← In Search Of Excellence
In Search Of Excellence
John Mackey’s Wild Story: From Dishwasher Showers to a $13.7B Amazon Deal | E188
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- [00:00]
John Mackey
The biggest thing that happened is I had what I call my food awakening. I thought the body was like a machine. And what I learned at Piranha 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. I love this. Natural, organic foods could change the world. America's unhealthy. If people eat differently, we have different health outcomes that could be very transformative. Everything we judge and attack is really our own projection, our own guilt, our own faults get projected out. We see them in someone else and we attack them there.
- [00:39]
Randy Kaplan
The best advice I've ever received is
- [00:42]
John Mackey
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. The world starts to line up.
- [01:17]
Randy Kaplan
Welcome to In Search of Excellence. My guest today is the co founder and ex CEO of Whole Foods, John Mackey. Whole Foods started with a single store in Austin, Texas, grew to 540 stores. Its annual sales exceed 22 billion doll. They have more than 105,000 team members. And in 2017, Amazon bought them for $13.7 billion. John, welcome to In Search of Excellence. Thanks for being here today.
- [01:40]
John Mackey
Thanks for inviting me on, Randy. Looking forward to it.
- [01:42]
Randy Kaplan
When you invest in a VC deal, just for those people who don't know you put your money in, three things can happen. One, you lose it, all, right? That's a bad thing. Two, the company sells, you get some kind of money back, you may get nothing back. If it's a bad sell, you may make money. Or three, your company goes public. When our company filed to go public, I remember, oh, geez, you know, I had this shampoo bottle and I think we had something like three or four months, and the shampoo bottle was like this. I said, you know what? I'm just gonna focus on the shampoo bottle. And I think by the time the shampoo is out, I think we're gonna go public, right? You just gotta just. Hopefully nothing happens. It's a liquidity event that you have.
- [02:15]
John Mackey
You go public before or after Sarbanes, Oxley?
- [02:17]
Randy Kaplan
It was before, right?
- [02:18]
John Mackey
The world's so different now.
- [02:19]
Randy Kaplan
It's so different. But let's go to January 13, 1992. You were 38 years old. Your company goes public. You raised $28 million at 100 million. Do you do that day?
- [02:29]
John Mackey
You know, I was ecstatic. That was. I always say that was the second happiest day of my life. The joke is, is that at first I thought it was the happiest day. And I thought, you know what, I'm going to get in a lot of trouble with my wife if I say that was the happiest day of my life. So I say it's the second happiest day of my life. My wedding day was my happiest day. And that probably is really actually true. However, that was a very happy day. And the reason why is because all those family investors and angel investors particularly, I mean, 1992 is 14 years after the initial investors put money at Safeway. That's a long time to wait for any kind payout. And now we had delivered a huge return on that investment. I mean many, many, many, many, many x. I mean more, way more than 100x for those original investors. And so in some ways it was such a sense of relief. Wow, I've delivered, we've done what I told them we could do. And now they want to keep their money in and go with us and compound it some more. Great. But I fulfilled my obligations, I feel like, to them. So that was a sense of relief and a sense of ecstasy also. It was like I did my own calculations and it was like, shoot, I'm worth 7 million dol. It was only not that long ago. I was just dirt poor in safer way and living on the third floor. And Renee and I were taking $200 a month out as salaries. It was a very, very happy, very happy time. It was a very happy day. I felt also just relieved. And that's. It was kind of a combination of ecstasy and relief.
- [03:49]
Randy Kaplan
Our company filed to go public about a year after we started. It's some kind of record. And then maybe that is a record. Wow, it's one and done. We had $3.2 million in revenue. I remember sitting, I was just leaving the company. I remember sitting in broker's office just watching the stock pop. You know, our, our company first day close was $14.4 billion on $3.2 million in revenue. And when the stock closed, my wife said to me at the time, oh, does this mean we have this much money? And I said, yeah, it means that we have this much money. And her, her famous line is paper wealth. And you know, her famous line was, oh my God, we had to give some of it back. I said, what are you fucking nuts?
- [04:30]
John Mackey
Well, you are going to get some of it back. The government's going to take a big chunk.
- [04:33]
Podcast Host / Advertiser
Yeah, I hope you're enjoying. 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 mentor mentoring others and 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.
- [05:26]
Randy Kaplan
Well, let's. Let's fast forward. 911 happens. There are four founders of our company. One of our founders was killed that day. First person killed was on the flight coming to Los Angeles, was decapitated. He was a.
- [05:38]
John Mackey
This is.
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Randy Kaplan
You're talking about one of the 9 11.
- [05:41]
John Mackey
Yeah. And one, your friend was on one of the planes.
- [05:43]
Randy Kaplan
One of our partners, he was the first one killed that day. Right. Danny Lun was his name. Israeli trained, military, thick stock, had a hijacker and a headlock. Didn't see one behind him and decapitated him. And we know this because.
- [05:56]
John Mackey
Found his body when it crashed.
- [05:58]
Randy Kaplan
Well, the stewardess called it in from the bathroom and said the passenger in 7A, you know, the phone worked.
- [06:03]
John Mackey
And that was. That was one of your partners.
- [06:05]
Randy Kaplan
Yeah, that was one of the parts
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John Mackey
he had been his ex military.
- [06:07]
Randy Kaplan
Yeah. Badass. Total badass.
- [06:09]
John Mackey
Wow.
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Randy Kaplan
Thick and, you know, trained and was in a.
