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Whole Foods iidea Whole Foods was family was just a medium myth it's easy to be a Critic it's actually hard to be an entrepreneur for years I was told that this was never going to work my mother was begging me on her deathbed to give
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up this stupid grocery dream when did you realize that love was the center of everything most people could be corrupted by money Fame power cuz what people want is love talk to me about the clashing worldviews between socialism and capitalism I know my history
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capitalism is a win-win win-win game what qu ities do you think the most successful entrepreneurs have one of the challenges that I think every successful entrepreneur eventually [Music] faces I think the best place to start is
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going back all the way to the beginning to safer way which be was the precursor to Whole Food right where did the idea for that come from in my book the whole story I actually talk about I had the Psychedelic experience uh where I experienced this ego death ego
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dissolving when I was 22 and pretty soon after that that's why that's why I started the book there and I'll start the answer to your uh question there and then that that really just changed my I got off the path my parents really
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wanted me to be on and uh I just moved into this vegetarian Co-op a housing Co-op sort of like a commun and I wasn't vegetarian at that time and I really didn't even know much about food I'd just been a typical American kind of junk food eater and but I had my food
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Awakening my Consciousness awoke there I I I'd already thought my body is kind of like well you eat food to get fuel like a car used to get gasoline and I and that mechanistic model doesn't do credit to the fact that you actually need to
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nourish trillions of cells in your body with super healthy food if you do that you'll feel better immune system will be stronger you won't get sick as fre ly and you'll live longer and you'll just probably overall have a better life I kind of got that when I moved into that
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Co-op sort of had some older wiser people in the co-op and and I learned how to cook I became the food buyer for the co-op and I got deep into it it was like wow this natural and organic food stuff is pretty interesting then I went
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to work for a small natural food store in Austin Texas at that time called The Good Food Company and I became the assistant manager there and I I loved it I never I never worked retail before I loved I became friends with customers friendss with the the employees that I
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was working with and then I remember coming back to the co-op one day no before I came home that night I was looking around I was closing up the store and I thought I love this I could do this this is this is a within my
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realm of Life competence I could I could run a store and I came back and I talked to my girlfriend at the co-op Renee and I at this time I'm probably just about 23 Rene is 19 and I I said Renee what do you think we we opened up our own natural food store and it
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changed my life her n looked at me grabbed my hands looked me in the eyes and said she was a hippie And she said Oh ma man that'd be so cool let's do it and so we did and and if she'd said that's a stupid idea my life might I
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wouldn't be here with you today my life might have taken a completely different trajectory but she said she's excited about it we did it together and it was called saferway it was a vegetarian store and it was um was very pure we didn't sell we didn't sell meat we
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didn't sell white sugar we didn't sell um alcohol we didn't even sell coffee and and it and and I was like to say we did very little business we were not meeting the market where we found it so to speak it was our own ideals and we did that for a couple
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of years and and we managed to lose about half the capital we'd raised which of $45,000 but we began to figure out the business and as luck or fate would have it uh I found another location and had a lot of trouble persuading the
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investors to relocate and they only do it if I found another big investor which I did buddy I play basketball with pick up basketball with and and he inherited a lot of money from his parents who died and he uh he put in like a $100,000
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bucks and or no $50,000 and then we got more money from the shareholders and we relocated and changed the name to Whole Foods Market and that was the first Natural Food supermarket in Texas I've been inspired by bread and circus and Boston and M guchas in LA and Fraser
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farms in San Diego and thought this is an idea whose time could be coming and that became immensely successful and we and we sold meat we sold alcohol we sold coffee and we were still featuring natural organic foods but we were also
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now a more uh a grocery store that more people could identify with particularly Our Generation Um which was a kind of a counterculture long hair hippie generation that was looking to reinvent the world starting with one of the first places to reinvent was food and so uh
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that store was immensely successful that was the Lamar location yes it was in fact within six months it became the highest volume natural food store in the entire United States based on everything I know about the world back then let's
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pause there we're we're going to come back to this in a second talk to me about the tension between the idealism uh no meat no processed foods attention is always there I always say you know you've heard this cliche it's easy to be a saint on the
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Mountaintop it's easy for critics to judge and say you're selling out you're betraying your ideals like as I'm pl-based I hear I hear it all the time from vegans you're just a you know you're a hypocrite you say you're an ethical vegan and you whole food sold
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meat so you're just a hypocrite and a liar or you're not even ethical vegan I don't believe it blah blah blah but it's like what exactly have you done if you think a vegan store will work do it don't just criticize other people if you
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think you can make that a viable business the problem in that instance is that about half of 1% of Americans are vegan and 2% are vegetarian so you just don't have a big big for that big of a market and and another cliche which is true is you kind of have to meet the
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market where you find it not where you'd like it to be so the tension between your ideals and as long as we're into cliches I'll give you a third one which is the perfect is the enemy of the good if you just want to have your ideals you
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can have them but you may not have a business so you have to engage with the market you can try to influence the market you can try to educate the market but at the end of the day they vote every day with their pocketbooks exactly
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what they want if you're not prepared to serve them what they want then they're going to go find it somewhere else and you your business may end up failing because you so there is that tension between your ideals and but then you have to you have to
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mediate between them you you I always like to say we're always pushing IDE our ideals but always listening to our customers it's like a dialogue you're having or a dance and if you don't dance with your partner your partner's going
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to dance away from you so you have to you have to meet them where you find them I've always noticed that most of the people actually all the people who criticize other people doing things they're usually not doing the same thing they're not trying to do the same thing
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they're not in the same space they're just sort of like lobbing grenades from the safety of the sidelines and yes I think that's absolutely true and I also think there's a tendency for all of us including myself to project our own our
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own failings out onto other people and criticizing them then it's like you're not doing what I think you should do of course I'm not doing anything so it's it's it's it's easy to be a Critic it's actually hard to be an entrepreneur it's hard to actually create anything it's
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really hard but basally anything that's going to be successful and meet the test of time but it's very easy to find fault with what other people are doing and you know I've learned the hard way for example I just don't read comments
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anymore like if if if if you when this podcast is if you allow comments on your podcast I'm not going to read them because I'm going to get all this Hate's going to come my way hate they hate Whole Foods they it's gone down since Amazon bought it I hate John Mack He's a
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hypocrite blah blah blah blah the comments just allow people to vent all this negativity um and so I've learned just better to um just to let the stuff go you and me both so coming back to Lamar see you open Lamar it's uh what was it 10,000 sare
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fet it was huge yeah 10,500 fet well that'd be like the tiniest store at all food now no but I mean compared to the Victorian house you had it was huge compared to that and you got all this inventory you borrowed money or location
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you convinced the guy to lend it to you cuz he didn't want to lend it to you and then 100y year flood hits yeah so nine months after we opened up that really successful store the whole first Whole Foods Market in 1980 um when we were building it the
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owner of the building uh this Texas good old boy named Ben pal he let me know that this we were building it in the hundred-year flood zone and I said well what what does that mean exactly a 100y year flood zone he says well John what
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it means partner is that about once every hundred years Austin is gonna experience a 100-year flood there's gonna be eight feet of water the sh crease gonna overflow its banks water's gonna come down the lar it's going to fill up your store and I
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said really you're kidding right he says no no no it's in the 100-year flood zone and I said well when was the last time that happened he says well I'm not rightly sure it happened over 70 years ago before I was born but that's what happened and I was thinking all right
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well what are the chances we're going to have a 100-year flood flood anytime soon and uh so I thought well I'm going to still take the risk and he saidwell let's to be on the on the let's give you a little bit of margin error let's build
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a slab that's two feet high so our store was two foot concrete slab so you had to step up to get there which made it a little hard for grocery cars to get down in the front but we built a ramp for them to get down anyhow we had the hundred-year flood in the first year we
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were all better was uh and Renee my girlfriend was working work that night and she swam out of the store because it it happened kind of in late afternoon early evening and it was um Memorial Day weekend it was a Sunday night with
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Memorial Day the next day so uh that had some good things to it but you're asking about the banker that um this is the thing I didn't know about stakeholders and I didn't have language for but I experience people that love your business because the day after the flood
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we had uh I don't know dozens of people come in and help clean up the store that didn't work there they were neighbors they were customers they didn't want us to die they loved us we had uh the the suppliers gave us new inventory our
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employees worked for free while we were while we because we couldn't make a payroll we didn't have any money they worked for free until we could get back open again which there was no assurance that we would um but the most remarkable story that I found I about the flood I
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didn't actually find out about until about 10 years ago when um uh I'm met this conference and this guy comes up to me and he says you know John you don't you won't remember me you know uh but I used to work for City National Bank back in the day you know
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terrible thing that flood when that flood happened to you and I said yeah yeah you work for City Bank he must have known our Banker uh Mark Monroe and he said yes Mark and I are really good friends and that was quite a thing he
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did for you and I said well yeah sure was we I don't know if we could have reopened without that $100,000 loan the bank gave us said it always puzzled me though that because I was surprised the bank would give us the loan because you know it was just my signature
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guaranteeing and my signature was kind of worthless and he looks at me and he says you don't know what happened and I said well yeah I do the bank gave us the money and he says no John the bank did not give you that money I said yes they
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did we got a check from the bank he said John the bank turned the loan down the only reason you got that money was Mark Monroe personally guaranteed that loan I said what personally guaranteed why the hell would he do that and he said he did
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it because he said he really believed in you and he believed in Whole Foods and he knew you you'd pay him back even if it took you the rest of your life and and so he took the chance on you and I said that's incredible I I've got a I I
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need to thank him that's that's great says well you're too late he passed away about five years ago so that's a good story but that's that's when people ask me about stakeholders that's what stakeholders are they're people that are
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invested in your business care about your business and then you have responsibilities too did you realize you were on to something when you saw other people helping clean up that were customers and didn't work there it was only in retrospect later that I realized
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we were on to something that that I could see the patterns because I didn't I hadn't really been exposed to any kind of stakeholder thinking before um but then later when I got exposed to it I realized yeah that's what the they were
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stakeholders they were they were our customers and neighbors they were they cared about us It also says something about that this we're talking about now May of 1981 literally 43 years ago and the world's different back then than it is today uh I really wonder whether
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people would come in and help clean up maybe they would but Austin back then was a much smaller city than it is today was a much more neighborhood based much more and and and it was just a different Consciousness back then it's it's a you
