Interview Host / Journalist (4:11)

Or a large apron sink, you can.

Guy Raz (4:13)

Thank Chip and Joanna because they are widely credited for popularizing the now ubiquitous farmhouse look. 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. And it was a disused cottonseed oil refinery that was redeveloped by the Gaines's 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.

Chip Gaines (5:41)

I mean, I was in heaven. You know, there were always baseball gloves, there were always cleats, there were always all these, you know, incredible, you know, tennis rackets and tennis balls, unlimited supplies of tennis balls. And so as a kid, what else do you need? You know? And so we thought we were the richest kids in town. We just loved it. But dad, you know, he tried his hand at that business idea and, and, and, 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. Yeah, these guys are workers so your.

Interview Host / Journalist (6:16)

Dad was a football guy, but you were a baseball kid.

Chip Gaines (6:18)

Yeah.

Interview Host / Journalist (6:18)

And, and a pretty good athlete in high school. I mean you were like, this was your life, right?

Chip Gaines (6:24)

Yeah.

Interview Host / Journalist (6:24)

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.

Chip Gaines (6:31)

Totally. Yeah.

Interview Host / Journalist (6:32)

Yeah.

Chip Gaines (6:32)

It's called Connie Mack. Back in our day, you know, it was kind of a thing that we do. But yeah, that was a unique kind of.

Interview Host / Journalist (6:38)

And did you dream already, like when you're in high school of being a professional baseball player?

Chip Gaines (6:42)

I did, yeah.

Interview Host / Journalist (6:43)

And good enough if 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.

Chip Gaines (7:02)

It was the dream.

Interview Host / Journalist (7:02)

94 you, you're about to become a baseball player, Baylor.

Chip Gaines (7:06)

What? It was the dream.

Interview Host / Journalist (7:08)

What happens? Why aren't you a professional baseball?

Chip Gaines (7:11)

Well, you know, 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 end up 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, pick up the career.

Interview Host / Journalist (7:40)

I mean your whole identity in your life up until that point, you're like 19, 20 year old kid is baseball.

Chip Gaines (7:46)

Yeah.

Interview Host / Journalist (7:46)

And then that's it, it's gone. And so you wrote about this in, in your book, but you were depressed. This is like a depressing period.

Chip Gaines (7:55)

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 go, I would park my truck at the baseball field, bro. And walk to my apartment and, and take naps. So that in anybody that was driving around that maybe knew me would see my truck at the baseball, I mean I was in a real pickle. I mean I was depressed, I was sad. But you know, fate had other plans.

Interview Host / Journalist (8:29)

It's interesting how failure is like a gift. Like who knows, right? And because I know that while you were in college, this is 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. And a laundry business at one point.

Chip Gaines (8:52)

Totally. It was pretty simple for me. Kind of like simple economics because I started a lawn care company, which was kind of my prime.

Interview Host / Journalist (9:00)

While you were in college?

Chip Gaines (9:02)

While I was. I was probably a sophomore, junior year, something like.

Interview Host / Journalist (9:04)

Just to make money.

Chip Gaines (9:05)

Just to make money.

Interview Host / Journalist (9:06)

Yeah.

Chip Gaines (9:06)

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.

Interview Host / Journalist (9:23)

Like, I hated school in 95 degree weather.

Chip Gaines (9:25)

Yeah, well, yeah, on a cool day. On a cool day. Yeah, those were the good days. But so I, I did pretty much just that. I followed one of those mowing guys back to their truck and then their truck back to their little warehouse. And I talked to the guy. His name's Uncle David, David Stodchill. 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. That's kind of fine. And so he started me off on. 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 led to another. Years later, he told me that hiring me was like losing two of his best guys.

Guy Raz (10:06)

But.

Chip Gaines (10:06)

And so that's the kind of lawn worker I was.

Interview Host / Journalist (10:10)

But I mean, you even sold a business in college, a laundry business.

Chip Gaines (10:13)

Yeah.

Interview Host / Journalist (10:14)

Probably not for a whole lot of money, but still, you start a business and somebody bought it from you. Yeah, your client list or whatever.

Chip Gaines (10:20)

Yeah, that's true.

Interview Host / Journalist (10:21)

You were doing. You were just collecting people's laundry and taking it to a commercial. Like.

Chip Gaines (10:27)

Well, we actually did it, you know, we, we, we. 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, what ended up. 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 bucks. And you know, hilariously, even now, you know, gift cards and how some of them go unredeemed. I mean, geez. I mean, the float business, the profit actually came from 20 or 30% of those kids buying those $199 plans and never showing up. One time.

Interview Host / Journalist (11:20)

What was it you mentioned, like sitting in your classroom and just kind of dreaming. But I mean, you. There was something about starting these businesses. Like, not every college kid does that. Right. And I want, I want to ask you about this house that you bought around the time you graduated. Because the idea was you'd buy it renovated, 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.

Chip Gaines (11:46)

Dad and I were super putting up.

Interview Host / Journalist (11:48)

Drywall and stuff like that?

Chip Gaines (11:49)

Not that extreme, you know, but if we needed a fence built on the, in the backyard, dad and I would build the fence together.

Interview Host / Journalist (11:56)

And you just learn from him, Just watch, just helping him. Yeah.

Chip Gaines (11:58)

And 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 drywall, but we'd build fences. You know, he'd want a bird house or a dog house, and we'd build that together and we'd 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 fireworks stands in East Texas. I mean, bro. But all of that put together into one pot made about 30 to $50,000 a year. And as a college kid, so I'm going to school, a lot of money.

Interview Host / Journalist (12:36)

In the mid-90s, mid-90s, it might cash.

Chip Gaines (12:38)

Who knows, who knows what it would in Waco?

Interview Host / Journalist (12:40)

That went far.

Chip Gaines (12:41)

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

Interview Host / Journalist (13:13)

And that could have led to a corporate job like management. I mean, you're good at sales.

Chip Gaines (13:19)

Got a computer, I got a little pager.

Interview Host / Journalist (13:21)

That's a real job.

Chip Gaines (13:22)

I got a real.

Interview Host / Journalist (13:23)

It was real money, late 90s sales job.

Chip Gaines (13:28)

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 I'm 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. We put about $50,000 into the house, and I sold that house for about $150,000. So that A plus B equals C. And that thing took me probably three and a half, four months. And it was a lot of hard work and whatnot, 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, the year before that.

Interview Host / Journalist (14:19)

How did you know what to do in the house? I mean, you mentioned like, building fences with your dad and dog houses and bird houses, right? That's like some basic carpentry. But, yeah, 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'd you know where to start?

Chip Gaines (14:34)

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. There 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, this is like pre YouTube.

Interview Host / Journalist (15:01)

You couldn't, like go on YouTube.

Chip Gaines (15:02)

And I wish there were.

Joanna Gaines (15:03)

Matt, you're the most relational guy. When 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 think it was more relational than understanding. Like A plus B equals C. So.

Interview Host / Journalist (15:30)

Even in that first house, like, would you say you had a sense of, like, what looked good? No.

Chip Gaines (15:36)

No idea as to what.

Interview Host / Journalist (15:38)

You're just like, this carpet's nasty. We need to go replace it. So let's just get. Yeah, go to Home depot or whatever.

Chip Gaines (15:43)

100%. And it was exciting, you know, it was exciting. It was sexy. I mean, there weren't really house flipping.

Interview Host / Journalist (15:49)

Shows, you know, wasn't a thing yet.

Chip Gaines (15:50)

There was. This is 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 had gotten a job yet, like, how the job market was and as if I'm looking for jobs. And. 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 those things. But it was just like I. I had a job. It unorthodox, very untraditional.

Interview Host / Journalist (16:30)

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. He was in the army.

Joanna Gaines (16:50)

Yes. He was drafted at 18 years old.

Chip Gaines (16:55)

Skinny and look like John Lennon.

Interview Host / Journalist (16:57)

Did your mom speak English?

