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The Endless Ambition of Martha Stewart
Building a Media Empire Sustained for Decades
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Martha Stewart
Martha Stewart became America’s first female self-made billionaire when her company went public in 1999.
Her story, spanning decades of company building, is filled with lessons.
She’s the original lifestyle influencer, overcame going to prison, and somehow has stayed relevant decade after decade.
How did she do it all?
Let’s get to it.
Early Days
Born in New Jersey in 1941 as Martha Kostyra, Martha was the second of six children.
She was very curious and a big reader at a young age, something she carries with her to today which includes reading “an awful lot of biographies.”
Her desire to read was further encouraged by her parents, who let her go to the library at any time.
That reminds me of the Naval tweet: “Read what you love until you love to read.”
Martha’s father, who later died before Martha was 30, was an important influence on her:
He was my best teacher. He taught me everything about gardening. He taught me everything about perfectionism. He taught me everything about doing the very best job you could possibly do.
He also always gave me the advice, “Martha, you can do anything,” which was very positive advice for a young girl at that time because instead of saying, “oh, no you must be a secretary or maybe a teacher,” he would always say, “set your sights high and go for it,” which is the best thing you can tell a kid. The best.
By age 13, Martha started working as a model, a gig she’d continue years later when she attended Barnard College, choosing a small scholarship from the school over a full scholarship at NYU.
While at Barnard she not only modeled to pay for school but worked as a maid and a cook as well.
She also met Andy Stewart while at Barnard, whom she’d marry while in college, later divorced, and also had her only child with, Alexis, in 1965.
Always one to pursue eclectic interests, although she majored in history and architectural history in college, Martha became a stockbroker in 1967:
My father-in-law was a stockbroker, and he encouraged me to sort of gamble. I liked that little bit of life too and learned a lot about stocks.
I went to work for a very interesting young firm. No one was over 23 years old in my firm. And we worked very hard. We started every day at zero. I learned how to really be competitive there. It was a tough environment, just a microcosm of Wall Street. The movie Wall Street had nothing on this firm.
Martha spent about 6 years on Wall Street, during which time she said she was making about $135,000 a year, which, adjusted for inflation, would be about a million dollars today.
And she loved it. Loved the energy of it all. Loved the fast pace.
But after the stock market crash in 1973, she got out.
That soon led to her first entrepreneurial success, on which she’d build a lifestyle empire.
Catering Success
Martha, as you could probably guess, has always had a lot of energy.
I mean, she’s 82 years old today and she’s still going strong.
So it should come as no surprise that after she left her job as a stockbroker and stayed at home managing family life with her husband and daughter, she got bored:
I really wanted to know how to deal with family life and so I went home. Oh there was also a little glitch in the in the political scene in America called Watergate.
I remember listening to the hearings on the radio while I painted the entire exterior of my house. I did all the chores around the place, built the gardens, landscaped the property, you know, pretty fearless about all this stuff having never really done it on such a big scale, but I just started doing it.
And I built the most beautiful gardens and I built the most wonderful vegetable gardens and I started small livestock, I joined the Fairfield Organic Gardeners, the only club I think I've ever belonged to, and learned about how to raise a pig, how to raise goats, how to milk goats, how to make cheese, you know, I did the whole thing and had all those animals on my little four acres in Westport.
But then I got bored within a year and really wanted to start a business and that's when I started the catering business.
Martha started the catering business from her home, no small undertaking given the town regulations and rules she had to get around.
It proved to be a fantastic decision.
It also gave her an edge:
I could have done it very differently. I could have just left my house and gone to a catering kitchen somewhere and spent all my days there, 12, 15, 20 hours a day somewhere else.
Because I stayed at home, because I still went out and picked the vegetables from my garden and gathered the eggs from my chickens and used all those things and the flowering roses and the lilies and everything from my garden I created a style that I couldn't have done if I hadn't been organically interested in what was going on around me.
And that is what gave me my edge and gave me the opportunity to realize that what I was doing was art, it was a kind of art that I could create a book from, and I wrote that landmark book.
