Magnolia: Chip & Joanna Gaines. From House Flipping to Household Name

This podcast is brought to you by Squarespace. I talk to entrepreneurs all the time who are looking for a way to upgrade their digital footprint. Well, whether you're just starting out or you're scaling your business, Squarespace is the easiest way to build a great website that stands out. It's an all-in-one website platform that gives you everything you need to claim your domain, showcase your products, and get paid.

Anyone can use Squarespace's cutting-edge design tools to build an online presence that truly reflects what makes your business special. There are templates, intuitive drag-and-drop editing, and even an AI-enhanced website builder. Then, Squarespace's built-in analytics tools help you make smarter business decisions, review website traffic, learn where to focus engagement, and track revenue all in one place. Looking to grow your business?

Squarespace even offers fast, easy business financing through Squarespace Capital. Go to squarespace.com slash built for a free trial, and when you're ready to launch, use offer code built to save 10% off your first purchase of a website or domain. Loan issued by Celtic Bank and service by Stripe, all loans subject to credit approval. This episode is brought to you in partnership with Airbnb.

This past summer, I took my family to Athens, and it was truly an incredible trip. We ate amazing food, we saw Parthenon and the Agora, and all the incredible things you can see in one of the most amazing cities in the world. And one of the things that made it special was the home we booked on Airbnb. We could see the Parthenon from our bedrooms.

It even had a small jacuzzi on the roof, and we were walking distance from everything you'd want to see. We had such an amazing time cooking and just spending time together as a family in that home on Airbnb. If you've ever had a chance to visit Athens, I cannot recommend it enough. That's the thing about Airbnb.

You're not just getting a place to sleep, you're getting a home base that fits your trip. And while you're away, your own home doesn't have to sit empty. Hosting on Airbnb can help you earn extra money on your schedule with full control. Your home might be worth more than you think.

Find out how much at airbnb.ca slash host. Did either of you think a show based on us renovating houses, like how are people going to be interested in that? 100%. That's exactly the way we felt.

Oh, wow, people in Waco are going to get to see our work on television. Central Texas. Never thought. My grandma.

But did you even ask them, like, how do you turn that into a TV show? Yeah. And I didn't know, of course, because how could you know? You've never been on television.

You don't even know anything about television. I have an actual phobia of cameras. That's terrifying. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

I'm Guy Raz, and on the show today, how Chip and Joanna Gaines turned their house-willing business in Waco, Texas, into a massive lifestyle brand called Magnolia. If I said Waco, Texas, just 10 or 15 years ago, you'd likely think of two things. Possibly Baylor University, but more likely the standoff between federal agents and the Branch Davidian cult in 1993 that ended in tragedy. For years, that's what defined Waco.

People even called it Wacky Waco. But today, you're just as likely to meet someone who associates Waco with classic American home decor. And that's almost entirely because of two local residents, Chip and Joanna Gaines. If you know them, it's most likely because of a TV show called Fixer Upper, a reality show where Chip and Joanna renovated homes on a tight budget.

And if you've renovated your home over the past 15 years, and it included reclaimed wood or shiplap or barn doors or a large apron sink, you can thank Chip and Joanna. Because they are widely credited for popularizing the now ubiquitous farmhouse luck. A few weeks ago, I flew out to Texas to see how these two people changed the city of Waco. In the center of town, there's a sprawling property called The Silos.

It was a disused cottonseed oil refinery that was redeveloped by the Gaineses over the past decade. And today, it's the center of activity in Waco. There's a coffee shop, a bakery, food trucks, a row of stores filled with cool curated items for sale, and of course, a large furniture and home goods store called Magnolia, which is also the name of Chip and Joanna's business. There's a TV network, a magazine, books, restaurants, home decor lines, even packaged baked goods, now sold at Target.

And what's most striking is how it all started. No pitch deck, no business plan, no investors. Chip and Joanna met in 2001. They got married two years later, and from the start, they worked side by side.

Joanna ran a small home goods shop, and Chip flipped houses. And together, they built something bigger than either of them ever imagined. Now, before all of that, both Chip and Joanna's fathers ran their own businesses. Chip was partly raised in Dallas, where he grew up playing baseball.

And his dad owned a sporting goods business in town. I mean, I was in heaven. There were always baseball gloves. There were always cleats.

There were always all these incredible tennis rackets and tennis balls, unlimited supplies of tennis balls. And so as a kid, what else do you need? So we thought we were the richest kids in town. We just loved it.

But dad, he tried his hand at that business idea. And as I got to know him better, and as an entrepreneur myself, my dad and my father-in-law, Joe's dad, are similar in the sense that they're really grinders. These guys are workers. So your dad was a football guy, but you were a baseball kid.

And a pretty good athlete in high school. I mean, you were like, this was your life, right? From the time you were a kid. Little League, Pony League, Travel Baseball, whatever it was back then.

I don't even know if they did travel. Totally, yeah. It was called Connie Mack back in our day. You know, it was kind of the thing that we do, but yeah, it was a unique kind of...

And did you dream already, like, when you were in high school of being a professional baseball player? I did, yeah. And good enough, I know you started out playing at a local community college, but then you got recruited to play for Baylor's baseball team. Obviously, better known for football, but still, like, I mean, you're talking about D1, baseball, university.

Let's go. Let's go. It was the grade in 94. You were about to become a baseball player at Baylor.

It was the dream. What happens? Why are you a professional baseball player? Well, you know, the reality struck.

I don't have a great... It wasn't a great ending to a beautiful story. You know, I was a sophomore transfer to Baylor. Long story short, I had a terrible practice.

I ended up getting cut from the team, and I essentially immediately transitioned into, darn it, you know, I was hoping Baylor University was going to work out. My dad and I started getting on the phone. We were going to go to TCU. We were going to go to a smaller school.

We were going to go somewhere else and kind of pick up the career. Your whole identity in your life up until that point, you're, like, 19, 20-year-old kid. It's baseball, and then that's it. It's gone.

And so you wrote about this in your book. You were depressed. It was like a depressing period. And a kid that even to this day, I mean, I don't really know that I know what depression is as a 50-year-old grown-ass adult, you know, but I knew what depression was that season.

It was sad. I mean, I would park my truck at the baseball field, bro, and walk to my apartment and take naps so that anybody that was driving around that maybe knew me would see my truck at the baseball field. I mean, I was in a real pickle. I mean, I was depressed.

I was sad. But, you know, fate had other plans. It's interesting how failure is like a gift. Who knows, right?

And because I know that while you were in college, this was the mid to late 90s, you start to do these, what, now, in hindsight, we know we're like entrepreneurial things, right? Selling firecrackers and a laundry business at one point. Totally. It was pretty simple for me, kind of like simple economics because I started a lawn care company, which was kind of my prior year.

While you were in college. I was probably a sophomore, junior year or something. Just to make money. Just to make money, yeah.

And I would just sit. I would sit in these freaking classes at Baylor, and I would look out the window, and I would watch these guys literally mowing the grass at this beautiful university that I was at. And I was just like, man, I'd get my right arm to be one of those guys mowing grass at this place. I hate this.

Like, I hate it. And 95 to be weathered. Well, yeah, on a cool day, on a cool day. Yeah, those were the good days.

But so I did pretty much just that. I followed one of those mowing guys back to their truck, and in their truck, back to their little warehouse. And I talked to the guy. His name's Uncle David.

David's not chill. And I asked him to let me work with him. And he was like, well, you know, you don't have any experience. You don't know what you're doing.

So I mean, no, no, no, no, no. And finally one day, he just was just kind of fine. And so he started me off on one of these crews. And I was the driver.

You know, I was like, didn't know my head from a hole in the wall. But one thing later, another. Years later, he told me that hiring me was like losing two of his best guys. And so that's the kind of lawn worker I was.

But I mean, you even sold a business in college. A lot of business. Probably not for a whole lot of money. But still, you started a business and somebody bought it from you.

Yeah. Your client list or whatever. Yeah. You were doing, you were just collecting people's laundry and taking it to a commercial.

Well, we actually did it. You know, we built in-house a little coin laundry mat, but without the coins. You know, so the customer would essentially sign up for a prepaid service. I mean, I brag about this a lot.