- [06:13]
John Mackey
He was here. He was a hero.
- [06:14]
Randy Kaplan
Yeah. So you were walking around New York City that day and you had a life changing event. Tell us what happened and about your sabbatical.
- [06:22]
John Mackey
What happened to us that day was we were in New York, going downtown near the Twin Towers. You weren't going in the Twin Towers that day. Although I'd been in the Twin Towers for various financial meetings many times. We Were going down to the bond rating agencies, Moody's and S&P 500, because we had some bonds. And every couple of years they want you to come in and talk about your business so they can see if they want to change the rating on the bond. But something's important to do. So we're driving there, and we have a. You know, we have a driver. When that first plane hit the first tower, we were far enough away where we didn't hear it, but we, you know, they had the radio on, and then there was an interruption to the radio, and somebody says, it's news flash. A plane has just crashed into one of the Twin Towers. And we thought, that's very disturbing. How could that happen? But our driver was much older than us. And the driver says, you know, I remember when I was younger and soon after World War II, a plane ran into the Empire State Building. And I said, really? A plane ran into the Empire State Building? I guess this stuff happens from time to time. So that kind of calmed us down a little bit. But then we're still heading downtown, and we're getting close now when that second jet hits, and we're close enough where we heard the explosion and the car stopped. Stopped. And all this debris was raining down on the car. All these people were pouring out of the offices, pointing up. So I got out of the car and I could see clearly both towers aflame. They were both burning. And it was like, it's a terrorist attack. It can't. What else could it be? You couldn't have. It cannot be a coincidence that two planes hit both Twin towers. Then in my mind just said. I got back and I said, there's no way we're going to be having a meeting with the S and P S and P? Bond rating agency today. So. And I thought, what's going to happen? Okay, first thing I'm going to do, they're going to shut down all the airports. They don't know if it's going to be somewhere else. And then they're going to shut down Manhattan. They might shut down Manhattan first. We got to get the hell out of this island. Oregon might be trapped here for who knows how long. And who knows what else is going to happen in New York. We got to get out of here. So I said, drive us to the train station. We'll get a train out of here. So we went to the train station and we caught. Which might have been the last train out of New York, because then they shut down the trains. But that one was. We got as far as Philadelphia. And then they stopped the train and so this like, okay, still want to get home? So then we rented a car to drive to Austin and. But I know on that train nobody knew what had happened. And I said, you guys know both twin towers have had airplanes cashing in the towers, the World Trade Centers. And they said, that's ridiculous. That's you're crazy. And then the train comes around. And I said, crazy, look at that. And we could see the towers on fire once we got driving back home and you know, we're in shock. We're communicating with everybody talking on the phones and. But we're also driving back through. This was a total, this life changed my life because I thought to myself, I could have been in those towers today. I could have been one of those people trapped up on the 65th floor or whatever that jumps out of a building because I'd rather fall to my death and burn. Burn, be burned alive. And it was like, you know, I want to do something besides just Whole Foods Market. It just made me really look at my life and examine it. It's like I'd work so hard. This was 2001, so it had been 23 years and I had pretty much just worked really hard for that 23 years. And it was like I took a self examination. I thought, you know what, I still want to do Whole Foods, but I have some other dreams. I want to make sure I pursue those dreams. And on the drive back, we're driving through, we're driving through the Appalachian Mountains. And I remembered I had a flash on this thing that happened when I was a little boy on a vacation and I saw this backpacker come out of the woods and ask my father what that I was about eight years old, you know, and he said, that's that, that's a backpacker. He's hiking the Appalachian Trail. And I didn't know what that was. And they said, well, that's a footpath that goes all the way from Georgia to Maine. And I said, he's walking from Georgia to Maine. How can he do that, daddy? And he said, that's why he has that big pack son. And I thought it's someplace a little 8 year old. Mine said, I think I'd like to hike the Appalachian Trail someday. So it was sort of like a seed was planted at that time. Then driving back that question, why don't I hike the Appalachian Trail and why not? Now, six months later, I'm launching on the out. I got a permission from my board to take a Sabbatical, and I hadn't taken any real serious vacation time for those 23 years. So it's like I made a deal with the board. I'd come off for a board meeting and any other crises, and I'd be in touch via cell phone. And so, so I hiked the Appalachian Trail, which was. And I kind of been hiking ever since. That was a total. That was, that was a great experience. I really, really, really love long distance backpacking.
- [11:02]
Randy Kaplan
Everybody thinks going public is the holy grail, but the reality is it's not. Because if you have one pebble or you misspeak for one word, you could lose a billion dollars of market cap. Your peak market cap was in 2014. You reached $23 billion. Then you lost half of your value. And an activist firm called Jana Partners bought 8.4% of your company. And then you said, oh, geez, you know, this is, this is not good. Tell us about the dream you had. And then tell us about Jeff Bezos.