That landmark book she mentioned?
It was called Entertaining, but we’ll get to that shortly.
First, we have to understand Martha’s outsized ambition at this time.
Martha started the catering business with a partner, Norma Collier, but her partner didn’t last long:
I started with a partner. Why? I decided I think out of just friendship and she was a good cook, but she wasn't a hard worker and I wanted to grow fast and she was happy to be small and she also didn't really like cooking for other people so much.
Norma wanted to cater for 10 people.
Martha wanted to cater for 1,000.
She did just that:
I built up a clientele and I didn't just stay in Fairfield County. I moved a lot of my business to New York, catering lots of huge events at the Metropolitan Museum, at the Hewitt Museum, the Museum of Modern Art, Sotheby's, those were all very big and good clients.
Then, in 1982, it all changed.
Entertaining
From her catering success, Martha decided to write a book.
Her husband at the time was a publisher of beautiful art books and Martha thought she could write one based on her experience and lifestyle.
She was 40 years old in 1982 when the book, Entertaining, was published.
It was the beginning of Martha’s brand:
I knew that I had something to say to women like me that really needed and wanted advice on how to make a beautiful home, how to cook delicious meals, how to entertain their friends and family in the nicest possible way, and it was the beginning of the brand.
That book, it was the beginning of the empire of recipes and content creation that we did ultimately and it was a lot of fun.
The beginning of the empire.
It all started with a book, but the book was written because of the catering, and the catering only happened because she quit the stockbroker's life path.
Fascinating how life progresses, isn’t it?
Reminds me of Arianna Huffington’s book being a launch point for her career too.
Martha, confidently, had the intuition that her book was going to sell tens of thousands of copies:
They were going to start printing 20,000 copies which was a lot of copies in those days. I said, “Oh my gosh, I know 20,000 people that'll buy this book, I think you better print more.”
They did print 35,000 copies it sold out immediately. They had to go back to press it was a $35 book, it was expensive in those days too, and yet it was such an instant hit.
Such an instant gratifying experience for me and I became an expert overnight. That's what a book does. I mean, when you hear all the authors outside it's that first book that makes you an expert, even if it's shlock, but you have to live up to a reputation of excellence.
Of course, writing a book is one thing, selling it is quite another.
Martha put in the work touring and giving talks to make sure her book was a success.
Although her book was a hit, Martha still got a ton of backlash, at which she gave an excellent rebuttal about what it took to write the book, something the critics didn’t understand:
It was all from the people I call the foodies, and I think this is what it was: I write this beautiful book, and it was a big hit, and I think that that irritated a lot of people—irritated them to death, because they felt that I hadn’t paid my dues.
And I also think that they looked at that book and probably said, “Boy, why didn’t I write this book?” And that’s what irritated me.
All I ever said was, “Just come and try to spend a day with me, and work with me, and outlast me.”
They didn’t have a clue what it took to be the kind of caterer I was, who baked every loaf of bread I served, every croissant.
I didn’t have Balthazar to go and buy my croissants at. I made my own baguettes, from scratch, and they were delicious. They had no idea that I went to bed at three and got up at five.
Not one to rest on her laurels, Martha didn’t stop there.
Just like Tyler Perry, Shonda Rhimes, and Arianna Huffington, Martha was prolific:
I could write. I was prolific. I could write a book a year to great advantage. I could get it on the bestseller list, my publisher was very happy, and I just kept writing, writing, writing, writing, working so hard on these books but having the greatest time and gradually becoming very well-known in the country.
And again, what everyone says, you know, she's such a great self-promoter, but it wasn't about self-promotion, it was about filling voids. Every time I wrote a book it was to fill a void that I and my friends had to have filled.
By 1987, those books helped her land a lucrative five-year consulting deal with Kmart, which at the time was one of America’s largest retailers.
In the spring of the following year, she launched the Entertaining Newsletter, a printed quarterly newsletter with 12 or 13 pages that built on her growing brand name.
The newsletter was also a success and had 25,000 subscribers paying $18 a year to get access.
