3 Takeaways - Chew on This: The Founder of Whole Foods Is Bananas for Capitalism (#215)

Episode Date: September 17, 2024

The story of Whole Foods is the story of its founder, John Mackey, and it’s nothing short of astonishing. Here, this charismatic entrepreneur talks about the fundamentals of success, his own superpowers, why capitalism is a powerful force for progress, and what he believes is the most important thing in life. (It’s not money.) Feast on this conversation.

He has been called, quote, one of the most interesting and influential entrepreneurs of our time, unquote. He was a college dropout whose parents despaired. He was looking for, he said, happiness, adventure, love, joy, purpose, creativity, and play. He wouldn't go to college or get a job. He just couldn't conform. He was caught in his wonderful words between a life he couldn't live and a life he couldn't see. He ended up starting a company, and he pursued what many thought was a crazy, crazy strategy. Before his first store was even a year old, he was already envisioning a second store, this time even bigger. His father said to him, quote, this makes no sense. The point of business expansion is not to take a failing business and replicate it, unquote. But he thought staying small was not the safer way.

And he created and built a business with over 100,000 employees, which he later sold to Amazon for almost $14 billion. How did he go from college dropout to founder of a multi-billion dollar company? And how did his unorthodox growth strategy work? Hi, everyone. I'm Lynn Thoman, and this is Three Takeaways. On Three Takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers, and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Today, I'm excited to be with John Mackey, founder and former CEO of Whole Foods Market, which helped change the way people eat. John is one of the most unusual people

I've ever met. He is also the author of the whole story, Adventures in Love, Life, and Capitalism. Welcome, John, and thanks so much for joining Three Takeaways today. Thanks, Lynn, for inviting me on. It is my pleasure. John, you started by creating a store which represented the world as you felt it should be. And then you pivoted and started Whole Foods. Why did you start Whole Foods? I started Whole Foods because I wanted to sell healthy food to people. I wanted to earn a living and I wanted to have some fun.

And that met the bill for all three. I got very interested in healthy eating when I moved into this vegetarian commune back when I was 23 and kind of had a food awakening and became the food buyer for the co-op. It never really occurred to me before then that I had always thought food was kind of like, if I thought my body was more like a machine, like a car, and I periodically have to go in and fill it up with gas so that the car would go. And it was just about food for me was, well, if it tasted good and it filled me up, then that was what was important. And I never realized that we're really not machines.

We're living beings with tens of trillions of cells that need to be nourished, not simply given fuel so the body will go. And so I got on fire about that. I'd kind of found my purpose in life to try to help people to be healthier and to eat a healthier diet. And so that's why we started Whole Foods. And that's one reason it was so successful. We tapped into something the marketplace didn't know it wanted, but in fact, it did want and we helped to grow it. Most people would spend years and years making one store profitable and the best that it could possibly be and then try to replicate it. But there was really only one thing on your mind, John,

expansion. Why was that? That came a little bit later. My first thing on my mind was to have a successful store and not fail. I didn't want to let everybody down. I wanted to be successful. I wanted to be profitable. That was the first thing. And then after we had succeeded there, then the next thing was, hey, let's expand. Let's see if we can have a second store that would be successful too. And then a third and then a fourth. And we went through lots of tribulations, particularly in the first several years. But eventually we overcame those setbacks and the business continued to grow and grow and grow and grow and grow. Still is. Were you more than just a natural food store?

How did you think about Whole Foods? It was a community. It was a gathering place for people with counterculture values. We were a place that even to this day, people will tell me they like going into our stores. They just like the way it feels. We didn't know what we were doing, so we were free to reinvent things. We didn't invent it like a traditional supermarket because we didn't have that background. And one of the things we really wanted to do was be a great place to work. But in the very beginning, we really wanted people that worked with us. We cared about them. We wanted them to flourish. We wanted them to move up, get more pay, stay with the company for many years.

And a lot of people did. Was it fun building Whole Foods and working at Whole Foods? Well, if there's something more fun than building a business, I haven't discovered it yet. I mean, was every moment fun? No. I mean, we had our setbacks. One of the ways I can compare it to is that I wasn't doing it alone. I was sharing it with many people that were my friends, people that I'm still friends with, people I love.

And it's kind of like you're going through the hard times together, but you're also sharing the successes and the triumphs together. And that creates a deep bonding with people. At the end of the day, one of the reasons I stayed so long was because so many people, I didn't want to leave the people I loved, kind of my family. These are people I care deeply about. So yeah, I had so much fun. What do you think of as your superpowers? Yeah, I think I have a few superpowers.

