In Search Of Excellence - John Mackey: How Whole Foods Grew From One Store to $22 Billion in Sales | E187

Episode Date: May 12, 2026

What does it really take to build a company from one store in Austin, Texas into Whole Foods Market, a global brand with more than 540 stores, $22 billion in annual sales, and a $13.7 billion acquisition by Amazon?John Mackey, co-founder and former CEO of Whole Foods, joins Randall Kaplan to reveal the hard-earned lessons behind entrepreneurship, resilience, fear, failure, raising capital, work ethic, conscious capitalism, and the life-changing moments that shaped one of America’s most iconic business founders.Key TakeawaysFear is the biggest limiter of human potential. John explains why fear of failure, fear of judgment, and even fear of success stop people from answering their own “hero’s journey.”Failure only becomes failure when you quit. From getting cut from the basketball team to losing money in the early days of Whole Foods, John shows how setbacks can become turning points.No job is beneath you. Dishwashing, bussing tables, bagging groceries, and entry-level work build discipline, humility, work ethic, and service.Entrepreneurs must learn to sell the dream. Whether raising $45,000 from friends and family or pitching venture capitalists on Sand Hill Road, persistence and conviction matter.Business is a community of relationships. The Whole Foods flood taught John that customers, team members, suppliers, investors, and lenders are all stakeholders in a shared mission.About Randall KaplanRandall Kaplan is a serial entrepreneur, investor, professional coach, and the host of In Search of Excellence, where he interviews world-class entrepreneurs, leaders, athletes, entertainers, and high achievers about the habits, failures, mindsets, and preparation behind extraordinary success.Randall is the co-founder of Akamai Technologies, a global leader in cloud services and cybersecurity, and was an early investor in companies including Google. Over the course of his career, he has advised and invested in numerous companies and worked closely with founders, CEOs, executives, business owners, and high performers.Through his Extreme Preparation™ methodology, Randall helps ambitious leaders accelerate success by building the discipline, strategy, mindset, and preparation required to perform at the highest level.If you found value in John Mackey’s story, take a moment to like this video, subscribe to In Search of Excellence, and share it with someone building something difficult.Comment below:What lesson from John Mackey’s journey resonated with you most—failure, resilience, work ethic, raising capital, or conscious capitalism?Want to Work One-on-One with Me?I coach a small group of high achievers on how to elevate their careers, grow their businesses, and reach their full potential both professionally and personally.If you're ready to change your life and achieve your goals, apply here:www.randallkaplan.com Listen to my Extreme Preparation TEDx Talk here: https://www.youtube.com/watch?v=MIvlFpoLfgs Listen to this episode on the go!Apple Podcasts: https://podcasts.apple.com/us/podcast...Spotify: https://open.spotify.com/show/23q0XIC... https://www.randallkaplan.com/ Follow Randall!Instagram: @randallkaplan LinkedIn:  @randallkaplan TikTok:  @randall_kaplan Twitter / X: https://x.com/RandallKaplanWebsite:  www.randallkaplan.com1-on-1 Coaching: www.randallkaplan.comCoaching and Staying Connected:1-on-1 Coaching | Instagram | YouTube | TikTok | LinkedIn 

Once I got interested in business, I devoured business books. I've read hundreds and hundreds of business books on every... Accounting, finance, marketing, management, leadership, biographies, entrepreneurs. Once I got interested in and I couldn't get enough of it. I think reading the biographies of the great entrepreneurs will teach you more than anything else. Read about John D. Rockefeller, read Rockefeller by Chernow, read Elon Musk by Walter Isaacson, read Jobs by Isaacs, and read Jobs by Isaacs, and study the grades if you want to be grades. What's your advice to everyone out there who doesn't want to clean the bathroom floor or wait tables at cheat cheese like I did or bag groceries in high school like I did? Any job that's serving other people is a worthwhile job.

They're not menial shit jobs. These are these are important jobs that need to be done. They're not beneath you. I never felt like washing dishes or being a bus boy or working for AstroWorld, Six Flags Afterworld. But that was any, it was menial. I thought I was serving people. I was helping people. that work was essential. It was valuable.

Welcome to In Search of Excellence. My guest today is the co-founder and ex-CEO of Whole Foods, John Mackey. Whole Foods started with a single store in Austin, Texas, grew to 540 stores. Its annual sales exceed $22 billion. They have more than $105,000 team members. And in 2017, Amazon bought them for $13.7 billion. John, welcome to In Search of Excellence. Thanks for being here today. Thanks for inviting me on, Randy. Looking forward to it. So I would start with our family. Your mom, Margaret, was a school teacher. Your dad, Bill, was an accounting professor at Rice University who, 15 years later,

was CEO of a company called LifeMark was sold for a billion dollars. I want to go back to an incident when you were younger where you brought home a report card and you had all A's in one B. And your dad asked you a question. What was the question and what's the life lesson there? Well, I was very proud of that report card. And, of course, he asked me, what are we going to be going to be? to do about that B. And I was sort of crestfallen because it was like, gosh, I mean, all A's and

one B, it's pretty good. But for him, it was, it wasn't perfect. It wasn't excellent yet. And so, in a sense, the lesson there is you're striving for excellence. You're striving to be as good as you can possibly be and you shouldn't be satisfied. You should be proud of the fact that I made all A's except for one B, but not be satisfied with that. But you're young at that point. Your dad, You guys had a complicated relationship. We'll get into it a little bit later in the show. Well, sure. It was tough when I was younger.

But it was later when I reflected on it that I saw all the wisdom in that. That he wanted me to push harder and take it higher and not be satisfied. I think I learned a valuable lesson there. When you're young, we shared something in common. I was bullied when I was younger. I stuttered. I had no friends. People called me retarded.

River Randy had a huge impact on me. You were bullied. You were small. people thought you were... Nobody thought I was retarded, though. No, no one thought you were retired. People called me retired. I don't know if they thought I was retired, but they certainly called me retarded.

It had a major impact on my life. How did being bullied have an impact in your life? And are people who are bullied when they're younger, more motivated to succeed than those who are not bullied? That question is a really good question. And I don't know, because I never really thought about it before. But, I mean, I think sometimes people that are bullied surrender and they become meek. But I think others, they take the bully being bullied as a challenge. I know for me, I just can to this day dislike bullies.

