John Mackey: How Whole Foods Grew From One Store to $22 Billion in Sales | E187

Summary

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In Search Of Excellence – Episode 187

Guest: John Mackey, Co-Founder and ex-CEO of Whole Foods
Host: Randall Kaplan
Air Date: May 12, 2026
Episode Title: John Mackey: How Whole Foods Grew From One Store to $22 Billion in Sales

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Overview

In this episode, Randall Kaplan sits down with John Mackey to explore his journey from a book-loving nonconformist to the co-founder and CEO of Whole Foods, a $22 billion business. Mackey candidly discusses formative personal experiences, the lessons that shaped his philosophy on excellence, money, entrepreneurship, and leadership, as well as the highs and lows of building Whole Foods—culminating in its acquisition by Amazon. The episode is rich with advice for aspiring entrepreneurs, stories of resilience, and reflections on what really matters in life and business.

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Key Discussion Points & Insights

1. Early Influences and Family Life

[01:43 – 05:41]

• Striving for Excellence: Mackey shares a childhood story about bringing home a nearly perfect report card, only to have his father focus on the one “B” rather than the string of A’s.

  • Quote: “What are we going to do about that B?” (John Mackey quoting his father, [02:07])
  • Lesson: Pride in achievement is positive, but don't settle—always strive for more.

• Dealing with Bullying: Both host and guest discuss being bullied as children and how those experiences shaped their resilience and drive.

  • Quote: “I think people make different choices to the things that happen to them in their lives.” (John Mackey, [03:32])
  • Insight: Being bullied can make you tougher and more resistant to adversity, though individuals respond in varied ways.

• Parental Support & Life Lessons: When John was unfairly cut from his basketball team, his parents moved temporarily so he could play at a different school, instilling in him a sense of agency and the belief that you can change your circumstances.

  • Quote: “If you don't like the hand that's dealt to you, change it, do something about it.” (John Mackey, [05:41])

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2. Overcoming Fear and the Importance of Resilience

[09:01 – 15:14]

• On Fear: Mackey identifies fear—of failure, ridicule, even success—as the number one barrier to realizing one’s potential.

  • Quote: “The thing that limits most people's potential is fear.” (John Mackey, [09:26])
  • “Life is so much shorter than people realize. There’s no point to play it too safe.” ([09:26])

• Failures as Teachers:

  • Both host and guest agree that setbacks are among life’s greatest teachers. Mackey adds that you only truly fail if you quit.
  • Quote: “You only fail if you quit, if you're resilient and you pick yourself back up and learn and move forward.” (John Mackey, [09:26])
  • Memorable Moment: Patty, a longtime Whole Foods executive, once joked, “John, I’m tired of learning things from failure. Let’s do some things right…” ([13:30])

• Advice for the “Woe is Me” Crowd:

  • 1. Recognize fear but move forward anyway.
  • 2. Find and follow your passion.
  • 3. Embrace life’s shortness—take the hero’s journey.

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3. Money, Work Ethic, and Starting from the Bottom

[15:20 – 21:57]

• Household Economics: Mackey’s parents didn’t give allowances; instead, they put prices on chores—teaching early lessons on value and work ethic.

  • Quote: “Any money I earned, it was mine. I could spend it whenever I wanted to.” ([15:29])
  • Allowances breed entitlement; working for money fostered entrepreneurial thinking.

• Money and Happiness:

  • “Money buys freedom, but does not buy happiness… Happiness ensues from fulfilling purpose, relationships, love, kindnesses, the things that really matter in life.” ([17:03])

• Valuing ‘Menial’ Jobs:

  • Mackey credits his early jobs (dishwasher, busboy, etc.) for teaching discipline and the value of service.
  • Quote: “Any job that's serving other people is a worthwhile job. They're not menial shit jobs. These are important jobs that need to be done.” ([19:12])
  • These early jobs teach discipline and humility, leading to greater career success later on.

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4. Education & The Path to Entrepreneurship

[21:57 – 29:26]

• Nontraditional College Experience:

  • Mackey attended college for six years, never graduated, and only took classes that interested him.
  • Quote: “I'm just here to learn. I used to go into the library all day long. I bring a lunch and I just spend [time] in the stacks.” ([22:28])

• Questions About College Today:

  • College can be valuable for intellectual awakening, but isn't always necessary for everyone—individual choice is key.

• Learning Business, With or Without Business School:

  • Mackey never took a business class but devoured business biographies and learned by doing, mentored by his father.
  • Quote: “Study the greats if you want to be great.” ([00:00], [28:26])

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5. Finding Passion and the Beginnings of Whole Foods

[29:26 – 36:14]

• The Prana House & ‘Food Awakening’:

  • Living in a vegetarian commune changed Mackey’s relationship to food and helped ignite his passion for natural foods retail.
  • “Our body… doesn't need just fuel, they need nourishment… I had my food awakening.” ([29:38])

• Leaping In: Starting ‘Safer Way’

  • Mackey and Renee (his girlfriend and eventual business partner) lived in their early store, sometimes showering in the Hobart dishwasher.
  • Quote: “I like to joke. I'm pretty sure that was against Austin health code.” ([33:33])

• Raising the First $$:

  • Whole Foods began with $45,000 in friends & family money and lost half in the first year.
  • “Persistence pays… Sell your dream… When you begin something with boldness, the world changes. When you move forward with purpose and determination, the world makes a shift.” ([36:56])

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6. Principles, Vision, and the Role of Stakeholders

[42:36 – 48:34]

• Naming ‘Safer Way’ as a Joke:

  • “Safer Way was just a funny name that we thought… maybe Safeway will come after us. That would be good publicity.” ([42:58])

• First Whole Foods Store (Austin, 1980):

  • “We were packed from the day we opened… Within six months, that was the highest volume natural food store in the United States.” ([43:41])
  • Ecstatic highs and utter terror: the emotional roller coaster of entrepreneurship.

• The 1981 Flood and the “Stakeholder” Epiphany:

  • After a catastrophic flood destroyed the store, customers, employees, suppliers, and bankers rallied. It became a lesson in community and mutual gain.
  • Quote: “Business is really this community of relationships… The stakeholders, without even having the language for it… didn't let us die.” ([48:34])
  • Biggest lesson: business can (and should) benefit everyone, not just investors.

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7. Fundraising and the Truth About Venture Capital

[49:44 – 55:34]

• Persistence in Fundraising:

  • Every entrepreneur is told by someone that giants will crush them—but resilience is key.
  • “Rejection is part of the game.” ([55:24])

• The Reality of Venture Capitalists (VCs):

  • “Venture capitalists are hitchhikers with credit cards… As long as you get them to where they want to go, they're going to help pay for the gas… But if you get a little bit lost, they’re likely to hijack the car… and toss you out on the side of the road.” ([50:43])
  • Not all VC money is equal; some bring connections, mentorship, and value. Choose partners wisely.