One superpower I have is I'm very optimistic and I'm a visionary. So people like to be around people that are positive about the future. We feel more alive. And I'm very positive and optimistic about the future. So I think that helps enliven other people. And a related superpower is evangelical zeal in a sense that when I read biographies about other entrepreneurs, this is not an uncommon trait. You'd find somebody like Steve Jobs or Elon Musk or many of the famous entrepreneurs have had that evangelical zeal and they have a strong sense of purpose. I've always had a strong sense of purpose and the ability to communicate that purpose. And people are drawn to purpose. And my other superpower, I think,

is I have a very, I'm very authentic. I have a very open heart and I'm very passionate. So I care deeply about things I care about and care deeply about some of the people that I love very deeply. And what I discovered in building a business is if you put these two things in your company, you're very difficult to compete with. The first is purpose. Everybody wants to feel like their work makes a difference. We give that at Whole Foods. And secondly, people want to feel that somebody cares about them. And you have to create a culture that's a caring culture. If you give people purpose and love, you're giving them the two things that they most want in life. And so I think those are sort of superpowers that I have.

I can give purpose and love to people. And that's part of the undergirding of our success. I would add to that that your entrepreneurial spirit, what you call your optimism, was hugely important because you always had wonderful ideas and visions of what to do next. And they were always so creative. And you brought your team along with you. So they were excited, I think, every day. And the other thing that strikes me about you, John, is that you're also very competitive, which means that you spent a whole lot of time thinking about the business, looking at your competitors, reading everything you could

read about almost everything. And that also seemed to have helped a lot. Do you agree? Yeah, I agree. Thank you. Those probably are a couple more superpowers. And that's the shadow side too. I mean, sometimes our weaknesses come out of our restraints. I am highly competitive. And yesterday I was playing pickleball. I now, sometimes our weaknesses come out of our strengths. I am highly competitive. And yesterday I was playing pickleball. I now pride myself that I can always leave the game behind when I finish playing. But while I'm in the game, I'm very intense. And that's something I need to do better work on to seem more relaxed when I'm playing. But that competitive spirit is still burning intensely in me.

You are also passionate about capitalism. What does capitalism mean to you and why is it so important? You'll seldom meet anybody more enthusiastic about capitalism than I am. And I'm not sure I've ever met anybody. And it's because capitalism, most people have no idea. They haven't studied history. They don't know how bad it used to be. Instead, I really see this with young people, particularly when they come of age. They look around, the world's kind of messed up. It's not perfect. It's not a utopia. Humans have, you know, we're kind of a mixed bag.

We have very beautiful impulses for kindness and generosity, compassion and love. And we also can be greedy and selfish and hurt other people. And so, the world is a mixture of those two things. And so, what people don't know about capitalism is they don't know what the world was like 200 years ago. I always have to, because I know what the world was like 200 years ago. I always have to because I've studied it very carefully. 200 years ago, 94 percent of everyone alive on this planet lived on less than two dollars a day. Ninety four percent. I mean, that's more than nine out of 10 people. And 85 percent lived on less than one dollar a day.

And that's in today's dollars. The average lifespan was 30. Now across the world, it's getting very close to 80. The illiteracy rates back then were 88%. Almost 9 out of 10 people on the planet couldn't read. And now illiteracy rates are down below 10% across the planet, mainly down to like 8%. The world has been transformed and that has been capitalism. It is capitalism that has done it. It is operationalized scientific breakthroughs the scientists come up with and create businesses around it. And that creates progress because businesses compete with each other. If you have a good idea, others study it, copy it and iterate on it. And you have to continue to get better.

And that continues, that competition to be better, to serve customers better with lower prices and higher quality or new innovations is what has generated this tremendous progress in the world. It's never been seen before in the whole history of the human race. This has all happened in the last 250 years. That's been capitalism. And it doesn't get credit for it. And people still, young people, they still believe socialism has some answers and it doesn't. 41 countries in the last 100 years embrace socialism in one form or another. And there are 41 failures. They believe that it just

hasn't been done right yet, that it gets somebody like a Stalin or a Mao or a Castro takes it over and they're bad people, but if we could get the right people doing it, it would be good. I always say, do you like going down to the Department of Motor Vehicles to get your driver's license renewed or to take a new test? That's to me the epitome of what socialism is. You're just queued up in lines, waiting with indifferent bureaucrats who don't care about you. The thing about business is that people can be greedy and selfish in business, but they also have to provide quality and service to their customers one way or another, or they will fail. But if the government's running everything,

there is no failure there i mean there's failure but there's nothing you can do about it if you're unhappy with whole foods market for example you can go shop at trader joe's or you can go shop at safeway or kroger or heb or walmart or whatever you want to nobody's forced to shop with us and so that forces whole foods to get better to lower its prices to get its quality improved to get its quality improved, to improve its service. There's no impulse in a socialistic economy for that service to be there. There's no punishment if you fail to provide good service to your customers. So socialism inherently doesn't work. Capitalism does. And that's responsible for all the progress we've made on this planet in the last 250 years. And yet people

