carter (00:07:38):

While you wouldn't expect an American consumer to quite get there, just adding a pound or two and completely changing the face of the mushroom industry in the United States, is totally feasible when you look at numbers like that.

‍

Daniel Scrivner (00:07:51):

Yeah. I mean, that's a order of magnitude difference. And so, yeah, even if you double from there, it's a huge step function change.

‍

Andrew Carter (00:07:57):

Yeah, it makes sense. And there's not a lot of produce like that. It's like leafy greens, a lot of berries and stuff. The difference between regions, isn't that much. A lot of people in developed countries are living on a global diet, and mushrooms just have so much opportunity with health and nutrition and all of that, but also just so much opportunity in that people don't know what you can do with them.

‍

Andrew Carter (00:08:25):

And so we want to be there providing that high quality product, growing locally, doing all the things that we care about and making sure that people are eating the right kind of mushrooms, as much as possible.

‍

Daniel Scrivner (00:08:35):

Yeah. I want to go back to something you said a moment ago, just because I'm curious. You said that 80% of production happens in Pennsylvania. Is that climate related? Is that kind of just where the industry took root? Why is that the case?

‍

Andrew Carter (00:08:49):

Yeah, there's a lot of theories. It's all in this area called Kenneth Township. It's outside of Philadelphia, and that area, apparently, there were a bunch of entrepreneurial families, I think mostly of Italian descent, in like the 1800s, that had access to horse manure when they were building Philadelphia. You can grow button mushrooms on animal byproducts, and they did that, and created these very large... Some of them are still family owned. There's private equity involved in a lot of these facilities as well now, but just these big farms growing buttons.

‍

Andrew Carter (00:09:28):

It's not to say that there's not some benefits of growing there. It's more about a distribution advantage there. Like you have access to the East Coast, all of the major cities, and you can get into the Midwest, and so there's a lot of benefits from being there. But I think the origination of it was mainly just because there were some people there at the right place at the right time.

‍

Daniel Scrivner (00:09:51):

Yeah. It's fascinating. I want to ask one more question then we'll dive a little bit deeper in the science of mushrooms, and growing mushrooms and talk about Smallhold's business. You talked about you'd been growing leafy greens, you got interested in mushrooms, when did you decide that you wanted to start a business growing mushrooms? And what was that conversation and decision like?

‍

Andrew Carter (00:10:10):

I was consulting for a while, doing the leafy green stuff. I worked for a few companies and then found a, found a home with a group called Agritecture, a close friend of mine named, Henry Gordon Smith started this business, and they have a blog they're still consulting. It was great. I was kind of the science guy. Eventually, my job was helping a bunch of people with business models, and a lot of people were raising a lot of money on some of my business models, but I was also just trying to help people problem solve because people make promises that are hard to keep sometimes in this space.

‍

Andrew Carter (00:10:41):

And I kind of just thought that I wanted to do something on my own business, and try it out. I think that towards the very beginning with Smallhold, I had the ambition of creating a business. I wasn't quite sure exactly how big it would get, that happened a little later. I was playing around with the idea before 2017, when we started. I was working and then building stuff on the side and trying to figure out... Like I had a little lab, it looked like we were making drugs in the basement. It looked crazy, like pressure cookers and propane stoves, and all this kind of stuff. It's how a lot of mushroom growers start honestly.

‍

Andrew Carter (00:11:23):

I knew that I wanted to do something but I was on my own at that point, and I thought of the name, and I thought of the loose concept of a distributed farm. I definitely started thinking that we would do mushrooms. Then my co-founder Adam, came back from a motorcycle trip, and he had his own experience with a bunch of different startups, mainly in data privacy and technology, which just helped me out. We were we're close friends, and so he would just sort of help me grow mushrooms.

‍

Andrew Carter (00:11:52):

We started getting these calls from amazing restaurants and grocery stores, because people started hearing about this random stuff we were doing on the weekend. I had all these ideas of building this technology out, and we just decided to quit our jobs in 2016, and go for it in 2017. We got very organized very quickly. We were lucky enough to go through the Techstars program, which is an accelerator program in 2017, right in the beginning of the company. They really helped us organize our thoughts, to make sure that we're communicating our business in the right way to the right investors, and accessing finance in interesting ways, and all of that really helped accelerate us, what they're supposed to do.

‍

Andrew Carter (00:12:34):

But yeah, I've been trying to do something and now it's definitely something. I mean, we're a fairly large organization now, with national distribution, with farms all over the place, and so it's a very exciting time over here.

‍

Daniel Scrivner (00:12:47):

I'm going to try to describe your business model because I think it's really interesting, and then I'd love you to kind of flesh out from there and talk about how each of these kind of pieces of the business came to be. But effectively, I think one of the things that's fascinating about what you're building, is this idea of a distributed farm. So taking something that would traditionally be one farm, as an example, as a farm in Pennsylvania, serving all of the United States, and turning it into this network.

‍

Daniel Scrivner (00:13:10):

You guys have done that by having onsite farms, which I want to talk about in much more depth, but effectively, it's this kind of small mini farm that might live at a restaurant or a grocery store. You have regional hubs that are much larger, that do more volume, that can serve grocery stores. And then you have this kind of wonderful direct to consumer side of the business, where people can actually grow their mushrooms at home. How did each of those come to be, and I guess what's unique about each of those elements?

‍

Andrew Carter (00:13:34):

Smallhold wants people to eat more mushrooms. We are mainly just trying to get mushrooms on people's plates in any sort of way possible. We want them to be grown locally, so they're fresh and enjoyable, and we have different ways of doing that. We did that with onsite productions, as you mentioned, mini farms, that was the first thing we came out to market with.

