The Knowledge Project with Shane Parrish - John Mackey: Building Whole Foods

Episode Date: October 29, 2024

From near bankruptcy after a devastating flood to a $13.7 billion Amazon acquisition, Whole Foods founder John Mackey reveals how a small health food store became an empire that revolutionized American eating. Discover how a single near-death experience transformed a 25-year-old college dropout into the pioneer of the organic food movement. Mackey shares raw insights from the frontlines: how he turned hostile customers into evangelists, survived multiple extinction-level threats, and built a mission-driven billion-dollar business without compromising its soul. John Mackey is the co-founder of Whole Foods Market, where he was the CEO of the company from 1980 to 2022. He is the author of the bestselling book, Conscious Capitalism. Newsletter - The Brain Food newsletter delivers actionable insights and thoughtful ideas every Sunday. It takes 5 minutes to read, and it’s completely free. Learn more and sign up at https://fs.blog/newsletter/ -- Upgrade — If you want to hear my thoughts and reflections at the end of the episode, join our membership: ⁠⁠⁠⁠⁠⁠⁠https://fs.blog/membership/⁠⁠ and get your own private feed. -- Follow me: ⁠⁠⁠⁠⁠⁠⁠⁠https://beacons.ai/shaneparrish⁠⁠⁠⁠⁠⁠⁠⁠ -- Watch on YouTube: https://www.youtube.com/@tkppodcast 00:00 Introduction 02:30 From Safer Way to Whole Foods: The Early Days 03:46 The Struggles and Successes of Whole Foods 05:22 Navigating Criticism and Market Realities 08:36 The Lamar Location and the 100-Year Flood 10:46 Rebuilding and Realizing Stakeholder Value 14:57 Learning the Retail Ropes 22:35 Growth, Challenges, and Entrepreneurial Resilience 35:51 Acquisitions and Expanding the Whole Foods Empire 41:17 The Drive to Build a Chain 42:17 Founder-Led vs. Professional Management 44:38 Challenges of Bureaucracy 46:56 The Importance of Cost Control 50:44 Entrepreneurial Spirit and Creativity 52:56 Facing Leadership Challenges 01:02:57 The Amazon Merger 01:19:01 Capitalism vs. Socialism 01:26:27 The Illusion of Control in Socialism 01:27:44 The Kibbutz Experiment: Idealism vs. Reality 01:30:53 Capitalism: A Win-Win Game 01:32:04 The Power of Win-Win-Win Philosophy 01:34:28 A Personal Story: Winning Over Deborah 01:37:29 The Role of Business Planning 01:38:49 Qualities of Successful Entrepreneurs 01:49:12 The Hero's Journey: Advice for Young Entrepreneurs 01:51:05 Introducing Love Life: A Holistic Health Venture 01:57:18 The Importance of Whole Foods and Nutrition 02:08:09 Concluding Thoughts on Success and Happiness Learn more about your ad choices. Visit megaphone.fm/adchoices

It's easy to be a critic. It's actually hard to be an entrepreneur. For years, I was told that this was never going to work. My mother was begging me on her deathbed to give up this stupid grocery dream. I remember feeling that many times. You're wrong. Whole Foods is going to grow. We're going to change the world. If you're not willing to seize that opportunity, somebody else will. We really did all feel like we were part of this movement that was going to change the way America ate. Life is shorter than you think it is. It's too short to not be doing something that you really are passionate about, that you're drawn to. Welcome to the Knowledge Project. I'm your host, Shane Parrish. In a world where knowledge is power, this podcast is your toolkit for mastering the best of what other people have already figured out. If you're listening to this, it means you're not a supporting member. Members get early access, no ads, my personal reflections at the end of the conversation, access to the highlights from the books I'm reading, hand-edited transcripts, and so much. much more. Check out the link in the show notes for more information. My guest today is John Mackie,

founder of Whole Foods Market. I wanted to hear John's story all the way from the creating of safer way to Amazon buying Whole Foods and everything in between. John is a master at resilience. Let's look at some of the things he's had to overcome. Consider this. Right after the opening of the first Whole Foods Market, this huge store where they had apple juices filler on the shelves to make it look full because they couldn't afford enough inventory, a hundred-year flood hit Austin and put the store eight feet underwater. John didn't have any insurance and he had no money. And if that wasn't enough, he had to deal with risk-averse investors, four different coup attempts, and so much more. John has interesting takes on lots of things from investors and

capitalism to the clash between the idea of Whole Foods market and the reality of running a retail business. He also has a fascinating way to deal with critics. It's time to listen and learn. There are too many podcasts and not enough time. What if you could skip the noise and get just the insightful moments, even from shows you didn't know existed? That's what Overlap does. Overlap is an AI-driven podcast app that uses large language models to curate the best moments from episodes.

Imagine having a smart assistant who reads through every transcript, finds just the best parts, and serves them up based on whatever topic. you're interested in. I use Overlap every day to research guests, explore, and learn. Give it a try and start discovering the best moments from the best podcast. Go to joinoverlap.com. That's joinoverlap.com. I think the best place to start is going back all the way to the beginning to safer way, which was the precursor to Whole Foods. Where did the idea for that come from?

in my book the whole story I actually talk about I had the psychedelic experience where I experienced this ego death ego dissolving when I was 22 and pretty soon after that that's why I started the book there and I'll start the answer to your question there and then that that really just changed my I got off the path my parents really wanted me to be on and I just moved into this vegetarian co-op a housing co-op sort of like a commune and And I wasn't a vegetarian at that time, and I really didn't even know much about food. I'd just been a typical American kind of junk food eater. But I had my food awakening.

My consciousness awoke there. I had already thought my body is kind of like, you eat food to get fuel, like a car that used to get gasoline. And that mechanistic model doesn't do credit to the fact that you actually need to nourish trillions of cells in your body with super healthy food. if you do that, you feel better. The immune system will be stronger and we'll get sick as frequently. And you'll live longer and you'll just probably an overall have a better life. I kind of got that when I moved into that co-op. I sort of had some older, wiser people than the co-op.

And I learned how to cook. I became the food buyer for the co-op. And I got deep into it. It was like, wow, this natural and organic food stuff is pretty interesting. Then I went to work for a small natural food store in Austin, Texas, at that time called the Good Food Company. and I became the assistant manager there and I loved it I never I never worked retail before I loved I became friends with customers friends with the employees that I was working with and then I remember

coming back to the co-op one day no before I came home that night I was looking around I was closing up the store and I thought I love this I could do this this is this is within my realm of life competence I could I could run a store and I came back and I talked to my girlfriend at the co-op Renee and at this time I'm probably just about 23 and Renee's 19. And I said, Renee, what do you think we opened up our own natural food store? And she changed my life. Renee looked to me, grabbed my hands, looked me in the eyes and said, she was a hippie. And she said, oh, McElman, that'd be so cool. Let's do it. And so we did. And if she'd said, that's a stupid idea. My life might, I wouldn't be here with you today. My life might have taken a completely different trajectory. But she said,

She was excited about it. We did it together, and it was called Safer Way. It was a vegetarian store, and it was very pure. We didn't sell, we didn't sell meat, we didn't sell white sugar, we didn't sell alcohol, we didn't even sell coffee. And I was like to say we did very little business. We were not meeting the market where we found it, so to speak. It was our own ideals.

And we did that for a couple of years, and we managed to lose about half the capital we'd raise. which of $45,000, but we began to figure out the business. And as luck or fate would have it, I found another location and had a lot of trouble persuading the investors to relocate, and they only do it if I found another big investor, which I did, buddy I play basketball with, pick up basketball with, and he inherited a lot of money from his parents who died, and he put in like $100,000, or no, $50,000. And then we got more money from the shareholders, and we really really, relocated and changed the name to Whole Foods Market. And that was the first natural food

supermarket in Texas. I'd been inspired by Bread and Circus in Boston and Mrs. Gouches in L.A. and Fraser Farms in San Diego and thought, this is an idea whose time could be coming. And that became immensely successful. And we sold meat. We sold alcohol. We sold coffee. and we were still featuring natural organic foods, but we were also now a more grocery store that more people could identify with, particularly our generation, which was kind of a counterculture,

long hair, hippie generation that was looking to reinvent the world, starting with one of the first places to reinvent it was food. And so that store was immensely successful. That was a Lamar location? Yes. It was, in fact, within six months, it became the highest volume natural food store

in the entire United States based on everything I know about the world back then. Let's pause there. We're going to come back to this in a second. Talk to me about the tension between the idealism, no meat, no processed foods. Attention is always there. I always say, you know, you've heard this cliche,

it's easy to be a saint on the mountain top. It's easy for critics to judge and say you're selling out, you're betraying your ideals. As I'm plant-based, I hear it all the time from vegans. You're just a, you know, you're a hypocrite. You say you're an ethical vegan and yet Whole Foods sold meat, so you're just a hypocrite and a liar, or you're not even an ethical vegan.

I don't believe it, blah, blah, blah. But it's like, what exactly have you done if you think a vegan store will work? Do it. Don't just criticize other people if you think you can make that a viable business. The problem in that instance is that about half of 1% of Americans are vegan and 2% are vegetarian, so you just don't have a big, for that big of a market. And another cliche, which is true, is you kind of have to meet the market where you find it, not where you'd like it to be.

So the tension between your ideals, and as long as we're into cliches, I'll give you a third one, which is, the perfect is the enemy of the good. If you just want to have your ideals, you can have them, but you may not have a business. So you have to engage with the market. You can try to influence the market. You can try to educate the market. But at the end of the day, they vote every day with their pocketbooks exactly what they want. If you're not prepared to serve them what they want, then they're going to go find it somewhere else.

And your business may end up failing because you – so there is that tension between your ideals. But then you have to mediate between them. I always like to say we're always pushing our ideals, but always listening to our customers. It's like a dialogue you're having or a dance. and if you don't dance with your partner your partner is going to dance away from you so you have to meet them where you find them I've always noticed that most of the people

actually all of the people who criticize other people doing things they're usually not doing the same thing they're not trying to do the same thing they're not in the same space they're just sort of like lobbing grenades from the safety of the side limits and yes I think that's absolutely true

and I also think there's a tendency for all of us including myself to project our own failings out into other people and criticizing them then. It's like, you're not doing what I think you should do. Of course, I'm not doing anything. So it's easy to be a critic. It's actually hard to be an entrepreneur. It's hard to actually create anything.

It's really hard, particularly anything that's going to be successful in meet the test of time. But it's very easy to find fault with what other people are doing. And, you know, I've learned the hard way. For example, I just don't read. comments anymore. Like if you if when this podcast is if you allow comments on your podcast, I'm not going to read them because I'm going to get all those hate's going to come my way. They hate whole foods. It's gone down since Amazon bought it. I hate John Mack. He's a hypocrite. Blah, blah, blah, blah. The comments just allow people to vent all this negativity.

And so I've learned just better to, just to let the stuff go. You and me both. So coming back to Lamar, so you open Lamar. It's, uh, what was it 10,000 square feet, it was huge. Yeah, 10,500 square feet. Well, that'd be like the tiniest store at Whole Foods now. No, but I mean, compared to the Victorian house you had. It was huge compared to that. And you got all this inventory.

You borrowed money or location. You convinced the guy to lend it to you because he didn't want to lend it to you. And then 100-year flood hits. Yeah. So nine months after we opened up that really successful store, the whole first Whole Foods Market in 1980. When we were building it, the owner of the building, is Texas good old boy named Ben Powell.

He let me know that we were building it in the 100-year flood zone. And I said, well, what does that mean exactly, a 100-year flood zone? He says, well, John, what it means, partner, is that about once every 100 years, Austin is going to experience 100-year flood. There's going to be 8 feet of water. The shoal crease can overflow its banks. Water's going to come down in the Lamar.

It's going to fill up your store. And I said, really? You're kidding, right? And he says, no, no, no. It's in the 100-year flood zone. And I said, well, when was the last time that happened? He says, well, I'm not rightly sure. It happened over 70 years ago for I was born.

But that's what happened. And I was thinking, all right, well, what are the chances we're going to have a 100-year flood anytime soon? And so I thought, well, I'm going to still take the risk. And he said, well, let's give you a little bit of margin error. let's build a slab that's two feet high. So our store was two-foot concrete slabs. He had to step up to get there, which made it a little hard for grocery cars

to get down in the front, but we built a ramp for them to get down. Anyhow, we had the 100-year flood in the first year. We were open. And Renee, my girlfriend, was working that night, and she swam out of the store because it happened kind of in late afternoon, early evening, and it was Memorial Day weekend.

