John Mackey
Co-founder and CEO of Whole Foods Market for 44 years
Where to hear and read about John Mackey1 episode or test
John Mackey co-founded Whole Foods Market and ran it for 44 years, growing a single Austin natural food store into the largest natural and organic grocer before Amazon bought it. The lesson most worth taking from him is to compete where rivals aren't looking, keep growing when partners want to stop, and never hand control to people whose goals differ from yours.
We can't compete with Walmart on price. We're not even going to try to.
John Mackey: The Dropout Who Changed How America Eats
John Mackey: the story and the lessons
1How John Mackey went from dropout to grocer
Mackey learned early that money meant freedom. His parents gave no allowance and priced each chore instead, so at 10 he washed dishes, mowed lawns and raked leaves to buy comic books, then records, then a car.
He says money meant freedom, and he agrees that most entrepreneurs want control of their lives more than money itself.
Six months in a natural food store showed him his future. A shirtless hitchhiking hippie who had dropped out of college, Mackey took a job at the Good Food store and liked customers who shared his counterculture lifestyle.
He had never worked in retail. His joke resume runs: busboy, dishwasher, boys' camp counselor, assistant manager at Good Food, CEO of Whole Foods Market. He thought, "I could do this the rest of my life."
He raised money on enthusiasm alone. With six months of retail experience, no business classes and no management history, he raised the first money from friends and family by telling them, "I know this is going to work, trust me."
His girlfriend Renee caught the same excitement, and that spark started SaferWay and then Whole Foods. Mackey applies the Steve Jobs phrase reality distortion field to himself and calls entrepreneurs "a little bit like panhandlers," except they sell dreams.
A skeptical landlord signed because Mackey reminded him of himself. Houston lawyer Ben Powell said there were not enough hippies to fill the store, then laughed and said, "Let's do your damn hippie store."
He warned Mackey that life would teach him a thing or two, and then helped.
The first SaferWay store was a badly located mistake. It sat in a house in a residential neighborhood where no cars passed, and Mackey calls it a terrible mistake.
He sold investors on a bigger store anyway, raised more capital, and the larger store worked. He counts resilience as more important than people credit.
A rival's numbers showed him what a full fresh offering could do. SaferWay sold $8,000 to $10,000 a week while Mrs. Gooch's in LA sold about $100,000 from a store only a little bigger, driven by fresh meat and big produce departments.
SaferWay was too small for meat and produce, so a bigger location was needed. Mackey calls Mrs. Gooch's a huge early influence.
A flood showed him how devoted his customers were. Nine months after opening, a 100-year flood put eight feet of sewage-tainted water in the first Whole Foods, which had been profitable by 2:00 PM on its first day.
A shopper who did not work there showed up to help mop up. Mackey says it taught him about stakeholders.
2Why Mackey kept growing when his partners wanted to stop
Co-founder Mark wanted to protect one profitable store. Mark saw the first store's profits and said, "Let's just not screw it up," while Mackey wanted more stores. When new stores lost money as they matured, Mark said, "You've blown it."
Mark was eventually bought out. Mackey compares a young business to a seed: "You plant a seed, you can't be digging, you've got to let it grow."
Co-founder Craig shared the bigger vision and stayed. Craig once predicted a store as far away as Kansas City, and Mackey called him when Whole Foods opened there.
Mackey treats business as a puzzle he trusts he will solve. He says entrepreneurs act without certainty because they trust they will do more of what works and less of what doesn't, and his cautious partners lacked that belief.
For Mackey, failure was not an option. He took from Michael Dell that you have to make mistakes to learn and iterate, and he is doing the same puzzle-solving now with Love.Life.
Peers in the industry chose security, Mackey went all in. Other natural food founders were older, had families and wanted financial safety, while Whole Foods kept opening bigger stores.
He echoes Dell: "If you stay the same, you get passed up, you're going to fail." He sees his clash with partners as similar to Rockefeller buying out co-founders who did not match his commitment.
He used a VC's dismissal as fuel. A venture capitalist turned Whole Foods down as hippies selling to hippies and said Safeway or H-E-B would crush it. Mackey felt a slow burn and doubled down.
He compares it to being turned down for a date and then told why, and admits it was partly ego. Mackey says the VC might have been right, except the chains never paid attention.
3How Whole Foods won by ignoring Walmart's game
Mackey competed on quality and service, never on price. When Walmart added groceries, supermarkets cut capital spending, labor and store appeal to match its prices, and still lost. Whole Foods sold a differentiated product mix, pretty stores and help carrying bags to the car.