‍

Andrew Carter (00:14:01):

The main reason that we came out to market with that first is, we didn't have any space and we didn't have any place to grow mushrooms on our property; we had no property, and so we convinced restaurants to allow us to grow in the nooks and crannies of their spaces. And then that evolved quite a bit, because a lot of people are extremely excited about that. You can find those in central markets in Texas, you can find them in various restaurants in New York, and some grocery stores here as well, and you'll definitely see more of them in the years to come.

‍

Andrew Carter (00:14:29):

We are continuing to install those, but not every customer necessarily wants mini farms. Some places might not have as much mushroom sell through as certain places, and so we built larger facilities. We call them macro farms. Our most recent one, we just built is 34,000 square feet in Vernon. It's 10 minutes east to Downtown LA. And those are growing specialty mushrooms that are packed in compostable cardboard clamshells. Those are sold in retailers all over the place, but they're all sold regionally. And so if you're buying our mushrooms in Los Angeles, for example, at Whole Foods or Erewhon, or Lassens, they're all grown there, they're not grown from our facility in New York.

‍

Andrew Carter (00:15:13):

We're building a national brand with local distribution. It's not an easy thing. It's a weird thing, but it's exactly how we want to do it, because we think that the quality speaks for itself and it really helps get more people excited about mushrooms.

‍

Andrew Carter (00:15:28):

One of the reasons why you don't see a lot of these mushrooms that we grow on the shelf is because they have horrible shelf life and they do not ship well. And the industry at large, just ships produce all over the place, and no one's really figured it out the way that we're figuring it out. The grow kits was very interesting. There was very much a COVID response. We had some great customers going on. Going into COVID, we were a tiny team. We were a team of 12 going into that, and had a couple Whole Foods stores with our mini farms in it, but had a bunch of conversations going with some amazing retailers, including H-E-B in Central Market in Texas.

‍

Andrew Carter (00:16:04):

But everyone just went dark. All of our restaurant customers disappeared, and that was in March of 2020 or whatever it was, and we just kind of jumped into action. We realized that our customers were still there. They were stronger than ever, honestly. People wanted to be healthy. The vegan thing was going on, Fantastic Fungi came out. All this kind of stuff started happening, and it was just more the way of getting our mushrooms to them, got more complicated. And so we did a home delivery for a while. That was just literally me and Adam, my co-founder, and our team just driving around in a van.

‍

Andrew Carter (00:16:47):

They had a Google sheet where people could sign up and get five pounds a week from us. There was a lot of mushrooms, and we had a lot of people eating a lot of mushrooms, which goes back to our conversation about how much consumption you can have. Like our customers were eating 50 or 60 pounds a year.

‍

Andrew Carter (00:17:02):

Then we realized that a bunch of our friends lost their jobs, and so we had all these commercial blocks, and we just kind of gave it out because people wanted to have fun, but also people were struggling to feed themselves and stuff; it was very horrible. We had a lot of people just growing mushrooms at home, and it turned into this viral thing. The story was really funny. It was very much a New York thing, and then some friends of ours wanted to write an article about us in Bon Appétit.

‍

Andrew Carter (00:17:32):

And Toniann is the author and she, Toniann Fernandez and she emailed me on like a Thursday night, and was like, "This piece is going to go up on Friday. It's going to say that if you're in New York, you can buy from Smallhold, but if you are anywhere else, you can buy from this other company." And we were like, "That's silly." So I stayed up all night making a Shopify page, and Adam, my co-founder, stayed up all night, figuring out this whole supply chain thing. Then I launched the next day, and we sold just a crazy amount of kits, and it just went like completely viral from there.

‍

Andrew Carter (00:18:06):

We were in New York Times, we were in Eater, we were in all sorts of stuff for that. We still continue to do it. We've never run ads. What we see is that just allows people... it's like a good gateway into mushrooms. We think that once you sort of get into it, people get obsessed with mushrooms; to become mushroom people. I'm sure you know people or the people listening, probably know one or two people, maybe you are one, where you're just obsessed. It's like a lifestyle. And there's no better way of converting someone into that, than getting them to grow it. Because then that's like a life changing moment for them.

‍

Andrew Carter (00:18:44):

We continue to offer that, and it's still getting fresh mushrooms, it's as fresh as possible. It's grown locally, it's grown in your kitchen. So it all kind of feeds back into that idea that we can get people to eat this really fresh, exciting product that's grown right there.

‍

Daniel Scrivner (00:19:02):

I'd love to go back and talk about the science of growing mushrooms, and in particular, those onsite farms, and we'll add a photo to the show notes. I encourage everyone to look up Smallhold and look at some of the photos on your website, but the onsite little mini farms look funky, and weird, and different than anything you've ever seen.

‍

Daniel Scrivner (00:19:21):

So one, maybe talk a little bit at a high level about just how you grow mushrooms, and then two, what is unique and what have you patented and innovated on, in terms of how you produce and grow them?

‍

Andrew Carter (00:19:32):

Sure. So main thing to think about are fungi are its own kingdom, and so animals are a kingdom and plants have a kingdom and fungi have their own kingdom. A lot of people think they're like plants, but they're really not. They function a little more like animals actually, than like plants. I mean, people will argue with you whether they have a conscience and all that kind of stuff, but the mushrooms that we grow, they digest substrate, they release enzymes kind of like your stomach does.

‍

Andrew Carter (00:20:02):

They breathe in oxygen, they release CO2. They don't have lungs, but the functioning that is happening with these organisms is more similar to animals than to plants... Than to most plants. But the mushrooms we grow, they're called Saprotrophic mushrooms, which means that they're like a digester mushroom, and we feed them, mostly saw dust. And it's a byproduct from the timber industry.

‍

Andrew Carter (00:20:26):

Most mushroom farmers are using industrial byproducts, whether it's from farms or horse manure in Pennsylvania, which is amazing for a lot of mushroom growers. But we found that sawdust from the timber industry needed dealt with, it still goes to landfill. And it's a great product for these kinds of mushrooms. That's what these mushrooms grow on naturally anyway. And so we source all of this byproduct, it's hydrated and sterilized and then seated; it's inoculation, it's technically the term, but you put a little bit of the mycelium, which is the living organism into each of these substrate blocks. And then it grows out and it releases enzymes and breaks down that substrate.