Joanna Gaines (16:59)

No English.

Interview Host / Journalist (17:00)

Wow.

Joanna Gaines (17:00)

He. He goes to this party, they meet, and my mom loved him because he was so quiet. Well, what she didn't realize is he was stoned, which is why he was so quiet. She's like. She said, I see all these guys talking and trying to, like, get. Be the center of the attention. And I see this guy in the corner just sitting there quiet. And she says, I told my friend, that's the guy I'm gonna marry.

Interview Host / Journalist (17:23)

So your mom growing up because you were living in Wichita and then you lived in Austin for some time. But. But I know that. I mean, probably there weren't many families like yours, right?

Joanna Gaines (17:34)

There really weren't. Yeah.

Interview Host / Journalist (17:35)

I think your grandma lived with you for some time. Did your grandma speak much English?

Joanna Gaines (17:39)

She spoke zero English. We. We actually lived Right outside of Wichita, in 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.

Interview Host / Journalist (18:03)

Could you talk to her?

Joanna Gaines (18:05)

I knew a little bit of Korean just because of my mom just listening to them. And 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. The. The kids were kind of rude to us, and they were. Kept calling me, is it hap, Hapa. I should know this. Happy. 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. 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 then when I go to the school, I feel different. And I. 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 through 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.

Chip Gaines (19:19)

So even through high school, you felt that same tension.

Joanna Gaines (19:22)

Yeah, I was. I never played. I never talked about the Korean side.

Interview Host / Journalist (19:27)

Yeah.

Joanna Gaines (19:28)

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. You go from, you know, a school of 500 kids in your class to 25. You fit in pretty quick. Like, it's a small private school, everyone's your friend. So it was. It was an. It was a soft landing for me coming from a school where I. I just felt lost, and I was totally insecure. Coming to Waco, it just felt like, okay, I've I got my footing pretty quick and it was a fun experience for me.

Interview Host / Journalist (20:02)

You guys moved here, your dad opened up a tire shop, Firestone Tire Store. And, and this is important because he also had TV commercials and he would have his family in the commercials. And you can see those. They're still available and they're amazing.

Chip Gaines (20:19)

They're amazing. You did great. I love how you held your hand. Little family triangle.

Guy Raz (20:23)

Just shouldn't be off tv.

Interview Host / Journalist (20:25)

He's proud of his family, you know, he's proud of his family and, and it's a local business and he's got. And, and. But I think that's. Is that, is it true that's where you first saw Joanna on those commercials?

Chip Gaines (20:39)

That's true. Yeah. So she was a local legend. I mean, this girl was like, I mean, she goes into all this aw shuck stuff and the half Korean and how sad it was to be a seven year old in, 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, I mean she was, she was the hot rod.

Joanna Gaines (21:03)

My dad had these commercials that we would do and I was at the same time going to Baylor and 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 Stevens.

Guy Raz (21:22)

Because it's your voice, right?

Interview Host / Journalist (21:24)

When my voice hear the. At the end. Yeah.

Chip Gaines (21:26)

Oh, and she's got a great voice.

Interview Host / Journalist (21:27)

And you were doing college radio.

Joanna Gaines (21:29)

I was doing newscaster Awbu. I was there at 5am doing the radio. Who was listening at 5am going. 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.

Interview Host / Journalist (21:48)

I mean, you did an internship in New York with dan rather.

Joanna Gaines (21:52)

Yes. 48 hours.

Interview Host / Journalist (21:53)

I mean, and it was a really.

Chip Gaines (21:55)

Big deal for Waco.

Interview Host / Journalist (21:55)

I mean, I mean, also like Dan Rather, Texan. Did you ever interact with him? Was he particularly like. Because he seems like the kind of guy who would love Texans that he would.

Joanna Gaines (22:07)

I, I wore a Baylor sweater. We had one like 2am shoot in a, in a courtroom. And I remember he came up to me because I was wearing My Baylor sweatshirt. And he said, are you from Texas? And so that's. So every time he saw me, call me Baylor.

Interview Host / Journalist (22:24)

Right.

Chip Gaines (22:25)

That was your nickname today.

Interview Host / Journalist (22:28)

Your ambition was to be a broadcaster, to be, like a TV anchor.

Joanna Gaines (22:33)

I. I think I. You know, I had two ambitions. One was to take over my dad's store because I wanted to be. He had three daughters, and he. I. I heard him at one point say, man, I always wish I had a son, because I could. I could hand 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. Him anymore. After five years in college in New York.

Interview Host / Journalist (23:00)

A.

Chip Gaines (23:00)

She's from all these small towns.

Interview Host / Journalist (23:02)

You're describing CBS New York in the. In the early 2000s. That was a. Oh, late 90s.

Joanna Gaines (23:07)

Totally the stuff I saw.

Chip Gaines (23:08)

She talks about toxic environments, you know, which has become somewhat common. I mean, this was a complicated place. You were just like, holy moly. These people were super rough.

Joanna Gaines (23:17)

Well, I think it's just the. The nature of the beast with news. It's the. The. The first thing that was said to me is, you know, I need you 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, and again, as this 19.

Chip Gaines (23:36)

Did anybody just chew you out? No, but you're.

Guy Raz (23:38)

You're.

Joanna Gaines (23:39)

You're opening this trauma for people, and there's no. There's no like, here. This is how you go in and you. You just knock on the door and you're nothing. It's just like, we want the story, right?

Interview Host / Journalist (23:50)

You call them up again.

Joanna Gaines (23:51)

It's not that. It's that I. I was conflicted. I'd come home and be like this. 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.

Guy Raz (24:13)

In New York.

Joanna Gaines (24:14)

In New York. And I'd step in and I. I still remember the sounds, the smells like. And 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.

Guy Raz (24:34)

Have, like, a little boutique, maybe make.

Joanna Gaines (24:36)

People feel at home. No matter where they're at, when they step in, I want to create that experience that I felt that was such a sweet spot for me and a hard place. And so that was. I. That's really where I say Magnolia started. That dream in my heart was in New York City during that internship.

Interview Host / Journalist (24:54)

But meantime, you graduate. You're gonna go work at the shop. At the tire shop.

Joanna Gaines (24:58)

Yeah. Meantime, I'm like, I guess I'm doing it.

Interview Host / Journalist (24:59)

Starting to get apprenticed to eventually take it over one day.

Chip Gaines (25:04)

And she smelled like a tire. So she looked like you. She looked like a swimsuit model.

Joanna Gaines (25:09)

I love the smell, but.

Chip Gaines (25:10)

Smelled like a tire. Tires smell like home for me. It was. It was quite the combination.

Interview Host / Journalist (25:15)

And I'm assuming you. You went to the tire shop to get tires, your car.

Chip Gaines (25:19)

Yeah, but only because it was her tire shop.

Interview Host / Journalist (25:21)

Because you knew she was there from the commercials.

Chip Gaines (25:24)

I didn't care at all about Jerry Stevens Firestone.

Interview Host / Journalist (25:27)

You knew that she. She was there.

Chip Gaines (25:28)

She was there. And there was a chance. If you went to that shop, there was a chance you could meet Joanna Stevens. There was a chance.

Joanna Gaines (25:36)

At this point in my career. Now I come back, I'm like, I don't want to do this. I'm going to help my dad. I used to do his books. Like, I was his bookkeeper for, like, seven or eight years. Well, I started thinking, if I'm going to take over, I need to actually understand what is a tire, what size tire. How do I. When I'm. 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 him? Because I know what a 235, you know, I know the size tire. I know all of the language alignment. So I was learning the business. So I happened to be at the front when this guy decided to get his, like, sixth pair of tires that.

Chip Gaines (26:13)

He didn't need jobs, like, weekly, if I could afford it.

Interview Host / Journalist (26:17)

So in that. I mean, you go there with the intention, obviously, of trying to meet Joanna. Right.

