John Mackey’s Wild Story: From Dishwasher Showers to a $13.7B Amazon Deal | E188

21:55John Mackey:Because when you're selling something for a dollar and now you start selling at 90 cents, first thing that happens is your sales just dropped 10%. Your same store sales just dropped 10%. And your profits dropped 30 % or 40%. So if you have shareholder activists, you can't really do that. So you need time to execute that. Amazon gave Whole Foods time to do that. We were able to drop our prices four times in the first two years. And even since I left three years ago, they've continued to drop prices. I was talking to my successor, Jason Beagle, and I'm not going to reveal anything confidential here.

22:30John Mackey:Let's just say that Whole Foods continued to drop its prices, and it's now highly competitive. People are still holding on to some old narratives, but if you went and compared our prices to other supermarkets, you'd see Whole Foods is very, very price competitive now. We've gotten to price parity, which was one of our goals. Even with Trader Joe's, we're matched on private label now. So that was one of our goals. Amazon made that possible. And that cost them hundreds of millions of dollars to do, and they had the patience to do it. They also raised the pay of every hourly person in Whole Foods within 30 days.

23:04John Mackey:That cost them hundreds of millions of dollars to do. Our suppliers, every stakeholder won with the Amazon merger. The only negative thing is that their culture is very different. Whole Foods has a very different culture. And so there's been some cultural dissonance, you might say. And that was my biggest problem. I fought with a lot of the Amazon executives over culture. It ultimately got me to retire because I wasn't winning any of the arguments. And that was frustrating to me. You're listening to part two of my incredible interview with John Mackey, the founder and ex-CEO of Whole Foods. If you haven't yet listened to part one, be sure to check that one out first.

23:43Now, without further ado, here's part two of my awesome interview with John. All cash transaction of$13.7 billion. You didn't take stock.

23:50John Mackey:Can I make a little joke here? Yeah. You know what I love about that$13.7 billion? A lot. No, I know. $13.7 billion happens to be the estimated age of the universe since the Big Bang. I got$1 for every year the universe has existed. I think that's funny. Was there a reason you took all cash as opposed to stock? Yeah. I wanted to take stock. They said it's cash only. That's all we're going to do. We don't want. You can't have our stock. Yeah, stocks up 12.1 times since that deal in 2017. Trust me, I know. But for me, there's a happy thing that happened. Let me tell you what happened. I had taken no compensation from Whole Foods since 2006.

24:29John Mackey:I didn't even take any stock options. I donated all that to our foundations, which was worth a lot of money. Let's say a lot of money the foundations got from my stock options. But I felt differently. If Amazon was acquiring the company, I felt differently about it. I said, guys, we're going to do something. I don't want to work for Amazon for free. However, I don't want to take a salary because I've gone out publicly and said I don't take salary any longer. So I got to stay the salary. And they said, well, how about if we give you an RSU package? And so what they did, they gave me an RSU package, which at times seemed pretty generous.

25:06For those people who don't know, that means restricted stock units. You have to stay to get them. They're giving you stock. And they're vesting.

25:11John Mackey:But here's the thing, what Amazon did, which actually worked really to my benefit. They said, look, you also need to sign a non-disclosure agreement, a non-disparagement agreement, and a non-solicitation agreement as part of this, what you're getting for this. And your RSUs do not even start to vest until you retire. And then they start to vest. So basically, I worked for them for five more years. I signed a five-year contract, and I left when the contract ended. So my RSUs were getting more valuable, but they weren't even investing. And now they started to invest. And I think I've sold off what didn't turn out to be a lot of money initially when those RSUs become incredibly valuable to me.

25:54John Mackey:It's amazing how much money that's worth now because, as you said, the Amazon stock has gone up so much since the merger. So what was not that much is now quite a bit. Right. I mean, their market cap at the time of the deal was$240 billion. I think, are you sure? I mean, everything you've said has been pretty much right on the money. Are you sure about that one? I'm sure. Okay, great. Well, that's been great for me. Yeah. Let's move on. We all make mistakes in our careers that we regret. And so you made social media posts under your personal name. And then essentially you were going through the Wild Oats merch.