Bare, cheap supermarkets pushed upper middle class shoppers toward Whole Foods. Staff had piercings and tattoos but looked like the shoppers' own children.
Rivals hypnotized by Walmart left Whole Foods wide open. For 20 to 25 years, until the 2004 Columbus Circle store, supermarkets paid almost no attention, while some shoppers drove 100 miles and spent $300 to $400 on a weekend stock-up.
"They were so obsessed with stopping Walmart that it allowed Whole Foods to compete on a different framework."
Taking a few customers from many stores kept rivals calm. Whole Foods was different enough that no single competitor lost many shoppers, so none felt threatened enough to respond.
For about 20 years Mackey watched first-time shoppers' jaws drop: "I've never been in a store like this." That feeling faded as natural food became common and supermarkets raised their game.
With no patents, scale had to be the defense. A retailer cannot patent a store concept, product mix, marketing or service, and rivals can hire away key people.
Whole Foods survived because chains ignored it until it had real scale, and scale then brought better pricing. Once supermarkets caught on, they copied it with nicer stores and more produce, then competed with Whole Foods on price.
Mackey bet on a basement store he feared would fail. Columbus Circle in New York needed heavy capital and had no parking, yet it took off and remains the highest-volume Whole Foods store.
The publicity sent supermarket executives to study it and drew media coverage and new stock buyers, which Mackey describes as an upward spiral.
4How Mackey turned a network of friends into an acquisition engine
Existing natural food supermarkets proved the model before he opened. Mackey found the three or four that existed, including Bread & Circus, Mrs. Gooch's and Frazier Farms, in the Natural Foods Merchandiser and visited them.
He told investors, "I didn't invent this. There are other people doing it." His test for a natural food supermarket was at least 10,000 square feet, unlike the old pill shops selling supplements.
Rival founders traded financial statements like a club. Each owned a geographic niche, so members met around new store openings, swapped numbers and took trips to Alaska, Yosemite and Belize.
Mackey hosted in Houston in 1984. Peter Roy organized the network, sold his New Orleans Whole Food Company to Whole Foods in 1988, served as president for five years and introduced Mackey to Lex Alexander, which led to buying Wellspring in North Carolina.
Mackey refused to compete head-on with friends. He skipped Portland because Nature's was there and waited on Boulder until Alfalfa's and Wild Oats had partnered, later buying some owners out.
"I did not want to hurt my friends." Entering Northern California still broke up the network, since Mrs. Gooch's felt California was theirs and members stopped sharing financials.
Buying a local chain gave each new region a ready team. Mackey built regions from scratch only in Texas, Northern California and Chicago. Los Angeles, Boston, Washington DC, Florida and North Carolina began with acquisitions.
The Florida deal brought just two stores, but the people and know-how let Whole Foods grow faster. Of about 550 stores, perhaps 25 are acquired ones still operating unmoved.
Public stock made Whole Foods the buyer of choice. Most owners had no other path to liquidity, so after the 1992 IPO they asked to be bought. Bread & Circus's founder was paid $28 million and received about $30 million as the stock rose.
Sellers trusted Mackey to keep standards and look after their people. "We were going to love their business and make it better."
5John Mackey on venture capital and control
He took VC money and is glad he did. A small round paid for the move into Northern California, and Mackey doubts the company could have grown without it.
Four years later Whole Foods was public and no longer needed the investors, who, in his words, got out of the car.
He went public in 1992 so VCs could not take control. VCs held 34%, and another private round would have given them control.
Going public kept Whole Foods independent for 25 years before Amazon bought it, and created a stock currency for acquisitions. "I didn't want the VCs to get control of the business."
VC incentives push good businesses to scale too fast. Funds must start paying back in about seven years and hunt for 100X winners, so they tolerate many failures and can wreck a good business that will never reach a billion dollars.
He warns of cram-down rounds that dilute founders and boards that replace them with professional managers. His advice: "Don't give up control of your business to the VCs."
Mackey values builders over flippers. He contrasts long-term builders with serial founders who run a company about five years and sell, while granting that many serial founders, like Brett Hurt, genuinely love creating.
Mackey says every business that reaches scale evolves into a corporate structure, which is what restless creators flee.
