Small Farms Everywhere

Green Shoots of Hope after the Farm Rush

Hi friends,
Today I’m writing about something I call the Farm Rush - the massive investor interest in controlled environment agriculture (CEA) that has occurred over the past 10 years, and its negative and positive impacts. Farm.One was a tiny crumb in that dynamic.

If you eat food, the Farm Rush impacts YOU, because it is shaping how we grow the food you eat, and the lives impacted by that food production. It even shapes what food you eat and the diversity of your diet.

If you are in a startup, this kind of dynamic affects YOU - in the same way that the Farm Rush affected the Ag industry, every industry is affected by influxes of capital and broader trends.

While it’s scary, there are exciting consequences of the Farm Rush. 
Let’s dive in!


As I started writing this, Michael sent me Vertical Farm Daily’s article announcing that Smallhold has filed for Chapter 11 (a kind of ‘reorganization bankruptcy’ for those outside of the US). This will probably not be the last VC-backed farm to go under, but it represents the tail end of a wave that includes Kalera, Aerofarms, Fifth Season, InFarm, and several others with cumulatively over a billion dollars invested.

Smallhold is a company dear to the hearts of folks in the Ag community. Andrew and Adam created a positive and inspiring culture around mushrooms, and have been a key driver of a global surge in interest in fungi. For a long time it seemed like they might have cracked the code of profitable CEA mushroom farming, with national availability and farms in several states. At Farm.One we sold their tasty mushrooms to our customers during our subscription days.

It is likely Smallhold will continue in some way after this event, but in a mutated form dictated by the worldview of their majority owners, who are money folks, not mushroom people or operators.

Their collapse is part of the end of the Farm Rush - the massive recent influx of capital into CEA (Controlled Environment Agriculture), and subsequent retraction. Folks who built businesses that depended on that capital for fast growth have all found themselves stranded when that same capital has retreated, with limited options, and beholden to choices of their investors.

The global interest in fungi will stay, and the attempts to grow mushrooms in novel ways around the world will continue due to underlying trends that are stronger than the whims of capital. To use an obvious metaphor, the fascination with fungi is the mycelial network, and Smallhold is a fruiting body - there is little danger to the underlying system if a fruiting body is damaged.

The Farm Rush lasted from ~2015~2024. I am not the first to talk about this phenomenon - Back in 2021 Henry Gordon-Smith was one of the first and most vocal about the industry’s imminent ‘trough of disillusionment’, and plenty of others have articulated the trend. I don’t know if anyone gave it a name. I want to talk about why it happened and what happens next - which is where it gets interesting.

Why did the Farm Rush happen?

BTW, I focus more on the leafy-greens vertical farming world in this post, as Smallhold’s mushroom business gives it slightly unrepresentative economics and less exposure to the crazy dynamics of the more prominent leafy-green vertical farming space.

It is easy to see how the Farm Rush occurred: a cocktail of startup culture, cheap money, an inflection point of indoor growing tech, and underlying trends driving more CEA. In addition to the overarching dynamics, in most startup boardrooms you have the conditions to respond in a specific way:

  • A gung-ho founding team that wants to prove their ideas

  • VCs who have a short timeframe to make this company ‘go big’

  • VCs who have more experience of software than hard tech

  • A CEO (maybe founder) who must scale fast to keep the VCs happy

  • Early stage VCs who want to keep later-stage VCs sweet — they do not add any brakes to the scale-fast mentality.

  • Other VCs who will say nothing of any consequence whatsoever 😝 even when asked very direct questions

It’s almost as if my explanation exposes some past trauma 😉 

In Be Like Animal, Be Like Plant I always want to convince you that worldviews have a huge effect on intention and outcomes. Inside (and outside) the boardroom, we hear worldviews that:

  • Population is growing rapidly and so we need aggressive, dynamic, disruptive innovation in agriculture

  • Incumbents are “dumb” and existing products “terrible”

  • There is a strong “first-mover advantage”

  • Whoever builds biggest will “control the market”

  • We are expanding into an infinite space where externalities don’t matter because we have to move so fast

  • But we need to outspend competitors

  • We can only build things that slot into the existing food system

All of the above are mostly fictions. The Global North’s population is not really growing anymore - in contrast we are likely to see a net reduction in population in G7 countries over the next few decades, with the US showing only a tiny increase. Folks who have been in Ag for years may be a little stuck in certain processes, but they are not dumb. First-movers in most markets are often are the first to fail, and secondary entrants scoop up the learnings, talent and tech. And there are very few markets ‘controlled’ by any specific player, especially not the player that built the largest infrastructure the quickest.