I don't like politicians that are bullies. I personally don't like to be bullied. And I will resist bullies. And if I'm watching a movie, I hate the bullies. So it's like it definitely made a mark on me. And I think it made me more resistant. I think it made me tougher. But I think people make different choices to the things that happen to them in their lives.

It definitely made me more motivated, not to prove everybody wrong, but when kids make fun of you, it's brutal, right? You're insecure, you go home. I went home crying every day. Don't most kids get made fun of, though? I mean, it's not unusual. Everybody, they look for some flaw in everybody. I mean, I just think kids can be really cruel. And I think they pick on, I think they gang up and they, you know, Lord of the Flies type of thing. If you think children are perfectly innocent, but you might say the human nature, of can be, you know, the shadow side of humanity comes out in children, too. It's not just adults. I think we all get a taste of it. Even the ones that are the bullies get bullied to a certain extent, maybe by their older siblings. There's some crazy statistic that some high number, very high number percentage of mass shooters were bullied when they were younger. Oh, God, that's that, is that right, really? And they're taking their revenge. I guess that, you know, that makes kind of psychological sense. I'm happy to say that I didn't go in that direction.

Yeah. So we're going to talk about a lot of life-changing moments in your life and in my life as we go through the show today. I want to go to high school to your senior year. I don't. I don't want to go back to high school. I hated high school. Well, let's go back to high school for a minute. To your senior year, you were cut from your school basketball team. Your parents were very, very supportive. Tell us what happened and what your parents did and how. that impacted your future. Yeah, you know, that's such a good question. You've done your homework well. The coach of this particular high school did not like me for a variety of reasons. By the way, by the way, not to cause you have. You've never named the name of the coach.

The name of that coach was Coach Coleman. I thanked him later at a high school reunion because what he did actually change my life in a positive direction, which we'll get into. So I got cut from that team, and I thought it was really fair. I was the leading score on the junior varsity team. And I was, I thought I was, I was a good basketball player. I just thought he really didn't like me because, A, I was a little bit of a smart ass. And he wanted his athletes to be like fellowship of Christian athletes, you know, student council. He wanted them to be these, you know, paragons of virtue. And I was a little bit of a smart ass, a bit of a troublemaker, but a pretty good basketball player.

And he cut me and generally, and I was like shocked because I thought I was, I thought I was, as good as the players that were just ahead of me in the varsity. And I thought I could challenge them for their starting positions. If not, I'd be like a sixth man. So it was shocking to me that it happened. I think a lot of my other friends that were cut, it really stopped their confidence. But what I did that the district made a rule change that year that you could actually transfer to another school and you wouldn't have to sit out a year. That's what it used to be in Texas. If you transfer to another school, you were ineligible to play varsity. So they wouldn't have these kids being and bribe to go into another school.

So they changed that ruling. And so I, my parents, they temporarily moved to another school, another home that put me in another school. And I played basketball at that other school. And we did great. We were 25 and 13. I was a starting point guard, averaged to, I don't know, 12 points a game, led the team and assist.

And the reason that was such a life-changing event for me is that in reflection later, it was like, I realized, you know what, if you don't like the hand. hand it's dealt to you, change it. Do something about it. You can make different choices. You don't have to be, so to speak, a victim. I could have just mooped, how unfair life is. Instead, and real kudos to my parents for willing to help support me and temporarily moving so I could be eligible to play basketball. I think that really gave me more self-confidence. And when I got into situations later in life that were tough and I had setbacks, it was like, all right, well, that's not going to knock me out. We're going to make a different choice and go a different direction.

Innovate our way out of it, so to speak. I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach a nice level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google Lift and Seagate, and I also co-founded a company that today is worth more than $15 billion. I've been incredibly blessed in my journey, and at this stage of my life, I want to give back. I want to share the lessons I've learned so you,

you can reach incredible success way faster than I did. In my own journey, I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others, and I'm looking for a few hungry entrepreneurs are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity.

In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions, and if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video. The goal of the show is to inspire, motivate people to reach their potential. And there are so many people out there watching today and in the world, hundreds of millions of people who do accept the hem that they're dealt.

They don't have the tools that you have or that I have or I don't know if it's a gift, we're born motivated. But what's your advice to everybody out there who is sitting there and thinking, woe is me, there's nothing I can do? What three pieces of advice do you have for them to change your life? Well, the first one is the thing that limits most people's potential is fear. People are afraid of many things. One, they're afraid of failure and their self-esteem couldn't handle a failure. But life is always going to have setbacks. You're always going to have, you're going to have some failures.

But failures are an opportunity to learn. It's an opportunity to choose again and make a different choice. I've always felt like, as an entrepreneur, that my failures were my best teachers. So you only fail if you quit. If you're resilient and you pick yourself back up and learn and move forward. But people are also afraid of people poking fun of them, people bullying them, people laughing at them. Some people are actually even afraid of success because they have that imposter syndrome. They're not worthy of it, so they don't feel like they deserve it.

And they're always expecting to fail any minute because they're not really worthy of it. You can make different choices. And so if I'm trying to motivate people, I'm going to say, look, here's the reality. Life is, particularly, I'm 72 years old now. And as older I get, the faster time goes. Life is so much shorter than people realize. There's no point to play it too safe in life. Because why?

At the end of the day, we're all going to die. Nobody's getting out of here alive. And so why not go for it? Why not go for the things you care most about that you're passionate about? And that requires to have the courage. You know, I think we're called to a hero's journey. Answer the call. Don't hide away.

Trying to play safe because it's not going to work. anyway. You could spend your whole life in your house trying to be safe. The Grim Reaper is eventually going to kick the door in and drag you out, whether you like it or not. Have the courage to answer your own inner call for the hero's journey, because I think everybody does get that call. It's a risky path. There could be going to be setbacks, but it's an adventure. And once you launch on that adventure, it's a lot of fun. It's a lot of fun. You're going to meet interesting people. You're going to learn new lessons, you're going to be doing something you care about that you're passionate about. That's what I've done, and it's worked really well for me. So whenever I talk to young people,

they ask me, you know, I don't know what to do with my life. And I say, well, find out what your heart is calling you to do, what you really are passionate about. And answer the call. Answer the call. Follow your heart and let that guide you. I do a lot of coaching, executive coaching, entrepreneurs, CEOs, founders, professionals, founders, professional athletes, I'd tell everybody that we learn a lot more from our failures than successes. And one of the things that people, I think, misinterpreted just because you've had a lot of success, which I've been grateful to have. And we talked a little bit before the show. We have a lot of challenges and we've overcome a lot of things. I still fear failure when I do something new.