• The Edison Mentality:

  • Mackey and Kaplan agree that persistence—bouncing back from thousands of rejections or failures—leads to “gushers” (successes) in entrepreneurship.
  • “You don't give up. You don't surrender. That's not to say you don't learn—ask ‘why didn’t you invest?’—and refine your pitch.” ([55:34])

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Notable Quotes (with speaker & timestamp):

• “Study the greats if you want to be great.”
  – John Mackey ([00:00], [28:26])

• “You only fail if you quit. If you're resilient and you pick yourself back up and learn and move forward.”
  – John Mackey ([09:26])

• “Any job that’s serving other people is a worthwhile job. They’re not menial shit jobs. These are important jobs that need to be done.”
  – John Mackey ([19:12])

• “If you don’t like the hand that’s dealt to you, change it, do something about it.”
  – John Mackey ([05:41])

• “Business is really this community of relationships… The stakeholders… didn’t let us die.”
  – John Mackey ([48:34])

• “Venture capitalists are hitchhikers with credit cards.”
  – John Mackey ([50:43])

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Timestamps for Key Segments

• 00:00 – Inspiration from reading biographies, “Study the greats…”
• 02:07 – Father’s tough love and striving for excellence
• 05:41 – Life lessons from being cut from the basketball team
• 09:26 – Advice on overcoming fear and embracing life
• 17:03 – Relationship between money, freedom, and happiness
• 19:12 – The dignity of “menial” jobs
• 22:28 – Nontraditional college journey and its value
• 28:26 – The power of learning from biographies and unorthodox entrepreneurship
• 33:33 – Early sacrifices: living in the store, Hobart dishwasher showers
• 36:56 – Raising first capital, persistence, “Selling the dream”
• 43:41 – Ecstasy of opening the first Whole Foods
• 48:34 – The great flood, discovery of the “stakeholder model”
• 50:43 – Navigating the venture capital landscape

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Conclusion

John Mackey’s journey is a testament to resilience, service, persistent learning, and the importance of relationships in both personal life and business. From enduring bullying and setbacks to revolutionary success with Whole Foods, Mackey’s story is equally about character as it is about commerce. The actionable lessons for listeners—study the greats, embrace adversity, cherish “small” jobs, pursue meaningful work, and never stop learning or trying—provide a roadmap for anyone aspiring to achieve their own brand of excellence.

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Transcript

[John Mackey]

Once I got interested in business, I devoured business books. I've read hundreds and hundreds of business books on every accounting, finance, marketing, management, leadership biographies, entrepreneurs. Once I got interested in it, I couldn't get enough of it. I think reading the biographies of the great entrepreneurs will teach you more than anything else. Read about John D. Rockefeller, read Rockefeller by Chernow. Read Elon Musk by Walter Isaacs and lead jobs by Isaacson. Study the greats if you want to be great.

[Randy]

What's your advice to everyone out there who doesn't want to clean the bathroom floor or wait tables at chichis like I did, or bag groceries in high school like I did?

[John Mackey]

Any job that's serving other people is a worthwhile job. They're not menial shit jobs. These are important jobs that need to be done. They're not beneath you. I never felt like washing dishes or being a busboy or working for AstroWorld, Six Flags AstroWorld, that, that was any, that was menial. I thought I was, I was serving people, I was helping people. They, that work was essential. It was valuable.

[Randy]

Welcome to In Search of Excellence. My guest today is the co founder and ex CEO of Whole Foods, John Mackey. Whole Foods started with a single st store in Austin, Texas, grew to 540 stores. Its annual sales exceed $22 billion. They have more than 105,000 team members and in 2017Amazon bought them for $13.7 billion. John, welcome to In Search of Excellence. Thanks for being here today.

[John Mackey]

Thanks for inviting me on, Randy. Looking forward to it.

[Randy]

So I would start with our family. Your mom, Margaret was a school teacher. Your dad, Bill was an accounting professor at rice University who 15 years later was CEO of a company called Lifemark. Was sold for a billion dollars. I want to go back to an incident when you were younger where you brought home a report card and you had all A's and one B and your dad asked you a question. What was the question? And what's the life lesson there?

[John Mackey]

Well, I was very proud of that report card and of course he asked me what are we going to do about that B? And I was sort of crestfallen because it was like, gosh, I mean all A's and one B, it's pretty good. But for him it was, it wasn't perfect, it wasn't excellent yet. And so in a sense the lesson there is you're, you're striving for excellence. You're striving to be as good as you can possibly be and you shouldn't be satisfied you should be proud of the fact that I made all A's except for one B, but not be satisfied with that.

[Randy]

But you're young at that point, and your dad. You guys had a complicated relationship. We'll get into it a little bit later in the show, but.

[John Mackey]

Well, sure, it was tough when I was younger, but it was later when I reflected on it that I saw the wisdom in that, that he wanted me to push harder and take it higher and not be satisfied. I think I learned a valuable lesson there.

[Randy]

When you were young, we shared something in common. I was bullied when I was younger. I stuttered. I had no friends. People called me retarded. River Randy had a huge impact on me. You were bullied? We were small. People thought you were.

[John Mackey]

Nobody thought I was retarded, though.

[Randy]

No. No one thought you were retarded. People called me retarded. I don't know if they thought I was retarded, but they certainly called me retarded. It had a major impact on my life. How did being bullied have an impact in your life? And are people who are bullied when they're younger more motivated to succeed than those who are not bullied?

[John Mackey]

That question's a really good question, and I don't know because I never really thought about it before. But, I mean, I think sometimes people that are bullied surrender and they become meek. But I think others, they take the bully being bullied as a challenge. I know for me, I just can, to this day, dislike bullies. I don't like politicians that are bullies. I personally don't like to be bullied, and I will resist bullies. And if I'm watching a movie, I hate the bullies. So it's like, it definitely made a mark on me, and I think it made me more resistant. I think it made me tougher. But I think people make different choices to the things that happen to them in their lives.

[Randy]

It definitely made me more motivated. Not. Not to prove everybody wrong, but it. When kids make fun of you, it's brutal, right? You're. You're insecure, you go home. I went home crying every day.

[John Mackey]

Don't most kids get made fun of, though? I mean, it's not unusual. Everybody, they look for some flaw in everybody. I mean, I just think kids can be really cruel, and I think they pick on. I think they gang up and they. And they, you know, Lord of the Flies type of thing. If you think children are perfectly innocent. But the. You might say the human nature of. Can be, you know, the shadow side of humanity comes out in children too. It's not just adults. I think we all get a taste of it. Even the ones that are the bullies get bullied to a certain extent, maybe by their older siblings.

[Randy]

There's some crazy statistic that some high number, very high number, percentage of mass shooters were bullied when they were younger.

[John Mackey]

God, that's. Is that right? Really? I, I and they're taking their revenge. I guess that, you know, that makes kind of psychological sense. I'm happy to say that I didn't go in that direction.

[Randy]

Yeah. So we're going to talk about a lot of life changing moments in your life and in my life as we go through the show today. I want to go to high school to your senior year.

[John Mackey]

I don't, I don't want to go back to high school. I hated high school.

[Randy]

Well, let's go back to high school for a minute. It's your senior year. You were cut from your school basketball team. Your parents were very, very supportive. Tell us what happened and what your parents did and how that impacted your future.