‍

Andrew Carter (00:21:08):

Eventually, when it's done with its food, then it fruits out the mushrooms, and that's what people are eating. The fruit of the mushroom is kind of like an apple off an apple tree.

‍

Andrew Carter (00:21:17):

So when you buy a mushroom on the shelf, it's part of the reproductive cycle. It's not actually the living organism, the living organism is in the mycelium, and that's a fibrous sort of net that exists everywhere. It's under the ground. There's different kinds of it. The type that we grow, again, these Saprotrophic mushrooms, but there's fungi that have relationships with trees, mycorrhizal relationships, there's other types of fungi that have different relationships with their environment, but the mycelium network exists all over the place, and I'm sure you can go down a wormhole just talking about that. But that's the living thing that we're trying to cultivate, that then eventually fruits in our spaces.

‍

Andrew Carter (00:22:00):

And so what we figured out, we figured out a bunch of stuff, but the technology itself really, is extremely good at running the fruiting cycle of the mycelium. And so inside of each of those mini farms, as well as our large facilities, they capture tons of data and then push them to our own servers. We're running our own analysis of what's going on in that space. And we're trying to not only replicate climates that these mushrooms are from, but modify those climates, so they're even better for these mushrooms, in whatever environment that they're in, and that's unfortunately kind of complicated.

‍

Andrew Carter (00:22:36):

The mushrooms generally want cool temperatures, high humidity and high airflow. They release CO2, but they don't really like being around too much CO2. And so all those things individually, are not that complicated, but once you're trying to do them together, especially when you're trying to be efficient with your use of resources, like we are, it's way too complicated, and so we have to develop our own ways of doing it.

‍

Andrew Carter (00:23:00):

And we're not the only mushroom farm out there. Obviously, there's a whole industry, but we couldn't find any control system out there doing exactly what we wanted, and so I started building it, but we have a whole engineering team now that's built the whole entire thing, and now we have granted patents on it as well. But it's the same system that's applied to our larger facilities, the macro farms, just in a larger footprint, but all of that data gets pushed into this large database that we're collecting on all varieties that we grow. And so it just makes us smarter and smarter, and grow better and better, as we continue to scale.

‍

Daniel Scrivner (00:23:35):

It's fascinating. I mean one, well, I learned a ton, I didn't know mycelium was a substrate. I want to know more about relationships, and how they have relationships. So I'll maybe ask that question in a second. I actually didn't know the mushrooms were fruit, so that's super interesting, it's part of that reproductive cycle. So I guess a couple of quick follow up questions, it would be really interesting to know more, just a little bit more about what you're talking about, your relationship and what that looks like, because I'm guessing it's maybe a little bit deeper than most people might think.

‍

Daniel Scrivner (00:24:02):

And then kind of secondarily, if you could talk a little bit about the technology and how much it took you guys to come up with that and refine that, because it is very interesting, I think from the outside looking in, you would think... I would think you'd have a lot of control systems. I wouldn't necessarily think you would need as complex a series of sensors and database and cloud computation as you guys use, which is fascinating.

‍

Andrew Carter (00:24:26):

Mushrooms themselves are complicated. What I find so fascinating about them is that people don't really understand them that well, and we understand a lot at Smallholds, but we also just kind of embrace the unknown and get excited about the fact that we'll never really understand them. But again, stepping back, it's always important to think of it as a kingdom, and so the mushrooms that we grow, they have their own relationship with the environment and that they're digesters.

‍

Andrew Carter (00:24:54):

A tree falls in the woods, these organisms come and help break that tree down and turn it into nutrition, whether it's in a fruiting body form for certain types of animals, or it breaks it down so then it can go through a further decomposition process. There are some types of fungi that will do it, will come in after mushrooms like we grow, come in. It's like this whole entire process that happens through the decomposition cycle.

‍

Andrew Carter (00:25:21):

But then there's other types of mushrooms that have more of a true relationship with plants. Those are called mycorrhizal mushrooms. People struggle to grow those. There's some work doing it in labs, but most people don't really know how to grow those, and so most of them don't fruit any mushrooms that people can eat, but there are some very popular ones like Chanterelles, for example, Matsutake, Truffles, even those are mycorrhizal relationships. And what that is, is you have a plant, and then it has the roots underground. And then the mycelium itself, creates a symbiotic relationship, so it's beneficial to both parties, with those roots.

‍

Andrew Carter (00:26:01):

Mycelium can grow away faster, and it can help give it more of en capture zone for water, and so it can help it collect more water and more nutrition from the soil. And then the in turn, the plant gives it sugars usually, or some form of nutrition from photosynthesis. There's some amazing stuff out there about this. Again, it's literally everywhere, 90%+ of plants have this relationship, and so there's a question really, whether plants and mushrooms really are separate. Like why are we even considering them two different things, when they pretty much... Like the outliers are the ones that don't have this relationship.

‍

Andrew Carter (00:26:42):

There's a lot of research showing that original plants that came from the water, as evolution was going on, didn't even have roots. They just had this relationship, and then the roots ended up just being more of a host for the mycelium. That's another bigger conversation, but you could look at humans the same way. I mean, we're like a donor of bacteria and fungi. What are we without those relationships?

‍

Andrew Carter (00:27:11):

That's what I mean by relationships. And we try to think about that as we grow, like all of our waste, so the compost, the substrate, after we grow our mushrooms, goes to these large composting projects. We've become big remediation projects in Los Angeles as well, some really exciting stuff, but trying to make sure that the stuff that we're growing goes to the right place, because it would be devastating if it went to a landfill, which a lot of people do, but we don't want to do that. And so you're asking about the technology as well?