I mean, we're human beings and people put us on this pedestal. Yes. And then the pedestal is very weak and it can crumble, you know, just like that. So I think it's very important for people to realize that for me, the fear of failure never goes away, and it's a tremendous motivator. I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach a nice level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google Lift and Seagate, and I also co-founded a company that today is worth more than $15 billion. I've been incredibly blessed in my journey and at this stage in my life I want to give back I want to share the lessons I've learned

so you can reach incredible success way faster than I did. In my own journey I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others and I'm looking for a few hungry entrepreneurs are excited to take action on their journey to incredible future success. So if that's you I've got an opportunity. In the description of this video there's a link where you can apply to work with me. All you need to do is answer a few simple questions and if you're a good fit my team will reach out so we can build a game plan together. All right, now let's get back to the video. Hmm. Do I still have a fear of failure here? I suppose so. I mean, but it's not the crippling

fear that holds a lot of people back. It comes as a thrill of the challenge. But I do think I do fail, and particularly if you're doing something new, you're going to have some, you're going to make a lot of mistakes. But those are your learning opportunities. And if you keep learning and you grow from those mistakes and you, and then that's how you move forward. Anytime you're doing something new, if you're learning a new skill or a new language, trying to learn how to play the guitar, well, gosh what, you're not going to be very good at it, but the more you practice it, the better you will get. But I want to tell you a story that will resonate with you.

We were in a tough period at Whole Foods at some point. We were having a lot of setbacks, and I was doing the talk about, you know, failures are a great teacher, and we should be thankful for these failures because they're helping make us better. And one of my longtime executives, Patty, C.L. He says, you know, John, I'm tired of learning things from failure. Let's do some things right. That'll be a lot of fun too, don't you think?

And I had no answer to that. She was right. We had maybe too many setbacks, and she was getting discouraged. But the truth remains still there that failure is our great teacher. But success also is inspiring and helps people appreciate the. The failure has also said, context for the joy of success. Success is a lot more fun, a lot more meaningful if it's come as a result of learning, overcoming challenges and the setbacks. It's all part of the life adventure.

There's another lesson here, at least in my life, sometimes our greatest disappointments lead to our best opportunities. I think that's true because oftentimes, you know, if one door is closed, sometimes another door opens. I want to go back to you growing up in your household. You didn't get in allowance, you had some free market economy going on. Can you tell everybody what that was about? And it's something I always encourage parents to do with their kids because my parents never gave us an allowance. They basically priced everything.

So if any chores, you know, washing the dishes, mowing the lawn, raking the leaves, whatever chores they wanted to do, they put a price on it. You had to earn your money. I think a lot of entrepreneurs have similar type experiences in a way. Any money I earned, it was mine. I could spend it whatever I wanted to. When I was really young, I'd spend it on comic books. Then when I got old, I'd spend it on records.

And then when I got older, I was saving up to buy a car. I kind of worked hard because I really wanted the freedom to do with that money. It would be my money. I could do whatever I wanted. Because I was having to work for it, I appreciated it a lot more because there was a labor cost and there was time cost to getting that money so that I could do what I wanted to do with it. I think an allowance is kind of like socialism in a way. You get this sense of entitlement.

Well, where's my allowance? My parents were like, you want money? You work for it. We have to work for it. We have to work for a living. So, so do you. I mean, of course, they still fed me and whatnot. But this was for the money, but to go to the movies and all the things that I wanted to do with them.

If I said, hey, well, you give me some money to go to the movie. No. You know what? We got some chores for you to do. You can earn those movie tickets. It made a huge difference in my consciousness. And as soon as I could work, as soon as I got old enough to actually legally hold a job, I worked all through high school on the weekends and things like that because I wanted that money.

It kind of breeds an entrepreneurial mindset in a way. Money buys freedom, but does it buy happiness? No, money does not buy happiness, but it does buy freedom and freedom can lead to happiness. You know, it's kind of weird. Happiness is something that if you pursue it directly, you probably won't find it. You end up pursuing pleasure. and that may not lead to happiness. Happiness comes from, I think, from fulfilling purpose, relationships, love, kindnesses, things that really matter in life. Happiness ensues from fulfilling

those type of goals and things like that. But no, I don't think money gives you happiness. I think once you get past minimum, you know, you need enough money to meet a lot of your basic needs. It's kind of like Maslow's hierarchy of needs. If you're, if you don't have enough money to have a place to live or food, things like that. Money can buy some happiness there because you're getting your basic needs taken care of. But on a psychological level, accumulating money will not lead to happiness per se. But it can lead you to experiences. It can lead you to relationships.

It's a tool. The tool itself will not give you happiness. But it pursued, used wisely, it can help you to be happier. Some people also say on the flip side, more money, more problems. If you feel that way, then you can always give your money away. Funny when you point that out, they don't tend to do that. Let's go to some of the jobs that you had. I mean, you mentioned money equals freedom.

You worked at six flags. You were a dishwasher, a bus boy. You had a lot of odd jobs. I think in today's life, I've seen this among my kids' friends. And again, my kids grow up in a wealthy community. I've done well. I'm grateful they're very humble kids, appreciative kids. I remind them all the time where I came from.

But one thing I've noticed in today's world, and this is true of teenagers and especially young professionals who intern or they come in, they want mentorship, they don't want to do the shit work. What's your advice to everyone out there who doesn't want to clean the bathroom floor or wait tables at Chi-Chi's like I did or bag groceries in high school like I did to get all these menial jobs that made me who I am today? Those jobs are not beneath people. I think that's a very not a good attitude.

Any job that's serving other people is a worthwhile job. They're not menial shit jobs. These are important jobs that need to be done. They're not beneath you. And you take the jobs, sure, you'd like to get a better job, but learning discipline, learning a work ethic, learning how to work hard. I never felt like washing dishes or being a bus boy or working for AstroWorld, sick slags, Astro World, that that was any, that was menial.

