Hi Jordan. To start, can you tell me the story of how Molly came to be in your life, and how that led you to start Grounds & Hounds in 2014?

Molly came into my life rather unexpectedly. I was 24; I think it was four days before my twenty-fifth birthday. I was heading to breakfast in Santa Monica, California. I had just been walking up to the restaurant and I saw a Dalmatian adoption off to the side of the road, and it was a really small, one-woman operation with six or seven Dalmatians. I just wanted to go play with some dogs before breakfast, so I walked over and this kind of sheepish brown and white Dalmatian came over right away, and I squatted down and she crawled in my lap and then tucked her nose in my jacket. It was one of those moments where I was like, “Oh man, I guess I’m getting a dog today. This is happening.” So, Molly came into my life just as quickly as that. No planning, no forethought; I didn’t have any prior preparation. It probably wasn’t even a good time - I was in the middle of a move, still young and trying to figure out what I was doing. I just decided that this seems right and I’m going to pull the trigger on it and see what happens. Everything has been amazing ever since she came into my life. But more importantly, when I brought her into my home and spent more time with her, I was just amazed by how much love she had to give and how she was perpetually happy and grateful, and just a pleasure to be around. I started volunteering with the animal rescue groups because I wanted to help provide a second chance for some dogs, if there were any other dogs like Molly who were out there and stuck in a shelter. I just wanted to help in some capacity. So, that’s how we got to the initial premise of Grounds and Hounds. When I was working with these shelters, I was looking at it from a business - or more of a problem-solving background - of, ‘What can we do to help scale the solution so it’s not just me donating one or two hours a week on the weekend? How can I actually make a tangible difference in the world of animal rescue?’ I was looking at the donation-funding model of grants, one-off donations, and different events and raffles, things that were a lot of work and they weren’t really dependable for long-term revenue streams. I started thinking about it more, like, if I can create a product or a concept that would open the door towards consistent revenue or donations for rescue groups, then we could help alleviate some of those pain points and work with the rescue organizations to create more of a forward-looking, budgeted approach to animal rescue and start addressing the root cause initiatives that had led to overpopulation and high euthanasia rates in the animal shelters. That’s kind of how my one random occurrence with Molly became a company of social impact and trying to create consistent funding towards animal rescue.

And I have to ask… why coffee?

I wish there was this really good, scientific answer behind it, but there are two reasons. One, I woke up every morning and I had a cup of coffee, and I took Molly on a walk. When I was thinking through the problem of, “How do we help? How do we make more of an impact in animal rescue?” I was doing the same routine every single morning. And then finally it hits me: I wake up and the first thing I’m happy to see is Molly and her wagging tail; the second thing is a cup of coffee. If I do this, how many other people out there have this exact same routine? How many other people will do just this in the morning? And if only a small fraction of them – of this massive market size – love dogs and they love coffee, then we might be able to make a difference and make an actual impact in this space. So, that was the more anecdotal side of it. From a business perspective, my background was wine and spirits. I had grown up around it and my career at that time was in the wine and spirits industry. I looked at the industry of coffee, and when I would go to the grocery store or look online, it was very similar to what I saw in wine, where everyone was fighting over the same positioning. They were micro this, or they were using a specific roast profile, and they were all making great coffee, but they’re all fighting each other off of roasting and growing regions techniques, and there was this big gap in emotion within the category. Wine had a similar battle with all of the Sonoma, Russian River, Sonoma Coast, and then a brand like Yellowtail or Little Black Dress or Ménage-a-Trois comes into the market and just blows up. I looked at coffee and I said, “If we could connect with people emotionally and deliver a great product, but not just be about the connoisseur drinker and more about mainstream people who love coffee but don’t really have the interest or background to dive into paying $15 for a bag that they don’t know anything about, then that’s an opportunity to create a product that really connected with shoppers from an emotional perspective, but didn’t have the pretentiousness of some of the high-end coffees at that time.”

Definitely. I have a lot of respect for the way that you balance genuine care for animal rescue, as well as the impact, with the business side of trying to identify and analyze pain points and customer profiles, and all that comes with that. 

Some people look at it through the dual-lens of, “If you want to be a charity and you want to do charitable work, then that’s one thing. If you want to be a company that creates great products, that’s another thing,” but I look at it from the perspective of, “Why can’t a company do great work?” 

To do great work, I felt like you had to have a great product. So, our care and effort is always to give our customers an amazing experience and to deliver an incredible cup of coffee or a great t-shirt that allows us to achieve our mission more effectively than just trying to say, “Hey, buy this because it will help a dog!” We want to make sure you buy it because you love it, but then it also has an underlying beneficial cause to it. That was always the approach in the beginning: not to have it as a marketing piece as much as just, “This is why we exist.”