It was a Sunday night with Memorial Day the next day. So that had some good things to it. But you're asking about the banker that this is the thing I didn't know about stakeholders and I didn't have language for it. But I experienced people that love your business because the day after the flood, we had, I don't know, dozens of people come in and help clean up the store that didn't work there. They were neighbors. They were customers.

They didn't want us to die. They loved us. We had, the suppliers gave us new inventory. Our employees worked for free while we were, while we, because we couldn't make a payroll. We didn't have any money. They worked for free until we could get back open again, which there was no assurance that we would. But the most remarkable story that I found, I, that about the flood, I didn't actually find out about until about 10 years ago when I met this conference and this guy coming up to me. And he says, you know, John, you don't, you won't remember me, you know, but I used to work for

City National Bank back in the day, you know, a terrible thing, that flood, and that flood happened to you. And I said, yeah, yeah, you worked for Citibank. He must have known our banker, Mark Monroe. And he said, yes, Mark and I are really good friends. And that was quite a thing he did for you. And I said, well, yeah, sure was. We, I don't know if we could have reopened without that $100,000 loan the bank gave us. I said it always puzzled me, though, but, because I surprised the bank would give us the loan, because, you know, it was just, my signature guaranteeing in, and I signature was kind of worthless. And he looks at me, and he says, you don't know what happened.

And I said, well, you know, I do. The bank gave us the money. And he said, no, John, the bank did not give you that money. I said, yes, they did. We got a check from the bank. He said, John, the bank turned the loan down. The only reason you got that money was Mark Monroe personally guaranteed that loan. I said, what he personally guaranteed?

Don't know why the hell would he do that. And he said, he did it because he said he really believes in you and he believed in Whole Foods and he knew you, you'd pay him back, even if it took you the rest of your life. And so he took the chance on you. And I said, that's incredible. I've got a, I need to thank him. That's great. He says, well, you're too late.

He passed away about five years ago. So that's a good story. But that's, when people ask me about stakeholders, that's what stakeholders are. There are people that are invested in your business, care about your business, and that you have certain responsibilities to. Did you realize you were on to something when you saw other people helping cleanup that were customers and didn't work there. It was only in retrospect later that I realized we were onto something, that I could see

the patterns because I didn't, I hadn't really been exposed to any kind of stakeholder thinking before. But then later, when I got exposed to it, I realized, yeah, that's what the, they were stakeholders, they were, they were our customers and neighbors, they were, they cared about us. It also says something about that, this we're talking about now, May of 1981, literally 43 years ago. And the world's different back then than it is today. I really wonder whether people would come in and help clean up. Maybe they would. But Austin back then was a much smaller city than it is

today. It was a much more neighborhood based, much more. And it was just a different consciousness back then. It's, you know, as you make progress, you also lose certain things. You didn't want to give out after the flood. I mean, a lot of people, I think, would have just thrown. their arms up in the air and sort of tried to walk away. You know, that's a very good comment in question. And I think the answer to that, honestly, is that I thought maybe Renee and I were going to, that the universe decided we weren't going to do this. I was going to do something else in life.

But I had a lot of friends and family that invested money. I had a real, I felt like I can't let these people down. We've got to found a way to get back open again. And in the book, I talk about it. about when Whole Foods does its IPO in 1992, so 11 years later, it was one of the happiest days of my life because finally, all the investors that had believed in me and believed in our vision,

believed in Renee, they could leave now, they could cash out. And so that really took a load off of my chest, so to speak. Thanks, my back. Talk to me a little bit about learning the X&Os of retailing. What are the X&Os? of retailing in a grocery store that you've learned over the years, but you started out with no

experience. Yeah. Well, I mean, there's literally thousands and thousands of things. I mean, I can just give you, some of the most important things, you realize is that, hey, nobody has to shop with you. I thought it was so funny later on when the Federal Trade Commission said Whole Foods was a monopoly. And it's like, you've got to be kidding. We got less than 1% of the grocery business. And they sort of made up this category that we were the, we had a monopoly of premium natural and organic food supermarkets. But my point is, of course, we weren't a monopoly of anything. And what I learned early on is that customers always have choices. If they don't like your prices, your service, your quality, if you're not convenient, if they can't get in and out

fast, that you don't have a business. So I learned that the most important stakeholder is an always will be the customer. That's number one stakeholder. And if a business doesn't realize that or forgets it, their business probably is going to suffer in the long run. Because people do, your competitors are constantly innovating. They're constantly studying what you're doing, copying your best ideas, and then iterating on them. And this is how the human race makes progress, to be honest, is that people have choices and you have to compete to serve your customers. Does that mean some people do a poor job? Of course they do. I mean, that happens. But there is this competitive drive to serve your customers better. That's the single most important

lesson I learned in business, period. But certainly it's true in the retail business. We don't have any patents. We don't have any monopolies. Everything we're doing is wide open for people to see copy. I mean, people used to come in and take pictures of our prices and they'd be looking at our products and they're showing up in the supermarket. So everybody was studying us and we no way to stop that. So that's one thing I learned. Secondly, I learned that, yeah, you've got to take care of your customers. Well, who takes care of them? Your employees do. Your team members do. And if they're unhappy, they're not going to take care of your customers well. So if you really want good service to your customers, make sure your team members are a well trained, well-motivated

and that they are rewarded for serving the customers well, that you have a high standard, and then you meet, because happy team members lead to happy customers. Happy customers lead to a prosperous business, and that makes happy investors. So I learned then about sort of the interdependency of all these stakeholders that are connected together, and that in a sense of business is this ecosystem of stakeholders,

an ecosystem of customers, employees, suppliers, investors, and the communities that we're all part of. And that once you see that, then you see that there are a system and that you can create these synergies between the different constituencies, between the different stakeholders, to help this business to optimize itself at a higher level. That was what we call conscious capitalism. At the end of the day, it's being very conscious about how you have these responsibilities to all these stakeholders and you're trying to create value for all of them.

And that's very difficult to do. That's also nothing I learned. That's hard to do all of that. There are little tradeoffs that end up being made. But how do you minimize the tradeoffs and maximize the synergies? And I also learn the adage goes, retail is detail. There's a thousand little details. I mean, typical stores got tens of thousands of products.

And what's more irritating that if you go to the store and you have a recipe that needs broccoli in it and they just don't happen to have any broccoli? Well, you're really pissed off. First of all, you have to go to another store. And it's like, how can you run out of broccoli? So, but then again, if you stock too much broccoli, it's going to rot on the shelf. So you have to develop the skills, particularly in the grocery business, where you have all these perishables, to be able to keep your food fresh and in stock, but turn it over fast enough.

And so there's that relationship where you want it fresh, but you also don't, you also don't want it to be out of stock. and sometimes those are intentioning with each other. There are so many other things I could tell you about. It's just a three-tail business is a, how do you price stuff? Like, okay, you know, if somebody's underpricing, do you match that? What do you match? What do you go lower on? There's a whole pricing strategy that you have to do, and that can be complex

because you have a variety of different competitors competing with you. If you're competing with Airwan in L.A., you're not worried about price, but they may be having a higher quality, higher more high-end product that you have to compete against, and do you choose to compete against it? So I suppose what I like about business in general is that... Summer's here, and you can now get almost anything you need for your sunny days delivered with Uber Eats.

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You never quite figure it all out. You're continually learning. The world's continually evolving and changing. Like, let's say, look at what happened to the grocery business when COVID came in. All of a sudden, you know, people want to stuff delivered

at home. And fortunately for us, we were teamed up with Amazon at that time, and Amazon was able to step up and invest literally hundreds of millions of dollars in delivery in order to enable Whole Foods and Amazon Fresh to be able to deliver when the demand went from virtually zero to a huge percentage of your business. So I don't know. I can keep going on this, but you may want to have different questions. Keep going. I love the detail here. Is perishables is the most important part of the store to get right? Absolutely, particularly in food retailing. People choose their supermarkets based usually on the quality.

Partly convenience, but then if they have crummy produce, crummy meat, seafood's fishy, I mean, they're going to go someplace else. Whole Foods' competitive advantage has always been. I just thought we did a better job than just about anybody else out there in overall produce perishable quality. And that gave us competitive, I gave us competitive edge. Why is produce the first part of the store you walk into? Because that sets the tone for the whole store.

People oftentimes pick their store by how good the produce is. And it's not easy to do it well. It takes a lot of skill to be able to manage your produce so that you keep your in-stock position while you keep freshness. It's part science and part art. And, I mean, I just think produce is, it's also the healthiest part of the store. Produce is the most important foods that we eat. Fruits and vegetables are the healthiest foods. We can eat.

And if you want to have a strong immune system and you want to have high longevity, you're going to have to learn to like vegetables and fruits. Let's go back to Lamar for a second here. So you reopen. And at this point, you're profitable. You're the most. Yeah, we became profitable. safer way was this struggle and that's also an interesting story here we were struggling with safer way

we relocate it to a better location make it bigger expand our product mix and we went from a struggling business to hugely successful um and then i thought wow we got a tiger by the tail here let's grow this thing and we just had a flood so we had to grow it just so we'd have a you know dip wouldn't have all of our eggs in one basket that might float down the river but you had four founders at that time right and not everybody wanted to grow the business. Yeah, one of my, one of my co-founders, Mark Skiles, after we had the really successful store, he really didn't want us to grow because he said, John, we have a gold mine here. Let's just not screw it up. We can be rich. We don't have to do anything else. We can just live off this thing for the next 25 years and just, you know, have a

wonderful lifestyle. And I said, I don't want to do that. I want to grow the business. I want to have more stores. And he was willing to go along with that until, you know, the next couple of stores we opened up were slow to, they didn't take off right at the right off at the go point. Now, remember that very first Whole Foods Market took two small stores because we merged with this other natural food store. We took them together and we had their customer basis from both stores as a foundation. And then we were unlike any other store, and so we were able to pull in from a much wider geographical area, which is one reason the store was so successful. We opened a second store. Well, we had to go out in the suburbs. It wasn't hippies anymore. It wasn't a counterculture

market. And it started slower. Now, it grew really well, but it took a few years before it became profitable. And that proved to be the case. Anytime Whole Foods went into a new market for the first 10 to 15 years we existed, it was a slow growth because people just had never heard of us before. And what are you? That stores weird. And you guys are, you guys all dressed weird. You don't look like a regular supermarket. So, but once our brand got well known, then our stores started to take off.

But in the day for Mark, when he remembers, I mean, he was there, the new stores were slow and they diluted down the first very successful store. And he got, he blamed it on me. He got angry and angry at me, angrier at me. And that ultimately led to a break where Mark decided to leave the company. And he said, I was going to wreck the company with your growth dreams. And he sold out his interest and opened up a pizza place. And that probably wasn't the best decision he could have made. He wasn't the only one who thought you were going to wreck the company with growth dreams.

Over the years, I mean, Mark's first nicknamed me Wacky Mackey. And through the years, I think entrepreneurs always are climbing a wall of doubt. Because the entrepreneur is looking ahead. They're seeing possibilities that other people don't see yet. And so it's easy to be skeptical. I just, for years, I was told that this was never going to work. I mean, my mother was begging me on her deathbed to give up this stupid grocery dream. I think we had about four stores back in 1987 and just, you know, go back to school and make something in my life.

So in general, there's just a huge amount of skepticism about what new entrepreneurial ideas. And an entrepreneur has got to have the faith and confidence to move forward, even though people are constantly telling him it's going to fail. In my case, all of that criticism, all those attacks, they just made me more determined, I'm going to prove all these people wrong. I remember feeling that many times. You're wrong. What we're going to do. We're going to grow. We're going to change the world.

I felt that with Mark when he was telling me I was going to wreck the company. And he didn't want to keep any of his stock. And he went all of his stock out before I wrecked the company. So, yeah, that happened several times. I had, I count four different coup attempts that occurred over the history of the company. that I was able to beat back. Talk, does that come from, like, is there a chip on your shoulder or was there at the time that was sort of like, I'm going to prove you wrong?

You know, I don't think I had sort of an inherent chip on my shoulder. It's just, in some ways, I'm a very competitive guy. And when people will tell me it won't work, you're going to fail, it's just, I just, is it a chip on my shoulder? I think a chip on a shoulder is something that you're just kind of mad at the world about. But when people would say what we were doing wasn't going to work, it just made me more determined. It's kind of like you get a competitive challenge from somebody. You could see I was talking about Arawon.