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know so as you make progress you also lose certain things didn't want to give up after the flood I mean a lot of people I think would have just thrown their arms up in the air and and sort of tried to walk away you know uh that's a a very good commenting question and I
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think the answer to that honestly is that um I thought I thought maybe Renee and I were going to that the Universe decided we weren't going to do this I was going to do something else in life but I had a lot of friends and family that invested
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money I had real I felt like I can't let these people down we got to found a way to get back open again and it's in in the book I talk about when Whole Foods does its IPO 14 or in 1992 so 11 years later it was one of the happiest days of
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my life because finally all the investors that had believed in me and believed in our vision believed in Renee they could leave now they could they could cash out and so that really took a a load off of my my chest so to speak my back talk to me a little bit about
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learning the xnos of retailing what are the xnos of retailing in a grocery store that you've you've learned over the years but you started out with no experience yeah well I mean there's literally thousands and thousands of things I mean I can just give
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you some of the most important things you realize is that hey nobody has to shop with you I thought it was so funny later on when the F Federal Trade Commission said Whole Foods was a monopoly and it's like you got to be kidding we got got less than 1% of the
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grocery business and they sort of made up this category that we were the we had were a monopoly of Premium natural and organic food supermarkets but my point is of course we want a monopoly of anything and what I learned early on is
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that customers always have choices if you don't Ser if you if they don't like your prices your service your quality if you're not convenient if they can't get in and out fast that you don't have a business so I learned that the most
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important stake holder is and always will be the customer that's number one stakeholder and and if a business doesn't realize that or forgets it um their business probably is going to suffer in the long run because people do your competitors are constantly
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innovating they're constantly studying what you're doing copying your best ideas and then iterating on them and this is how the human race makes progress to be honest is that um people have choices and you have and you have to compete to serve your
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customers does that mean some people do a poor job of course they do I mean that happens but there is this competitive drive to serve your customers better that's what I that's the single most important lesson I learned in business
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period but certainly it's true in the retail business we don't have any patents we don't have any monopolies everything we're doing is wide open for people to see copy I mean I people used to come in and take you know pictures of
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our prices and and they'd be looking at our product and you they're showing up in the supermarket so everybody was studying us and we no way to stop that so that's one thing I learned secondly I learned that um yeah you got to take care of your customers well who takes
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care of them your employees do your team members do and if they're unhappy they're not going to take care all of your customers well so if you really want good service to your customers make sure your team members are a well trained well motivated and that they are
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rewarded for serving the customers well that you have a high standard and then you meet because happy team members lead to happy customers happy customers lead to a prosperous business that makes happy investors so I learned then about
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sort of the interdependency of all these stakeholders that are that are connected together and that and a sense of business is this ecosystem of of of of stakeholders ecosystem of customers employees suppliers investors the communities that we're all part of
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and that once you see that then you see that there a system and that you can you can create these synergies between the different constituencies between the different stakeholders to help this business to optimize itself at a higher
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level that was what we call conscious capitalism at the end of the day it's being very conscious about how you you have these responsibilities to all these stakeholders and you're trying to create value for all of them and that's very
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difficult to do that's also another thing I learned that's hard to do all of that there are little trade-offs that end up being made so but how do you minimize the tradeoffs and maximize the synergies um and I also learn As the adage goes retail is detail there's a
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thousand little details I mean typical stores got tens of thousands of products and what's more irritating that if you go to the store and you you have a recipe that needs broccoli in it and they just have don't happen to have any broccoli well you're really pissed off
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first of all you have to go to another store it's like how can you run out of broccoli so but then again if you stock too much broccoli it's going to rot on the Shelf so you have to you have to develop the skills particularly in the
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grocery business where you have all these perishables to be able to keep your food fresh and in stock but turn it over fast enough uh but if you and so there's that there's that relationship where you want it fresh but you also don't you also don't want it to be out
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of stock and sometimes those are intentional with each other there are so many other things I could tell you about it's just uh um retail businesses a um how do you price stuff like okay you know if somebody's underpricing do you
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match that which what do you match what do you go lower on there's a whole there's a whole pricing strategy that you have to do and that's can be complex because you have a variety of different competitors competing with you if you're
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competing with a airan in La you're not worried about price but they may be having higher higher quality higher um more um more high-end product that you have to compete against and do you choose to compete against it so I I suppose what I like about business in
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general is that you never quite figure it all out you're continually learning the world's continually evolving and changing like uh let's say look at what happened to the grocery business when covid came in uh all of a sudden you know um people want stuff
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delivered at home and fortunately for us we were teamed up with Amazon at that time and Amazon was able to step up and invest literally hundreds of millions of dollars in delivery in order to enable Whole Foods in Amazon Fresh to be able
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to deliver when the demand went from virtually zero to to a huge percentage of your business so I don't know I can keep I can keep going on this but you you may want to have different questions oh keep going I love the detail here is
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is perishables the most important part of the store to get right absolutely particularly particularly in food food retailing people choose their supermarkets based usually on the qu partly convenience but then if they have crummy produce crummy meat the Seafoods
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fishy I mean they're going to go someplace else whole foods' competitive Advantage has always been I just thought we did a better job than just about anybody else out there in overall produce perishable quality and that gave
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us compe I gave us Competitive Edge why is produce the first part of the story you walk into because that sets the tone for the whole store people oftentimes pick their store by how good the how how good the produce is and it's not easy to do it well it takes
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a lot of skill to be able to manage your produce so that you keep your in stock position while you keep freshness it's it's a it's part part science and part art um and I mean I just think produce is is it's also the healthiest part of
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the store produce is is the most important foods that we eat fruits and vegetables are the healthiest foods we can eat and if you want to have a strong immune system and you want to have high longevity you're going to have to learn to eat like
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vegetables and fruits let's go back to Lamar for a second here so you reopen and at this point you're you're you're profitable you're the most yeah we became profitable safer way was this struggle and that's also an interesting story here we were struggling with safer
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way we we relocate it to a better location make it bigger expand our product mix and we went from struggling business to hugely successful um and then I thought wow we got a tiger by the tail here let's grow this thing and we just had a flood so we
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had to grow it just so we'd have a you know wouldn't have all of our eggs in one basket that might float down the river but you had four Founders at that time and not everybody wanted to grow the business yeah uh one of my one of my co-founders Mark Mark Skyles uh after we
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had the really successful store he really didn't want us to grow because he said John we have a gold mine here let's just not screw it up we're we're we can be rich we don't have to do anything else we can just live off this thing for
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the next 25 years and and just you know have a wonderful lifestyle and and I said God I don't want to do that I I want to I'm I'm to grow the business I want to have more stores and he was willing to go along with that until you know the the next couple stores we
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opened up were were slow to take they didn't take off right I the right off uh at the Go point now remember that very first Whole Foods Market took two small stores because we merged with this other natural food store we took them together
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uh and we had their customer bases from both stores as a foundation and then we were unlike any other store and so we were able to pull in from a much wider geographical area which is one reason the store was so successful we opened a
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second store well we had to go out in the suburbs it wasn't hippies anymore it wasn't a counterculture market and it started slower now grew really well but it took a few years before it became profitable and that proved to be the case anytime Whole Foods went into a new
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market for the first 10 to 15 years we existed it was a slow growth because people just had never heard of us before and what are you the stores weird and you guys are you guys all dress weird you don't look like a regular Supermarket so but once our brand got
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well known then our store started to take off but in the day for Mark when he remembers when he was there this the news stores were slow and they diluted down this the first very successful store and he got he blamed it on me he
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got angry and angry at me angri at me and that ultimately led to a break where Mark um decided to leave the company and he said I was going to wreck the company with your gr growth dreams and uh he sold out his interest and opened up a
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pizza place and and uh that probably wasn't the best decision he could have made he wasn't the only one who thought you were going to wreck the company with growth James over the years I mean Mark first nickname me wacky Macky and uh Through The Years um I think
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entrepreneurs always are climbing a wall of Doubt because the entrepreneurs looking ahead they're seeing possibilities that other people don't see yet and so it's easy to be skeptical I I just for years I was told that this was never going to
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work I mean my mother was begging me on her deathbed to give up this stupid grocer dream think we had about four stores back in 1987 and and just you know go back to school and make something of my life so in general um there's just a huge amount of
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skepticism about what new entrepreneurial ideas and an entrepreneur has got to have the uh the faith and confidence to move forward even though people are constantly telling him it's going to fail in my case all of that criticism all those
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attacks they just made me more determined to I'm going to prove all these people wrong I remember feeling that many times you're wrong what we're g to we're we're Whole Foods is GNA we're going to grow we're going to change the world I felt that with Mark
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when he was telling me I was going to wreck the company and he he didn't want to keep any of his stock and he wanted all of a stock out before I wreck the company so yeah that happened several times I had I had I count four different
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coup attempts that occurred uh over the history of the company that I was able to beat back talk does that come from like is there a chip on your shoulder or was there at the time that was sort of like I'm going to prove you wrong you know I don't think I I had sort of an
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inherent chip on my shoulder it's just in some ways I'm a very competitive guy and when people will tell me it won't work you're going to fail it's just I just is it a chip on my shoulder I think a chip on a shoulders is something that
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you're you're just kind of mad at the world about and I but when people would say what we were doing wasn't going to work it just made me more determined it's it's kind of like um you get a competitive Challenge from somebody you could see I was uh talking about about
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Aran we were off camera that I would love to be competing more aggressively with Aran if I was still the CEO but in because General I just um I love I love games I love play I love to to compete to me it's really fun and so when people would tell me that
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it's not going to work it's like I'd look at it and I would you know maybe they're are they right no they're not right I'm going to prove them not right and or if I would hear about a competitor I I just I feel like that's
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not unusual for entrepreneurs they they they're they're constantly being told what they're doing is not going to work and so I think you have to have resilience and that resilience in my case comes from kind of my competitive
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Spirit which is like it would just make me more determined I think that's a healthy thing by the way because too many people quit they they hit a a roadblock or they a setback an entrepreneur gets set back so many times you get knocked down and you got to get
