February 2, 2025 • 16 mins
Why Sustainable Food Startups Fail: The Rise and Fall of SmallholdPodcast Description:Can passion and sustainability alone build a successful food startup? In this episode, we take a deep dive into the story of Smallhold, the mushroom startup that soared to a $90 million valuation—only to crash into bankruptcy. We explore the harsh realities of running a sustainable food business, the hidden dangers of venture capital, and why good intentions aren’t enough to survive in the industry.Join us as we break down the lessons food entrepreneurs can learn from Smallhold’s rise and fall, featuring insights on branding, financial strategy, and the importance of balancing sustainability with profitability. Whether you're an aspiring food founder or just curious about the business of food, this episode is packed with real-world takeaways you won’t want to miss!🎙️ Tune in now and discover what it really takes to succeed in sustainable food entrepreneurship!
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey, everyone, welcome to another deep dive. Today. We're going
(00:04):
to be looking at sustainable food startups, okay, and specifically
some of the challenges they face. And the source material
for today's deep dive is a really, really fascinating article
from The Guardian.
Speaker 2 (00:15):
Oh yeah, I read that one.
Speaker 1 (00:16):
Yeah. It's called vcs Need Their Money Back? Why Sustainable
Startups Struggle to Fix our Broken Food System? Catchy title, Yeah,
it is, and it kind of gets at the question
that I think we're going to be kind of circling
around today, which is, you know, can these businesses really
change the world for the better, right or are they
(00:37):
ultimately beholden to you know, the bottom line?
Speaker 2 (00:40):
Yeah, are they all talk or can they actually walk
the walk?
Speaker 1 (00:42):
Exactly? And the article uses this case study of small
Hold small Hole. Yeah you familiar with your Yeah.
Speaker 2 (00:48):
They're a mushroom growing company.
Speaker 1 (00:49):
Right, exactly, interesting company.
Speaker 2 (00:51):
Yeah, and they have this really interesting trajectory. So they
start out in Brooklyn, just a single shipping container growing mushrooms,
and within six they're in fourteen hundred stores across the country.
Speaker 1 (01:03):
That's pretty impressive.
Speaker 2 (01:04):
It's incredible, right, And they hit a peak valuation of
ninety million dollars.
Speaker 1 (01:09):
Wow, that's that's serious investor confidence. Yeah.
Speaker 2 (01:12):
They were really seen as this kind of company of
the moment, especially during the pandemic when there was this
huge surge and interest in you know, local sustainable food.
Speaker 1 (01:22):
Yeah, they really tapped into something.
Speaker 2 (01:23):
And they also had like a really great brand, Like
their social media was really clever, really witty.
Speaker 1 (01:30):
Yeah, I've seen their stuff. They made mushrooms look cool, right.
Speaker 2 (01:33):
Who knew? And then kind of seemingly out of nowhere,
what happened? The founders stepped down, they filed for bankruptcy. Whoa,
and new investors come in, okay, and they basically shrink
the whole operation down.
Speaker 1 (01:45):
Wow, what a what a turnaround?
Speaker 2 (01:47):
Yeah, and I think for a lot of people who
saw small Hold as this model for how to do
things differently, it was a real shock.
Speaker 1 (01:55):
Yeah, definitely. So the article uses their story to look
at kind of the dues and don'ts for sustainable startups.
Speaker 2 (02:02):
What worked, what didn't work right?
Speaker 1 (02:04):
What can we learn from their experience? No, exactly, So
let's start with the good stuff. What were some of
the things small Hold did well that contributed to their
initial success.
Speaker 2 (02:15):
Well, one of the things that really stood out to me,
was they found their niche. Okay, they didn't just offer
you know, the basic button mushrooms you see everywhere.
Speaker 1 (02:24):
The boring ones.
Speaker 2 (02:24):
Yeah, exactly. Yeah, they focused on specialty varieties Okay, like
she talked blue oyster lions.
Speaker 1 (02:32):
Maine ooh fancy.
Speaker 2 (02:33):
Yeah, and these have unique flavors and they're really visually
appealing too. So they really helped small holds stand out.
Speaker 1 (02:40):
Okay, so they elevated the humble mushroom to something kind
of special, right, Yeah, and then we touched on their
branding earlier.
Speaker 2 (02:48):
Yeah, their branding was on point.
Speaker 1 (02:49):
Yeah.
Speaker 2 (02:50):
I think they really understood that in today's market. You know,
you have to offer more than just ethical practices, right,
you have to deliver on quality, cost effectiveness, and create
a brand experience that resonates with consumers.
Speaker 1 (03:01):
It's not enough to just be sustainable exactly.
Speaker 2 (03:04):
Sustainability alone isn't a guarantee of success.
Speaker 1 (03:07):
That's a really good point. You know, I might care
about a company's values, but if their product isn't good
or it's too expensive, I'm probably going to go with
a different option.