I invented a real live industry because I was doing this here in Waco. And now it's a thing. Like, you can go to a college and you can sign up for essentially a laundry plan. Well, that's what I was noodling all those decades ago.

I was trying to figure out how could we get a parent to sign up for a plan that was, let's say, $199 and, you know, hilariously, even now, you know, gift cards and how some of them go unredeemed. I mean, geez, I mean, the profit actually came from 20 or 30 percent of those kids buying those $199 plans and never showing up one time. What was it? You mentioned like sitting in a classroom and just kind of dreaming.

But I mean, there's something about starting these businesses. Like not every college kid does that, right? And I want to ask you about this house that you bought around the time you graduated because the idea was you buy it, renovate it, got it, renovate it, and then flip it. First of all, how did you know, like, how did you know how to do stuff in a house?

Did you grow up being taught that? Dad and I were super into drywall and stuff like that. Not that extreme, you know, but if we needed a fence built in the backyard, Dad and I would build a fence together. He just learned from him.

Yeah. Just helping him. He was a country guy that he's one of these guys that just grew up in a very rural environment. So he knows just a little bit about everything, you know, and so we were never hanging dry walls, but we build fences, you know, he'd want a birdhouse or a doghouse and we'd build that together.

We kind of figure it out. And so in all of those endeavors, you know, I had a laundry business. I had a lawn business. I bought several firework stands in East Texas.

I mean, bro, but all of that put together into one pot, made about 30 to $50,000 a year as a college kid. So I'm going to school. In the 90s? In the 90s?

Who knows? Who knows what it was? In Waco, that went far. Totally.

So that's kind of how it shook out. And then I graduated from Bailey University and had two very obvious options. Stay the course, which was me continue to operate these. I think I still had the washing fold at the time.

I had a lawn business that was kind of starting to pick up steam a little bit. So I could stay the course or I could move to Houston and work for Xerox in a somewhat prestigious sales job. You know, and again, you're selling copiers, so I don't want to overstate it. But for salespeople in my neck of the woods, this was a real honor.

And that could have led to a corporate job like management. I mean, I got a computer. I got a little pager. I mean, I got a real, it was real money.

It's the late 90s sales job. I wish I remember the number, but I think between 60 and 80 grand. So here I am, to your point, working my tail off. It's always 100 degrees everywhere I go.

You know, maybe making two thirds of that, half that on most years. That, maybe if I'm lucky, you know, but I didn't do it. And so here I am making 30, 40, 50 grand a year in Waco. And I buy this house.

I'm going to just do the rough numbers and who knows if this is accurate or not. But I buy this house for about 50 grand. But I made $50,000 in that two or three, four month period, which was similar to my entire 12 month, you know, income the year before that. How did you know what to do in the house?

I mean, you mentioned like building fences to your dad and dog houses and bird houses, right? That's like basic carpentry. But how did you know, like, okay, here's this house. You know it has to look nice.

How did you know what to do? How did you know where to start? I think in the very, very first unit, if I can recall correctly, it was simply like if the carpet was nasty, which it was, there was, it was not debatable stuff here. I mean, it was like graffiti on the wall.

So of course you got to pull down the drywall because it's, it's been painted in some weird way. The carpet was disgusting. So I just ripped it all out, brought it back to the studs. I had hired some guys and just hired some guys.

And we just started figuring it out. Literally like YouTube. You couldn't like go on YouTube. I wish there were YouTube.

You're the most relational guy. I was thinking of you asking this question. I was like, you know, with Chip, even though he may not have known how to do the house from start to finish, the key with any renovation or any project or even any business is your relational skills. Find the people.

Find the right people. Do them right. They do you right. And so they were teaching Chip.

Chip was teaching them. So I thought it was more relational than understanding like A plus B equals C. So even in that first house, like, would you say you had a sense of like what looked good? No, no ideas.

Like this carpet's nasty. We need to replace it. So let's just get, go to Home Depot or whatever. A hundred percent.

And it was exciting. And it was exciting. It was sexy. I mean, there weren't really house flipping shows.

It wasn't a thing yet. There was not a, I mean, my father-in-law, I get married and my father-in-law, I own probably seven or 10 rental properties. When we got married, I had a pretty robust little renovation business and her, her dad would take me on these Sunday drives and ask me if I'd gotten a job yet, like how the job market was. And as if I'm looking for jobs and I was always so thankful for him because it never really hit me like in this wildly offensive way, which hilariously it probably should have.

But I just was grateful that he cared about us and cared about me and all these things. But it was just like, I had a job. It was just very unorthodox, very untraditional. All right.

I want to pause your story for a moment and turn to you, Jenna. Because I know you were, you moved to Waco when you were in high school. You grew up in Wichita for a number of years and you had a Korean mom. Your dad met your mom when he was stationed there in Korea.

He was in the army. Yes. He was drafted at 18 years old. Skinny.

What about John Lennon? Did your mom speak English? No English. Wow.

He goes to his party. They meet. And my mom loved him because he was so quiet. Well, she didn't realize that he was stoned, which is why he was so quiet.

She said, I see all these guys talking and trying to be the center of attention. I said, this guy in the corner is just sitting there quiet. And she says, I told my friend, that's the guy I'm going to marry. So your mom, growing up, because you were living in Wichita and you lived in Austin for some time, but I know that, I mean, probably there weren't many families like yours, right?

There really weren't, yeah. And your grandma lived with you for some time? Did your grandma speak much English? She spoke zero English.

We actually lived right outside of Wichita, this little town called Rose Hill. And there were no other Asians. So like everyone, you know, it was obvious we were unique. We were different.

And then my grandmother comes to live with us and she didn't know any English, but she would, she would come to all of my sporting events and the kids would try to talk to her and she would just kind of nod her head. Could you talk to her? I knew a little bit of Korean just because of my mom just listening to them. I always wanted to try to understand what she was saying, but I remember the moment it hit me that I was different.

And the moment I chose to decide to play more on this side than that side. I remember we went to a Korean church in Kansas and seeing all these Korean people. And they were kind of, the kids were kind of rude to us and they kept calling me. I said, half Papa, I should know this, halfie.

And so there they were kind of being like, oh, they're half. So they were, you know, kind of being a little mean, like we were different. And then when I go to school, I felt that same. So I really remember wrestling with where do I fit?

Because when I go to this all Korean church, I'm different. And when I go to the school, I feel different. And I felt like I chose, I'm going to go more on the side where I'm not going to own that Korean side of me. And my mom, I mean, she's working for her own thing secretly, quietly as she's trying to figure out how she fits into some American culture.

And so, you know, that's, that's the choice I made as a little girl. And so that's why I'm like, I'm not hard on myself for that. You do what you do to survive. And for me, it was play along.

So even through high school, you felt that same tension? Oh, yeah, I was, I never played, I never talked about the Korean side. And I was so proud of my mother. Like it was, but to me, again, she was very cultured.