26:28You had bought a competitor, Wild Oats. SEC was fighting to block it for anti-competitive reasons. And then this comes out. You had been posting privately as an individual, having nothing to do with Whole Foods on a message board about Whole Foods stock. And at some point, you even made a joke about your hair.

26:50I hope you're enjoying this video so far. But before we jump back in, I want to know if you've ever thought about what you need to do to reach another level of success in your life. Over the last 25 years, I've been an advisor to more than 50 companies. I've invested nearly 100, including Google Lyft and Seagate. And I also co-founded a company that today is worth more than$15 billion. I've been incredibly blessed in my journey. And at this stage of my life, I want to give back. I want to share the lessons I've learned so you can reach incredible success way faster than I did. In my own journey, I've learned that having the right mentor is a massive advantage to achieving our goals.

27:22I'm hugely passionate about mentoring others. I'm looking for a few hungry entrepreneurs who are excited to take action on their journey to incredible future success. So if that's you, I've got an opportunity. In the description of this video, there's a link where you can apply to work with me. All you need to do is answer a few simple questions, and if you're a good fit, my team will reach out so we can build a game plan together. All right, now let's get back to the video.

27:46John Mackey:Yeah, that turned out to be a huge scandal leading to FTC trying to block. FTC isn't one that ratted me out to the SEC. Now the SEC is investigating me for potential. The goal was to get me indicted and then the board would have to fire me. That was the end game here. These people were very vicious. You're talking about the Securities and Exchange Commission had it out for you because they thought you were potentially manipulating the stock. Which is, you know, they quickly discovered that I never revealed any inside information. And the media, that the media interpreted as that, their narrative was completely illogical if you think about it.

28:30John Mackey:So I'm posting under this screen name, like every other poster on Yahoo was doing then. Everybody posted under a screen name, like my trail name is Strider when I'm out backpacking. That's my trail name. My screen name was Raho Deb, which was my wife's Deborah. So it was kind of like an anagram of her name. The media made it out that I was like, because I also posted occasionally, I defended Whole Foods and debated against some of our competitors like Wild Oats, for example. And so I made maybe a dozen sort of criticisms of Wild Oats as a competitor. And so the media interpreted that as that I was trying to drive the wild oats stock price down so I could buy it cheaper.

29:17John Mackey:Now, think about that for a moment. There's some anonymous poster on a bulletin board named Rahudev. Nobody knew it was the CEO of Whole Foods Market. How can that person drive down any stock price? It's ridiculous. And furthermore, they neglected the fact that I stopped posting on the Yahoo bulletin board six months before we initiated any merger talks or acquisition talks with wild oats. The whole narrative was blown out inaccurately. I was just really having fun. That's what people understand. There was no nefarious motivation except for me liking to play games. But nevertheless, I couldn't defend myself because I was being investigated by the SEC.

29:55John Mackey:So my lawyer said, you cannot say anything, nothing. So I was not allowed to defend myself at all. And so the media narrative just went wild and it was wildly inaccurate. But to this day, that's what people still believe, that somehow or another this horrible CEO manipulated the wild oats stock so they could buy it cheaper. That's the narrative that's out there. So yeah, I regret ever posting and I've never really posted on a bulletin board ever since then, to be honest. So at least under any other kind of name but my own. I don't think that's the narrative today. And I'm just saying that because you're here sitting in front of me.

30:33John Mackey:Well, now times pass and people forget or they never knew it in the first place. Let's go to what it takes to be successful. And one of the things that's made me very successful, something I called extreme preparation. It's my brand. Someone prepares one hour for a podcast. I think today I'm at 13 hours and 25 minutes. As of today, I was still making changes before you walked in the door here. I found another nugget before you. Let me compliment you. I've done a lot of podcasts and I've been interviewed a lot of time. I don't think anybody knew my story that I've ever talked to as well as you have today.