Speaker 2 (03:17):
You can vote with your wallet, exactly.
Speaker 1 (03:20):
So are there other companies that have managed to kind
of strike this balance.
Speaker 2 (03:26):
Well, definitely. The article mentions a couple of other companies,
Bowery Farming and Gotham Greens. They've both found ways to
combine sustainability with strong branding and a compelling product. So
they're really tapping into that growing consumer demand for transparency
and quality.
Speaker 1 (03:45):
Yeah, that makes a lot of sense. Oh okay, So
finding your niche, building a strong brand and offering a
great product alongside those ethical values. That's key. But now
let's dive into the flip side. Okay, what were some
of the things that small Hole may Be stumbled on
that ultimately led to their downfall.
Speaker 2 (04:02):
Well, one of the biggest factors was their reliance on
venture capital funding. Okay, and you know, maybe taking on
too much of it too quickly.
Speaker 1 (04:09):
I thought getting funding was a good thing.
Speaker 2 (04:11):
Well it can be, yeah, but it really depends on
the terms and the expectations that come with that funding. Okay,
And in Smallhold's case, the pressure to deliver quick returns
for investors, which is typical in the VC world. Yeah,
push them to prioritize technology over simplicity and efficiency.
Speaker 1 (04:28):
So instead of focusing on what worked best for growing
mushrooms sustainably, they were more focused on showcasing fancy tech
that might impress investors.
Speaker 2 (04:36):
Yeah, exactly. They were trying to scale up very rapidly,
which can be difficult to manage even for established businesses, right,
let alone a young company trying to disrupt a complex
industry like agriculture.
Speaker 1 (04:49):
Yeah. And I imagine that rapid growth probably made it
even harder to reach profitability.
Speaker 2 (04:54):
Yeah, that's a key point.
Speaker 1 (04:56):
Especially if you're focusing more on expansion than refining your
core operations.
Speaker 2 (05:00):
Absolutely, and it's not unique to small hold either. Oh really,
the article mentions Aero Farms and app Harvest. Okay, these
are two other indoor farming companies that also filed for
bankruptcy after receiving significant venture capital investments. So it suggests
a systemic challenge within the startup ecosystem itself.
Speaker 1 (05:20):
So it's not just about individual companies making mistakes, right,
It's about a larger tension between the demands of investors
and the realities of building a sustainable business.
Speaker 2 (05:30):
Exactly, especially in an industry like agriculture, right.
Speaker 1 (05:34):
Where the time frames might be a lot longer.
Speaker 2 (05:36):
Yeah, The typical timeframes for return on investment that many
venture capitalists expect which is typically five to seven years,
don't always align with the longer term vision and slower
growth trajectory that many sustainable businesses require.
Speaker 1 (05:51):
That's a really good point. So if relying too heavily
on venture capital can be a pitfall, what are some
alternative paths for sustainable startups? Are there other ways to
fund their growth without sacrificing their values? Yeah, or getting
caught in that pressure cooker of rapid expansion. Right we're
just talking about small hold and you know their journey.
Speaker 2 (06:10):
Yeah, fascinating story.
Speaker 1 (06:11):
It really highlights the challenges, right.
Speaker 2 (06:13):
Yeah, definitely balancing that commitment to sustainability with the realities
of the business world.
Speaker 1 (06:19):
And it brings up some really important questions I think,
yeah for sure, Like how can sustainable startups find the
funding they need without compromising their values in the process.
Speaker 2 (06:29):
It's a tough one.
Speaker 1 (06:30):
And I guess even beyond funding, you know, what are
some of those systemic issues that make it so tough
for sustainable businesses to really thrive.
Speaker 2 (06:40):
One of the biggest things is this tension between the
long term vision of sustainability and the short term demands
of the market. Okay, you know, sustainability is all about
creating systems that work for people and the planet right
over the long haul.
Speaker 1 (06:55):
Yeah, it's about the bigger picture exactly.
Speaker 2 (06:57):
It's about you know, looking at the entire life cycle
of a product and minimizing negative impact.
Speaker 1 (07:03):
So it's about more than just profit then, exactly.
Speaker 2 (07:06):
It's about values, okay. But so much of our current
economic system is driven by this short term thinking, you know,
quarterly earnings reports and a relentless focus on growth.
Speaker 1 (07:17):
Yeah, it's all about the bottom line.
Speaker 2 (07:19):
Exactly, and this creates a fundamental mismatch.
Speaker 1 (07:22):
So sustainable businesses are almost playing a different game.
Speaker 2 (07:25):
Then in a way. Yes, they often require more upfront investment,
they might take longer to turn a profit, okay, and
they may prioritize things like ethical sourcing and fair labor practices.
Speaker 1 (07:38):
Right, which can all increase costs exactly, and that can
put them at a disadvantage in a market that's so
focused on you know, speed and low prices.
Speaker 2 (07:46):
That's right, and that's where the role of policy and
regulation becomes really crucial.