Chip Gaines (26:23)

And sole purpose.

Joanna Gaines (26:25)

And then we strike up a conversation. First thing he says, aren't you the girl in the commercials? Which was truly the most annoying thing that anybody said to me.

Interview Host / Journalist (26:35)

Yeah, I would say that all the time.

Joanna Gaines (26:36)

Yes. And I kind of rolled my eyes like, oh, here's one of these guys. But we sit outside for 30 minutes. 30 minutes.

Chip Gaines (26:43)

I mean, we talk. 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.

Joanna Gaines (26:58)

She thought I was like married with kids. So I'm sitting here going, I mean, this is really friendly. Should I be concerned?

Chip Gaines (27:06)

She thinks I'm some creep, like with a family and kids just hitting on her for no log.

Joanna Gaines (27:11)

So all that to say. The next day, I see a note on my desk. Chip Gaines says to call you back because I would. And so call him back. He asked me on a date the next day.

Chip Gaines (27:20)

And it was amazing. It really was. It was an amazing first date.

Joanna Gaines (27:23)

The one thing I liked about him is everyone had left. All of our friends that went to Baylor all went to Dallas. All three, 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 something special about Waco.

Chip Gaines (27:54)

But even back on that first date, I just remember there was this unique depth to Joe that I had never really experienced before. I mean, just our conversations were super rich and that we just, in a very short amount of time, we got a lot of things covered and it was just really awesome.

Interview Host / Journalist (28:13)

You must have also really trusted her and, and found something in her that. Not just in terms of your interpersonal 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 to learn Spanish. And, and from what I read, you basically say that to, to Joanna. Hey, can you run my, can you run these?

Chip Gaines (28:38)

Can you like, real business?

Interview Host / Journalist (28:40)

My real, my different complicated business? Can you collect the rent from the people? And like, how, how did that happen? Why. Why did you have the confidence to, you know, give this 22 year old.

Chip Gaines (28:50)

23 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, there must have been.

Joanna Gaines (28:59)

I wasn't really equipped.

Chip Gaines (29:02)

Idiot, you know, So I just wanted to do this thing in Mexico. She was kind Enough to kind of support.

Interview Host / Journalist (29:07)

You wanted to study Spanish.

Chip Gaines (29:08)

I went to study Spanish.

Interview Host / Journalist (29:09)

And you're like, dreams, I'm just gonna leave my businesses and study Spanish.

Chip Gaines (29:13)

Try. Try to basically do a crash course, three month immersion Spanish course. And she was like, you should do it. Because I just had these Hispanic guys that I just loved 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 going to solve 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.

Joanna Gaines (29:43)

I was encouraging him as well. But what happened in his life, his. In his businesses is like, every A plus B has to happen. Or then C, you know, so complete. So if you don't get rental money, then you can't pay the. So I started realizing, okay, rent's due on the 5th. 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 Chip could go and say, give me the money. And he'd get it, or he'd call their parents. I didn't know how to do all of 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.

Interview Host / Journalist (30:37)

The business starts to collapse.

Chip Gaines (30:38)

Oh, overnight at the Firestone.

Joanna Gaines (30:42)

So now these subs are coming to my dad's. Dad's Firestone.

Chip Gaines (30:45)

And her dad is, I mean, of reproach. He is very straightforward.

Joanna Gaines (30:50)

We're getting enough NSF checks sent to the Firestone. And my dad's like, what is. I mean, he sits me down. He's like, what's happening? And who is this guy? And so I, you know, of course I try 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. It was a fragile.

Chip Gaines (31:07)

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 going to go a little smoother here.

Joanna Gaines (31:14)

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.

Chip Gaines (31:27)

I was running out of money there she's running.

Joanna Gaines (31:29)

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, I. It was. It all kind of hit.

Chip Gaines (31:39)

I need you to come home.

Joanna Gaines (31:41)

I called him two days earlier and said, if you don't pack your things up right now and head this way, it's over.

Chip Gaines (31:47)

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 broke down. Truck and my truck barely made it back. I mean, there were, there were moments to where I could have not made it back.

Joanna Gaines (32:06)

And I hear this knock on the door at about 11:30 at night. And my mom answers it. It's chipped with his backpack. He has a lasso on it. He's got all his like little things.

Chip Gaines (32:12)

He bought along the way, a lasso.

Joanna Gaines (32:15)

And my mom till this day will say, when I opened the door, I saw the look on his face of embarrassment, of. I know I disappointed. He. She saw that look and then immediately wanted to just, 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 and we're going to fix it.

Interview Host / Journalist (32:50)

I mean, young, young people, right, don't always think about practical things when they're. When they decide to get married. But sometimes they do. And I wonder because you guys get mixed married in 2003. Did you see in Chip not just a life partner, but a business partner. Did you like in you? I could imagine that in Joanna, you saw this. She has a great head on her shoulder. She knows how to do accounting and bookkeeping. She's run her dad's tire business. Like this is I am marrying up right, and I won. And I don't mean to say that you aren't either, but did you see in ship like somebody who. Did you see a spark in him maybe that other people didn't see that, that. That he was going to be able to build something interesting?

Joanna Gaines (33:36)

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 who had a really good 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 of that, he 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 times. You know, like mine was not as faith, it was more of this religion. So there's that, there's a piece to 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.

Interview Host / Journalist (34:23)

Pretty soon after you got married, you start to 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.

Joanna Gaines (34:34)

When we, as we're engaged, we're engaged. And this is when Chip. I had a legal pad just like this but bigger. And I like four pages back, I wrote down all my dreams when I was supposed to be working for my dad. I was like doodling shopping up front exteriors and names and.

Interview Host / Journalist (34:51)

And the dreams go back to the time in New York, like a boutique or something like that.

Joanna Gaines (34:55)

And I think as I was bored at my dad's, I was conflicted because I was like, I really want to honor my dad, but I also just don't love tires. I mean, 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 wouldn't you go for them? And 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 and 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 I 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 10 heartbreak. And I said, I'm so sorry.

Chip Gaines (35:41)

Even for me. I remember. And the irony again, back to the fate or God, all those things mixed into a pot. I mean, here's a business that already works and sustainable and it's 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 boggling. It doesn't even make any sense. For sure.

Joanna Gaines (36:03)

Doesn't make sense for you because you really were a big fan and I.

Chip Gaines (36:07)

Could have been the son that your dad never had in that practical way and that, that.

Joanna Gaines (36:11)

I think my dad even saw that as the writing on the wall. 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.

Chip Gaines (36:19)

Totally.

Joanna Gaines (36:20)

So when I told him that, I mean, 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.

Interview Host / Journalist (36:30)

When you describe what you wanted to do in 2003, what, what did you say it was going to be?

Joanna Gaines (36:36)

A little home store with like, decor, candles. Just wanted a little boutique.

Interview Host / Journalist (36:43)

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?

Guy Raz (36:49)

It's not.

Interview Host / Journalist (36:50)

You're not going to find people who are going to spend that kind of money.

Joanna Gaines (36:52)

No one pushed back on Waco. They would push back on me, though. And, and, and not in, not in a mean way.

Chip Gaines (36:58)

Your mom and dad.

Joanna Gaines (36:58)

No, everybody.

Chip Gaines (36:59)

Oh, everybody.

Joanna Gaines (37:00)

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 year nine going into almost year ten of working for my dad at Aspirestone. And I say, okay, dad, hey, I'm gonna 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 was like, if people Would buy it. Yeah. As were. Me and Chip are renovating this dumpy little old building. So I remember one thing I was super proud of. I would 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, yay. Like, you know, two feet. And I. It was $5. And I thought, oh, my gosh, I'm gonna. So I went to Michael's or hobby lobby.

Chip Gaines (37:59)

This was sad. This is an embarrassment.

Joanna Gaines (38:01)

Talking me out of it. Yeah, I think, okay, I'm gonna go buy fake ivy. So I fake ivy the whole sled.