6Mackey's father, his mother and the hardest decision he made
Selling IPO stock on his father's advice was a mistake. His father, 20 at Pearl Harbor and shaped by the Depression, kept urging him to sell in case another depression came, and Mackey did.
"I should have compounded it and compounded it and compounded it." He says he would be far wealthier had he followed his own instincts.
At 40 he removed his 72-year-old father from the board. His father had grown conservative and they kept fighting over growth. Mackey told him to sell half his stock and let the rest compound, and it doubled within a year.
Mackey did not know Alzheimer's was starting; it was diagnosed a couple of years later. Before this he often caved to his father, and afterward he ran the company on his own judgment. Years later his father said he had decided rightly and was proud of him.
His mother died wanting him to finish college. In 1987, weeks before she died, she called Whole Foods little grocery hippie stores and asked him to promise to go back to school. He refused.
He now wishes he had told a white lie and calls it a minor regret. He later saw that she, a Baptist-town rebel who smoked, gambled and danced, gave him his own rebel streak, and he thanks her for it.
He made peace through a ceremony of forgiveness. Mackey recommends naming what a dead parent did for you, admitting you never said it, asking their forgiveness and then forgiving them.
He did this himself and says he feels at peace.
7What John Mackey believes about wealth and capitalism
Every Whole Foods team member got stock options. Options went to everyone, not just executives, and over 25 public years many meat cutters and grocery staff became millionaires.
At an annual gathering hundreds gave him a standing ovation, saying they had bought houses, could send kids to college or could retire. He calls it "so deeply satisfying."
Mackey sees capitalism as win, win, win. He says 250 years ago 94% of people lived on under $2 a day and 88% were illiterate, and that capitalism lifted humanity out of that.
He argues entrepreneurs keep a sliver of the value they create for customers, employees, suppliers and investors, and proposes ranking people by wealth created for others, a "Bezos 1000."
He calls Rockefeller perhaps the greatest entrepreneur ever. Mackey admires Rockefeller, Bezos and Musk for planning whole systems and executing them, while noting he himself never tried to control his suppliers.
8Mackey's view of building as a spiritual journey
He says building a company is a hero's journey inward. Mackey did inner work the whole time he built Whole Foods and says founders follow an inner voice that most people ignore out of fear of failure and ridicule.
He took LSD before founding Whole Foods for spiritual reasons and now recommends guided breathwork of one to two hours as a drug-free route into the unconscious.
For Mackey, work feels like play. He says real enjoyment makes it hard to call it work: "you're doing what you want to do, and it's playful."
His summary of learning from setbacks is "Learn or die," though he adds that you learn from success too.
John Mackey: The Dropout Who Changed How America Eats
Mackey built a single Austin natural food store into the largest natural and organic grocer by competing on quality and service while rivals chased Walmart on price, then consolidating the natural foods industry through acquisitions. The decisions that make it worth hearing are going public in 1992 to keep VCs from taking control, and firing his own father from the board to keep growing.
Mackey learned early that money meant freedom. His parents gave no allowance and priced each chore instead, so at 10 he washed dishes, mowed lawns and raked leaves to buy comic books, then records, then a car.
He says money meant freedom, and he agrees that most entrepreneurs want control of their lives more than money itself.
Six months in a natural food store showed him his future. A shirtless hitchhiking hippie who had dropped out of college, Mackey took a job at the Good Food store and liked customers who shared his counterculture lifestyle.
He had never worked in retail. His joke resume runs: busboy, dishwasher, boys' camp counselor, assistant manager at Good Food, CEO of Whole Foods Market. He thought, "I could do this the rest of my life."
He raised money on enthusiasm alone. With six months of retail experience, no business classes and no management history, he raised the first money from friends and family by telling them, "I know this is going to work, trust me."
His girlfriend Renee caught the same excitement, and that spark started SaferWay and then Whole Foods. Mackey applies the Steve Jobs phrase reality distortion field to himself and calls entrepreneurs "a little bit like panhandlers," except they sell dreams.
A skeptical landlord signed because Mackey reminded him of himself. Houston lawyer Ben Powell said there were not enough hippies to fill the store, then laughed and said, "Let's do your damn hippie store."
He warned Mackey that life would teach him a thing or two, and then helped.
The first SaferWay store was a badly located mistake. It sat in a house in a residential neighborhood where no cars passed, and Mackey calls it a terrible mistake.
He sold investors on a bigger store anyway, raised more capital, and the larger store worked. He counts resilience as more important than people credit.