I thought I was serving people. I was helping people. That work was essential. It was valuable. That's a, so I think that's, that attitude is, is a poisonous attitude. It also taught me that I needed to learn more skills. I want to get paid more money. I needed to get, I needed to get, I needed to learn things so I could get a better job.

I always saw that as, working in McDonald's, I never worked for McDonald's, but it's the point. So many people learn a good work ethic. You have to, you have to show up. You have to go, you have to be on time. You have to, you have to do what you're told to do, and you have to work hard. These are all incredibly important life habits that entry-level jobs will teach you. Those are skills that can serve you the rest of your life. And if you don't learn them, well, I think I read, I don't know for sure, but a lot of the younger

generation seems to think that, well, that's why so many young people think socialism is a good alternative. It's somebody else is going to pay for give you the things that you want with you having to work for them and earn them. But listen, the way a free market economy works is you, you're going to be. get money by providing service to other people, by providing things other people want. The more you give to other people that they want, the more money you will make. And so it teaches you the discipline of you're not entitled to anything just because you're alive. You have to serve others. And working

is a form of serving others. And that provides you money that gives you the freedom and also maybe the motivation to get work harder and move up a work hierarchy. so you can make more money and serve in better ways. Just follow up on that. Put those kids to work. Yeah. Just follow up on that. I mean, I get questions, you know, what was the first step of creating a $14 billion

well-known technology company? And what I respond is, it was digging ditches for the Weight Waters World Headquarters building coming home caked in mud. It was knocking on doors when I was 16. Can I pull your weeds coming home with sores under my fingers? It was stuffing envelopes in college for three cents each. It was knocking on every door in college selling T-shirts. That's what makes us who we are today.

And without that, I know I wouldn't be anywhere near where I am in my career. I'm on the same page. I agree with you 100%. Let's talk about post-high school and college. And college is a big topic today, whether we need to go to college or not go to college. In today's world, the average student has $47,000 of student debt. It takes more than 20 years to pay it off. You went to Trinity College, transferred to UT.

You were in and out of college for six years. You had 130 credits, only 120 to graduate, and you didn't graduate because you only took classes that you liked. Right. What's your advice to people today? Should they go to college or not go to college? I don't think there's a blanket answer to that. I think those individual choices.

You know, when I went to the university, that's what my mind opened up. I had, until I went to the university, you know, I was taking all these required courses, and I had sort of that intellectual awakening. I think philosophy classes did that. It got me thinking about the big questions of life, the meaning of life. And I saw that there was a whole life of the mind.

I'll tell you this story. I don't think the story's in my book, but I once signed up for 30 hours of classes. And I just took classes I was interested in. I signed up for 30 hours, and within about three weeks, I was down to six hours. I dropped 24 hours because I didn't like the classes. I didn't like for a lot of reasons. So I got called in to the dean's office, and they were trying to understand. Mr. Mackey, first of all, you're not allowed to take 30 hours.

He's signed for 30 hours, and you can't take 30 hours. That's against the rules. And I said, well, I knew I was going to drop. I knew I was going to drop some of these classes. So I wanted a choice. And he said, but you're down to six hours. And we don't want you to take six hours because you're not on a path to graduate. And this was a different era.

And I said, well, I'm only interested in these two classes. So that's all I'm taking. And then he made the most interesting argument. He says, you know, John, if you're putting all your energy into these two classes, you have an unfair competitive advantage against the rest of students who are having to take, you know, 15 to 18 hours. And I said, I don't understand. He says, well, you're going to be able to make A's in those classes because that's all you have to concentrate on. I said, so you're telling me, sir, that you don't want me to really focus how much on these two classes, you know. You're saying, you're saying, I should have my interest diluted down.

And he said, well, I'm not saying that. And I said, well, it seems like that's kind of what you're saying. He says, well, we just don't think you ought to be able to, you know, where it's a competitive job market out there. And you're going to make A's in these classes because you're just focused on them. And other students, you know, they may not be able to make A's because you're going to make, I didn't make any sense. And I said, okay, I'll tell you what, I'll drop those two courses tomorrow and I'll just audit them. Because I'm just here to learn. I'm just here to learn.

I used to go into the library all day long. I bring a lunch and I just spend in the stacks. All these books. It was incredible, the university library, all these books and tomes, and I was really like a kid in a cany school. It was just so much information I was taking in. And school was enhancing that learning, but also like the dean and other people were inhibiting it. So I just really took control of my own education. And I audited a ton of classes, too, that I just liked.

I remember professors, you know, I'd be like a star student. and they says, you know, John, I don't find you. I don't understand. You're actually not registered as this class. And I said, no, sorry, I'm just interested in the subject. And he said, but you're doing really well. You should have signed up for this class, you know. And I said, yeah, well, it doesn't matter. I'm still learning it. So I know that's a different approach to schooling. And you have to understand, this was a different era. This was before the government started giving all this money to the universities. And universities weren't that expensive. I mean, it was incredible how little money it cost to go to college back as a baby boomer

when I was going to school. It wasn't expensive at a private school like Trinity. It was even cheaper at a state school because, A, professors weren't paid as much. You didn't have this big administrative staff. And so much of these student loans have been hyperinflation. When you look at the cost of living, the two things that have gone up the most in America are health care costs and education cost because so much government money is being funneled into them and it just causes inflation to go up. Anyway, that's what I did, but it was, you know, would other students do that? I don't know. I just, I was young and I just wanted to know everything in the world. So I just studied everything I was interested in. I still look back on those times, Randy, with sort of romantic,

that was a happy time for me. I was free. I didn't have any responsibilities and I was just free to learn all that I wanted to learn. It was great. You created a $14 billion company and accredited some of that success. You got a lot bigger than that. You're just, you're way in past. Well, 35 billion at the peak. What you're talking about market cap. Yeah, I'm talking about market cap. So you created a company worth $14 billion and credited a lot of that to not taking a business class and it taught you a new way to think unorthodox.