[John Mackey]

Yeah, you know, that's such a good question. You've done your homework. Well, the coach of this particular high school did not like me for a variety of reasons, by the way, by

[Randy]

the way, not to cut you off. You've never named the name of the coach.

[John Mackey]

The name of that coach was Coach Coleman. I thanked him later at a high school reunion because what he did actually changed my life in a positive direction, which we'll get into. So I got cut from that team and I thought it was really fair. I was the leading scorer on the junior varsity team and I thought I was a good basketball player. I just thought he really didn't like me because a, I was a little bit of a smart ass. And he wanted his athletes to be like fellowship of Christian athletes, you know, student council. He wanted them to be these, you know, paragons of virtue. And I was a little bit of a smartass, a little bit of a troublemaker, but a pretty good basketball player. And he cut me and generally. And I was like shocked because I thought I was, I thought I was as good as the players that were just ahead of me in the varsity. And I thought I could challenge them for their starting positions and if not, I'd be like a sixth man. So it was shocking to me that it happened. I think a lot of my other friends that were cut, it was really sapped their confidence. But what I did that the district made a rule change that year that you could Actually transfer to another school and you wouldn't have to sit out a year. That's what it used to be in Texas. If you transferred to another school, you were ineligible to play varsity. So they wouldn't have these kids being bribed to go to another school. So they changed that ruling. And so I, my parents, they temporarily moved to another school, another home. That put me in another school and I played basketball at that other school and we did great. 25 and 13. I was a starting point guard, averaged, I don't know, 12 points a game, led the team in assist. And the reason that was such a life changing event for me is that in reflection later, it's like I realized, you know what, if you don't like the hand that's dealt to you, change it, do something about it. You can make different choices. You don't have to be, so to speak, a victim. I could have just moped how unfair life is instead. And real kudos to my parents for willing to help support me in temporarily moving so I could be eligible to play basketball. I think that really gave me more self confidence. And when I got into situations later in life that were tough and I had setbacks, it was like, all right, well, that's not going to knock me out. We're going to, we're going to just make a different choice and go a different direction. Innovate our way out of it, so to speak.

[Entrepreneur Mentor]

I hope you're enjoying this video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach the next level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google, lift and Seagate. And I also co founded a company that today is worth more than $15 billion. I've been incredibly blessed in my journey and at this stage of my life. I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did in my own journey. I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others. I'm looking for a few hungry entrepreneurs, entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions and if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video.

[Randy]

The goal of the show is to inspire, motivate people to reach their potential. And there are so many people out there watching today and in the world, hundreds of millions of people who do accept the hand that they're dealt. They don't have the tools that you have or that I have or I don't know if, if it's a gift. We're born motivated. But what's your advice to everybody out there who is sitting there and thinking, woe is me, there's nothing I can do. What, what three pieces of advice do you have for them to change your life?

[John Mackey]

Well, the first one is the thing that limits most people's potential is fear. People are afraid of many things. One, they're afraid of failure. And their self esteem couldn't handle a failure. But life is always going to have setbacks. You're always going to have. You're going to have some failures. But failures are an opportunity to learn. It's an opportunity to choose again and make a different choice. I've always felt like as an entrepreneur that my failures were my best teachers. So you only fail if you quit, if you're resilient and you pick yourself back up and learn and move forward. But people are also afraid of people poking fun of them, people bullying them, people laughing at them. Some people are actually even afraid of success because they have that imposter syndrome. They're not worthy of it, so they don't feel like they deserve it. And they're always expecting to fail any minute because they're not really worthy of it. You can make different choices. And so if I'm trying to motivate people, I'm going to say, look, here's the reality. Life is particularly. I'm 72 years old now, and as older I get, the faster time goes, life is so much shorter than people realize. There's no point to play it too safe in life because why, at the end of the day, we're all going to die. Nobody's getting out of here alive. And so why not go for it? Why not go for the things you care most about that you're passionate about? And that requires to have the courage. You know, I think we're called to a hero's journey. Answer the call. Don't hide away trying to play safe because it's not going to work anyway. You could spend your whole life in your house Trying to be safe. The Grim Reaper is eventually going to kick the door in and drag you out. Whether you like it or not. Have the courage to answer your own inner call for the hero's journey, because I think everybody does get that call. It's a risky path. There could be going to be setbacks. But it's an adventure. And once you launch on that adventure, it's a lot of fun. It's a lot of fun. You're going to meet interesting people, you're going to learn new lessons. You're going to be doing something you care about, that you're passionate about. That's what I've done and it's worked really well for me. So whenever I talk to young people, they asked me, you know what? I don't know what to do with my life. And I said, well, find out what your heart is calling you to do, what you really are passionate about. And answer the call. Answer the call. Follow your heart and let that guide you.

[Randy]

I do a lot of coaching, executive coaching, entrepreneurs, CEOs, founders, professional athletes. I tell everybody that we learn a lot more from our failures than successes. And one of the things that people, I think, misinterpret just because you've had a lot of success, which I've been grateful to have, and we talked a little bit before the show, we have a lot of challenges and we've overcome a lot of things. I still fear failure when I do something new. I mean, we're human beings and people put us on this pedestal.

[John Mackey]

Yes.

[Randy]

And then the pedestal is very weak and it can crumble, you know, just like that. So I think it's very important for people to realize that for me, the fear of failure never goes away. And it's a tremendous motivator.

[John Mackey]

Foreign.

[Entrepreneur Mentor]

This video so far, but before we jump back in, I want to know if you've ever thought about what you need to do to reach the next level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly a hundred, including Google, Lift and Seagate. And I also co founded a company that today is worth more than $15 billion. I've been incredibly blessed in my journey and at this stage in my life, I want to give back. I want to share the lessons I've learned so you can reach incredible success, success way faster than I did in my own journey. I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others I'm looking for a few hungry entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions, and if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video.

[John Mackey]

Do I still have a fear of failure? I suppose so. I mean, but it's not the crippling fear that, that holds a lot of people back. I, I, it comes as a thrill of the challenge and because I do think I do fail. And particularly if you're doing something new, you're going to have some. You're, you're going to make a lot of mistakes, but those are your learning opportunities. And if you keep learning and you grow from those mistakes, and then that's how you move forward. Anytime you're doing something new, if you're learning a new skill or a new language, trying to learn how to play the guitar, well, gosh, what, you're not going to be very good at it. But the more you practice it, the better you will get. But I want to tell you a story that will resonate with you. We were in a tough period at Whole Foods. At some point, we were having a lot of setbacks, and I was doing the Talk about failure is our great teacher, and we should be thankful for these failures because they're helping make things better. And one of my longtime executives, Patty, she looks at me, says, you know, John, I'm tired of learning things from failure. Let's do some things right. That'll be a lot of fun, too, don't you think? And I had no answer to that. She was right. We had maybe too many setbacks, and she was getting discouraged. But the truth remains still there, that failure is our great teacher. But success also is inspiring and helps people appreciate the, the failures also set context for the joy of success. Success is a lot more fun, a lot more meaningful if it's come as a result of learning, overcoming challenges, and the setbacks. It's, it's all, it's all part of the life adventure.

[Randy]

There's another lesson here, at least in my life. Sometimes our greatest disappointments lead to our best opportunities.