‍

Daniel Scrivner (00:27:44):

Yeah. If you could just flesh that out a little bit more, the origin of it. I would guess that you guys maybe are over index a little bit, in a positive way, in being very tech forward. So how did that come about and maybe take us in a little bit deeper into what's happening with that technology, and with all that computation.

‍

Andrew Carter (00:28:02):

Yeah. So I mean, the original source of it was that we had a shipping container farm that was on this amazing place at this amazing temporary farm called North Brooklyn Farms in Williamsburg, and love them to death, but the power there was spotty at best, and every grow we grew was extremely important to us, and power would go out, and we wouldn't know. And we basically had to start creating alert systems, and that's available, obviously. You can get different kinds of power alert systems, but we've started playing around with that and then started playing around with control systems, and then really trying to find what was available on the market for way more small scale grows. And that's all DIY.

‍

Andrew Carter (00:28:51):

There's the same issue with indoor farming is that most of the tech is for huge facilities or DIY or... like weed is like weed is big in hydroponics, and so like all the cannabis stuff, which a lot of it's kind of DIY as well. And so mid-scale, like people taking it seriously, but don't want to build some multimillion dollar facility, it's rare. So we started sort of fitting that area with the technology that we're building, but as we started building more of the systems and realizing all of the controls that we needed to evolve from there.

‍

Andrew Carter (00:29:26):

But you can grow mushrooms without tons of tech. I mean, we sell grow kits to people and they just spray it with water and they can grow it on their counter, but you can't grow the same kinds of mushrooms and you can't grow the consistency and the quality that we grow. Like we have customers that demand mushrooms at the same time, every week, same volume, same consistency. We're certified organic. We have crazy food safety certifications as well.

‍

Andrew Carter (00:29:54):

And all of this you can do with low tech farms, a lot of people do, but it ends up being more difficult than it needs to be in our opinion. And so we wanted to make it so we could build something that's way more efficient, and way more scalable. And having these systems in place are really what does it. Most of the mushroom farms, and this is an issue with all farms, is that they rely on migrant labor and problematic ways of running their businesses.

‍

Andrew Carter (00:30:29):

There's some great mushroom farms out there. I'm not trying to say that they're all like this, but it's an issue with agriculture in general in the United States, and we don't want to do that. And we think that technology will allow us, so the people that work at Smallhold can be paid a living wage and can be doing the right thing, and we can be growing a really good quality product for the people that are consuming our stuff.

‍

Daniel Scrivner (00:30:51):

I'd love to talk about that note for a second, because obviously hearing you talk about the system makes me think a lot of it is automated and maybe there's even very… Maybe someone needs to go visit it a couple times per week. How much of the operations is human centric and what do the humans do versus the algorithm and the sensors.

‍

Andrew Carter (00:31:11):

Yeah. We do have humans. Most of our work to date has been around climate management and so essentially these spaces, you can roll the blocks in and then you can leave it and then when they're ready to harvest, then they come out. So we're still working with people to… Like our team is harvesting and packing and that gives us a really amazing quality. It's hand-picked, it's hand-packed, it's amazing, but we are working on further automation for that as well.

‍

Andrew Carter (00:31:44):

I think it's going to be a long time till the mushrooms we grow are fully automated for anyone. It's rare to see that you can see automated button mushroom farms, you can see other kinds of automation that exists, but picking the mushrooms, it doesn't lend itself to soft robotics or any of these kinds of things, but PAC-line automation is on the new, the more soon horizon for us. A lot of the facilities will be getting that later this year actually.

‍

Daniel Scrivner (00:32:13):

I want to go higher level for a second and talk about the food industry and the food system that we have today, because obviously a goal, a motivation for Smallhold is to rethink that food system. My experience with it or my understanding of it is, one, it seems very monolithic, two, it seems very transportation heavy, so things are… Some of the stats I can't remember any off top of my head, but I know there's crazy stats around it taking weeks, oftentimes months.

‍

Daniel Scrivner (00:32:41):

I think it's even three plus months a lot of times for when food enters basically leaves a farm to when it actually arrives at the grocery store. I mean, you know, those are a couple of data points. What do you know about the food industry that most people don't and how do you think about the problems with it? And then talk a little bit about how you're trying to reshape that, rethink that.

‍

Andrew Carter (00:33:00):

Yeah. I mean, I've been in it for a while and so I know a lot of stuff and there's so many crazy things and Smallhold can help with certain things, but also not other things. The thing that always blows my mind is the fish industry, if you ever heard any of this stuff. Most fish in the United States, even if it was caught in the United States, it's cheaper for them to ship it to China to get processed, and then it comes back.

‍

Andrew Carter (00:33:27):

So if you have Alaskan caught whatever salmon, then it'll still say it's caught in Alaska, but it was shipped. It's all frozen. All fish is frozen because of shipping, but also food safety stuff and they ship into China process it and then ship it back. Pretty much it's the vast majority of fish.

‍

Andrew Carter (00:33:47):

So if you have a relationship with a fishermen and stuff, that's great, but most fish you buy has been around the world which is insane and most people don't know that. You're right. Certain kinds of produce like apples, if you're buying an apple a lot of the time, it's a year old and there's an amazing innovation and in and making that, so it feels like it's a fresh apple.

‍

Andrew Carter (00:34:10):

Mushrooms have some interesting stuff. A lot of it is shipped from overseas. It's not as, I would say, sophisticated as these big, ethylene chambers and stuff like that they do with bananas and apples and stuff like that, but they do have a lot of food miles. The main issue that I see with a lot of imported mushrooms, there's the footprint of that, but overseas, there's some amazing growers in China and Japan, I would never say that they're not.

‍

Andrew Carter (00:34:41):

I would strive to grow like that, but sometimes the power is not that clean. A lot of the time there's coal-powered facilities and it's not… The carbon footprint of that kind of food is a little high for my liking and so growing it domestically is very important.