And my question is, one, I'd like to hear about that. And two, if you're an entrepreneur thinking about starting a business, are you about better off not taking business classes versus business classes? No, I mean, I think that's, I've said things like that just to be provocative as much as anything. In my case, it's true, I didn't take any business classes and I didn't know anything. I don't think, there was an advantage to that. I didn't know how I was supposed to do things, which had allowed me to innovate. But it also meant I reinvented the wheel and had to, and wasted a lot of time and energy on things that other people would know. I was very fortunate, though, that my father was a very good business person, and he mentored me.

From age 24 to 40, I really never made any decisions that he didn't, the big decisions that I didn't check out with him. And I went along with him. I really trusted his judgment. Was it 40 that we had, kind of had our break? He was my business education. That plus mistakes that I did learn from. And just, I'll start it once that, that reading ethic. that I had in college. Once I got interested in business, I devoured business books. I've read hundreds

and hundreds of business books on every, accounting, finance, marketing, management, leadership, biographies, entrepreneurs. Once I got interested in and I couldn't get enough of it. Is that one of your biggest piece of advice to entrepreneurs out there? People want to grow their companies to read every single book they can about whatever they're doing? You know what I would do now? I think the best teacher, having read a lot of those books, is not that you shouldn't know basic about marketing and finance and accounting. I think reading the biographies of the great entrepreneurs will teach you more than anything else.

You know, read about John D. Rockefeller, read Rockefeller by Chernow. Read Elon Musk by Walter Isaacson. Read jobs by Isaacson. You know, there's so many great biographies of entrepreneurs. Read Michael Dells' autobiography. That's what I would tell people to do. Read those biographies. You will learn how these people thought.

And how they did their, and it's amazing how many are, how many of these guys are similar. And so many of the lessons they learned, study the greats. And you, and if you want to be great, study the greats, see what they, and they all started out in humble beginnings too. I mean, it's amazing. Someone like Rockefeller started out incredibly poor, but a very, very driven guy who was determined to be successful. Let's talk about Prana House.

I want to take it into two parts. So first, let's just freeze it at pre-Rene. And I just want to talk about, so what was Prana House and how did that change your life forever? Prana House was a, in Austin. It was a, it's kind of a commune, what we called it a co-op. It was a communal living situation. We had, it was a big Victorian house. We had 18 people living there about, I think it was 10 women and 8 men, but people would come and go.

Why that was, that was life changers for me. I moved in there when I was, I think, 22 or 23, still kind of at the very end of my college days. It was vegetarian, and I was not a vegetarian when I moved in there. And I moved in there primarily because I thought I was interested in all things counterculture at that time. I was very influenced by the counterculture, by hippies, by the music of that era. I thought they were cool, and I thought I'd meet interesting women in a vegetarian co-op. I moved in there, and the biggest thing had happened, is I had what I call my food awakening.

Before then, I just thought food was, you just ate what taste the good. You ate because your body needed fuel. It's like drive-thru jack-in-the-box. It's like you go to the jack-in-the-box to get fueled up or McDonald's. It's just like you'd go to a gas station, put gas in the tank. I thought the body was like a machine. And what I learned at Prana House was actually no. Our body consists of trillions and trillions of cells that compose us,

and they don't need just fuel. they need nourishment. They need vitamins. They need minerals. They need nutrients of all kinds. Phidonutrients. There are literally thousands and thousands and thousands of these nutritional elements that food consist of that nourish our bodies that make us, that help us be healthy and vital, can keep us fit and help prevent cancer, help prevent obesity. And I didn't know that until I moved into that. So I had my food awakening. And then like everything else, once I awakened into something, it was like, I started reading about it. I like to read cookbooks for fun. I still do. It's like I like to cook. I became the food buyer for the co-op. I started, and I worked for

a small natural food store called Good Food Company. And I like, I love this. I just, natural organic foods could change the world. America's unhealthy. If they would eat differently, we'd have different, we'd have, we'd have different health outcomes. And our agricultural system, if we would, if we'd farm with regenerative agriculture back then, we'd just say organic. That could be very transformative. So I sort of drank that Kool-Aid and got super enthusiastic about it. I remember I was working at this small natural foods for good foods and I was enjoying the heck out of it. I liked retail. I'd never, and all my odd jobs, I'd never worked in a retail store. And these people would come in and shop and they were like, I became friends with them.

We were, we were in the same diets trying, eating these new weird foods and all these new foods that I never tried before. I didn't eat vegetables when I moved in there. I was a meat and junk food eater. All of a sudden, my palate evolved and I started liking these super healthy foods. And then other people that I was friends with liked them. And then I was making friends with the people I worked with. It's like, wow, we're doing this together. We're a team. I played basketball when I was younger so that the whole team thing really worked for me. And it's like, I love this. I love this. I want to do this. And I remember coming back to the co-op, and that's where then Renee comes in, is that she was my girlfriend. And I came in and I remember,

looking her in the eye and grabbing her hands and saying, I am so excited about natural foods. Why don't we do our own store? And Renee got excited about it too. And I often wonder if she hadn't been whether I would be sitting in this chair today. So let's talk about that for a second. I mean, when we start companies, we make sacrifices. We start a tech company. I slept on friends' couches in New York. I was not taking nonstop flights. I remember sleeping in a motel where the Miller light sign is flashing through the window. Tell us about the duplex that you guys rented and the Hobart dishwasher hose that you use in the old postal truck. And how do you got going? Well, those are actually three different subjects in a way. But we were still, we started out

for still living at Prana House. But one of the things that happened was Prana House actually took a lot of time because you had a lot of, you had a lot of co-op meetings and there were a lot of chores that you'd have to do to do your share of the work, cooking, dishwashing. But once we got going with Safer Way, Safer Way was an 80-hour. You know, Renee and I were, it was an 80-hour work week. So we needed to move out of Prana house. And we, and so we moved into a duplex and we needed, we were ordering bulk food and we needed a place to store. So we just brought it into the duplex. And we, our whole house was filled up with bags of whole wheat flour and brown rice and pento beans, et cetera, et

And then when we need something, we would, you know, we'd take it from the house and deliver it to the store. I worked fine for a little while until our landlord popped in unexpectedly. And he did not like what we were doing with this property. He said, you can't have a warehouse. And this is a, you can't put a warehouse in here. So you guys, he evicted us. We had to be out by the end of the week. We got a small real warehouse for the food.