Chip Gaines (38:09)

And then I put, like, some Christmas.

Joanna Gaines (38:10)

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 chose 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'm put $25 on it. And I was going to show everybody how you can take a $5 thing, put a little money into it, sell it for 25.

Chip Gaines (38:34)

Was it like Christmas season? I had had to have been right.

Joanna Gaines (38:37)

It was. We're moving into the fall season, okay? As I'm. Every day I go in, as I'm working for my dad, I see the sled still there. I'm like, dang it. Two weeks later, I walk in. There's no sleigh, sleigh, sled, whatever it was. And my dad's at the counter, and he hands me an envelope. It's $25 cash. And 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. It's meant to be sweet. A year later, my dad sells that firestone to back to corporate. So now they're running, and he. I'm helping him move out, and I find that little sled up in the attic. He hits. But what he doesn't know, it was the right moment in time. Because if he would not have fake, you know, sold that, sure, I would have quit and said, I'm not doing this, chip.

Interview Host / Journalist (39:32)

So when you decide to open that store, how did you even know how to Source material. Like, how did you. Where were you going to get the stuff from?

Joanna Gaines (39:40)

Well, right up the street is Dallas Market. And I learned real quick, this cost is $5, and then you sell it for 10 to $12. And so I was learning this as I was going. I went to Market market the first time with my mom and I had $25,000. That was my line of credit for inventory. But I. 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. And she, you only want four of these. And I was like, well, I don't know if the custom. So at the end of that day, I remember my mom pulled out. I got physically sick. I was so nervous. Like, I just blew $25,000 in product that I don't even know people. Like, I have all this inventory now. Had her pull over on i35. And I threw up all. I was so sick physically. Like, I am not built. What am I doing? And so it's like, it's funny. At 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. I mean, if one of the things I regret is not keeping my open sign, that was an A frame sign by the road.

Chip Gaines (40:48)

This was another ugly one. I don't know which says, now open the wicker thing or your first.

Joanna Gaines (40:54)

So my A frame sign, I. I paint a magnolia and I write the word ope. And then the N didn't fit, so I put the N under it. Like literally like a 7 year old. Write a letter.

Interview Host / Journalist (41:05)

Yeah.

Joanna Gaines (41:06)

And so you look at this. A frame sinus is now open in at the bottom. I mean, what. Just some of these things, I'm like, how did. How are we here?

Chip Gaines (41:14)

Oh, my gosh.

Guy Raz (41:16)

When we come back in just a moment, the store finally opens and Chip and Joanna tackle their biggest construction project yet, which looks great on paper until.

Interview Host / Journalist (41:27)

The housing crisis hits. Stay with us.

Guy Raz (41:30)

I'm Guy Raz, and you're listening to How I Built. Some of my best trips have been on Airbnb because you get space, privacy, and the feeling of actually being part of the neighborhood. Not just passing through. You can spread out with friends, share meals around a table, or just relax in the living room instead of a lobby. And it's not just about the homes. Airbnb experiences have been some of the most memorable things I've done while traveling. And in fact, I've had so much fun that I decided to host my own original Airbnb Experience in San Francisco this month. It's designed to help you think about your next big move in your career or in your life. If you want to check it out, head to Airbnb.com guy. You know, as someone who's built an entire career around curiosity, I find myself asking questions even in the quietest moments of my day. Whether I'm walking my dog in the morning or just reading a good book, my mind is always wondering about the why behind things, which is exactly how Claude has become such an incredible collaborator in my daily life. Claude is the AI for minds that don't stop at good enough, the thinking partner that works with you to explore the things that fascinate you. Take last night while making dinner, I found myself wondering about the science behind making the perfect crispy roast chicken. And this all led to an enlightening conversation with Claude that went far beyond basic cooking science. We explored the Maillard reaction, moisture management, salting and brining, and even the history of how humans discovered the cooking process. It was really cool stuff, and I love how Claude matches my natural curiosity rather than trying to shut it down with quick answers. Like when I recently noticed all the different layers in a cliff face during a hike, Claude transported me back in time. It helped me explore how these rocks formed under ancient seas and all the forces that transformed them over millions of years. Whether you're researching outdoor curiosity spirals or working through complex creative challenges, Claude extends your thinking to tackle the problems together. And it helps me see connections I never would have made on my own, turning casual observations into moments of genuine discovery. Ready to explore what's possible? Try Claude for free at Claude AI hibt. That's Claude AI HIBT to start thinking deeper Today it seems like every day we hear about how AI is coming for our jobs, and people are getting anxious and fearful. But a recent survey from Miro reveals that 76% of us believe that AI can actually benefit their role, while 54% struggle to know when to use it well. Enter Miro's Innovation Workspace. It's an intelligent platform that brings people and AI together in a shared space to get great work done. Miro has been empowering teams to transform bold ideas into the next big thing for over a decade. We've recently started a new project using Miro, and it's a really awesome creative partner. It helps us develop better processes for organizing it Even generates new ideas. You don't have to be an AI master or toggle to yet another tool. The work you're already doing on Miro's canvas is the prompt. Help your teams get great done with miro. Check out miro.com to find out how that's M I R O dot com. 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.

Chip Gaines (45:36)

And, well, she looked me square in the eye and I feel like your parents were with us. And she said, said, nobody is going to 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, we. Why don't we assume the best? You know, let's. It could go the other direction. And we opened that thing at like 9 o' clock in the morning. And I'm telling you, if there's a BMW in Waco, Texas, it was at that grand opening.

Joanna Gaines (46:02)

There were 30 cars, Mercedes, BMW. I'm like, what? Who are these people? And this totally at. At 10am 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 they were. Everyone said, we just love that sign. We were 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, the payment to the bank, all the thing. And I had to make 250 a day. So I just told ship, 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. It 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.

Interview Host / Journalist (47:20)

Do you feel like you had just an intuitive sense of what was nice? I mean, how did you know? No, no.

Chip Gaines (47:29)

Well, I really don't. I want to counter that, because this is true about Joe, and she's always been this way. If you gave Joe 15 bucks, she would go out and read your mail, and she would find you exact. 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 Joe has always had that awesome gift. I mean, you feel.

Interview Host / Journalist (47:52)

You feel like it wasn't intuitive.

Joanna Gaines (47:53)

Well, I feel like that. I do, because it's like I try to figure out your story, and. And that feels different. What. What I think, as far as intuitive is, like, what looks good versus what doesn't look good. Those days. I was guessing.

Chip Gaines (48:06)

So you're saying you didn't have great taste at the beginning of all.

Joanna Gaines (48:10)

I did not have. And I am not just saying that to be. I did not have great taste the.

Interview Host / Journalist (48:14)

The store. So meantime, you are focused on flipping, right? On flipping, yeah. And at what point. And you're. 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, just like Chip, you weren't an apprentice to a construction worker. Did you start to do that pretty early on?

Joanna Gaines (48:43)

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 mantle, 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, I don't belong here. And then all of a sudden, something unlocked for me, which is like, it's 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. But 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.

Guy Raz (49:22)

Did you.

Interview Host / Journalist (49:23)

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?

Chip Gaines (49:35)

I think we tried and failed. Is the answer to that question.

Joanna Gaines (49:38)

We tried and failed, but people were still buying the property. 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. I could not hold two kids on the hip, so it was too hard.

Chip Gaines (50:02)

And so I really duct tape to wrap these babies around.

Joanna Gaines (50:06)

I felt like I was letting go of my dream.

Chip Gaines (50:09)

I remember that was sort of one of those.

Joanna Gaines (50:11)

It was a. It was. It was a God moment where I was like, if I let this go, is it. 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 going to come back and in a way bigger way because of your trust. Like, you're 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.

Interview Host / Journalist (50:49)

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 over the country are skyrocketing.

Chip Gaines (51:06)

Totally.

Interview Host / Journalist (51:06)

Is that now we know it was a bubble.