[John Mackey]

I think that's tr. Oftentimes, you know, if one door is closed, sometimes another door opens.

[Randy]

I want to go back to you growing up in your household. You didn't get an allowance. You had some free market economy going on. Can you tell everybody what that was about?

[John Mackey]

And it's something I always encourage parents to do with their kids. Because my parents never gave us an allowance. They basically priced everything. So if any chores, you know, washing the dishes, mowing the lawn, raking the leaves, whatever chores they wanted to do, they put a price on it. You had to earn your money. I think a lot of entrepreneurs have similar type experiences. In a way, any money I earned, it was mine. I could spend it whenever I wanted to. When I was really young, I'd spend it on comic books. Then when I got older, I'd spend it on records. And then when I got older, I saved enough to buy a car. I kind of worked hard because I really wanted the freedom to do with that money would be my money. I could do whatever I wanted because I was having to work for it. I appreciated a lot more because I. There was a labor cost and there was time cost to getting that money so that I could do what I wanted to do with it. I think an allowance is kind of like socialism in a way. You get this sense of entitlement. Well, where's my allowance? My parents were like, you want money, you work for it. We have to work for it. We have to work for a living. So do you. I mean, of course, they still fed me and whatnot, but this was for the money. But to go to the movies and all the things that I wanted to do with them, if I said, hey, will you give me some money to go to the movie? No. You know what? We got some chores for you to do. You can earn those movie tickets. That made a huge difference in my consciousness. And as soon as I could work, as soon as I got old enough to actually legally hold a job, I worked all through high school, on the weekends and things like that because I wanted that. Money kind of breeds an entrepreneurial mindset in a way.

[Randy]

Money buys freedom, but does it buy happiness?

[John Mackey]

No, money does not buy happiness, but it does buy freedom. And freedom can lead to happiness. You know, it's kind of weird. Happiness is something that if you pursue it directly, you probably won't find it. You end up pursuing pleasure. And that may not lead to happiness. Happiness comes from, I think, from fulfilling purpose, relationships, love, kindnesses, the things that really matter in life. Happiness ensues from fulfilling those type of goals and things like that. But no, I don't think money gives you happiness. I think once you get past minimum, you need enough money to Meet a lot of your basic needs. It's kind of like Maslow's hierarchy of needs. If you don't have enough money to have a place to live or food, things like that, money can buy some happiness there because you're getting your basic needs taken care of. But on a psychological level, accumulating money will not lead to happiness per se, but it can lead you to experiences, it can lead you to relationships. It's a tool. The tool itself will not give you happiness, but it pursue, used wisely, it can help you to be happier.

[Randy]

Some people also say on the flip side, more money, more problems.

[John Mackey]

If you feel that way, then you can always give your money away. Funny when you point that out, they don't tend to do that.

[Randy]

Let's go to some of the jobs that you had. I mean, you mentioned money equals freedom. You worked at Six Flags. You were, you were a dishwasher, a busboy, you had a lot of odd jobs. I think in today's life I've seen this among my kids friends, and again, my kids grow up in a wealthy community. I've done well. I'm grateful. They're very humble kids, appreciative kids. I remind them all the time where I came from. But one thing I've noticed in today's world, and this is true of teenagers and especially young professionals who intern or they come in, they want mentorship, they don't want to do the shit work. What's your advice to everyone out there who doesn't want to clean the bathroom floor or wait tables or Chi Chi's like I did, or bag groceries in high school like I did to get all these menial jobs that made me who I am today?

[John Mackey]

Those jobs are not beneath people. That is, that is, I think that's a very. Not a good attitude. Any job that's serving other people is a worthwhile job. They're not menial shit jobs. These are important jobs that need to be done. They're not beneath you. And you take the jobs. Sure, you'd like to get a better job, but learning discipline, learning a work ethic, learning how to work hard. I never felt like washing dishes or being a busboy or working for AstroWorld, Six Flags AstroWorld. That, that was any, that was menial. I thought I was, I was serving people, I was helping people. That work was essential, it was valuable. So I think that's. That attitude is a poisonous attitude. It also taught me that I needed to learn more skills, I wanted to get paid more money, I needed to learn things So I could get a better job. I always saw that as working at McDonald's. I never worked for McDonald's, but it's the point. So many people learn a good work ethic. You have to show up, you have to be on time, you have to do what you're told to do and you have to work hard. These are all incredibly important life habits that entry level jobs will teach you. Those are skills that can serve you the rest of your life. And if you don't learn them, well, I think I read, I don't know for sure but a lot of the younger generation seems to think that. Well, that's why so many young people think socialism is a good alternative. It's somebody else is going to pay for, give you the things that you want with you having to work for them and earn them. But listen, the way a free market economy works is you get money by providing service to other people, by providing things other people want. The more you give to other people that they want, the more money you will make. And so it teaches you the discipline of you're not entitled to anything just because you're alive. You have to serve others and working is a form of serving others. And that provides you money, that gives you the freedom and also maybe the motivation to get work harder and move up a work hierarchy so you can make more money and serve in better ways.

[Randy]

Just follow up on that.

[John Mackey]

Put those kids to work.

[Randy]

Yeah, just follow up on that. I mean I get questions, you know, what was the first step of creating a $14 billion well known technology company? And what I respond is it was digging ditches for the Whitewaters world headquarters building. Coming home caked in mud. It was knocking on doors when I was 16. Can I pull your weeds? Coming home with sores under my fingers. It was stuffing Envelopes College for 3 cents each. It was knocking on every door in college selling T shirts. That's what makes us who we are today. And without that I know I wouldn't be anywhere near where I am in my career.

[John Mackey]

I'm on the same page. Agree with you 100%.

[Randy]

Let's talk about post high school and college. And college is a big topic today whether we need to go to college or not go to college. In today's world, the average student has $47,000 of student debt. It takes more than 20 years to pay it off. You went to Trinity College, transferred to UT, you were in and out of college for six years. You had 130 credits, only 120 to graduate. You didn't graduate because you only took classes that you liked.

[John Mackey]

Right.

[Randy]

What's your advice to people today? Should they go to college or not go to college?