- [11:32]
John Mackey
Well, I'm going to put some context in this. It's a little bit, I go a little bit here now beyond what I did in the book. But back when we had the Great Recession, the financial crisis in 2008, Whole Food stock dropped 90%. Randy. We were, we were worth 10% of what we were worth a year before. That was incredibly shocking. We were also trading at like, only three times our cash flow. So we were very worried about a shareholder activist taking over the company. So we took in some private equity
- [12:01]
Randy Kaplan
money from Leonard Green. From Leonard Green, a lot of money
- [12:04]
John Mackey
that we took in. We sold, we got 15% of the company for, at that time, for $475 million. And we got voting control of that 15% for like, I think 18 months to two years. We still got a shareholder activist, Ron Burkle, but now he was blunted by the fact Leonard Green had this big, big percentage share. And he, he. But then what happened after, after we started coming out of the recession, Whole Foods Market stock just went up and up and up and up. We went way past our previous market capitalization because our. After that recession, our, Our same store sales, our comps went into double digits and stayed there for. We just, we just kept it just. Things just were. This was a great period of time. We just kept. Our New York stores were doing really well, and all our stores were just coming together. It was kind of Whole Foods Markets. I mean, I remember when Fortune wrote a piece on Whole Foods at our peak in 2014, it's like whole Foods Taking over the world because we were sort of. We seemed to be unstoppable juggernaut. And our same store sales were so strong. What we should have been doing at that time, in retrospect, we should have been cutting our prices. This was the absolute perfect time to do it. And I think it was just greed is why we didn't do it. It was like we didn't see the competitive front, which is Whole Foods Markets capped, went above Kroger's. We were the most highly valued pure food retailer in the United States for 15 minutes. And I think that was just in the boardrooms around America. It's like, how can this. Because Kroger had eight times our sales, eight to 10 times our sales, and we had a bigger market cap. And I'm sure that said we're gonna, we're gonna get those guys. I think. And I. I think they began to compete much more strenuously with Whole Foods and prices on our products. A lot of the things that, that we thought separated us from, from. From all the major supermarket competitors began to change and they began to price much more aggressively. Meanwhile, I don't think Whole Foods was cutting their prices. I think Whole Foods have been raising their prices because we had gross margins that were getting, expanding. When I asked into it, I was always told we were getting it through reduced shrink, less spoilage, and we were getting more buying power. So we're getting it on the buy side. And those were true, but they were also raising prices. And. And so I. My mistake was not checking what. And not checking what. They. I trusted them, trusted the managers that told me that I should have gone in and looked carefully myself. And I didn't do that, probably because I was very happy to have that stock price going up too. I think if we had done that, we would have been less vulnerable to the supermarket competitors, which may meant our stock price never would have gotten that high. But then it never would have fallen back either. We would have been a much smoother transition. And we probably still be independent today. But we had shareholder activists come in, Jana Partners. And they were. We met with them. They didn't want to work with us. They came in and showed this PowerPoint presentation, which I thought had a lot of inaccuracies in it. I asked him for a copy of the PowerPoint presentation because I wanted to give him some feedback on it. He said, no, you can't have it, but we're showing it to all your investors. And I said, well, why won't you let me have it? He Says, we don't want to. He says, mackie, we don't want to work with you. I'm going to tell you exactly what we're going to do. We're going to take over your board. We're going to take over the board. And after we take over the board, we're going to. First thing we're going to do is fire you. And then we're going to tell all your executives they don't want to do exactly what we tell them to do. We're going to fire them, too. And we're going to put this company up for sale, and we're going to sell it to the highest bidder, and there's not an effing thing you can do about it. And they walked out of our conference room, right? So then we be. So it's like, okay, well, we've got our. You know, we got our. We got our. We got our activists, we got a legal firm, we got investment bankers. You know, we're all huddling together and we start looking at our alternatives. And they're like four alternatives. One alternative, and the one that I'll always wonder if we should have taken it or not, was, let's fight the bastards. We can beat them, let's beat them. And all my competitive instincts wanted to do that. Second one's, let's find a friendly partner or friendly investor to take it over, like Warren Buffett. And the joke there is that we contact Warren and he makes a joke about, well, you know, I own Dairy Queen and I'm famous. You know, I'm a junk food eater. Whole Foods does not fit my personal brand. He has a great sense of humor. I actually just think he thought we were too highly valued. And Warren's always been a value investor. And then it was about. Maybe there's a. You know, we talked to Albertsons. Albertson was very interested in merging with Whole Foods. And I won't go into the details, but I hint at it in my book. I actually think there was a conspiracy, and I'm not going to get into that with you today. Maybe I'll do it a little bit off camera if you want to talk about it. But I think there was. This whole thing was very well planned out. And there was a plan because the third alternative was to take the company private. And there was a lot of pressure on to take the company private. I had Mike Milken courting me at that time, and one of those private equity investors that come in, Leonard Green, they were interested in taking it private. But the Thing about taking a company private is you're basically selling it to the private equity firm and they pay for it by leveraging your balance sheet. And they put maybe a billion in and they buy out the rest of the investors first with bridge money and then they use the balance sheet of the company to fund it. And the result is that can be a big payday for the private equity firm if you can turn the company around, if you can. It goes bankrupt and the company goes bankrupt. They've lost their billion dollars, which they don't want to lose, but the company's gone or it gets carved up into pieces and sold off. So it's a huge risk to do that. I didn't want to do that. I mean, I had stopped taking compensation. I wasn't really bribable. So. And then it was like, well, what are we going to do? And I kept asking that question, I asked this question, what's