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back up again it's it's like a you know like a if you're a fighter I mean you know eventually you you have you might have to M defeat eventually because you're going to die if you don't but in general you just want to keep getting up
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and see if you can get the next punch in um anyway that's how sort of wired growth meant more money more Capital needed yeah talk to me about the various sources of capital and and sort of when you chose at first to take outside money well of course it like the classic
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entrepreneurial story The initially it was friends and family and then um my dad taught me was my mentor that the best Capital you have this is very different than the way people think about it today says the best Capital you'll ever have is the capital you make
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yourself and if you if you don't want to lose control of your business then make sure you're very profitable don't scale too quickly grow your business thoughtfully and painfully uh patiently keep your cost down and plow the money
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back in and that's how Whole Foods operated for the first many most first decade of Our Lives we took Venture Capital Money in uh we started trying to get it in 1988 so years after we started safe for away and we we got our first investment in
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1989 I call the VCS um I call them hit trikers with credit cards and but what I mean by that is that uh they're getting into your car and as long as you take them where they want to get to which is an exit uh which either has to be a sale or an IPO and we didn't want to sell the
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business we wanted to we wanted to grow it ourselves and so we always had the IPO the initial public office offering was in the back of her minds but I realized that the VC's they have a little bit different agenda they want to exit the car but they don't want exit
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the car too soon uh because they they'd like to have the compounding occur while they once once the company does an IPO most of the VCS because of their the way they're structured with their with their own investors they have to either
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distribute that within a year they generally have to either distribute the stock or sell it on behalf for the investors and so in in Whole Food's case we actually wanted to go public because the VCS wanted another round of VC financing but that was going to give
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them control of the business and talking to my dad about it we said we don't want those guys to get control of the business first of all they first thing they were going to do is replace me and put in a professional manager which they
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were trying to do already and we we it's in the book the guy that was supposed to start working as president died on the day he was supposed to start work and it was like if that's not a sign of the Universe I don't know what is but we didn't we didn't actually hire that
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person from the supermarket industry and we got the VCS to good exit they made a lot of money on Whole Foods they only were in the car for three years from 1989 to 1992 and so they they got out of the car and now we had our own currency once we
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once you do a public offering you can go back to the public markets we did several rounds of financing over the years to raise additional money from public so that's why it's an IPO that's the initial public offering but
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corporations do other public offerings after that and we did several particularly when we made Acquisitions we needed to to cash out the the investors in those businesses sometimes like with fresh fields we needed to do another public offering in order to just
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cash out the their their venture capitalist as well so um yeah so venture capitalist they're can be important in a business and it's just I always tell young entrepreneurs a couple things one is they're going to tell you to to try to don't worry about
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your burn rate just grow grow grow and I said that's not in your best interest they say that because you they're the ones supplying the money and eventually if they need to they'll do a cram Down Round And basically take it do it at a
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much lower price and you'll have an opportunity to invest but you've long you've long exhausted your own funds to invest and you'll lose control of your business I've seen happen many many many times so I always just say know what
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you're when you're an entrepreneur and you need Capital you often times aren't really thinking about the consequences of it are so I always try to warn other entrepreneurs look when you take the VC's in just know what you're doing they're not they're they're getting in
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your car they're not there for the long ride with you they're there for their own agenda you can go together for a while but you need to be careful that's just generally my message the minutes something happens they're they're
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thinking already they really are mhm is there an optimal level of growth you know um I think there is but it could vary from business to business uh if you if your business like Whole Foods was which was a um a retail business where culture is very
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important uh I found that once our growth got above 20 24% do you know what the you know the rule of 72 yeah so for the listeners the rule of 72 is if you take your growth rate and divide it into 72 that's how quickly you will double so
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let's say you're growing your sales at 24% a year then 24 into 72 is three so in three years you'll actually double your sales or if you're growing at 18% 18 into 72 is four so every four years you double your sales so um that's really we found that when we began to
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grow faster than 24 to 25% that our culture would began to get diluted and it was we couldn't um the culture can in in it can incorporate a certain level of growth before the culture itself begins to fray too many new people are coming
34:17
in they're not getting indoctrinated or inculturated and uh and our business would suffer when we grew that fast but if you don't grow fast enough there's another downside if you're not growing fast enough then people will leave they won't want to stick with your company
34:31
because they don't feel like they have very many opportunities I don't I can't get Advanced that you know the person my my leader ahead of me is the same age as me and she's not going anywhere but if you're opening up new stores then you're
34:44
opening up new opportunities and that really gets people excited because their own dreams get tied into the business so there is an Optimum level of growth and it's not too little that you'll lose people and not so high that your culture
34:58
gets diluted down and changes negatively so it Whole Foods that sweet spot for us was between about 15 and 25% but I see other businesses particularly digital businesses that can scale at enormous rates without cultural problems because it's they're doing it
35:16
with so few people I think of it sort of as dividing The Pie versus growing the pie and the minute you stop growing the pie people are focused on dividing it that's true and that causes a lot of internal politics and organizations it does sharp
35:30
elbows if you one reason you got to and another thing is if you keep focused on growth um then people are busy not in fighting because they've got enough work to do that they don't look around for something to you know occupy their their
35:45
time you did over I think 20 on positions there what have you learned I did 23 what have you and you only had one one that went bad I think yeah and it was not and because it was uh not retail stores that was Amon it was um it was a mail order supplement company that
36:03
we thought we could use that to springboard into the dot boom back in the late 90s and the problem was the people that bought supplements with a catalog they were slow adopters to the internet because they were mostly in their 60s 70s and they never so they
36:20
didn't really make the adoption uh so that was a mistake on our part that one failed what what did you learn about acquisition that I mean that batting average is just insane it's pretty good but but the thing about it is we were always all the
36:33
other Acquisitions were retail stores and if they had problems the team could know how to fix them but we had nobody in our team that knew how to fix a mail order catalog that was slowly dying so I couldn't send my best guy go fix that
36:46
they didn't know what to do but if I sent my best guy to fix some stores we acquired in in Detroit they could go fix them so that I learned it's stick to your knitting stick to what you know stick to what you know how to do and also if there are problems you know
37:05
how to fix them some of the Acquisitions you made you had choices uh and one of the early ones was what was the California chain M Mrs Gucci Mrs Gucci you weren't you didn't have the capital at that point to do the acquisition you weren't ready for it but we were public
37:20
and so we did have our currency when when my dad was objecting to that that merger he was saying John you have your hands full with bread and circus which was still less than a year old you don't have the capacity to take on it on the
37:35
opposite Coast you're just you're gonna you can't handle it it's you're going to delute your Talon down and he was right but as I kept pointing out it's like you're right but this opportunity is not going to come again this is the Crown
37:49
Jewel natural food store chain on the west coast if we don't take them somebody else is we'll have to figure out how to do it and we did and we did acquire them and we did figure out how to do it mostly by leaving them alone they were already we didn't have to
38:03
integrate them they were Mrs gues they already had great management we pretty much just left them alone for the first few years and didn't try to integrate them into into our company or culture just let them operate independently that
38:15
was the solution and it worked that's a clever solution I like the fact that you know often we're not ready for that next leap uh that next level we just finished you know maybe we just finished acquisition or something but it doesn't
38:28
come up again right if you didn't buy that you weren't going to get another chance you have to one of the secrets to success in life and business you have to seize the opportunities when they're there if you don't see these great opportunities only come they don't come
38:43
around every day and he who you know I he who hesitates lost if you not willing to seize that opportunity somebody else will you have to you have to know when to go all in it's you know when to make the bets I knew m they were very
38:58
profitable they had a great brand very successful uh did not want to lose those guys and plus they were if we didn't get them somebody else would and they would end up being this great competitor for us down the road we just had to make
39:10
that deal we paid we paid a really rich price for it too you guys created a network I think early on of sort of The Operators of the Whole Food stores and and you would meet regularly yeah what people don't realize is that when we invented the natural food supermarkets
39:26
there was co-invented a few different people in different parts of the country there hadn't been there were small natural food stores there hadn't been these supermarkets One-Stop shops and the ones of us that were doing it we we connected with each other and we we
39:40
developed friendships we we get together three times a year different a different operator would host and that's how I got to be friends with the people running M gues the people running bread and Circus the people running um alfalfas in
39:54
Colorado and unicorn Village in Florida we were all meeting together and we we were we were all in this common Mission we wanted to sell natural organic foods we were spreading it and um we were helping each other out sharing financial
40:07
information we really bonded well it was a it was a wonderful time because I felt like I was part of this larger movement now eventually Whole Foods ended up all those entrepreneurs ultimately sold out to us so Natural Foods Network ended up
40:21
being this great vehicle of relationship building that allowed those entrepreneurs to all cash out and make make become Millionaires and make a lot of money and gave Whole Foods what we needed which was these various geographical platforms that we could use
40:34
to expand and grow off of uh one of the Curious Parts about this for me was you were so open about your books and and what you were doing it's you know the best way to understand it was that we really did all feel like we were part of this movement
40:49
that was going to change the way America ate we were all very idealistic uh the original Founders were then you later on you get the Venture capitals coming in seeing this as a good opportunity but in the early days we were all um uh we were
41:04
young and idealistic and uh uh really thought the world would change the way it ate and to a large extent it did I mean the world's very different now that the Natural Foods organic movement came out it's not the same as it was and Whole Foods had a big I think it over
41:20
time it it it changed the world why do you think you were the one to be able to come out and buy all of those people versus the other operators I think uh I think it was um a lot of them just didn't have the they were like my friend Mark they they
41:41
liked being um uh my co-founder Mark they just wanted to be a big wheel and they Mark just would be happy just to have be a big wheel with that one store and I think that's true of the other people they they they were just happy to
41:54
get the money and they got local notor variety and whatnot they didn't have the vision or desire really to build a chain I just think I did I had that kind of Drive I I wanted it to me it was like this game's getting more and more fun
42:09
let's just keep let's just keep growing it and building it and that's just the way I was wired and I think the other people were wired a little bit differently is there a difference between or actually I'll rephrase this um what's the difference between
42:24
professional management and a founder-led company it's a huge difference um nobody ever loves their business as much as a Founder does uh and I mean I led Whole Foods for 44 years I will always it's like it's like if you're a parent your child grows
42:43
up I raise that child as best I can it's on its own now I can't tell Whole Foods what to do anymore and you just hope you put inculcated good values and that they have a happy life I will always love Whole Foods I will always wish the very
42:55
best for Whole Foods even though I'm not in it any longer uh and in fact I deliberately try to stay out of the loop because it bothers me when I hear things so I just try to I just try to leave it alone and and do other things but professional
43:10
managers they're not I'm not saying they couldn't be but in my experience they're very they're not usually Mission driven they've gotten their their MBA from Harvard or Wharton or Stanford they're very intelligent they work hard but working in Whole Foods or Amazon it's
43:29
just uh it's just part of their career path they want to put it on their resume and then they want to use that to leverage to get the next promotion maybe at another company it's a stepping stone it's a stepping stone thank you that's
43:41
exactly correct and I think one of the things that hold fut for so long is we did most of our promotions from within and so we built this very loyal committed Mission driven business that um was very unlike most of the businesses I saw um and when we brought
44:00
Professionals in we spent a lot of time making sure they were good cultural fits at least in the early days and later on um as we got bigger we be and more famous we began to attract people who really were looking in it as more of a
44:17
