Hello, and welcome back to The Breakdown.

Today, we are going to be breaking down a part of the business we all know and love, Magnolia.

While you probably know them for their lovable personalities, and abundance of demo days, what you may not know is the empire they are building.

Here's a couple of things you might take away from this issue:

1. The power of an audience

2. Diversifying your income streams

Breaking down Magnolia

If you're like me, Magnolia is every where in your house. And I mean everywhere. We have Magnolia (Hearth and hand, technically) candles, utensils, multiple cookbooks, heck, they were on my registry for my wedding. Getting a deal with Target you may think is one of the most impactful deals for Magnolia, and you certainly could be right.

This is what has allowed them to go from HGTV sensations, into the homes of their fans, and beyond to just normal shoppers roaming through Target.

But, LEAVING HGTV may be one of their best moves that they have made for their business. You might be thinking, how could leaving HGTV be their best move?

Well, it's not exactly leaving that was their best move, it's what it lead them to do next.

What you have to realize about a business today, is a lot of businesses are centered around people now, not around a business itself. The first people that I know of that lead this charge would be people like Oprah, Rob Dyrdek, Chip and Joanna would be up there, and now a lot more people are following this trend in whats now known as the "creator economy".

You no longer associate people with the business they started, rather the other way around. You recognize the people, not the business they are running. Examples of before could be Rupert Murdoch and Fox, Rockefeller and Standard Oil, Warren Buffet and Berkshire Hathaway. These were people known first by the business, then you knew the person.

The best example of today would be Mr. Beast and all his affiliated businesses (Mr. Beast Youtube, Feastables, Beast Burger), which recently has been valued at over a billion dollars.

This is the same with Chip and Joanna, they first got their popularity through HGTV and their hit show, Fixer Upper. After doing that for 5ish years, it was time to make their company explode. But, that comes with one main issue in the creator economy. The business, IS Chip and Joanna. No Chip and Joanna, no popularity.

So they have an audience, but they have no way to reach them after their HGTV show ends. Well, as many creators do, the first thing they go to is selling products they would use themselves. Everyone loved Joanna for her design, so they began making and selling products they would probably use on the show in a deal with Target. That has now grown to over 500 SKU's (different products) in Target, and taking up an entire section of every single store.

But, how do they do what they do best, entertain? And bring their fans more of what they enjoy. This is where they make their best move.

Instead of just starting up another show, doing more of the same, Chip and Joanna have partnered up with Discovery and made the "Magnolia Network." It is a network of shows featuring all the things you love about Fixer Upper, and it has it's seal of approval from Chip and Joanna. BUT, they no longer need to be in every second of every show.

They still have their time, but you love Harp Designs? Find more of him there. You want more of Waco in general, this network is the place to be. How about that new up and coming couple doing demolition and design? Now they're on Magnolia Network.

This is so powerful because they now own their own distribution with Discovery. They get to share in the ad revenue, subscription revenue, everything. And this is usually a better business than physical goods because whereas with physical goods you have to manufacture, ship, display, and then sell, the only cost now is time and people. So it is way more profitable. AND, it's probably recurring, the best type of revenue. Month after month after month of people paying, and that compounds and grows. That is why I think this is a better move than the Target deal.

But, put this on top of the fact that they have a whole town dedicated to them and their business in Waco, I would have to assume the Hearth and Hand brand continues to grow, and now this, I think it would be no surprise if the Gaines's are worth $1b+ within 5 years, if not already.

And if you don't believe that it's achievable, I mentioned Rob Dyrdek earlier in this issue. You may not know him, maybe you do. He was a skateboarder turned entertainer with shows such as Rob and Big, Ridiculousness, the Fantasy Factory, and he also went ahead and did exactly what Chip and Joanna did and made his own production company for his shows.

Since that point, he has exited amongst other businesses, for a total exit value across all of $400 million+. Yes, some "dumb" skateboarder exited his businesses for over $400 million. He did a great podcast with My First Million which you should check out here, and let me tell you, he is a really impressive dude.

Now, to finish, this is why I like this story and this business, and why so many people like Chip and Joanna. If you were to Google their net worth, you are going to find numbers ranging from $10 million, to $50 million, to articles questioning if they are already billionaires.

That just means they're humble, they don't boast, they don't brag, they just live the life they want to live. If I had to guess, we'll never know their net worth, and they won't sell Magnolia network. They will run it until they die, or their kids take it over, and rather just live the life they want to.

And that to me, is what business is all about. Getting to a point where you are doing the things you love, with the people you love, whenever you want to do them. And that is MY biggest takeaway from this amazing story of two people turned business empire builders.

And that's all for today, if you want to get more follow me on Twitter @Cam_LaChance, where I interact with people and share more thoughts similar to what I write about here.

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💯 Freaking sick dude🤷‍♂️ Meh, do better next time😑 Bruh, I might unsubscribe after reading that