the win, win, win scenario for all the stakeholders? What's the best thing for our customers, the best thing for our team members, the best thing for the investors, the best thing for our suppliers? I kept asking that question day after day. And one day when I woke up in the morning, the answer just popped into my brain. The answer could be Amazon. I had met Jeff at a conference the year before. Kind of hit, we kind of hit it off. We talked about scuba diving. He was very interested in whole foods, talked about science fiction and fantasy. He's an entrepreneur. Entrepreneurs can, you know, they have a lot of similar energies and dreams and things like that. So I really liked him. And of course he's actually one of my heroes. So I admired Amazon. I think it's an amazing company. So we contacted Amazon and they were very interested and I flew there with three of my executives. We met with Jeff. It's all very, it's kind of, I like to. It's kind of hush hush because they wouldn't tell us where the meeting place was until we got off the plane. And then we go to the meeting place and then we're all searched, searched for weapons, I guess. And our car is searched and they go underneath the car to make sure there's no bomb or anything on the bottom of the car. And we're ushered into. We were. Is it Jeff's boat house which is close to his, his house. And so that's where we meet and we're meeting there and it's. I always say that when you fall in love, when you fall in love, at some point you'll have what you have the conversation. And the conversation is where you have kind of the meeting of the minds, where you find out that this. This woman or this man is like, wow, you really connect. You connect at the soul level, this heart level. And that happened in our very first conversation with Amazon. These guys were super smart. They had asked great questions. They were very, very. They'd already dug into Whole Foods. They wanted to talk about. They wanted to understand our business model, want to understand how it worked. And I was so impressed. A. They weren't corporate types that I. These guys were. These guys were. These were good business people who thought. And they were super smart people, and particularly Jeff. And it's like, wow, these guys are fantastic. So I remember after the meeting, we talked for like two and a half hours. Then after the meeting, we go to a restaurant to just kind of. My team of three other executives to go process what happened. We said, God, those guys are really smart. It's really. Because we talked about all the things we could do together. The synergies were huge when we talked about what we could do together. And then we were sitting around and it was like, kind of all kind of a little dazed. And I remember asking the question, I said, hey, do you think they liked us too? You know, it's like having a fabulous date and you go and you leave and it's like, wow, I really like her. I wonder if she likes me. I wonder if we'll get a second date. Well, they asked us out just a couple days later, flew down, and I say we were engaged to be married six weeks after that first meeting. So it was, yeah, kind of love at first sight. Has that been a. Was that a perfect. That was the best solution for Whole Foods at that time. I'll always wonder what would happen if we'd fought. But many good things came with that merger. The best thing that came of it, Whole Foods needed to drop its prices. We needed to drop our prices to compete with the supermarkets. And. But to do that was going to cost hundreds of millions of dollars and time. Because when you're selling something for a dollar and now you start selling at 90 cents, first thing that happens is your sales just drop 10%. Your same store sales just dropped 10%, and your profits dropped 30 or 40%. So if you have shareholder activists, you can't really do that. So you need time to execute that. Amazon gave Whole Foods time to do that. We were able to drop our prices four times in the first two years. And even since I left three years ago, they've continued to Drop prices. I was talking to my, my, my successor, Jason Beechle, and, and not going to reveal anything confidential here, let's just say that Whole Foods continue to drop its prices and it's now highly competitive. If you, if people are still holding on to some old narratives, but if you went and compared our prices to other supermarkets, you'd see Whole Foods is very, very price competitive. Now we have gotten to price parity, which was one of our goals, even with Trader Joe's. We're match on private label now. So that was one of our goals. Amazon made that possible and that cost him hundreds of millions of dollars to do, and they had the patience to do it. They also raised the pay of every hourly person in whole foods within 30 days. That cost him hundreds of millions of dollars to do. Our suppliers, every stakeholder won with the Amazon merger. The only negative thing is that their culture is very different. Whole Foods has a very different culture. And so there's been some cultural dissonance, you might say. And that was my biggest problem. I fought with a lot of the Amazon executives over culture. That's ultimately what got me to retire, because I couldn't win. I wasn't winning any of the arguments, and that was frustrating to me.
- [23:36]
Randy Kaplan
You're listening to part two of my incredible interview with John Mackey, the founder and ex CEO of Whole Foods. If you haven't yet listened to part one, be sure to check that one out first. Now, without further ado, here's part two of my awesome interview with John. All cash transaction of 13.7 billion. You didn't take stock. If you take it.
- [23:51]
John Mackey
Can I make a little joke here?
- [23:52]
Randy Kaplan
Yeah.
- [23:52]
John Mackey
You know what I love about that? 13.7 billion.
- [23:55]
Randy Kaplan
A lot.
- [23:56]
John Mackey
No, I know. 13.7 billion happens to be the estimated age of the universe. Since the Big bang. I got $1 for every year the universe has existed. I think that's funny.
- [24:07]
Randy Kaplan
Was there a reason you took all cash as opposed to stock?
- [24:10]
John Mackey
Yeah, I wanted to take stock. They said it's cash only. That's all we're going to do. We don't want. You can't have our stock.
- [24:16]
Randy Kaplan
Yeah, stock's up 12.1 times since that deal in 2017.
- [24:21]
John Mackey
Trust me, I know. But for me, there's a happy thing that happened. Let me tell you what happened. I had taken no compensation from whole foods since 2006. I didn't even take any stock options. I donated all that to our foundations, which was worth a lot of money, let's say a lot of money. The foundations got from my stock options. But I felt differently if Amazon was acquiring the company, I felt differently about it. I said, guys, we got to do something. I don't want to work for Amazon for free. However, I don't want to take a salary because I've, you know, I've gone out all publicly and said I don't take salary any longer. So I, I got to stay the salary. And I said, well, how about if we give you RSU package? And so what they did, they gave me an RSU package which was at times seemed pretty generous.