career move um and not and they and we never could get them to buy in to the mission and I think what happened Happ s after the founders leave and retire that it's it's very difficult for a company to be anything but professionally you led at that point going after that
44:35
that's one reason most companies don't last that long uh you you start to build as professionalism builds it begins to uh hire um more professionals and you you your bureaucracy begins to expand as well you get bigger and bigger legal
44:52
department a bigger and bigger HR department they have their own sort of professional ethics their own professional goals they want to accomplish but it's hard to manage the cost now because the professionals are running their own little fums and you
45:09
either you either say well every you have to do sort of what Amazon's done from time to time it's like everybody has to do a 10% cut well that's kind of arbitrary it it that hurts morale but how else do you check your growing bureaucracy what the way capitalism
45:24
deals with it is is that these big these big corporations eventually just get sort of sclerotic and entrepreneurs come in and create these very new businesses that are that are very Nimble that are young that haven't built up a
45:38
bureaucracy yet I'm I'm having this time is building love life now and I'm determined you know as long as I'm still running the company that we're not going to build up a big bureaucracy because I mean you just have to have to hold it in
45:53
check I don't think I did as good a job at Whole Foods of checking that bureaucracy when once it got that once the professionalism got in there I had trouble um controlling it I going to make sure it doesn't get a good fi hold into love life how did that show up was
46:05
that sort of through cost expansion or was it sort of you hire people to try to do something you you're unable to do or you know you're like we need to hire somebody to work on that and then of course they can't do it by themselves so
46:21
they have to build a team and what what's not happening it's sort of like the federal government they add new government departments on they don't ever they don't Sunset them they don't get R of them they just add new ones on well corporations have more of a profit
46:34
they just can't operate indefinitely building up a deficit the way the federal our federal government can do so there is the shareholder push to keep control of the cost to be to be sure but it's hard to do it surgically you end up
46:48
you know doing it you take these everybody figure out how to cut your waron 5% or 10% or whatever uh that also kills morale when you start doing layoffs so uh the better way is not to build it up in the first place and that just means being skilled at saying no no
47:04
we're not going to do that no and because there's always things that are nice to do and if when you're profitable and you have the resources to do it you start to add things on but you don't go do a good job of sunsetting them or getting R of them or just evaluating
47:19
their cost Effectiveness I think the most successful businesses and the most successful entrepreneurs um spend a lot of time worrying about their cost and even when they're successful one of my mistakes I think in looking back was as we got more
47:34
and more successful I tended to just not say no enough uh I'd still do it more than anybody else but I was it was easy to just say yes and uh figure you can you can grow your way out of it talk to me a little bit more about the the focus
47:51
aspect of this and and saying no and what you say no to because you have an organization that you're running it's large you're successful you're making money people are coming to you with these ideas maybe great projections maybe not and they just need a yes from
48:05
you and at that point you're disconnected from every you don't see the and you can't easily evaluate uh whether what their proposing is going to be successful or not and generally when something is failing the people that um are responsible for don't
48:20
want to admit it's failing and what they do is that we need more resources I can make this work but you need to give more resources so at some point you'll have to say no it's better to say no early on or if you just want to you just have to
48:35
set very limited budgets for it and then not let those budgets increase because there a tendency for budgets to sort of grow automatically just um well we're going to have a you know we're going to have a 7% increase in that budget and it's like
48:49
well is that worth it I remember the we did this for years and it was my least favorite day of the year we would would we would uh we would bring the leaders in to talk about their budgets and I hated that day because I was always the
49:07
Grinch I was always the one saying no or we're going to eliminate that and um probably we should have kept doing that we stopped doing it and I eventually they said we don't need to do this anymore and because it was such a painful day for me because I ended up
49:23
having to be the the I guess I guess um every company needs somebody that's uh really really watching the focusing watching the cost sometimes that's a Chief Financial Officer but in general it needs to be kind of a a cultural thing whole feed
49:41
was not as good at that if we were at other things and uh I wasn't as good at that as I should have been there's a natural entropy to not only bureaucracy but expenses and just the scope of the work that you take on it is it's really
49:56
it's it's it's something that uh as a business grows that you have to be even more Vigilant about it because it's so many things are happening that you can't even you can't even see them anymore your company's gotten it's grown beyond your ability to actually understand
50:12
everything that's going on in it and so you have to you delegated that out and you have to trust those leaders and so that's why companies end up getting managed a lot by their budgets and and that you're determining where you're
50:25
going to expand give resources to and where you're going to take resources away from they all would make cases for why they need more resources but your function as the leader is to make the difficult decisions that well actually we're going to stop funding that or or
50:38
we'll let that run one more year but you'll need to hit these objectives or we're going to pull the plug on it so um you know I got to say because because I identify as an entrepreneur as Whole Foods got to be larger and larger a lot
50:51
of ways I enjoyed it less because the it's the creative part that's fun and that's what I'm doing doing again with love life you know putting deals together thinking about you know this this whole Health scene is changing rapidly who are you going to partner
51:04
with what are you going to let go of what do we need to invest in um and it's it's you know I'm thinking about new ideas every day it's it's that's very fun but when you're begin to manage a really big Corporation ah it's more about um I
51:19
don't I didn't get to be as creative any longer it wasn't it wasn't my entrepreneurial Spirit was sort of not um nearly as as engaged as it was for the and that was only about the last 10 years or so remember 44 years of a long time so there was a nice long creative
51:35
run and it it didn't like change overnight it just slowly as the bureaucracy got bigger as I was dealing more with problems rather than opportunities my enjoyment of the business began to shift are there things that you said yes to that a more
51:52
professional manager wouldn't have said yes to I'm thinking things that don't make sense on a spre sense for the well of course I mean um that's the job of the entrepreneur is to see things the professionals it would not see or the professionals are making
52:06
a more calculated decision on uh is this good for my career or not or if this succeeds will it really help my career but if it fails will I end up getting fired um the entrepreneur is just going to they're going to take a more of a
52:20
let's try it let's see what happens and if it works we'll give more money to it if it doesn't work we'll we'll we'll discontinue it I I've never had a problem uh it's always been pretty easy for me to uh to try things make mistakes and admit admit that it's a mistake and
52:37
discontinue it it's like we tried that it didn't work it's okay um um professionals sometimes have trouble letting go of that because they worry that this loss is going to be a blemish on their resume the entrepreneur I don't think quite thinks that way through
52:56
wrote this you had I think four coup attempts at your leadership at various stages talk to me about what that felt like and and how you dealt with those you know um I use a good metaphor but it's it's only for the people that know something
53:11
about the Lord of the Rings fortunately the movies came out but I those books had a big influence on me when I was younger I think I read those the the three books uh five times before I got out of high school it was kind of like
53:22
my cult reading thing when I was a teenager and then of course the movies came out I've seen them multiple times and um in in The Lord of the Rings there's this one ring this the the Amazon now has the rings of power show on and they're showing how these Rings
53:37
were made uh which is not actually in The Lord of the Rings so it's really really interesting stuff and the One Ring The Ring of Power it's a great metaphor because there are three things that I found are very corrupting for most people not
53:56
everyone but most people could be corrupted by money Fame and power because what people want is love and they think those things will give them love if they have enough of them if you have enough money or power Fame but in fact those things do
54:15
not satisfy the soul and most people can easily be corrupted and Addicted by those things if you have money you you start to compare yourself to people that have more money than you and you're dissatisfied uh if you have Fame you have certain am Instagram followers or
54:33
uh you see who has more and you want more it doesn't really lead to happiness if you get more um and power you see this with politicians they they want more power and these things again do not satisfy the soul so these are Rings the
54:51
ring of power is corrupting well in this case I'm the CEO I I'm I'm getting the most money or the most Fame and the most power and other people's coveted those things and they always felt like they could do a better job the coup attempts were always I think well-
55:08
intended um or they people doing them thought they were well intended they thought they really would do a better job than me and if I could just get out of the way then they would be able to wear the ring and I wasn't going to just get out of the
55:24
way so they did what they could to get me out of the way I think that's where the coups came from and uh um I just think it's partly human nature as you acquired more wealth and power and fame as you guys grew how did you stay so
55:41
grounded um well of course other people might tell you that they didn't think I stayed that grounded so but I think I did stay pretty grounded and I think it's because um you know I have this whole background in philosophy and you know my book is kind of about my own
55:56
spiritual journey and I got really clear at a pretty young age like back in my existential days back when I was in my late 20s and then the psychedelics took it to another level I got really clear about death what I mean about that is
56:12
that um we're all going to die I got that at a very young age and most people they're always in denial there's this big denial of death and that when you're young it's like well that's what old people do but I'm not old and then I got my whole life ahead of me and and and
56:27
and they just put it out of their mind I was just aware that I only had so much time that that what do I want to so my big question is what do I want to do with the time that I have and so I was always had this um awareness that time was running out
56:46
and uh that I needed to get on with stuff and so the successes I had it's like I once heard that somebody asked Picasso what his famous his favorite painting was and he said the one I'm working on right now and so I never I don't think that stuff corrupted me
57:05
because I didn't care about it to me it was creating the next thing it was the next thing I was doing that was fulfilling me it I didn't think money or fame or power would really be very satisfying and they they weren't um I
57:20
remember when I met Jeff basos for the first time uh we we were it was it was well not was second time I met him because I'd met him at this conference and we'd hit it off but when we were going up there to talk about maybe Amazon buying Whole Foods um you
57:35
know we were meeting at Jeff's boat house which is next to his his mansion on Lake Washington and and but when we they wouldn't tell us who the meeting place was until we landed and then they gave us an address when we got there we were searched our car was searched
57:51
because they were worried about somebody trying to kill Jeff and I was thinking to myself I would never want to be so rich and so famous and so powerful that I couldn't live a normal life that I didn't have any anonymity that was like
58:06
a real wakeup call it's like I'm sure Jeff's one of the most envied people in the world but I would not want to have to live my life like that so a little bit of Fame a little bit of money a little bit of power to a certain point
58:19
is gratifying to the soul but past that point you get diminishing returns it's no longer bringing you any kind of Happiness it's now a burden so I I got clear about death at a pretty young age and I just wanted to accomplish things and I didn't think my accomplishments
58:37
were that big a deal other people are accomplishing stuff as well so I didn't spend a lot of time comparing myself to others either people that had less or had more I was too busy creating the next painting because that was what was
58:50
fun that was what was exciting that was where the joy and the love came and then the relationships with the people that you're doing with that's the real satisfying part when did you realize that love was the center of everything I think I've had glimpses of
59:05
it many times I mean I talked about it the first time I had that ego death and LSD that I had this realization that we were all it was just the the one being that it was it was all founded ultimately on play and love and games
59:20
and then when I did MDMA for the first time Adam uh MDMA ecstasy Molly uh when it was legal back in 1984 that just burst my heart open and I I I I wrote it down I like never forget this there is nothing more important than love and of course you will forget it
59:38
but once you had that deep connection to it you never quite forget it and then my spiritual path took me you know studying the course of Miracles doing breath work doing meditation I I I wanted to go deeper into love and so that's just sort of been a life um
59:56
part of my life purpose life mission is to because I just that's what makes life worthwhile everybody that gets to the and they're on their deathbed if you imagine you're on you're on your deathbed do you think you'll be thinking God I wish I'd made more money I wish
1:00:12
I'd been richer I wish I'd been more famous wish I'd had more power now you're going to be thinking about I wish I'd told my son how much I loved him I wish I hadn't let that relationship go I wish I hadn't said those things you're
1:00:26
regrets are always going to be about relationships and the ways that love failed in your life I mean if that that's the clearest indication that Love's the most important thing is because that's what happens when you're dying is you're looking back and you're
1:00:40
thinking about the people that you loved and didn't love well enough uh you're not thinking about the other you've let it go and so I've just been clear about that for a long time how do you learn to love yourself there's always like an inner
1:00:56
critic Right To Love Yourself unconditionally of course I you know you're you're asking great questions and you're also leading me through the book pretty well so um in my case my whole life in some ways has been an attempt to be able to
1:01:12
totally accept myself because I have had I think everybody has an internal critic we not have internal critic that internal critic is judging everybody else and then frequently judging ourselves is inadequate not perfect and in my case
1:01:26
in some ways the the the Whole Life Adventure and you get back into the Deep thing about the way I was raised my parents my you know um I was kind of that rais where if I brought home a report card and had all A's and one B it was like what are you going to do about
1:01:41
