Home Makers

Long before their HGTV show Fixer Upper, Baylor alumni Chip and Joanna Gaines were improving Waco neighborhoods one home at a time. What you see on television might make you think their eventual success would be a "no brainer," to use one of Chip's favorite phrases. Viewers are attracted not only by Joanna's sense of style and Chip's sense of humor, but also by the authenticity of their relationship with each other and with each client. Many have witnessed how their dream to make a difference in this world has become reality. However, this power couple’s meteoric rise to prominence had separate, humble beginnings--with Chip peddling fireworks in East Texas and Joanna working in her father's Waco tire shop.

Baseball Dreams

Chip Gaines, BBA '98, started wearing Baylor caps in middle school, yet he had no connections to Baylor.

"I grew up, for no logical reason, as a Baylor fan," says Chip, who lived in Albuquerque, N.M., until the third grade, when his family moved to Colleyville, Texas. "I've got pictures of me around junior high age--all of a sudden I started wearing Baylor caps. Somehow I had this thing for Baylor University. I have no idea what planted that seed."

Chip became a standout second baseman for Grapevine High and, upon graduation, joined the team at North Lake Junior College in Irving. That year, former Baylor baseball coach Mickey Sullivan was scouting one of Chip's games against Hill Junior College.

"Coach Sullivan talked to my dad and I after the game was over," Chip says. "I transferred my sophomore year to Baylor. My first real introduction to Baylor was basically from a baseball standpoint."

But Sullivan retired shortly after Chip committed to Baylor, and Chip's chance to play was gone with him.

"It [baseball] got me in the front door at Baylor. As God would have it, I was not destined to be the next great baseball player, but I was destined to enjoy Baylor University and the dear friends that I met there," he says. "After baseball went away, it took me about a year to get my head back on straight. I settled down, landed on my feet, and met some of my best friends in the world. They became really relevant parts of my life."

After graduation from Baylor in 1998, it was a dating relationship that kept him in Waco. His then girlfriend had two years left at Baylor, but that relationship didn't pan out.

"It's very similar to the baseball story, to be honest with you," Chip explains. "I look back on it from what might have been God's perspective, and He knew He had to handcuff me at least short-term. God knew when I was ready to move on. What would have happened had I not had a serious relationship that kept me in Waco?"

Chip might never have gained the precursory business experience needed for his current work, and he could have missed meeting his future wife.

Entrepreneurial Spirit

Chip loved Baylor first and grew fond of Waco over time. He plugged into the local scene and made friends from outside of the University.

"I got to see Waco for what it really was. It's a great, small town where I felt like I could make an impact--maybe become a bigger fish in a smaller pond more quickly than I could in a bigger city," he says.

As the son of parents who provided for Chip's needs but encouraged him to work for his wants, Chip wasn’t afraid to try his hand at business during his time as a Baylor student and soon after graduation.

"When my parents said to work for what I wanted, I didn't hear that as a negative. They forged in my heart and mind that you work first and the reward comes afterward. I carried that to Baylor," he says. "I was the kid that wanted to be on a fishing boat in Alaska where they say you can make $6,000 cash very quickly. You might lose a finger, but the upside is that you might make $6,000. I was always wanting to do something like that."

His entrepreneurial spirit took him into several ventures, beginning with a fireworks stand partnership in East Texas. One stand turned into four.

As a junior at Baylor, Chip also started a lawn business. Then as a senior, he and a partner opened BMC (later Green and Gold) Wash-n-Fold, a pre-paid subscription laundry service for Baylor students. It was housed in the first commercial property Chip owned, a shopping strip in the 1100 block of Speight Avenue, where Terry and Jo's Food for Thought became Chip’s first tenant.

"During Welcome Week, I had plastic tables set up at the larger dorms where we signed up 300-400 kids. That was the big light bulb moment where I knew there were bigger opportunities that were slightly outside of the box and slightly impossible, to some extent."

Chip sold that business, which is now called University Laundry and still operates at Baylor and 32 other universities.