‍

Andrew Carter (00:35:02):

But really how I feel, the US food distribution is that… It's kind of based, and this is an assumption and it's very broad and so I know that there's so much more to it, but vast majority of agriculture in the US are staple crops and meat. You have corn, wheat, soy, cotton, you have beef, all of those kinds of products, they can actually ship fairly well because they grow in really large areas and then they're dehydrated processed in a way and they don't need to be eaten fresh.

‍

Andrew Carter (00:35:40):

I mean, fresh corn is great, but majority of people are not eating fresh corn and so that actually lends itself to having a fairly large distribution. That's the most efficient way of doing it. People don't really realize that trains are extremely friendly to the environment and some of these supply chains are actually really great but then the industry at large applied that to everything it seems and you have vast majority of leafy greens grown in Salinas, in the Southwest United States and shipped on the same routes that all these other things that don't have a shelf life are shipped on and you get tons of food waste, so you get really low food quality, you have tons of food, safety issues.

‍

Andrew Carter (00:36:28):

The US has a really bad track record with food safety and you just have this really funny system here that I think that we just need to look critically at. How I look at Smallhold is that we're just like, “Okay, we need to rethink about this supply chain.” We still move stuff around, but we don't use cold chain for certain things.

‍

Andrew Carter (00:36:51):

We want to have the fresh product as close as possible to consumers so we reduce food waste and it's always fresh and local and I think that we can solve it for mushrooms, we can solve it maybe for other kinds of crops, but other people need to look at other kinds of crops and dedicate different kinds of supply chain initiatives, and ingenuity for all types of different kinds of crops because all of it needs it.

‍

Daniel Scrivner (00:37:15):

I want to go back to something that you said. Actually, before we started recording, we were talking about that in many ways Smallhold is one company in a wave of companies that's been coming to market recently. An example of another company that's very different in many ways is something like AppHarvest, which came public last year, I think through a SPAC, but this wave of companies that are basically growing indoors, they're doing vertical farming and I think broadly consumers are really interested in that, but one of the questions you raised is people having reasonable expectations around the business.

‍

Daniel Scrivner (00:37:47):

I wanted to get your perspective. How do you think about that? How have you approached those conversations with investors? How do you think about the business upside of something like Smallhold?

‍

Andrew Carter (00:37:55):

I mean, food is vast. Everyone eats and so there's a big business in feeding people. The only thing though is that we're talking about distributed farming. The business, and the industry is very distributed and there's not… There's some centralization in certain kinds of crops, but when you're talking about lettuce, there are some large players, but it's hard to be the only one that's growing.

‍

Andrew Carter (00:38:26):

I think that there's a ton of potential in indoor farming. It's what I've spent my whole career working on and so I'm extremely excited about it though it's such a small fraction of the production in the United States. It has a really long way to go and I don't know if money's really going to solve that. It's more time and the other industry has to shift. And the other industry, what I mean is, outdoor production.

‍

Andrew Carter (00:38:51):

It makes total sense to grow outdoors in certain places and certain times of year. There's certain crops it does not make sense to grow year round in the places that they're grown. Tons of water waste, crazy labor, there's a lot of problems with it. I see a lot of potential in indoor farming solving that. There's a lot of attention in it, because people are worried about the world and worried about food and the UN has all of these goals and sustainability goals and calls to action because the population is growing so rapidly and the food isn't there for it.

‍

Andrew Carter (00:39:26):

That's arguable. I think that there's a lot of people that believe we do have land. We can grow outdoors and actually feed people, but my opinion is more that the climate is changing so fast that a lot of the organisms that we grow can't evolve fast enough for the environment that we're going into, and so we need to figure out these solutions now because in 20, 30, 40 years, it's likely that we're going to be relying more on these things to have at least a somewhat similar diet that we have today.

‍

Andrew Carter (00:39:56):

The big question is if these companies can exist until then. I think a lot of them can't. Greenhouse isn't new. There are many greenhouses out there. AppHarvest gets credit for being the biggest greenhouse in the United States or something. I don't really think that's true. There's Houweling's is an amazing tomato greenhouse. I think they have a facility in Colorado actually, but they have one in California as well.

‍

Andrew Carter (00:40:16):

Most of the greenhouse producers just don't have great PR teams and they more suffer from the main issue with produce is that people don't have brands in produce. They're producers that sell large distributors at the lowest price possible and ship it for really far distances, waste a lot of produce. The tomato probably tastes amazing when it was harvested in these greenhouses, but no one really had any idea about it because they don't have the brand that some of these places do.

‍

Andrew Carter (00:40:47):

I don't mean to dispel… A lot of these companies are building some really amazing technology, especially in the vertical farming space. People are focusing on automation, crazy fertigation and sensor technology. Some of the stuff is very real. It's not made up and fake or anything like that.

‍

Andrew Carter (00:41:04):

The bigger question really is just how fast can they actually get it to market, how fast can they provide their unique economics that make it so they can really truly compete in food? What I love about mushrooms is that the playing field is equal. All the cultivated mushrooms are grown indoors, but they're just grown in worse places than us and so we are competing with the sun, which is really what the problem is with the vertical farm space.

‍

Andrew Carter (00:41:32):

With greenhouses it's similar. I mean they use sun, but a lot of time they're using supplemental lights with LEDs or other types of lights, but then there's other kinds of climate control that can end up using a lot of fuel like with you're growing in the winter, you're going to be still using gas to heat those things. So there's stuff to figure out there, but I think there's still a lot of potential there.

‍

Daniel Scrivner (00:41:56):

I want to ask a question about brand, because obviously prepping for this interview, researching Smallhold, your logo's beautiful, the packaging you have is beautiful, I mean even the aesthetic of these onsite farms looks really beautiful. It makes the food really appealing.

