When the kit is supplied to you it is fully colonized.  This means that the mycelium has taken over and penetrated throughout the whole block of substrate available to it in the grow-bag.  At this point, the mycelium forms a vascular system that allows it to transport nutrients and water from one place to the other within the bag.  However, since the organism is mostly devoid of an oxygen supply and has been kept in the dark, it will not fruit.

The process that allows the kit to start producing mushrooms is called initiation.  Cutting the bag according to the instruction to expose the organism to oxygen, the mechanical stress included by the thumping and the exposure to light are the combination of catalysts that will change the hormonal balance to shift from vegetative growth to a reproduction cycle that will eventually form fungi.

Throughout the process, it is important that the kit is misted on the outside to create a humid environment that is ideal for the fungus to thrive.  It does not need to be watered inside as it already contains all the water it needs.