[John Mackey]

I don't think there's a blanket answer to that. I think those are individual choices. You know, when I went to the university, that's what my mind opened up until I went to the university. You know, I was taking all these required courses, and I had sort of that intellectual awakening. I think philosophy classes did that. It got me thinking about the big questions in life, the meaning of life. And I saw that there was a whole life of the mind. I took a. I'll tell you this story. I don't think the story's in my book, but I once signed up for 30 hours of classes, and I just took classes I was interested in. I signed up for 30 hours, and within about three weeks, I was down to six hours. I dropped 24 hours because the court. I didn't like. The classes I didn't like for a lot of reasons. So I got called in to the dean's office, and they were trying to understand Mr. Mackey. First of all, you're not allowed to take 30 hours. He's not here for 30 hours, and you can't take 30 hours. That's against the rules. And I said, well, I knew I was going to drop. I knew I was going to drop some of these classes, so I wanted a choice. And he says, but you're down to six hours and that we don't want you to take six hours because you're not on a path to graduate. And this was a different era. And I said, well, I'm only interested in these two classes, so that's all I'm taking. And then he. He made the most interesting argument. He says, you know, John, if you're only. If you're putting all your energy into these two classes, you have an unfair competitive advantage against the rest of students for having to take, you know, 15 to 18 hours. And I said, I don't understand. He says, well, you're going to be able to make A's in those classes because that's all you have to concentrate on. I said, so you're telling me, sir, that you don't want me to really focus that much on these two classes. You know, you're saying. You're saying I should have my interest diluted down. And he said, well, I'm not saying that. I said, well, it seems like that's kind of what you're saying. He says, well, we just don't think you ought to be able to, you know, where it's a competitive job market out there. And you're going to make A's in these classes because you're just focused on them. And other students, you know, they may not be able to make A's because you're gonna. I didn't make any sense. And I said, okay, I'll tell you what, I'll drop those two courses tomorrow and I'll just audit them because I'm just here to learn. I'm just here to learn. I used to go into the library all day long. I bring a lunch and I just spend in the stacks. They all these books. It was incredible. The university library, all these books and tomes and. And I was really like a kid in a candy school. It was just so much information I was taking in. And school was an. And was enhancing that learning, but also like the dean and other people were inhibiting it. So I just really took control of my own education. And I audited a ton of classes too, that I just liked. I remember professors, you know, I'd be like a star student. And they says, you know, John, I don't find you. I don't understand. You're actually not registered as this class. And I said, no, sir, I'm just interested in the subject. He said, but you're doing really well. You should have signed up for this class, you know. And I said, yeah, well, it doesn't matter. I'm still learning it. So I know that's a different approach to schooling. And you have to understand, this was a different era. This was before the government started giving all this money to the universities. And universities weren't that expensive. I mean, it was incredible how little money it cost to go to college. Back as a baby boomer, when I was going to school, it wasn't expensive at a private school like Trinity. It was even cheaper at a state school because a professors weren't paid as much. You didn't have this big administrative staff. And so much of these student loans have been hyperinflation. When you look at the cost of living, the two things that have gone up the most in America are health care costs and education costs, because so much government money is being funneled into there and it just causes inflation to go up. Anyway, that's what I did. But it was, you know, would other students do that? I don't know. I just. I was young and I just wanted to know everything in the world. So I just studied everything I was interested in. I still look back on those times, Randy with sort of romantic. That was a happy time for me. I was free. I didn't have any responsibilities and I was just free to learn all that I wanted to learn. It was great.

[Randy]

You created a $14 billion company and accredited some of that.

[John Mackey]

You got a lot bigger than that.

[Randy]

You're just, you're way past 30, 35 billion at the peak.

[John Mackey]

And then market cap.

[Randy]

Yeah, I'm talking about market cap. So you created a company worth $14 billion and credited a lot of that to not taking a business class and it taught you a new way to think. Unorthodox.

[John Mackey]

But.

[Randy]

And my question is, one, I'd like to hear about that and two, if you're an entrepreneur thinking about starting a business, are you better off not taking business classes versus business classes?

[John Mackey]

No. I mean I think, I think that's. I've said things like that just to be provocative as much as anything. In my case, it's true. I didn't take any business classes and I didn't know anything. I don't think there was an advantage to that. I didn't know how I was supposed to do things, which allowed me to innovate. But it also meant I reinvented the wheel and had to and wasted a lot of time and energy on things that other people would know. I was very fortunate though that my father was a very good business person and he mentored me. I from age 24 to 40. I really never made any decisions that he didn't. Big decisions that I didn't check out with him and I went along with him. I really trusted his judgment was at 40 that we had our kind of our break. He was my business education that plus mistakes that I did learn from and just. I also started once that reading ethic that I had in college or once I got interested in business, I devoured business books. I've read hundreds and hundreds of business books on every accounting, finance, marketing, management leadership biographies, entrepreneurs. Once I got interested in it, I couldn't get enough of it.

[Randy]

Is that one of your biggest pieces of advice to entrepreneurs out there. People want to grow their companies to read every single book they can about whatever they're doing.

[John Mackey]

You know, what I would do now I think that, I think the best teacher having read a lot of those books is not that you should know basics about marketing and finance and accounting. I think reading the biographies of the great entrepreneurs will teach you more than anything else. You know, read about John D. Rockefeller, read Rockefeller by Chernow, read Elon Musk by Walter Isaacson. Read Jobs by Isaacson. There's so many great biographies of entrepreneurs. Read Michael Dell's autobiography. They're just. That's what I would tell people to do. Read those biographies. You will learn how these people thought and how they did their. And it's amazing how many of these guys are similar and so many of the lessons they learned. Study the greats if you want to be great. Study the greats. See what they. And they all started out in humble beginnings too. I mean, it's amazing someone like Rockefeller started out incredibly poor, but a very, very driven guy who was determined to be successful.

[Randy]

Let's talk about Prana House. I want to take it into two parts. So first let's just freeze it at pre Renee and I just want to talk about. So what was Prana House and how did that change your life forever?

[John Mackey]

Prana House was a. In Boston, it was a. It's kind of a commune. What we called it a co op. It was a communal living situation. We had. It was a big Victorian house. We had 18 people living there about. I think it was 10 women and eight men. But people would come and go. Why that was. That was a life changer for me. I moved in there when I was, I think 20, 22 or 23, still kind of at the very end of my college days. It was vegetarian and I was not a vegetarian when I moved in there. And I moved in there primarily because I thought I was interested in all things counterculture. At that time I was very influenced by. By the counterculture, by hippies, by the music of that era. I thought they were cool and I wanted to. I thought I'd meet interesting women in a vegetarian co op. I moved in there and the biggest thing that happened is I had what I call my food awakening. Before then I just thought food was. You just ate what tasted good. You ate because your body needed fuel. It's like drive thru jack in the box. It's like you go to the jack in the box to get fueled up or McDonald's. Just like you go to a gas station, put gas in the tank. I thought the body was like a machine. And what I learned at Pwna House was actually, no. Our body consists of trillions and trillions of cells that compose us. And they don't need just fuel, they need nourishment, they need vitamins, they need minerals, they need nutrients of all kinds, phytonutrients. There are literally thousands and thousands and thousands of these nutritional elements that food consists of that nourish Our bodies that help us be healthy and vital can keep us fit and help prevent cancer, help prevent obesity. And I didn't know that until I moved into that. So I had my food awakening. And then like everything else, once I awakened to something, it was like I started reading about it. I like to read cookbooks for fun. I still do. It's like, I like to cook. I became the food buyer for the co op. I started and I worked for one. Went to work for a small natural food store called Good Food Company. And I like, I love this. I, I just. Natural organic foods could change the world. America's unhealthy. If people eat differently, we'd have different. We'd have, we'd different. Have different health outcomes and our agricultural system. If we would, if we'd farm with regenerative agriculture back then, we'd just say organic. That could be very transformative. So I, I sort of drank that Kool Aid and got super enthusiastic about it. I remember I was working at this small natural Foods for Good foods and I was enjoying the heck out of it. I liked retail. In all my odd jobs, I'd never worked in a retail store. And these people would come in and shop and they were like, I became friends with them. We were in the same diets, trying eating these new weird foods and all these new foods that I never tried before. I didn't eat vegetables when I moved in there. I was a meat and junk food eater. All of a sudden my palate evolved and I started liking these super healthy foods. And then other people that I was friends with liked them. And then I was making friends with the people I worked with. It's like, wow, we're doing this together. We're a team. I played basketball when I was younger so that the whole team thing really worked for me. It's like, I love this, I love this. I want to do this. And I remember coming back to the co op and that's where then Renee comes in, is that she was my girlfriend and I came in and I remember looking her in the eye and grabbing her hands and saying, I am so excited about natural foods. Why don't we do our own store? And Renee got excited about it too. And I often wonder, if she hadn't been, whether I would be sitting in this chair today.

