One of the most surreal aspects of watching Smallhold's demise was the meetings. Countless meetings across all levels, with charts that everyone stared at with waning hope over about two years. We all understood margins wouldn’t improve unless we addressed our business fundamentals, yet we kept pushing forward. Plenty of solutions came up, but they required some serious rejiggering that never happened.
As time began to run out, we actually had couple of proposals to merge with, or be bought out by, Bowery Farms. Same core issues as ours, just bigger. The key difference was that specialty mushrooms could actually yield competitive margins by eating into the button mushroom category, at least according to the subcategory’s 5-year velocity data -- if we grew them without all the bloat. Not linking up probably bought us a couple more months.
If you’ve ever read Catch-22, you can relate. It was like being on a runaway train, fueled by burning cash, hurtling toward a wall. You’re crazy to stay on it, but when you try to pull the emergency brake, everyone tells you you’re nuts.
In my opinion, one reason more founders won't speak openly about this is because they still want to raise money. I respect that, and support them. Same train, different track. Welcome.
To them I say this:
If you want to fix a broken food system, invest in your fundamentals. It’s not glamorous, but it’s… real. And nourishing. Invest in your farms, invest in your farmers. And yes, invest in technology—to help your crew do their jobs. Food takes time to grow.
Here’s hoping the next wave of investment catches on to this to support the new crop of "regenerative" businesses. We honestly don't have much time left to fix things and need to move forward. And there’s definitely money to be made in produce and food... if we stop expecting SaaS returns on lettuce, mushrooms, and the like.
cc @Snaxshot
