The Costco Connection

IN 2009, COSTCO members Alejandro Vélez and Nikhil Arora were two months from graduating from UC Berkeley, and had lucrative employment contracts signed with top financial firms, when they decided to toss their plans aside for mushroom farming.

The two college seniors met at a lecture after their business professor piqued their interest with a slide about growing mushrooms from used coffee grounds. While the professor couldn’t elaborate on the topic, he encouraged the two to seek the answers for themselves.

Arora and Veléz immediately hit it off. They spent their weekends and time in between classes growing mushrooms in 5-gallon buckets filled with donated coffee grounds in Veléz’s college fraternity kitchen. After watching hours of You Tube videos and combing research books, they excitedly took their first successful bucket to a Whole Foods and asked the employee stocking produce if the store would buy them. “He looked at us like, ‘What [in the world] are you guys doing?’” laughs Vélez.

They were eventually connected to the store’s buyer, and that was the end of their post-College in Brooklyn Park, Minnesota.

Although Patrick was a nascent inventor who had every intention of eventually marketing his own products, he and Jamie knew they would have to start with someone else’s invention. While on vacation in Florida, Jamie discovered the Aqua Bike, a large three-wheeled contraption that could travel on land or water, and called Patrick.

“By the time I got home he had rung up quite a big phone bill calling around, trying to find it,” she says, explaining that it was no easy task in those pre-internet days. Patrick and Jamie worked to convince the manufacturers to let these two “kids” distribute their product. They succeeded and were off and running.

Today, McNaughton Incorporated, which has been in business since 1985, manufactures and markets 340 items for homes, gardens and autos under brand names such as Buckle Guard, Soda Bottle Bird Feeders, Soapy

Sibling success
Back to the Roots

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PROVIDED BY MCNAUGH TON INC.

graduation plans. “Forget investment banking, forget consulting. Mushroom farming it is,” Vélez recalls to The Connection. And that’s when Back to the Roots was officially born.

Vélez, whose family emigrated from Colombia when he was 11, says turning his back on a financially stable future was a tough decision. While their families supported their plans, Vélez says explaining to friends was tougher. His fraternity brothers even tried to stage an intervention prior to graduation. But ultimately Vélez’s and Arora’s partnership, along with their shared drive to make an impact in the world, won out.

As their business grew, they began selling rudimentary at-home mushroom growing kits, which were a hit with kids and classrooms. They switched their focus to selling sleek grow-at-home mushroom kits (expanding later to herbs and tomatoes), an aquaponics garden and limited-ingredient cereals made from sustainable crops, available on Costco.com.

Vélez says his double major in business and economics and Arora’s double major in business and political science have helped them run their business. Today, they’ve garnered investors, expanded their staff and set their sights on continued growth by every definition of the word.—Hana Medina

Soles, Sole Mates, Gadjits, Master
Mounts and Window Vases. Jamie
calls them “forehead slappers,” and
says, “I love it when I show them to people;
they many times slap their forehead and say,
‘Wow, I wish I had thought of that!’ ”
Although he started out studying architec-
ture, “as our business started to grow and
develop, I started taking more marketing
classes, more business classes, just seeing and
knowing that those were the skills that I needed
to learn [to run] the company,” Patrick says.

Patrick was living at home in those early days and ran operations from there. Later, Jamie remodeled her basement into an office, complete with cubicles.

“The business from the very beginning
started to grow relatively fast. And being self-
employed can be quite demanding,” Patrick
explains. “I was running in and out. It’s difficult
when you’re in the middle of something and you
have to leave to take a class and leave a class to
go home to call customers, or work on a product,
and put the homework piece off until later.”
Jamie says it wasn’t unusual to see Patrick
sleeping on the floor, surrounded by books
and papers.

Their advice to those contemplating starting a business: “The hardest part for anybody, regardless of their age, is taking action.

Taking that first step. It’s a little scary. It’s risky. But once you take that first step and start moving, everything else starts to come into place and feel better and easier.”

—Steve Fisher

Nikhil Arora (left) and Alejandro Vélez

JAMIE MCNAUGHTON & PATRICK MCNAUGHTON

McNaughton Incorporated • Plymouth, Minnesota • mcincshop.com

TOP TIP: Be true to yourself and your ambitions; be sincere; be honest. Don’t try to hide your age or lack of experience. Share your excitement and enthusiasm.