Renee and I needed a place to live. So we moved into Safer Way where our store was. That was in an old Victorian house, and it wasn't zoned for residential. It was zoned commercially. On the first floor, we had their store, and on the second floor, we had a vegetarian. It was vegetarian. It was a vegetarian. That was one of my lessons I learned because Safer Way, we were vegetarian. We didn't sell alcohol.

We didn't sell coffee. We didn't sell meat. We didn't sell sugar. We didn't sell white flour. We just wanted to sell really nourishing food to people. And as I say, we didn't do very much business. Safeway was too pure for the market. And so that was one of the lessons I learned.

But we, on the second floor, at the vegetarian cafe, and then Renee and I lived in the office on the third floor. We had a futon couch that we could fold out and we'd sleep on it at night. But we also didn't have a shower or a bathtub or anything like that. So when we'd shower, we would just climb into the Hobart dishwasher, which had a hose hanging down, and we'd just, you know, rinse ourselves off there, which was, I like to joke. I'm pretty sure that was against Austin Health Code.

We were violating health code violations sitting in the dishwasher. But, you know, we were, you know, Randy, we were young, young, healthy, loving what we were doing, loving each other. I look back on it was hard time. We had a lot of struggles that saved her way. We had our share of fights. But we were young and we were alive and we were doing something we cared about. It was a grand adventure. I loved it.

So you start, we always, one of the questions I get is how do you get going? Right. You got an idea. And the first step is usually friends and family money. Yes. People who, your family, if they have money, your friends who have known you forever, who believe in you, you raise $45,000 right out of the gate. Your dad, an old friend named Jim Sud, invested. Yeah. And then you guys lost most of it in a year. Half of it. Half of it in a year.

So what, tell everyone. out there, because I get this question a lot. How do you do it? Like, who are you going to? What if your family can't afford to give you a $25,000 check? I mean, what should the first step be that everybody does to raise capital? You know, I sometimes say that an entrepreneur is a little bit like, think about a panhandler asking you for money out there, except the difference is, is the entrepreneurs selling a dream. And I believe passion, I think if you read the biographies of the entrepreneurs, they start out in garages. They don't have money. They do get money from friends and family. But what they have is a persistence. You know, you get turned down a lot. I got turned down. I mean, most people, I asked every friend I

knew. I knew friends of my parents and family, you know, most of them turned us down. But persistence pays. And I was so excited about what we were going to do. I was so convinced we could be successful that I didn't stop, you know. It's like you take no for an answer, but you go and you keep you keep selling the dream. $45,000 was more money back in 1978, but it still wasn't that much money. And we were able to, through persistence, we were able to get it. And actually, we were trying to get 50.

We only got 45. 50 was our target. We said, we'll make a go at 45. I just don't quit. You just go sell your dream. In fact, one of the characteristics of entrepreneurs is, you know, they used to say about Steve Jobs, that he had a reality distortion field.

Steve would be telling you things that in one point, you knew it wasn't true. But he had so much passion about it, you'd kind of, he'd distort your reality field and you begin to believe it. I think in general entrepreneurs have a lot of charisma, and they are able to persuade people that their dream's going to work, even if their common sense says it's not going to work. So I think I have that, I think I have that same characteristic. You know, we were talking earlier a little bit about when before we went on a camera about bullies and things like that. You just can't quit. You just have to have persistence. People quit too easily. You just keep going for it.

And I also believe, here's something I firmly believe. I think that was Gerdes talked about, I can't get the quote quite right, but he says, when you begin something with boldness, the world changes. When you move forward with purpose and determination, the world makes a shift. You will find the money. You'll meet the right person at the right time. You'll stumble. Serendipity begins to happen.

Coincidence has happened. The world starts to live. line up to have you fulfill the dream. That's been my experience. We think we're like passive here, but we're creating this experience that we're having. We're creating this reality that we're living. Having that strong intentionality and putting it out into the universe, the universe and my experience shifts, and you will make it happen. But what you know what won't is the defeatist attitude that is ready to make an excuse. Well, I tried to get somebody. Nobody gave it to me. It's like, it's that determination and that commitment. I'm going to, we're going to find a, we're going to find a

that money and not to quit just because you get some setbacks. Keep putting that intentionality out there and amazing things will happen. You'll find it. You're listening to Part 1 of my incredible interview with John Mackey, the founder and CEO of Whole Foods. Be sure to check out part two of my awesome interview with John next week. You mentioned something about Steve Jobs. By the way, they were the first investor in our technology company. I'll take that back. They were the series C investor in our technology company when we didn't think. How many rounds did you do? We did five rounds. Series A was 2.25 million of friends and family, along with $6 million of VC money. You had some rich friends and family.

Battery. Well, yes, I knew well-connected, Angel, a former retired record executive who had made $50 million. I was just teasing you. No, but it's true. And when you're raising money, you want value-add money. There's Dock Walker money, right? There's Dog Walker money that can't add anything. sophisticated investors who know people. Our angel investors introduced us to CEO of AOL and Time Warner

and Playboy who all became beta customers. Wow. And we specifically went after these angel investors to create value for us. Sure. And it sped things up by years, by years and years and years. Of course, because they also have their connections and they also can give good advice. One of the things that you mentioned has never come up on a show before. I think it's really important. By the way, is Steve Jobs would say things that weren't true, right? We see this in the technology world where the CEO or the sales guy is going out pitching things that haven't been built yet, right? They're pitching the promise. And I get this question as well all the time.

At some point, how far out on the scale and extreme do you go by saying, okay, we can do X, Y, and Z, even if it's not developed yet. You know, it's coming. In some cases, it may not be coming. Well, I don't think he should ever deliberately deceive people. I think that lacks integrity. I think, I can't, I did not know Steve Jobs, but he strikes me as a guy that actually sincerely believed what he was saying. And I don't think he was just a con man. I think Steve really did believe what he was saying.

And he was able to distort other people's perceptions who they think, well, that can't possibly happen. But Steve was so convincing. He was convinced himself. I don't think he was just a con man. I'm not suggesting people are a con men. I just, I think at the end of the day, people do get ahead of themselves. I'm not talking about fraudulent CEOs. I'm talking about people who are excited in this product.