[Randy]

So let's talk about that for a second. I mean, when we start companies, we make sacrifices. We started a tech company. I slept on friends couches in New York. I was not taking nonstop flights. I remember sleeping in a motel where The Miller light sign is flashing through the window. Tell us about the duplex that you guys rented and the Hobart dishwasher hose that you use in the old postal truck and how you got going.

[John Mackey]

Well, those are actually three different subjects in a way, but we were still. We started out still living at Pranahaus, but one of the things that happened was Piranha House actually took a lot of time because you had a lot of. You had a lot of co op meetings and there were a lot of chores you'd have to do to do your share of the work. Cooking, dishwashing. But once we got going with Safer Way, Safer way was an 80 hour. You know, Renee and I were. Was an 80 hour work week. So we needed to move out of Pirahana House and we. And so we moved into a duplex and we needed. We were ordering bulk food and we needed a place to store it. So we just brought it into the duplex and we. Our whole house was filled up with bags of whole wheat flour and brown rice and pinto beans, etc. Etc. And then when we need something, we would, you know, we'd take it from the house and deliver it to the store. I worked fine for a little while until our landlord popped in unexpectedly and he did not like what we were doing with this property. He said, you can't, you can't have a warehouse. And this is a. You can't put a warehouse in here. So you guys are. He evicted us. We had to be out by the end of the week. We got up small, real warehouse for the food. Renee and I needed a place to live, so we moved into Safer Way, where our store was that was in an old Victorian house and it wasn't zoned for residential. It was owned commercially. On the first floor we had our store, and on the second floor we had a vegetarian. It was a vegetarian store. Safer Way was very pure vegetarian. That was one of my lessons I learned because Safer Way we were vegetarian. We didn't sell alcohol, we didn't sell coffee, we didn't sell meat. We didn't sell sugar, we didn't sell white flour. We just wanted to sell really nourishing food to people. And as I say, we didn't do very much business. Safer Way was too pure for the market. And so that was one of the lessons I learned. But we. On the second floor, we had the Vegetarian cafe. And then Renee and I lived in the office. On the third floor we had a futon couch that we could fold out and we'd sleep on it at night. But we also didn't have a shower or bathtub or anything like that. So when we'd shower, we would just climb into the Hobart dishwasher, which had a hose hanging down, and we'd just, you know, rinse ourselves off there, which was. I like to joke. I'm pretty sure that was against Austin health code. We were violating health code violations sitting in the dishwasher. But, you know, we were, you know, Randy, we were young, young, healthy, loving what we were doing, loving each other. It's a real very. I look back on, it was hard time. We had a lot of struggles at safer way. We had our share of fights, but we were young and we were alive, and we were doing something we cared about. It was a grand adventure. I loved it.

[Randy]

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

[John Mackey]

Half of it.

[Randy]

Half of it in a year.

[John Mackey]

So what?

[Randy]

Tell everyone out there, because I get this question a lot. How do you do it? Like, who are you going to. What if your family can't afford to give you a $25,000 check? I mean, what. What should the first step be that everybody does to raise capital?

[John Mackey]

You know, I sometimes say that an entrepreneur is a little bit like, think about a panhandler asking you for money out there. Except the difference is, is the entrepreneurs selling a dream? And I believe passion. I think if you read the biographies of the entrepreneurs, they start out in garages. They don't have money. They do get money from food, from friends and family, but what they have is a persistence. You know, you get turned down a lot. I got turned down. I mean, most people I asked, every friend I knew, I knew friends of my parents and family, you know, most of them turned us down. But persistence pays. And I was so excited about what we were going to do. I was so convinced we could be successful that I didn't stop. You know, it's like you take no for an answer, but you go and you keep. You keep selling the Dream. $45,000 was more money back in 1978, but it still wasn't that much money. And we were able to. Through persistence, we were able to get it. And actually, we were trying to get 50 we only got 45. 50 was our target. We said, we'll make a go at 45. Just don't quit. You just go sell your dream. In fact, one of the characteristics of entrepreneurs is, you know, they used to say about Steve Jobs that he had a reality distortion field. Steve would be telling you things, and at one point you knew it wasn't true, but he had so much passion about it, you'd kind of. He'd distort your reality field, and you'd begin to believe it. I think in general, entrepreneurs have a lot of charisma, and they are able to persuade people that their dream's going to work, even if their common sense says it's not going to work. So I think I have that. I think I have that same characteristic. You know, we were talking earlier a little bit about when before we went on camera, about bullies and things like that. You just can't quit. You just have to have persistence. People quit too easily. You just keep going for it. And I also believe. Here's something I firmly believe. I think that was Gerdes talked about. I can't get the quote quite right, but he says, when you begin something with boldness, the world changes. When you move forward with purpose and determination, the world makes a shift. You will find the money. You'll meet the right person at the right time. You'll stumble. Serendipity begins to happen. Coincidences happen. The world starts to line up to have you fulfill the dream. That's been my experience. We think we're, like, passive here, but we're creating this experience that we're having. We're creating this reality that we're living, having that strong intentionality and putting it out into the universe. The universe, in my experience, shifts, and you will make it happen. But what you know what won't is a defeatist attitude that is ready to make an excuse. Well, I tried to get some money. Nobody gave it to me. It's like. It's that determination and that commitment. I'm gonna. We're gonna find that money and not to quit just because you get some setbacks. Keep putting that intentionality out there, and amazing things will happen. You'll find it.

[Randy]

You're listening to part one of my incredible interview with John Mackey, the founder and CEO of Whole Foods. Be sure to check out part two of my awesome interview with John next week. You mentioned something about Steve Jobs. By the way, they were the first investor in our technology company. I'll take that back. They were the series C investor in our Technology company when we didn't think.

[John Mackey]

How many rounds did you do?

[Randy]

We did five rounds. Series A was 2.25 million of friends and family, along with $6 million of VC money.

[John Mackey]

You had some rich friends and family battery.

[Randy]

Well, yes, I knew. Well connected angel, a former retired record executive who had made $50 million.

[John Mackey]

I was just teasing you.

[Randy]

No, but it's true. And when you're raising money, you want value, add money. There's Dog Walker money. Right? There's Dog Walker money. They can't add anything. Sophisticated investors who know people. Our angel investors introduced us to CEO of AOL and Time Warner and Playboy, who all became beta customers.

[John Mackey]

Wow.