Like she, she was beautiful. I was so proud of her. But when I moved to Waco, you go from, you know, a school of 500 kids. class to 25 you fit in pretty quick like it's a small private school everyone's your friend so it was it was a soft landing for me coming from a school where i just felt lost and i was totally insecure coming to waco it just felt like okay i got my footing pretty quick um and it was a fun experience for me you guys moved here your dad opened up a tire shop firestone a tire store and um and this is important because he also had tv commercials and he would have his family and commercials and you can see those they're still available they're amazing they're amazing i love how you held your hand in front of the triangle he's proud of his family he's proud of his family and it's a local business and he's got and but i think that's is that is it true that's where you first saw joanna on those commercials that's true yeah so she was a local legend i mean this girl was like i mean she goes in all this all shuck stuff and the half korean and how sad it was to be a seven-year-old in wichita kansas but she was a fox i mean make no mistake she was a hot rod she moved into town she started going to school at this little private school and all the boys loved her she became she was a hot rod my dad had these commercials that we would do and i was at the same time going to baylor and doing um communications like broadcast journalism so he was like hey why don't you use what you're learning there and help me produce these commercials if you want to be the talent in them and so that's where i kind of stepped up to be the spokesperson of jerry stephen this is your voice right my voice yes and you were doing college radio i was doing gwbu i was there at 5 a.m doing the radio who was listening at 5 a.m but i was you know learning so much and i loved it but that's where i thought oh i can't wait to do broadcast journalism i'll have a teleprompter i love the idea of being able to voice something but someone else write it i mean you did an internship in new york with dan rather yes 48 hours i mean and did you really big deal for waco i mean also like dan rather texan did you ever interact with him was he particularly because he seems like the kind of guy who would love texans that he would i wore a baylor sweater um we had one like 2 a.m shoot in a courtroom and i remember he came up to me says wearing my baylor sweatshirt and he said are you from texas and so that's every time he saw me call me baylor right that was your nickname today your ambition was to be broadcaster to be like a tv anchor i think i you know i had two ambitions one was um to take over my dad's store because i wanted to be he had three daughters and he i heard at one point say man i always wish i had a son because i handed this over to him and then but also was doing the broadcast journalism on the side and i went to new york and i think after the internship maybe day three i was like okay i don't want to do journalism anymore after five years in college in new york hey she's from all these small towns you're describing she'd go in the early 2000s that was like oh by the late 90s the stuff i saw she talks about toxic environments you know which has become somewhat common and this was a complicated place you were just like holy moly these people were super well i think it's just the nature of the beast with news it's the the first thing that was said to me is you know i need to find beautiful people who do awful things and i was like wait what okay and then i became the the person over the cold case division so i had to like call people you know you're reopening this trauma for people and there's no there's no like um here this is how you go in and you just knock on the door and you're nothing it's just like we want this story and again it's not that it's that i was conflicted i'd come home i guess i don't know if i want to have this life i don't know if i can carry the weight of these stories i felt so alone i felt unseen i was in this huge city i wanted to come home the only place i felt like alive and seen was in these tiny little local boutiques that i would go to on the weekends in new york in new york and i'd step in and i still remember the sounds the smells like i'm just like the intentional displays and i'd go in and it'd be an escape for me and i felt at home and i loved it didn't buy anything i would just go and browse and i feel like after that internship i remember thinking one day i'd love to do that have a little boutique maybe make people feel at home no matter where they're at when they step in i want to create that experience that i felt it was such a sweet spot for me in a hard place um and so that was that's really where i say magnolia started that dream in my heart was um in new york city during that internship but meantime you graduate you know go work at the shop the tire shop meantime i'm like i guess i'm doing it start to get some apprentice to eventually take it over one day and she smelled like a tire so she looked like you she looked like a swimsuit model but smelled like a tire for me it was it was quite a combination and i'm assuming you you went to the tire shop to get tires your car but only because it was her tire shop because you knew she was there yes i didn't care at all about jerry stevens firestone you knew that she was there she was there and there was a chance if you went to that shop there was a chance you could meet joanna stevens at this point in my career now i come back i'm like i don't want to do this i'm gonna help my dad i used to do his books like i was his bookkeeper for seven or eight years well i started thinking if i'm gonna take over i need to actually understand what is a tire what size tire how do i when a male comes to the counter and he sloughs at me like can i talk to somebody else how do i prove that guy wrong and overwhelm them because i know what a 235 you know i know the size tire i know all of the language alignment right so i was learning the business so i happened to be at the front when this guy decided to get us like six pair of tires i got great jobs like weekly if i could afford it so in that i mean you go there with the intention obviously trying to meet joanna right and sole purpose and then we strike up a conversation first thing he says aren't you the girl in commercials which was truly the most annoying thing that anybody said to me yes and i kind of rolled my eyes like oh here's one of these guys um but we sit outside for 30 minutes 30 minutes it was so cute and hilariously she looks like she's 20 now at mid 40s i look like i'm 80 at 50 and so rewind the tape to that day she thought i was an old guy she thought i was like a married married with kids so i'm sitting here i mean this married guy is really friendly should i be concerned she thinks i'm some creep like with a family and kids just hitting on her for no longer so all that to say the next day i see a note on my desk chip canes says to call you back so i would end so call back yes it was amazing it really was it was an amazing first date yeah the one thing i liked about him is everyone had left all of our friends that went to baylor all went to dallas also they moved they no one stayed in waco and i remember saying why are you still here you're out of college and i just remember him saying i love the community i love the people here and i want to put my roots in this town and i just remember thinking that's that's risky for a guy outside you know so i loved that that he thought differently because everyone else was kind of doing opposite so i just remember that stuck with me that he saw um something special that we go but even back on that first date i just remember there was this unique depth to joe that i'd never really experienced before i mean just our conversations were super rich and then we just in a very short amount of time we got a lot of things covered and it was just really awesome you must have also really trusted her and found something in her that not just in terms of your personal relationship but like in terms of her instincts because i think like six months in your relationship you leave town you go to mexico i guess learn spanish and from what i read you basically say that to joanna hey can you run can you run these several businesses can you collect the rent from the people and like how did that happen why did you have the confidence to you know give this 22 year old every year old like i'm an idiot so i will say that isn't all that special you know it does sound amazing the way you've described it and oh man i wasn't really equipped i was a complete idiot you know so i just wanted to do this thing in mexico she was kind enough to kind of support you went to study spanish i went to study spanish i'm just going to lead my businesses and try to basically do a crash course three-month immersion uh spanish course and she was like you should do it because i just had these hispanic guys that i just love like brothers and we were always so close and it was powerful but i couldn't communicate super clearly to them and they were limited in their ability to communicate to me so i thought this is all my problems you know and so but the idea that i trusted her to do these things i would have trusted a monkey i mean i was a complete idiot i was encouraging him as well but what happened in his his businesses is like a plus b has to happen or then see you know so if you don't get rental money then you can't pay the sub so i started realizing okay rents do on the fifth so i would go to these they all were football players that lived in these houses so i'd knock on the door and they'd be like are you here to clean the house i'm like no i'm here to collect rent and they go we'll give it to you tomorrow and i couldn't collect rent from these guys so now it's like five houses in i can't get the rent money well if you don't have rent money we've already wrote checks to some of our subs for these other things now checks are bouncing so you know where chick could go and say give me the money he'd get it or he'd call their parents i didn't know how to do all that i wasn't good at it i would just take no and be like okay i'll wait for tomorrow well what happened is i didn't collect rent so then a lot of things started business starts to collapse overnight at the firestone so now these subs are coming to my dad's firestone and her dad is i mean above reproach he is very straightforward working in a seven check sent to the firestone my dad's like what is i mean he said to me i was like what's happening and who is this guy um and so i you know of course i tried to cover chip i was like well it's because i didn't collect rent money but it was just you know it was a fragile my parents were like why did you