These fictions create dumb behaviors among smart people:

  • Telling everyone that vertical farming was going to ‘solve’ the world’s food crises

  • Throwing ~$2B in investments into <10 companies

  • Growing commodity crops in competition with subsidized farms

  • Developing proprietary tech AND operating farms at the same time

  • Trying to stand out on the grocery store shelf with identical produce

  • Building larger and larger facilities

  • Building MORE farms without demonstrating operational profitability of a single location (!)

  • Doing nothing to seriously address the carbon footprint of high-technology agriculture

  • Building farms in multiple geographic locations across the country without any beneficial network effect

  • Building farms explicitly outside of communities - for instance in industrial parks outside cities

  • Expanding to new countries without having first perfected the business model in the original geography

  • Doing all this while knowing that other investors are doing exactly the same thing at these other 10 companies

Terrible, right? In so many ways, yes. These behaviors created perceptions in consumers’ minds about agriculture that were false. They caused huge infrastructure building projects, many of which will need to be torn down, with awful environmental impact. They employed and then laid off thousands of people. They made it difficult for anyone coming along in the next five years to raise money around the idea of an indoor farm. Most significantly, the opportunity cost of throwing hundreds of millions of dollars into these endeavors came at the expense of many other uses for that money in our troubled food system.

Was all that madness and badness for nothing?


My favorite parable comes up at the end of the movie Charlie Wilson’s War. Phillip Seymour Hoffman plays CIA operative Gust Avrakotos, whose efforts led to Operation Cyclone, a program to organize and support the Afghan mujahideen during the Soviet–Afghan War.

Advising caution after the CIA’s ‘success’, Hoffman tells this tale:
One day a boy is given a beautiful strong horse, and everyone in the village says “this is wonderful” — but the ‘zen master’ says “we’ll see”.

The next day the boy falls off the horse and breaks his leg. Everyone in the village exclaims “this is terrible”, and the zen master says “we’ll see”.

The next day the army comes to the town to conscript troops for battle, and the boy is spared because of his broken leg. Everyone in the village says “this is amazing, the boy is saved” — but the zen master says “we’ll see”.

The next day the army loses the battle because of being one person short… and so on and so on.

You can see how the parable applies to Afghanistan, the Taliban and more over the past 40 years, in its bouncing from a supposed ‘victory’ to a ‘defeat’ to a ‘victory’ again. We’ll see! (Remember also, there is no such thing as a ‘zen master’ but hey.)

The “we’ll see” about the Farm Rush is that while we see clear negative consequences amidst bankruptcies and layoffs, there are many positive effects too. Just as bushfires promote new growth, there are now the conditions to foster a vibrant, diverse and resilient future for the industry.

A friend who joined the industry a few months back texted me while I was writing…

Green shoots after the Farm Rush

Benefit 1: Loads of tech innovation! Cheaper LEDs! Expertise! The billions of dollars that went into startups meant new tech, new suppliers, new software, new ways of working. This is an obvious and bountiful benefit.

There are now thousands of skilled indoor farm workers around the world

Benefit 2: Layoffs suck, but they scatter seeds of talent across the economy, sprouting new innovation everywhere. The folks who learned how to farm (and, more broadly, how to think about hard tech) at startups like InFarm, Kalera and Aerofarms (Aerofarms, your noncompete clauses look pretty stupid now, don’t they) are going on to do new and innovative things. There are thousands of skilled indoor farm workers now around the world — this is a very different picture even to ten years ago. Combine these folks with the huge workforce dedicated to cannabis-growing in the US and you have a massive upgrade in the labor and expertise available compared to the past.

Benefit 3: We have proved that communities care about their food. Talk to anyone who operates a new local farm and you will find that their customers are passionate and excited about the farm in their neighborhood. They send Valentine’s cards and host birthday parties and meet the team and do everything they can to support it. Just think of how you would receive a farm on your street compared to a branch of Starbucks or a Burger King, and how you might think about your nephew working at an indoor farm compared to a chicken factory.