Chip Gaines (51:10)

Totally. We didn't know it at the time.

Interview Host / Journalist (51:12)

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.

Chip Gaines (51:20)

Totally.

Interview Host / Journalist (51:21)

And I mean, I have to imagine you guys get hit pretty hard.

Chip Gaines (51:27)

Yeah, we were over our skis, were.

Joanna Gaines (51:28)

Knee deep in a develop. We've never done a development before. We wasted one housing, kind of one or 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.

Chip Gaines (51:40)

I was so excited.

Joanna Gaines (51:41)

And so it looks like a dreamy little neighborhood with big magnolia trees, 38.

Chip Gaines (51:46)

Houses, all 1500 square feet. Ish. You know, and we were doing big, big, real projects. I mean, we were. 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. Yeah.

Joanna Gaines (52:04)

So we're doing this development streets, curbs and gutters and it hits. And so that was a rough three to four years of just every day was like do we. Is this when we do the bankruptcy?

Interview Host / Journalist (52:15)

Kids in a five year period or.

Joanna Gaines (52:16)

Kids at 1.4 and under. Like I think three of them were.

Chip Gaines (52:20)

Still in diapers, babies.

Joanna Gaines (52:22)

And so we were in trouble doing that, trying to keep this and then also doing renovations and doing everything just hit it with.

Chip Gaines (52:30)

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 dirt bags that are always screwing everybody, I'm sure everybody would have locked us out and 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 a hundred and then we'd owe somebody 5,000 and we'd give them a thousand. And we just kind of kept sort of stair stepping, making the best of these worst case scenarios and. 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 and one more day.

Interview Host / Journalist (53:19)

Is that because you were over leveraged? Like you had too much, like you would purchase too much property at too high of a price and then the crisis hit or not really.

Chip Gaines (53:28)

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 had for now going on nearly a decade. But. But it was just this bank development note. And I mean I remember it like it was yesterday because again how much was it? It was $500,000 to do the infrastructure.

Interview Host / Journalist (53:54)

On this and that that loan was.

Chip Gaines (53:56)

Was called. So we basically had gotten to. I, I want, 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 in infrastructure, streets were in, you know, curbs and gutters, 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%. 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.

Interview Host / Journalist (54:46)

So what did you do?

Chip Gaines (54:48)

I, I got, yeah, I can't even remember exactly how it played out other than I remember that Joe and I were, 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 alive. Go ahead. It seemed like I'm just, I'm just.

Interview Host / Journalist (55:08)

Thinking you're a young couple, you've got four young kids. I mean, and a business that looks like it could collapse if, you know.

Chip Gaines (55:16)

And it really was collapsing. It wasn't like it could in my. 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 envision it sort of like a tug of war to where if 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, and almost like SW to God, we're going to align on this pinky promise. Let's be together. We noticed this sort of energy. It was like this one plus one started equaling 10. 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. Holy.

Joanna Gaines (56:08)

And I think we started just getting creative. Chip would sell some things. He would. I started doing these home shows where, because I still had my vendor contacts, so I would buy about 12,000 to $15,000 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 25 to $30,000 of 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, we, we saw things differently and we weren't going to quit.

Interview Host / Journalist (56:43)

And you were living in a lot of the, I mean, you lived in nine houses in the first 10 years. So you were, you were living in the house that you were innovating, raising kids, doing demo work, you know. Right. Like some of the parts of the house are like plastic sheeting to protect the kids from the dust. And then you'd move to the next house and you do the same thing.

Joanna Gaines (57:03)

And by move it was because we couldn't afford boxes. It was putting everything in trash bags on the back of chips trailer. And you could, they could always see, oh, the gains are moving again. It could be a trailer with just.

Chip Gaines (57:12)

Like the clampets all over clothes.

Joanna Gaines (57:14)

I mean it was, it was a show for sure.

Chip Gaines (57:16)

Did you were the Waco Hillbillies for sure.

Interview Host / Journalist (57:18)

I mean, on, on, on one level, that's a really practical way to like run a business, right? You're going to live in the place where you're renovating and then you move to the next place. On another level, you can look at it like from, from an outsider's perspective and, and you know, you can have looked at your family and thought that, you know, they're not giving their kids any stability, they're just constantly moving. Like that's true. Yeah. Was any part of you, I don't know, worried about that, about, about living that way?

Chip Gaines (57:44)

We didn't have friends that were, really, had really made it and that 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 as you.

Joanna Gaines (58:15)

Said 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 5, 6 under. So even then, you know, the, 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 were always driving around. We're always at projects.

Chip Gaines (58:36)

We almost felt like pioneers. I mean, when you think about pioneers literally hauling their family and they're too young, looking for a better life.

Joanna Gaines (58:43)

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, 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 loved. It was like the model home.

Chip Gaines (59:03)

It was a dream.

Joanna Gaines (59:04)

Then we move into this thing that's just like, had no character, no story. It was a house from the 80s. But I started tweaking everything about that house so 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 for me with design is like, don't ever design for pretty design for the people that are living in the house. So it's 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.

Chip Gaines (59:36)

I remember you had that one room that was almost like this arts space.

Interview Host / Journalist (59:39)

Yeah.

Joanna Gaines (59:40)

So even though we were kind of dying on the vine and not sure if we were going to make it, it my. I feel like my kids felt for the first time at home somewhere by 2011, 2012.

Interview Host / Journalist (59:49)

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 lives. 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 houses that you flipped to see them. And. And it was cool. The story, I mean, the story of which is. Which is well known who by people who know a little bit about you is that you write.

Joanna Gaines (60:31)

You.

Interview Host / Journalist (60:32)

You start to write 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 the really the boom time of 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. And what was your reaction? What do you remember thinking?

Chip Gaines (61:03)

I thought it was a scam. This is going to be some kind of a. You've got to pay somebody $5,000 and they're going to come down and produce some nonsensical thing. Joe was telling me about this. I was like, baby, you can do it back.

Joanna Gaines (61:15)

And she called on my cell phone, was like, hey, what do you think about us just coming for a day and just filming. Filming you what you do a day in the life. And I said, okay. And so I told Chip. I was like, chip, this could be kind of fun. And he said, don't call her back. It's a scam. I remember sitting on the couch going, should I listen to him?

Chip Gaines (61:33)

Even now, again, as a 50 year old that prides himself, there's been several moments through all of this to where somebody had to see into the future and make a bet or make a prediction on that future. I'm so thankful that for Joe, when they came.

Interview Host / Journalist (61:47)

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 like a show based on us renovating houses? Like, how are we gonna. How. Why are people gonna be interested in that?

Chip Gaines (62:03)

100 was that. I think we thought exactly the way we felt.

Joanna Gaines (62:07)

Oh, wow, people in Waco are gonna get to see our work on television.

Chip Gaines (62:11)

Central Texas. Never thought my grandma.

Interview Host / Journalist (62:14)

But did you even ask them, like, how do you turn that into a TV show?

Chip Gaines (62:18)

Yeah, the whole thing. We were, we didn't know anything.

Joanna Gaines (62:20)

We didn't have a tv. We didn't watch reality television.

Chip Gaines (62:23)

Even as they captured us via these, these, you know, you know, cameras, we were just like, what is this? What is this gonna be about? And back to the point. I think you were alluding to. I would be the secret weapon. Thank God for me, because I've got the gift. Gift of gab. I. I didn't know, of course, because how could you know? You'd never been on television. You don't know anything about television. I have an actual phobia of cameras.

Interview Host / Journalist (62:49)

Oh, really?

Chip Gaines (62:49)

Not modern day. Modern day. I've worked it out.

Interview Host / Journalist (62:52)

But you were not comfortable.

Chip Gaines (62:54)

The least comfortable.

Joanna Gaines (62:55)

He turned into a totally different. When I watched him, I was like, what is. He would sweat. He would. He couldn't get his words out. He couldn't breathe.