31:07John Mackey:I would say that's extreme preparation. I've been very impressed. I mean, I haven't corrected you. You've made a few minor errors, but they were very minor compared to what I normally hear. Thank you. So kudos to your extreme preparation. I'm very impressed. Well, thank you. I appreciate that. I think extreme preparation starts out a meeting and a podcast on a completely different level. It's part of my executive coaching. You walk into any meeting, you hit somebody with a question or knowledge. It shows you've done your research. It makes people be respectful. Most of my guests, I mean, they're all extremely successful.

31:41You get 90 minutes. Everyone runs longer because I've done the research. My questions are different than most. I don't want to repeat the same questions. How has extreme preparation led to your success?

31:53John Mackey:You know, the funny thing is, I don't think that's... I think everybody is a collection of strengths and weaknesses. And extreme preparation is not my strength. In fact, I'm more of an entrepreneur who is extreme spontaneity. Now, as you know from what I talked previously about my reading and learning, so I could say that I try to learn as much as I can. And that is a type of form of extreme preparation. But in general, I don't tend to over-prepare for things. I trust my own well of knowledge, my own experiences, my own learnings to see me through in most situations. And I think very well on my feet.

32:42John Mackey:So I have a quick mind. And so I kind of like, I prefer that. Now, if I was doing your job, I wouldn't do extrema preparation, but I would prepare. But I generally just review. Like, even for this today, I did a new extreme preparation, but I said, better find out a little bit about this Randy Kaplan guide. So I read up on you a little bit, and I was quite impressed with what you've achieved and accomplished. Thank you. I'd say I do enough preparation so I can wing it. I like winging it. That goes against my DNA. Different strokes for different folks. Different strokes for different folks. One of the things you talk a lot about, and I think is very underrated, is culture.

33:28And you had this appreciation ethos that when you walk out of a team meeting, everyone has to say something nice about somebody else.

33:35John Mackey:No, they don't all have to say something nice. It has to be voluntary. It has to be voluntary. Five people are in the meeting. How many people would give someone else a compliment? Well, let me talk about appreciations. Let me give a little backstory for that. I am not exaggerating. If you practice appreciations, you will transform the culture of your organization. It's so simple to do. I've seen the effects. I've had other people tell me when they started doing appreciations, their culture shifted. And so appreciations are something we do at Whole Foods and at Love Life at the end of every meeting.

34:07John Mackey:They're voluntary. No one has to do them. It's very important that the leader do a lot of it because you lead by example. And people pay a lot more attention to what you do than what you say. And appreciations, the reason they're transformative, first of all, they have to be authentic. because we know the difference between flattery and an authentic preparation. When I appreciated you for your extreme preparation, that was authentic. I was quite impressed with your preparation. And so I meant it, and I really did appreciate that about you. Thank you. So there's a tendency in a meeting in particular because people can get bored.

34:43John Mackey:They begin to judge other people. They're saying, well, that's a stupid comment he just made. And so you could, you know, over length of a meeting, people can get into sort of negative spaces just because they're sitting there a little bit bored, a little bit tired of the meeting. That if you go out of the meeting with that kind of consciousness, it can be it can be destructive to culture and morale. But what happens when you do an authentic appreciation? An authentic appreciation is actually an act of love because it's coming from the heart. If it's authentic, there's no if you just say it and it's not authentic, then it is just a form of flattery.

35:17John Mackey:It's not, it's not, and people sense the difference. People know when it's authentic. They, they, at some level, we know when it's real and when it's bullshit. And so let me give you an example of something that happened to me very recently. A guy that I go hiking with all the time, and, and he's a really good hiker. He's young. I'm not going to give his name, but I really thought he doesn't like me. I always get this kind of weird vibe from him. And I was about to do a hiking trip, and I was thinking about not inviting him because he's such a strong hiker, and he's younger, and I really can't.

