John Mackey on What it Takes to Build a Company Like Whole Foods

This message, is this something that you have sort of developed over the years of arguing with people about it? No, it's mostly from what we did at Whole Foods, because I had no background in business, right? I'm an entrepreneur. I didn't... You guys started here, right? In Austin, that's right. I first started here over 42 years ago. Jesus, you look great. How old are you? Sixty-seven. You look very good. Well, thank you, Tony. See? I'm eating all that Whole Foods foods. I'm eating all that healthy Whole Foods. That is one thing that you guys did do that's very interesting, right? You created a market where, like, if you tell people, I go to Whole Foods, you know, people are like, oh, well, you care about your health. Like, it's synonymous with healthy foods, even in the name, Whole Foods. That was our brand when we were up and comer, and then when we got really rich. America loves the up and comer, but then once you have become really successful and you're making a lot of money, they start to turn on you. Oh, no. Well, we became Whole Paycheck. Who said that? I don't know, but whoever did, I wish they... I never saw it. You never saw that until right now. You just shit on yourself in a way that I never... All I heard was Whole Foods. I never heard Whole Paycheck. Then your team didn't do good research. I have no team. So, is this when you sold to Amazon? No, no. The Whole Paycheck thing has been around for a long time. Oh, because Whole Paycheck meaning because it's so expensive. Yes, because initially when we were up and comer, if you shop at Whole Foods, you were showing everybody you were with it. Environmentally conscious. Yes, and you were hip and cool. And then the narrative went sour because it's like, you're a fool for shopping there because you can get the same food cheaper elsewhere, so you're going to Whole Paycheck. So the narrative turned negative, so to speak. I still see that pretty much all the time, although since our merger with Amazon, we've cut our prices many, many times. How'd you do that? Amazon allowed Whole Foods to think long term again. We needed to cut our prices, but when you're a public company, if you're selling something for a dollar and you say, you know what, we need to sell this for 90 cents, and you start selling it for 90 cents, in the short run, you just cut your sales 10% because you're not selling any more of it. Over the long term, people will realize, man, I can get a good deal for 90 cents. I used to pay a buck for it, and they start to shop with you more and your sales will go up. When you're a public company and the market's very short term oriented, you pay a heavy price in the short term for reducing your prices. Amazon is willing to think long term and let Whole Foods do that. Does Jeff Bezos got that long money, son? He has long money because he's had a lot of brilliant ideas and put together a pretty good team. Yeah. What keeps that guy working? When you have 150 in the bank, 150 billion, what keeps you going? Most of it he has it in. It doesn't have it in the bank. It's got it in stock. He's got a few in the bank. He's got a few in the bank, probably. I feel like he could probably relax. I think the same thing that keeps me going at age 67. Building something's great fun. Building Whole Foods, I've got plenty of money, Joe. I don't need to work. I just like it. Do you still run Whole Foods? What's your relationship there? Still CEO. Still CEO. You still work long hours? I don't work as long today as I did when I was in my 20s and 30s. There's no question about it because I was putting a lot of 80 hour weeks in year after year after year after year. It wasn't work. It was play. I was having a blast. It was fun. Elon Musk has famously said that if you're in a tech startup and you're not working 120 hour weeks, you won't succeed. I never been in his tech startup, so I can't speak for that. The grocery business wasn't quite that hard, but we did put a lot of 80 hour weeks in. That seems like not a lot of time to sleep. I'm a great believer in sleep. How many hours are left? How many hours are in a week? Well, let's see. There's 24 hours, 168 hours a week. 168 hours a week. He's only got 48 hours to sleep. That is ridiculous, Elon. How dare you. I don't know. All you did was 48 hours divided by seven. That's almost seven hours a night. If all you did was work and sleep, I don't know when he eats. Maybe you have to eat when you're working. You definitely have to eat. I would recommend eating. You got to go to the bathroom sometime. You got to scratch that out. So you sleep seven hours a night and just stay at work. I don't actually think ... You have to put a lot of energy in to build anything. If you're doing it right, we talk a lot about conscious capitalism is about higher purpose. If you have a purpose that's animating you, it doesn't feel like work. It feels like play. It also attracts people to you that share that same purpose. This is something that I find very frustrating in people that don't recognize that it is incredibly difficult to build a successful business when they just want to tax the shit out of people and take all that money. Do you think it's easy to make something like Whole Foods? Do you think it's easy to make a company like Tesla? It's not easy. It's an insanely difficult task. That's why most people don't do it. When someone does do it and they have become successful, then other people start looking at it and go, well, they have all this money. They should contribute more or they should do this. We're talking about some people