Chip Gaines (63:03)

Well, they would turn the thing on. And so there was A red dot above the camera and you're laughing out. And I would see that freaking red dot and it would just terrify me. A and B, I need like, 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 this. I need less 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 that was weird. I would always, like, protect my genitalia, as if somebody was going to throw a.

Joanna Gaines (63:43)

So day one, he removed himself from that side of the camera. So it was terrifying. And then I stepped up because I was like, well, this poor company is here and one of us have to.

Chip Gaines (63:55)

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 Joanna's leg, and as she would walk around the kitchen trying to describe what was happening, she was literally kind of limping with this kid that was literally, you know, hanging on her foot as she. He was moving around as if he was like this ankle weight or something like this.

Interview Host / Journalist (64:22)

I. I mean, I've seen obviously many episodes. In that first episode, you've got the, you know, you're doing the demo work and you're tearing down that wall and like, you're in the top of that. That you're almost like the electrical wires are coming down and stuff. Did you have a sense that it would be. I mean, it was picked up HGTV orders based on the pilot, I think a season 12 episodes. I mean, what did you think at that point? Did you think. Did you have a sense of how successful it would be?

Guy Raz (64:53)

Did you.

Interview Host / Journalist (64:54)

Did you know where it was going to go?

Joanna Gaines (64:56)

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 we're, you know, for us, it was on the business side.

Chip Gaines (65:09)

Of the 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.

Interview Host / Journalist (65:21)

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 a camera. And then there's obviously some production work.

Chip Gaines (65:39)

But it was a season or two. Yeah, it wasn't straight out.

Joanna Gaines (65:42)

After the first season we said yes. We did a home show in San Antonio, $2,500 speaking engagement.

Chip Gaines (65:49)

And I was like, we're doing this, 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.

Interview Host / Journalist (66:01)

Other characters who were also on TV shows, htv.

Joanna Gaines (66:05)

So when we stepped out.

Guy Raz (66:06)

Oh yeah, we looked and had no.

Joanna Gaines (66:09)

I like really thought maybe 30,000 thousands.

Chip Gaines (66:12)

Of people were there for us to 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. It was just.

Interview Host / Journalist (66:24)

But you were shocked at the number of shots.

Joanna Gaines (66:26)

The Meat and green did not need hours.

Chip Gaines (66:29)

We were there.

Interview Host / Journalist (66:29)

No. You didn't realize that. No idea you were having that kind of impact.

Joanna Gaines (66:33)

Could not believe that many people would come.

Chip Gaines (66:35)

And these people that were running this thing came to us at the end of this meet and greet and they were like, we are so sorry. We should had 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.

Interview Host / Journalist (67:07)

You know, whether or not you liked it. You're becoming television stars.

Guy Raz (67:10)

Totally.

Interview Host / Journalist (67:11)

Which is not. Was not in the. On your bingo card in 2012. But you are still grinding running a business.

Joanna Gaines (67:21)

It was a weird thing for us to try to navigate production and our business. And those two things were always 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. Well, now you have production step in and it's like, okay, we need to expedite that. So if this is a six month project, we need it done in eight weeks. We need it done in 12 weeks. That times 12 puts a pressure on your business like nothing else.

Chip Gaines (67:58)

And then we look back in the rearview mirror and we're like, we don't know how we made it.

Joanna Gaines (68:02)

And maybe that's why we don't remember much because it was such. There was so much that we were juggling at the time.

Chip Gaines (68:08)

We were doing these four young kids.

Joanna Gaines (68:10)

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 were done by then. I don't even know. I feel like that was always with.

Chip Gaines (68:20)

Us, always a part of it.

Interview Host / Journalist (68:21)

Yeah. Your lives were now on television. So people start as they come to Waco, Texas, to maybe to see you guys, just wanted to see you at your desk or at your office. And then you had people saying, hey, I need this job finished.

Joanna Gaines (68:34)

Right.

Interview Host / Journalist (68:36)

I mean, there must have been. I mean, maybe it was all a blur, but it must have been.

Chip Gaines (68:41)

It was a blur. But I will say there were not enough hours in the day. I mean, we look back and I think we were running at 18 to 20 hour work.

Joanna Gaines (68:49)

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.

Interview Host / Journalist (68:57)

Yeah.

Joanna Gaines (68:57)

A lot of kids and just always, just pushing forward and going. And I felt like. 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 surrounded ourselves with our dear friends. They were doing business with us. I mean, we were doing this with the people we loved.

Chip Gaines (69:26)

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, the Nobody just had never been trained for it 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 going to figure out that warehouse. And they kind of did, you know, and, 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. Had we 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 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.

Interview Host / Journalist (70:45)

And that's because the combination of being on national 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, get paid a lot of money for.

Chip Gaines (71:04)

Right, that's true.

Guy Raz (71:05)

And.

Interview Host / Journalist (71:06)

And certainly documentaries. Now this is maybe different because this is a massive show and probably over.

Chip Gaines (71:11)

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 the. These conflicts that were brewing because our production company cared about the television and the production elements and you cared about. Cared about clients and the business and the project, and it had to be done right. All these things were complicated. It was nobody's fault.

Guy Raz (71:36)

Like, we.

Chip Gaines (71:36)

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. But we were all pulling in the same direction. And we found out soon after that we were, in fact, there were two different objectives. Priorities are different.

Interview Host / Journalist (71:54)

Right, because you guys have a business and the production company has a show that they want to make a hit.

Chip Gaines (71:59)

100.

Guy Raz (72:00)

Yeah.

Interview Host / Journalist (72:01)

And they want more of your time. And you can only give a limited amount, 100%.

Chip Gaines (72:07)

And the cart was out of whack in the sense that. Which came, you know, the cart before the horse.

Joanna Gaines (72:12)

And.

Chip Gaines (72:13)

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.

Guy Raz (72:38)

How did you know?

Interview Host / Journalist (72:40)

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 in the way it happened?

Joanna Gaines (72:56)

We didn't have a strategy. I knew I had a dream. I had a dream of one day I'd love to partner with Target. I also also love retail. That's what I started at 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 decor, candles, all the things that you fill your house with. I think those are the two dreams I quietly had in my heart.

Chip Gaines (73:21)

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 this.

Interview Host / Journalist (73:33)

Show you were going to be developing pro properties buildings.

Chip Gaines (73:37)

And I would tell Joe things like our pillow talk started consisting of Joe, you watch. I'm going to be the largest home builder in Waco, Texas.

Interview Host / Journalist (73:45)

By the time it turns out that that wasn't not going to be the core of your business at all, it was going to be about designed about.

Chip Gaines (73:51)

Products about our construction company. Modern day we still have a construction company and it's exactly, 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 hadn't gotten any smaller from the very beginning. But everything else in every other category that she heads has, has dwarfed that Little Construction Company by 10x or more.

Interview Host / Journalist (74:21)

And that was just untotally unanticipated.

Chip Gaines (74:24)

Totally unanticipated.