It was also the precursor to Martha’s next big move - starting a magazine.
A Budding Empire
It was 1990 when Martha started her magazine, Martha Stewart Living.
The path to get there?
That’s quite the story.
Here’s the full story from Martha:
It came about because I was writing books, one a year about, and I went to my publisher, Clarkson Potter, which is a division of Random House which is now a division of Bertelsmann, which was a division formerly of Crown, so very complicated.
I said to them, “You know, I really would like to do a series of beautiful how-to books.”
I was very interested in the way things were done in and around the home especially and they said, “Oh we don't really want books on how-to.”
So then I thought what format would be appropriate for the how-to that I loved so much, the step-by-step, the do-it-yourself, and I thought well a magazine would be and there was no real only-lifestyle magazine.
There were magazines like Good Housekeeping which was more a service magazine. There was House & Garden which was really a beautiful magazine with lots of pictures about other people's houses and gardens.
So I made an outline. I went to S.I. Newhouse and I gave him my outline and he thought, “Oh this is a very interesting concept.” He gave me an art director and the money to create what we called at that time a prototype and it was kind of a pilot of a magazine and I loved it and I wanted the name Living.
I had a little conference with my neighbors on Turkey Hill in Westport Connecticut and we all sat in one Sunday morning at around a breakfast table and tried to think of what would be the good name for this magazine and everyone everyone finally agreed on Martha Stewart Living and I took that name to S.I. and he said, “Sorry, this is Condé Nast, and it would be Condé Nest Living.”
That wasn't for me. I would have gone with it if he had shown a little bit more interest, but he didn't… so I took it to Rupert Murdoch, and I loved Rupert. I thought he was fantastic, but at the time, unfortunately, he was just about to close many of his media properties in the magazine world and he said, “Take it to Time, maybe they'd be interested in it.”
So I took it to Time and they of course were interested in it and the rest is kind of history, but I remember the first lunch I had with the editors. They sat around and I was presenting a prototype, July issue with July 4th in it and all kinds of good stuff. They said, “Well, this is so full of information what would you do next July?”
I was shocked that they couldn't understand that there was a limitless quantity of information, so this is a magazine that really devotes the pages to living a good life, inspiration, information, how-to, good trusted recipes, good trusted content that's not only inspirational but also really goes to two kinds of people, doers and dreamers, and that's really what it is.
Martha had big plans for her magazine and how she could create a much bigger company from it.
Time Warner could’ve played a bigger role, but missed out, as Martha mentioned in Vanity Fair:
In 1990, Time Warner financed the start-up, and Stewart was merely an employee of the media behemoth, which had no interest in giving her capital to expand her magazine franchise into what she envisioned as an “omnimedia”—she says she chose the term—enterprise with books, network TV, cable TV, radio, Internet, and a high-end merchandising unit to go along with an existing consulting deal she had with Kmart (since 1987).
“I wasn’t going to sit around and wait for Time Warner if they weren’t interested in funding anything else,” Stewart says. “So they let me slip through their fingers. Like, the very first time I walked into Time Warner to talk to them, they said, ‘Well, what do you want to do?’ I said, ‘I want to synergize.’ That was part of my plan from the very beginning.
If you’re going to do all that research for a magazine article, the same research can be used in a different way for television, radio, books, and so on—and that would lead to products that would lead to creating desire, to fulfilling desire, with merchandising, all in one company. In 1990 ‘synergy’ was the word, but Time Warner couldn’t synergize.”
There's that ambition again.
Martha wanted to go big and she saw the true potential in what she was building.
She had a vision.
Time Warner did not.
The magazine, Martha Stewart Living, was a hit, with the first issue selling around 350,000 newsstand copies and eventually growing to more than 2.3 million subscribers.
The content eventually focused on seven content areas: Cooking, entertaining, collecting, crafting, gardening, decorating, and holidays.
By 1991, Martha had already created a budding empire that included 2 million copies of her books in print, 500,000 copies of Entertaining sold, a nearly $1 million per year Kmart deal, seminars, videotapes, and CDs.