35:52John Mackey:He can't really hard keep up with him. And I told him in the email because he knew I was going to go on this hike, and he said, I really want to come on that hike. And I said, well, you know, I got to tell you that I just think you're too good of a hiker. I didn't want to invite you because I always feel like we're slowing you down and that you're just kind of bored. And he said, well, a slower hike is better than no hike. I really want to come. And then a few days later, I got an unsolicited text from him that did this massive appreciation of me. He just said, I just want you to know how much I admire you, how much I love you.

36:29John Mackey:Don't ever doubt it. You're one of the most important people in my life. You've changed my life. So he just did an incredible appreciation for me. And I've been thinking this guy didn't even like me. That's what appreciations do. It causes you to rethink someone. You see them in a different way now. If it's an authentic appreciation, it's like, I have misinterpreted that person. I've misjudged that person. I will never think about my friend the same way as I thought about before that appreciation because I know it's from his heart. I knew that. I know he loves me. And I'll never doubt it ever again.

37:03John Mackey:And when you do that with your team, I'll tell you one other story. When I was leaving Whole Foods Market, one of these regional vice presidents who, again, he'd been standoffish. I really thought he didn't like me. And he's, you know, I've never been able to connect with the guy. It was the last time I saw him. And he came up and he was really nervous and shaky. And he presented me with this thing he'd made for me. And it was just this real, it was this beautiful artwork that told basically how much he loves me and how important. And what a difference I'd made in his life. And it was this way to thank me and appreciate me for what he'd done at Whole Foods.

37:42John Mackey:Here was a guy that I didn't even think liked me. And it was like, his name was Mark. And I said, Mark, I'm so blown away. I kind of wish I'd known you'd felt this way about me for a longer period of time because now I'm leaving and we could have had such a closer relationship. And he said, I was too scared to tell you, but you were leaving, so this was the time to do it. Appreciations are transformative events. They transform relationships. They transform team morale. They're incredibly powerful. And the last story I'll tell you is that we did them everywhere at Whole Foods. The last place I could get was the board of directors.

38:18John Mackey:It took me 10 years. The board just said, this doesn't seem professional and blah, blah, blah, blah. Finally got the board to start doing appreciations. I just started doing them in the meetings. And then the rest of the board caught on. After we started doing appreciations, no one ever resigned from our board of directors. They loved it so much. They had such a connection with the other directors because they were appreciating each other. Appreciations are so organizationally powerful that every company should do it. You should try it. It's incredible. I'm going to put it in a different context.

38:46I took a personal sabbatical a month ago, the Hoffman Institute, which is where people go to get mentally healthy. And I've been through a lot of things.

38:54John Mackey:Very transformative organization. Very transformative. It was amazing. And one of the things they teach you is to appreciate yourself. Even when things go bad and you've done bad things and people were there for all different reasons. The youngest person there, 25-year-old, we were crafting a guide and then we had famous CEOs there just all over the spectrum. And it really was transformative for me to say, okay, I appreciate myself. And then I have a daily journal that my teacher gave me, Danny Kim, who was amazing, great coach, still work with him today. and it says in the morning, one thing I appreciate is X.

39:35And then two things I appreciate about my life are X. And one thing I appreciate about myself today is Y. And it really is a mind shift because we all have busy lives. We've all been through trauma. We all have challenges and it really is. It's great to appreciate people at work, but it's also critical to appreciate yourself.

39:56John Mackey:Yeah, totally agree. You know, I think there's three, now that you've gotten on this track, and it's probably bringing it close to this, there's three transformative things that you can do in your own life that will transform your life. You just name one of them, appreciations. So appreciate others, appreciate yourself. The other two are just as powerful. Gratitude. I practice gratitudes every day. And that is transformative. If you practice gratitudes, they're expansive. And as you're grateful, as you practice that, you're great. And it's just amazing what gratitudes will do if you practice them on a regular basis.