We were off camera that I would love to be competing more aggressively with Aeroon if I was still the CEO. But because general, I just, I love games. I love play. I love to compete. to me, it's really fun. And so when people would tell me that this is not going to work, it's like I'd look at it and I would, you know, maybe they're, are they right? No, they're not right.

I'm going to prove them not right. And if I would hear about a competitor, I just, I feel like that's not unusual for entrepreneurs. They're constantly being told what they're doing is not going to work. And so I think you have to have resilience. And that resilience, in my case, comes from. kind of my competitive spirit, which is like it would just make me more determined. I think that's a healthy thing, by the way, because too many people quit. They hit a roadblock or a setback.

An entrepreneur gets set back so many times. You get knocked down, and you've got to get back up again. It's like if you're a fighter, you know, eventually you might have to admit defeat eventually because you're going to die if you don't. But in general, you just want to keep getting up and see if you can get the next punch in. Anyway, that's how I'm sort of wired. Growth meant more money, more capital needed.

Talk to me about the various sources of capital and sort of when you chose at first to take outside money. Well, of course, like the classic entrepreneurial story, initially it was friends and family. And then my dad taught me, it's my mentor, that the best capital you have, this is very different than the way people think about it today. So the best capital you'll ever have is the capital you make yourself. And if you don't want to lose control of your business, then make sure you're very profitable.

Don't scale too quickly. Grow your business thoughtfully and patiently, patiently, keep your costs down and plow the money back in. And that's how Whole Foods operated for the first many, most first decade of our lives. We took venture capital money in, we started trying to get it in 1988, so 10 years after we started to save for Wade, and we got our first investment in 1989. I called the VCs. I call them hitchhikers with credit cards. And what I mean by that is that they're getting into your car, and as long as you take them where they want to get to, which is an exit, which either has to be a sale or an IPO, and we didn't want to sell the business.

We wanted to grow it ourselves, and so we always had the IPO. The initial public offering was in the back of our minds. But I realized that the VCs, they have a little bit of different agenda. They want to exit the car, but they don't want exit the car too soon. Because they'd like to have the compounding occur while they, once the company does an IPO, most of the VCs, because of their, the way they're structured with their own investors, they have to either distribute that within a year, they generally have to either distribute the stock or sell it on behalf of the investors. And so in Whole Foods's case, we actually wanted to go public because the VCs wanted another round of VC financing, but that was going to give them control of the business. And I'm talking to my dad about it. We said we don't want those guys to get control of the business.

First of all, the first thing we're going to do is replace me and put in a professional manager, which they were trying to do already. It's in the book, the guy that was supposed to start working as president died on the day he was supposed to start work. And it was like, if that's not a sign of the universe, I don't know what is, but we didn't actually hire that person from the supermarket industry. And we got the VCs to good exit. They made a lot of money on Whole Foods. only were in the car for three years from 1989 to 1992. And so they got out of the car. And now we

had our own currency. Once you do a public offering, you can go back to the public markets. We did several rounds of financing over the years to raise additional money from public. So that's why it's an IPO. That's the initial public offering. Corporations do other public offerings after that. And we did several, particularly when we made acquisitions, we needed to do. to cash out the investors in those businesses, sometimes like with fresh fields, we needed to do another public offering in order to just cash out their venture capitalist as well.

So venture capitalists, there can be important in a business, and it's just I always tell young entrepreneurs a couple of things. One is they're going to tell you to try to, don't worry about your burn rate, just grow, grow, grow. and I said, that's not in your best interest. They say that because they're the one supplying the money.

And eventually, if they need to, they'll do a cram down round and basically take it, do it at a much lower price. And you'll have an opportunity to invest, but you've long exhausted your own funds to invest and you'll lose control of your business. I've seen happen many, many, many times. So I always just say, know what you're, when you're an entrepreneur and you need capital,

you oftentimes aren't really thinking about the consequences of it are. So I always try to warn other entrepreneurs, look, when you take the VCs in, just know what you're doing. They're not, they're getting in your car. They're not there for the long ride with you. They're there for their own agenda. You can go together for a while, but you need to be careful. That's just generally my message. The minute something happens, they're thinking already.

They really are. Is there an optimal level of growth? You know, I think there is, but it could vary from business to business. If you're a business like Whole Foods was, which was a retail business, where culture is very important, I found that once our growth got above 24%, do you know what, you know the rule of 72? Yes. So for the listeners, the rule of 72 is if you take your growth rate and divide it into 72, that's how quickly you will double. So let's say you're growing your sales at 24% a year, then 24 into 72 is three. So in three years, you'll actually double your sales.

Or if you're growing at 18%, 18 into 72 is 4. So every four years, you double your sales. So that's really, we found that when we began to grow faster than 24 to 25%, that our culture would begin to get diluted. And it was, we couldn't, the culture can incorporate a certain level of growth before the culture itself begins to fray. Too many new people are coming in. They're not getting indoctrinated or inculturated.

And our business would suffer when we grew that fast. But if you don't grow fast enough, there's another downside. If you're not growing fast enough, then people will leave, they don't want to stick with your company because they don't feel like they have very many opportunities. I don't, I can't get advanced. You know, the person, my, my leader ahead of me is the same age as me and she's not going anywhere. But if you're opening up new stores, then you're opening up new opportunities. And that really gets people excited because their own dreams get tied into the business. So there is an optimum level of growth. And it's not too little that you'll

lose people and not so high that your culture gets diluted down and changes. negatively. So at Whole Foods, that sweet spot for us was between about 15 and 25%. But I see other businesses, particularly digital businesses that can scale at enormous rates without cultural problems because they're doing it with so few people. I think of it sort of as dividing the pie versus growing the pie. And the minute you stop growing the pie, people are focused on dividing it. That's true. And that causes a lot of internal politics and organizations. It does. It's sharp. If you, one reason you got to, and another thing is if you keep focused on growth, then people are busy not infighting because they've got enough work to do that they don't

look around for something to, you know, occupy their time. You did over, I think, 20 acquisitions there. What have you learned? It did 23. What have you, and you only had one, one that went bad, I think. Yeah, and it was not, because it was not retail stores, that was Amryon. It was, it was, it was, it was a mail order supplement company that we thought we could use that to springboard into the dot-com boom back in the late 90s. And the problem was the people that bought supplements with a catalog, they were slow adopters to the internet because they were mostly in their 60s, 70s, and they never, so they didn't

really make the adoption. So that was a mistake on our part. That one failed. What did you learn about acquisitions that, I mean, that batting average is. It's just insane. It's pretty good, but the thing about it is we were always, all the other acquisitions were retail stores, and if they had problems, the team could know how to fix them, but we had nobody in our team that knew how to fix a mail order catalog that was slowly dying,

so I couldn't send my best guy, go fix that. They didn't know what to do, but if I sent my best guy to fix some stores we acquired in Detroit, they could go fix them. So I learned, stick to your knitting, stick to what you know. stick what you know how to do, and also, if there are problems, you know how to fix them. Some of the acquisitions you made, you had choices, and one of the early ones was, what was the California chain, Mrs. Guchess? Mrs. Guchess. You weren't, you didn't have the capital at that point to do the acquisition. You weren't ready for it. But we were public, and so we did have our currency. When my dad was objecting to that merger, he was saying, John, you have your hand.

with Bread and Circus, which was still less than a year old. You don't have the capacity to take on the opposite coast. You're just, you're going to, you can't handle it. You're going to dilute your talent down. And he was right. But as I kept pointing out, it's like, you're right. But this opportunity is not going to come again. This is the crown jewel natural food store chain on the West Coast.

If we don't take them, somebody else is. We'll have to figure out how to do it. And we did. And we did acquire him. I mean, we did figure out how to do it, mostly by leaving them alone. They were already, we didn't have to integrate them. They were Mrs. Gooch's. They already had great management.

We pretty much just left them alone for the first few years and didn't try to integrate them into our company or culture. Just let them operate independently. That was the solution, and it worked. That's a clever solution. I like the fact that, you know, often we're not ready for that next leap, that next level. We just finished, you know, maybe we just finished an acquisition or something, but it doesn't come up again, right? If you didn't buy that, you weren't going to get another chance. You have to, one of the secrets to success in life and business, you have to seize the opportunities

when they're there. If you don't, these great opportunities only come, they don't come around every day. And he who, you know, he who hesitates lost, if you're not willing to seize that opportunity, somebody else will, you have to, you have to know when to go all in. It's, you know, when to make the bets. I knew they were very profitable. they had a great brand, very successful, did not want to lose those guys. And plus, if we didn't get them, somebody else would, and they would end up being this great competitor for us down the road. We just had to make that deal.

We paid a really rich price for it, too. You guys created a network, I think, early on of sort of the operators of the whole food stores and you would meet regularly. Yeah, what people don't realize is that when we invented the natural food supermarkets, It was co-invented by a few different people in different parts of the country. There hadn't been, there were small natural food stores. There hadn't been these supermarkets, one-stop shops. And the ones of us that were doing it, we connected with each other and we developed friendships.

We get together three times a year, a different operator would host. And that's how I got to be friends with the people running Mrs. Gooches, the people running bread and circus, the people running alfalfas in Colorado and Unicorn. Village in Florida. We were all meeting together and we were we were all in this common mission. We wanted to sell natural organic foods. We were spreading it and we were helping each other out, sharing financial information. We really bonded well. It was a, it was a wonderful time because I felt like I was part of this larger movement. And eventually Whole Foods ended up, all those entrepreneurs ultimately sold out to us. So Natural Foods Network ended up being this great

vehicle of relationship building that allowed those entrepreneurs to all cash out and become millionaires and make a lot of money and gave Whole Foods what we needed, which was these various geographical platforms that we could use to expand and grow off of. One of the curious parts about this for me was you were so open about your books and what you were doing. The best way to understand it was that we really did all feel like we were part of this movement that was going to change the way America ate. We were all very idealistic, the original founders were.

Later on, you get the venture capitals coming in, seeing this as a good opportunity. But in the early days, we were all, we were young and idealistic and really thought the world would change the way at 8. And to a large extent, it did. I mean, the world is very different now that the natural foods organic movement came out. It's not the same as it was. And Whole Foods had a big, I think over time, it changed. the world. Why do you think you were the one to be able to come out and buy all of those people versus the other operators? I think it was a lot of them just didn't have the, they were like

my friend Mark. They liked being my co-founder Mark. They just wanted to be a big wheel and their, Mark just would be happy just to be a big wheel with that one store. And I think that's true of the other people. They, they, they, they were just happy to get the money and they got local notoriety and whatnot. They didn't have the vision or desire really to build a chain. I just think I did. I had that kind of drive. I wanted, it to me, it was like, this game's getting more and more fun. Let's just keep, let's just keep growing it and building it. And that's just the way I was wired, and I think the other people were wired a little bit differently. Is there a difference between, or actually I'll rephrase this, what's the difference between professional management

and a founder-led company? It's a huge difference. Nobody ever loves their business as much as a founder does. And, I mean, I led Whole Foods for 44 years. I will always, it's like if you're a parent, your child grows up, I raised that child as best I can, it's on its own now. I can't tell Whole Foods what to do anymore. And you just hope you put inculcated good values and that they have a happy life.

I will always love Whole Foods. I will always wish the very best for Whole Foods, even though I'm not in it any longer. And in fact, I deliberately try to stay out of the loop because it bothers me when I hear things. So I just try to leave it alone and do other things. But professional managers, they're not, I'm not saying they couldn't be, but in my experience, they're very, they're not usually mission driven. They've gotten their MBA from Harvard or Wharton or Stanford. They're very intelligent. They work hard, but working at Whole Foods or Amazon, it's just part of their career path.