‍

Daniel Scrivner (00:42:12):

You talked about that most produce companies don't have a brand and that's definitely true. When I go to the grocery store, I feel like you're not in brand selection mode. You're more like, “How do these bananas look versus this other pile of bananas over here?” Why did you guys focus on building a brand and then talk a little bit about some of the intentional decisions you've made. Because from the outside, looking in, it looks very intentional, very beautiful. It looks like something you focused on.

‍

Andrew Carter (00:42:39):

Thanks. I appreciate that. It hasn't always been intentional. Produce, yeah, there are brands that exist like Chiquita Banana, Dole. These are brands, but they're not brands that really resonate with consumers. They might have at one point, but I'm sure they're spending money on it, but the efforts didn't really come to fruition, I guess, to create a brand that people really cared about in the modern day.

‍

Andrew Carter (00:43:07):

The produce section itself, people don't really approach it… Companies don't really approach it in the same way that you see in CPG and stuff like that. We don't pay slotting fees or anything like that, which is for listeners. A lot of your favorite brands or paying a lot of money to be on that shelf and produce normally doesn't really work like that. I'm sure some people do it, but we're lucky in that we don't have to, but we can apply other kinds of ways of marketing, like we use social media really well, I think, and we try to provide a really aesthetically pleasing product.

‍

Andrew Carter (00:43:43):

Luckily, the mushrooms themselves are very cool-looking and when they're grown fresh, they're super colorful and they look like aliens and so they do a lot of the talking for us, but we wanted to have some form of a brand that really resonated with people and people could remember as the company that grows fresh and grows local and grows organically, it pays everyone a living wage and grows in all these cool ways.

‍

Andrew Carter (00:44:09):

A brand on its own isn't defensible and those do not last. We think that the brand means so much more and I think a lot of consumers are realizing that. The evolution of that was really funny for us. We thought that we were going to be a white-labeled product always. We thought that we were going to build equipment for people and maybe sell mushrooms, but it wasn't going to be our brand.

‍

Andrew Carter (00:44:34):

Honestly, in the beginning, it was me and Adam just goofing around on Instagram and we built a community around us and continued to try to really build on that community. Now we have an amazing marketing team. Abigail runs the ship there and amazing group of people that are working with different community groups and using social media in interesting ways.

‍

Andrew Carter (00:44:57):

We do a lot of onsite tabling and cooking demos and all that kind of stuff. Normal stuff that you'd expect from a food brand, but we try to be as authentic as possible, try to open our doors to as many people as possible. We try to just sort of educate whenever we can and it's still continuing to work and help us build that brand even further.

‍

Daniel Scrivner (00:45:19):

I want to ask as well about… I know, or at least my understanding is some of your initial customers were restaurants in New York. If I was an entrepreneur and I could go and serve a restaurant, especially an incredible restaurant and work with a chef to be able to give them these really fresh ingredients, they can literally grow in their restaurant, that's seems incredibly rewarding even just to feel like you're a part of the food that's being cooked.

‍

Daniel Scrivner (00:45:45):

It would be great to, I guess, understand a little bit of the backstory of how you ended up in some of these restaurants and then just even how the logistics works. Where is this being grown in the restaurant? Do they harvest the mushrooms? Do you harvest the mushrooms? How does that whole piece work?

‍

Andrew Carter (00:46:01):

Yeah. With the restaurants, it was different for so many different places. We went out and we went to 50 different restaurants and talked to everyone and what's about Smallhold is everyone wants the mini farm, but a lot of the time they can't really fit it. It's not like you could put it everywhere, but when we were bringing in samples, it was extremely rewarding because people would cook amazing dishes, serve it to us, serve it to our friends, take photos of it. It was just really a lot of fun. Still is. People still do that.

‍

Andrew Carter (00:46:36):

The first customer we ever had was Bunker Vietnamese. They are Vietnamese restaurant in Bushwick. They're amazing. They let us grow our first version of the mini farm in their basement. There's no photos of that online, because it looked insane, but they ended up showing that to one of the managers at one of the Whole Foods stores and that person was like, “I want this at Whole Foods. Let's get this in Whole Foods,” and then leadership kind of caught onto it. It was just very much this network effect.

‍

Andrew Carter (00:47:05):

Angela Dimayuga was a chef at Mission Chinese in the city, which is, they have one in San Francisco, but they in New York as well. She moved on, she worked with The Standard and helped us get in there as well. She's consulting on a bunch of really cool stuff. She just released a book for anyone that's interested about Filipino cooking but she's been a believer. She's kind of been part of our community and just really been supportive in the beginning.

‍

Andrew Carter (00:47:33):

I'm sure someone could find it. In the beginning she was really good at social media and Audi asked her to do an ad and she was like, “I'm going to rent this red Audi and drive it over to Bushwick and get mushrooms from my mushroom friends.” Anyway, we were just friends with people and just continued to build on that.

‍

Andrew Carter (00:47:58):

The mini farms are in all sorts of different places. We have a standardized unit that's in most of the places and so this has a nice, crazy aluminum facade, these beautiful glass windows that you can see in and see all of the mushrooms growing right there. It fogs up from time to time when it's going through the humidification cycle, it does all of this kind of cool stuff, but that unit is about four feet by two feet and then about six feet tall, so it looks kind of like a refrigerator, but sort of space-age aesthetic.

‍

Andrew Carter (00:48:31):

There's other places that have gotten us to do custom installations and so if you go to Maison, Yaki in Brooklyn or The Standard hotels in the East Village, they have these wood clad units that are hung above the bars. They're really cool. They harvest the mushrooms and put them on skewers and do all this cool stuff for people. Those are custom. We don't put those out too much. It's just for the right customers, so if people are listening and they want a custom mini farm, we're happy to talk to them, but we really try to get people to put in the more standardized unit because it's a little easier for everyone basically and then it's all a standalone unit.

‍

Andrew Carter (00:49:08):

You can just roll that thing and plug it in and then it's running. Other kinds of installations require remote compressors and there's refrigeration in it and so it's not the most simple thing to install into a space.