Around that time, Chip entered the real estate business, purchasing a small house near campus. He also bought 11 acres on 3rd Street across LaSalle Avenue, south of campus.

"The laundry and the lawn businesses allowed me to save up some seed money for what would eventually become my career, but that also gave me a lot of working knowledge of business," he says.

In the first year out of college, Chip made $30,000 working full-time.

"I remember very vividly taking that money and buying my first investment property. I made $30,000 on the first house flip that I ever did. It became obvious to me that I could work an entire year and make $30,000, or I could work for three months flipping a house and make the same amount of money," he explains. "I became very excited about investing in rental property and flipping property."

Chip later sold the 11 acres to developers who built Aspen Heights, one of the first of the large student-oriented apartment complexes across LaSalle Avenue.

Learning to Communicate

While Chip was building his businesses, Joanna Stevens, BA '01, was working at her father's tire store--Jerry Stevens Firestone--and dreaming of being a newscaster. The Austin-area native moved to Waco during high school, graduated from Texas Christian Academy and studied business at McLennan Community College in preparation for one day taking over the family business. She continued to get hands-on business experience working in the shop during college.

That work included doing TV commercials for her father's business. The camera work and the editing intrigued her, and she decided to study broadcast journalism at Baylor, where she developed and honed a range of communication skills she still uses on and off camera. [Note: Read more about Joanna in the fall 2015 issue of Baylor Arts and Sciences magazine.]

"Even though I'm naturally a shy, introverted person, there's something about the camera that I enjoy," Joanna says." always joke with the film crew now, 'Where's my teleprompter?' I would do great with one, but Chip would be horrible because he is much more comfortable just winging it. He would make a great live reporter, except maybe he'd exceed the time limit."

Joanna gained valuable experience interning at Waco's KWTX television and KWBU radio stations. She then snagged a semester-long internship at 48 Hours with Dan Rather in New York, where she scoured newspapers across the nation for story ideas that she could pitch to the senior story editor.

"I had visited New York two years before, and I knew I wanted to be back there some day," she says. "I was adamant about finding an internship there."

Following that internship and with a year left at Baylor, Joanna felt the urge to go in a different direction.

Finding Love at the Tire Shop

Although Chip and Joanna shared a semester as Baylor students in fall 1998, they didn't meet until 2001 when Chip took his pickup for a brake inspection at Jerry Stevens Firestone. Although he had been going to that store for some time, it was the first time Joanna happened to be working.

"'Hey, you're the girl from the commercials,' is the first thing he said to me," Joanna recalls. "We ended up sitting outside and talking for 30 minutes. The next day he called the shop and asked me out. Very romantic." The two visited Valley Mills, a town 20 miles west of Waco, to dine at a historic home converted into a (now-defunct) restaurant.

Chip had been drawn to Jerry Stevens Firestone, a business that displayed a family photo--including three daughters--and a stack of Christian books in the waiting area with a sign that read, "Please take and enjoy."

"I was intrigued," Chip says. "It was these interesting things that her family did that appeared really natural to them that made an impact on me before I ever met any of his beautiful daughters. As we met and then dated, the whole picture became a whole lot clearer, and it made a lot of sense."

Joanna and Chip dated for a year, married in 2003 and started a business together almost immediately.

Teammates at Home and at Work

As Joanna joined Chip in flipping houses on 3rd Street, the newlyweds fell in love with a small building at 3801 Bosque Ave. It became the first Magnolia Market.

"For 10 years, I had a notebook where I would write all my dreams and other business ideas. When we married, Chip suggested I make one of those actually happen," Joanna says. "That was kind of like my first dream--a retail business. I was terrified because I was not a risk taker, but obviously, Chip isn’t scared of anything.

"I had no business doing anything home décor related. I had never designed anything in my whole life, but people would ask me to help them put together a look, and that first year, I really just guessed. In the second year, I cultivated this look I was comfortable with and felt right in my gut," she notes. "Helping people in their homes became a passion. That's kind of how this whole thing developed on the design side and on the renovation side. I want people to walk into their homes and feel inspired in their space to then go create intentional spaces for their own homes."