They want to put it on their resume, and then they want to use that to leverage to get the next promotion, maybe at another company. It's a stepping stone. It's a stepping stone. Thank you. That's exactly correct. And one of the things at Whole Food had for so long is we just, did most of our promotions from within. And so we built this very loyal, committed, mission-driven business that was very unlike most of the other businesses I saw. And when we brought professionals

in, we spent a lot of time making sure they were good cultural fits, at least in the early days. And later on, as we got bigger and more famous, we began to attract people who really were looking in it as more of a career move and not, and we never could get them to buy in to the mission. And I think what happens after the founders leave and retire, that it's very difficult for a company to be anything but professional you led at that point going after that. And that's one reason most companies don't last that long. You start to build. As professionalism builds, it begins to hire more professionals.

and your bureaucracy begins to expand as well. You get a bigger and bigger legal department, a bigger and bigger HR department. They have their own sort of professional ethics, their own professional goals they want to accomplish. But it's hard to manage the cost now because the professionals are running their own little fiefdoms. And you either say, you have to do sort of what Amazon has done

from time to time is like, everybody has to do a 10% cut. that, well, it's kind of arbitrary. That hurts morale. But how else do you check your growing bureaucracy? The way capitalism deals with it is that these big corporations eventually just get sort of sclerotic. And entrepreneurs come in and create these very new businesses

that are very nimble, that are young, that haven't built up a bureaucracy yet. I'm having this time as building Love Life now, And I'm determined, you know, as long as I'm still running the company that we're not going to build up a big bureaucracy because, I mean, you just have to hold it in check. I don't think I did as good a job at Whole Foods of checking that bureaucracy once it got. Once the professionalism got in there, I had trouble controlling it. I'm going to make sure it doesn't get a good fit hold into love life. How did that show up?

Was that sort of through cost expansion or was it sort of? You hire people to try to do something you're unable to do. Or you're just like, we need to hire somebody to work on that. And then, of course, they can't do it by themselves, so they have to build a team. And what's not happening is sort of like the federal government. They add new government departments on them. They don't sunset them. They don't get rid of them.

They just add new ones on. Well, corporations have more of a profit. They just can't operate indefinitely building up a deficit the way our federal government can do. So there is the shareholder push to keep control of the cost to be, to be sure. But it's hard to do it surgically. You end up doing it, you take these, everybody figure out how to cut your department 5% or 10% or whatever. That also kills morale when you start doing layoffs. So the better way is not to build it up in the first place.

And that just means being skilled at saying no. No, we're not going to do that. No. and because there's always things that are nice to do. And when you're profitable and you have the resources to do it, you start to add things on. But you don't do a good job of sunsetting them or getting rid of them or just evaluating their cost effectiveness.

I think the most successful businesses and the most successful entrepreneurs spend a lot of time worrying about their cost. And even when they're successful, one of my mistakes, I think, in looking back was as we got more and more successful, I tended to just not say no enough. I'd still do it more than anybody else, but it was easy to just say yes and figure you can grow your way out of it. Talk to me a little bit more, but the focus aspect of this and saying no and what you say no to because you have an organization that you're running. It's large. You're successful. You're

making money. People are coming to you with these ideas, maybe great projections, maybe not. they just need a yes from you. And at that point, you're disconnected from every, you don't see the... And you can't easily evaluate whether what they're proposing is going to be successful or not. And generally, when something is failing, the people that are responsible for don't want to admit it's failing. And what they do is that we need more resources. I can make this strict, but you need to give more resources. So at some point, you'll have to say no.

It's better to say no early on. or if you just want to you just have to set very limited budgets for it and then not let those budgets increase because the tend to sure budgets to sort of grow automatically it is just well we're going to have a you know we're going to have a 7% increase in that budget and it's like well is that worth it I remember the we did this for years and it was my least favorite day of the year we would we would we would we would bring the leaders in to to talk about their budgets. And I hated that day because I was always the Grinch. I was always the one saying no. Or we're going to eliminate that. And probably we should have kept doing that.

We stopped doing it. And eventually they said, we don't need to do this anymore. And because it was such a painful day for me, because I ended up having to be the asshole, I guess every company needs somebody that, that's really watching the focusing, watching the cost. Sometimes that's the chief financial officer. But in general, it needs to be kind of a cultural thing.

Whole Foods was not as good at that if we were at other things. And I wasn't as good at that as I should have been. With Amex Platinum, access to exclusive Amex pre-sale tickets can score you a spot trackside. So being a fan for life turns into the trip of a lifetime. That's the powerful backing of Amex. Pre-sale tickets for future events subject to availability and varied by race. Terms and conditions apply. Learn more at mx.ca.com.

You can get protein at home or a protein latte at Tim's. No powders, no blenders, no shakers. Starting at 17 grams per medium latte, Tim's new protein lattes, protein without all the work, at participating restaurants in Canada. There's a natural entropy to not only bureaucracy, but expenses, and just the scope of the work that you take on. It is.

It's really, it's, it's something that as a business grows, that you have to be even more vigilant about it because it's so many things are happening that you can't even, you can't even see them anymore. Your company's gotten, it's grown beyond your ability to actually understand everything that's going on in it. And so you have to, you delegated that out and you have to trust those leaders. And so that's why companies end up getting managed a lot by their budgets. and you're determining where you're going to expand, give resources to, and where you're going to take resources away from. They all would make cases for why they need more resources, but your function as the leader is to make the difficult decisions

that, well, actually, we're going to stop funding that, or we'll let that run one more year, but you'll need to hit these objectives or we're going to pull the plug on it. So, you know, I've got to say, because I identify as an entrepreneur, as Whole Foods got to be larger and larger, a lot of ways I enjoyed it less. because it's the creative part that's fun. And that's what I'm doing again with Love Life,

you know, putting deals together, thinking about, you know, this whole health scene is changing rapidly. Who are you going to partner with? What are you going to let go of? What do we need to invest in? And it's, you know, I'm thinking about new ideas every day. It's, that's very fun.

But when you're beginning to manage a really big corporation, ah, it's more about, I didn't get to be as creative any longer. It wasn't, it wasn't, my honest. entrepreneurial spirit was sort of not nearly as engaged as it was. And that was only about the last 10 years or so. Remember, 44 years a long time. So there was a nice, long creative run. And it didn't like change overnight. It just slowly, as the bureaucracy got bigger, as I was dealing more with problems rather than opportunities, my enjoyment of the business began to shift. Are there things that you said yes to that a more professional manager wouldn't have said yes to?

I'm thinking things that don't make sense on a spreadsheet that makes sense for the company. Well, of course. I mean, that's the job of the entrepreneur is to see things as professionals. It would not see. Or the professionals are making a more calculated decision on, is this good for my career or not? Or if this succeeds, will it really help my career? But if it fails, will I end up getting fired? the entrepreneur is just going to they're going to take a more of a let's try it let's see what happens

and if it works we'll give more money to it if it doesn't work we'll we'll discontinue it I've never had a problem it's always been pretty easy for me to to try things make mistakes and admit admit that it's a mistake and discontinue it it's like we tried that it didn't work it's okay um professionals sometimes have trouble letting go of that because they worry that this loss is going to be a blemish on their resume. An entrepreneur, I don't think quite thinks that way. Throughout this, you had, I think, four coup attempts at your leadership at various stages. Talk to me about what that felt like and how you dealt with those. You know, I use a good metaphor, but it's only for the people

that know something about the Lord of the Rings. Fortunately, the movies came out, but those books had a big influence on me when I was younger. I think I read those, the three books, five times before I got out of high school. It was kind of like my cult reading thing when I was a teenager. And then, of course, the movies came out. I've seen them multiple times. And in the Lord of the Rings, there's this one ring. The Amazon now has the Rings of Power show on, and they're showing how these rings were made, which is not actually in the Lord of the Rings. So it's really, really interesting stuff. And the one ring, the ring of power, it's a great metaphor because there are three things that I've found are very corrupting for most people. Not everyone, but most people could be corrupted by money, fame, and power.

Because what people want is love and they think those things will give them love if they have enough of them. You have enough money or power or fame. But in fact, those things do not satisfy the soul. And most people can easily be corrupted and addicted by those things. If you have money, you start to compare yourself to people that have more money than you and you're dissatisfied. If you have fame, you have certain Instagram followers or you see who has more and you want more. It doesn't really lead to happiness if you get more. And power, you see this with politicians, they want more power.

And these things, again, do not satisfy the soul. So these are rings, the ring of power is corrupting. Well, in this case, I'm the CEO. I'm getting the most money or the most fame and the most power. And other people's coveted those things. And they always felt like they could do a better job. The coup attempts were always, I think, well intended. or

people doing them thought they were well intended they thought they really would do a better job than me and if I could just get out of the way then they would be able to wear the ring and I wasn't going to just get out of the way so they did what they could to get me out of the way I think that's where the coups came from and I just think partly human nature

as you acquired more wealth and power and fame as you guys grew, how did you stay so grounded? Well, of course, other people might tell you that they didn't think I stayed that grounded. But I think I did stay pretty grounded. And I think it's because, you know, I have this whole background in philosophy. And, you know, my book is kind of about my own spiritual journey. And I got really clear at a pretty young age, like back in my existential days, back when I was in my

late 20s and then the psychedelics took it to another level. I got really clear about death. What I mean about that is that we're all going to die. I got that at a varying age. And most people, they're always in denial. There's a big denial of death that when you're young, it's like, well, that's what old people do, but I'm not old. And then I got my whole life ahead of me, and they just put it out of their mind. I was just aware that I only had so much time that what do I want to do?

So my big question is, what do I want to do with the time that I have? So I always had this awareness that time was running out and that I needed to get on with stuff. And so the successes I had, it's like I once heard that somebody asked Picasso what his favorite painting was. And he said, the one I'm working on right now. And so I never, I don't think that stuff corrupted me because I didn't care about it. to me it was creating the next thing. It was the next thing I was doing that was fulfilling me. I didn't think money or fame or power would really be very satisfying. And they weren't. I remember when I met Jeff Bezos for the first time, we were, it was, well,

not it was second time I met him at this conference and we'd hit it off. But when we were going up there to talk about maybe Amazon buying Whole Foods, you know, we were meeting at Jeff's boat house, which was next to his mansion, like Washington. But they wouldn't tell us who the meeting place was until we landed. And then they gave us an address. When we got there, we were searched. Our car was searched because they were worried about somebody trying to kill Jeff. And I was thinking to myself, I would never want to be so rich and so famous and so powerful that I couldn't live a normal life that I didn't have any anonymity. That was like, like a real wake-up call. It's like, I'm sure Jeff's one of the most envied people in the world,

but I would not want to have to live my life like that. So a little bit of fame, a little bit of money, a little bit of power, to a certain point, is gratifying to the soul. But past that point, you get diminishing returns. It's no longer bringing you any kind of happiness. It's now a burden. So I got clear about death at a pretty young age, and I just wanted to accomplish things. think my accomplishment's for that big a deal. Other people are accomplishing stuff as well. So I didn't spend a lot of time comparing myself to others. Either people that had less or had more. I was too busy creating the next painting because that was what was fun. That was what was exciting. That was where the joy and the love came. And then the relationships with the people

that are doing it with. That's the real satisfying part. When did you realize that love was the center of everything? I think I've had glimpses of it many times. I mean, I talked about it the first time I had that ego death and LSD that I had this realization that we were all. It was just the one being that it was all founded ultimately on play and love and games. And then when I did MDMA for the first time, Adam, MDMA, ecstasy, Molly, when it was legal back in 1984, that just burst my heart open. And I wrote it down. I was like, never forget this. There is nothing more important than love.

course you will forget it, but once you had that deep connection to it, you never quite forget it. And then my spiritual path took me, you know, studying the course of miracles, doing breath work, doing meditation. I wanted to go deeper into love. And so that's just sort of been a life, part of my life purpose, life mission is to, because I just, that's what makes life worthwhile. Everybody that gets to the, and they're on their deathbed, if you've made, Imagine you're on your deathbed. Do you think he'll be thinking, I wish I'd made more money?

I wish I'd been richer. I wish I'd been more famous. I wish I'd had more power. No, you're going to be thinking about, I wish I'd told my son how much I loved him. I wish I hadn't let that relationship go. I wish I hadn't said those things. Your regrets are always going to be about relationships

and the ways that love failed in your life. I mean, that's the clearest indication that loves the most important thing is because that's what happens when you're dying is you're looking back and you're thinking about the people that you loved and didn't love well enough. You're not thinking about the other shit.

You've let it go. And so I've just been clear about that for a long time. How do you learn to love yourself? There's always like an inner critic, right? To love yourself unconditionally. Of course, you know, you're asking great questions and you're also leading me through the book pretty well. So, in my case, my whole life in some ways has been an attempt to be able to accept myself

because I have in it. I think everybody has an internal critic. We're not just having an internal critic. That internal critic is judging everybody else and then frequently judging ourselves. It's inadequate, not perfect. And in my case, in some ways, the whole life adventure, and you get back into the deep thing about the way I was raised, my parents, my, you know, I was kind of that raised were if I brought a home a report card and had all A's and one B, it was like, what are you going to do about that

B, son? It's like, there was no, like, that's really great, fantastic report card. And then, when I'd have failures, you know, my own self-judgments would be pretty intense. So I think you come to love yourself. And what I experienced when I finally did it, and it was just a few years ago now, well, a little over two years ago, on a guided spiritual journey, I experienced, I got really in touch with my, like my inner child, this little boy that was so very beautiful and so idealistic and so loving and just wanted to help people. And it had been hurt. As we go through life, we get wounded. And the little boy, it had many wounds. But he was still, he was still this beautiful little boy, and I saw him very clearly. I saw that child like of myself,

and I realized that my entire life, I'd tried to do good, and I'd made a lot of mistakes. I'd hurt people, but I knew that at the core, there was this good person that really loved. And I saw that, and that was the first time I really, I think, unconditionally loved myself. That's really powerful. Let's go back to the Amazon's But before we get there, let's rewind. So crisis hits, sales aren't what's expected. Jana Partners, who's an optimist firm, comes in. Walk me through from that moment to the meeting with Bezos.

