Growth Engine: Man, or Mushroom?

mushroom

College.  Mushrooms.  Vegas.

Think you know where this story goes?  Hang on.

Two guys at Rensselaer Polytech Institute get seriously hooked on mushrooms. They just can’t stop thinking about how fungal mycelium bonds wood chips together.  Inspired, they work on new ways to use mycelium as a resin.

Four million dollars in grants later, Eben and Gavin are building their second manufacturing plant in the northeast and planning a third in Texas so their mushroom-based, foam-replacing packing material doesn’t have to ride the train from NY to one of their big customers, as in Dell.  Steelcase buys their stuff by the trainload, too.

Did I say manufacturing plant?  Looked more like a bakery to me, seeing Gavin’s prez yesterday in Vegas (he was a keynote speaker at the National 4R Conference sponsored by the US Chamber of Commerce – @chamberbclc).  Racks and racks of pans (think L-shaped bundt cakes).

Five days on the rack, no sun, hardly any energy at all, and, presto!  No more office furniture dinged in shipping and no more foam packing material.

ecovative

Check them out:  ecovativedesign.com (@ecovative) It’s a great story.

Two things really struck me, beyond the sheer awe that mushrooms can do this and that two guys figured it out:  1) the role of public money in getting this company off the ground (or, from under the bed, as Gavin tells us — the mushrooms needed darkness and they didn’t have a lab); and 2) the role of nature as manufacturer.

I have a bias against government subsidies.  Using taxpayer money to artificially create demand and markets strikes me as, well, unsustainable.

But this mushrooming business altered my position, if not my reality.  Yes, the EPA gave these guys some money.  As in, you and I gave these guys some money.  Would Kleiner Perkins have funded them?  Maybe, though the social media, casual-gaming play isn’t jumping out at me here (Mushroomville?).

I didn’t ask Gavin if he would have taken private equity to get started.  I didn’t get that vibe from him.  He used the word “bootstrap” a lot.

Are we better off now that Ecovative Design exists?  Environmentally, I’d say yes.  This stuff practically makes itself, breaks down in soil in 30 days, and replaces a fossil fuel-derived staple.  Since we pay the EPA to help make us better off, environmentally, that’s my bridge to OK for using public money to help these guys get off the ground.  It’s a new bridge and for now it hangs on the difference between stimulating supply and creating demand.

Now, if there’s something seemingly unnatural about how Ecovative Design got its early financing, there’s little but nature turning their mushrooms into dent-free desks and servers.

Here’s the recipe, lifted from their site:  “We actually grow EcoCradle™ using mycelium, a fungal network of threadlike cells. This mycelium grows around agricultural by-products like buckwheat husks, oat hulls, or cotton burrs to any shape we make. In 5 – 7 days, in the dark, with no watering, and no petrochemical inputs, the mycelium envelops the by-products, binding them into a strong and beautiful packaging part.”

Strong and beautiful, indeed.  Hey!  Turn out the lights and shut off the water!  Rare commands in the product manufacturing business.

Smells like a good balance sheet coming off those racks, too.

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