But this was child’s play compared to what she’d do the rest of the decade.
Self-Made Billionaire
Martha’s first syndicated TV Show, Martha Stewart Living, came out in 1993, and, like her ambition, quickly expanded:
1993 we started a weekly half-hour, which grew to a daily half-hour, which grew to a daily one hour, and that's what I'm on, that island, it's one hour a day scheduled programming which is considered quite valuable by many people. It is now visible 21 times a week on national television.
The next year she launched Martha Stewart Weddings, an annual magazine publication.
She followed that up in 1995 with a weekly syndicated newspaper column and her Martha by Mail direct-mail catalog business.
Then, in 1997, she made a big deal with Kmart which helped her finance a buyout of her Martha Stewart Living magazine from Time Warner, a deal that reportedly was somewhere in the $40 million to $83 million range.
Here’s what Martha said about buying back her magazine from Time Warner:
Basically they said, “Why don’t you just go away?” Because at one point the then chairman took umbrage at something I did: I called on a weekend, and you’re not allowed to call on the weekends.
He took umbrage and drove himself to my house to say that I sort of skipped the line of command. He said, “You know, maybe you should just buy the company back.” I said, “How much?” I should have said yes. It was $9 million! But I didn’t have $9 million!
Then, a second time, they said, “The only solution is you should buy the company back.” And Sharon Patrick said, “Well, how much?” And the guy wrote it on a piece of paper. I won’t give you names, because it doesn’t matter anymore. They’re not there anymore. But he wrote it on a piece of paper and we kept that piece of paper. It wasn’t exactly that price. We paid more than that, but I got my company back.”
It’s an example of something we’ve seen repeatedly with the founders I’ve covered in this newsletter: Owning as much of your business as possible.
Oprah advised Tyler Perry to do this with his company and it made him a billionaire.
Felix Dennis harped on this repeatedly in his incredible book as well.
Martha continued to evolve, expanding from creating media to making products, which was an inflection point in her business:
The book gave me the idea for the magazine [Martha Stewart Living] which grew to encompass a media brand [Martha Stewart Omnimedia] and then, because you could whet the appetites of many people—and those people want the same product you’re using—I started making products as well. That’s when the business really took off.
In October 1999, Martha’s company, Martha Stewart Living Omnimedia, went public on the New York Stock Exchange, making her, on paper, a billionaire and the second-richest woman in the United States.
By 2000, Martha was leading a team of 500 people, not counting freelancers, and her company did $286 million in revenue, nearly $41 million in profit.
I found a good description of Martha and what helped her get this point in a Vanity Fair piece:
“Martha’s approach to business is almost on an intuitive, creative basis,” says Allen Grubman, the powerful attorney who represents Stewart and many other stars in business and entertainment, including Madonna and David Geffen.
“In other words, if she wants to get from A to B, she will not be hindered or limited by what people tell her is the traditional way, or the traditional business approach, to getting there. She knows where she wants to go and she figures out how to get there—very often in an unorthodox fashion.”
Martha is another high agency founder.
I can’t help but think of other examples we’ve covered like César Ritz working to get a law changed so he could serve dinner at his hotel on Sundays or Tyler Perry creating Camp Quarantine, working with medical professionals and creating a 30-page plan to make TV shows during the pandemic or Sara Blakely writing a patent herself for her product because she didn’t have money to pay for an attorney.
It’s that old adage from Hannibal crossing the Alps: I shall either find a way or make one.
That budding empire of Martha’s in 1991 I mentioned earlier?
It was a full-blown juggernaut a decade later in 2001:
The MSO business model, as diagrammed on page 2 of the company’s 1999 annual report, says it all. It is a solar system; at the center is the sun, symbolizing Martha Stewart. The corporate divisions and business partnerships are symbolized by planets; their orbits are MSO’s “distribution platforms.”
