This anti-capitalist mushroom company needs a business plan. But does it want one?

Radical Mycology

When Tzogas started Smugtown Mushrooms about four years ago, it was a way to sell the fruits of her foraging, to expand the ranks of the myco-conscious, and create something Rochester’s politically radical and artistic communities could gather around. Named after a book about Rochester’s post-war boom days, Smugtown first made its home in a 9,000-square-foot warehouse on the city’s industrial fringe. The startup was financed with Tzogas’s personal savings and staffed mostly by volunteers. And the labyrinthine building—which doubled as a punk performance space and art gallery—accommodated a small shopfront, plus space for Tzogas to carry out the complex production process.

The space was large enough for Tzogas to install an autoclave, a piece of equipment that uses heat and pressure to eliminate anything from bacteria to bugs in dozens of bags of media at a time. (It looks like something between a bank vault and a steamship boiler.) And the brewery right next door, which donated its spent grains as a substrate for fruiting mushrooms, was one of the location’s major perks.

Between what she foraged and what she grew, Tzogas sold 150 to 200 pounds a week of fresh mushrooms, as of fall 2015—mostly lion’s mane, oyster, shiitake, and wine cap—at festivals and local farmers’ markets, plus additional orders to four or five regular restaurant clients. She also developed a line of shelf-stable products. The company sells DIY mushroom kits made from bags of fungally-infused spent grains from local breweries; “plug spawn” (wooden dowels rejected by local furniture makers, inoculated with mushroom cultures) to be hammered into start-your-own shiitake logs; and dried mushrooms for tinctures and teas.

Among Smugtown’s driving principles are the values of “radical mycology,” a movement founded in the early 2000s that extols the power of fungi for “personal, societal, and ecological resilience.” For radical mycologists, mushrooms’ nutritional and medical benefits are just a starting point. Fungi are also powerful natural digesters and recyclers of waste, and Mycelium — the cottonlike “root” system from which mushrooms sprout—is a key reinforcing element of soil and a fortifying network for plants. Fungi even have the potential to restore polluted or depleted environments.

Tzogas says she wants to “build my business based on a more mutual aid type of model, like farmers growing food for other farmers. In my perfect utopian world, we all have these skills that we’re sharing, and we all help each other survive.”

“But I’m not saying I’m not, like, a hustler, let’s make that clear,” she goes on. “I’m definitely into slinging and getting it done.”

But then, late this past summer, the landlord took his own life days before a new lease was to be signed, Smugtown was forced to vacate its warehouse home. The property landed in the hands of a pair of developers set on turning the space into a hip beer garden.

Smugtown put its autoclave in storage and relocated to a 3,600-square-foot greenhouse on an organic permaculture farm in nearby Parma. It was a promising development. The new location has three times the fruiting space of the old one, with the added benefits of direct sunlight and fresh air. Tzogas immediately saw a chance to meet a demand she says has consistently been above Smugtown’s capacity. “We can’t grow enough mushrooms,” she says. “It pisses me off.”

But it hasn’t quite panned our so far. With the cold of winter, growing is suspended in the under-insulated greenhouse. Tzogas’s plans to integrate Smugtown’s operations with those of the farm have stalled, and now that Smugtown is outside the city, customers are less inclined to drop in or wander by. While Smugtown largely succeeded in its goal of supporting its community, of developing mutually supportive local networks and serving as an ambassador for fungus, the realities of business have remained an impediment.

“What am I going to do today, am I going to, like, go to the woods or am I going to think about drawing up a business plan?” Tzogas says. At this point, she has little choice.

Grassroots growing pains

For development to happen—to rebuild the lab, reinstall the autoclave, set up incubation rooms for the various strains Tzogas wants to grow—she’ll need an injection of tens of thousands of dollars in capital. She’s been in talks with the Farm Services Agency to arrange a loan after being turned down by her bank, for lack of a business plan. So Tzogas finds herself in a tough spot.

The point of starting Smugtown was not to conquer markets, but to connect people to fungus and one another. To get the funding she needs, she must devise a plan that will guarantee income and growth. That sounds straightforward, but it isn’t.

For example, Tzogas has been working with Rochester-based Empire Medicinals to create a strain of reishi mushrooms—the “mushroom of immortality,” treasured in traditional Asian medicine—for the Shanghai market. Tzogas says her regionally adapted reishi has performed exceedingly well in trials against other strains. That’s great news. Reishis are valuable—on Amazon, a pound of dried organic reishi go for more than $40. But the process is raising questions Tzogas hasn’t had to face before.

“I’ve got these people that are trying to potentially take my culture overseas, or take it to laboratories that I’m not familiar with, and I’m unsure what’s going to happen. Maybe I should license my culture, but make it open, kind of like Linux,” says Tzogas. “I mean, I want to obviously protect my cute little products. But it’s like, our little jelly jars, is somebody going to copyright that? Do I have to trademark everything? I hope not.”

The U.S. mushroom industry is robust and well developed, but the space hasn’t been militarized by intellectual property the way other areas of agriculture have, like corn. There’s also a significant overlap between smaller-scale growers and the communities of mushroom enthusiasts and home growers. In those circles, sharing and open-sourcing are often the norm, and talk about conquering markets doesn’t much enter the conversation. Instead of a war chest, Smugtown has built a community, but that might not be enough to keep it afloat.

As the market evolves and grows to favor small organic growers, it may come to pass that the most business-wise thing to do is focus on forming the kinds of mutual partnerships and sustainable operations that Smugtown aims for. It might not be the ideal basis for a banker-backed business plan, but like many independent food producers and sellers, Tzogas hopes to better the world, not take it over. This is a question that anybody venturing into business for the sake of a personal, sustainable vision must answer—is it worth shedding the principles a business is built on for the sake of its survival? Is a business worth growing if it doesn’t embody the values it was founded on?

“I don’t want to just be a sterile box on a shelf, we want to offer the ethos of what we are.” Tzogas says. “I support businesses that I feel have the same ethics as me and the same values as me, and I want people to know that this is how we roll, that this is what we believe in and how we want our systems to be.”