Chip and Joanna decided to close the first Magnolia shop in 2005 as Joanna was about to have their second child. She invested more time into their growing family while still assisting with the real estate business.

"I felt like God was saying shut the shop down," Joanna says. "It was hard for me because I was finally comfortable and felt like I had a rhythm and a great client base. It just didn't make sense from a business standpoint to close down, but from a mom standpoint it did. I'm such an all-in person. It was very hard.

"We sold everything. My last day of business in 2005, I remember being upset in a way, like this is our baby. This is the first risk I took. My question to God was, why would you allow all of this to fall in my lap--it was a perfect way of teaching me a whole creative element--and then now you’re shutting that down?"

Amidst that stressful backdrop, she found peace.

"I was locking the door, and I really felt like God said, 'If you trust me with your dreams, I'll take Magnolia further than you can ever imagine, but right now, I'm asking you to step away,'" Joanna says. "I remember feeling a complete peace, like OK, I just trust you."

The building on Bosque became their business headquarters for Magnolia Homes, a real estate, home renovation and interior design business. Chip and Joanna enjoyed building a life together at home and at work, but it wasn’t always easy.

"We had to learn to work together," Chip says. "Fundamentally we were so similar. We had so many similar passions, desires and big picture aspirations, and we were so opposite in all of the things that mattered less. We leaned on each other in certain areas--she was better with the day-to-day functions and I was better at negotiating buildings and dreaming about future businesses. It really helped to forge a solid marriage that has served us well not only in business, but in life in general."

The business of flipping for a living involved a lot of moving for the Gaineses, who lived in nine different houses during their first 10 years of marriage--from South Waco to the Castle Heights neighborhood and then to North Waco--before moving to their current abode, an 1880s farmhouse on 40 acres.

"We've always looked at it as an investment, but--with our busy lives--we're just looking for a place to settle," Joanna says. "For our four kids and me, it is more important now than ever."

Galvanizing the Magnolia Brand

An August 2007 meeting served as a catalyst for the current Magnolia business model. Joanna was spending more time at home, yet adding in time for business at the office. The couple sought inspiration on possible future directions for the business with Chip calling a meeting with some of his closest friends to seek their advice.

"It wasn't all top executives invited from all over the country," Chip jokes. "It was a gathering of friends that God had provided for us. I remember some of the specific bullet-point outcomes--what an asset we had in Joanna and her design style, and her as a human being, her looks and her character. Basically, we established that Joanna had the 'it' factor. That meeting was a defining moment. We regularly go back and recall what was discussed at that meeting."

The discussion helped formulate the next stage, with Chip determined to facilitate whatever that next stage might be.

"On the show now, I have a relevant part in it, and I'm proud of the character that is presented on television. There are no insecurities on my part, but she’s the ace." he says. "The show could go on without me, where I don’t think you could say the opposite."

The Big Break

In 2011, Joanna was invited to do a guest blog post about child-friendly home design for DesignMom.com, a prominent website in the design world. That post drew the attention of High Noon Productions, which contacted the Gaineses about doing a pilot episode focused on their family business. Eventually, it turned into the popular HGTV series, Fixer Upper.

The blog post discussed their home in North Waco, where Joanna began to understand that design should evolve with the season of life of the homeowner.

"When you're empty nesters, it is going to look different than when you're a mom of four kids," Joanna explains. "For me, that taught me a lot, and I was passionate about that. I got to go on Design Mom’s blog and say I designed a house around my kids for the first time, and that was really what the story was about."

Waco 2015: The Land of Opportunity

Chip enjoys the irony of such a popular show being based in Waco, which, for all its assets and appeal, lacks the national prominence of Dallas/Fort Worth, Houston, Austin or San Antonio.

"Thinking about the economic impacts that happened in the past few hundred years, it always started with a spark. The Alaskan or the California gold rushes or the Oklahoma land rush all started with some rumor or fact or valid reason that you’d want to move there," he explains. "I feel like there's enough rumor, speculation and positive buzz that if somebody wanted to come and make an impact in our great city, now would be the time to do it."