40:31John Mackey:And the third and the most powerful of all, even more powerful than appreciation is gratitude. Forgiveness. If you practice forgiveness, forgive everyone. Anytime you're tempted to judge somebody and attack them, forgive them. Practice forgiveness. And as you forgive others, you will find you too are forgiven. It is incredibly powerful. And people have a lot of trouble forgiving because we like the ego satisfaction of judging and being angry at people. But it's a trap. Forgiveness is the most powerful thing we can do to transform our lives. Forgiveness opens up love as much or more than gratitudes and appreciation.

41:11John Mackey:Those three things together, dynamite. Again, take it. Well, number one, forgiveness will take a weight off your shoulder. It could be an 800-pound gorilla that just eats at you for years and years and years. It's poison. It's poison. Get it out of your soul. It's cancer. It's cancer. At Hoffman, what they also teach you, talking about the individual, is to forgive yourself, which is very hard to do. We beat ourselves up over all these things that we've done over our lives. It could be family. We all want to do well. We all want to do great things to our family, our life, our coworkers, our friends, but we all make mistakes.

41:48At the end of the day, to be mentally healthy, you do have to forgive yourself.

41:53John Mackey:You do. Well, let me throw a big idea out there for you to chew over later. Everything we judge and attack in the so-called outside world is really our own projection, our own guilt, our own faults get projected out. We see them in someone else and we attack them there. And as we forgive in that external world, we discover that we are too forgiven. You can say you're forgiven, but as you forgive it in the external world, you begin to experience it within your internal world. That's why it's so powerful to forgive. Yes, we need to forgive ourselves, but if we forgive ourselves and we continue to attack, it's still projecting out there.

42:34John Mackey:In other words, we're seeing our own things that we feel guilty about and we dislike about ourselves. we see it in the external world where we attack it. We generally judge things that are also part of who we are. So that's why it's so powerful to practice forgiveness with others, because we are projecting it out into the, it's like our own, as we begin to see others as forgiven. As we practice forgiveness, we experience love and we begin to see it and experience in the outside world. The world is largely our projection that we're making of it. We think it's external to us, but it's really our projection.

43:16John Mackey:It's our dream. And so we need a dream that's a dream of love, a dream of forgiveness, a dream of appreciation, a dream of gratitude. And as we begin to choose that in the external world and see it, then that's how we're being transformed at the same time, because there's no disconnect. That's my big idea to share. We're almost at the end of the show, and I want you to tell everyone about Love Life and what you're doing today. Well, that'll take us into another show. But basically, Love Life is a community of— This is your new company. It's a new company. Our first location is here in L.A. Probably our second one is going to be in Austin.

43:54John Mackey:It's down in El Segundo, Manhattan Beach area, south of the airport. It's big. It's an old Best Buy. It's next door to a big Whole Foods market. It's 45 ,000 square feet. It's kind of a one-stop wellness, holistic health center, longevity center. So we've got, let me just tell the components. We've got a healthy restaurant there. Food is important to people's health and well-being. We have a really great fitness center, our state-of-the-art fitness center, yoga studio, Pilates, physical therapy. We've got a spa. We've got a big community gather room where we do classes and do lectures. We've got a, the most important thing we've got, we've got pickleball courts.

44:36John Mackey:That's not the most important thing. Most important thing is our medical center. So our healthcare system is basically broken, not because of the money. That's misunderstanding. It's who pays for it. It's really about our medical program is like a plumber's model. So Randy, when do people go, when do they get a plumber? When you're clogged. Yeah. When you're clogged up or your pipes break, when something goes wrong. That's when we mostly go see a doctor, when something's gone wrong. And the reason that's not a good strategy anymore is because what goes wrong and kills people a day, heart disease, cancer, obesity, type 2 diabetes, autoimmune diseases, stroke, the leading killers of human beings generally, generally are not infectious diseases.