So, Whole Foods, you know, it's, we weren't in, people think we were like failing or in decline, and that was not. true. Whole Foods was actually incredibly successful. We had, at the time, the activist investors invested in Whole Foods. We had the highest sales per square foot of any public food retailer. We'd had the same store sales growth of 8% over 30 plus year period. By every, we, almost every objective measurement, Whole Foods was the most profitable food retailer, grocery store operator out there. We had so many wonderful things going for us. But competition was catching up with us. We were being copied. The whole paycheck narrative. The media just ran wild with that. And we were increasingly being tacked by governments. I talked to them in the book about how we had

First California and then in New York attacked us for mispricing, which we weren't deliberately mispricing anything. And we were making more mistakes in favor of the customers and others. But it's just on the things like cut fruit. You have a little tear weight. and you could be off a penny or two. But if you have an ambitious weights and measures, Department of Consumer Affairs, it's kind of an extortion thing. And that's what happened to us, both California and New York,

generating massively negative publicity. That drove our sales down. We lost a lot of customers from that when it happened in New York. And then what we needed to do was we needed to be able to drop our prices across the whole company. But we began to start having that happening. we got attacked by activists. Activists are shareholder activists.

We've been attacked by lots of other activists over the years, from animal rights activists to a variety of different kinds of activists. But these were particularly shareholder activists. They don't think the business is being managed to maximize shareholder value. And so this particular group of activists was Jana Partners. And they, we met with, them soon after they took a position and to find out what, you know, if we could work together to try to create more value for the shareholders. And they had this PowerPoint presentation and

they showed it to me and my leadership team and a couple of my directors. And, you know, there were some things in it that were accurate and there were a lot of things that were not accurate. I asked them, could I get a copy of that presentation that you're making? Because I'd like to address some of these concerns. I don't think everything you put in there's accurate. I'd like to correct the record. He says, no, you can't have it. And I said, well, why not? And he says, well, we don't want to. Listen, John, let me just tell you what's going to happen here.

Let's cut to the chase. We're going to take over Whole Foods. Here's how we're going to do it. We're going to take over your board first. After we do that, we're going to fire you and any other management people that won't line up with us. And then we're going to put this up for a bid and sell it to the highest bidder. And there's not an effing thing you can do about it and walked out of the room. It's like, whoa, I don't think we're going to have a partnership with these guys.

and, you know, we had our bankers, we had our lawyers, and we began to look around for what I would call the win, win, win solution. How do we get a win for every one of our stakeholders? How can we do something? It would be best for our customers, best for our team members, best for our suppliers, best for our investors, best for the communities that we're part of. I started asking that question. I was putting that question, you might say, out to my, to the universe, out to my soul. Give me an answer for this question. And we looked at all the different alternatives, The most obvious one is we'll fight Jana. All my competitive instincts were, you know,

and we were beat those guys. And so that was the first thing. But we needed time to do that. We know we needed to reverse our same store sales decline. We needed to have a chance to change our prices. But if you're selling something for a dollar, and now you're selling it for 90 cents, in the short run, in the long run, that's a good decision probably.

But in the short run, your sales just, dropped from a dollar in 90 cents your same store sales just went negative your uh your profits there's a lag period your profits are going to are going to fall and then maybe a couple years from now uh when people become aware that you have these lower prices you'll see your traffic go up and it'll end up being a really good business decision we needed that time jana wasn't going to give it to us so fighting them was going to be very difficult, and they knew that. Secondly, we could find a sympathetic investor, somebody who would buy us and give us the time we needed

to turn the business around, drop the prices and not worry. We'd be off the public markets, and the logic one, there are people that do that. Warren Buffett's like the best example, and we actually contacted Warren and asked him if you'd be interested, and he has a good sense of humor, and he said, dot um ah you know i own berry queen but i don't think hopefully is a good brand fit for me um and so nothing came of that and then it was maybe we could take it private am i going private

would mean we'd you'd work with a private equity firm or two and they they would do it's a kind of a two-step process where they they would they would put up some money and they'd borrow money from the rest of the money needed from a consortium of investment banks and then after they get control of the company, the second step is they would pay back that bridge loan and they got from the investment banks and they would borrow longer-term money using the company's own balance sheet to finance the loan, which means they would borrow, say they'd Whole Foods were sold Amazon for $13.7 billion, so it took it private for the same amount. They'd put in about a billion and they'd borrow $12.7 billion. And so Whole Foods would be on the hook for the interest

rates of that. Now, we had really good cash flow. We were very, had EBITDA was very high. I think we were making about $1.3 billion in EBITDA when Jan and borrowed us. So it's, again, the idea of the whole food was failing in some way. That's just a medium myth. And so we could have serviced the debt provided that 2008 didn't happen again, right? In 2008, what do they call it, the plug went out of the tub, and we saw the whole economy we shrink. Our Whole Foods market stock dropped 90%. We were selling it three times our cash flow.

We could have bought our company and paid for it in three years with our own cash flow. And so if a situation like that occurred again, we would have failed. And so the going private option was one we seriously looked at, but then the private equity firms would have control of the business. Remember, I wanted to get those venture capital, hitchhikers out of the cars. Now I'm taking them into the car, but they're definitely driving the car. You're not in control any longer. They're in control, and their agendas are very different. And I just thought it was very risky. You're risking the business. And if it works, they could make, well, they could make billions of dollars. That's why they'd be interesting going private. And so I couldn't find the right

solution. And then I kept, but I kept asking the question again and again and again, what's the win, win, win solution for all the stakeholders? And then one day, I woke up, right when I I woke up, the idea flashed in my mind, what about Amazon? That was a question. What about Amazon? And I'd met Jeff the year before at this Microsoft CEO summit, and I hit it off with Jeff. We did a panel together, and he was very interested in Whole Foods. We talked about Whole Foods a lot. He also was interested in science fiction and fantasy, and we read a lot of the same books, like the Lord of the Rings. and he was into scuba diving, and I've been scuba diving a long time

and dive at all over the world. So we hit it off. We had a good rapport. So then he said, in fact, this has been a great conversation. Let's get together sometime and let's talk further. And I said, well, you got my number, but I didn't hear from him.

But here it is, and I'm thinking, what about Amazon? Because I knew they were getting, I'd read that they were getting more and more interested in the food retailing. I knew that Amazon Fresh was kind of struggling as a business, but they hadn't opened up any physical stores yet. And so I said, well, let's find out. And we called them up and they wanted to talk. And we flew into Seattle. And I had three

executives with me and Jeff had three with him. And we had kind of like, you know, when you fall in love with somebody, you'll have this amazing conversation where your souls kind of meet. That happened on that conversation with Amazon that day. We talked about all the things we could do. together and we got really excited about the technology and they told us about their they wanted to be they really wanted to be big in grocery and they thought whole foods could help them and also i like the amazon team they weren't these kind of professional financial types like i thought i was that i thought they probably were they were really good guys super smart you know jeff's really brilliant man himself and he hired really brilliant people to work with him and but they were kind of regular

were people. They weren't, they weren't stuffed shirts. They were really interesting guys with diverse, diverse and clever minds like Jeff. So I remember our team retreated after we talked for about three hours and our team went to a restaurant to kind of process and we're kind of looking around at each other saying, that was an incredible conversation. Wow, man, those guys are smart. I think we could do some amazing stuff together. And then we're looking around and I voiced it for the whole group. I said, maybe so, but do you think they liked us too? And it turned out they did because they came down just three days later and six weeks after that first meeting we had signed an agreement to get married to merge and yeah what kind of questions

did the the amazon team ask at that meeting of you goes everything the thing i liked about amazon was how good their questions were you can oftentimes tell about somebody's intelligence by how good the questions they're asking by the way you're asking me good at questions and And they really were asking great questions, and then that would lead to answers. You know, I'm very candid, so I was answering very truthfully to their questions unless I thought it would harm her business in some way. And then, but they were, we'd ask them questions, and they would be equally forthcoming. So it was a very, very good dialogue. Just, they wanted to understand their business.

They just, you know, and they, they were asking the right questions to how to understand it. Why are your same store sales going down? And then you could explain about competition, and I could explain about, well, we know we can get it back, but we need to drop prices. So let me just tell you so that when the deal got went through, remember I was asking that question, what's the win-win solution for all of our stakeholders? The Amazon merger, every one of our stakeholders benefited from that merger. We really did drop our prices. We dropped our prices four times significantly in the first two years of that merger. I hardly ever hear the whole paycheck narrative any longer.

Hopefully to Silsen is expensive, but I don't hear that narrative any longer because we're far more competitive, price-wise, than we used to be. It cost Amazon hundreds of millions of dollars to invest that, but they think long-term. They, Jeff and his team think 10, 15, 20 years in the future. They're willing to make that investment. They raised our wages. And every one of our hourly people, Amazon decided we're going to, this was back in 2017, within 30 days in the merger, they said, we're going to raise the minimum starting wage at

15 bucks. So that meant everybody got a raise because of people that were at 1525. And, you know, the gap, they couldn't stay at 1525. They needed to go up too. So pretty much every hourly person got a raise. It was good for our suppliers. They're not only to Amazon not cutting them or suppliers out, but they studied our sales. And they saw, wow. They picked up a ton of our suppliers, and so that was good for them. It was good for our investors, right? They got about a 30% premium on the deal from what the stock had been before Jana got involved. And then it was good for our government.

They got a massive amount of capital gains taxes from the deal, and good for our communities that we're part of, because Amazon did not change our philanthropic, that we had, hopefully, has three foundations. not only did Amazon not tell us we had to stop doing those, they contributed additional monies to it. So every one of our stakeholders was a winner in that. It doesn't mean that that merger has been perfect. There's been a lot of things. I talk a little bit about it in the book and stuff off the record I won't talk about here, but I had my share of disagreements with Amazon. I fought with them many times. And ultimately, that led to me to retire. What do you think of activist shareholders having been a public company, CEO, and founder at that? Yeah, it's like I'm not opposed to shareholder activist trying to help, you know,

help companies in constructive ways to become more successful and profitable. But I think it's a flaw in the current in the United States, it's a flaw in our system because we treat short-term shareholders with the same type of respect that you treat long-term shareholders. I think that long-term shareholders that are really making long-term bets on the business and lets the team execute over the long-term, that's really what you need. When you have short-term people that are just trying to make a pop to the stock price in a short period of time, which are what shareholder activists are trying to do, get a sale, I don't think that's good for the economy. And there's pretty simple solutions to it. We need to make a distinction in

tax policy. Right now, a short-term capital gains, anything less than one year. What I'd love to see is that if you held something for, say, 10 years, maybe your taxes, capital gains taxes went down to close to zero. And if you sold it in less than a year, maybe they'd be much higher. Maybe it'd be 50 or 60 percent. So that you'd create these incentives to hold longer, and that would make a shareholder activist at least have to hold a stock for a couple of years so they they'd have less lower gains also those gains that they they need to make need to be the individual shareholders are oftentimes taxed on those situations and the management is not thinking about taxation at all in those decisions so it's almost as if they should be tax first and then

the distribution shouldn't be taxed at all that would be another solution I think think there's many ways that you can make changes in regulations and laws that would make shareholder activists constructive and a good thing for business rather than what it is today to be seen as they're kind of pirates. So I do think that its reform could be possible there. Hit pause on whatever you're listening to and hit play on your next adventure. This fall get double points on every qualified stay. Life's the trip. Make the most of it at Best Western. Visit bestwestern.com for complete terms and conditions. It's Monday morning.