That makes sense. And I’ve also noted that you went the route of an LLC, rather than a 501(c)3. What was the strategy or reasoning behind that decision?

Very early on, I explored whether it would make sense to have a non-profit for this. But at the same time, I was in business school, looking at my future, like, “What am I going to do? I’m twenty-five, twenty-six years old trying to figure out what my next ten, twenty years [will] look like.” And just like anything, in business there is opportunity cost. For me to undertake a company, I need to make sure it’s financially viable for me, and also financially viable for it to grow and be worth the time and effort to be involved. When you take a more social-impact capitalist approach, you say that it’s not necessarily a binomial outcome; it can be a win-win. We did the LLC because if I can make a company a hundred million dollars in revenue a year, and generate two to five million dollars in donations, then we’re a huge donor in the world of animal rescue. Plus there’s a win for my employees and my supply chain and everyone involved and you can attract outside investment and really grow and become a continuous, perpetually more impactful business each year. On the 501c3 side, it kind of goes back in line with being more of a charitable-based company where you’re raising outside money for donations and your ability to scale will be more limited. The LLC gave us more flexibility as an entity to grow and find our foothold, whereas if it was more of a non-profit, we would be a little bit more of a localized program and probably wouldn’t have been able to scale at the same level. Certainly, it would have been difficult for me to balance graduate school student loans and all of that type of stuff while trying to run a non-profit. 

Yeah, that makes sense. Especially at the beginning, I think people should know that you put it on the line in order to start. You sold a lot of your stuff and were in business school. Have you always had the all-in entrepreneurial mindset in you? 

It’s funny because I think I’ve been entrepreneurial my entire life, but I didn’t grow up in a necessarily entrepreneurial family. My dad was more in the corporate side of his industry, so I saw him work his way up throughout my life. My mom’s an engineer, so she’s much more rational and tactical. I wasn’t surrounded by a bunch of entrepreneurs so that lifestyle was new to me, but it was always kind of an innate trait for me. I always thought that you’ve gotta go for it and you have to take a chance. I played baseball through college until I was injured a couple times. It’s the same mentality of an entrepreneur.  

You’re the product. You have to create; you have to generate output. You either succeed or you fail based on your merit. You have to put the work in and you understand that there is a risk every time you go out there. If you want to be a professional athlete, you’re going to have to take the same kind of risks as someone who wants to start a company because you might not make it; most people don’t. 

There’s a level of risk tolerance that I’ve always had, and I’ve always liked the process of rolling up my sleeves and starting something from scratch and seeing it built. So, when it come time to put it on the line and put my money where my mouth was, I took more of the Cortez approach of, “Burn our ships at the shore and don’t give yourself a second option.” I quit my internship, and I didn’t even consider looking for another job after business school; I just went all in. I said, “If this is going to work, it’s going to work. But if not, at least I’ll know it wasn’t because I didn’t have a full level of commitment.” I knew I wasn’t trying to dabble in it and find a way to be safe and hedge my bets. I said, “I’m going to go for it. If it works, it’ll be great, and if it doesn’t, it will be a learning experience and we move onto the next project.” That entrepreneurial mindset has always been there; I just didn’t know about it until I was in my early twenties. So if any of the readers are still trying to figure it out, it’s not like you have to grow up selling newspapers and doing the Warren Buffet approach from the time you’re six years old. Sometimes it hits you when you’re twenty-two or twenty-five and you say, “Hey, this is it. This is what it’s all about.”

Right. Another thing people in their twenties are probably thinking about is whether or not to pursue a Master’s. As someone who has done it, how does that next step of education influence or impact what you do today? Was it worth it? 

I can’t speak for everybody; I’m not going to be someone who says that everyone should go out and get an undergraduate degree and everyone needs to get a graduate degree. I think it depends on what you make of it. If you think just having that degree is what changes your future, then I have to say that you’re approaching it with the wrong mindset. I greatly benefited by going back for my graduate degree. I had a good undergraduate experience, but again, I was playing sports so my main emphasis while I was in school was baseball and practice. I was completing the coursework and getting through it, but I wasn’t really all-in, immersed in the process. When I went back to grad school, I was rolling up my sleeves and starting this company while reading through case study after case study, learning new things that were expanding my scope of knowledge. I was around smart people, so I could kick these ideas off of people who are really intelligent and could provide valuable feedback. It’s not necessarily the book or the coursework itself that is going to make you a better entrepreneur; the entire environment and ecosystem that helped me thrive in the process. And then down the road, having a graduate degree certainly doesn’t hurt when you’re speaking with banks and investors; it gives them another stamp of approval or a little bit more trust in the background, and I found that it did open a few doors. I went to school at Notre Dame and the Notre Dame alumni network has been supportive since I’ve began. They’ve opened up a lot of doors for me that I would have never had if I had just finished undergraduate and just plowed ahead. You have to know that you’re going into it with a broad approach of, “I want to develop critical thinking skills. I want to build my network. I want to use this as an incubation period, and then when I leave here, I want to tap into whatever resources my university can provide,” and then put it to work. But no one bought my product because I had a graduate degree; that was more of an outcome of what we created.