- [25:05]
Randy Kaplan
But for those people who don't know, that means restricted stocks, restricted stock units. You have to stay to get them.
- [25:10]
John Mackey
They're giving you stock and they're vesting. But here's the thing. What Amazon did, which, which actually worked really to my benefit, they said, look, you also need to sign a non disclosure agreement, a non disparagement agreement and a non solicitation agreement as part of this. What you're getting for this. And, but your, and your RSUs do not even start to vest until you retire and then they start to vest. So basically I worked for them for five more years. I signed a five year contract and I left when the contract ended. So my RSUs were getting more valuable, but they weren't even vested and now they started to vest. And I think I've sold off what didn't turn out to be a lot of money initially with those RSGs become incredibly valuable to me. It's amazing how many, how much money that's worth now because as you said, the Amazon stock has gone up so much since the merger. So what was not that much is now quite a bit.
- [26:04]
Randy Kaplan
Right? I mean their market cap at the time of the deal was $240 billion, I think.
- [26:08]
John Mackey
Are you sure? I mean everything you've said has been pretty much right on the money. Sure about that one?
- [26:12]
Randy Kaplan
I'm sure.
- [26:13]
John Mackey
Okay, great. Well that's been great for me.
- [26:15]
Randy Kaplan
Yeah, let's, let's move on. We all make mistakes in our careers that we regret. And so you made social media posts under your personal name and then essentially you were going through the Wild Oats merch. You had bought a competitor. Wild Oats SEC was fighting to block it for anti competitive reasons. And then this, this comes out. You had been posting privately as an individual having nothing to do with Whole Foods on a message board about Whole Food stock. And at some point you even made a joke about your hair.
- [26:50]
Podcast Host / Advertiser
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 in my life, I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did in my own journey. I've learned that having the right mentor is a massive advantage to achieving our goals. I'm hugely passionate about mentoring others. 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.
- [27:32]
Randy Kaplan
Opportunity.
- [27:32]
Podcast Host / Advertiser
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.
- [27:47]
John Mackey
Yeah, that turned out to be a huge scandal leading to the FTC trying to block or FTC is the one that ratted me out to the sec. Now the SEC is investigating me for potential. The goal was to get me indicted, and then the board would have to fire me. That was the end game here. These people were very vicious.
- [28:08]
Randy Kaplan
You're talking about the securities and Exchange Commission had it out for you because they thought you were potentially manipulating the
- [28:13]
John Mackey
stock, which is, you know, they quickly discovered that I never revealed any inside information. And the media that the media interpreted as the. Their narrative was completely illogical, if you think about it. So I'm posting under this, a screen name like every other poster on Yahoo was doing. Then everybody posted under a screen name. Like, my trail name is Strider. When I'm out backpacking, that's my trail name. My screen name is Rahodeb, which was my wife's Deborah. So it was kind of like a. An anagram of her name. The media made it out that I was like. Because I also posted occasionally, I defended Whole Foods and debated against some of our competitors, like Wild Oats, for example. And so I made maybe a dozen sort of criticisms of Wild Oats as a competitor. And so the media interpreted that as. That I was trying to drive the Wild Oats stock price down so I could buy it. Cheaper. Now think about that for a moment. This some anonymous poster on a bulletin board named Rahu Dev. Nobody knew it was the CEO of Whole Foods Market. How can that person drive down any stock price? It's ridiculous. And furthermore, they neglected the fact that I stopped posting on the Yahoo bulletin board six months before we initiated any merger talks or acquisition talks with Wild Oats. The whole narrative was blown out inaccurately. I was just really having fun. That's what people understand. There was no nefarious motivation except for me liking to play games. But nevertheless, I couldn't defend myself because I was being investigated by the sec. So my lawyer said, you cannot say anything. Nothing. So I was not allowed to defend myself at all. And so the media narrative just went wild and it was wildly inaccurate. But to this day, that's what people still believe, that somehow or another, this horrible CEO manipulated the Wild Oats stock so he could buy it cheaper. That's the narrative that's out there. So, yeah, I regret ever posting. And I've never really posted on a bulletin board ever since then, to be honest. So at least under any other kind of name but my own.
- [30:28]
Randy Kaplan
I don't think that's the narrative today. And I'm just saying that because you're here in front of me.
- [30:33]
John Mackey
Times pass and people. People forget or they never knew it in the first place.
- [30:37]
Randy Kaplan
Let's go to what it takes to be successful. And one of the things that's made me very successful, something I called extreme preparation. It's my brand. Someone prepares one hour for a podcast. I think today I'm at hours and 25 minutes. As of today. I was still making changes before you walked in the door here. I found another nugget.
- [30:56]
John Mackey
Before you, let me compliment you. I've. I've done a lot of podcasts and I've been interviewed a lot of time. I don't think anybody knew my story that I've ever talked to as well as you have today. I would say that's extreme preparation. I've been very impressed. I mean, I haven't corrected you. You've made a few minor, minor errors, but they were very minor compared to what I normally hear. So kudos to your extreme preparation. I'm very impressed.
- [31:23]
Randy Kaplan
Well, thank you. I appreciate that. I think Extreme Preparation starts out a meeting and a podcast on a completely different level. As part of my executive coaching, you walk into any meeting, you hit somebody with a question or knowledge. It shows you've done your research. It makes people be respectful. Most of my guests, I mean, they're all extremely successful. You get 90 minutes, everyone runs longer. Because I've done the research, my questions are different than most. I don't want to repeat the same questions. How has extreme preparation led to your success?