Speaker 1 (07:51):
So it's not just about individual companies trying to do
the right thing, No, not at all. We need bigger
changes to kind of level the playing field.
Speaker 2 (07:57):
Absolutely, we need policies that incentivize sustainable practices, support innovation
in this space, and hold companies accountable for their environmental
and social impact.
Speaker 1 (08:09):
Can you give me some examples of what those policies
might look like?
Speaker 2 (08:11):
Sure, we could talk about things like carbon taxes, subsidies
for renewable energy, stricter regulations on pollution, or even labeling
requirements that give consumers more information about the sustainability of
different products, transparency exactly. These could all help shift the
market in a more sustainable direction.
Speaker 1 (08:31):
This is some really interesting ideas. But what about the
role of us as consumers? Can our choices really make
a difference?
Speaker 2 (08:38):
Absolutely? Consumers hold incredible power through their purchasing decisions.
Speaker 1 (08:43):
Okay, how so, well.
Speaker 2 (08:45):
Every time you buy something, you're essentially casting a vote
for the kind of world you want to see.
Speaker 1 (08:49):
So it's about being more conscious then exactly about where
we spend our money, yeah.
Speaker 2 (08:53):
And supporting businesses that align with our values.
Speaker 1 (08:56):
Putting our money where our mouth is exactly.
Speaker 2 (08:58):
It's also about doing your research, asking questions, advocating for change.
Speaker 1 (09:04):
Okay.
Speaker 2 (09:04):
All of these actions have a ripple effect.
Speaker 1 (09:07):
That makes sense, but it can be tough, yeah, you know, Yeah,
to know who to trust for sure. It feels like
every company is claiming to be sustainable these days.
Speaker 2 (09:15):
Greenwashing is a real problem, But how can.
Speaker 1 (09:17):
We really tell if they're walk in the walk?
Speaker 2 (09:20):
That's a great point, and that's where critical thinking comes in. Okay,
don't just take marketing claims at face value, right, dig
a little deeper, look for third party certifications, read reviews
from reputable sources, and consider the company's track record.
Speaker 1 (09:36):
Do your homework exactly, and I guess be wary of
greenwashing exactly.
Speaker 2 (09:40):
Greenwashing is when companies use misleading marketing to appear more
sustainable right than they really are. It's a real problem.
Speaker 1 (09:49):
Yeah, so being an informed consumer and holding companies accountable
is crucial.
Speaker 2 (09:53):
Absolutely, But this.
Speaker 1 (09:54):
Whole conversation also makes me wonder, you know, if even
a company like small Hold, with their strong values and
initial success couldn't navigate these pressures, right, what does that
say about the larger challenges of building a truly sustainable
food system.
Speaker 2 (10:10):
That's the million dollar question, isn't it? It is, and
it's one we need to keep exploring. It's clear that
there are major hurdles to overcomes.
Speaker 1 (10:18):
So where do we go from here? Then? How do
we even begin to shift towards a system that prioritizes
long term sustainability over short term profits.
Speaker 2 (10:27):
It's a big question. Yeah, we can't just rely on
good intentions. We need to change the rules.
Speaker 1 (10:32):
Of the game.
Speaker 2 (10:33):
It's through policy and by shifting cultural norms and expectation.
Speaker 1 (10:37):
What do you mean by shifting cultural norms?
Speaker 2 (10:39):
Well, right now, so much emphasis is placed on profit
and growth as the primary measures of success. We need
to start valuing long term thinking, resilience, social responsibility.
Speaker 1 (10:52):
Yeah, just as much. That's a big ask, it is,
but it's kind of exciting to think about what might
be possible if we could make that shift.
Speaker 2 (10:59):
I agree, and I do think we're seeing a growing
awareness that the current system is unsustainable. Okay, more and
more people are demanding change, supporting businesses that are doing
things differently, and advocating for a more just and equitable future.
Speaker 1 (11:14):
It feels like we're reaching a tipping point I think,
so where sustainability is no longer a niche concern but
a mainstream movement exactly.
Speaker 2 (11:24):
And that's incredibly exciting because it means we have the
potential to create real, lasting change.
Speaker 1 (11:31):
Yeah, I'm feeling helpful me too. This conversation has been
so insightful.
Speaker 2 (11:34):
It's been great.
Speaker 1 (11:35):
I'm feeling challenged and hopeful at the same time. Yeah,
it's clear that there are, you know, these hurdles to overcome, sure,
but there's also this growing momentum. Yeah, for a more
sustainable future.
Speaker 2 (11:48):
Definitely.
Speaker 1 (11:48):
It feels like we're at a turning point.
Speaker 2 (11:50):
I feel it too.
Speaker 1 (11:52):
I think so too. So I guess to kind of
wrap up this part of the conversation. Okay, what are
some key takeaways?