Guy Raz (74:27)

When we come back in just a moment, one of the most powerful dealmakers in TV pays a visit to Waco, Texas. Stay with us. I'm Guy Raz and you're listening to How I Built this. This episode of How I Built this was brought to you by Square. In Square's new series the Way Up, I sit down with six local businesses. I chart the entrepreneur's journey, the hurdles and the highs. How Square played a part in helping the business grow. Think about a thriving local business you admire. Maybe it's a great boutique with the softest towels or a local cafe that has the best scones. Many of these businesses trust Square to help manage their operations and grow. For instance, I absolutely love talking to the father daughter duo behind Vala's Pumpkin Patch. They started with a tiny plot of land growing pumpkins and now they make pies and ciders and welcome up to 20 in a single day. And that growth, it was made seamless by Square. Hear the journeys of six rising American businesses. Visit square.com go bilt to learn more. That's sq U-A-R-E.com go bilt learn how square can help your business on the way up Ever had one of those afternoons where your brain just quits on you? You're sluggish, hangry, maybe even a little foggy. What if it's your glucose? See, glucose is an energy currency for your mind and body. When it's stable, you're on point. When it crashes, so can you. That's why Lingo is so interesting. Lingo is a glucose wearable designed to help you connect the dots between your glucose and what you eat, how you move and how you feel. It shows your glucose data in real time. Instead of guessing, you see the impact of your choices. Maybe that healthy snack is actually sending your glucose on a roller coaster or that afternoon walk is the perfect stabilizer. It's about unlocking your consistent best all day long by truly understanding your body's unique responses. Get to know your glucose and learn about how to build healthy habits that work for you. With Lingo, designed for you by Abbott through November 30th. Use code GUY10 on HeloLingo.com to get 10% off a lingo plan. Purchase one use per customer. This offer cannot be combined with other offers, US, Puerto Rico and UK only. The lingo glucose system is for users 18 years and older not on insulin. It is not intended for diagnosis of diseases including diabetes. Individual responses may vary. Hey, welcome back to How I Built this. I'm Guy raz. So by 2016, Chip and Joe have grown Magnolia way beyond home construction. They've launched a magazine, published their first book, put out a line of furniture and home decor and paint. And they've just opened the Silos, a gathering space in the heart of Waco.

Joanna Gaines (77:41)

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 to pause to have us 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, love seeing people just on the lawn lingering and.

Interview Host / Journalist (78:07)

And I think with the silos. I want to talk about the silos for a moment because this is a. I visited 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, 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 the Branch Davidians and David Koresh and that horrible thing that happens. And most young people don't even know what that is today.

Chip Gaines (78:46)

Sure.

Guy Raz (78:46)

Now, if you asked the average person.

Interview Host / Journalist (78:48)

About Waco, they would say magnolia. I mean, tourists come from even overseas.

Chip Gaines (78:54)

I think about the idea that we have inadvertently rebranded a city and it means a lot to us because, you know, I joked 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 in New York, you can make it anywhere. And I just kind of like hilariously and quickly quipped. I was like, I'll. I'd like to counter that thought with if. Which is if you can make it in 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 from.

Interview Host / Journalist (79:27)

An academic standpoint, the attention, oh my.

Chip Gaines (79:29)

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 is you keep alluding to was there this grandiose plan, this big idea. And sadly, I'm just like, this stuff was just Happening.

Interview Host / Journalist (80:12)

I don't think sadly.

Guy Raz (80:13)

I don't think it is sadly.

Joanna Gaines (80:15)

To me, that was like.

Chip Gaines (80:17)

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.

Joanna Gaines (80:23)

It.

Chip Gaines (80:23)

But when I think about the Mark Cubans of the world and the Elon Musk, it's like they had these beautiful plans. They executed these things perfectly. I feel like there was more luck mixed into this than I would like to admit.

Interview Host / Journalist (80:35)

And 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 have planned that out.

Chip Gaines (80:50)

Right. Like, you would argue, like us, these things were not preempt.

Guy Raz (80:53)

These things.

Interview Host / Journalist (80:54)

I mean, he wanted to be successful for sure. Okay. He was 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 where you go to church and, oh, the, The. The pastor said this and must reflect on. So all of these things, all of the, The. The things that are personal for most people that you don't. That aren't public. You know, I have a argument with my wife. We, you know, I love my wife. We've been together for 20 years, but we have an argument two days ago that's not public. Right.

Guy Raz (81:25)

It's in our house.

Interview Host / Journalist (81:26)

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 it's still hard sometimes when you see things that are critical or that are, you know, accuse you of saying or believing something or being a kind of. The kind of person that you don't recognize in yourself.

Guy Raz (81:51)

How.

Interview Host / Journalist (81:52)

How do you. How do you manage that?

Joanna Gaines (81:55)

I think in the beginning, when it hit, it was like a. It was such a surprise to us. Like, wait, what? Like, you know, 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.

Interview Host / Journalist (82:12)

Yeah.

Joanna Gaines (82:12)

But I also felt this was in, like, 2016.

Interview Host / Journalist (82:14)

I think it was a BuzzFeed article about the church that you're members of and that the allegation was. It was anti LGBT and all the. And so this became kind of.

Joanna Gaines (82:24)

It just became a bigger story about personal beliefs that no one knows. No one. No one sat with us and even.

Chip Gaines (82:30)

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 or 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 lunchroom and feel like all eyes on you. And for that to be misconstrued and for Joe to really feel like. And, 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.

Joanna Gaines (83:14)

So I can spend time over there arguing or even trying to be understood for even a second. But then that takes away from my actual job, which I feel like is to find beauty, to highlight that because that's. You're never going to win there. And I think again, we are complicated, human. We're all complicated. So to just peg me as a this or to peg someone as a that is just like, come on, we're, we're way more complex.

Interview Host / Journalist (83:41)

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, then it's been a recent story where you had a same sex couple on one of your shows and, and some evangelicals and, 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 the silos or who are fans, you know, my sister in law who happens to be Korean is a massive. They don't, those things don't matter. Those controversies seem, they matter to, to tiny number of people but their voices.

Chip Gaines (84:25)

Can really amplify tens of thousands in a moment can feel like the entire world. And 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, 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 that was in the community and.

Joanna Gaines (84:53)

Now we're being rebuked.

Chip Gaines (84:55)

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 going to 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.

Joanna Gaines (85:19)

But. But when I think about all of that, it's like, here, here's the issues that sometimes, you know, that come up and I. And I think about the result of being. What's the word? Added, whatever. Like, you're. Like, we're gonna come at you is almost reference. If I were to talk to a therapist, I don't know, I don't go to. I probably should go to a therapist, but 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 for a second we feel that, we feel like, oh, no, they're abandoning us or they're putting worse, we should be shamed right now. And if I feel that and then 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.

Guy Raz (86:14)

Have.

Interview Host / Journalist (86:15)

I want to. I want to ask you about a decision you made in. In 2018 to end your. The, you know, fixer upper at that time to stop making that show. A lot of people were, you know, sad because the show was averaging like 19 million viewers a week. From your perspective, I under. I mean, I understand the dynamics were tricky because you're a production company that won 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? Were they considerations that ever. You ever had that cross your mind?

Chip Gaines (86:53)

I felt sought sincere counsel to that exact question. And I would say it was unanimous that you leave this television show. All of these things that you've built are gonna be everyone.

Guy Raz (87:05)

That's right.

Joanna Gaines (87:05)

That's what I love about. 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. Your act of faith, it comes back. We have renowned the silos. We have a show, all this stuff. And even though everyone was saying, don't.

Interview Host / Journalist (87:23)

Shut it down, shut it down, no one's gonna know. You get a people's minds, totally.

Guy Raz (87:28)

Your business is gonna suffer stuff.

Joanna Gaines (87:31)

But I felt, felt. We felt the confidence that 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.

Chip Gaines (87:44)

Yeah.

Joanna Gaines (87:45)

And you move forward with that. There's something good that comes from that. Even in that.

Chip Gaines (87:49)

No, but I. I would say that those risks that we made along the way, those bets that we made on ourselves, that it was like, we're going to trust, then we believe that we're supposed to 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.

Joanna Gaines (88:12)

And truly, we stopped. We took a year off. We didn't do any meetings. We didn't even want to.

Interview Host / Journalist (88:17)

No nothing.

Joanna Gaines (88:18)

We were done.

Chip Gaines (88:19)

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 Dave. David Zaslav and we were going to do this network together.

Joanna Gaines (88:33)

Did I ever dream of a network? Noted. We never dreamed.

Interview Host / Journalist (88:36)

This was David Zaslav, who runs Discovery. He came to Waco and he. He came here and. And you started to talk about, well, maybe we do something together where you actually, because you didn't have presumably equity in that previous show, you didn't have ownership over your own show. Right. And now you have an opportunity to own something.