leave her in that spot her parents were saying the same i was like i thought it was gonna go a little smooth here was the moment i remember as my eyes are now awakening to the reality of like all hell's breaking loose and it's happening at my dad's office and now it's like oh i'm in trouble now chip's parents are mad everybody's mad i was running out of money there she's i had to like western union him money like from i mean so we were like doing this weird thing and finally i just said hey listen it was it all kind of hit i need you to come home i called him two days earlier and said if you don't pack your things up right now and head this way it it's over i remember getting home from mexico and i went to her parents house first so i'm coming back from this exhausting almost traumatic i mean it was me and my dog and all this stuff and my truck barely made it back i mean there were there were moments where i could have not made it back and i hear this knock on the door about 11 30 at night and my mom enters the ship with his backpack his lasso on he's got all his little things he bought along the way a lasso and my mom till this day will say when i open the door i saw the look on his face of embarrassment of i know i disappointed she saw that look and then immediately wanted to say it's okay and i think him coming in the house sharing the story it's like my parents could care less what happened in the weeks before that they knew he had a good heart and i think from that moment is when my parents really fell in love with him because he was humble about it i messed up i'm back his intentions were great some mishaps happened and now he's back we're gonna fix it oh i mean young young people right don't always think about practical things when they're when they get married but sometimes they do and i wonder as you guys get married in 2003 did you see in chip not just a life partner but a business partner did you like in you i can imagine that in joanna you saw this she has a head on her shoulder she has to do accounting and bookkeeping she's run her dad's entire business like this is i am marrying up right and i want and i don't mean to say that you aren't either but did you see in chip like somebody who did you see a spark in him maybe that other people didn't see that that he was going to be able to build something interesting i think for the girl who played it safe her whole life i was attracted to this guy who did not play it safe but he had a really good heart heart and i feel like for me and my faith with god i feel like i'd rather a man of great faith where he trusted in the friendship of god he trusted in the nature of god and because i could do anything and for me i had faith but my faith was a little more calculated like okay god i'll say yes when i see the green light turn green three you know like mine was not as faith it was more of his religion so there's that there's a piece of that i was so attracted to that his relationship with god was one that i'd never seen before it was real and it was tangible and it was risky and i liked that pretty soon if you get married you start work together right i mean you're flipping houses and you're doing this together so i have to assume that you're not at some point you stop working at the tire shop when we as we're engaged we're engaged and um this is when chip i had a legal pad just like this but bigger and i i like four pages back i wrote down all my dreams when i was supposed to be working with my dad i was like doodling shop front exteriors and names and and the dreams go back to that time in new york a boutique or something like that and i think as i was bored at my dad i was conflicted because i was like i really want to honor my dad but i also just don't love tires you know i just i couldn't get into it and when chip saw this and he flipped back he said i don't understand why you have all these dreams on paper why would you go for them i was like why would i go for them these are just like this is my daydreaming and this is as we're engaged and he is only coach could do i call you coach i mean now we're partners but still i feel like he's like my life coach he was like just pick one of those let's do it let's do it and so i got enough of the courage in me to do it and found a building and then i went to my dad and they said dad i want to buy this building i want to start my own business i don't want to do the firestone this was like year nine almost ten heartbreak and i said i'm so sorry even for me i remember and the irony again back to the fate where god all those things mixed into a pot i mean here's a business that already works and sustainable and clearly made a living for your dad mom why not and the fact that you and i looked at that opportunity and kind of equally decided to pass on it is just mind bogging it doesn't even make any sense for sure it doesn't make sense for you because you really were a big fan i could have been the son that your dad never had in that practical way and i think my dad even saw that as a writing i'm like this is perfect you got this entrepreneur guy my daughter who knows the business this is going to take this thing to the next level so when i told him that i i think it was a bit heartbreaking for him but he also in that moment of being a good dad was like i want you to do what you feel when you described what you wanted to do in 2003 what did you say was going to be a little home store with like decor candles um just wanted a little boutique yeah was there going to be i mean did anybody push back and say you know waco's not the right place to do this it's not you're not going to find people we're going to spend that kind of money no one pushed back on waco they pushed back on me though and and not in not in a mean way no everybody everybody everybody was like you don't do design you you've never had a store before you've only known tires like are you sure you should do this and this is one of my favorite stories about my dad because now i'm saying this is like you're nine going into almost your 10 working for my dad this person um and i say okay dad hey i'm going to try to start getting you know used to this like you know buy and sell goods thing while i'm here can i put product in your coffee like on your coffee table in your waiting area and put a tag on it and just see and he's like if people would buy it as where me and chip are renovating this dumpy little building um so i remember one thing i was super proud of i'd go to garage sales on the weekend i would spray paint stuff sand it down a little bit and then like bump it up like double the price i found this wicker sled that was like you know two feet and it was five dollars and i thought oh my gosh i went to michael's robbie lobby this is sad i thought this is why everyone was talking me out of it yeah i think okay i'm gonna go buy fake ivy so i fake ivy the whole sled and then i put like some christmas battery operated christmas lights around it and i put $25 on it and i showed his mom i showed his sister i showed my family i showed my friends and every time i showed someone they all kind of gave the same huh is what they would say not that's beautiful so i put it in my dad's waiting area at the firestone i put $25 on it and i was gonna show everybody i can take a $5 thing put a little money into it sell it for $25 was it like christmas season i had it been right we're moving into the fall season so as i'm every day i go in as i'm working for my dad i see the sled still there so i'm like dang it two weeks later i walk in there's no sleigh sleigh sled whatever it was and my dad at the counter he hands me an envelope it's $25 cash i'm like and literally at that point i was thinking to myself if i don't sell that damn sled i'm not doing this business this is a sign i shouldn't do this the day i say that to myself my dad hands me this envelope $25 cash and i thought okay it's a sign that it's meant to be a year later my dad sells that firestone to back to corporates and now they're running and i'm helping him move out and i find that little sled up in the attic but he doesn't know it was the right moment in time because if he would not have sold that i would quit and said i'm not doing this job so when you decide to open that store how did you even know how to source material how did you where were you gonna get the stuff from well right up the street is Dallas market and I learned real quick this cost is five dollars and then you sell it for ten to twelve dollars and so I was learning this as I was going I went to market the first time with my mom and I had twenty five thousand dollars that was my line of credit for inventory but the first day at market I remember you know the lady would look at me and say okay how many of these do you want and I'd say four you only want four of these and I was like well I don't know because so at the end of that day I remember my mom pulled out I got physically sick I was so nervous I just blew twenty five thousand dollars in product that I don't even know people like I have all this inventory now I had her pull over on I-35 and I threw up oh I was so sick physically like I am not built what am I doing and so it's like it's funny every mile marker doubt would hit like what are you doing you're not built for this so all that to say that first year was a lot of I don't feel equipped I don't feel like I should be doing this um I mean one of the things I regret is not keeping my open sign it was an A-frame sign by the road this was another ugly one it said I don't know what's that now open the wicker thing or your first so my A-frame sign I paint a magnolia and I write the word O-P-E and then the end didn't fit so I put the end under it like literally like a seven year old letter yeah and so you look at this A-frame sign it says now open in at the bottom I mean what just some of these things I'm like how did how are we here oh my gosh let me come back in just a moment the store finally opens and Chip and Joanna tackled their biggest construction project yet which looks great on paper until the housing crisis hits stay with us I'm Guy Raz and you're listening to How I Built This hey welcome back to How I Built This I'm Guy Raz so it's 2003 and Joanna is about to open her very first home design store in Waco and well she looked me square in the eye and I feel like your parents were with us and she said nobody is gonna come to this like I'm gonna open this and I'm essentially gonna be embarrassed and I just kept going like we don't know you know why don't we assume the best you know we could go the other direction and we opened that thing at like nine o'clock in the morning and I'm telling you if there's a BMW in Waco Texas it was at that grand opening there were 30 cars in the lot I'm like who are these people and at 10 a.m.