[Randy]

And we specifically went after these angel investors to create value for us. And it sped things up by years by, by, by years and years and years.

[John Mackey]

Of course, because they also have their connections and they also can give good advice.

[Randy]

One of the things that you mentioned that's never come up on the show before, I think is really important, by the way, is Steve Jobs would say things that weren't true. Right. We see this in the technology world where the CEO or the sales guy is going out pitching things that haven't been built yet. Right. They're, they're, they're pitching the promise. And I get this question as well all the time. At some point, how far out on the SC extreme do you go by saying, okay, we can do X, Y and Z, Even if it's not developed yet, you know, it's coming. In some cases, it may not be coming.

[John Mackey]

Well, I don't think he should ever deliberately deceive people. I think that lacks integrity, I think, and I can't. I did not know Steve Jobs, but he strikes me as a guy that actually sincerely believed what he was saying. I don't think he was just a con man. I think Steve really did believe what he was saying and he was able to distort other people's perceptions who they think, well, that can't possibly happen. But Steve was so convincing, he was convinced himself. I don't think he was just a con man.

[Randy]

I'm not suggesting people are con men. I just, I think at the end of the day, people do get ahead of themselves and are not. I'm not talking about fraudulent CEOs, I'm talking about people who are excited. In this product, this is coming, this feature is coming, but it may not be coming for six months and it may never come.

[John Mackey]

Well, Elon Musk seems to be guilty of that because he makes a lot of promises about Tesla and his Day that's going to. He was always. He turns out to be right, but premature. In other words, it might take longer to deliver. He may be a little optimistic about time periods, but generally what he says ends up happening. But maybe two years later than when he thought said it was going to happen.

[Randy]

We're going to get into what makes companies successful. I want to talk about marketing right now. And then we're going to come back to work ethic and some other qualities. You create a store called Saferway hoping to invite a lawsuit. Well, which is, which is not the best way to go about starting a company, especially given where that, you know, lawsuits today when you go to trial, over a million bucks.

[John Mackey]

That's more of a joke. We didn't think. We never got on Safeway's radar screen. And it's not sure that we were in a trademark violation anyway. Safer Way was just funny. Safer Way was just. That was just a funny name that we thought it was a joke that maybe Safeway will come after us. That would be good publicity.

[Randy]

Let's go to the first opening of Whole Foods store. And again, I want to take this in two different parts.

[John Mackey]

Right.

[Randy]

We'll talk about the flood in a minute. But you opened your first store in Austin, Texas, 1980 Lamar Avenue. What was that like? I mean, you, you had this idea. You had a smaller store. I think you'd done a merger with

[John Mackey]

Clark's Clarkson Natural Grocery.

[Randy]

Yep, here you are. Then you open your own first store. What was the feeling when you walked around and you were open for business and opened the doors the first day?

[John Mackey]

Well, of course that's. We relocated Safer Way. And somehow, even though Safeway had lost half its money in that first year, I was able to persuade the investors to put a little bit more capital in. You know, of course it was exciting because it was a. It was, it was so exciting because I make the joke. It's not really a joke, but it's. It's. People ask me how long it'd take that first Whole Foods Market to be profitable. And I said till about 2 o' clock in the afternoon on the first day because we were packed from the day we opened that first store. It was. The timing was great. It was a great location. The two stores together had good sales because we merged together. We brought in so much more business from the local community. And within six months, that was the highest volume natural food store in the United States. It passed up like Mrs. Gooch's in LA Breton Circus in Boston. It was a huge success. That Was ecstatic. You know, Randy, I've heard an entrepreneur describe it this way. It's been true for me. I think it's true for most entrepreneurs. There's two emotions that all entrepreneurs will feel more often than most people. One is utter terror. It's gonna fail. It's not gonna work. The market, it doesn't want what we're doing. And the other one is utter ecstasy. It works. It's going to work. We're gonna make money. Thank God. All the investors are gonna get paid off. And there's the ecstasy and there's the terror. And those emotions are both exaggerated, I think, in the entrepreneurial life.

[Randy]

I got married to my wife Madison. We got married in Cabo. Hurricane season ended October 15th. Our wedding was October 18th. And then we got a call from the general manager of the Hilton Hotel. We'd gotten to know that's where we were getting married. And he says, well, before that, I got a call from one of my friends. It was a bit of a worry wart. We all have friends like that. He called me, hey, there's a hurricane coming to Cabo. Are we going to be okay? I'm like, oh, fine, whatever. Then the general manager calls me. I remember I was sitting at the dinner table with my three kids saying, you can't get married here. I'm in a sat phone. The hotel is in the water. Basically. Most of the hotels in the water, there's something called a hundred foot plane, which basically means that you have a 1 in 100 chance every 100 years that something's going to flood.

[John Mackey]

No, no, it means 100, 100 year flood zone means it will flood within 100 years.

[Randy]

Within. Within 100 years. Okay, so what happened for the great flood on Memorial Day? And tell us the crazy story about what happened. And 11ft of water.

[John Mackey]

Well, first of all, the backstory of that was when we, we found the location that we wanted to do that first. Whole Foods Market was a good location. It had been a, it had been a nightclub that burned out. So nobody, nobody gone into it because it laid vacant. But I thought it was a great location. It turned out to be a really wonderful location. We got it from this guy named Ben Powell, who was an attorney. His family owned the property. He'd been in the LBJ's administration when we were signed the lease, and he was saying, you know, John, one thing I want to do full disclosure on. You know, this is in the hundred year flood zone, right? And I said, well, what does that mean exactly? What's a Hundred year flood zone. He says, well, it means about once every 100 years there's going to be like 8ft of water in this store. It's going to Shoal Creek's going to overflow its banks. It's going to come down Lamar, and this store is going to be filled up with water. I said, gosh, terrible. When was the last time that happened? And he said, it was before I was born, over 70 years ago. And I thought those are good odds. I mean, if it's only going to be 100, once a flood, once every 100 years, you know, chances, as you say, maybe once every 100 years there'll be a flood. I like that. Once, one in 100 every year. Those are good odds. However, in our case, it happened the very first year we opened, nine months after we opened up the famous Memorial Day flood. It was the worst flood in over 70 years. We were eight feet underwater. We were ruined, we were bankrupt. I thought that was the end of the dream, but it was actually a life transforming experience. You know, it's very interesting as I did a TED Talk back and it's just today they posted it and I talk about, it's called Win, Win, Win. So I'm pitching the TED Talk people to listen to. But I tell the story of the flood in the TED Talk as a transformative event. And it was transformative because I didn't know this was back in Memorial Day, 1981. I didn't have any language for stakeholders, but I learned about stakeholders the day after the flood and for the weeks that followed the flood because we showed up to work the next day to clean it up. And we had all these people that weren't working for the company helping us clean up. And they were our customers. They had heard about what happened and they didn't want Whole Foods to die, so they came in and helped us clean it up. A lot of them came and worked every day until we got back open again. Our team members, they worked for free until we could get open, so we couldn't pay them. We didn't have any cash at that time. Suppliers fronted us more inventory. Our bank loaned us more money on my signature, which was worthless. And I found out later that the bank turned the loan down. But the loan officer personally guaranteed that loan.