Benefit 4: ‘Cheap' capital is often the most expensive kind, and the fact that it is not widely available now is not an impediment to the long-term health of the controlled environment agriculture industry.

It is more difficult now to find funding for many ideas. But it is not impossible to find ways of funding local-scale, community-driven projects using off-the shelf technology, and this is exactly what we need right now. A healthy long-term CEA system uses project-like financing, not VC. Capital comes not from speculators but from those who see a predictable rate of return from established ways of working. We can establish those standards.

VC funding also comes with a strong restriction on information sharing (see above) which means that new entrants have to solve the same problems over and over again.

So! Benefits like these can mean our “Phase 2” can foster more stable, profitable and sustainable companies that figure out the problems earlier entrants did not. And the underlying reasons for CEA are still there!

There are MANY strong upward trends that still support CEA:

⬆️ Increasing unpredictability of field farming due to climate change

⬆️ Increasing water scarcity and runoff-related pollution hazard

⬆️ Increasing demand for pesticide-free, local produce

⬆️ Increasing productivity per square foot for CEA farms

⬆️ Increasing expertise (new graduates, training, experience)

⬆️ Increasing affordability of CEA tech (lighting, HVAC, equipment)

⬆️ Increasing availability of tools (software, information)

⬆️ Increasing availability of zero/low-emission renewable energy

⬆️ Increasing interest in food, farming and sustainability in young people

There is (at the moment) only ONE strong external downward trend:

⬇️ Interest in CEA from speculators

I say speculators to include all the folks who saw CEA as a way to jump on a quick-growth trajectory towards wealth, whether they are VCs funding hot companies or people joining hot companies or related hangers-on. These folks have mostly disappeared. They will be back at some point.

Of course I am simplifying the situation. My map is not the territory. It is still really hard to make any vertical farm profitable. I am not here to try to convince you to start a farm - that’s a huge, consequential decision with many individual variables. But the nine upward trends I mention above are strong — the climate- and energy-related trends are likely to continue for several decades at least. This creates a great long-term environment for new farms and innovation.

The “other” important trend - the long-term need to rewild

Before we continue, I want to talk about another thing that underlies the long-term importance of CEA. It doesn’t get mentioned that much.

We share a fallacy that traditional farms are the ideal use of our land. Roughly 50% of US land is used for agriculture. We think of beautiful rolling fields. We are shown idyllic imagery of hay bales and cattle peacefully grazing. A cowboy looking out over them. We are given the message that use of land as farmland is ‘as good’ as that land being forested, gently curated, or left to run wild, because it looks green, and it looks healthy, and it speaks to a tradition.

Farms are NOT our best use of land

Yes, perhaps some careful regenerative farming can achieve some level of (temporary?) carbon sequestration, but I would argue that rewilding land has a far better impact and a set of secondary positive externalities that make it ‘no contest’ in our long-term drive towards more biodiversity, reversal of climate change, reduced chemicals in our air and water and land, air quality, animal welfare, transport emissions, etc etc etc. This is even without considering the theft of indigenous peoples’ lands around the world for those farms.

CEA can contribute to rewilding our land by reducing our area of traditional farmland, step by step. As productivity per square foot of CEA farming is increasing, and population is effectively stagnant, we can shift some of the water-hungriest, highest-pesticide-use production into controlled environment farms, and return land to its original stewards. This is a long-term and complex endeavor, does not work for all crops, is maybe not even a ‘trend’ yet, and something kinda controversial that is beyond the scope of this post. I will return to the topic. Related: Rewilding Golf Courses (NYT).

So when I talk about small CEA farms, I generally assume that they are taking over existing concrete infrastructure or existing farmland - never converting wild land to farmland.


The benefits and trends above are why people are starting small farms. This global environment could be the best time ever to start small, community-connected agriculture projects that leverage all of the know-how, talent, technology and systems created during the Farm Rush.

And this is what is happening. I call this trend Small Farms Everywhere.

Large farms are not useless and will not disappear any time soon. Food I eat every day comes from large-scale agriculture and it would be impossible currently to feed cities like New York without a system that includes large-scale farming. Farming cereal crops, nonperishables and many fruits mostly makes no sense whatsoever in CEA. For now.

But small farms create more diversity in the types of agriculture and our approach to agriculture. They help enable detailed future visions of urban communities that have switched to fundamentally more sustainable local food supply chains. And they are more connected than remote, large farms.