Joanna Gaines (88:56)

Yeah. And every other conversation we had was, hey, will you and Chip do a show for X, Y or Z? And for us, we were like, 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 magazine because we can highlight other people's stories. We love that. And then he started brainstorming about this idea of a network.

Chip Gaines (89:18)

He said he and Oprah had done it maybe 10 years prior. And obviously the own network, Oprah Winfrey Network, came up of that relationship between he and Oprah. And he kind of laid out a bit of a road map that would be some similar version to 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. 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 even know existed.

Interview Host / Journalist (89:59)

You become, at this point, owners finally of your own on screen Personas.

Chip Gaines (90:05)

Sure. Back to my point before, when the production company was sort of the boss of us, we just felt always like we knew that it 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?

Interview Host / Journalist (90:32)

I mean, now you've got all of these many different businesses, right? There's the. You're still flipping houses, sort of Kish.

Chip Gaines (90:40)

Yeah.

Interview Host / Journalist (90:41)

Which is a smaller part. Part of your business. But how do you decide which businesses to do which? I mean, because you're. The most valuable thing you have is your time, and your time is limited.

Chip Gaines (90:51)

Totally.

Interview Host / Journalist (90:52)

Right. And the demands are intense. So, for example, if there is 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?

Chip Gaines (91:08)

Probably not. I mean, honestly, for us, you know, the fun part is, is making money, you know, and, 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.

Interview Host / Journalist (91:28)

Oh, but I mean, a good example is the silos, which I. I visited is a beautiful space you can imagine, you know, on a Saturday, it's jammed. But to maintain that place is. Is just to make it so beautiful. To keep it beautiful costs a lot. You could spend all of your time, you know, having the. The chip and Joanna Gaines paint line and which could be, you know, a business that is a hundred times bigger than that.

Chip Gaines (91:53)

Yeah, totally. That's right.

Interview Host / Journalist (91:55)

Yeah. But the silo is clearly something you're passionate about, you love.

Chip Gaines (91:58)

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.

Joanna Gaines (92:04)

I mean, not only 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 feels 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 the. 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.

Interview Host / Journalist (92:42)

First time you're doing. I mean obviously you. You have cupcakes and baked goods at the S, but you are rolling out cookies and banana bread and biscuits.

Joanna Gaines (92:52)

Biscuits, yes.

Interview Host / Journalist (92:53)

Cinnamon nationally.

Joanna Gaines (92:54)

Yes.

Interview Host / Journalist (92:54)

Chocolate in the frozen. In like frozen. The frozen section. Is it with.

Joanna Gaines (92:59)

It's. It's going to be exclusively with Target.

Interview Host / Journalist (93:01)

With Target.

Joanna Gaines (93:01)

Right. For a year. And so I, 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 cookbooks. The cookbook more people we thought homebody was going to sell outsell any of the books because it's designed and that's how people know me. But the cookbooks proved otherwise.

Chip Gaines (93:22)

Yeah.

Joanna Gaines (93:23)

And I think because that there's a thing there that gets you it's more attainable. Where I think design in a lot of ways can be aspirational, can be intimidating. Inspirational and intimidating.

Interview Host / Journalist (93:33)

Following a recipe is, hey, I can.

Joanna Gaines (93:35)

At least try this. Right. And so I'm in a nostalgic season in my life as my kids are going off to college. For me, being in the kitchen, it grounds me and. And I think the idea that all the work and effort I'm putting into it for that in moment at the table, it's like something I'm to going just. 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.

Chip Gaines (93:58)

And 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. 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 fleeting. 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.

Interview Host / Journalist (94:33)

But 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 aligned with Target and the new food line, and I mean, they're the possibility. And you probably pitched all the time, you know, hey, you guys, let's do.

Guy Raz (94:57)

A Chip and Joanna prefab homes or Magnolia prefabricated homes that you just, you.

Interview Host / Journalist (95:02)

Know, built in a factory and are put on.

Guy Raz (95:05)

And what do you.

Interview Host / Journalist (95:07)

You imagine this will be in 10 years? I mean, do you want to. Do you want to be bigger and bigger and bigger? Is that in the cards?

Joanna Gaines (95:17)

I mean, I think if we're. We're kind of in the daydreaming stage now, and I think about. You 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. Other places? There's a lot of places that we're always surprised because it's like these consistent cities, and we're like, what if we put something there?

Chip Gaines (95:40)

Lake? Yeah, We've got these cities that just seem like our people, you know?

Joanna Gaines (95:44)

So I. I think the dream is again, I mean, Chip and I, I mean, 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? Like, why does there have to be a next? Yeah, we were, like, offended by it.

Interview Host / Journalist (96:06)

I hate that question. I just asked you that question. I hate that question people ask me.

Joanna Gaines (96:10)

But now we're in a healthy stage where I, like, love to dream. But last year, Chip was like. He called it and was like, we're going to 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. Now it's like so many things we're dreaming about. And we're like, okay, now we're probably scaring the team. They're like, oh, woke them up.

Interview Host / Journalist (96:41)

Yeah.

Joanna Gaines (96:42)

So who knows? Or not. Or we just.

Chip Gaines (96:45)

What we have here, we always mess with that. Or not thought is it. Would we be satisfied. 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 Magnolia Market or Magnolia silos across the country. And it 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 a. What a. What a dream. And 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? It's just like, what's. What's next? What's not next?

Interview Host / Journalist (97:35)

You know, Joanna, when you think about this journey that you guys took, you know, this guy goes to Mexico and says, run my business. And.

Chip Gaines (97:44)

And.

Interview Host / Journalist (97:45)

And, you know, and here you are now, you know, 20, almost 25 years later. How much of. Of all this do you. 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?

Joanna Gaines (98:03)

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, so they're like, what, What?

Chip Gaines (98:18)

You know, they think we're pretty dumb. They're humbling.

Joanna Gaines (98:21)

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. I feel like when I think about who I am as a person and the. The real Joe, she wouldn't have done any of that. When I think about Joe with God and obviously with Chip, I did. I'll go to any mountain. I'll do whatever. 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 gotta 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, 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 is like, you know, the life I used to live was like, don't say yes until it makes a hundred percent sense. And. But I missed out on so many things because that's really how life works.

Interview Host / Journalist (99:32)

Chip, same question for you. Luck, hard work, grind. I mean, I have. I have my thoughts, but those don't matter here.

Chip Gaines (99:42)

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 wished 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 Gaines's 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. And I'm super optimistic and excited, you know, do you feel that? Do you feel that excitement and optimism about the next 10 years?

Joanna Gaines (100:27)

I feel like the last 10 years kind of happened to us.

Guy Raz (100:31)

Us.

Joanna Gaines (100:32)

And these next 10 years, we not. I don't want to, like, manhandle them, but I. I do want to craft it. Yeah. Like Chip has always said, design the life you love, Joe. And I think in that way, it's like, we want to shape it. We have the foundation set to do kind of whatever, and so I'm excited about that.

Guy Raz (100:51)

That's Magnolia founders Chip and Joanna Gaines.

Interview Host / Journalist (100:55)

Guys, thank you.

Chip Gaines (100:56)

Yeah, yeah, thank you, thank you. How much do we owe you for the couple hours of therapy here?

Guy Raz (101:03)

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 from some of the world's greatest entrepreneurs. Sign up for my newsletter@guyraz.com or on substack. This episode was researched by Chris Massini and produced by Katherine Simon Cypher, with music composed by Ramtin Erabloui. It was edited by Neva Grant. Our engineers were Kwesi Lee and Patrick Murray. Our production staff also includes Andrea Bruce, Alex Chung, Elaine Coates, Casey Herman, Noor Gill, Sam Paulson, Kerry Thompson, and Rommel Wood. I'm Guy Raz and you've been listening to How I Built this. If you like How I Built this, you can listen early and ad free right now by joining Wondery plus in the Wondery app or on Apple Podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself by filling out a short survey@wondery.com survey.