There are 15 planets orbiting Martha, including her magazines—Martha Stewart Living and Martha Stewart Weddings, plus such special issues as Martha Stewart Baby and Martha Stewart Kids—with a combined readership of more than 10 million; two TV shows, Martha Stewart Living, airing six days a week on CBS (1.6 million viewers daily), and From Martha’s Kitchen; two syndicated newspaper columns (233 papers); and a syndicated radio program (227 stations).
The Website, marthastewart.com, has 1.7 million registered users and receives more than one million hits a month.
For merchandising there is Martha by Mail, the high-end mail-order/Internet catalogue (3,000 products to choose from); marthasflowers and marthascards, online; two lines of paint, the Martha Stewart Everyday Colors line with Sherwin-Williams ($17 to $20 a gallon) and the high-end Martha’s Fine Paints (about $90 a gallon); a home-decorating line available at such specialty stores as Calico Corners; and the Martha Stewart Everyday line for Kmart, which is the chain’s No. 1 brand, with more than 5,000 products and an estimated $1.6 billion in sales this year. (Jaclyn Smith, Kmart’s next-most-popular celebrity brand, posts $300 million in sales a year.)
In March, MSO bought The Wedding List, a British-American wedding registry with stores in New York, London, and Boston.
Crazy, right?
She was everywhere.
But her empire would be in serious trouble a few short years later.
Prison
While not the focus of today’s piece, here’s the abbreviated version of why Martha went to prison in 2005.
It all started with a stock trade on December 27, 2001.
Martha sold about $230,000 worth of shares in a biopharmaceutical company called ImClone Systems the day before it was going to be announced that the company’s drug had failed to get FDA approval.
After the announcement, the stock price fell off a cliff.
Martha was investigated by the SEC and the Department of Justice starting in June 2002 and indicted on nine charges on June 4, 2003.
In reaction, she stepped down as chairman and CEO of Martha Stewart Omnimedia, staying on the board of directors and moving to a chief creative officer role.
On March 5, 2004, she was found guilty of two counts of making false statements, one count of obstruction of justice, and one count of conspiracy.
Notably, she was not found guilty of securities fraud.
Nonetheless, she ended up being sentenced to five months in prison and five months of home confinement, reporting to prison on October 8, 2004, and being released on March 4, 2005. Her home confinement ended on August 31, 2005.
The aftermath of her guilty verdict included Viacom dropping her television show, her resignation from Revlon’s board, and her resignation from her creative officer role at her own company, among other things.
Remarkably, after being released from prison, she got to work rebuilding her brand immediately, all part of a carefully orchestrated plan.
The Comeback
There’s a fantastic article in Fortune that detailed Martha’s actions following her conviction. Perhaps worth bookmarking, you know, just in case you ever find yourself in a similar position as Martha.
Anyways, immediately after the conviction, she got to work on the rebuild that was going to be needed, given what happened:
Advertisers were fleeing her flagship magazine, revenues were tanking companywide, profits were gone, and MSLO stock was trading at $11 a share. (Four years earlier it had been as high as $34).
She'd been ridiculed on the front page of the New York Post two days before in a cut-and-paste picture of her in prison stripes.
Just a few months after her home confinement ended in 2005, Martha was making moves:
Her flagship magazine, Martha Stewart Living, has seen ad pages jump 48%; her new advice book, The Martha Rules, is on the New York Times bestseller list.
She's landed a syndicated daytime TV show, a $30 million satellite radio deal with Sirius, a DVD deal with Warner Home Video, a music deal with Sony BMG, even a partnership with KB Home to build Martha Stewart--branded residential communities.
After plunging from a peak of $295.6 million in 2001 to $187.4 million last year, revenues at her company, Martha Stewart Living Omnimedia (MSLO), are rebounding to an expected $208 million this year; after the company's seven consecutive quarters of losses, Wall Street projects a return to profitability in 2006.
In the four years that followed, Martha continued to write books, launched her own collection at Macy’s, and signed a partnership with The Home Depot among many other things.
Then, in 2011, Martha was finally able to rejoin the board of directors of Martha Stewart Living Omnimedia.
What’d she do next?
Create more partnerships.