Small farms help us re-examine limiting paradigms, like:

  1. The idea that our agricultural output must grow rapidly

  2. The model of consumer → grocery-store → distributor → farm 

  3. Growing a tiny range of crops with very little biodiversity

  4. The idea that human hands touching food is dangerous

  5. That everyone wants to spend less time thinking about food

  6. That the only good solutions are ‘large scale’ solutions

We can be ambitious not only about building but about re-configuring.

Literally every week, new innovative farms are starting. Vertical Farm Daily and iGrow News and others do great work in highlighting all of these hundreds of new small farms around the world that appear every year. We see farms in South Africa and Uganda and Belgium and Singapore and Taiwan alongside the better-known companies in the US and the Netherlands.

We see folks doing university projects, we see garage startups, we see corporations building mini-farms for their offices, we see rooftop greenhouses, we see aeroponics and hydroponics and aquaponics and fogponics and more.

Many of them will fail. We must be OK with that. But all of them, to a certain extent whether they survive or not, are creating a new network of farming that will improve our cities, and inspiring other people to adapt and refine models.

Small farms like these are far closer to people, so they have strong cultural value. The number of people who have visited Farm.One even pre-COVID is easily in the several thousands.

Common characteristics of new small farms

Many are aligned with a “Neighborhood Farmtype approach - growing a diverse product range, making the farm tourable and transparent, educating young people, providing on-the-job training, selling to foodservice and consumers, creating events and community happenings, doing things to reduce waste. Doing a multitude of things to survive and thrive. Generally:

  • They are OK being a small farm and they believe in small farms

  • They create benefits for the community - jobs, education, access

  • They use CEA farming methods when it makes sense

  • They sell directly to the local population or supportive local partner

  • They aim for zero pesticide use, renewable energy

  • They aim for zero waste principles

  • They grow a diverse, culturally-representative set of crops

  • They are run by people who love food and farming

Small farms are multi-faceted and this is a good thing. The small farms that introduce tourism, events and community engagement are forming strong networking links with people, organizations, communities and place. These links make it harder for the farm to fail, as hundreds of people integrate their operations into their daily lives. The tourism around visiting farms and understanding what they do increases locals’ and tourists’ knowledge of their food system, and educates kids on different ways of interacting around food. Within a city, having dozens of small farms creates pockets of community. Systems of these small farms in a city are inherently more resilient than one large farm. When organizations like farms can impact multiple related issues in the system that is a city, while providing economic value, it is worth noticing.

Just think about the positive feedback loops we see when we combine


Small farms have difficult economies of scale (duh). One scary dynamic of small farms is that expensive management overhead will make a good operation unprofitable. Some founders work for years for nothing because of this. This pushes other ambitious founders to imagine large farms, so they can pay the workers less, then extract sufficient management compensation to make the thing ‘worthwhile’ for themselves who have had expensive higher ed.

There’s obviously something kind of screwy there - while good-quality small-scale vertical farming takes expertise, it does not require a $300,000 college degree and a full time management team trying to make the farm bigger. It takes on-the-job training and other things that are available to anyone, not just an MBA grad. Meaning that worker-owned cooperatives, and in general, models where owner-operators do not extract huge salaries, work just fine at small scale.

How do we help small farms everywhere?

In the first part of my career I focused on language — our primary human innovation that we use to communicate ideas and form connections with other humans. In the second stage, I focused on food, because food-gathering has been the primary human activity since time immemorial.

When I left Farm.One I did not have an appetite to start another farm 🙂.
I see my role in the industry now more as an advisor and an advocate for small farms and positive, resilient practices within urban ag. So I want to work on this idea a little bit while doing my other stuff - which is thinking about how we work and how our worldviews shape what we do.

In my earlier post, A Landscape for Creativity, I argued that we should strive for elegant solutions that satisfy multiple criteria, including being harmonious. And that true creativity comes from examining the spaces between processes, not just the process itself.

Part Two - how might small farms proliferate even more?

So in part two of this post, I want to inquire about elegant ways to help this network of small farms around the world to create positive dynamics.

What attributes might an elegant system include? Could we improve our existing system while making space for new systems? Where are the points of leverage? What might make a resilient global system? These are good questions. Let’s look for answers 😀 


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