Speaker 2 (11:58):
Okay, well, first, yeah, remember that sustainability is a journey,
not a destination. Every step we take in the right
direction matters.
Speaker 1 (12:07):
I like that.
Speaker 2 (12:07):
Yeah, what else?
Speaker 1 (12:09):
Be a quonscious consumer? Okay, support businesses that align with
your values, don't be afraid to ask questions and demand transparency,
do your research exactly.
Speaker 2 (12:18):
So, we were just talking about, you know, that tension
between ethical ideals and the desire for racked growth, right,
especially in the world of sustainable startups.
Speaker 1 (12:28):
Yeah, it feels like a real catch twenty two.
Speaker 2 (12:30):
Sometimes it is, as we saw with small Hold, that
pressure to scale quickly, especially when you're fueled by venture capital,
it can lead to compromises that undermine the company's original mission.
Speaker 1 (12:42):
Right, So does that mean then that venture capitalists are
kind of inherently at odds with sustainability.
Speaker 2 (12:49):
Not necessarily. There are definitely vcs out there who are
genuinely committed to impact investing, okay, and supporting businesses that are,
you know, creating positive change.
Speaker 1 (13:00):
Yeah.
Speaker 2 (13:01):
But it's crucial for entrepreneurs to be really selective about
their funding sources and to understand the expectations that come
with different types of investment.
Speaker 1 (13:10):
It's about finding the right.
Speaker 2 (13:11):
Partners exactly, partners who share your vision for.
Speaker 1 (13:14):
The long haul. Yeah. And I guess sometimes a slower,
more organic approach to growth might actually be a better fit.
It might be for a company's values and long term goals.
Speaker 2 (13:24):
Absolutely.
Speaker 1 (13:24):
Like we saw with art foods and tailor farms, they
really prioritized that financial stability and gradual expansion.
Speaker 2 (13:31):
Right, They weren't chasing those huge numbers exactly.
Speaker 1 (13:33):
And I think those alternative models are worth exploring further.
Speaker 2 (13:37):
Definitely.
Speaker 1 (13:38):
You know, there's this growing movement I think towards businesses
that are purpose driven, right, stakeholder focused and prioritize that
social and environmental impact alongside profit exactly, like the b
Court movement.
Speaker 2 (13:51):
Yes, b Core are certified companies that meet really rigorous
standards of social and environmental performance, wow and transparency. It's
a way for businesses to signal their commitment to a
different way of doing business.
Speaker 1 (14:08):
So it's not just about what you produce, but how
you produce it.
Speaker 2 (14:10):
That's right, the whole picture.
Speaker 1 (14:12):
Yeah, and it seems like consumers are really starting to
pay attention to this.
Speaker 2 (14:15):
Definitely. They want to support businesses that align with their
values and they're willing to put their money where their
mouth is.
Speaker 1 (14:23):
Yeah. So I guess this all circles back to that
big question we keep coming back to. Can businesses really
change the world for the better?
Speaker 2 (14:30):
Right?
Speaker 1 (14:31):
Or are they ultimately beholden to profit above all else? Right?
Speaker 2 (14:35):
I'm optimistic. I think businesses have the potential to be
powerful forces for good. They can create jobs, drive innovation,
provide solutions to some of the world's most pressing problems.
Speaker 1 (14:47):
Yeah. But it's not that simple, right.
Speaker 2 (14:49):
No, it requires a real shift in mindset. Okay, we
need to move away from that narrow focus on shareholder
value and embrace a more holistic view of success that
includes social and environmental impact.
Speaker 1 (15:02):
So maximizing benefit for all.
Speaker 2 (15:04):
Stakeholders exactly, not just profits for a select few.
Speaker 1 (15:08):
And that's where I guess, you know, conscious consumers come
in absolutely. By supporting those businesses that are walking the walk,
we can create a market demand for those products and
services that are good for people and the planet.
Speaker 2 (15:20):
It creates a virtuous cycle.
Speaker 1 (15:22):
Yes, businesses respond to consumer demand, and consumers reward businesses
that are doing the right thing exactly.
Speaker 2 (15:29):
And ultimately, I think that shift in consciousness is what
will drive real lasting change.
Speaker 1 (15:36):
I love that. Well, this has been such a thought
provoking conversation. I feel like I've learned a lot into
about the complexities of building a sustainable business and the
importance of looking beyond just the bottom line.
Speaker 2 (15:47):
Absolutely.
Speaker 1 (15:48):
So to kind of wrap things up for our listeners today,
what are some key takeaways that you'd like them to
walk away with?
Speaker 2 (15:54):
Okay, Well, first, remember that sustainability is a journey, not
a destination. Every step we take in the right direction matters.
Speaker 1 (16:03):
Love that. What else?
Speaker 2 (16:04):
Be a conscious consumer? Support businesses that align with your values. Yeah,
don't be afraid to ask questions and demand transparency, do
your research exactly, and lastly, never underestimate the power of
your choices. Every purchase, every action is a vote for
the kind of world you want to create.