Your team just finished a meeting, and yet people still aren't sure about the next steps. ToDoist helps small teams get organized without the setup headache. See what's due, who's doing what, and what's falling behind, all in one calm, shared workspace. Try ToDoist free and bring some clarity to your chaos. Visit todoist.com. A lot of founders today seem to be going dual class shares, where they either retain a super voting share or they issue non-voting shares. It may not surprise you that Love Life has that in our structure there. That didn't really exist when Whole Foods got founded back in 1978, but no, we have two classes of shares.

I've learned that lesson. Talk to me about sort of the clashing world views, I guess, between socialism and capitalism and how you think about these things. That's a much longer topic. So you want to dive into it? Sure, let's go. Well, first, I'm like a, I'm a totally enthusiastic capitalist, and meaning I'm not, I'm not seen as unbiased in this when people talk to me about it because I know my history. I know what the world is like 200 years ago. As capitalism got started in the late 18th century, so the last 250 years, but just 200 years ago, these statistics tell you all you need to know.

200 years ago, 94% of everyone alive on the planet lived on less than $2 a day and today's dollars. 85% lived on less than $1 a day. The average lifespan was a $30. Oh, by the way, so let's give it today, the only 6% of the world's population lives on less than $2 a day. It's gone from 94% to 6% in the last 250 years. The average lifespan 200 years ago was 30 now. It's across the planet. It's getting closer to 80.

It's gone from about 77. I think it's 76 for men and 78 for women across the whole planet from 30. Illiteracy rates 200 years ago, 88% of the people alive couldn't read. Now it's under 10%. and child birth, I mean child deaths and child deaths, children dying before their age of 10. The type of advancements we've made in vaccines, in antibiotics, modern dentistry, the amazing innovations that we have today and music and it's the world is so much better than it was. The people that complain about the world being a disaster don't put it in a historical context.

Do we have problems today? Sure we do. Of course we do. We always will have problems, by the way. But these are different problems than we had. When people talk about existential threat of climate, the existential threats are far less today than they were 200 years ago. And it's been capitalism. Science plus capitalism has allowed humanity to prosper collectively. We're so much better off. It's not utopia. It's not perfect. And that's why socialism, still holds such an attraction, particularly for young people, is they're born and they see, they don't see racism the way I see it in the context of what it was like in the United States 200 years ago or 170 years ago or even when I was a little boy growing up in Houston, Texas, and they had Jim Crow laws. They had racial segregation, it was legal. There's so much less racism today than there was. In fact, we're the least racist we've ever been.

There's always going to be inequality, but there's no more inequality today than there was at the founding of our republic. And that's just people change in terms of where they are in that hierarchy, but there's always going to be inequalities. It's because there's different. There's inequalities due to people's certain constitutional abilities, intelligence, the way their parents raised them, the communities that are born in. there's just lots of reasons why some people become more successful than others. My point is socialism is a utopian dream that's failed. It's a God that failed. There are 41 countries in the last 120 years, starting with Russia in 1917 or 1918, that have tried socialism. Every one of them has failed. All 41 have failed. Socialism has never

worked. And when people talk about, what about the Nordic countries? It's like, they're not socialistic. If you look at the Economic Freedom Index, which charts how economically free a country is, all the Nordic countries are in the top 25 in the entire world. And three of those five are ahead of the United States in economic freedom. Well, what about Sweden? It's like, well, Sweden's my favorite example, because when you talk about Sweden, it's like, Let's look at what Sweden does. Did they lock down during COVID? They didn't.

No, they didn't. They stayed open. And they said that, everybody said that was a disaster. But now if you look at deaths for Sweden over the last four years from COVID, they're pretty good compared to much better than the United States, for example. That's on a per capita basis, too, just for everybody. Yes, per capita basis. Of course, there's a much lower population there. Sweden's economic freedom index is lower than the United States.

There, I think the United States is now up to about like number 18. Sweden is like number 15 or 16. Corporate tax rates in Sweden are like 20%. I always tell people, so would you favor corporate tax rates dropping in the United States down to 20%? Well, no. School choice. Sweden has universal school choice. Students can go to any school they want to. The students make the choices. The parents and students make the choices. school choices bitterly fought against the United States by the, well, the progressives and the teachers unions. Sweden's a very progressive country that's universalized school choice. Sweden has amazing freedoms in other areas, and they're so far from a socialistic, it's just they have a big social welfare program.

their health care, but they're also... That's kind of the ideal, though, isn't it? You have capitalism and it propels you forward, but then you have a social safety now. I always tell people, it's like, if you want to use Sweden as an example, you've got to take the whole shooting match. I would take the Swedish. If you gave me everything Sweden has, but they don't want to take the low corporate taxes. They don't want to take the universal health care.

They don't want to take all the things of Sweden. They want to lock down the... economy and they don't want to take all of Sweden, they just want to cherry pick it. But if you took it all, I'd probably, I'd be, because what the tradeoff is, they're going to have those big social welfare programs that Sweden has, and you're going to have higher personal income taxes, but you're going to have lower corporate income taxes and you're going to have more economic freedom. I'd probably take the Swedish package if you could all, but you'd have to give me the whole thing. And people don't see it that way. Why do you think we're still, we as a

society, you know, we as individuals are drawn to it still? I mean, I mean, there's talk about price caps, there's all of this stuff, and it seems to be this time is different. We're smarter than all the other 41 times it's been tried and failed. It's very, in a capitalistic society where you have economic freedom and free markets, no one's actually running things. Markets are self-adapting and correcting. Many people are very uncomfortable without idea. They think somebody has to be in control of it all. that and so they're they're willing to give up their economic and personal freedoms for the security of thinking somebody's in control someone's doing it and they believe that despite all the other failures which by the way they're not aware of they just can rationalize those failures or way well that was Stalin or that was Mao or that was Castro or that was Hugo Chavez these were dictators if you know we just got to get

right people in. If we get the right people in running things, it'll be different this time. What they don't understand is the right people never get in. Because the people that are most drawn to power and control of others, the monsters, they eventually eliminate all the well-meaning professors and put them in the gulags. And the dictators end up in power and in charge. And you lose your economic freedom and you end up these totalitarian nightmares that started well-intentioned with good intentions, but when you take away individual freedom, almost by definition, socialism cannot allow economic freedom. You can't allow individuals to make these decisions. People have to do what they're told, and you end up using coercion and force

to try to make the atopia work. It's very interesting. If you study like, take the kibbutz in Israel, which was such a well-intentioned socialist movement, and the people that founded it were socialist. And it's what happens. The first generation was so idealistic and made all these sacrifices for the kibbutz. The second generation, they're not quite as much into it. They're more, they want to have more private possessions. They're not willing. They don't want their children raised by the collective. They want to raise their children themselves. They want to have their own possessions. So you might say that individualism starts to creep back in. And by the third generation, they don't even want to stay in the kibbutz. They want to get the hell out into the rest of the

world. The world's a big place, lots of opportunities. So those ideals ultimately are not what most people want. And so socialism is bound to fail. It will always fail. It'll never succeed. It's a dream that doesn't work. It always turns into a nightmare. But every generation is born has to be the young are always idealist. I was a socialist when I was young. Before I started my own business, you know, surely we can create a utopia together. It'll be different this time, but human nature is not changing and your ideals are, safer way was an idealistic thing and it's like I had to meet the market where I found it, not where I wanted it to be. I just think that it's always going to be this, you can always describe it as in these perfect terms. capitalism is always compared against its failures and socialism is always compared to its ideals

and that's not a fair comparison you have to compare reality against reality or ideals against ideals because capitalism has noble ideals as well and so if you just have complete lazy fair capitalism you end up with the mafia you have to have somebody that keeps the violent people from beating up the ones who are their competitors. So there is no perfect solution to, we have to muddle along with freedom and some regulations and do the best that we can. But it's going to be capitalism is really,

it's never been done before. Economic freedom has always been under the thumb of other people throughout all history until the late 18th century when freedom broke through in this great upward lifted prosperity. The genie got out of the bottle, and they've been trying to, intellectuals and people have been trying to cram that genie back in the bottle ever since.

They haven't been able to do it yet. But if they ever do, then we're going to see progress, come screeching to a halt and begin to go in reverse. Well, I think we already have in some countries where they've gone more socialist than capitalists. Well, whenever they go socialist, they start, like Venezuela is a great example of what, They were one of the richest, it was the richest country in South America before they, before Chavez got in there. And he had the richest oil reserves. And they completely screwed it all up, which pretty much is always what happens. How did you land on the win, win, win philosophy? Is there like a moment or example where you started to think that way or did you always think that way?

I did not always think that way. It's we, I think we're trained to think in terms of win, lose. I mean, think about almost every game, every sport. There's a winner. and there's a loser. We're taught, and the way, what reason people don't understand that about capitalism, by the way, so I can tie this back into it is capitalism is a win, win, win, win, win game.

It's good for all the participants. The people, customers don't have to trade with the business. If they don't like the prices or the service or the selection, they can go down the, you don't like Whole Foods, you can go down to Trader Joe's, and you've got to alternatives.

If you don't like working for Whole Foods, you don't have to. There's plenty of other places you can go work at. So Whole Foods has to do a good job, or people won't stay working there. If you don't do a good job with your customers, they'll trade somewhere else. If you don't do a good job with your suppliers, they don't have to trade with you. They can cut you off. They don't have to be business and business with you any longer. Same way with your investors, if your public like Whole Foods was, publicly traded. We could sell your stock if you don't like it. So you have all

of these stakeholders and the business has to be managing to create a win for the customers, a win for the employees, a win for the suppliers, and the win for the investors, and win for the communities that you're part of. That's when I began to realize the importance of win-win-win was to stakeholder philosophy. But I'll take it one further. Once you really can internalize win-win-win-win in your life, and that's how you try to live, you're always looking with every person you interact. You're looking for a win-win-win-win. Good for you, good for me, good for all of it really becomes an ethical system. It pretty much can just only, you can resolve any ethical question by always going back,

what's the win, win here? How do we all win? It solves almost all ethical questions. It's kind of an ethical code in and of itself. I love that philosophy. It's also the only one that endures across time because we all know what it's like to be on a losing end of a relationship or feel like we're losing. You know, it's true.

And think about it. When you're with somebody who's always looking out for you, who's looking for a win for you, too, you trust them. Your relationship deepens, and with trust, there's so many more things you can do together. So part of the win-win-win-win is knitting people together. But you have to – there are people that don't think win-win-win-win. It's almost like you've got to be asking the question. Is the person I'm dealing with, are they looking for a win for me too? are they just looking to see how much they can get from me?

So you need to have the attitude of win-win-win, but you also have to be conscious of people that are working from a different framework who might try to exploit you, and you need to be more cautious around them. But once you know you're dealing with somebody else who's operating from a similar framework, man, oh, man, there's almost nothing you can't do together.

And the interesting thing is, like, Whole Foods wouldn't exist today without your suppliers back after the flood thinking in a win-win way. where they extended you more inventory. It's true. And it wasn't altruism on their part. We had been a very successful business,

and they felt confident once we got back on our feet, we'd be able to pay them back. But still, they had to take at least a little bit of a leap of faith to do it. That's kind of win-win in action, right? In a moment of crisis, you're going out of your way to make sure that your partner that you want to have a long-term relationship with, not always survives but thrives. Exactly correct.

Can we talk about Deborah for a second? Sure. Talked about everything else. One of the most interesting parts of the book for me was your first date with Debra and how it didn't go well. And then you sort of mentioned this letter you wrote to her after. What did you say in that letter? Because you totally changed her mind of it. Yeah.

Well, in that letter, I just kind of, kind of like I've done in this podcast, I just opened myself up. And I just said, here's, I don't know exactly what I did wrong, but I knew I did something wrong. But here's who I am. I got, I really like you. Here's who I think you are. I realize that I kind of blew this date, but it's okay. Even having one date with you is very special. And I think you're a very special person.

I think you're going to, I wish you the very best. I hope you have a wonderful life. This was before email. I stayed up all night writing this letter and polishing it and then rewriting it. And then I stuck it under a door about 5 a.m. I mean, I had that very faint hope. It was a Hail Mary pass. You know, I didn't think I was going to get a second date,

but maybe if she really liked this letter, maybe she'd give me a chance. So I was motivated. I was looking for a win-win there. And it worked because she did like the letter. She called me up and said, I wasn't going out with you again, but anybody that could write that good of a letter

is worth a second date. So the second date went better, and she likes to say by the third date, she knew we were getting married. That's incredible. 34 years, over 34 years ago now. Especially, you know, I sort of read that story. I wanted to know what was in the letter,

but then I sort of map it to dating today, which is you have a date. Maybe it goes okay, just okay, or less than okay, in your case, you know, she wasn't going to give you another date, but you instantly go home, you flip open this app, and all of a sudden there's like 15 people

vying for your attention, and you feel good about that, whereas this never would have happened back then, I don't think. You know, I never thought about it. You're possibly right. You know, my ego was hurt. And if I had other women that were ready to go out with me, I might have said, well, you know, that's her loss. Well, she might have done the same, right?