I agree. And correct me if I’m wrong, but in the summer of 2018, Grounds & Hounds was acquired by a Sterling Partners private equity backed holding company. First, congrats; that’s incredible. Thinking about your social impact, I found that is kind of unique. Second, how has that impacted your goals for the company? 

It’s hard to believe. I started out bootstrapping the company. We were growing as fast as we could grow and anyone that has a small business – particularly a company that doesn’t have a ton of assets where you’re not buying equipment, you’re not buying buildings - it’s very difficult to get the bank financing to grow, and it’s expensive. It’s very difficult to get a private or institutional investment as a small business. For four years, we were growing as fast as we could handle with credit cards, lines of credit, and the cash flow we were generating. It was a self-financed operation, and we were always pushing up against our growth limits. I was spending a lot of my time trying to raise capital or dealing with financing and determining what we could do with our suppliers, so my bandwidth was getting sucked up in the back-of-house finance and operational piece of the company. When we started raising additional funds, and there was more interest in the space, one of the groups we started speaking to was Sterling. It started off as just a Series A investment discussed and it evolved. We kept going further down the line and it just turned into a full acquisition, and then rolled into a holding company where we would be able to piggyback back-of-house resources so we wouldn’t have to worry about dealing with the financing and the banks on a daily basis. We wouldn’t have to worry about HR and billing and the tablestacke functions that eats up your time as an entrepreneur. Doing that, what it really did is it put rocket fuel in our growth. We were growing fast. At that time, it was around fifty to sixty percent per year. But since we’ve done that deal, we’ve been growing around 200% every year for the past two and a half years now. It has allowed us to scale really quickly. 

I didn’t get into this to have a small company. My goal was to always make it big; I wanted the company to be really large because for us to have the impact I want to have in the rescue world, it can’t happen with a million dollars in revenue. My goal is we have to get to a hundred million. 

And to get to a hundred million is a very difficult growth path for any company. For us, it was having the infrastructure and architecture in place that we could scale quickly, and so that’s what we’ve really been able to do. We went from a million to three and a half, to eight. So it’s on the right path for rapid growth. 

And not only is your growth incredible, but so is your impact. You’ve provided over 1.5 million shelter meals, over 3,000 toys, 2,000 vaccines, 500 spay/neuter surgeries, 1,500 microchips, and 2,000 at risk pet transfers to pups in need. What has inspired you to have a hand in every aspect, so to speak?  

It’s like the old saying, “Think global; act local.” With social impact brands, a lot of times people create them and they have the marketing in place of, “You do this, and we’ll provide this, so buy X, get Y.” When I looked at it, I said, “Well if we want to be a unique company, we have to be part of the community.” With that, you start to understand really quickly that city to city, town to town, state to state, the actual issues change. So just me saying, “I’m going to provide food to rescue groups,” sounds nice and I can give you a big number, but there are organizations that have food partners that don’t need more food, or cities that don’t have issues with food shortages and their bigger issue is their spay-and-neuter program. Or maybe it’s rescue transfers, or they have excess capacity and they bring up more dogs from a high-kill shelter in a different state. There are situations that vary state to state. 

Our goal has always been: let’s work with these rescue groups to figure out what the problem is, and how we can support, and let them do what they do best. We want to help them go and tackle the problems that make a difference. 

That’s been our objective from the very beginning, and that’s why we’re so diverse with our impact. It’s not as much strategic as wanting to be in a bunch of different areas; it’s just that over the years, this is the stuff we’ve ended up being involved in. It keeps expanding because each month, we’ll find a new group that’s doing another amazing program. We just finished up one with Austin Pets Alive where we helped provide funding for their Parvo Puppy ICU and they’re working on additional treatments that have reduced the death rate of parvo, which is extremely deadly, by 80% in their facility, and they’re sharing their approach with other shelters. It’s about solving the problem; it’s not just about providing toys to dogs. As much fun as that is, we want to make sure we’re actually making a difference. That’s why we’ve been involved with so many diverse areas of animal rescue. We’re trying to get to the root cause of these problems and address them with these incredible groups who do the work every day. We’re try to behave more like partners and friends than we  ust a corporation sending checks. 