A rival's numbers showed him what a full fresh offering could do. SaferWay sold $8,000 to $10,000 a week while Mrs. Gooch's in LA sold about $100,000 from a store only a little bigger, driven by fresh meat and big produce departments.
SaferWay was too small for meat and produce, so a bigger location was needed. Mackey calls Mrs. Gooch's a huge early influence.
A flood showed him how devoted his customers were. Nine months after opening, a 100-year flood put eight feet of sewage-tainted water in the first Whole Foods, which had been profitable by 2:00 PM on its first day.
A shopper who did not work there showed up to help mop up. Mackey says it taught him about stakeholders.
Co-founder Mark wanted to protect one profitable store. Mark saw the first store's profits and said, "Let's just not screw it up," while Mackey wanted more stores. When new stores lost money as they matured, Mark said, "You've blown it."
Mark was eventually bought out. Mackey compares a young business to a seed: "You plant a seed, you can't be digging, you've got to let it grow."
Co-founder Craig shared the bigger vision and stayed. Craig once predicted a store as far away as Kansas City, and Mackey called him when Whole Foods opened there.
Mackey treats business as a puzzle he trusts he will solve. He says entrepreneurs act without certainty because they trust they will do more of what works and less of what doesn't, and his cautious partners lacked that belief.
For Mackey, failure was not an option. He took from Michael Dell that you have to make mistakes to learn and iterate, and he is doing the same puzzle-solving now with Love.Life.
Peers in the industry chose security, Mackey went all in. Other natural food founders were older, had families and wanted financial safety, while Whole Foods kept opening bigger stores.
He echoes Dell: "If you stay the same, you get passed up, you're going to fail." He sees his clash with partners as similar to Rockefeller buying out co-founders who did not match his commitment.
He used a VC's dismissal as fuel. A venture capitalist turned Whole Foods down as hippies selling to hippies and said Safeway or H-E-B would crush it. Mackey felt a slow burn and doubled down.
He compares it to being turned down for a date and then told why, and admits it was partly ego. Mackey says the VC might have been right, except the chains never paid attention.
Mackey competed on quality and service, never on price. When Walmart added groceries, supermarkets cut capital spending, labor and store appeal to match its prices, and still lost. Whole Foods sold a differentiated product mix, pretty stores and help carrying bags to the car.
Bare, cheap supermarkets pushed upper middle class shoppers toward Whole Foods. Staff had piercings and tattoos but looked like the shoppers' own children.
Rivals hypnotized by Walmart left Whole Foods wide open. For 20 to 25 years, until the 2004 Columbus Circle store, supermarkets paid almost no attention, while some shoppers drove 100 miles and spent $300 to $400 on a weekend stock-up.
"They were so obsessed with stopping Walmart that it allowed Whole Foods to compete on a different framework."
Taking a few customers from many stores kept rivals calm. Whole Foods was different enough that no single competitor lost many shoppers, so none felt threatened enough to respond.
For about 20 years Mackey watched first-time shoppers' jaws drop: "I've never been in a store like this." That feeling faded as natural food became common and supermarkets raised their game.
With no patents, scale had to be the defense. A retailer cannot patent a store concept, product mix, marketing or service, and rivals can hire away key people.
Whole Foods survived because chains ignored it until it had real scale, and scale then brought better pricing. Once supermarkets caught on, they copied it with nicer stores and more produce, then competed with Whole Foods on price.
Mackey bet on a basement store he feared would fail. Columbus Circle in New York needed heavy capital and had no parking, yet it took off and remains the highest-volume Whole Foods store.
The publicity sent supermarket executives to study it and drew media coverage and new stock buyers, which Mackey describes as an upward spiral.
Existing natural food supermarkets proved the model before he opened. Mackey found the three or four that existed, including Bread & Circus, Mrs. Gooch's and Frazier Farms, in the Natural Foods Merchandiser and visited them.
He told investors, "I didn't invent this. There are other people doing it." His test for a natural food supermarket was at least 10,000 square feet, unlike the old pill shops selling supplements.
Rival founders traded financial statements like a club. Each owned a geographic niche, so members met around new store openings, swapped numbers and took trips to Alaska, Yosemite and Belize.
Mackey hosted in Houston in 1984. Peter Roy organized the network, sold his New Orleans Whole Food Company to Whole Foods in 1988, served as president for five years and introduced Mackey to Lex Alexander, which led to buying Wellspring in North Carolina.