45:20John Mackey:They are chronic diseases that develop over time through our diets and our lifestyles. I mean, America is now 73 % overweight, 74 % overweight and 43 % obese. Think about that. And the trend lines continue to go up. It hasn't leveled off. So we might be 80 % overweight in 10 years and 50 % obese. We are literally eating ourselves to death. And people don't even know it. But we have this technology. We have technologies now that can give these detailed assessments that you can find out where you are on your health continuum. Most people are too scared to find out. But once you find out, you can begin to make different choices.

45:58John Mackey:And Love Life is about creating a community of people that are dedicated to becoming the healthiest version of themselves, physically, emotionally, and spiritually. All those are very, very important. First, you start with a deep assessment, find out your baseline. Then we can create a strategy for you to begin to make changes to be as healthy as possible. Then you can track it. We can have these amazing wearables. I also think, you know, like I always say that I stopped drinking alcohol now four years ago because of my Apple Watch, because I have a I have an auto sleep on my Apple Watch. It tracks my sleep.

46:33John Mackey:And I discovered that any time I drank any alcohol at all, my deep sleep went to zero. My overall sleep dropped an hour on the night and my pulse rate would be about eight points higher. I like drinking alcohol. So this was an unwelcome discovery. But I did it over and over and over again until it was like, John, would you rather have alcohol or would you rather sleep well? And I haven't had a drink since because I'd rather sleep well. I'd rather feel good the next day. I have no more throwaway days. Every day is a great day because I feel good every day. As you become more conscious, you make different choices.

47:05John Mackey:And love life is about helping people to be more conscious so they'll make better choices and be healthier, feel more vital, live longer. have more happiness. I always conclude my show with a game I call fill in the blank to excellence. You ready to play? Ready? Yeah. The biggest lesson I've learned in my life is to love everyone. My greatest personal goal is to love everyone. My number one professional goal is the same. My biggest regret is taking so long to discover that. My biggest fear is my biggest fear is that I will somehow or another fail. The craziest thing that's happened in my career is...

47:42John Mackey:I became so successful. The funniest thing that's happened in my career is... I didn't do extreme preparation. The best advice I've ever received is... Follow my heart. 10 years from now, I'm going to be doing... I don't know. It'll be an adventure. If you could pick one trait that made you successful, it was... Perseverance. If you could pick one trait that would make somebody successful, it would be? Perseverance. The one thing I've dreamed about doing for a long time but haven't is? There's nothing. If I can invent one thing today, it would be? A way to create world peace. If you could go back in time and give your 21-year-old self one piece of advice, it would be?

48:23John Mackey:I wouldn't. My life's worked out wonderfully well. I had to learn all the lessons I've learned to be who I am today. I wouldn't want to take away that gift to my 21-year-old self. If you could meet one person in the world today who is alive, it would be? John Mackey. If you're the president of the United States today, the first thing you would do is? The first thing I would do if I was president of the United States is, I guess I'm not answering this. That's as quick as I would. I would cut the federal deficit. If you were on your deathbed and had 60 seconds to live, what would you want to tell the world?

48:58John Mackey:I love you. I was going to ask, what would you tell your wife? And I assume it would be the same answer. The one question you wish I'd asked you but didn't is? Nothing comes to mind. You ask a lot of good questions. So grateful for you to be on my show. Been a big fan of Whole Foods my whole life. Customer of Whole Foods today. My family loves it. I love it. Congratulations on all your success. And thank you for sharing your story today. Very inspiring, very motivating. Randy, thank you for what you're doing. I'm sure that your podcast is inspiring thousands and thousands and thousands of people.

49:32John Mackey:to be more successful in business and happier in life. You're doing a great gift, and I really appreciate that. You don't have to do what you're doing, and it's really beautiful what you're doing. Thank you. Thank you. It means a lot to me. Thank you. Appreciate you. Appreciate you, too.

50:02you