Speaker 1 (16:24):
That's a powerful note to end on. Huh, thanks for
joining us on this deep dive.
Speaker 2 (16:27):
It's been a pleasure.
Speaker 1 (16:28):
We hope it's given you some food for thought. Pun intended,
pun intended. Yeah, and it inspired you to keep learning,
keep questioning, and keep pushing for a more sustainable future.
Hey, everyone, welcome to another deep dive. Today. We're going
(00:04):
to be looking at sustainable food startups, okay, and specifically
some of the challenges they face. And the source material
for today's deep dive is a really, really fascinating article
from The Guardian.
Speaker 2 (00:15):
Oh yeah, I read that one.
Speaker 1 (00:16):
Yeah. It's called vcs Need Their Money Back? Why Sustainable
Startups Struggle to Fix our Broken Food System? Catchy title, Yeah,
it is, and it kind of gets at the question
that I think we're going to be kind of circling
around today, which is, you know, can these businesses really
change the world for the better, right or are they
(00:37):
ultimately beholden to you know, the bottom line?
Speaker 2 (00:40):
Yeah, are they all talk or can they actually walk
the walk?
Speaker 1 (00:42):
Exactly? And the article uses this case study of small
Hold small Hole. Yeah you familiar with your Yeah.
Speaker 2 (00:48):
They're a mushroom growing company.
Speaker 1 (00:49):
Right, exactly, interesting company.
Speaker 2 (00:51):
Yeah, and they have this really interesting trajectory. So they
start out in Brooklyn, just a single shipping container growing mushrooms,
and within six they're in fourteen hundred stores across the country.
Speaker 1 (01:03):
That's pretty impressive.
Speaker 2 (01:04):
It's incredible, right, And they hit a peak valuation of
ninety million dollars.
Speaker 1 (01:09):
Wow, that's that's serious investor confidence. Yeah.
Speaker 2 (01:12):
They were really seen as this kind of company of
the moment, especially during the pandemic when there was this
huge surge and interest in you know, local sustainable food.
Speaker 1 (01:22):
Yeah, they really tapped into something.
Speaker 2 (01:23):
And they also had like a really great brand, Like
their social media was really clever, really witty.
Speaker 1 (01:30):
Yeah, I've seen their stuff. They made mushrooms look cool, right.
Speaker 2 (01:33):
Who knew? And then kind of seemingly out of nowhere,
what happened? The founders stepped down, they filed for bankruptcy. Whoa,
and new investors come in, okay, and they basically shrink
the whole operation down.
Speaker 1 (01:45):
Wow, what a what a turnaround?
Speaker 2 (01:47):
Yeah, and I think for a lot of people who
saw small Hold as this model for how to do
things differently, it was a real shock.
Speaker 1 (01:55):
Yeah, definitely. So the article uses their story to look
at kind of the dues and don'ts for sustainable startups.
Speaker 2 (02:02):
What worked, what didn't work right?
Speaker 1 (02:04):
What can we learn from their experience? No, exactly, So
let's start with the good stuff. What were some of
the things small Hold did well that contributed to their
initial success.
Speaker 2 (02:15):
Well, one of the things that really stood out to me,
was they found their niche. Okay, they didn't just offer
you know, the basic button mushrooms you see everywhere.
Speaker 1 (02:24):
The boring ones.
Speaker 2 (02:24):
Yeah, exactly. Yeah, they focused on specialty varieties Okay, like
she talked blue oyster lions.
Speaker 1 (02:32):
Maine ooh fancy.
Speaker 2 (02:33):
Yeah, and these have unique flavors and they're really visually
appealing too. So they really helped small holds stand out.
Speaker 1 (02:40):
Okay, so they elevated the humble mushroom to something kind
of special, right, Yeah, and then we touched on their
branding earlier.
Speaker 2 (02:48):
Yeah, their branding was on point.
Speaker 1 (02:49):
Yeah.
Speaker 2 (02:50):
I think they really understood that in today's market. You know,
you have to offer more than just ethical practices, right,
you have to deliver on quality, cost effectiveness, and create
a brand experience that resonates with consumers.
Speaker 1 (03:01):
It's not enough to just be sustainable exactly.
Speaker 2 (03:04):
Sustainability alone isn't a guarantee of success.
Speaker 1 (03:07):
That's a really good point. You know, I might care
about a company's values, but if their product isn't good
or it's too expensive, I'm probably going to go with
a different option.
Speaker 2 (03:17):
You can vote with your wallet, exactly.
Speaker 1 (03:20):
So are there other companies that have managed to kind
of strike this balance.
Speaker 2 (03:26):
Well, definitely. The article mentions a couple of other companies,
Bowery Farming and Gotham Greens. They've both found ways to
combine sustainability with strong branding and a compelling product. So
they're really tapping into that growing consumer demand for transparency
and quality.