they all pull in at the same time and the reason they pull in was not because of my now open sign it was because of the magnolia sign that Chip had surprised me with a week earlier that went on the building where he went to a junkyard and bought all these old channel letters and put together the word magnolia and everyone said we just love that sign we're trying to figure out what's in here those 10 women that were doctor's wives attorneys they come in and I feel like bought everything in that one day and that was what I needed not that they came in every day but that one day of like if you build it they will come they sure came they spent money I did the math on the utilities and you know my payments and all the thing and I had to make $250 a day so I just told you if we make $250 a day we can stay in business I remember that first day we did about $2,800 now again I didn't do $2,800 every day but what I found is in those like ebbs and flows I would sit there there were some days where no one would come in at all I was kind of located in a weird spot but what I was learning because of those three hard years of not knowing what I was doing that was my college that was my this was my degree do you feel like you had just an intuitive sense of what was nice I mean how did you know no no well I want to counter that because this is true about Jo and she's always been this way if you gave Jo 15 bucks she would go out and read your mail and she would find you exactly you would find some little $15 trinket that meant nothing to anybody and somehow it would speak to you in this really profound way and she always like it wasn't too well I feel like that I do because it's like I try to figure out your story and that feels different what I think as far as intuitive is like what looks good versus what doesn't look good those days I was guessing so you're saying you didn't have great taste at the beginning of all I did not have and I am not just saying that I did not have great taste the store I mean so meantime you are focused on flipping right on flipping yeah and at what point and you're running the shop right and at what point were you sort of getting like giving Chip advice on how to make a house look nice like again you're not you weren't an interior designer you weren't like an apprentice to an interior designer you're just like Chip you were an apprentice to a construction worker did you start to do that pretty early on I think about year two of being in the shop women would ask me to come into their homes and help help them design a mantel design a tablescape for thanksgiving and again every time I said yes I would learn something new even though in my mind I was like home belong here and then all of a sudden something unlocked for me which is like gonna look different in every home and if you play to the home story and the family story you can make a really beautiful thing and so the tricky thing about what Chip was doing is he's flipping houses there's no story of family but there's a lot of story of the home and so that's what I think we worked together on I think for us together that's where the magic hit and we were both just having fun in the space did you do you remember trying things in the early days and then looking at it and saying wow this looks terrible or were you already starting to put the pieces together I think we tried and failed is the answer to that question we tried and failed but people were still buying properties and so I do think that there was an element of success that kept me feeling like okay at every level I'm upgrading a bit and then it became kind of became this cool thing of like about year three I had my second baby and there was something instinctively in me to just shut the shop down I could not hold two kids on the hip so it was too hard and so I really I felt like I was letting go of my dream I remember that was sort of one of those moments for you it was a god moment where I was like if I let this go is it gone forever and I remember I'll never forget as I was turning the key for the last time as I locked the door on the last day I was open I felt like God said it's gonna come back in a way bigger way because of your trust like just trust me and so that's where I started like looking at the plans and from home saying hey what if we add a beam here what if we and so that's how we really started to partner together is I'm now at home I'm not at the shop we're partnering on these projects we're taking the kids with us and now this becomes like our new business was Magnolia Homes which is now we renovate and again like you are I mean you've got this great business you're buying homes renovating them flipping them now this is becoming a thing right this is like 2006 7 property values all the country are now we know it was a bubble in the bubble totally we didn't know it at the time and you were you had been in that business for a long time and so presumably taking on more risks because it makes sense and then the financial crisis hits totally and I mean I have to imagine you guys get hit pretty hard yeah we were over our skis we were knee deep in a develop we've never done a development before we wasted one house kind of wanted two at a time and we found six acres of land and chip had this vision of doing 38 patio homes called a pocket community I was so excited and so it looks like a dreamy little neighborhood with big magnolia trees small houses all 1500 square feet ish you know and we were doing big big real projects I mean we kind of stepped out of sort of a entry-level flip kind of construction company to where we were doing renovations that were hundreds of thousands of dollars for houses that were nice houses so we're doing this development streets curbs and gutters and it hits and so that was a rough three to four years that just every day was like is this when we do the bankruptcy game four kids in a five year period four kids at 1.4 and under like I think three of them were still in diapers babies and so just doing that trying to keep this and then also doing renovations and doing everything just hit it but again because of our naivety it was like we didn't even know that you could file bankruptcy so that really wasn't on the table because we didn't know anything about it everybody was being super gracious because we weren't the only people going through this and again if we're the dirtbags that are always screwing everybody I'm sure everybody would have locked us out that would have been the end of it but they always knew we were trying and you know we owed somebody $500 and we'd give them $100 and then we'd owe somebody $5,000 and we'd give them $1,000 and we just kind of kept sort of stair-stepping making the best of these worst-case scenarios and again it was exhausting it was I wish I could say it was six months and it was this lesson learned and that was the end of it years of doing this just virtual bankruptcy we were always broke we were always begging people for one more minute one more day is that because you were over leveraged like you had too much like you purchased too much property at too high of a price and then the price hit or really we were always pretty conservative in that way so all of our properties were in good shape so we had lots of equity in several properties which really even as you're describing it that simply that's probably what saved us we probably were refinancing some of these pretty good bets that we had for now going on nearly a decade but it was just this bank development note and I mean I remember it like it was yesterday because again it was $500,000 to do the infrastructure on this and that loan was called so we basically had gotten to I'm speculating on this part I remember the amount which was $500,000 so we had gotten this line of credit for $500,000 we probably had $300,000 worth of that line of credit in the dirt so infrastructure streets were in you know curbs and gutters a lot of electrical stuff was already preemptive yeah but there was not a single house and and I remember the bank called and they said listen man this this note has basically been decreased by 50 percent so we were at like a $250,000 cap of which we had $300,000 already implemented I mean done and we need this obviously couple hundred thousand to get it across the finish line but we didn't have long I mean six months something like this at that moment so what did you do I got yeah I can't even remember exactly how it played out other than I remember the Joe and I were literally like we have got to finish this development because if we could get it across the finish line and that's all the fundamental stuff then start building houses maybe just maybe we get out of here a lot go ahead I'm just I'm just thinking you're a young couple you got four young kids I mean and a business that looks like it could collapse if it wasn't like it could it might it was collapsing but I just remember Joe and I just had this epiphany in our marriage because again it was pretty early in our marriage in that sense we kind of we kind of envisioned it sort of like a tug of war to where she and I are always tugging against one another and then there's a problem or an issue you know we're just kind of all every man for himself it feels like in those moments but if we could ever get aligned and pull against the thing that we're trying to overcome and literally align and almost like swear to god we're gonna lie on this pinky promise let's be together we noticed this sort of energy it was like this one plus one started equaling ten it wasn't you know always easy but we just decided to stop sort of bickering at each other and nipping at each other's heels and instead just support one another wholly and I think we started just getting creative chip would sell some things you would I started doing these home shows um where because I still had my vendor contacts so I would buy about twelve thousand to fifteen thousand dollars of inventory put it in the house that we were doing and tell everyone come look at our newest remodel and have a one-day show and sell twenty five to thirty thousand dollars a product in that home well then that would then pay off something so we just started getting scrappy we started getting creative and I feel like that's just where we don't wish that upon ourselves but in those moments we saw things differently and you were going to quit and you were living in a lot of you lived in nine houses in the first ten years you were you were living in houses you were raising kids doing demo work you know right like some of the parts of the house are like plastic heating to protect the kids from the dust and then you move to the next house and do the same thing my move it was because we couldn't afford boxes it was putting everything in trash bags on the back of the trailer you know the games are moving again it would be a trailer with just like trash bags all our clothes I mean it was it was a show did you did you go hillbillies for sure I mean on one level that's a really practical way to like run a business right you can live in the place where you're stability you're just constantly moving that's true yeah was any part of you I don't know worried about that about about living that way we didn't have friends that were really had really made it and they were at the country club looking at us like what are y'all doing it was pretty much just you and I and my parents and her parents both had very similar circumstances where they had very tight seasons of their lives so it wasn't like we were being judged by our parents because our parents were like when we were 30 we were broke like this we know the feeling and we didn't have really any external mirror to look against and say oh my gosh we're really failing even the kids to your point because you say that piece I think is interesting but when I think about when I look back to pictures of us when we finally moved to our 10th house which was the farm the kids were about five six and under so even you know the resilience of kids at that age they were just always along for the ride with us like they had no option I just remember car seats we're always driving around we're always at projects I almost felt like pioneers I mean you think about pioneers literally hauling their families looking for a better life you can't explain it but I will say what evolved out of that journey was we had we were living in this dream home of mine in this historic part of Waco Castle Heights and when all this hit we were like okay we can't we know we have to start choosing so we I just