This is coming. This feature is coming, but it may not be coming for six months, and it may never come. Well, Elon Musk seems to be guilty of that because he makes a lot of promises about Tesla in his day. He was always, he turns out to be right, but premature. In other words, it might take longer to deliver. He may be a little optimistic about time, period. But generally, what he says ends up happening, but maybe two years later than when he thought said it was going to happen. We're going to get into what makes companies successful.

I want to talk about marketing right now, and then we're going to come back to work ethic and some other qualities. Sure. You create a store called Safer Way, hoping to invite a lawsuit, which is not the best way to go about starting a company, especially given where that, you know, lawsuits today when you go to trial over a million bucks. That's more of a joke. We didn't think, we never got on Safeway's radar screen, and it's not sure that we were in a trademark violation anyway. Safer Way was just funny. That was just a funny name that we thought.

It was a joke that maybe Safeway will come after us. It would be good publicity. Let's go to the first opening of Whole Food Store, and again, I want to take this in two different parts, right? We'll talk about the flood in a minute. But you open your first store in Austin, Texas, 1980, Lamar Avenue. What was that like? I mean, you have this idea, you had a smaller store. I think you've done a merger with Clark's grocery store.

Here you are. Then you open your own first store. What's the feeling when you walked around and you were open for business and opened the doors the first day? Well, of course, we relocated Safer Way. And somehow even though Safer Way had lost half its money in that first year, I was able to persuade the investors to put a little bit more capital in. You know, of course it was exciting because it was so exciting because I make the joke. It's not really a joke, but it's people ask me how long it'd take that first Whole Foods market to be profitable.

And I said until about 2 o'clock in the afternoon on the first day, because we were packed from the day we opened that first store. It was the timing was great. It was a great location. The two stores together had good sales because we merged together. We brought in so much more business from the local community. And within six months, that was the highest volume natural food store in the United States. It passed up like Mrs. Goochers in L.A., bread and circus in Boston. and it was a huge success.

That was ecstatic. You know, Randy, I've heard an entrepreneur describe it this way. It's been true for me. I think it's true for most entrepreneurs. There's two emotions that all entrepreneurs will feel more often than most people. One is utter terror. It's going to fail. It's not going to work.

The market, it doesn't want what we're doing. And the other one is utter ecstasy. It works. It's going to work. We're going to make money. Thank God. All the investors are going to get. get paid off. And there's that, there's the ecstasy and there's the terror. And those emotions were both

exaggerated, I think, in the entrepreneurial life. I got married to my wife, Madison. We got married in Cabo. Hurricane season ended, October 15th. Our wedding was October 18th. And then we got a call from the general manager of the Hilton Hotel. We got into know that's where we were getting married. And he says, well, before that, I got a call from one of my friends. There's a bit of a worry wart. We all have friends like that. He called me, hey, there's a hurricane coming to Cabo. Are we going to be okay? I'm like, oh, it's fine, whatever.

Then the general manager calls me. I remember I was sitting at the dinner table with my three kids saying, you can't get married here. I'm in a sat phone. The hotel is in the water. Basically, most of the hotels in the water. There's something called a 100-foot plane, which basically means that you have a one-in-a-hundred-hundred-chance every 100-year-floodd years that something's going to flood. No, no, no, it means 100-year flood zone means it will flood within a hundred-year flood. hundred years. Within a, within a hundred years. Okay. So what happened for the great flood on Memorial Day?

And tell us the crazy story about what happened and one feet of water. Well, first of all, the backstory of that was when we, we found the location that we wanted to do that first Toll Foods Market, it was a good location. It had been a, it had been a nightclub that burned out. So nobody got nobody gone into it because it laid vacant. But I thought it was a great location. It turned out to be a really wonderful location. We got it from this guy named Ben Powell. who was an attorney, his family owned the property. He'd been in the LBJ's administration. When we were signed the lease and he was saying,

you know, John, one thing I want to do full disclosure on, you know this is in the 100-year flood zone, right? And I said, well, what does that mean exactly? What's the 100-year flood zone? He says, well, it means about 170 years there's going to be like 8 feet of water in this store. It's going to shore creek is going to overflow its banks. It's going to come down Lamar,

and this store is going to be filled up with water. I said, gosh, it's terrible. When was the last time that happened? And he said, it was before I was born over 70 years ago. And I thought, those are good odds. I mean, if it's only going to be once a flood, once every 100 years, you know, chances, as you say, maybe once every 100 years there'll be a flood. I like that.

Once one in 100 every year, those are good odds. However, in our case, it happened the very first year we opened. Nine months after we opened up, the famous Memorial Day flood. It was the worst flood in over 70 years. We were eight feet underwater. We were ruined. we were bankrupt. I thought that was the end of the dream. But it was actually a life-transforming experience. You know, it's very interesting as I did a TED talk back, and it's just today,

they posted it. And I talk about, it's called win-win-win. So I'm pitching the TED Talk to listen to. But I tell the story of the flood in the TED Talk as a transformative event. And it was transformative because I didn't know, this was back in 1981, Memorial Day 1981. I didn't have any language for stakeholders. But I learned about stakeholders the day after the flood and the weeks that followed the flood because we showed up to work the next day to clean it up and we had all these people that weren't working for the company helping us clean up. And they were our customers. They had heard about what happened and they didn't want Whole Foods to die. So they came in and helped us clean it up. A lot of them came and worked every day until we got back open again. Our team members,

they worked for free until we could get open. So we couldn't pay them. We didn't have any cash at that time. suppliers frontend this more inventory. Our bank loaned us more money on my signature, which was worthless. And I found out later that the bank turned the loan down, but the loan officer personally guaranteed that loan. Mark Monroe. Yes. He personally guaranteed it because he thought we were integrity and we definitely would pay him back. And we wouldn't forfeit on it. We wouldn't. And the investors put in more capital. So the stakeholders, without even having the language for it, they didn't let us die. And I realized that business is really, really this community of relationships. And that in some ways I felt like I've been paying those

stakeholders back ever since, that we should have died and they saved us, a near-death experience. It was very transformative. And then later on, when I heard that word stakeholders, it's like that's what it was at Whole Foods. That's what we are. We're this network of relationship with customers, with employees, with suppliers, investors. They're all community. They're all trading with us voluntarily for mutual gain. That's the amazing thing about business. The amazing thing about capitalism that people don't realize, it's not a zero-sum game or somebody else's gain as somebody else's loss. It's the system of winning. Everybody's winning. Win, win, win, win, through these trading, through voluntary exchanging for mutual gains. And that's how

business and capitalism have lifted humanity into prosperity collectively. So many companies have a unique idea and then everyone tells them, oh, you're going to get crushed by Microsoft or Google and you're going to just get crushed by everybody. Every entrepreneur hears that. Every entrepreneur hears that. So let's go back to 1982 to 1989. You're expanding a lot. Company's doing well.

