PART 1: Mollenhour Gross invests in “exceptional businesses”
(EDITOR’S NOTE: This is the first article in a two-part series sharing the experiences that Knoxville’s Jordan Mollenhour has encountered as an entrepreneur, the lessons that he has learned, and the aspirations for the community that he calls home.)
By Tom Ballard, Chief Alliance Officer, PYA
Mollenhour Gross is not a household name to many Knoxvillians, but it is a well-respected owner or investor in what the company describes as “exceptional businesses that are a testament to their founders’ character, hard work, and market success.”
One of its more recognizable and rapidly growing portfolio companies is Red Stag Fulfillment, an enterprise developing a 4.5 million square foot fulfillment campus in Sweetwater that we spotlighted recently in this teknovation.biz article. On the newer venture side, there are start-ups like StoragePug, the Knoxville company focused on serving the smaller, frequently independent owners and operators of self-storage facilities.
Co-Founders Jordan Mollenhour and Dustin Gross met while students at the University of Tennessee, Knoxville and later started a company together, growing a very successful construction and commercial real estate business. Then, the “Great Recession” of 2007-08 hit, and the economic boom, sparked by cheap credit and lax lending standards that fueled a housing bubble, came crashing down on them.
“We never stopped trying to grow the business until it was too late,” Mollenhour said. “We lost everything and spent three years working through that mess.” It was a time of introspection and learning for the team, and the company that emerged from the ashes is very different . . . a different business model and one where the attributes captured in those words – “exceptional businesses” and “character, hard work, and market success” – are key decision drivers.
In comments he made at last December’s “Mollenhour, Fezziwig, and Friends Christmas Party” and in a follow-up interview, we learned just how the trauma of 2007-08 had shaped Mollenhour and his thinking about the future. What particularly captured our attention was a personal story he shared about the importance of grace, the need for people to be forgiving and also have faith in others.
“It was a very tough time professionally and personally,” Mollenhour says, explaining that he and Gross asked their creditors to be patient and promised that they would honor their financial commitments. It was, in essence, asking for their grace. It took several years, but they eventually repaid every person or business that they owed money.
More important, however, was the transformational impact the experience had on the hard-charging entrepreneur and businessman who started working at a retail grocery store when he was only 12 years old. Four years later, Mollenhour had started his own business and was buying, renovating, and selling houses before he turned 20 years old. He and Gross went into business together in 2003, and their ventures included commercial real estate, a software development company, and some apartments.
The “Great Recession,” however, was truly an eye-opener for the Knoxville native who has earned three degrees from UTK – a B.S. in Accounting, MBA, and Doctor of Law – along with a second MBA from The Wharton School.
“We were 27 years old, and I had been working for 15 years,” Mollenhour says, adding, “I saw it all (the equity that Mollenhour and Gross had built-up) evaporate.” Today, he can look back on the experience and acknowledge that, in retrospect, “It was in some ways one of the best things that could have happened. I did not become bitter; I grew a lot from it.”
During our interview, Mollenhour told us that the lessons he learned during the “Great Recession” can’t be taught in the classroom while noting with his subtle wit, “It was very expensive tuition to pay.”
He also reflected on how tightly focused he was during the period leading up to 2007-08. “As much as focus can be a strength for entrepreneurs, it can also cause them to have tunnel vision,” Mollenhour explained. “You can’t think about yourself in silos. There are also challenges at work, with your own mental health, and in your relationships. All of those get tested.”
Grace has many meanings, both religious and in other contexts. Noting that it was a key concept he learned as a participant in Leadership Knoxville, Mollenhour offered an important reminder for readers: “Even the slightest kindness or helping hand may seem insignificant, but that glimmer of hope might be all someone needs.”
NEXT: How the experiences during the “Great Recession” and the concept of grace have driven the Mollenhour Gross business strategy going forward.