that b son it's like there was no like that's really great fantastic report card um and then when I'd have failures you know my own self judgments would be pretty intense so I think you come to love yourself and what I what I
1:01:57
experienced when I finally did it and it was just a few years ago now L A little over two years ago on on a guided spiritual journey I experienced I got really in touch with my like my inner child um this little boy that was so very beautiful and so idealistic and so
1:02:17
loving and just wanted to help people and uh it it it been hurt as we go through life we get wounded the little boy had had many wounds and um but his he was still this beautiful little boy and I saw him very clearly I saw this that child like of myself and I realized
1:02:35
that my entire life I'd tried to do good and I'd made a lot of mistakes I'd hurt people but I knew that at the core there was this good person that really loved and um I saw that and that was the first time I really I think Unconditionally
1:02:51
Love myself that's really powerful talk to me let's go back to the uh Amazon sale but before we get there let's re one so crisis hits sales aren't what's expected Janet Partners who's an otimus firm comes in walk me through from that
1:03:11
moment to the meeting with Bezos so um Whole Foods you know it's it's we weren't in people think we were like failing or in Decline and that was not true Whole Foods was actually incredibly successful we we had that at the time
1:03:34
the activist investors invested in Whole Foods we had the highest sales per square foot of any public food retailer we'd had the same store sales growth of 8% over 30 plus year period by every we we almost every objective measurement
1:03:49
holies was the most profitable food retailer uh grocery store operator out there we had so many wonderful things going for course but competition was catching up with us we were being copied the whole paycheck narrative the media just ran wild with that um and we were
1:04:07
increasingly being tacked by governments I talked to him in the book about how we had the uh that first California and then in New York um attacked us for mispricing and which we weren't deliberately mispricing anything and we were making more mistakes in favor of
1:04:23
the customers than others but it's just on the things like cut fruit if you have a little tear weight and you could be off a penny or two but if you have an ambitious um uh weights and measures Department of Consumer Affairs it's it's
1:04:37
kind of an extortion thing and that's what happened to us both California and New York generating massively negative publicity that drove our sales down we lost a lot of customers from that when happened in New York um and then what we
1:04:49
needed to do was we needed to be able to drop our prices uh across the whole company but but we began to start hap that happening we got we got attacked by activists activists are shareholder activists we've been attacked by lots of other activists over the years from
1:05:07
animal rights activists to variety of different kind of activists but uh these were particularly shareholder activists they don't think the business is being managed to maximize shareholder value and so this particular group of
1:05:21
activists was jna partners and they um we met with them soon after they took a position and to find out what you know if we could work together to try to create more value for the shareholders and they had this PowerPoint presentation and they they showed it to
1:05:39
me and my leadership team and a couple of my directors and you know did there were some things in it that were were accurate and there were a lot of things were non accurate I asked them could I get a copy of that presentation that you're making because I'd like to
1:05:52
address some of these concerns I don't think everything you put in there is accurate i' like to correct the record he says no you can't have it and I said well why not and he says well we don't want to listen John let me just tell you
1:06:03
what's going to happen here let's cut to the chase we're going to take over Whole Foods here's how we're going to do it we're going to take over your board first after we do that we're going to fire you and any other management people
1:06:15
that won't line up with us and then we're going to put this up for a bid and sell it to the highest bidder and there's not an effing thing you can do about it and walked out of the room it's like whoa I don't think we're going to
1:06:27
have a partnership with these guys and you know we had our Bankers we had our lawyers and we we began to look around for what I would call the win-win-win solution how do we get a win for every one of our stakeholders how can we do
1:06:39
something will be best for our customers best for our team members best for our suppliers best for investors best for the communities that we're part of I started asking that question I was putting that question you might say out to my to the universe out to my soul
1:06:52
give me an answer for this question and we looked at all the different Alternatives the obvious one is we'll fight Janna all my competitive instincts were you know and we're going to beat those guys and so that's that was the
1:07:05
first thing but we needed time to do that we we know we needed to reverse our our our same store sales uh the decline we needed to have a chance to change our prices but if you're selling something for a dollar and now you're selling it for 90 cents
1:07:22
in the short run in the wrong long run that's a good decis decision probably but in the short run you just your sales just dropped from $1.90 your same store sales just went negative your uh your profits there's a lag period your profits are going to are
1:07:37
are going to fall and then maybe a couple years from now uh when people become aware that you have these lower prices you'll see your traffic go up and you'll end up being a really good business decision we needed that time Jan wasn't going to give it to us so
1:07:51
fighting them was going to be very difficult and they knew that uh secondly we could we could um we could find a a sympathetic investor somebody who would would buy us and give us the time we needed to turn the business around drop the prices and not worry
1:08:07
we'd be off the public markets and and The Logical one there are people that do that Warren Buffett's like the best example and we actually contacted Warren and asked him if he'd be interested and he has a good sense of humor and he said
1:08:18
that um ah you know I own Dairy Queen I don't think H is a good brand fit for me um and so nothing came of that and then it was maybe we could take it private by going private would mean we' you'd work with a private Equity Firm or two and
1:08:36
they they would do it's a kind of a two-step process where they they would they would put up some money and they'd borrow money from the rest of the money they needed from a Consortium of investment Banks and then after they get control of the company the second step
1:08:52
is they would pay back that bridge loan they got from the Investment Bank and they would borrow longer term money using the company's own balance sheet to finance the loan which means they would borrow say they whole fuser sold Amazon
1:09:06
for 13.7 billion so took a private for the same amount they'd put in about a billion and they'd borrow 12.7 billion and so Whole Foods would be on the hook for the interest rates of that now we had really good cash flow we were very
1:09:19
had Eva doll was very high I think we're making about $1.3 billion doar in EA doll when Jan Ard us so it's again idea the whole food was failing in some way that that's just a media myth and um so we could have serviced the debt provided
1:09:36
that 2008 didn't happen again right in 2008 the the what do they call it the the plug went out of the tub and uh we saw the the whole economy shrink our Whole Food Market stock dropped 90% we were selling it three times our cash flow we could have bought our company
1:09:55
and paid for it in three years with our own with our own cash flow and so if a situation like that occurred again we would have failed and and uh so I the going private option was was one we seriously looked at but then the private Equity firms would have control of the
1:10:11
business remember I wanted to get those venture capitalist hitchhikers out of the cars now I'm taking them into the car but they're definitely driving the car they're you're not in control any longer they're in control and they their
1:10:22
agendas are very different and I just thought thought it was very risky you're risking the business and if if it works they could make well they can make billions of dollars that's why they'd be interested in going private um and so I
1:10:35
couldn't find the right solution and then I but I kept asking the question again and again and again what's the win-win win solution for all the stakeholders and then one day I woke up right when I woke up the idea flashed in my mind what about Amazon that was a
1:10:52
question what about Amazon and I had met Jeff the year before at this Microsoft CEO Summit and I hit it off with Jeff we we did a panel together um and he he was very interested in Whole Foods we talked about Whole Foods a lot he also was
1:11:07
interested in Science Fiction and Fantasy and we' read a lot of the same books like the Lord of the Rings and he was into scuba diving and I've been scuba diving a long time and dive it all over the world so we hit it off we we had a good rapport so then he said in
1:11:23
fact let John Let's this has been a great conversation let's get together sometime and let's talk further and I said well you got my number but I didn't hear from him so but here it is and I'm thinking what about Amazon because I
1:11:35
knew they were getting I'd read that they were getting more and more interested in the food retailing I knew that Amazon Fresh was kind of struggling as a business but they hadn't opened up any physical stores yet and so I said well let's let's find out and we called
1:11:49
them up and they wanted to talk and we flew into uh Seattle and I had three Executives with me and Jeff had three with him and we had kind of like you know when you when you fall in love with somebody you'll have this amazing
1:12:04
conversation where you where your souls kind of meet that happened on that conversation with Amazon that day we talked about all the things we could do together and we got really excited um about the technology and and they told us about their they wanted to be they
1:12:19
really wanted to be big in grocery and they thought whole food could help them and uh that also I like the Amazon team they weren't these kind of professional Financial types like I thought I was that I thought they probably were they
1:12:32
were really good guy super smart you know Jeff's really brilliant man himself and he hired really brilliant people to work with him and but they were kind of regular people they weren't they weren't uh stuffed shirts they were really interesting guys with diverse diverse
1:12:46
and clever Minds like Jeff so I remember our team retreated after we talked for about three hours and our team went to a restaurant to kind of process and looking around at each other saying that was an incredible conversation wow man
1:12:59
those guys are smart I think we could do some amazing stuff together and then we're looking around and I I voiced it for the whole group I said maybe so but do you think they liked us too and it turned out they did because they they came down just three days
1:13:14
later and six weeks after that first meeting we had signed an agreement to get married to merge and um yeah what kind of questions did the the Amazon team ask at that meeting of you guys everything the thing I liked about Amazon was how good their questions were
1:13:33
you can often times tell about somebody's intelligence by how good the questions they're asking by the way you're asking me great questions and uh um they really were asking great questions and uh and then that would lead to answers you know I'm very candid
1:13:47
so I was answering very truthfully to their questions unless I thought it would H harmmer business in some way and then but they were they we'd asked them questions and they would be equally forthcoming so it was um a very very good dialogue uh just they wanted to
1:14:02
understand our business they just you know and they they were asking the right questions to how to understand it why why are your same sore sales uh going down and then you could explain about competition and I could explain about
1:14:14
well we know we can get it back but we need to drop prices so let me let me just tell you so that when the deal got went through when I remember I was asking that question what's the win-win-win solution for all of our stakeholders the Amazon merger every one
1:14:26
of our stakeholders benefited from that merger we really did drop our prices we dropped our prices four times significantly in the first two years of that merger I hardly ever hear the whole paycheck narrative any longer hope
1:14:39
siling is expensive but I don't hear that narrative any longer because we're far more competitive price-wise than we used to be it cost Amazon hundreds of millions of dollars to invest that but they think long term they Jeff and his team think 10 15 20 years in the the
1:14:55
future they're willing to make that investment they raised they raised our wages and every one of our hourly people Amazon decided we're going to this was back in 2017 within 30 days of the merger they they said we're going to raise the
1:15:07
minimum starting wage at 15 bucks so that meant everybody got a got a raise because of people that were that it were at 1525 and you know that the Gap they they couldn't stay at 1525 they needed to go up too so pretty much every hourly
1:15:23
person got a raise it was good for our suppliers that not only did Amazon not cut any our suppliers out but they studied our sales and they saw wow they picked up a ton of our suppliers and so they they uh that was good for them um it was good for our
1:15:40
investors right they got about a 30% premium on the deal from what the stock had been before Jana got involved and then um it was good for our government they got a massive amount of capital gains taxes from from from the deal uh and good for our communities that we're
1:15:57
part of because Amazon did not change our philanthropic uh that we had hopefully has three foundations not only did Amazon not tell us we had to stop doing those they contributed additional Monies to it so every one of our stakeholders
1:16:10
was a winner in that it doesn't mean that that merger has been perfect there's been a lot of things uh I talk a little bit about it in the book and stuff off the record I won't talk about here but I had my share of disagreements
1:16:20
with Amazon I I fought with them many times and uh ultimately that led to me to to retire what do you think of activist shareholders having been a public company CEO and founder at thought yeah it's like um I'm not opposed to shareholder activist trying
1:16:41
to help you know help companies in constructive ways to become more successful and profitable but I think it's a flaw in the current in the United States flaw in our system because we treat short-term shareholders with the same type of
1:16:56
respect that you treat long-term shareholders I think that long-term shareholders that are really making long-term bets on the business and lets the team execute over the long term that's really what you need when you have short-term people that are that are
1:17:10
just trying to make a a pop to the to the stock price in a short period of time which are what shareholder actors are trying to do get a sale um I don't think that's good for the economy um and there's a there's Pretty Simple Solutions to it you we need to make a
1:17:26
distinction in tax policy right now A short-term capital gain is anything less than one year what I'd love to see is that if you held something for say 10 years maybe your taxes capital gains taxes went down to close to zero and if
1:17:43
you sold it in less than a year maybe they'd be much higher maybe it'd be 50 or 60% so that You' create these incentives to hold longer and that would make a shareholder activist at least have to hold the stock for a couple of years so they they'd have less lower
1:17:59
gains also those gains that they they need to make need to be the individual shareholders um are oftentimes taxed on those situations and the management is not thinking about Taxation and all in those decisions so it's almost as if they should be taxed
1:18:18
first and then the distribution shouldn't be taxed at all that would be another solution I think there's many ways that you can make changes and regulations and laws that would make shareholder activists constructive and a good thing for business rather than what
1:18:32