Speaker 1 (03:45):
Yeah, that makes a lot of sense. Oh okay, So
finding your niche, building a strong brand and offering a
great product alongside those ethical values. That's key. But now
let's dive into the flip side. Okay, what were some
of the things that small Hole may Be stumbled on
that ultimately led to their downfall.
Speaker 2 (04:02):
Well, one of the biggest factors was their reliance on
venture capital funding. Okay, and you know, maybe taking on
too much of it too quickly.
Speaker 1 (04:09):
I thought getting funding was a good thing.
Speaker 2 (04:11):
Well it can be, yeah, but it really depends on
the terms and the expectations that come with that funding. Okay,
And in Smallhold's case, the pressure to deliver quick returns
for investors, which is typical in the VC world. Yeah,
push them to prioritize technology over simplicity and efficiency.
Speaker 1 (04:28):
So instead of focusing on what worked best for growing
mushrooms sustainably, they were more focused on showcasing fancy tech
that might impress investors.
Speaker 2 (04:36):
Yeah, exactly. They were trying to scale up very rapidly,
which can be difficult to manage even for established businesses, right,
let alone a young company trying to disrupt a complex
industry like agriculture.
Speaker 1 (04:49):
Yeah. And I imagine that rapid growth probably made it
even harder to reach profitability.
Speaker 2 (04:54):
Yeah, that's a key point.
Speaker 1 (04:56):
Especially if you're focusing more on expansion than refining your
core operations.
Speaker 2 (05:00):
Absolutely, and it's not unique to small hold either. Oh really,
the article mentions Aero Farms and app Harvest. Okay, these
are two other indoor farming companies that also filed for
bankruptcy after receiving significant venture capital investments. So it suggests
a systemic challenge within the startup ecosystem itself.
Speaker 1 (05:20):
So it's not just about individual companies making mistakes, right,
It's about a larger tension between the demands of investors
and the realities of building a sustainable business.
Speaker 2 (05:30):
Exactly, especially in an industry like agriculture, right.
Speaker 1 (05:34):
Where the time frames might be a lot longer.
Speaker 2 (05:36):
Yeah, The typical timeframes for return on investment that many
venture capitalists expect which is typically five to seven years,
don't always align with the longer term vision and slower
growth trajectory that many sustainable businesses require.
Speaker 1 (05:51):
That's a really good point. So if relying too heavily
on venture capital can be a pitfall, what are some
alternative paths for sustainable startups? Are there other ways to
fund their growth without sacrificing their values? Yeah, or getting
caught in that pressure cooker of rapid expansion. Right we're
just talking about small hold and you know their journey.
Speaker 2 (06:10):
Yeah, fascinating story.
Speaker 1 (06:11):
It really highlights the challenges, right.
Speaker 2 (06:13):
Yeah, definitely balancing that commitment to sustainability with the realities
of the business world.
Speaker 1 (06:19):
And it brings up some really important questions I think,
yeah for sure, Like how can sustainable startups find the
funding they need without compromising their values in the process.
Speaker 2 (06:29):
It's a tough one.
Speaker 1 (06:30):
And I guess even beyond funding, you know, what are
some of those systemic issues that make it so tough
for sustainable businesses to really thrive.
Speaker 2 (06:40):
One of the biggest things is this tension between the
long term vision of sustainability and the short term demands
of the market. Okay, you know, sustainability is all about
creating systems that work for people and the planet right
over the long haul.
Speaker 1 (06:55):
Yeah, it's about the bigger picture exactly.
Speaker 2 (06:57):
It's about you know, looking at the entire life cycle
of a product and minimizing negative impact.
Speaker 1 (07:03):
So it's about more than just profit then, exactly.
Speaker 2 (07:06):
It's about values, okay. But so much of our current
economic system is driven by this short term thinking, you know,
quarterly earnings reports and a relentless focus on growth.
Speaker 1 (07:17):
Yeah, it's all about the bottom line.
Speaker 2 (07:19):
Exactly, and this creates a fundamental mismatch.
Speaker 1 (07:22):
So sustainable businesses are almost playing a different game.
Speaker 2 (07:25):
Then in a way. Yes, they often require more upfront investment,
they might take longer to turn a profit, okay, and
they may prioritize things like ethical sourcing and fair labor practices.
Speaker 1 (07:38):
Right, which can all increase costs exactly, and that can
put them at a disadvantage in a market that's so
focused on you know, speed and low prices.
Speaker 2 (07:46):
That's right, and that's where the role of policy and
regulation becomes really crucial.
Speaker 1 (07:51):
So it's not just about individual companies trying to do
the right thing, No, not at all. We need bigger
changes to kind of level the playing field.
Speaker 2 (07:57):
Absolutely, we need policies that incentivize sustainable practices, support innovation
in this space, and hold companies accountable for their environmental
and social impact.
Speaker 1 (08:09):
Can you give me some examples of what those policies
might look like?