- [31:53]
John Mackey
You know, funny thing is, I don't think that's. I think everybody is a collection of strengths and weaknesses. And extreme preparation is not my strength. In fact, I'm more of a entrepreneur who. I'm extreme spontaneity. Now, as you know from when I talked previously about my reading and learning. So I. I could say that I try to learn as much as I can and that is a type of form, a form of extreme preparation. But in general, I don't tend to over prepare for things. I trust my own well of knowledge, my own experiences, my own learnings to see me through in most situations. And I think very well on my feet. So I have a quick mind. And so I kind of like, I prefer that. Now, if I was doing your job, I wouldn't do extreme preparation, but I would prepare. But I generally just review. Like even for this today, I didn't do extrema preparation, but I said, but better find out a little bit about this Randy Kaplan guy. And so I read up on you a little bit and I was quite impressed with what you've achieved and accomplished.
- [33:08]
Randy Kaplan
Thank you.
- [33:09]
John Mackey
I'd say I do enough preparation so I can wing it. I like winging it.
- [33:17]
Randy Kaplan
That goes against my DNA. I couldn't screams in that.
- [33:21]
John Mackey
Different. Different strokes for different folks.
- [33:22]
Randy Kaplan
Different strokes for different folks. One of the things you talk a lot about and I think is very underrated, is culture. And you had this appreciation ethos that when you walk out of a team, everyone has to say something nice about somebody else.
- [33:35]
John Mackey
No, they don't all have to say something nice. It has to be voluntary.
- [33:38]
Randy Kaplan
It has to be voluntary. Five people are in the meeting. How many people would give someone else a compliment?
- [33:44]
John Mackey
Well, let me talk about appreciations. Let me give a little backstory for that. I am not exaggerating. If you practice appreciations, you will transform the culture of your organization. It's so simple to do. I've seen the effects. I've had other people tell me when they started doing appreciations or culture shift. And so appreciations are something we do at Whole Foods and at Love Live at the end of every meeting. They're voluntary. No one has to do them. It's very important that the leader do a lot of it because you lead by example and people pay a lot more attention to what you do. Than what you say. And appreciations. The reason they're transformative, first of all, they have to be authentic because we know the difference between flattery and an authentic preparation. When I appreciated you for your extreme preparation, that was authentic. I was quite impressed with your preparation, and so I meant it. And I really did appreciate that about you. Thank you. So there's a tendency in a meeting in particular, because people can get bored. They begin to judge other people. They're saying, well, that's a stupid comment he just made. And so you could, over length of a meeting, people can get into sort of negative spaces just because they're sitting there a little bit bored, a little bit tired of the meeting. That if you go out of the meeting with that kind of consciousness, it can be. It can be destructive to culture and morale. But what happens when you do an authentic appreciation? An authentic appreciation is actually an act of love because it's coming from the heart. If it's authentic. There's no. If you just say it and it's not authentic, then it's just a form of flattery. It's not. It's not. And people sense the difference. People know when it's authentic at some level. We know when it's real and when it's bullshit. And so let me give you an example of something that happened to me very recently. A guy that I go hiking with all the time, and he's a really good hiker. He's young. I'm not going to give his name, but I really thought he doesn't like me. I always get this kind of weird vibe from him. And I was about to do a hiking trip and I was thinking about not inviting him because he's such a strong hiker and he's younger, and I really can't. He can't really hard keep up with him. And I told him in the email because he knew I was going to go on this hike. And he said, I really want to come on that hike. And I said, well, you know, I got to tell you that I just think you're too good of a hiker. I didn't want to invite you because I always feel like we're slowing you down and that you're just kind of bored. And he said, well, a slower hike is better than no hike. I really want to come. And then a few days later, I got an unsolicited text from him that did this massive appreciation of me. He just said, I just want you to know how much I admire you, how much I love you. Don't ever doubt it. You're one of the most important people in my life. You've changed my life. So he just did. An incredible appreciation for me. And I'd been thinking, this guy didn't even like me. That's what appreciations do. It causes you to rethink someone. You see them in a different way. Now, if it's an authentic appreciation, it's like I have misinterpreted that person. I've misjudged that person. I will never think about my friend the same way as I thought about before. That appreciation, because I know it's from his heart. I knew that. I know he loves me, and I'll never doubt it ever again. And when you do that with your team, I'll tell you one other story. When I was leaving Whole Foods Market, one of these regional vice presidents, who, again, he'd been standoffish. I really thought he didn't like me. And just, you know, I'd never been able to connect with the guy. It was the last time I saw him, and he came up, and he was. He was really nervous and shaky, and he presented me with this thing he made for me. And it was just this real. It was this beautiful artwork that told basically how much he loves me and how important what. And what a difference I'd made in his life. And it was this his way to thank me and appreciate me for what he'd done at Whole Foods. Here was a guy that I didn't even think liked me. And it was like his name was Mark. And I just. I said, mark, I'm so blown away. I kind of wish I known you'd felt this way about me for a long time, for a longer period of time, because now I'm leaving. And I. We could have had such a closer relationship. And he said, I was too scared to tell you, but you were leaving, so this was the time to do it. Appreciations are transformative events. They transform relationships. They transform team morale. They're incredibly powerful. And the last story I'll tell you is that we did them everywhere at Whole Foods. The last place I could get was the board of directors. It took me 10 years. The board just said, this doesn't seem professional, and blah, blah, blah, blah. Finally got the board to start doing a pre. I just started doing it in the meetings, and then the rest of the board caught on after we started doing appreciations. No one ever resigned from our board of directors. They loved it so much. They had such a connection with the other directors because they were Appreciating each other. Appreciations are so organizationally powerful. Every company should do it. You should try it. It's incredible.