is today to be seen as they're kind of pirates um so I do think they it's reform could be possible there a lot of Founders today seem to be going dual class shares uh where they either retain a super voting share or they issue non-
1:18:47
voting shares it may not surprise you that love life has uh that in our structure there that didn't really exist when Whole Foods got founded back in 1978 but no we have two classes of sharers I've I've learned that lesson talk to me about sort of the clashing
1:19:03
World Views I guess between socialism and capitalism and how you how you think about these things that's a much longer topic so um you want to dive into it sure let's go well first I'm like a I'm a totally enthusiastic capitalist
1:19:23
and and meaning I'm I'm not I'm not seen as um unbiased in this when people talk to me about it because I know my history I know what the world was like 200 years ago as capitalism got started in the late 18th century so the last 250 years
1:19:39
but just 200 years ago these statistics tell you all you need to know 200 years ago 94% of everyone alive on the planet lived on less than $2 a day and today's dollars 85% lived on less than $1 a day the average lifespan was a 30 oh by the way so let's give it today the
1:19:58
um only 6% of the world's population lives on less than uh $2 a day it's gone from uh 94% to 6% in the last 250 years um the average lifespan 200 years ago was 30 now it's across the planet it's getting closer to 80 we've gone from
1:20:20
it's about 77 I think it's 76 for men and 78 for women across the whole planet from 30 um ill literacy rates 200 years ago 88% of the people alive couldn't read now it's under 10% and child birth I mean child death deaths and child deaths children dying
1:20:38
before their age of 10 um uh the type of advancements we've made in vaccines in antibiotics Modern Dentistry uh the amazing innovations that we have today and music and it's it's the world is so much better than it was the people that
1:20:56
complain about the world being a disaster don't put it in historical context do we have problems today sure we do of course we do we always will have problems by the way but these are different problems than we had when people talk about existential threat of
1:21:11
climate and see the existential threats are far less today than they were 200 years ago um and it's been capitalism science plus capitalism has allowed Humanity to prosper collectively so much we're so much better off it's it's not Utopia it's not
1:21:30
perfect and that's why socialism still holds such an attraction particularly for young people is they're they're born and they see they don't see racism the way I see it in the context of what it was like in the United States 200 years
1:21:46
ago or 170 years ago or even when I was a little boy growing up in Houston Texas and they had Jim Crow loss they had racial segregation was legal there's so much less racism today than there was in any in fact we're the Le least racist
1:22:00
we've ever been um there there's always going to be inequality but there's no more inequality today than there was at the founding of our Republic and and that just people change in terms of where they are in that hierarchy but um there's always going to be inequalities
1:22:18
it's because there's different there's inequalities due to people's certain constitutional abilities intelligence the way their parents TR uh rais them the community they're born in there's just lots of reasons why uh people become more some people become more
1:22:35
successful than others my point is socialism is a utopian dream that's failed it's a God That Failed We There are 41 countries in the last 120 years 100 yeah with starting with Russia 1917 or 1918 that have tried soal soci ISM every one of them has failed all 41 have
1:22:58
failed socialism has never worked and when people talk about what about the Nordic countries it's like they're not socialistic if you look at the economic freedom index which which charts how economically free a country is all the
1:23:13
Nordic countries are in the top 25 in the entire world and three of those five are ahead of the United States in economic freedom well what about Sweden it's like well freeden Sweden's my favorite example because when I talk about when you talk about Sweden it's
1:23:30
like okay well let's look at what Sweden does did they locked down during covid they didn't no they didn't they stayed open and they said that they every said that was a disaster but now if you look at deaths for Sweden over the last four
1:23:43
years from covid they're pretty good compared to much better than the United States for example um that's on a per capita basis for everybody per capita basis of course there's much lower population there um Sweden's economic freedom index is lower than the United
1:23:58
States there I think the United States is now up to about like 18 Sweden's like number 15 or 16 um corporate tax rates in Sweden are like 20% I always tell people like so would you favor corporate tax rates dropping in the United States down to 20% well no
1:24:17
um school choice Sweden has Universal school choice students can go to any school they want to the students make the choices the parents and the students make the choices School choices bitterly fought against the United States by the by the
1:24:33
well the progressives and the teachers unions Sweden's very Progressive country that's that's universalized school choice um uh Sweden has um amazing um uh freedoms in other areas and and they're they're so far from a socialistic it's just they
1:24:54
have a have a big social welfare program with their health care and they're but they're also that's kind of the ideal though isn't it you have capitalism and it propels you forward but then you have a social safety I I always tell people
1:25:07
it's like if you want to use Sweden as an example you got to take the whole shooting match I would take the Swedish if he gave me everything Sweden has but they don't want to take the low corporate taxes they don't want to take the universal um uh uh healthare
1:25:22
healthare they don't they don't want to take all the things of Sweden they don't they they want to lock down the economy and they don't want to take all of Sweden they just want to cherry-pick it but if you took it all I'd probably I'd
1:25:33
be because what the tradeoff is they going to have those big social welfare programs that Sweden has and you're going to have higher personal income taxes but you're going to have lower corporate income taxes and you're going to have more economic freedom I'd
1:25:45
probably take the Swedish package if you could off but you'd have to give me the whole thing and people don't see it that way why do you think we're still we as a societ not we as in individuals are drawn to it still I mean there's talk
1:25:58
about price caps there's all of this stuff and it seems to be this time is different we're smarter than all the other 41 times that's been tried and failed it's very in a in a in a in a capitalistic Society uh where you have economic freedom and free markets no
1:26:16
one's actually running things markets are self- adapting and correcting many people are very uncomfortable without they think somebody has to be in control of it all that and so they're they're willing to give up their economic and personal
1:26:31
freedoms for the security of thinking somebody's in control someone's doing it um and they believe that despite all the other failures which by the way they're not aware of they they just can rationalize those failures away well that was Stalin or that was ma or that
1:26:51
was Castro or that was Hugo Chavez these are dictators if you know we just got to get the right people in if we get the right people in running things it'll be different this time what they don't understand is the right people never get
1:27:04
in because the people that are most drawn to power and control of others the monsters they eventually eliminate all the well-meaning professors and put them in the Googs and and the dictators end up in power and in in charge and you
1:27:20
lose your economic freedom and you end up these totalitarian nightmares that started well-intentioned with good intentions but when you take away individual Freedom by almost by definition socialism does cannot allow economic freedom you can't allow individuals to
1:27:35
make these decisions people have to do what they're told and you end up using coercion and force to try to make the Utopia work it's very interesting if you study like take the Kuts in Israel which was such a well-intentioned socialistic
1:27:51
movement and the people that founded it were socialist and it's what happens the the first generation was so idealistic and made all these sacrifices for the Kuts the second generation they're not quite as much into it they're more they they want to
1:28:06
have more private possessions they're not willing they don't want their children raised by The Collector they want to raise their children themselves they want to have their own possessions so you might say that individualism
1:28:15
starts to creep back in and by the third generation they don't even want to stay in the Kuts they want to get the hell out into the rest of the world they the world's a big place Lots of opportunities so those ideals ultimately are not what most people want and so
1:28:31
socialism is bound to fail it's in it it will always fail it'll never succeed it's a dream that doesn't work it always turns into a nightmare but every generation is born has to be they're the young are always idealist I was a socialist when I was young I before I
1:28:48
started my own business you know surely we can create a Utopia together it'll be different this time but human nature is not changing and your ideals are I saferway was an idealistic thing and it's like I had to meet the market where
1:29:04
I found it not where I wanted it to be um I I just think that um it's always going to be this you can always describe it as in this perfect terms capitalism is always compared against its failures and and socialism is always compared to its ideals and that's that's
1:29:28
not a fair comparison you have to compare reality against reality or ideals against ideals because capitalism has Noble ideals as well they and and so if you just have complete lazy Fair capitalism you end up with the mafia you
1:29:42
have to have somebody that keeps the the violent people from beating up the ones who are their competitors so there is no perfect solution to we we have to muddle along with freedom and some regulations and do the best that we can but it's
1:29:58
going to be capitalism is really it's never been done before human the economic freedom has always been under the thumb of other people throughout all history until the late 18th century when Freedom broke through and this great
1:30:14
upward lifted Prosperity the genie got out of the bottle and they've been trying to intellectuals and people have been trying to cram that Genie back in the bottle ever since they haven't able to do it yet but if they ever do then we're going to see progress from
1:30:27
screeching to a halt and begin to go in reverse well I think we already have it in some countries where they've gone more socialist than capitalist at well whenever they go socialist um they start like Venezuela is a great example of
1:30:40
what they one of the richest that was the richest country in South America before they before Chavez got in there and he had the richest oil reserves and they completely screwed it all up and which pretty much is always what happens
1:30:53
how did you live on the win-win-win philosophy is there like a moment or example where you started to think that way or did you always think that way no I did not always think that way um it's we I think we're trained to think conerns a win lose I mean think about
1:31:07
almost every game every sport there's a winner and there's a loser we're taught and the way what reason people don't understand that about capitalism by the way so I can tie this back into it is capitalism is a win-win win-win game
1:31:21
it's good for all the participants the people customers don't have to trade with the business if they don't like the prices or the service or the selection they can go down you don't like old foods you can go down to Trader Joe's and got Alternatives if you um uh if you
1:31:35
don't like working for Whole Foods you don't have to there's plenty of other PE places you can go work at so Whole Foods has to do a good job or people won't stay working there uh if you don't do a good job with your customers they'll
1:31:47
trade somewhere else um if you don't do a good job with your suppliers they don't have to trade with you they can they they can they can cut you off they don't have to be business in business with you any longer um same way with your investors if you're public like
1:32:01
Whole Foods was publicly traded we could sell your stock if you don't like it so you have all of these stakeholders and the business has to be managing to create a win for the customers a win for the employees a win for the suppliers
1:32:15
and the win for the investors and win for the communities that you're part of that's when I began to realize the importance of win-win win was to stakeholder philosophy but I'll take it one further once you really can internalize win-win-win in your life and
1:32:28
that's how you try to live you're always looking with every person you interact you're looking for a win-win-win good for you good for me good for all of us it really becomes an ethical system it's it pretty much can just only you can you
1:32:40
can resolve any ethical question by always going back what's the win-win win here how do we all win it solves almost all ethical questions it's kind of a an ethical code in and of itself I love that philosophy it's also the only one that endures across time because we all
1:32:55
know what it's like to be on a losing end of a relationship or feel like we're losing you know it's true and think about it um when you're with somebody who's always looking out for you who's looking for a win for you too you trust
1:33:10
them you your relationship deepens and and with trust there's so many more things you can do together so part of the win-win-win is is knitting people together but you have to there are people that don't think win-win-win it's it's almost like you've got to be asking
1:33:25
the question is the person I'm dealing with are they looking for a win for me too are they just looking to see how much they can get from me so you you need to have the attitude of win-win win but you also have to be conscious of
1:33:37
people that are working from a different framework who might try to exploit you and you need to be more cautious around them but once you know you're dealing with somebody else who's operating from a SIM similar framework man oh man there's almost nothing you can't do
1:33:51
together and the interesting thing is like whole FS wouldn't exist today without your your suppliers back after the flood thinking in a win-win way where they extended you more inventory it's true and it wasn't altruism on their part it's we had been a very
1:34:06
successful business and they felt confident once we got back on our feet we'd be able to pay him back but still they had to take at least a little bit of a a leap of faith to do it that's kind of win-win in action right in a
1:34:18
moment of Crisis you're going out of your way to make sure that your partner that you want to have a long-term relationship with with not only survives but thrives exactly correct can we talk about Deborah for a second sure one of the most talk about everything else well
1:34:32
one of the most interesting parts of the book for me was uh your your first date with Deborah and how it didn't go well and then you sort of mentioned this letter you wrote to her after what did you say in that letter cuz you totally
1:34:44
changed her mind about you yeah well in that letter uh I just kind of kind of like I've done in this podcast I just open myself up and I just said here's I don't know exactly what I did wrong but I know I did something wrong but here's who I
1:35:00
am I got I really like you here's who I think you are uh I I realized that I kind of blew this date but it's okay even having one date with you was very special and I I think you're a very special person I think you're G to I wish you the very best I hope you have a
1:35:17
wonderful life this was before email I I stayed up all night writing this letter and polishing it and then rewriting it and then I stuck it under her door about 5:00 a.m. I mean I had the very faint hope that it I was it was a Hail Mary P
1:35:32
you know I was I didn't think I was going to get a second dat but maybe if she really liked this letter maybe she'd give me a chance so I was motivated I was looking for a win-win there and uh it worked because she did like the letter she called me up and said I
1:35:45