finished decorating and designing that big house that we love it was like a model home it was a dream we moved into this thing that just had no character no story was a house in the 80s um but I started tweaking everything about the house and my kids would be happy and my kids would feel seen and they would feel like they could live in this house and that's honestly where the epiphany came from me with design is like don't ever design for pretty design for the people that are living in the house is practical and make it pretty if you want but for me I think it was seeing my kids thrive in that space that wasn't the beautiful house in Castle Heights it was like their space so even though we were kind of dying on the vine and not sure if we were going to make it I feel like my kids felt for the first time at home somewhere by 2011 2012 ish you're you've pulled out of this crisis and the business is stable and you've got you know right you're sort of a robust business supporting your family at that moment in your life right it's not that long ago was any could any part of you have imagined what was going to happen to your lives you were in Waco obviously you had a reputation with your design eye you were in the local magazine and people would come to your house that you flipped to see them and it was cool um the story i mean the story which is which is well known by people who know a little about you is that you write you search for a blog and put photos up and and that gets noticed by a production company that is doing reality tv shows this is like now the sort of really boom time reality tv and they reach out to you and say hey we'd be interested in meeting with you they didn't know i mean they didn't know what you would be like on camera they certainly didn't know about your husband right um and what was your reaction remember i thought it was a scam this is going to be some kind of a you're going to pay somebody five thousand dollars and they're going to come down and produce some nonsensical thing joe was telling me about this i was like maybe you can call her back and she called on my cell phone was like hey what do you think about us just coming for a day just tell me what you do a day in the life and i said okay and so i told you i said this could be kind of fun and he said don't call her back it's a scam i remember sitting in the couch going uh should i listen to him now again as a 50 year old that prides himself there's been several moments through all of this where somebody had to see into the future and make a bet or make a prediction on that future i'm so thankful for when they came when they came and they filmed you and then they sort of came to you and said hey we think this could be something did either of you think a show based on us renovating houses like how are we going to how are people interested in that hundred percent was that i think we thought exactly the way we felt oh wow people in baco are gonna get to see our work on television central texas never thought my grandma but you can ask them like how do you turn that into a tv show yeah the whole thing we didn't know anything we didn't have a tv we didn't watch reality television even as they captured us via these these you know you know cameras we were just like what what is this going to be and back to the point i think you were alluding to i would be the secret weapon thank god for me because i got the gift of gab i didn't know of course because how could you know you've never been on television you don't know anything about television i have an actual phobia of cameras oh really not modern day modern day i've worked it out so you were not comfortable the least comfortable you turned into a totally different when i watched him i was like what he would sweat he would he couldn't get his words out he couldn't breathe well they would turn the thing on and so there was a red dot above the camera and i would see that freaking red dot and it would just terrify me a and b i need like immediate affirmation i need that sort of interaction where when you're looking at a camera and saying something funny and nothing happens as a result of that then i get in my head going oh gosh that didn't land that wasn't funny i need more of this i need less of this and i just i became the guy that like what do you do with your hands i didn't know where to put my hands if i put my hands in a weird place it was weird i would always like protect my genitalia as if somebody was going to throw up so day one he removed himself from that side of the camera so it was like and then i stepped up because i was like well this poor company is here and one of us have to talk to me a little duke who's now our middle child at the time he was our third out of four and so this middle kid that was literally a toddler was just holding on to join his leg and as she would walk around the kitchen trying to describe what was happening she was literally kind of limping with this kid was literally you know hanging on her foot and she was moving around as if he's like this ankle weight or something like this i mean i've seen obviously many episodes in the first episode you got the you're doing the demo work and you're turning down that wall and like you're on the top of that you're almost like electrical wires coming down and stuff did you have a sense that it would be i mean it was picked up hg tv orders is a pilot i think a season 12 episodes um i mean what did you think of that but did you think did you have a sense of how successful it would be did you did you know where it was going to go i think we were still we were so naive that we didn't know i think if anything we thought oh this will secure another hopefully 12 jobs for us as where you know for us it was on the business side of oh we'll have 12 more innovations side of the business it was always what is this tv show going to enable us to do on the business side of it so we were always laser focused on the business part i think it premiered in 2014 season one when did you first realize that this was bigger than you realized than you imagined i mean you're in waco you're doing your job but you're being followed around by camera and then you know there's always obviously some production yeah it wasn't straight after the first season we said yes we did a home show in san antonio gosh $2,500 speaking let's do it we went to this thing and there were two or three other types of us that we actually kind of knew about generally speaking we're like oh i know that guy and i know that guy we were kind of awestruck by these other characters we're also on tv shows i guess yeah when we stepped out oh yeah we looked and had no i really thought maybe 30 thousands and thousands of people were there for us and we would leave and there would be 15 or 30 or 50 for all the other alternatives and i don't want to overstate that because i'm not trying to video just but you were shocked at the number of people came to the meet and greet hours you know you didn't realize that no idea you were having that kind of could not believe that many people would come and these people that were running this thing came to us at the end of this meet and greet and they were like we're so sorry we should have a better strategy we had no idea it was going to be like this and i think that's honestly when people say what separated us or why did the show become so relevant to so many people i think it was just that we really do this for a living you know we did this for a living we do this for a living we really are married we really have these kids i mean you know there was nothing artificial about it and i think something about that really spoke to the audience spoke to the moment you know whether or not you liked it you're becoming television stars which is not was not on your pino card but you are still grinding running business it was a weird thing for us to try to navigate production and our business and those two things were always um at odds because when you're doing a real project which we were doing this was not a made-up thing with made-up clients it was a real project we were indebted to that client the timeline all the things now you have production step in and it's like okay we need to expedite that so this is a six-month project we need it done in eight weeks we need it done in 12 weeks that times 12 puts the pressure on your business like nothing else um and then we look back in the rearview mirror and we're like we don't know how we made it and maybe that's why we don't remember much because it was such there's so much that we were juggling at the time we were doing these renovations for the show that were in this expedited timeline we were doing renovations outside the show and we were still trying to finish that dang development maybe we're done with it i don't even know i think that was always always a part of it yeah your lives were now on television so people started to come to waco texas to maybe to see you guys just wanted to see you at your desk or job is and then people say hey i need this job finished right um i mean there must have been i mean maybe it was all a blur but it must have been it was a blur but i will say there were not enough hours in a day i mean we look back and i think we were running at 18 to 20 hour work we were kind of already doing that what's so weird is like before all this hit we were already navigating life with too much on our plate a lot of kids and just always just pushing forward and going and i felt like it didn't feel like much more it was now that i look back but really it was just like this is what we're good at we're good at juggling things we're good at keeping our family close we were just being very selective at what we said yes to what we said no to but we were also to be completely honest having a lot of fun so i think for us we we surround ourselves with our dear friends they were doing business with us i mean we were doing this with people we loved we really found great people and i think that that was the secret sauce as i look back in the rearview mirror of it all none of them were all that great at the literal thing that we had hired them to do you know nobody was a warehouse manager prior to us and this relationship but we had these people that adored us that were like if you need me to figure out that warehouse i'm gonna figure out that warehouse and they kind of did you know and so in that way i would say the thing we didn't do great was that we didn't ever ask for help we never asked for money you know we never went through the private equity piece of this and we'd gotten tens of millions of dollars earlier the downside would have been somebody would have owned 50% of our business that would have been true and we could have done that the upside would have been we would have been able to build this much more efficiently and much quicker and so we look back and wonder you know we know that that was a good decision not to have done that piece so that part is true but it was just like it took us every dollar we made we reinvested into this business so even though we were making millions and millions of dollars and we used to make hundreds of thousands of dollars so this wasn't a little bit of an upgrade financially this was a massive upgrade financially and that's because the combination of being on international television and because i have to assume by the way and i think we should just be straight about this a lot of people don't realize that most most people in reality shows don't actually get a lot of money they pay a lot of money for shows and certainly documentaries now this is maybe different this is a massive show and probably over time it really wasn't all that different i mean we made money for from the tv side of this business but everything else dwarfed that and that honestly became again all these conflicts that were brewing because our production company cared about the television and the production elements and you cared about the business and the business and the project and it had to be done right all these things were complicated it was nobody's fault like we we never sued our production company our production company never sued us and we look back in the rearview mirror and we're like thankful for for that production company but but it was we thought we were all pulling in the same direction and we found out soon after that we were in fact there were two different priorities are different right because you guys have a business and the production company is a show that they want to get hit 100 yeah and they want more of your