- [38:45]
Randy Kaplan
I'm going to put it in a different context. I took a personal sabbatical a month ago, the Hoffman Institute, which is where people go to get.
- [38:51]
John Mackey
Yeah, I know about the Hoffman Institute.
- [38:53]
Randy Kaplan
Mentally healthy. You know, I've been through a lot of things.
- [38:54]
John Mackey
Very transformative organization.
- [38:56]
Randy Kaplan
Very transformative. It was amazing. And one of the things they teach you is to appreciate yourself even when things go bad and you've done bad things. And people were there for all different reasons. The youngest person there, 25 year old river crafting guide. And then we had famous CEOs there, just all over the spectrum. And it really was transformative for me to say, okay, I appreciate myself. And then I have a daily journal that my teacher gave me, Danny Kim, who was amazing, great coach, still work with him today. And it says in the morning, one thing I appreciate is X. And then two things I appreciate about my life are X. And one thing I appreciate about myself today is why. And it really is a mind shift because we all have busy lives, we've all been through trauma, we all have challenges. And it really is, it's great to appreciate people at work, but it's also critical to appreciate yourself.
- [39:56]
John Mackey
Yeah, totally agree. You know, I think there's three now that you've gotten on this track and it's probably bringing it close to this. There's three transformative things that you can do in your own life that will transform your life. You just name one of them. Appreciations. So appreciate others, appreciate yourself. The other two are just as powerful. Gratitude. I practice gratitudes every day and that is transformative. If you practice gratitudes, they're expansive. And as you're grateful, as you practice that, you're great. And it's just amazing what gratitudes will do if you practice them on a regular basis. And the third and the most powerful of all, even more powerful than appreciation and gratitude. Forgiveness. If you practice forgiveness, forgive everyone. Anytime you're tempted to judge somebody and attack them, forgive them. Practice forgiveness. And as you forgive others, you will find you too are forgiven. It is incredibly powerful. And people have a lot of trouble forgiving because we like that ego satisfaction of judging and being angry at people. But it's a trap. Forgiveness is the most powerful thing we can do to transform our lives. Forgiveness opens up. Love is much or more than gratitudes and appreciation. Those three things together, dynamite again, take it well.
- [41:16]
Randy Kaplan
Number one, forgiveness will take a weight off your shoulder. It could be an 800 pound gorilla that just eats at you for years and years and years.
- [41:24]
John Mackey
And it's poison. It's poison. Get it out of your. It's cancer.
- [41:28]
Randy Kaplan
It's cancer. At Hoffman, what they also teach you, talking about the individual is to forgive yourself. Right? Which is very hard to do. Right. We beat ourselves up over all these things that we've done over our life. It could be family and you know, we all, we all want to do well. We all want to do great things to our family, our life, our co workers, our friends. But we all make mistakes. At the end of the day, you know, to be mentally healthy, you do have to forgive yourself.
- [41:54]
John Mackey
You do. Well, let me throw a big idea out there for you to chew over later. Everything we judge and attack in the so called outside world is really our own projection. Our own guilt, our own faults get projected out. We see them in someone else and we attack them there. And as we forgive in that external world, we discover that we are too forgiven. You can say you're forgiven, but as you forgive it in the external world, you begin to experience it within your internal world. That's why it's so powerful to forgive. Yes, we need to forgive ourselves, but, but if we forgive ourselves and we continue to attack, it's still projecting out there. In other words, we're seeing our own things that we feel guilty about and we dislike about ourselves. We see it in the external world where we attack it. We generally judge things that are also part of who we are. So that's why it's so powerful to practice forgiveness with others because we are projecting it out into the. It's like, it's like our own. As we begin to see others as forgiven, as we practice forgiveness, we experience love and we begin to see it and experience in the outside world. The world is largely our projection that we're making of it. We think it's external to us, but it's really our projection, it's our dream. And so we need a dream that's a dream of love, a dream of forgiveness, a dream of appreciation, a dream of gratitude. And as we begin to begin to choose that in the external world and see it, then that's how we're being transformed at the same time because there's no disconnect. That's my big idea to share.
- [43:37]
Randy Kaplan
We're almost at the end of the show and I want you to tell everyone about love life and what you're doing today.
- [43:41]
John Mackey
Well, that'll take us in another show, but Basically Love Life is a community of.
- [43:49]
Randy Kaplan
This is your new company?
- [43:50]
John Mackey
New company. Our first location's here in la. Probably our second one's going to be in Austin. It's down in El Segundo, Manhattan beach area, south of the airport. It's big. It's an old Best Buy. It's next door to a big Whole foods market. It's 45,000 square feet. It's kind of a one stop wellness holistic health center, longevity center. So we've got, Let me just tell the components. We've got a healthy restaurant there. Food is important to people's health and well being. We have a really great fitness center. So state of the art fitness center, yoga studio, Pilates, physical therapy. We've got a spa, we've got a big community gather room where we do classes and do lectures. We've got a. But the most important thing we've got, we got pickleball courts. That's not the most important thing. Most important thing is our medical center. So our healthcare system is basically broken. Not because of the money, that misunderstanding, it's who pays for it. It's really about. Our medical program is like a plumber's model. So Randy, when do people go? When do they get a plumber?