Speaker 2 (08:11):
Sure, we could talk about things like carbon taxes, subsidies
for renewable energy, stricter regulations on pollution, or even labeling
requirements that give consumers more information about the sustainability of
different products, transparency exactly. These could all help shift the
market in a more sustainable direction.
Speaker 1 (08:31):
This is some really interesting ideas. But what about the
role of us as consumers? Can our choices really make
a difference?
Speaker 2 (08:38):
Absolutely? Consumers hold incredible power through their purchasing decisions.
Speaker 1 (08:43):
Okay, how so, well.
Speaker 2 (08:45):
Every time you buy something, you're essentially casting a vote
for the kind of world you want to see.
Speaker 1 (08:49):
So it's about being more conscious then exactly about where
we spend our money, yeah.
Speaker 2 (08:53):
And supporting businesses that align with our values.
Speaker 1 (08:56):
Putting our money where our mouth is exactly.
Speaker 2 (08:58):
It's also about doing your research, asking questions, advocating for change.
Speaker 1 (09:04):
Okay.
Speaker 2 (09:04):
All of these actions have a ripple effect.
Speaker 1 (09:07):
That makes sense, but it can be tough, yeah, you know, Yeah,
to know who to trust for sure. It feels like
every company is claiming to be sustainable these days.
Speaker 2 (09:15):
Greenwashing is a real problem, But how can.
Speaker 1 (09:17):
We really tell if they're walk in the walk?
Speaker 2 (09:20):
That's a great point, and that's where critical thinking comes in. Okay,
don't just take marketing claims at face value, right, dig
a little deeper, look for third party certifications, read reviews
from reputable sources, and consider the company's track record.
Speaker 1 (09:36):
Do your homework exactly, and I guess be wary of
greenwashing exactly.
Speaker 2 (09:40):
Greenwashing is when companies use misleading marketing to appear more
sustainable right than they really are. It's a real problem.
Speaker 1 (09:49):
Yeah, so being an informed consumer and holding companies accountable
is crucial.
Speaker 2 (09:53):
Absolutely, But this.
Speaker 1 (09:54):
Whole conversation also makes me wonder, you know, if even
a company like small Hold, with their strong values and
initial success couldn't navigate these pressures, right, what does that
say about the larger challenges of building a truly sustainable
food system.
Speaker 2 (10:10):
That's the million dollar question, isn't it? It is, and
it's one we need to keep exploring. It's clear that
there are major hurdles to overcomes.
Speaker 1 (10:18):
So where do we go from here? Then? How do
we even begin to shift towards a system that prioritizes
long term sustainability over short term profits.
Speaker 2 (10:27):
It's a big question. Yeah, we can't just rely on
good intentions. We need to change the rules.
Speaker 1 (10:32):
Of the game.
Speaker 2 (10:33):
It's through policy and by shifting cultural norms and expectation.
Speaker 1 (10:37):
What do you mean by shifting cultural norms?
Speaker 2 (10:39):
Well, right now, so much emphasis is placed on profit
and growth as the primary measures of success. We need
to start valuing long term thinking, resilience, social responsibility.
Speaker 1 (10:52):
Yeah, just as much. That's a big ask, it is,
but it's kind of exciting to think about what might
be possible if we could make that shift.
Speaker 2 (10:59):
I agree, and I do think we're seeing a growing
awareness that the current system is unsustainable. Okay, more and
more people are demanding change, supporting businesses that are doing
things differently, and advocating for a more just and equitable future.
Speaker 1 (11:14):
It feels like we're reaching a tipping point I think,
so where sustainability is no longer a niche concern but
a mainstream movement exactly.
Speaker 2 (11:24):
And that's incredibly exciting because it means we have the
potential to create real, lasting change.
Speaker 1 (11:31):
Yeah, I'm feeling helpful me too. This conversation has been
so insightful.
Speaker 2 (11:34):
It's been great.
Speaker 1 (11:35):
I'm feeling challenged and hopeful at the same time. Yeah,
it's clear that there are, you know, these hurdles to overcome, sure,
but there's also this growing momentum. Yeah, for a more
sustainable future.
Speaker 2 (11:48):
Definitely.
Speaker 1 (11:48):
It feels like we're at a turning point.
Speaker 2 (11:50):
I feel it too.
Speaker 1 (11:52):
I think so too. So I guess to kind of
wrap up this part of the conversation. Okay, what are
some key takeaways?
Speaker 2 (11:58):
Okay, well, first, yeah, remember that sustainability is a journey,
not a destination. Every step we take in the right
direction matters.
Speaker 1 (12:07):
I like that.
Speaker 2 (12:07):
Yeah, what else?
Speaker 1 (12:09):
Be a quonscious consumer? Okay, support businesses that align with
your values, don't be afraid to ask questions and demand transparency,
do your research exactly.