wasn't going out with you again but anybody that could write that good of a letter is worth a second date so second date went better and she likes to say by the third day she knew we were getting married so that's incredible 34 years 34
1:35:59
over 34 years ago now especially you know I sort of read that story I wanted to know what was in the letter but then I sort of map it to dating today which is you you have a date maybe it goes okay just okay or less than okay in your case you know she wasn't going to give
1:36:14
you another date but you instantly go home you flip open this app and all of a sudden there's like 15 people Ving for your attention and you feel good about that whereas this never would have happened back then I don't think you know I never thought about it you're
1:36:27
possibly right you know my ego was hurt and if I had other women that were ready to goow out with me I might have said well you know that's her loss um well she might have done the same right she might have done the same more likely she
1:36:39
would have but you know that was a blind date and uh it was hard it was harder to meet people back in the day you couldn't just have an app and and uh uh I thought I was being very clever at the time I asked my married friends if they were
1:36:54
single is there anybody they'd like to be going out with because I wasn't going to get any tips from my single friends and so fortunately I had a friend that um was married and he owned an art gallery and and Deborah was a customer
1:37:07
and he so he got to meet her that way and so I think you're going to really like this woman she's you know she's really she's beautiful she's smart she's really sweet girl next door type that you like and uh yeah she was like my
1:37:19
yeah she's my soulmate that's amazing I want to come back to business a little bit but we'll we'll sort of like cover a lot more different topics but what do you think of business planning business planning yeah uh I have mixed feelings about it I think that
1:37:35
uh it's a useful tool but you need to always remember it's a tool and it's a useful tool because it's it's good to think about your business when you go when you're doing business planning you're going into a different frame of mind you're going into what I call an
1:37:51
analytical frame of mind you're you're you're going to you're going to analyze where you're at and you're going to and then you're going to um create a like a spreadsheet kind of projecting about the future and you're you're creating this
1:38:02
plan around it that's all very useful to do it's good to think about your business that way from time to time but the tool shouldn't become the master some businesses become slaves to their business plan and it's like we're behind the plan now so what are we going to do
1:38:19
differently to get us back on plan it's like well don't do something something stupid to try to get yourself back on plan because maybe your plan's wrong and so the tool is something to help you think about the business but it's the
1:38:32
master if you start making business decisions to hit some stupid plan that you made change the damn plan um I um don't think I'll tell that story it was a b about Amazon they're a real planning company and I had some problems with
1:38:45
them over planning but I don't think I'm going to get into details about that one no problem uh what qualities do you think the most successful entrepr rurs have I think I think different entrepreneurs have different and I think there's not one size that fits all but
1:39:01
I'll talk about it in general terms I think there's some a lot that have a lot of overlap well most entrepreneurs are very creative you know I think the average intellectual does not understand how creative entrepreneurs are or how frequently intelligent they are because
1:39:15
they're not maybe intelligent the way the intellectuals are uh they're street smart they also see opportunities they see connection um entrepreneurs are very future oriented they often times see the world and the way the world could be they see
1:39:30
possibilities when others see problems an entrepreneur often times sees a problem as an opportunity to be solved wow and and they frequently do solve it so entrepreneurs also are um they have to be very resilient really you are going to it's just nature of the
1:39:51
Beast there's trial and error there's fail you're you're you're you're groping your way you have an idea that that could be a very successful idea but you don't exactly know how to put it into practice and so also entrepreneurs are
1:40:02
quick to see things that are working elsewhere and and and it's like they can take ideas from one context and add it to another that's something I happen to be really good at I see an idea here and it's like wow we could apply this to
1:40:15
love life or we could apply this to Whole Foods that's a terrific idea let's make that work um they're also um willing as I told said earlier often times entrepreneurs are willing to go and move forward and others are not they others hesitate they're worried about
1:40:31
their downside you know I don't know if you've read have you read Elon musk's biography by Walter Ison yet I've read a most of it okay I love that book um for a lot of different reasons but you know I know Elon a little bit but um I got to
1:40:46
know him better in that book and the thing that that just blew me away because I consider myself a guy who's willing to move aggressively and uh to seize opportunities and take chances but what he did again and again and again which
1:41:02
you know had never it always paid off for him he was always willing to get up there like a a person who won a bunch of chips in a Boker game and he just put the whole pot he put it all in he could have lost everything multiple times and
1:41:15
it was like that guy he the most courageous boldest entrepreneur I've ever seen he's a damn fool and you'd have to conclude Now by his tremendous success and wealth that he's just the most brilliant entrepreneur because I mean in the book it talk about some of
1:41:30
his friends also I know like his brother Kimble or Luke nosick these guys came and help bail him out when a couple times when he was near you know when he might have failed so he had friends and he had loyal friends who would help him in those crisis situations but his
1:41:43
boldness I mean the way star I mean not starlink the way SpaceX got created you know he goes and visits the Russians and and um to get misses from them and they he thinks they trying to sell them too expensive so he just decides well I'm
1:41:56
going to build my own Rockets it's like he figures out how much the materials are costing and he says well we can do this for a lot cheaper than they can um I again and then he does it he doesn't just say it he like yeah and he's able
1:42:09
and he's able to attract uh these amazing people to be on his team that's an that's by the way that's something I haven't talked about an entrepreneurs I'll say right now entrepreneurs generally have a lot of Charisma they they they talked about Steve Jobs having
1:42:23
I never met Steve they talked about Steve having a reality Distortion field and I think that's true of a lot of entrepreneurs they're so passionate about their Vision that that creates a kind of Charisma and it attracts people to them
1:42:38
that want to work with them I mean people like you know everything I've read people like like like Elon or Steve these guys can be really they can be very AG they can be at times but they are so passionate about what they're doing and they create sense a
1:42:53
sense of purpose that they draw very talented people that want to be on their teams and they and those people stay for a long time so I do think the the ability to create a great team is an underrated skill that I oftentimes think
1:43:08
entrepreneurs I don't know if they consciously create them I mean Steve Jobs used to say that he would only hire a-listers because he says if you hire b listers b listers will hire c-listers so he had these high standards of performance and he wouldn't sacrifice
1:43:27
those high standards for what he wanted in his team and his people and you know by all accounts you know Steve attracted just brilliant people to work with him is there a difference between a talent collector and a team Builder great question and and the
1:43:42
answer is I never thought about it before but yeah absolutely of course there is um sometimes those entrepreneurs that are driving forward not sometimes almost all the time they have to have other people on their team who correct for
1:43:57
their faults because their faults generally are very very big I know for example I'll take my own situation um I was um I was never very good at hiring and that's because I think my people's weaknesses come out of their strengths one of my strengths was I see people's
1:44:18
potential I see what I see the very best in them and by the way when you do that people want to perform to a very high level of you because they don't want to let you down and so I could see their potential and but the downside the
1:44:32
shadow side of that you might say is that often times didn't see their weaknesses that clearly so I've often times needed people on the team like I particularly worked really well with my Chief Financial Officer Glendon Flanigan because she always saw the downside in
1:44:47
people and you know she could see the shadow when I was BL blind to it and she said I don't think we should hire him he's you know I know I he he he's impressed you here because he's dazzled you John you think he's so in brilliant
1:44:58
and whatnot but God can you just see like kind of a slimy B Slime Guy me I don't think we can trust this guy I don't think he's going to fit into our culture I found out the hard way that she was almost always right when I'd overrule her and make pick pick hire
1:45:11
somebody anyway I'd always regret it so I finally learned to say I trust her judgment in this more than I trust my own so I think a good entrepreneur a good team Builder is going to be able to build a team that uh complement their
1:45:26
strengths and compensates for their weaknesses that's a different thing than just being able to collect talent because um it's like a difference between like a good basketball team is one that not just has a lot of talent but it's a talent that can play well
1:45:41
together where they they're synergistic and that the whole is greater than the sum of the parts if you just have a lot of talented people who don't work well together and are are backbiting each other then they might be brilliant but
1:45:53
your team's probably going to lose to what to what extent do you think that the teams and the organization should be built around the founder versus putting the founder into a more typical structure well I think that that question sort of answers itself the
1:46:10
founder founded the company so you can't fit the founder in another structure it wouldn't be the founder any longer where I was going with this is like the outside people are always like you need to bring in a professional grocery you
1:46:23
need to bring in an MBA you need to bring in all these people from the outside and what do they want to do I think they tend to be more structured more organized well you need both you need that's the that's the that's the Paradox you do need creativity but you
1:46:37
also need structure you need you need generative people and you need structural people I for example very generative I needed more structural people around me and also needed people to tell me when my ideas were full of and uh cuz sometimes
1:46:51
they really were and I needed people that that I had a high enough trusting relationship with me and they trusted me enough they could come in and just say John this is not going to work and here's the reasons why it's not going to
1:47:02
work we can't figure out how to make it work now every once in a while I would say I'll figure out how to make it work and go forward with it and figure it out but often times it's like you know you're right I can't figure out how to make this work we'll let it go but but
1:47:14
how did you get to a position where you could do that most people don't allow their ego that oh that's a good argument you had really good points I hadn't thought of that I'm going to change my mind one of the challenges that I think
1:47:27
many entrepreneurs uh every successful entrepreneur eventually faces and some don't rise to the occasion and that is is that success can breed an ego you know expansion where you start thinking that you're some kind of universal genius I
1:47:44
think in my case I had so many failures I I had my if you get your face slammed in the ground a few times you learn a little humility I I've I've remember saferway was a failure for me and uh and we had to get into the first Whole Foods
1:48:00
to make it successful then we had a flood after nine months we were we were we were bankrupt and then I started some new stores and my one of my Founders quit because he said you're wrecking the company you're these new stores are never going to amount to anything you're
1:48:13
you're diluting down our gold mine with these uh these mines don't have any gold in them so I had and I and there are many other examples of times had the I bought the Amry on I pushed to do doc we can't let the internet opportunity
1:48:27
Escape us100 millionar we lost so you know what I've had my serious successes but I've had enough failures to recognize I am far from infallible in my judgment and to learn to trust people that I'm working with and make decisions collectively almost only rarely did I go
1:48:44
against my team if they if they took a universal stand I would almost say that that the whole is smarter than me and just let it go and I think any good entrepreneur would will back down at times when that people they love and Trust are all telling them this is a
1:48:59
mistake you got to listen to it we all have blind spots we all have blind spots what advice would you give to current younger entrepreneurs or future entrepreneurs that's a very open question do you want to try to get it you want to try to well I like the
1:49:16
ambiguity of it actually because I want to see where your mind goes with it so first of all just in general um I get asked a a similar question slightly different I get asked what would you what advice would you give a young person entrepreneur or not and the
1:49:31
advice I'd always give is follow your heart life is shorter than you think it is it's too short to not be doing something that you really are passionate about that you're drawn to don't do something because you're just trying to
1:49:45
get Safety and Security you probably won't be happy as you as you as you get older or you might have to change when you get older so I I always tell people young people like what do you really care about what are you passionate about
1:50:00
go after that follow I I call it the hero's journey or you know I got that from U Joseph Campbell's the hero's journey but the hero's journey is one where you feel an inner calling an inner drive and you simply answer it you do it even though it's scary and you go off on
1:50:17
your adventure you don't know how it's going to turn out so hfid was my hero's journey I want a new one with love love I don't know how it's going to turn out fail I mean based on probability it will fail because most things do fail most
1:50:30
businesses do fail uh but that's the calling and I'm answering the call answer the call if you hear that inner calling don't hang up the phone do it go for it Life's a grand Adventure don't sell yourself short and try to play it
1:50:46
safe because you won't be safe there's no safety you're going to die that's why I said remember earlier on I said I got clear about death I'm going to die I'm going to live my life as an adventure it's more fun that way I can't guarantee
1:51:00
it'll pro it'll work out if it doesn't I'll learn and grow and do better next time talk to me about the new Venture well love life is kind of a continuation of the my hero's journey call to try to help people to be healthier first with natural regaining
1:51:18
foods and now with with love life it's a it's a whole list membership club is really what it is and it's it's it's got elements it's it's it's got a healthy restaurant it's a it's a plant forward Whole Foods restaurant got some animal Foods in
1:51:35
there but it's it's definitely focused on people eating a lot more fruits and vegetables it's um we've got a state-of-the-art fitness center we have a uh uh we have all kinds of classes spin classes work like a huge Health Center it is so I'm just telling
1:51:53
you the parts of it so you've got a gym we've got yoga we got Pilates we've got um we have a spa we have all this recovery equipment from hyperbaric oxygen Chambers to cryotherapy to redl therapy to infrared sonis regular sonis to cold plunges uh there's other other
1:52:14