Chip drolly refers to Waco as the land of opportunity. He notes they receive frequent emails asking if property costs and quality of lifestyle in the greater Waco area are as desirable as the show depicts.

"I hope and pray to some extent that Waco stays the way it is, but everybody wants it to improve and evolve into a better version of itself," he says. "I believe in 30 to 50 years that Waco will become something unrecognizable from what we see of it today."

Give it a Shot

Chip's advice for aspiring entrepreneurs comes from the Parable of the Talents in Matthew 25.

"There are so many people that have all the gifts and talents and resources out there to be successful entrepreneurs," Chip says. "It was the guy who buried his talent that got punished for it. It's almost become our culture to be afraid to risk any of those talents because who knows what would happen if you lost it."

He notes that not everyone is meant to be a risk-taker and that you have to know your strengths.

"I encourage young people to have the courage to get out and try it," Chip continues. "Far too few people give it a shot. There are a lot of people doing day jobs who were called to do entrepreneurial activities that just never had the courage to try."

Four More Seasons, Moving Downtown

After the success of the first two seasons, Chip and Joanna agreed to do four more seasons of Fixer Upper, which they hope to film in the next two years. At first they thought it might be difficult to find enough clients in the Waco area to fill the episodes, but that has not been the case. With four kids at home, the Gaineses do not want to be away from Waco for long stretches; therefore, the show's projects are within a 30-mile radius of Waco.

Fixer Upper's popularity also has created a marketing magnet for the Magnolia Market, where Joanna reopened her shop to sell items appearing on the show. Up to 5,000 people may visit the 2,000-square-foot shop on any given Saturday.

"Just do the math...it physically doesn't work," Chip says. "People line up in our parking lot, take pictures of themselves, buy T-shirts, they go have lunch and maybe some Common Grounds Coffee. I get such a kick out of that."

In the past year, Chip and Joanna purchased a century-old cottonseed oil mill in downtown Waco at 6th Street and Webster Avenue, about five blocks from the Baylor campus. The large edifice with two distinctive silos is being renovated as Magnolia's headquarters, which will open sometime this fall. Business is booming. They have a number of successful ventures now under the Magnolia name, including home renovation and construction, the retail home décor business, a realty company, and a new partnership with case goods manufacturer and importer Standard Furniture to create a comprehensive furniture collection called Magnolia Home. Joanna is designing the pieces, which will then be sold by furniture stores around the country beginning in October.

Finding Favor

The Gaineses' primary concern is about building relationships and helping people rather than making money. Joanna and Chip have led small groups at their Antioch Community Church over the years. Chip has been known to establish relationships with people down on their luck, from personally putting up homeless friends in hotels to making visits to homeless friends who have been incarcerated.

"Every so often, we have had the opportunity to serve and bless and love on people, and I am always infinitely more fulfilled with those opportunities than I am with the opportunities to make a great return on my investment from a business standpoint," explains Chip, who says he learned from some of his friends at Baylor how to actively try to be the hands and feet of Jesus. "You can't be so overtly giving that you cease to exist from a business standpoint, and I struggled with that. But I always felt to some extent that my business was my ministry, and there were times we suffered for that mentality because we didn't have any money.

"By the same token, that’s where I feel like God found favor with us. I feel like he could trust us with this opportunity."

Chip adds their end-goal isn’t to chase money for money's sake or become multi-millionaires but to be aware of the possibilities and opportunities.

"We are dumbfounded with what has transpired, but we are so excited," Joanna says. "The first day I met at Chip at Firestone, I was drawn to him when he said he wanted to stay in Waco--that there's something about this town he really likes. I always felt that about Waco as well.

"This town has so much potential. We love the community, love the people in it, love the small businesses, and we love that we got to plant our roots here," she explains. "When you combine Baylor and McLane Stadium with what's going on downtown and in places all over Waco, so many things are happening. There’s favor on the city that goes beyond a television show. It's Waco's time to shine, and we’re proud to be part of that."