She might have done the same. More likely she would have. But, you know, that was a blind date. And it was hard, it was harder to meet people back in the day. You couldn't just have an app. And I thought I was being very clever at the time. I asked my married friends if they were single. Is there anybody they'd like to be going out with?

because I wasn't going to get any tips from my single friends. And so fortunately, I had a friend that was married, and he owned an art gallery, and Deborah was a customer, and so he got her meet her that way. So I think you're going to really like this woman. She's beautiful. She's smart. She's really sweet. Girl next door type that you like.

And, yeah, she was like my soulmate. That's amazing. I want to come back to business a little bit, but we'll sort of cover a lot. lot more different topics. But what do you think of business planning? Business planning? Yeah. I have mixed feelings about it. I think that it's a useful tool, but you need to always remember it's a tool. And it's a useful tool because it's good to think about your business. When you're doing business planning, you're going into a different frame of mind. You're going into what I call an analytical frame of mind. You're going to analyze where you're at.

and then you're going to create like a spreadsheet kind of projecting about the future and you're creating this plan around it. That's all very useful to do. It's good to think about your business that way from time to time. But the tool shouldn't become the master. Some businesses become slaves to their business plan. And it's like, we're behind the plan now. So what are we going to do differently to get us back on plan?

It's like, well, don't do something stupid to try to get yourself back on plan. because maybe your plan's wrong. And so the tool is something to help you think about the business, but it's the master if you start making business decisions to hit some stupid plan that you may have changed the damn planned. I don't think I'll tell that story. It was about Amazon. They're a real planning company,

and I had some problems with them overplanning, but I don't think I'm going to get into details about that one. No problem. What qualities do you think that most successful entrepreneurs have? I think I think different entrepreneurs have different and I think there's not one size that fits all but I'll talk about it in general terms I think there's some lot that have a lot of overlap well most entrepreneurs are very creative you know I think the average intellectual does not understand how creative entrepreneurs are or how frequently intelligent they are because they're

not maybe intelligent the way the intellectuals are they're street smart they also see opportunities They see connections. Entrepreneurs are very future-oriented. They oftentimes see the world and the way the world could be. They see possibilities when others see problems. An entrepreneur oftentimes sees a problem as an opportunity to be solved.

Wow. And they frequently do solve it. So entrepreneurs also are, they have to be very resilient. Really, you are going to, it's just nature of the beast. There's trial and error, there's failure, you're groping your way, you have an idea that that could be a very successful idea, but you don't exactly know how to put it into practice.

And so also entrepreneurs are quick to see things that are working elsewhere, and it's like they can take ideas from one context and add it to another. That's something I happen to be really good at. I see an idea here and it's like, wow, we could apply this to Love Life or we could apply this to Whole Foods. That's a terrific idea. Let's make that work. they're also willing as I told said earlier oftentimes entrepreneurs are willing to go and move forward

and others are not they has others hesitate they're worried about their downside you know I don't know if you've read have you read Elon Musk's biography by Walter Isaacson yet I've read most of it I love that book for a lot of different reasons but you know I know Elon a little bit but I got to know him better in that book. And the thing that just blew me away, because I consider myself a guy who's willing to move aggressively and to seize opportunities and take chances. But what he did again and again and again,

which, you know, it always paid off for him, he was always willing to get up there like a person that had won a bunch of chips in a poker game. And he just put the whole pot. He'd put it all in. He could have lost everything multiple times. And it was like, that guy's either the most courageous, boldest entrepreneur I've ever seen here. He's a damn fool. And you'd have to conclude now by his tremendous success and wealth

that he's just the most brilliant entrepreneur. Because, I mean, in the book, talk about some of his friends. Also, I know, like his brother Kimball or Luke Nosick, these guys came and helped bail him out a couple times when he was near, you know, when he might have failed. So he had friends and he had loyal friends who would help him in those crisis situations. But his boldness, I mean, The way Starlink, I mean, not Starlink, the way SpaceX got created, and he goes and visits the Russians to get missiles from them, and they, he thinks you're trying to sell them too expensive. So he just decides, well, I'm going to build my own rockets.

It's like he figures out how much the materials are costing, and he says, well, we can do this for a lot cheaper than they can. And then he does it. And he doesn't just say it. And he's able to attract these amazing people to be on his team. And that's, by the way, that's something I haven't talked about on entrepreneurs, I'll say right now. Entrepreneurs generally have a lot of charisma. They talked about Steve Jobs having, I never met Steve, they talked about Steve having a reality distortion field.

And I think that's true of a lot of entrepreneurs. They're so passionate about their vision that that creates a kind of charisma and it attracts people to them that want to work with them. I mean, people like, you know, everything I've read, people like Elon or Steve, these guys can be really, they can be very, it can be assholes at times, but they are so passionate about what they're doing and they create sense of purpose that they draw very talented people to want to be on their teams. And they, and those people stay for a long time. So I do think the ability to create a great team is an underrated skill that I oftentimes think entrepreneurs. I don't know if they consciously create them. I mean, Steve Jobs used to say that he would only hire A-listers because he says if you hire B-listers, B-listers will hire C-listers. So he had these high standards of performance, and he wouldn't sacrifice those high standards for what he wanted in his team and his people.

And, you know, by all accounts, you know, Steve attracted just brilliant people to work with him. Is there a difference between a talent collector and a team-based? there. Great question. And the answer is I never thought about it before, but yeah, absolutely. Of course there is. Sometimes those entrepreneurs that are driving forward, not sometimes, almost all the time, they have to have other people on their team who correct for their faults because they're false generally are very, very big. For example, I'll take my own situation. I was never very good at hiring and that's because I think my people's weaknesses come out of their strengths one of my strengths was I see people's potential I see what I see the very best in them and by the way when

you do that people want to perform to a very high level of you because they don't want to let you down and so I could see their potential and but the downside the shadow side of that you might say is that oftentimes didn't see their weakness as that clearly so I've oftentimes needed people on the team, like I particularly worked really well with my chief financial officer, Glenn and Flanagan, because she always saw the downside in people. And, you know, she could see the shadow when I was blind to it. And she said, I don't think we should hire him. He's, you know, I know he's impressed you here because he's dazzled you, John. You think he's so unbrillian and whatnot. But, yeah, can you just see? He's like kind of a slimy slime guy. I don't think we

can trust this guy. I don't think he's going to fit into our culture. I found out the hard way that she was almost always right. When I'd overrule her and hire somebody anyway, I'd always regret it. So I finally learned to say, I trust her judgment in this more than I trust my own. So I think a good entrepreneur, a good team builder is going to be able to build a team

that complements their strengths and compensates for their weaknesses. That's a different thing than just being able to collect talent because it's like a difference between like a good basketball team is one that not just has a lot of talent, but it's a talent that can play well together where they're synergistic and the whole is greater than the sum of the parts. If you just have a lot of talent, people who don't work well together and are backbiting each other, then they might be brilliant, but your team's probably going to lose.

To what extent do you think that the teams and the organization should be built around the founder versus putting the founder into a more typical structure? Well, I think that question sort of answers itself. The founder founded the company. So you can't fit the founder in another structure. It wouldn't be the founder any longer. Where I was going with this is like the outside people are always like, oh, you need to bring in a professional grocer.

You need to bring in an MBA. You need to bring in all these people from the outside. And what do they want to do? I think they tend to be more structured, more organized. Well, you need both. You need, that's the paradox. You do need creativity, but you also need structure. You need generative people and you need structural people.

I, for example, very generative, I needed more structural people around me. And I also needed people to tell me when my ideas were full of shit. Because sometimes they really were. And I needed people that I had a high enough trusting relationship with me and they trusted me enough where they could come in and just say, John, this is not going to work. And here's the reasons why it's not going to work. We can't figure out how to make it work. Now, every once in a while, I would say, I'll figure out how to make it work and go forward with it and figure it out.

But oftentimes, it's like, you know, you're right, I can't figure out to make this work. We'll let it go. But how did you get to a position where you could do that? Most people don't allow their ego that, oh, that's a good argument. You had really good points. I hadn't thought of that. I'm going to change my mind. One of the challenges that I think many entrepreneurs, every successful entrepreneur eventually faces and some don't rise to the occasion.

And that is that success can breed at ego, you know, expansion where you start thinking that you're some kind of universal genius. I think in my case, I had so many failures. I had my, if you get your face slammed in the ground a few times, you learn a little humility. I remember, Safer Way was a failure for me. And we had to get into the first whole foods to make it successful. Then we had a flood after nine months. we were we were bankrupt and then I started some new stores and my one of my founders quit because

he said you're wrecking the company you're these new stores are never going to amount to anything you're you're diluting down our gold mine with these uh these mines don't have any gold in them so I had and I and there are many other examples of times I had the I bought the amri on I pushed the do dot com we can't let the internet opportunity escape us 100 million dollars we lost so you know what I've had my serious successes but I've had enough failure to recognize I am far from infallible in my judgment and to learn to trust people that I'm working with and make decisions collectively.

Only rarely did I go against my team. If they took a universal stand, I would almost say that the whole is smarter than me and just let it go. And I think any good entrepreneur will back down at times when people they love and trust are all telling them this is a mistake.

You've got to listen to it. We all have blind spots. We all have blind spots. What advice would you give to current younger entrepreneurs or future entrepreneurs? That's a very open question. Do you want to try to get it? You want to try to... Well, I like the ambiguity of it, actually, because I want to see where your mind goes with it.

So, first of all, just in general, I get asked to a similar question is a little different. I get asked, what advice would you give a young person, entrepreneur or not? And the advice I'd always give is follow your heart. Life is shorter than you think it is. It's too short to not be doing something that you really are passionate about, that you're drawn to. Don't do something because you're just trying to get safety and security. You probably won't be happy as you get older. You might have to change when you get older.

So I always tell young people, like, what do you really care about? What are you passionate about? go after that follow I call it the hero's journey or you know I got that from Joseph Campbell's the hero's journey but the hero's journey is one where you feel an inner calling an inner drive and you simply answer it you do it even though it's scary and you go off on your adventure you don't know how it's going to turn out so Whole Foods was my hero's journey I'm on a new one with Love Love I don't know how it's going to turn I could fail I mean, based on probability, it will fail because most things do fail.

Most businesses do fail. But that's the calling, and I'm answering the call. Answer the call. If you hear that inner calling, don't hang up the phone. Do it. Go for it. Life's a grand adventure. Don't sell yourself short and try to play it safe because you won't be safe.

There's no safety. You're going to die. That's why I said, remember earlier on, I said, I got clear about death. I'm going to die. I'm going to live my life as an adventure. It's more fun that way. I can't guarantee it'll work out. If it doesn't, I'll learn and grow and do better next time.

Talk to me about the new venture. Well, Love Life is kind of a continuation of my hero's journey call to try to help people be healthier. First with natural and organic foods and now with Love Life, it's a holistic membership club is really what it is. and it's it's it's got elements it's it's got a healthy restaurant it's a it's a plant forward whole foods restaurant got some animal foods in there but it's it's definitely focused on people eating a lot more fruits and vegetables it's um we've got a state-of-the-art fitness center we have a we have all kinds of classes spin classes work out a huge health center it is so I'm just telling you the parts of it so you've got a gym we've got yoga

We've got Pilates. We've got, we have a spa. We have all this recovery equipment from hyperbaric oxygen chambers to cryotherapy, to red light therapy, to red light therapy, to infrared sonas, regular sonnas, to cold plunges. There's other, other lymphatic massage suits you can wear and microcurrents that you can, we've got, you know, lots of different biohacks there. And then, of course, you have a spa with massage and facials and things that you would get at any kind of not a medical spa, no Botox, but what you get at a good spa, pretty much, like in a resort setting. Then we have pickleball. We have three indoor pickleball courts because we think play is important, and pickleball is a community builder.

People, since I was trying to play a pickleball about three years ago, I've made at least 50 new friends. that I hang out with because of Picklewall. And then the medical center, which is the most important part. And our medical, our health care system is now really a disease management system. And it's not preventative. It's not really dealing with lifestyle diseases. It's, our medical system is good if you have an infectious disease. It's good in terms of things like vaccinations, antibiotics, surgery, first aid.