hate capitalism. It's the most bewildering thing to me. Here's the greatest thing that's ever happened for humanity. People hate it. What are you proudest of at Whole Foods? I think I'm most proud of the fact that we've helped so many people in so many ways. People do not understand what a business like Whole Foods has done over its entire history. I mean, not only we helped millions of customers, literally millions and millions of customers to live a healthier life by being able to get natural and processed, healthy produce, meat and seafood, for example. But we've created over a million people that work for Whole Foods in our history, about 120,000 work there now. And that's made the lives better for thousands and thousands and thousands and thousands of people

that worked for us, that rose up and started working with us when they were 18 and then moved up our progress chart. And then they end up becoming store managers and then they can become regional vice presidents, regional presidents, and even go up and perhaps even run the company someday. Whole Foods has been that kind of a business. Our suppliers, we've helped so many suppliers all around the world because by buying their products, it helped their businesses to flourish. And as their businesses flourished, they could grow their businesses and the people they employed. And so you have this positive spiral that occurs with every one of the stakeholders. Better for our customers, better for our employees, better for our suppliers.

What about the people that invested in Whole Foods? They made so much money. If you held on the stock for many years, it grew and grew and grew and grew. If you'd been fortunate enough to be one of the original investors in the company, it multiplied thousands of times over what somebody would have originally paid. And it's been good for the communities that we're part of, Whole Foods markets, although the media never writes about what corporations do on a philanthropic basis, almost never. The Whole Planet Foundation, which does microcredit loans all around this planet, planet Earth, has helped,

gosh, I don't know, maybe 10 million entrepreneurs, poor entrepreneurs now make better lives for themselves. That's rippled out and had a positive effect in those communities. The Whole Kids Foundation gives away a free salad bar or a free school garden or free beehives to any school in the United States, Canada, or the UK that asked for it. And we've given away tens of thousands of gardens and tens of thousands of salad bars. That's made eating better for children in the schools. There's been many, many other things that we do. We, from a community philanthropic standpoint, not to mention the government, we have paid literally, gosh, probably billions of dollars in taxes over our

lifetime, not to mention the individuals that have paid taxes. So, business has this positive ripple effect. John, what are some of the most important lessons of entrepreneurship that you have learned over your career? You have to meet the market where you find it. You may have your own ideas, but you're in a dialogue with customers. And they're going to tell you what they like and what they don't like. They vote with their feet and they vote with their wallets. And you have to pay attention to how they vote because if you don't, you're going to fail as a business. So that's very important that entrepreneurs understand that. Secondly, you always have to be creating value

for other people. This is the thing people do not understand about business. You have to be always thinking about how do I create more value for our customers? How do we lower our prices? How do we cut our costs? How do we innovate in ways that will create value for them, things that they want? And as you create more value, your business will flourish. So those two important points about entrepreneurs. Third, you're going to do it with other people. It's an unfortunate truth that our media makes heroes out of certain entrepreneurs that lead. But in fact, behind Steve Jobs, behind an Elon Musk, behind any great entrepreneur is a team of very talented people. Steve Jobs like to call them A, he called them A-listers.

You've got to get the A-listers on your team. The best, if you can build the best team, you can create more value because you'll have more creative people, more dedicated people, people that are aligned with your purpose. Together, you can do great things. John, what are the three takeaways you'd like to leave the audience with today? Well, the first one is, particularly if you're a young person, I want you to understand that your life is an adventure. And every one of us has a call from within our own souls for a hero's journey. Most people are afraid to answer that call. They don't answer it because they're afraid of failure. They're afraid their friends might

reject them. Their families might be unhappy. But I really encourage you, if you feel that call from within, that call is best understood as following your own heart. So, follow your heart. And I can't guarantee your life will turn out wonderful, but I can guarantee it will be an adventure. And you won't have these regrets towards the end of the life. Number two, the most important thing in life without a question is love. Don't ever forget that. Remember that. Love is what life is about.

No one gets to their deathbed, lying on their deathbed, and they'll be thinking about, well, I wish I'd worked harder. I wish I'd made more money. I wish I'd been more successful. I wish I'd been more famous. Those aren't the things. It's always about relationships. Don't forget it and practice forgiveness instead of judgment. When we forgive, we let go of poisons that are really not good for us. And the third thing is life, it's fun, it's an adventure. It's a process of discovery and it's a process of connecting and the future is going to be better than the past. Do not let fear control your life or your life will be narrowed down. It won't do any good. Bad things are going to happen anyway. John, this has been wonderful. Thank you so much.

Thank you, Lynn. I've enjoyed our conversation. If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways newsletter at threetakeaways.com, where you can also listen to previous episodes. You can also follow us on LinkedIn, X, Instagram, and Facebook. I'm Lynn Toman, and this is Three Takeaways. Thanks for listening.