One of your initiatives is Rescue Roast, where you donate 100% of all profits generated by Rescue Roast Blend to a new rescue organization every month. What is that process like? 

That one has been a really great program. It’s actually been way more successful than I anticipated. The first rescue-based program we launched was in December of 2018 with Young at Heart Senior Pet Rescue, an amazing group out of northern Illinois. They provide care and hospice for senior pets. They were our first partner, and I had high hopes for it when we launched. And in the year and a half that’s followed, we’ve generated about sixty thousand dollars in funding through the program, and that number keeps growing significantly every single month. We’re tacking towards  bigger and bigger donations. The group and stories and missions behind the organizations we work with keep getting more and more interesting, and we’re telling these stories through our media platform and our content team builds out stories about the work they’re doing. We really want to help amplify their message. It’s been such a fun thing to be involved with, to learn about the specific initiatives and relay the stories to our audience, and then see the money get put to work by these organizations to make a tangible difference for things that actually move the needle every single day. 

And in moving the needle, something that I think about when I think about animal rescue is that I don’t know why people still choose to buy over adopt, or why there are such terrible misconceptions or stigmas around certain breeds. 

It’s a fair question; I wish I had the answers myself. I spend a lot of time in shelters, and interacting with every single dog you can imagine; they’re just all such amazing dogs and they have incredible amounts of love to give and they’re so forgiving. 

They’re not sitting there ruminating on their pasts and being angry; they’re just waiting for someone to give them a chance.

And some of them might be a little high strung, or they might be nervous, but for what they’ve been through, it’s understandable. I think that’s the part that’s hard for me, is people look at them and say, “Oh, this dog barks too much,” and it’s like, “Well, this dog’s been locked in a cage for six years before it ended up here, and it needs someone who can show it what love is and show that there are people out there who care.” It’s simple stuff that can make a huge difference, but I think sometimes the experience of it, people think about going to buy a puppy. It’s a little puppy in a box and it’s cute, and obviously, who doesn’t love a puppy? But the experience in a shelter is a little more involved. The dog’s a little bit older. 

You have to be willing to say that you don’t know what happened in the past, but you’re going to help change the future. 

I think that’s where people go back into their comfort zone of Hal Riney commercials, like “It’s Morning in America,” where there’s a nice traditional dog that you can buy. I think it’s about getting people back to thinking that they can actually change this dog’s life right now by taking it home from the shelter, and it makes another dog’s life improved because now there’s a new slot in the shelter so that dog isn’t being pushed out prematurely and has a place to be rescued. It’s a whole chain of events that can be impacted by rescuing a dog that hopefully we can continue convey.

We brought home a Pitbull rescue in January and just looking at the scars on him, because we don’t know anything, it’s so sad. We do know that he will need to have his ACLs fixed eventually. They might need to crown his teeth because they think he was locked in a cage and tried to bite his way out. It’s a lot to take in. How do you see those stories all of the time? Do you ever find it hard to hear about or see those things?

If you’re human, it’s hard not to. You’re in those shelters and it’s overwhelming. 

It’s a situation where you can go, “Oh, this is so terrible. I’m so sad. This is so sad,” and it certainly is, but the fact that you can’t save every single one, doesn’t mean you can’t save one right now. 

 I think that the objective is to continue to provide second chances and safe havens for pups. As sad as these stories can be, and they make you doubt humanity at times when you hear about the things that have happened to these dogs, or what people have done to them… for me, I get more infuriated than sad, but it just has to be channeled into improving the dog’s opportunities, or giving that dog a great life moving forward. Thinking, “Oh, this is overwhelming. I can’t do it, is not how you help. You have to say, “What do I do now that can make a difference?” And that’s always been our focus. Throughout all the ups and downs, even as a company where surviving as a business is challenging and difficult, you just have to do the work, and make a little improvement every day. And if we can all do that, then one of these days, hopefully we look up and there’s zero percent euthanasia rates in the country, we have ample space for dogs, and everybody is adopting or every dog is finding a home. That’s the big picture you keep in mind every day while dealing with the sad stories, the happy stories, and the infuriating stories. 

It takes strength and perspective. Whether it’s you as a human or you as a CEO, what would you say has been a big lesson you’ve learned over the last few years? 