Write more books.
Expand. Expand. Expand.
A decade after being released from prison, her company was acquired by Sequential Brands Group for $353 million.
Then, in 2019, Sequential sold her company for $175 million to Marquee Brands, a far cry from the company’s peak valuation of $2 billion, proving just how hard it can be to grow for decades, especially, in Martha’s case, with the fall of magazine publishing and the rise of digital media.
Nonetheless, throughout it all, Martha herself has remained relevant, keeping the brand alive.
Martha Today
Although Martha’s company struggled in the last decade, she has managed to personally stay relevant.
She’s done so by doing what she’s always done - pursue her curiosity and be willing to take chances.
It’s not surprising, given her desire to stay current:
I’m very interested in what is new and what is happening. Like, I have an electric car. I have a Tesla. I adopted the computer before most of my friends — in 1982, I bought my first IBM. I’m an early adopter of a lot of things. That keeps you very on your toes, it keeps you extremely avant-garde, it keeps you current. I want to be current.
In the past decade, she also roasted Justin Bieber, was a guest on Chopped, started a show with Snoop Dogg, and even appeared on the cover of the Sports Illustrated Swimsuit edition.
Martha mentioned in an interview with Kara Swisher in 2023 how she’s still working about 18 hours a day. Kara said on the show numerous times that she knows Martha works constantly, even though she’s 82 years old.
That work ethic over decades, combined with endless curiosity, helped build one of the most recognizable brands in the world.
Martha Stewart’s Wisdom
In each edition of the Just Go Grind newsletter, I like to include a few more quotes at the end from my research into the founder who is featured, sharing their wisdom.
On attracting a diverse audience to her brand:
Our audience is very diverse because I have spread out the demographic a lot by doing something so surprising as a show with Snoop Dogg.
You see that means that has broadened our demographics so much, not only ethnically, but also age-wise and so that's why your daughter's like me and your wife likes me and hopefully you like me…
I always believed that people want to learn and as a teaching business, I think that if you ever for one moment don't believe that your reader, your customer, doesn't want to learn then you're a lost soul.
On evergreen content in 2000:
I went out on the road and I lectured. I did fantastic fundraising for numbers of charities and groups like The Young Women's Clubs, Junior Leagues, everywhere, and that kept that library of books totally alive for me and my publisher so that the ten years after I published Entertaining I sold more copies that year than the first year.
So it kept going like that, snowballing, every single book was a big bestseller, the library is still alive and well and I have twenty-seven books now and they sell tremendous numbers and it's exciting that the voice is found, the brand is built.
The information is evergreen. It’s terribly important to me never to write anything that isn't evergreen and fits into an asset library for me and my company now. That's very valuable.
On the value of a diverse company, especially in media:
I like having a balanced company. I think it is really great to have every kind of person working for you because then you get an insight into what everybody needs.
On actually doing the work:
And the center is my real life. It is really getting up and cleaning out the kitty litter, you know, feeding the cats, taking the dogs for a walk, calling my friends, doing all of that before my work day starts.
It keeps me centered. If I didn't do that, I mean, people say, “Oh, you don't have to take care of the chickens.” Well, yes, I do have to take care of the chickens because I have to know all those different breeds of chickens if I'm going to do an article about chickens, or use the colored eggs to make a paint, the organic colors that have become so popular.
If I don't do that myself… you know, I have to be the expert.
On focus in an interview in 2018:
Focus is extremely important and when I was unfocused is when… that's when you start to veer in the wrong direction… that was building a daily television show.
I did many thousands of hours of daily television that are on CBS on NBC and on the Hallmark Channel, many thousands of hours of television that took me away from the day in and day out of the company. Not completely, and I try to know what's going on in every aspect, but it took away the laser focus that I had had before that.
On the importance of dreaming:
Fantasy, dreams, aspirations. Those are things that I think life is really made of. And if you don't have that, what are you going to do? Just get up and do your old thing every single day, the same old thing. With a dream, you can make a lot of other things happen in your life.
Thanks for reading!
Justin
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