‍

Daniel Scrivner (00:49:21):

Yeah. And how have you thought… I mean, you can keep this high level, but how have you thought about the business model there? I'm guessing it's leasing, maybe there's a subscription fee. How does that work if somebody wants to have one of these in their restaurant or in their hotel?

‍

Andrew Carter (00:49:34):

Yeah. We've tried lots of things. We tried every kind of… And we still do. We still try different kinds of creative ways of financing this. The most successful that we've had are people buying the unit and then they buy substrate from us. That's successful for both parties and so that makes it so it makes sense for them financially, but then it makes it easier on both ends for servicing.

‍

Andrew Carter (00:50:00):

In Central Market, for example, we send them substrate from our large farms. We're already sending them fresh mushrooms and that goes to their distribution center, then those go into each of the units. Their team takes care of it, they harvest it, it's great.

‍

Andrew Carter (00:50:13):

Other kinds of restaurants, they don't want to do anything and so we'll provide a service where either we bake it into the cost of the block or we charge separate fee. We're happy with either one and just make sure that we can get reimbursed for harvesting those mushrooms and servicing it.

‍

Andrew Carter (00:50:30):

But the technology takes care of a lot of it. The person who has one of those units, they don't have to look at their phone or click a button and be like, “Oh, I'm growing Blue Oysters today.” All that is automated and so that is completely off their hands. All they have to do is put a block in there, let it grow out, harvest the mushrooms and then we have to do cleaning cycles.

‍

Andrew Carter (00:50:54):

All of the farms are certified organic. It's under our own organic certification and we have to have certain food safety protocols as well and so we usually provide a service around that as well, but that's kind of baked into the pricing.

‍

Daniel Scrivner (00:51:09):

Yeah, it's fascinating. Obviously, I get that it's complex. You're trying to make two business model work. You're trying to make your customer's business model work and your own at the same time.

‍

Andrew Carter (00:51:18):

Yeah. And different people have different goals with it too. Some places just really want to grow their own produce and some people want to just show off mushrooms and both are fine as long as you're using the mushrooms. We don't want to… This way, we're selective. We're not going to install in a place that's not going to use the mushrooms.

‍

Andrew Carter (00:51:36):

Even though we can make money off that, the environmental impact of doing that is not what we want to do and so we are also selective on where we install them, but people are very excited about it and we're going to continue to do those in the years to come.

‍

Daniel Scrivner (00:51:52):

I want to ask one more question and then we'll move on and wrap up and talk about lessons that you've learned building Smallhold so far. The question I want to ask is around a movie that came out recently, Fantastic Fungi. As I mentioned to a handful of people, I was doing this interview, this kept coming up time and time and time again. I feel like for a lot of people, it's their touchstone, at least recently around mushrooms.

‍

Daniel Scrivner (00:52:15):

Talk about, I guess, what that movie is for people listening that aren't familiar, and I guess the impact you feel like that had on people's perception of mushrooms, maybe even your business.

‍

Andrew Carter (00:52:26):

Yeah. Fantastic Fungi is a movie that was done by Louie Schwartzberg and they have a whole team, but Louie is like a time lapse genius, and he has a bunch of different movies that are on Netflix around nature, time lapses. That's simplifying it way too much. You should talk to him about it, but they made this amazing film about fungi and the whole kingdom and it goes into all sorts of different aspects of the fungal kingdom, as well as different interests in [inaudible 00:53:03] mushrooms, but also just the beauty of the Mycorrhiza network that we explained earlier.

‍

Andrew Carter (00:53:09):

Some amazing visualizations that I think are going to be extremely important for the years to come. They're working on large educational platform as well and there's a lot of interest in incorporating that into proper public and private school systems. So it's important for everyone to watch that, but a lot of people have seen it and it really drove a lot of interest in the mushroom space.

‍

Andrew Carter (00:53:34):

The mushroom industry and interest was growing rapidly anyway, and it was probably going to happen anyway, but Fantastic Fungi being released on Netflix just really blew everything up in a good way and most mushroom growers, I know, have seen a really big influx of interest because of that movie, and so I'm really grateful for them to release that and to educate more people, because it's exactly what we want too. We want to turn people into mushroom people and I'm sure that two out of 10 people that watch that, if not more, become obsessed with mushrooms, so yeah, we're grateful for them to release that.

‍

Daniel Scrivner (00:54:15):

Yeah. And even if they didn't become obsessed with mushrooms, I wouldn't be surprised if people started eating more mushrooms, noticing the mushrooms when they were in the grocery store, if that aspect of it changed. Andrew, this has been so much fun. I want to close by asking you a few questions about the lessons that you've learned building Smallhold.

‍

Daniel Scrivner (00:54:33):

Just as a quick recap, you founded the business with your co-founder in 2017. You've done this for five years and your ambitions are large. You have started in Brooklyn, you've now expanded, you talked about this Los Angeles, this macro farm, your next big square footage farm that you opened in Los Angeles. What are some of the ahas and unlocks you've had building Smallhold so far. I mean, I'm asking that partially as maybe a mushroom guy, partially as a founder.

‍

Andrew Carter (00:55:00):

Yeah. I mean, we're still learning so much. I think that it's tough for a lot of founders, especially like… I'm very operational. I basically was the engineering department for a long time and the farming department and so I can get in the weeds. I didn't go to business school, I deal with the business really well inside and out. That makes it very hard to get out of the weeds.

‍

Andrew Carter (00:55:31):

There's times when you need to get out of the weeds anyway, just because you need to focus, but also it doesn't really allow your team to grow or to own things. Our team's amazing. We're great at hiring people, which is really… I try really hard, but it's also just the nature of the people that are here and we've built a culture for that, but it's something about trust and well, just letting go of stuff, is so important and really difficult for at least me, and I'm sure it's difficult for a lot of founders.