But the chronic diseases that kill people, obesity, heart disease, type 2 diabetes, autoimmune diseases, cancer, they're not very good at that. They might manage the symptoms of the disease, but they don't really prevent it or reverse it. So Love Life aims to change that, to disrupt that paradigm. We think now with the testing protocols we have that you can get, most people don't know how healthy they are, it starts with a good assessment so you can find out where you stand. And then once we had that, then with the wearables, the data you can get from an auror ring, Apple Watch, Garmin, there's so many different continuous glucose monitor, we can begin to track people's. And then once you have good assessments and tracking, then it's about the doctor works with you and a health coach to create kind of a precision individualized plan for you, unique to yourself, that allows you to become the health. aversion of yourself to be more vital, more healthy, more alive, stronger immune system,

more energy, positive attitude, and also love life's working on people's emotional and spiritual health as well. Now, we're doing breath work, we're doing meditation classes, when psychedelic therapy is legal in California, like it is in Colorado and Oregon, we will be doing that under therapeutic sessions. It's the whole idea to help every person that becomes a member to become the very healthiest, physically, emotionally, and spiritually that they can be. And hopefully, if people start young enough and work with us long enough, that these chronic diseases, I'll never get them. They're not inevitable. We're all going to die of something, but we should live to be 100 with, you know, without these chronic diseases

wrecking our lives and be a sound mind and high vitality. And the wisdom, it'll be good for the planet because we'll have healthy old wise people being greater percentage of the population you know wise enough to try to keep us out of wars and you know all the stupid things that we do when we're when we're not as wise as we should be talk to me a little bit about first actually i'll be rephrase that i love what you're doing i wish you'd open one in my city i think that needs to exist in every sort of center though we hope to certainly we hope to open them in new york Absolutely. To what extent do you think the diet is the biggest bang for the buck here versus exercise versus everything else?

I actually feel like, first of all, I think the most important thing is attitude. I mean, a positive attitude, a sense of purpose and meaning. It's like the body, as long as the body feels like it has something it needs to do, it wants to stay alive it's like you can't dial to me now i got important work to do and that's communicated through all the cells it's like we're not done here yet so i think i think first of all the the the mind and the attitude is most important for for health and longevity um i know people that eat terrible diets that have very positive attitudes that are remarkably healthy even though they you know they should be falling apart it's just that they're worm buffett he's well you know

Warren Buff is a good example because he's a terrible diet. On the other hand, he's got a great positive attitude, but he also doesn't take any toxins in other than his diet. He's not a smoker. He doesn't drink. He actually, he eats a, he has, he's not taking a lot of the things that wreck our health sooner than necessary. But yes, I think Warren has an incredibly positive attitude, and I think it's one of the reasons he's going to probably live to be 100 and still be trucking along, he's still sharp his attack, other than, of course, he missed out on that whole food's opportunity. Then I think diet, though, is very important.

I mean, I was a grocer. I do think the diet that people eat in America today is, you know, I mean, the statistics tell you all, 74% of Americans were overweight, 43% are obese, were dying from diseases like heart disease that are dietary, they're dietary diseases. obesity, a lot of the autoimmune diseases are also related to, that's more complicated, but diet is a huge factor in terms of how strong our immune systems are. So, you know, it's not that complicated. People make it, I mean, I always tell people, if you try to get your information from the

internet, you're going to be confused. Well, let's talk about this for a second, but before we do, what percentage of whole food sales at the time you left were actually whole foods? I don't know the answer to that quite, but I do know that I knew what our produce. I really don't think I should reveal those statistics because there's not public information. I don't want Whole Foods unnecessarily mad at me. But they were not as high as they were when we started out. Okay.

And that's because the processed food industry incorporated our standards and made processed foods that met Whole Foods market standards because we'd sell it. But they were just meeting them, you might say. And when we first started, they didn't, we didn't have very many processed food. We didn't have junk that we could easily sell. So we mostly sold produce and meat and bulk foods. People cooked. I will tell you one interesting statistic. Our very first store was over 20% of our sales were in the bulk foods department.

And we didn't have any candy back then. So it was just whole grains, whole grain flowers, beans, nuts, seeds, things like that, whole foods. And today it's under 1%. 20% to 1%. So what is Whole Foods? I mean, you've written a book on this, but what does it mean for people listening? When I say Whole Foods, I mean a food that's as close to its natural state as possible. So it's been minimally processed.

So, and that would be like the things I listed, fresh fruits and vegetables, meat, seafood. Those have been manipulated too. So I think you want to try to get animal foods that are, you know, not. been, that have been grass-fed, for example, if you're beef or there, there are not been, animals have not been put in feedlots, have not been crowded together, that they have lived out there sort of natural animal lives. So, sort of natural meats, then you've got, you've got your, your beans, your nuts, your seeds, all your legumes. You're going to have things that are produced with minimally processing.

So you can cook food, for example, but if you say take oil, oil or sugar, those are not whole foods. If you add oil, whether it be olive oil or seed oil, you're not getting a whole food. You're just getting the pure fat of that food. And what is sugar? Sugar is taking a whole carbohydrate food and stripping away the fiber and the germ until you're just left with pure carbohydrate. The biggest challenge humans have with our diets is that we evolved.

Our genes preclude us, or our genes, we evolved in scarcity. We evolved with starvation, it was our biggest problem. Not for just the last few thousand years, but for tens of thousands of years, perhaps hundreds of thousands of years. It just wasn't enough food. And so we've evolved to crave calorie-dense foods, and it's in our genetic structure. And we like foods that have a lot of protein or have a lot of sugar or have a lot of fat. Oil, pure fat, nothing but fat. Sugar, nothing but carbohydrate.

High concentrations of protein. People always put in protein powders and things like out in their smoothies. We crave calorie density. We also crave salt because it was scarce as we evolved. And so as a result, the food system today, it gives the market what it wants. wants calorie density, but it's killing us. It's making us sick. It's making us obese. We need to, people are always asking me as a plant-based guy, where do you get your protein? It's like, in every food I eat, protein's not scarce. Where do you get your fiber? Because you're not

getting fiber from those processed foods. You're not getting it from the animal foods. Maybe something like 90 plus percent of Americans have less fiber than is optimal for their gut health. We now know the gut is the first, most important part of our immune system. So that's whole foods. Whole foods are, you know, the definition is a little bit fuzzy, so a little bit of processing is not too bad, but the more you do, the worse it tends to become. And now we eat highly processed foods, not just three times a day, some people just eat and eat and eat and eat all day long.

That's a really good way to look at it. I think there's a scale. I'm going to get this wrong, but it came out from Brazil, and it sort of did the one through four in terms of processing for what food was. That's a good idea, actually. Yeah, and then that'd be great to put on labels at grocery stores or even on the shelves. Yeah. People could see.

This is a three, so it's better than a four. But you know what happens then is that those get gamed in the sense that there have been all kinds of rating systems that have tried to be applied. But then the food manufacturing companies, not only do they lobby, but they are constantly trying to change those. rules so that their products look good. It's more complicated than you think because we tried to do something at Whole Foods. We did, we actually did it. We called it, it was based on Joel Furman's work, an aggregate nutritional density index. So we were looking for nutrient density in foods. You can get it, you can get those, you can get how many vitamins and minerals and then the phytonutrients that foods have, and we raked, rate it all our food. And we put up the ratings

all around the store. Okay. Fresh vegetables, particularly leafy greens, are by far the most nutrient dense food you can eat. Nutrients per calorie. Yeah. I mean, it's not even close.

And then all the vegetables are way up there. Then the fruits are under that. Then you've got beans under that. Then you've got whole grains. Then you've got nuts and seeds. All the whole foods are much higher nutrient density. Then you get into the animal foods. And this is what became controversial

is that the animal foods on a per-calorie basis have fewer nutrients. This was very upsetting to people, and they got angry. People of team members got angry about it. People that want to eat a paleo diet were angry. The people that ate a carnivore diet, carnivore diet were angry because they really want, they like their animal foods. They're calorie dense. There's a lot of calories in animal foods.

They taste good. But you're not telling people what to eat. Why is more information than getting people? Kill the messenger, man. That's not a new thing. They didn't like the message we were delivering. And because people knew that I was a plant-based guy, they thought Mackie's trying to make everybody eat his diet. And all we were trying to do is give out the information of nutrient density per calorie.

It was important information. But at the end of the day, you know, I talked about how I had caved in. My team was not, they didn't want to keep doing it. What do you think would happen if a grocery store did that? And they sort of had like a color coding system, for example, which is like green, yellow, or red. And that's all they did just on the shelf beside the person. They'd have a lot of red products on their shelves, and then people would ask them, why the hell are you selling all this red food?

Yeah. And so. But if they took away the red food, then the people wouldn't go. No, what they would do is they'd dumb it down so that a lot of stuff that you think is red now would all of a sudden be green. It's like because most of the food that were selling in supermarkets is not good for people. If you start telling the truth, one or two things is going to happen. People are going to be either stop shopping at your store because all that store selling there's red food. I'm going to go to this other store that doesn't put all this red. It's the same food, but I don't want to know.

I'm not confronted with it. Or they will be forced to change the ratio mix so that some of the red food now is perceived to be healthy. So it's very difficult. You have to meet the market where you find it. You have to give the market what it wants. And when the market, if you feel judged by people, you don't want to do business there anymore. So that's one of the reasons The people in Whole Foods

Meed departments were very unhappy that they were not getting good anti-scores. So they didn't think this was good this is bullshit. This is not a good system. If you could wave a magic wand, I guess, and change a policy or maybe more than one policies, what would it do?

What would you do for the entire country? Policies and where? Like in terms of health. Like what if you get, you can probably diet might be the best place to start public. What would you say? What would you do? How would you do this? It's very, it's very, that's a very challenging question because in general, I don't, I think people need, these are adult, people need to make their own decisions and I don't think you should be telling people they

can't eat things. But can we nudge it? Yes, but then, I think you can nudge it. But then when you start using power to try to change people's behavior, how do you know that the people that take over the power will do it in an actually good way. We get, it's like the good intentions of socialism, the bad elements take it over. And the next thing you know, the healthy foods are being eliminated because the people in power have, it's been co-opted. But with that education wouldn't even work, right? Because if we educate people, then we're going to co-op the education at some point.

If you go onto the internet and you Google, is coffee good for me, you will get a massive amount of data that's good for it. That's right. Exactly. Exactly, exactly. And confirmation bias is so powerful. People just confirm what they want to believe. So if, you know what, if I could do anything that would help the health of America the most, I'd probably want to change, I'd want to make nutrition education more something that would be emphasized in the schools and emphasizing particularly the medical schools. Because they're not given, doctors are given almost no nutritional. They'd They don't, they come to believe that it doesn't have anything to do with health, that their potions and their elixirs, their drugs, are the thing that will restore health, and that's not right.

It's not true. I think I heard a couple weeks ago that the average med school student gets 30 minutes on nutrition or something. Yeah, it's pretty low, not much. John, I want to thank you for taking the time today. We always end the podcast on the same question, which is, what is success for you? you know i think success for me has been just being following my heart and being true to myself because doing following my bliss as joseph campbell said i've tried to follow my bliss and i've been

very successful by my own internal measurements because i have been true to myself i have followed my heart and it's led to me this my life's been this grand adventure i'm a very happy person I have a lot of love in my life, I have a lot of friends, I can do what I want to do, I meet cool people like you, and yeah, to me that's a successful life is a life well lived, one that's true to yourself, true to your own values, true to your beliefs, and has a lot of love in it. I wouldn't imagine a successful life with that didn't have a lot of love in it. Thanks for listening and learning with us. For a complete list of episodes, show notes, transcripts, and more, go to fs. fs. Or just Google the Knowledge Project. Recently, I've started to record my reflections and thoughts about the interview after the interview.

I sit down, highlight the key moments that stood out for me, and I also talk about other connections to episodes and sort of what's got me pondering that I maybe haven't quite figured out. This is available to supporting members of the Knowledge Project. You can go to FS.blog slash membership, check out the show notes for a link, and you can sign up today. And my reflections will just be available in your private podcast feed. You'll also skip all the ads at the front of the episode. The Furnum Street blog is also where you can learn more about my new book, Clear Thinking, turning ordinary moments into extraordinary results. It's a transformative guide that hands you the tools to master your fate, sharpen your decision-making, and set yourself up for unparalleled success. Learn more at fs.blog slash clear. Until next time.