In 1988, you're doing $50 million in sales. You're profitable. You go to Sandhill Road, which is everyone's dream. You know, you read about it, going to all these VC firms. And I remember when I went up there the first day, and of course, I was not dressed appropriately. I was in a suit. And, you know, this is a lesson for everyone out there. know where you're pitching, who you're pitching to. Do not wear a suit to Sandhill Road when you're pitching VC firms.

I was in a suit and it seemed to be more appropriate back in 1988. You went to 12 firms, rejected by all except for three. What's your advice to people who are raising money from VC firms? How many knows should they get before they finally say, you know what, this isn't working? You know, it's an interesting question. First of all, the world is very different today than it was. 1988. There are a lot more venture capitalists out there. They were all concentrated sort of in Silicon Valley or Sand Hill Road. And that was early, really in the early in the days of Silicon Valley as well.

But now, like every city has got venture capitalists. I mean, I think Austin had one at that time. Now there's, I don't know, maybe 100 venture capital firms in Austin. It's a hotbed. I always caution, you know what I tell people about VCs. I came up with a metaphor for it. Venture capitalists are hitchhikers with credit cards, meaning as long as you get them to where they want to go, they're jumping into your car. And as long as you get into where they want to go, which is a good exit, they're going to help pay for the gas. But if you somehow get a little bit lost on the road and you've kind of lost your way, they're very likely to hijack the car, hire a professional manager to drive it and toss you out on the side of the road. So VCs, they have like a seven-year investment limit. So you've got to get into where they want to get to within seven years because they have their own investors.

And so they're under a lot of pressure. And they have kind of a blockbuster model now, which is if they want the really, they want the 100x. They want that exponential payoff they can get with an Nvidia or an Apple or Google. Akamai. Yeah. I mean, they want those kind of payoffs. So what they try to do oftentimes is scale businesses quickly. And that said, they really want that exponential growth.

So I try to scale quickly. They get burn rates. They say we're going to do a series A, a series B, a C. That's why I asked you how many rounds you went. And if it goes well, each round is a higher valuation. But if you do get off the track, so to speak, some businesses can't scale that quickly. You know, they're not digital businesses. They may be, if you're doing physical locations, for example, like Whole Foods did, you can't grow that rapidly. When that happens, they can wreck a lot of businesses, meaning they can blow them up because they have a blockbuster model, which means that a lot of, the big successes pay for a huge amount. It's kind of like drilling for oil. Got a lot of dry holes, but the gusher's pay for the dry holes. The blockbuster

successes pay for lots of failed businesses. I think a lot of businesses, you have to pick your VCs carefully. You have to know they're not really your friends that they are trying to get an out, not say they can't help you. They can't help you. They can give you advice. They have relationships. They have network of people. But you also, if you get off track, then they can have the cram down round where they basically they really lower the price. The entrepreneurs can't come up with the capital. So they're diluted down.

And then they're oftentimes discarded. I've seen that happen to many of my friends. So I have a mixed feelings about the VCs. But your question originally was, what do you do about VC rejections? They're going to come along. I mean, it's the same way it was with friends and family and angel investors. I got a metaphor for it. If you're like Matthew McConaughey, you may not get turned down that many times.

But the average male, particularly, you know, as you go through, you're mostly getting turned down when you're asking women out for a date for a variety of reasons. They may have another boyfriend. They may not like you. They may not be the type. And maybe it's different now with these dating apps and bumbled and whatnot. But in my era, guys usually got turned down. You got used to being rejected in a way from, you know, if you were asking women out because it just kind of. kind of came with the territory and you'd have to have some resilience. If you were just going to go in the

corner and cry because you got turned down, then you're never going to meet. I never would have met my wife. Have a lot of failures, you might say. So I think it's the same way with with VCs. A lot of them, you're just not what they're looking for. No matter how good your business is, they're picky. They're going to turn down most of their investment opportunities. Rejection is part of the game. That's how I see it. Now, sure, if you're if you're a hot shot, if you're some successful serial entrepreneur who's got some big wins in your back pocket, you're going to easily be able to finance your next round and they're going to be following all of each other and invest in it. You're going to get a high valuation. But if you're kind of a startup guy with no real reputation,

it's going to be a tough, it's a tough path, and you have to stay with it. And you have to believe in what you're talking about. And then I think you'll meet the right VCs who can help your business to finance it and help grow it. It'd be really lucky if you get people, it took me a while. I talk about it in a book a little bit that all money is not the same color, that there are some VCs that really will mentor you can help you. And we got that with Jerry Gallagher at Oak. He was a really good, he helped mentor me a bit. And he was, he really did care about us in a way that maybe some of the other VCs didn't. My dad said it this way. And I'll just be very blunt. You go up to 100 women when you ask them to have sex with you in the first 99 and say no.

When the 100th women says yes, you forget about the other 99. Well, you know, they have a lot of stories about entrepreneurs, you know, or business people. And they say that Thomas Edison, when he was trying to get the filament for the light bulb, he had like 10,000 failures. He didn't quit until he found the filament that worked. We have light bulbs as a result of that. I think there's lots of stories about entrepreneurs failing again and again and against resilience. I cannot emphasize that enough as an important entrepreneurial trait.

You don't give up, you don't surrender, you keep, that's not to say you don't learn and you try different pitches. So if you keep getting turned down, sometimes it might be good to ask the, why didn't you invest? Why did you decide not to? And if you ask that with a sincere openness to listening, they might say, you know, I actually think your business is pretty good, but we're looking for a hundred. higher return than we think we can get here. You're going to get some valuable feedback and see then you can refine your pitch a little bit to what you think the market wants.