lymphatic massage suits you can wear and microcurrents that you can and we got you know lots of different biohacks there uh and then of course you have a spa with massage and and facials and things you would get at any kind of non
1:52:30
a medical spa no Botox but what you get it at at a good spa pretty much in like in a resort setting uh then we have um uh we have pickle ball we have three indoor pickle ball courts because we think play is important and pickle ball
1:52:44
is a community Builder people since I started playing pickle ball about three years ago I've made at least 50 new friends that I hang out with because of pickable um and then the medical center which is the most important part and our medical our healthc care system
1:53:00
is now really a disease management system and it's not preventative it's not really dealing with lifestyle diseases it's our medical system is good if you have an infectious disease it's good in terms of things like vaccinations antibiotics surgery first
1:53:19
aid but the chronic diseases that kill people obesity heart disease type 2 diabetes um uh autoimmune diseases cancer they're not very good at that they might manage that the symptoms of the disease but they don't really
1:53:36
prevent it or reverse it so love life aims to change that to disrupt that Paradigm our we think now with the testing protocols we have that you can get most people don't know how healthy they are it starts with a good assessment so you can find out where you
1:53:49
where you stand um and then once we had that then with the wearables the data you can get from an AA ring Apple watch Garmin there's so many different uh continuous glucose monitor we can begin to uh track people's and then once you
1:54:05
have good assessments and tracking then it's about the doctor works with you and a health coach to create kind of a Precision individualized plan for you unique to yourself that allows you to become the healthiest version of
1:54:20
yourself to be more vital more healthy More Alive stronger immune system uh more energy uh positive attitude and also love life's working on people's emotional and spiritual health as well not we're doing breath work we're doing meditation classes when psychedelic
1:54:38
therapy is legal in uh in California like it is in Colorado and Oregon we will be doing that under therapeutic sessions so whole idea is to help every person that becomes a member to become the very healthiest physically emotionally and spiritually
1:54:54
that they can be and if hopefully if people start young enough and work with us long enough that these chronic diseases they never get them they're not they're not inevitable um we're all going to die of something but we should live to be hundred with you know without
1:55:09
these chronic diseases wrecking our lives and be a sound mind and high vitality and the wisdom it'll be good for the planet because we'll have healthy old wise people being greater percentage of the population you know Wise enough to try to keep us out of
1:55:23
wars and you know all the stupid things that we do when we're when we're not as wise as we should be talk to me a little bit about I first actually let me rephrase that I love what you're doing uh I wish you'd open one in my city uh I
1:55:36
think that needs to exist in in every sort of Center though we hope to certainly we hope to open them in New York absolutely to to what extent do you think the diet is the biggest bang for the buck here versus exercise versus everything else
1:55:54
I actually feel like first of all I think the most important thing is attitude I mean a positive attitude a sense of purpose and meaning it's like the body as long as the body feels like it has something it needs to do it stay it wants to stay
1:56:13
alive it's like you can't dial to me now I got important work to do and that's communicated through all the cells it's like we're not done here yet yeah so I think I think first of all the the the the mind and the attitude is most important for for Health and Longevity
1:56:28
um I know people that eat terrible diets that have very positive attitudes that are remarkably healthy even though they you know they should be falling apart it's just that they're War Buffett he's well you know it's Warren Buffett is a
1:56:41
good example because he a terrible diet on the other hand he's got a great positive attitude but he also doesn't take any toxins in other than his diet he's not a smoker he doesn't drink he actually he eats uh he he h he does he's not taking a lot of the things that that
1:56:57
wreck our health sooner than than necessary uh but yes I think Warren has an incredibly positive attitude and I think it's one of the reasons he's going to probably live to be 100 and still be trucking along he still sharp his attack
1:57:10
other then of course he missed out on that Whole Foods opportunity um uh but then I think diet though is very important I mean I was a grocer I do think um the diet that people eat in America today is you know I mean the statistics tell you all 74% of Americans
1:57:27
are overweight 43% are obese um we're dying from diseases like heart disease that are dietary they're dietary diseases um uh obesity Auto a lot of the autoimmune diseases are also related to they're that's more complicated but diet
1:57:43
is a huge factor in terms of how strong our immune systems are so and you know it's it's it's not that complicated people make it I mean I always tell people if you want to if you try to get your information from the internet you're gon to be confused well let's
1:57:57
talk about this for a second but before we do what percentage of whole food sales at the time you left were actually Whole Foods I don't know the answer to that quite exam but I do know that I knew I know what our produce I I really don't
1:58:10
think I should reveal that those statistics because there's not public information I don't want Whole Foods unnecessarily mad at me but but they were not as high as they were when we started out okay and that's because the the processed food industry Incorporated
1:58:25
our standards and made processed foods that met Whole Foods Market standards because we'd sell it but they were just meeting them you might say um and when we first started they didn't we didn't have very many processed food we didn't
1:58:38
have junk that we could easily sell so we mostly sold produce and meat and Bulk Foods people cooked I will tell you one interesting statistic our very first store was over 20% of our sales were in the bulk foods to department and we
1:58:52
didn't have any candy back then so it was just whole grains whole whole grain flow beans nuts seeds things like that whole foods and uh today it's under 1% 20% to 1% so what is Whole Foods I mean you've written a book on this but what what does it mean for people
1:59:11
listening what does when I say Whole Foods I mean a food that's as close to its natural state as possible so it's been minimally processed so and that would be like uh the things I I listed fresh fruits and vegetables uh meat Seafood those have been manipulated too
1:59:29
so I think you want to try to get a um animal foods that have you know not been that have been grass-fed for example if you're beef or they're they're not been um animals have not been put in feed lots have not been crowded together that
1:59:44
they have lived out their sort of natural animal lives so sort of natural uh Meats then you've got you You' got your your beans your nuts your seeds all your legumes um you're going to have um uh things that are produced with minimally processing so you can cook
2:00:06
food for example but if you say take oil oil or sugar those are not Whole Foods if you add oil whether it be olive oil or seed oil you're not getting a whole food you're just getting the pure fat of that food and what is sugar sugar is
2:00:22
taking a whole carbohydrate food and stripping away the fiber in The Germ until you're just left with pure carbohydrate the biggest challenge humans have with our diets is that we evolved our genes preclude us or our genes um we evolved in scarcity we
2:00:42
evolved with with starvation was our biggest problem not for just the last few thousand years but for tens of thousands of years perhaps hundreds of thousands of years it just wasn't enough food and so we've evolved to Crave calorie
2:00:56
dense foods and it's in our genetic structure and we like foods that have a lot of protein or have a lot of sugar or have a lot of fat oil pure fat nothing but fat sugar nothing but carbohydrate uh high concentrations of protein uh you
2:01:14
people always put in protein powders and things like that in their smoothies We crave calorie density we also crave salt because it was scarce as we evolved and so as a result the food the food system today it gives the market what it wants it wants calorie density but it's
2:01:30
killing us it's making us sick it's making us obese we need to people are always asking me as a plant-based Guy where do you get your protein it's like in every food I eat protein's not scarce where do you get your fiber because you're not getting fiber from those
2:01:45
processed foods you're not getting it from the animal Foods I mean something like 90 plus per of Americans have less fiber than is optimal for their gut health we now know the gut is the first most important part of our immune system
2:01:59
so that's Whole Foods Whole Foods are you know it's the definition is a little bit fuzzy so a little bit of processing is not too bad but the more you do the worse it tends to become and now we eat highly processed foods not just three
2:02:13
times a day some people just eat and eat and eat all day long that's a really good way to look at it I think there's a a scale I uh I'm going to get this wrong but it came out from Brazil and it sort of did the one through four in terms of processing for
2:02:27
what food was that's a good idea actually yeah and then that'd be great to put on labels at grocery stores or even on the um shelves people could see this is a three so it's better than a four but the the but you know what happens then is that those get gamed uh
2:02:44
in the sense that the they've been TR there have been all kinds of rating systems that have tried to be applied but then the the food man manufacturing companies not only do they lobby but they they are they're constantly trying
2:02:57
to change those rules so that their products look good um it's more complicated than you think because we tried to do something at Whole Foods we did we actually did it we called it it's based on Joel furman's work an aggregate nutritional density index so we were
2:03:12
looking for nutrient density in foods you can get it get it you can get those you can get how many vitamins and minerals and and then the phytonutrients that foods have And We R rate all our food and we put up the ratings all around the store
2:03:27
okay fresh vegetables particularly leafy greens are by far the most nutrient-dense food you can eat nutrients per calorie yeah I mean it's not even close and then all the vegetables are way up there then the fruits are under that then you've got um
2:03:41
then you've got beans under that then you got whole grains um then you got nuts and seeds all the whole foods are much higher nutrient density then you get into the animal Foods this is what became controversial is that the animal Foods on a per calorie basis have fewer
2:03:56
nutrients this was very upsetting to people and they got angry people at team members got angry about it people that want to eat a a paleo diet were angry the people that eat a Carnivor diet carnivore diet were angry because they
2:04:08
really want they like their animal Foods they're calorie dense there's a lot of calories in animal Foods they taste good and uh but you're not telling people what to eat why is more information getting people Kill the Messenger man that's not that's not a new thing they
2:04:21
didn't like the message we were delivering and because people knew that I was a plant-based guy they thought Mack's trying to make everybody eat his diet and all we were trying to do is give out the information of nutrient density per calorie it was important
2:04:34
information but at the end of the day my you know I talked about how I had caved in my team was not they didn't they didn't want to keep doing it what do you think would happen if a grocery store did that and they sort of had like a
2:04:46
color coding system for example which is like green yellow or red and that's all they did just on the Shelf uh beside the product they'd have a lot of red products on their shelves and people would ask them why the hell are you selling all this red food yeah and so
2:04:59
that they took away the red food then the people wouldn't go what no what what they would do is they Dum it down so that a lot of stuff that you think is red now would all of a sudden be green uh and it's like because most of the
2:05:10
food that we're selling in supermarkets is not good for people and if you start telling the truth two one of two things are going to happen people are going to be either stop shopping at your store because all that store selling is red
2:05:21
food I'm going to go to this other store that doesn't put all this red it's the same food but I I don't want to know I'm not confronted I'm not confronted with it or they will they will be forced to change the ratio mix so that this some
2:05:35
of the red food now is perceived to be healthy um so it's it's very diffic you it's you have to meet the market where you find it you have to give the market what it wants and when you when the market if you feel judged by people you
2:05:48
don't want to do business there anymore so that's one of the reasons the the the people in hu's me departments were very unhappy that we they were not getting good Andy scores so they they didn't think this was good this was this is this is not a good system if
2:06:03
you could wave a magic wand I guess and change a policy or maybe more than one policies what would it do what would you do for the entire country policies in where like in terms of health like what would if you get you can probably diet
2:06:18
might be the best place to start but like where what would you say what would you do how would you do this it's very it's very that's a very challenging question because in general I don't I think people need to these are adult people need to make their own decisions
2:06:34
and I don't think you should be telling people that can't eat things but can we nudge it uh yes but then I think you can nudge it um but then when you start using power to try to change people's behavior how do you know that the people
2:06:48
that take over the power will do it in an actually good way we get it's like this the good intentions of socialism the bad elements take it over the next thing you know the healthy foods are being eliminated because the people in power have they it's been co-opted uh
2:07:04
but with with that education wouldn't even work right because if we educate people then we're going to co-op the education at some point and then if you go on to the internet and you Google is coffee good for me you will get a massive amount of data get whatever you
2:07:16
want it to say that's right exactly exactly and confirmation bias is so power powerful people just confirm what they want to believe so if you know what I would if I could do anything that would help the health of America the most it it I'd probably
2:07:34
want to change I'd want to make nutrition education more something that would be emphasized in the schools and emphasized in particularly in the medical schools because they're not given doctors are given almost no nutritional they don't they they come to
2:07:49
believe that it does anything to do with health that that their potions and their Elixir their drugs are the thing that will restore health and that's not right it's not true I I think I heard a couple weeks ago that the average med school
2:08:02
student gets 30 minutes on nutrition or something yeah it's pretty low not much yeah John I want to thank you for taking the time today we always end the podcast on the same question which is what is success for you you know I think success for me has
2:08:18
been just being following my heart and being true to myself because doing following my Bliss as Joseph Campbell said I've tried to follow my Bliss and I've been very successful by my own internal measurements because I have been true to myself I have followed
2:08:36
my heart and it's led to me this my life's been this Grand Adventure I'm a very happy person I I I have a lot of love in my life I have a lot of friends I can do what I want to do I meet cool people like you uh and and uh uh yeah to
2:08:54
me that's a successful life is a life well- lived one that's true to yourself true to your own values true to your beliefs and has a lot of love in it um I wouldn't imagine a successful life that without that didn't have a lot of love in it