[Randy]

Mark Monroe.

[John Mackey]

Yes. He personally guaranteed it because he thought we owe integrity and we definitely would pay him back. And we wouldn't forfeit on it. We wouldn't. And the investors put in more capital. So the stakeholders, without even having the language for it, they didn't let us die. And I realized that business is really this community of relationships and that in some ways I felt like I've been paying those stakeholders back ever since, that we should have died and they saved us a near death experience. It was very transformative. And then later on when I, when I heard that word, stakeholders, it's like that's what it was at Whole Foods. That's what we are. We're this network of relationships with customers, with employees, with suppliers, investors. They're all community, they're all trading with us voluntarily for mutual gain. That's the amazing thing about business, the amazing thing about capitalism, that people don't realize it's not a zero sum game where somebody else's gain or somebody else's loss, it's the system of winning. Everybody's winning, win, win, win. Through these two trading through voluntary exchanging for mutual gains. And that's how business and capitalism have lifted humanity into prosperity collectively.

[Randy]

So many companies have a unique idea and then everyone tells them, oh, you're going to get crushed by Microsoft or Google and you're going to just get crushed by everybody.

[John Mackey]

Every entrepreneur hears that.

[Randy]

Every entrepreneur hears that. So let's go back to 1982 to 1989. You're expanding a lot, company's doing well. 1988, you're doing $50 million in sales. You're profitable. You go to Sand Hill Road, which is everyone's dre. You know, you read about it, going to all these VC firms. And I remember when I went up there the first day and of course I was not dressed appropriately, I was in a suit. And this is a lesson for everyone out there. Know where you're pitching, who you're pitching to. Do not wear a suit to Sandhill Road when you're pitching VC firms.

[John Mackey]

I was in a suit and it seemed to be more appropriate. Back in 1988, you went to 12

[Randy]

firms rejected by all except for three.

[John Mackey]

Right.

[Randy]

What's your advice to people who are raising money from VC firms? How many no's should they get before they finally say, you know what, this isn't working?

[John Mackey]

You know, it's an interesting question. First of all, the world is very different today than it was in 1988. There are a lot more venture capitalists out there. They were all concentrated sort of in Silicon Valley or Sandhill Road. And that was early, really in the, early in the days of Silicon Valley as well. But now, like every city has got venture capitalists. I mean, I think Austin had one at that time. Now There's, I don't know, maybe 100 venture capital firms in Austin. It's, it's a hotbed. I always caution, you know what I tell people about VCs, I, I came up with a metaphor for it. Venture capitalists are hitchhikers with credit cards. Meaning as long as you get them to where they want to go, they're jumping into your car. And as long as you get them to where they want to go, which is a good exit, they're going to help pay for the gas. But if you somehow get a little bit lost on the road and you've kind of lost your way, they're very likely to hijack the car, hire a professional manager to drive it and toss you out on the side of the road. So VCs, they have like a seven year investment limit. So you've got to get into where they want to get to within seven years because they have their own investors. And so they're under a lot of pressure and they have kind of a blockbuster model now, which is if they want the really, they want the 100x, they want that exponential payoff they can get with an Nvidia or an Apple or Google and Akamai. Yeah, I mean they want those kind of payoffs. So what they try to do oftentimes is scale businesses quickly. In that said, they really want that exponential growth. So they try to scale quickly. They get burn rates. They say we're going to do a series A, a series B, a series C. That's why I asked you how many rounds you went. And if it goes well, each round is a higher valuation. But if you do get off the track, so to speak, some businesses can't scale that quickly. You know, they're not digital businesses. They may be if you're doing physical locations, for example, like, like Whole Foods did, you can't grow that rapidly. When that happens, they can wreck a lot of businesses, meaning they can blow them up because they have a blockbuster model, which means that a lot of the big success is pay for a huge amount. It's kind of like drilling for oil. Got a lot of dry holes. But the gushers pay for the dry holes. The blockbuster successes pay for lots of failed businesses. I think a lot of businesses, you have to pick your VCs carefully. You have to know they're not really your friends, that they are trying to get an out, not say they can't help you. They can help you, they can give you advice, they have relationships, they have network of people. But you also, if you get off track. Then they have, they can have the cram down round where they basically, they really lower the price. The entrepreneurs can't come up with the capital, so they're diluted down and then they're oftentimes discarded. I've seen that happen to many of my friends. So I have a mixed feelings about the VCs. But your question originally was, what do you do about VC rejections? They're going to come along. I mean, it's the same way it was with friends and family and angel investors. I got a metaphor for it. If you're like Matthew McConaughey, you may not get turned down that many times, but the average male particularly, you know, as you go through, you're mostly getting turned down when you're asking women out for a date for a variety of reasons. They may have another boyfriend, they may not like you, you may not be the type. And maybe it's different now with these dating apps and bumble and whatnot, but in my era, guys usually got turned down. You got, you got used to being rejected in a way from, you know, if you were, if you were asking women out because it just kind of came with the territory and you'd have to have some resilience. If you were just going to go in the corner and cry because you got turned down, then you're never going to meet. I never would have met my wife. Have a lot of failures, you might say. So I think it's the same way with VCs. A lot of them, you're just not what they're looking for. No matter how good your business is, they're picky. They're going to turn down most of their investment opportunities. Rejection is part of the game. That's how I see it now. Sure, if you're a hotshot, if you're some successful serial entrepreneur who's got some big wins in your back pocket, you're going to easily be able to finance your next round. And they're going to be falling all over each other and invest in it. You're going to get a high valuation. But if you're kind of a startup guy with no real reputation, it's going to be a tough, it's going to be a tough, it's a tough path and you have to stay with it and you have to believe in what you're talking about. And then I think you'll meet the right VCs who can help your business to finance it and help grow it. You'd be really lucky if you get People. It took me a while. I talk about it in the book a little bit, that all money is not the same color, that there are some VCs that Willie will mentor. You can help you. And we got that with Jerry Gallagher at Oak. He was a really good. He helped mentor me a bit. And he was. He. He really did care about us in a way that maybe some of the other feces didn't.

[Randy]

My dad said it this way, and I'll just be very blunt. You go up to 100 women when you ask them to have sex with you, in the first 99 say no. When the hundredth women says yes, you forget about the other 99.

[John Mackey]

Well, you know, they have a lot of stories about entrepreneurs, you know, or business people. And they say that Thomas Edison, when he was trying to get the filament for the light bulb, he had like 10,000 failures. He didn't quit until he found. He found the filament that worked. We have light bulbs as a result of that. I think there's lots of stories about entrepreneurs failing again and again and against resilience. I cannot emphasize that enough as an important entrepreneurial trait. You don't give up. You don't surrender. You keep. That's not to say you don't learn and you keep. You try different pitches. So if you keep getting turned down, sometimes it might even be good to ask the why didn't you invest? Why did you decide not to? And if you ask that with a sincere openness to listening, you might say, you know, I actually think your business is pretty good, but we're looking for a higher return than we think we can get here. You're going to. You're going to get some valuable feedback and see, then you can refine your pitch a little bit to what you think the market wants.