- [44:54]
Randy Kaplan
When you're clogged.
- [44:55]
John Mackey
Yeah, when you're clogged up or your pipes break. When something goes wrong, that's when we mostly go see a doctor. When something's gone wrong. And the reason that's not a good strategy anymore is because what goes wrong and kills people today? Heart disease, cancer, obesity, type 2 diabetes, autoimmune diseases, stroke. The leading killers of human beings generally, generally are not infectious diseases. They are chronic diseases that develop over time through our diets and our lifestyles. I mean, America is now 73% overweight, 74% overweight and 43% obese. Think about that. And the trend line is continuing to go up. It hasn't leveled off. So we might be 80% overweight in 10 years and 50% obese. We are literally eating ourselves to death and people don't even know it. But we have this technology, we have technologies now that can give these detailed assessments. You can find out where you are on your health container. Most people are too scared to find out, but once you find out, you can begin to make different choices. And love Life's about creating a community of people that are dedicated to becoming the healthiest version of themselves, physically, emotionally and spiritually. All those are very, very important. First you start with a deep assessment. Find out Your baseline. Then we can create a strategy for you to begin to make changes to be as healthy as possible. Then you can track it. We now have these amazing wearables. Also think. You know, like I always say that I stopped drinking alcohol now four years ago because of my Apple watch. Because I have a. I have an auto sleep on my Apple watch that tracks my sleep. And I discovered that anytime I drank any alcohol at all, my deep sleep went to zero. My overall sleep dropped. An hour on the night and my pulse rate would be about 8 points higher. I like drinking alcohol. So this was an unwelcome discovery. But I did it over and over and over again until it was like, John, would you rather have alcohol or would you rather sleep well? And I haven't had a drink since because I'd rather sleep well. I'd rather feel good the next day. I have no more throwaway days. Every day is a great day because I feel good every day. As you become more conscious, you make different choices and love life's about helping people to be more conscious so they'll make better choices and be healthier, feel more vital, live longer, have more happiness.
- [47:14]
Randy Kaplan
I always conclude my show with a game I call fill in the blank to excellence. You ready to play? Ready?
- [47:19]
John Mackey
Yeah.
- [47:20]
Randy Kaplan
The biggest lesson I've learned in my
- [47:21]
John Mackey
life is to love everyone.
- [47:23]
Randy Kaplan
My greatest personal goal is to love everyone. My number one professional goal is
- [47:30]
John Mackey
the same.
- [47:30]
Randy Kaplan
My biggest regret is taking so long to discover that my biggest fear is.
- [47:35]
John Mackey
My biggest fear is that I will somehow or another fail.
- [47:39]
Randy Kaplan
The craziest thing that's happened in my
- [47:42]
John Mackey
career is I became so successful.
- [47:44]
Randy Kaplan
The funniest thing that's happened in my
- [47:46]
John Mackey
career is I didn't do extreme preparation.
- [47:51]
Randy Kaplan
The best advice I've ever received is follow my heart. Ten years from now I'm going to be doing.
- [47:57]
John Mackey
I don't know, it'll be an adventure.
- [47:58]
Randy Kaplan
If you could pick one trait that made you successful, it was perseverance. If you could pick one trait that would make somebody successful, it would be perseverance. The one thing I've dreamed about doing for a long time but haven't is there's nothing. If I can invent one thing today,
- [48:14]
John Mackey
it would be a way to create world peace.
- [48:17]
Randy Kaplan
If you could go back in time and give your 21 year old self one piece of advice, it would be I wouldn't.
- [48:25]
John Mackey
My life worked out wonderfully well. I had to learn all the lessons. I've learned to be who I am today. I wouldn't want to take away that gift to my 21 year old self.
- [48:33]
Randy Kaplan
If you could meet one person in the world today who is alive, it
- [48:37]
John Mackey
would be John Mackey.
- [48:39]
Randy Kaplan
If you're the President of the United States today, the first thing you would do is.
- [48:43]
John Mackey
The first thing I would do if I was President of the United States is. Let me guess. I'm not answering this. That's as quick as I would. I would cut the federal deficit.
- [48:53]
Randy Kaplan
If you were on your DeathBed and had 60 seconds to live, what would you want to tell the world?
- [48:59]
John Mackey
I love you.
- [49:00]
Randy Kaplan
I was going to ask what would you tell your wife? And I assume it would be the same answer. The one question you wish I had asked you but didn't is nothing comes to mind.
- [49:10]
John Mackey
You asked a lot of good questions.
- [49:11]
Randy Kaplan
So grateful for you to be on my show. Been a big fan of Whole Foods my whole life. Customer of Whole Foods today. My family loves it. I love it. Congratulations on all your success and thank you for sharing your story today. Very inspiring, very motivating.
- [49:25]
John Mackey
Randy, thank you for what you're doing. I'm sure that your podcast is inspiring thousands and thousands and thousands of people to be more successful in business and happier in life. You're doing a great gift and I really appreciate that. You don't have to do what you're doing and it's really beautiful what you're doing. Thank you.
- [49:43]
Randy Kaplan
Thank you. It means a lot to me. Thank you. Appreciate you.
- [49:46]
John Mackey
Appreciate you too, Sam.