time and you can only get a limited amount of your time 100 and the cart was out of whack in the sense that which came you know the cart before the horse and but that's what's beautiful about success you know as we continue to be more and more successful the production company became less and less powerful in that relationship and we didn't know that i mean you talk about bluffing through all of these experiences we didn't know that they were not the boss of us because nobody sits you down and says hey this is an incredible success you guys are doing great here's these things they almost want to hold that from you to some extent how did you know when did you start to think you know this could be bigger we could have a media company we could have a whole line of products which is going to come later but but was there a conversation or a grand strategy or did that all just kind of happen over time the way it happened we didn't have a strategy um i knew i had a dream i had a dream of one day i'd love to partner with target i also love retail that's what i started out in 2003 so i knew i wanted that to be something that was like the main thing of our brand i thought oh i want it to go back to the roots which was home before candles all the things that you fill your house with i think those are the two dreams i quietly had in my heart we found out really quickly and again thank god that the construction business was the means to the end i mean the other things were the much bigger opportunities i thought as it related to the show you were going to be developing properties buildings until joe things like our pillow talk started consisting of joe you watch i'm going to be the largest home builder in waco texas by the time it turns out that that wasn't not going to be the core business it was going to be about design about products about our construction company modern day we still have a construction company and it's exactly as big as the construction company that this all started with i've got the same 12 guys we do about the same 12 to 18 24 projects a year i mean we haven't gotten any bigger and we haven't gotten any smaller from the very beginning but everything else in every other category that she has has has dwarfed that little construction company by 10x or more and that was just totally unanticipated totally unanticipated when we come back in just a moment one of those powerful deal makers in tv pays a visit to waco texas stay with us i'm guy ross and you're listening to how i build this hey welcome back to how i build this i'm guy ross so by 2016 chip and joe have grown magnolia way beyond home construction they launched a magazine published their first book put out a lot of furniture and home decor and paint and they just opened the silos a gathering space in the heart of waco i think the vision even of the silos at the time was how do we create an experience for a guest that creates a moment for them um to pause to have a meaningful moment with their family and so when you see the silos now you see those setups like everywhere where there's nice moments to pause yes there's a retail store there and some cottages that have shops but at the end of the day we love seeing people just on the lawn lingering and i think with the silos i want to talk about the silos for a moment because this is a this is there earlier today it's an amazing property it's literally two giant cotton seed oil silos that are disused and i guess most of it was a parking lot and dirt you bought it you've renovated it's a beautiful space with shops and cafes and a wiffle ball field and just places for people to hang out and food trucks and the thing that struck me when i was there was when i was younger waco texas was associated with branched Indians and david koresh and a horrible thing that happens and most young people don't even know what that is today sure now if you ask the average person at waco they would say magnolia i mean tourists come from even overseas i think about the idea that we have inadvertently rebranded a city and it means a lot to us because you know i joke about this and i really am being facetious but we were in a thing in new york and and the lady said something about if you can make it new york you can make it anywhere and i just kind of like hilariously and quickly quit i was like i'd like to counter that thought with which is if you can make it waco texas you can make it anywhere because if you're in new york you got all the money in the world at your disposal you got all the resources available for attention the media attention oh my gosh and the media and all the things etc we didn't have any of that going for us in waco and yet and still we had opposite of that we had a real negative persona and yet people would come from alaska come from tennessee come from dallas or houston or austin great cities in their own right and come to waco texas and be like wow this isn't at all what i expected that coupled with the magazine coupled with our television show it started it almost immediately became very clear that something extremely unique was occurring but i guess my biggest insecurity as you keep alluding to was there this grandiose plan this big idea and sadly i'm just like this stuff was just happy you know i don't think sadly to me that was like um but why do you say not sad because i will say i've got a big chip on my shoulder and i would love to remove it but when i think about the mark cubans of the world and the elon musk it's like they have these beautiful plans they executed these things perfectly i feel like there was more luck mixed into this than i would like to admit no mark cuban started as a bartender and then he got into selling computers and then eventually started this business broadcast.com which he then was able to sell to yahoo and sold his stock in time like he could not have planned that out i see like all of you argue like of course these things were not these things i mean you want to be successful yeah okay he's ambitious but you can't you can't architect it out so i mean as you become more famous there's more scrutiny and people start to look at you know even when you go to church and oh the pastor said this and must reflect on so all of these things all of the the things that are personal for most people that you don't that aren't public you know i have this argument with my wife you know i love my wife we've been together for 20 years but we had an argument two days ago that's not public right it's in our house but now because you're so visible it changes it means that the scrutiny is different how did you how did you begin to and maybe sit still hard sometimes when you see things that are critical or that are you know accuse you of saying or believing something or being the kind of person that you don't recognize in yourself how do you how do you manage that i think in the beginning when it hit it was like a such a surprise to us like wait what like you don't you don't even realize like people care about like what's happening right now and so when the first one hit i mean i remember thinking i hate being misunderstood yeah but i also felt this was in like 2016 i was a buzz about the church that you're members of that the allegation was anti-lgbt and all the and so this became kind of a bigger story about personal beliefs that no one knows no one no one sat with us and even joanna because she spoke to this a little bit earlier but she just remembers that little girl and and sort of being less than to someone being a little bit other and she has always just had an enormous heart for communities that feel that kind of way because she can understand what it feels like to walk into a lunch room and feel like all eyes on you and for that to be misconstrued and for joe to really feel like and again joe has dear friends that are in the lbgtq community and she just didn't love the fact that it was very difficult for her to try to articulate to the world actually who she was and what she stands for so i can spend time over there arguing and or even trying to be understood for even a second um but then that takes away from my my actual job which i feel like is defined beauty to highlight that because that's you're never gonna win there i think again we are complicated human we're all complicated so to just peg me as of this or to peg someone as of that it's just like come on we're way more complex it's interesting because i think when we are when you are when somebody is the target of these things it becomes amplified in your mind right like and the irony is there was that story in 2016 and there's been a recent story where you had a same-sex couple on one of your shows and and some evangelicals and christians were upset with you because you are christians but it's interesting because overall the overarching brand like 99 of people who come to waco to come to silos or who are fans um you know my sister-in-law who happens to be koreans a massive fan they don't those things don't matter those controversies they matter to tiny number of people but their voices can universally yeah tens of thousands of people in a moment can feel like the entire world it can really and to your point and i think we've learned a little bit about that and the fact that the buzzfeed thing started it out with us and that we got categorized as sort of like anti lbgtq and how inaccurate that was and then to flip the script and now we've had a couple on one of our shows that we executive produce it was in the community and now we're being rebuked by the christians that we adore and love and have grown up with in so many ways and then it's just like y'all we're not gonna be all things to all people we're just not and we don't want to be and we're okay with not being what we really prefer is a big huge table with lots and lots of people with lots of diverse opinions and we all get better as a result of those conversations um but when i think about all of that it's like here's the issues that sometimes you know that come up and i think about the result of being what's the word added whatever like we're gonna come at you is if i were to talk to a therapist i don't know i probably should go to a therapist if i were i wonder if some of the top issues are this feeling of abandonment and shame like if there's a top five fear i don't want to feel abandoned and i don't want to feel shame and if first second we feel that we feel like oh no they're abandoning us or they're putting where she should be shamed right now and if i feel that i take that to another layer of a people group and then they feel abandoned by the church or they feel shame it's like the god i serve is the opposite he he brings you in and he invites you in with his love and so if it is a feeling of abandonment or shame then that's not what i want to be a part of i want to ask you about a decision you made in 2018 to end your fixer at that time to stop making that show a lot of people were you know sad because the show was averaging 19 million viewers a week from your perspective i mean i understand the dynamics were tricky because your production company that one thing and you guys were moving in a different direction but was a part of you scared or worried that by not doing the show every year your business might suffer your brand might suffer would be considerations i've ever had i sought sincere counsel to that exact question and i would say it was unanimous that if you leave the television show all of these things that you've got are going to be everything but that's what i love about my experience before that which was i want to stay home with my two babies i'm going to shut the shop down and i felt like god had said this will come back in a bigger way just because of your active faith it comes back we have renown the silos we have a show all this stuff and even though everyone's saying don't shut it down shut it down no one's gonna know you've got people's minds your business gonna suffer but i felt we felt the confidence we've seen this before when you let something go it doesn't mean that may go away but it doesn't mean it just means you feel in your heart it's time to stop something yeah and you move forward with that there's something good that comes from that even in that no but i would say that those risks that we made along the way those bets that we made on ourselves it was like we're going to trust that we believe that we're supposed to uh stop moving forward with the show fixer upper i mean it allowed us to do much greater things but we would have never known that at the moment and truly we