have suggested some extraordinary tax rates in order to get us out of this current recession. Then I talk to business people and they say that is the exact wrong approach because that's actually going to stifle business and business is the only thing that's going to bring us out of this. If you incentivize businesses to take risks and to be open and to make more profits, then more people are going to get jobs than the economy bounces back. If you give them a gigantic tax burden, they're going to be less likely to take chances. They're not going to be able to survive. People on the outside who've never built a business like Whole Foods, they don't seem to see that. They don't see it. The reality is that people like an Elon Musk or Jeff Bezos, they're good capital allocators, so to speak. They're not going to waste that money. That money is going to be reinvested to create new and more dynamic businesses that will help, the innovations will help our society move forward. When you just redistribute that money, there's no more additional innovation. It's just being consumed. This whole idea that it's consumption that drives the economy is fundamentally a myth. It's mostly creativity and innovation that drives the economy. We need to keep that money in the hands of our most creative people, which are entrepreneurs, the creative business people. For some reason, I think because of envy, it seems so unfair. Again, we're in a win-lose model. If Jeff Bezos has $150 billion, then that's unfair. In some sort of cosmic way, that's unfair. They believe that some of our other others have less. There's this fixed pie and Jeff took a big piece of it or Elon Musk has taken a big piece of it, but it's not a fixed pie. That's the wrong metaphor. Innovationism is continually growing the pie. In fact, humanity is demonstrably better off because of the capitalists, because of the innovationists. Let me play devil's advocate because this is the way they look at it. They would say, well, when you get to that sort of a position like a Jeff Bezos, where you have $150 billion, you can exert your influence on people in a way that's detrimental to society. You've achieved too high of a position. You have too much power. You will probably use that power to loosen regulations, to bribe politicians or influence politicians and to get laws passed that are better for your business and stifle competition. I think that's a powerful argument. If and when it happens, you have to push back against. You have to resist it. I think most business people are not doing that. I don't see that Jeff's trying to pass or I don't see Jeff trying to pass laws that favor him on. No, I don't think he is. I'm not saying he is. If he was, boy, would they come after him because he's bawling so hard. They'd be like, that motherfucker, he doesn't have enough. But I know that when Whole Foods was ... We were a public company for 25 years and we had the government go after us a few times. We tried to make an acquisition of a company called Wild Oats back in 2007. We actually made the acquisition, but the FTC tried to stop it. We ended up going into court with them. We actually won in court and very interesting, the FTC has their own court and after we won in the federal courts, they said, well, now we want to take you into our court, the administrative court. Oh, terrific. They have their own court? They have their own court. Don't you wish you had your own court? Take you to Whole Foods court, motherfucker. I'll take the FTC to the Whole Foods court. But the People's Court. You don't win in the FTC court. You don't win in that court. How many people have won in that court? I think when I looked at it at that time, this back in 2007, I think 46 of the 48 previous cases, this is from memory, so I could be wrong, had lost. They should go to court. Someone should take them to court. But here's the thing. I asked our attorney, so, okay, we're going to lose in this court, in their court. Then what happens? He says, well, then you appeal that back to the federal courts. And then after that, if they want to, they would go to the Supreme Court if they'll take it. They would cost me to just fight them in their own courts. They said it's going to cost you $30 million in legal fees. Not to mention a lot of executive time. And it's like, man, $30 million and we're going to know we're going to lose, and then we're going to have to spend another $30 million to go to the appeals beyond that. The lawyers love it, by the way. Of course. They want you to do it. Like divorce lawyers. Yes, exactly. They love it. That's how people fight with each other. You guys should not talk. Don't talk this out. Don't try to work this out because he's going to try to steal your money. He's going to try to steal that money from you. He's a piece of shit. Look at him. Look at him. So again. So what did you do? You went up settling? We ended up, yes. We ended up, they let the merger go through and we agreed to sell off a bunch of stores. And that was the best we could do. How many stores do you have to sell off? We put up about 30 for sale. I think that. And we only about, I don't know, I think five or six, we sold about five or six. Those of the Joe Rogan experience are now free on Spotify. That's right. They're free from September 1st to December 1st. They're going to be available everywhere. But after December 1st, they will only be available on Spotify, but they will be free. That includes the video. The video will also be there. It'll also be free. That's all we're asking. Just go download Spotify. Much love. Bye bye. Mmm. Mmm. Mmm. Mmm. Mmm. Mmm. Mmm.