Speaker 2 (12:18):
So, we were just talking about, you know, that tension
between ethical ideals and the desire for racked growth, right,
especially in the world of sustainable startups.
Speaker 1 (12:28):
Yeah, it feels like a real catch twenty two.
Speaker 2 (12:30):
Sometimes it is, as we saw with small Hold, that
pressure to scale quickly, especially when you're fueled by venture capital,
it can lead to compromises that undermine the company's original mission.
Speaker 1 (12:42):
Right, So does that mean then that venture capitalists are
kind of inherently at odds with sustainability.
Speaker 2 (12:49):
Not necessarily. There are definitely vcs out there who are
genuinely committed to impact investing, okay, and supporting businesses that are,
you know, creating positive change.
Speaker 1 (13:00):
Yeah.
Speaker 2 (13:01):
But it's crucial for entrepreneurs to be really selective about
their funding sources and to understand the expectations that come
with different types of investment.
Speaker 1 (13:10):
It's about finding the right.
Speaker 2 (13:11):
Partners exactly, partners who share your vision for.
Speaker 1 (13:14):
The long haul. Yeah. And I guess sometimes a slower,
more organic approach to growth might actually be a better fit.
It might be for a company's values and long term goals.
Speaker 2 (13:24):
Absolutely.
Speaker 1 (13:24):
Like we saw with art foods and tailor farms, they
really prioritized that financial stability and gradual expansion.
Speaker 2 (13:31):
Right, They weren't chasing those huge numbers exactly.
Speaker 1 (13:33):
And I think those alternative models are worth exploring further.
Speaker 2 (13:37):
Definitely.
Speaker 1 (13:38):
You know, there's this growing movement I think towards businesses
that are purpose driven, right, stakeholder focused and prioritize that
social and environmental impact alongside profit exactly, like the b
Court movement.
Speaker 2 (13:51):
Yes, b Core are certified companies that meet really rigorous
standards of social and environmental performance, wow and transparency. It's
a way for businesses to signal their commitment to a
different way of doing business.
Speaker 1 (14:08):
So it's not just about what you produce, but how
you produce it.
Speaker 2 (14:10):
That's right, the whole picture.
Speaker 1 (14:12):
Yeah, and it seems like consumers are really starting to
pay attention to this.
Speaker 2 (14:15):
Definitely. They want to support businesses that align with their
values and they're willing to put their money where their
mouth is.
Speaker 1 (14:23):
Yeah. So I guess this all circles back to that
big question we keep coming back to. Can businesses really
change the world for the better?
Speaker 2 (14:30):
Right?
Speaker 1 (14:31):
Or are they ultimately beholden to profit above all else? Right?
Speaker 2 (14:35):
I'm optimistic. I think businesses have the potential to be
powerful forces for good. They can create jobs, drive innovation,
provide solutions to some of the world's most pressing problems.
Speaker 1 (14:47):
Yeah. But it's not that simple, right.
Speaker 2 (14:49):
No, it requires a real shift in mindset. Okay, we
need to move away from that narrow focus on shareholder
value and embrace a more holistic view of success that
includes social and environmental impact.
Speaker 1 (15:02):
So maximizing benefit for all.
Speaker 2 (15:04):
Stakeholders exactly, not just profits for a select few.
Speaker 1 (15:08):
And that's where I guess, you know, conscious consumers come
in absolutely. By supporting those businesses that are walking the walk,
we can create a market demand for those products and
services that are good for people and the planet.
Speaker 2 (15:20):
It creates a virtuous cycle.
Speaker 1 (15:22):
Yes, businesses respond to consumer demand, and consumers reward businesses
that are doing the right thing exactly.
Speaker 2 (15:29):
And ultimately, I think that shift in consciousness is what
will drive real lasting change.
Speaker 1 (15:36):
I love that. Well, this has been such a thought
provoking conversation. I feel like I've learned a lot into
about the complexities of building a sustainable business and the
importance of looking beyond just the bottom line.
Speaker 2 (15:47):
Absolutely.
Speaker 1 (15:48):
So to kind of wrap things up for our listeners today,
what are some key takeaways that you'd like them to
walk away with?
Speaker 2 (15:54):
Okay, Well, first, remember that sustainability is a journey, not
a destination. Every step we take in the right direction matters.
Speaker 1 (16:03):
Love that. What else?
Speaker 2 (16:04):
Be a conscious consumer? Support businesses that align with your values. Yeah,
don't be afraid to ask questions and demand transparency, do
your research exactly, and lastly, never underestimate the power of
your choices. Every purchase, every action is a vote for
the kind of world you want to create.
Speaker 1 (16:24):
That's a powerful note to end on. Huh, thanks for
joining us on this deep dive.
Speaker 2 (16:27):
It's been a pleasure.
Speaker 1 (16:28):
We hope it's given you some food for thought. Pun intended,
pun intended. Yeah, and it inspired you to keep learning,
keep questioning, and keep pushing for a more sustainable future.
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