stopped we took a year off we didn't do any meeting we didn't do nothing we were done no real even meetings with anybody about what was quote unquote next you know there's been several iterations kind of rumors like you're describing of like what exactly and that we knew that david zasloff and we were going to do this network together did i ever dream of a network no did you we never dreamed this was david zasloff who runs discovery he came here and he came here and you start to talk about well maybe we do something together where you actually because you didn't have equity in that previous show you didn't have ownership over your own show right and now you have an opportunity to own something yeah and every other conversation we had was hey will you and ship do a show for x y or z and for us we're not sure we want to do a show again when we sat down with david he's like what do you want to do what do you love and so i remember we were saying we love the magazines we can highlight other people's stories we love that and then he started brainstorming about this idea of a network he said he and oprah had done it maybe 10 years prior and obviously the own network oprah winfrey network came of that relationship between he and oprah and he kind of laid out a bit of a roadmap that would be some similar version where we would essentially take over a network we didn't know at the time but it ended up being the diy network and we rebranded that the magnolia network and that was a bit of a collaboration between me joanna and david just on the fly he was like it seems to me that you guys love the business of television you just don't necessarily love the being on television part and that he introduced us to a whole new universe that we honestly didn't know existed you become at this point owners finally of your own on-screen personas sure back to my point before when the production company was sort of the boss of us we just felt always like we knew they was misaligned but we didn't know how or why where this felt like the alignment finally got correct and we felt just extremely powerful i mean even the idea of being able to go and find shows that we're passionate about that we want to showcase and highlight i mean it felt exciting you know how do you decide i mean now you've got all of these many different businesses right there's the you're still flipping houses or which is the smaller part of your business but how do you decide um which businesses to do i mean because you're the most valuable thing you have is your time and your time is limited totally right and the demands are intense so for example if there's a project you decide to do and within two years it's not it might be really fun but it's actually not making any money would you continue to do it probably not you know honestly for us you know the fun part is is making money you know and figuring out businesses that make sense and that have the opportunity to scale and when they don't they don't and that's all right you know but we usually gravitate away from those businesses but i'm a good example is the silos which i visited is a beautiful space you can imagine you know on a saturday it's jammed but to maintain that place is just to make it so beautiful to keep it beautiful it costs a lot you could spend all of your time um you know having the chip and join games paint line and which could be you know a business that's a hundred times bigger than that yeah totally that's right yeah the silos clearly something you're passionate about you love that's totally true yeah but i would say if it didn't make money and it wasn't viable i don't think we would do it forever i don't think we do it forever but we also get the how everything plays together there is a reason we do this and so the silos is a place that we see people come together and we love that that's a thing that we can host and so that was like an honor so last year kind of had this like weird epiphany that food is the easiest way to connect with people and if we feel like right now culturally connection is missing and people miss each other they miss that connection totally we can focus a lot on the retail side on selling a candle or we can focus here around food and getting people around the table and i think instinctively we felt like we want to grow food and this is the first time you're doing i mean obviously you have cupcakes and baked goods but you are rolling out cookies and banana bread and this gets nationally yes it's going to be exclusively the target for a year um and so i feel like with that it's just it's crazy because you know we've written i've written a design book homebody and then the cookbook more people we thought homebody was going to sell outsell um any of the books because it's design and that's how people know me but the cookbooks prove otherwise and i think because there's a thing there that gets you it's more attainable where i think design in a lot of ways can be aspirational and intimidating a recipe is hey i can at least try this right and so i'm in a nostalgic season of my life as my kids are going off to college for me being in the kitchen it grounds me and i think the idea that all the work and effort i'm putting into it for that in moment at the table is like something i just feel more than ever because my kids are getting older those times are limited now with all the kids driving and in sports and so i don't think we know this in our 30s and 40s i wonder if that's true maybe some people are insightful enough but at 50 that i've experienced this year for the first time it's like it's it's like this i don't know i notice these things that you're describing more clearly now than i ever have before in the sense that we don't have all the time in the world and time is not infinite you know it's bleeding and i would just say we've become super particular about how we say yes and i don't think we felt that particular or restrictive in our 40s or 30s before that when you look out 10 years from now where do you see the business going i mean it's already you've got a tv network that you're you know your owners in and you know the magazine and the shops and the line with target and the new food line and i mean there's the possibility and you're probably pitched all the time you know hey you guys let's do a chip and joanna prefab homes or magnolia prefabricated homes you just you know built in a factory and or what do you imagine this will be in 10 years and do you want do you want bigger and bigger and bigger is that in the cards i mean i think if we're kind of in the daydreaming stage now and i think about we visited the silos today take the very best pieces of that so not all of it but the very best pieces and how do we take that to other places there's a lot of places that we're always surprised it's like these consistent cities and like what if we put something there like yeah we've got these cities that uh just seem like our people you know so i think the dream is again i mean chip and i we've been doing this now for almost 25 years we've never taken a break and it hit us last year like we both physically felt it where we couldn't see past right here we couldn't see vision our team was asking what's next we're like what do you mean what's next what about what's all here why does there have to be a next you're like offended by it i hate that question i just asked you that question no but now we're in a healthy stage where i like love to dream but last year chip was like he called it was like we're gonna take three months off and in that three months i think we regrounded ourselves in why we do this what we're doing is creating these moments and memories not only with our team and our family but with also the guests and the readers and the viewers and then when you ground yourself in that then you can start seeing vision for what's next um now it's like so many things we're dreaming about and we're like okay now we're probably scaring the team like oh crap we woke them up yeah um so who knows we're not or we just because we always mess with that or not thought is it would we be satisfied if this were it and we keep coming to this really beautiful conclusion we really would be the vision was always what you've seen you know what i mean i never thought about having 50 restaurants across the country i never thought about having multiple versions of this uh magnolia market or magnolia silos across the country and i was like this was it and and when i say this was it as if it's some kick in the pants what a dream what what a what a dream especially coming from where we started 10 short years ago broke we owed a real bank a 500 000 of which we could have never repaid even if we had sold everything so then to ask the question quote unquote what's next this is like what's what's next what's not next you know joanna when you think about this journey that you guys took you know this guy goes to mexico and says we're my business and and uh you know and here you are now you know 20 almost 20 years later how much of of all this do you attribute to the work you put in the grind and how much do you think is just chance or luck you talked about god how much do you think of all this is that i i always think when i think about my kids and when they're older and they get the full story of like what this is and you know i mean i think they're still kind of learning and you know do they even care right now i mean they're teenagers they're like what you know they think we're pretty dumb they're probably not cool to them but when i think about like what do we what's the story of magnolia the first thing i think of is it's a journey of faith and miracles um i feel like when i think about who i am as a person and the real joe she wouldn't have done any of that when i think about joe with god and obviously with chip i'll go to any mountain i'll do whatever um and so for me it's just showing how a risk-averse girl can live a very adventurous risky life with this guy but i also think you've got to work your butt off he talked about our dads being grinders we are grinders and that's who we are and we find a great deal of fulfillment in that like i love work so much chip loves work but at the end of the day for me to be the ceo of magnolia isn't because i am qualified it's because i said yes to all the right things and i moved forward in faith and i'm like wow look what that got me and i think that's the story i want to tell people it's like you know the life i used to live was like don't say yes until it makes 100 sense and i missed out on so many things because that's really how life works chips in question for you luck hard work grind um i mean i have my thoughts but it doesn't matter here no i appreciate your insight you know even when i was sharing my insecurity about how this has come about to some extent i feel like i've got a chip on my shoulder in the sense that i wish i had a business plan that laid all of this out and then i could say look you know we were really smart but instead there was so many miracles along the way joe really said it best all i can say to add to that is gains were built for hard things you know we were built to do hard things i think that we believe that god is with us and that with him anything is possible and i just wonder about the next 10 years i'm super optimistic and excited you know do you feel that you feel that excitement and optimism about the next 10 years i feel like the last 10 years kind of happened to us um and these next 10 years we i don't want to like manhandle them but i do want to craft it um yeah like chip has always said design the life you love joe and um i think in that way it's like we want to shape it have the foundations to set that to do whatever and so i'm excited about that that's magnolia founders chip and joanna gains guys thank you yeah thank you how much do we owe you for the a couple hours of uh therapy hey thanks so much for listening to the show this week please make sure to click the follow button on your podcast app so you never miss a new episode of the show and if you're interested in insights ideas and lessons for the world's greatest entrepreneurs sign up for my newsletter at gairaz.com or on substack this episode was researched by chris massini and produced by katherine cypher with music composed by louis it was edited by nico grant our engineers were kweisi lee and patrick murray our production staff also includes andrea bruce alex chung elaine coates casey herman norah gill sam paulson carrie thompson and ronnell wood i'm guy roz and you've been listening to how i built this