I think the most important thing I’ve learned is to not focus on the minute-to-minute, the short-term issues, and the tumultuous periods you encounter. I heard something along the lines of, “It’s either before an event, during an event, or after an event,” and I think a lot of times, we’re during the event, and that’s when you get really caught-up with, “This is do-or-die, this is the worst thing that could ever happen, what if this goes wrong?” And then you look back on it two days, three weeks, two years from now, you say, “Oh, that wasn’t bad. That wasn’t too bad at all.” You learn that you’re tough enough to survive a lot. You can go through a lot of different periods of stress and all kinds of issues that you never thought you’d have to deal with or encounter, but if you can just keep the big picture in mind, then in time this will be much less damaging or stressful than it seems to be right now. You can come through pretty much anything. If you can just stay focused and deal with the storm, you’re going to come out and there’ll be sunshine. Some of these days, I look back at periods of time where I’m like, “I can’t believe I thought that was bad. Looking back now, it wasn’t a problem,” but in my mind that day, it was the most difficult thing I had ever dealt with. That’s kind of the whole experience of business ownership - just building up your strength against dealing with unforeseen issues or unexpected circumstances.

And that could even be applied to people in all circumstances, too, especially right now.

It’s life. We watch TV shows and all of the rom-coms and you look at them and you say, “Oh, that’s what it is,” but no, life’s tough. It’s not always an easy stroll through the park. I hope, like you were saying right now, the period that we’re in right now, hopefully we all come out of it stronger and improved. 

I agree. And as difficult as it might be to plan for the future right now, what is next for Grounds and Hounds? 

We’re continuing to grow and move forward as fast as we can. We’re still emphasizing growth and our e-commerce business, so that continues to be a top priority for us, as well as our coffee club subscription program. Before COVID-19 hit, we were really starting to dive into café opportunities. Obviously right now, it’s become a very unusual time to contemplate or look for retail space, but that’s kind of the biggest opportunity lying ahead that I’m excited about. I don’t know if they’re back to normal ever again, but once things settle down a bit, I’m really excited about the opportunity to bring Grounds & Hounds to life in the café space, as we continue to expand our mission and our reach and bring more people into the company. Then, hopefully, we grow. Ideally one day you look up and you think of Grounds & Hounds like you think of a Warby Parker, or any big company that started with a mission at its core that has been able to grow and succeed and benefit the community and people around it.

I have to ask… could you tell me a fun fact about Molly?

Whether she’s happy to see me or nervous, she smiles. Tiny teeth, big gums, big time smile. But then she gets kind of nervous about it for some reason and won’t look at you, so she tries to hide the fact that she’s smiling by turning her head away. But she can’t stop smiling, so it’s like a little kid that’s too happy but they don’t want to show it. She gets this big, funny, goofy grin with her tiny teeth sticking out. It’s my favorite thing in the world to see.

What is one thing everyone should know how to do?

Create a personal budget. I didn’t realize it was so overlooked until I talked to some friends and aspiring entrepreneurs, but you need to  know how to budget your personal finances. People don’t factor in taxes, and withholdings. You look at your salary and you say, “Oh, I can live in this apartment,” but your apartment is actually 60% of your net pay, and then you’re going out and buying clothes, and the next thing you know, you’re $10,000 in debt. I think we should all know how to build and manage personal finances to greatly simplify the complexity of being an adult. 

It's vital. And what does a day in your life look like?

I maintain pretty much a consistent day. I wake up around 5:30am, I take Molly for a walk with a cup of coffee. I come back, I do about an hour and a half of work, and then I make breakfast and take about 30 minutes for that. Then I work for most of the day with periodic dog walks in between. Then, I’ll go to the gym or go for a run or cycle, whatever it might be that day, right around 5:30 to 7 or so. Then I’ll eat dinner, read and do some work, and then get to bed by 10 o’clock. I wish my life was more exciting, but I find that the routine helps me stay consistent and productive. It’s almost a sense of comfort as well. It’s something you can control, something you can put in place and you can stick to it. You can continue to maximize your time. I’m all about efficiency and use of time. 

I agree. They also help you stay mindful every day.

You can’t get back time. You hear it a lot, but people forget about it. The fact that you really, really need to be cautious about how you utilize your time because it’s the one thing that no matter how much money you have, you can’t get back. 

seven questions with jordan karcher:

I can’t go a day without… coffee.

Everyone should hear or listen to… Kind of Blue, Legacy Edition, by Miles Davis. Full album, on vinyl if possible.

Life is better with a little… wine.

Everyone in their 20s should… push their comfort zones as much as possible.

One insider thing to do in LA… see LA Philharmonic at the Bowl. They canceled this season, but if it’s happening or if there’s any concert at the Bowl when you’re in town, I highly recommend going.

What the world needs right now is… compassion.

One way to spread love is… to behave more like your dog.

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