‍

Andrew Carter (00:56:08):

There are so many different paths to get to success, even at the same milestone that you want to get to, and sure you need to track it appropriately and you need to communicate that in the right ways for your team and your shareholders, but trusting your team as long as they're motivated is the most important thing you can do.

‍

Andrew Carter (00:56:27):

We're not always the best at it. I'm not going to say we're perfect or anything, but the idea of just letting go is one of the biggest things that I could ever do and honestly makes things a lot easier too, because you're just like… You can roll with it like, “Let's go for it.” And now we're just like, I'm in amazing position where I have people around me that are way smarter than me and so I can do certain things, but like people learn and they get ownership and it's way more collaborative than if you didn't do it that way.

‍

Daniel Scrivner (00:56:59):

When you look back and think about the last five years, what are some of the most challenging moments that you've had as a founder? I think the question I really want to ask around that is if you could share some of those challenges, but more so talk about what you took away from them, what you learned and maybe how you applied that in the business or changed your approach.

‍

Andrew Carter (00:57:18):

Yeah. I mean, there's tons of challenges. Happens all the time. I mean the scariest times we're almost running out of money, and I know that happens to most people, you're making models and making the emergency scenarios and all those kinds of things, that is really tough because you have to stay strong for your team and keep people motivated to keep people trusting you, but also deep inside, you're concerned about what is going to happen.

‍

Andrew Carter (00:57:49):

Most of my concern is more about our team. We have a lot of people that rely on this and so there's a lot rolling on it, not just… We talk about feeding humanity and stuff, but there's 100 people whose lives are very intertwined with this company and so that is tough to deal with, but it's all about prepping and again, it's all about communicating and trusting the people around you.

‍

Andrew Carter (00:58:19):

We're not like radical transparency kind of thing. We try to do something like that but the more that you can be transparent about the situations that you're in, the more support you can get from people around you and so that's been helpful as we've built this thing.

‍

Daniel Scrivner (00:58:37):

Yeah. That's so well said. I don't normally ask this question, but just as a last question I want to ask… I feel like we've covered so much ground and there's also so many questions that I had thought of an didn't ask in the interview just because there's so much to cover here from mushrooms and the science of mushrooms to the vertical farming and indoor farming.

‍

Daniel Scrivner (00:58:55):

The last question I would ask is, what do you hope people take away, and I think take away in terms of why mushrooms matter? Why maybe Smallhold matters and why we should all be eating more mushrooms.

‍

Andrew Carter (00:59:06):

People just need to try mushrooms out. A lot of people think that they don't like mushrooms because they had a slimy mushroom one time or they think they're allergic. There are people that are allergic, but it's rare. Most people who think that they're allergic just had bad mushroom at one point.

‍

Andrew Carter (00:59:22):

Obviously, talk to your doctor if you really think you're allergic, but try out other kinds of mushrooms. There's a lot of diversity in the fungal kingdom and you might find that there are mushrooms that you actually do like and try to have fun with it.

‍

Andrew Carter (00:59:39):

The world is scary and we need to worry about sustainable food and all this kind of stuff and Smallhold can really help with a lot of that, but at its base level, you should have fun while you're eating and you should really enjoy eating and feeding your family because it's one of the most enjoyable things you can do. Try to try mushrooms out because they can be a lot of fun and they can help the world at the same time.

‍

Daniel Scrivner (01:00:02):

Well, thank you so much for the time. Thank you for coming on. This has been so much fun. Really appreciate it.

‍

Andrew Carter (01:00:06):

Yeah. Thanks for having me.

‍

Daniel Scrivner (01:00:09):

Thank you so much for listening. You can find the show notes in text transcript for this episode at outlieracademy.com/120. That 1-2-0. You can learn more about Smallhold at smallhold.com or by following Smallhold on twitter. At outlieracademy.com, you can find all of our other founder interviews, profiling incredible companies like Forward, Eat Sleep, Common Stock, Varda Space Industries, Superhuman, Primal Kitchen, 1-800-GOT-JUNK and many more.

‍

Daniel Scrivner (01:00:36):

In every interview, we deconstruct the ideas, frameworks and strategies these founders use to build incredible companies. You can find videos of all of our interviews on YouTube at youtube.com/outlieracademy. On our channel, you'll find all of our full length interviews as well as our favorite short clips from every episode in including this one, so make sure to subscribe. We post new videos and clips every single week. If you haven't already, make sure to follow us on Twitter and LinkedIn @outlieracademy. Thank you so much for listening. We'll see you right here with a brand new episode next Wednesday.

‍

On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today.

Explore all episodes of Outlier Academy, be the first to hear about new episodes, and subscribe on your favorite podcast platform.

Daniel Scrivner and Mighty Publishing LLC own the copyright in and to all content in and transcripts of the Outlier Academy podcast, with all rights reserved, including Daniel’s right of publicity.

‍

Tagged:

Strategy

Andrew Carter

Health

Entrepreneurship

Wellness

#122 Smallhold: Growing the World’s Best Mushrooms in High-Tech Mini Farms Right in Restaurants and Grocery Stores | Andrew Carter, Co-Founder & CEO

#122 Smallhold: Growing the World’s Best Mushrooms in High-Tech Mini Farms Right in Restaurants and Grocery Stores | Andrew Carter, Co-Founder & CEO

About Smallhold

Chapters

Our Favorite Quotes

5 Ways to Dive Deeper

Books Mentioned

Selected Links

Transcript

#122 Smallhold: Growing the World’s Best Mushrooms in High-Tech Mini Farms Right in Restaurants and Grocery Stores | Andrew Carter, Co-Founder & CEO

#122 Smallhold: Growing the World’s Best Mushrooms in High-Tech Mini Farms Right in Restaurants and Grocery Stores | Andrew Carter, Co-Founder & CEO

About Smallhold

Chapters

Our Favorite Quotes

5 Ways to Dive Deeper

Books Mentioned

Selected Links

Transcript

Next Up