Mackey refused to compete head-on with friends. He skipped Portland because Nature's was there and waited on Boulder until Alfalfa's and Wild Oats had partnered, later buying some owners out.
"I did not want to hurt my friends." Entering Northern California still broke up the network, since Mrs. Gooch's felt California was theirs and members stopped sharing financials.
Buying a local chain gave each new region a ready team. Mackey built regions from scratch only in Texas, Northern California and Chicago. Los Angeles, Boston, Washington DC, Florida and North Carolina began with acquisitions.
The Florida deal brought just two stores, but the people and know-how let Whole Foods grow faster. Of about 550 stores, perhaps 25 are acquired ones still operating unmoved.
Public stock made Whole Foods the buyer of choice. Most owners had no other path to liquidity, so after the 1992 IPO they asked to be bought. Bread & Circus's founder was paid $28 million and received about $30 million as the stock rose.
Sellers trusted Mackey to keep standards and look after their people. "We were going to love their business and make it better."
He took VC money and is glad he did. A small round paid for the move into Northern California, and Mackey doubts the company could have grown without it.
Four years later Whole Foods was public and no longer needed the investors, who, in his words, got out of the car.
He went public in 1992 so VCs could not take control. VCs held 34%, and another private round would have given them control.
Going public kept Whole Foods independent for 25 years before Amazon bought it, and created a stock currency for acquisitions. "I didn't want the VCs to get control of the business."
VC incentives push good businesses to scale too fast. Funds must start paying back in about seven years and hunt for 100X winners, so they tolerate many failures and can wreck a good business that will never reach a billion dollars.
He warns of cram-down rounds that dilute founders and boards that replace them with professional managers. His advice: "Don't give up control of your business to the VCs."
Mackey values builders over flippers. He contrasts long-term builders with serial founders who run a company about five years and sell, while granting that many serial founders, like Brett Hurt, genuinely love creating.
Mackey says every business that reaches scale evolves into a corporate structure, which is what restless creators flee.
Selling IPO stock on his father's advice was a mistake. His father, 20 at Pearl Harbor and shaped by the Depression, kept urging him to sell in case another depression came, and Mackey did.
"I should have compounded it and compounded it and compounded it." He says he would be far wealthier had he followed his own instincts.
At 40 he removed his 72-year-old father from the board. His father had grown conservative and they kept fighting over growth. Mackey told him to sell half his stock and let the rest compound, and it doubled within a year.
Mackey did not know Alzheimer's was starting; it was diagnosed a couple of years later. Before this he often caved to his father, and afterward he ran the company on his own judgment. Years later his father said he had decided rightly and was proud of him.
His mother died wanting him to finish college. In 1987, weeks before she died, she called Whole Foods little grocery hippie stores and asked him to promise to go back to school. He refused.
He now wishes he had told a white lie and calls it a minor regret. He later saw that she, a Baptist-town rebel who smoked, gambled and danced, gave him his own rebel streak, and he thanks her for it.
He made peace through a ceremony of forgiveness. Mackey recommends naming what a dead parent did for you, admitting you never said it, asking their forgiveness and then forgiving them.
He did this himself and says he feels at peace.
Every Whole Foods team member got stock options. Options went to everyone, not just executives, and over 25 public years many meat cutters and grocery staff became millionaires.
At an annual gathering hundreds gave him a standing ovation, saying they had bought houses, could send kids to college or could retire. He calls it "so deeply satisfying."
Mackey sees capitalism as win, win, win. He says 250 years ago 94% of people lived on under $2 a day and 88% were illiterate, and that capitalism lifted humanity out of that.
He argues entrepreneurs keep a sliver of the value they create for customers, employees, suppliers and investors, and proposes ranking people by wealth created for others, a "Bezos 1000."
He calls Rockefeller perhaps the greatest entrepreneur ever. Mackey admires Rockefeller, Bezos and Musk for planning whole systems and executing them, while noting he himself never tried to control his suppliers.
He says building a company is a hero's journey inward. Mackey did inner work the whole time he built Whole Foods and says founders follow an inner voice that most people ignore out of fear of failure and ridicule.
He took LSD before founding Whole Foods for spiritual reasons and now recommends guided breathwork of one to two hours as a drug-free route into the unconscious.
For Mackey, work feels like play. He says real enjoyment makes it hard to call it work: "you're doing what you want to do, and it's playful."
His summary of learning from setbacks is "Learn or die," though he adds that you learn from success too.