Evan Smith: On the way over to see you I passed the old Whole Foods location, at Tenth and Lamar [in Austin], and I got to thinking about how far you’ve come in the past couple of de cades—not distancewise, since it’s only a few blocks from there to the new, 80,000-square-foot store, but in terms of everything else.
John Mackey: I’m less nostalgic about that location than the one that predated it—SaferWay, which was at Eighth and Rio Grande. It was the beginning of Whole Foods. My girlfriend and I started it. After two years we opened the store at Tenth and Lamar, and then we had a second store, and then a third and a fourth, but my memories of SaferWay are more intense. We literally lived in that store. We weren’t supposed to, but we were buying stuff direct and putting it in the living room of the house we were renting; you’d come in the front door and you’d have to weave through all these bags of flour and rice and whatnot. Our landlord found out and gave us the boot. So then we said, “We’re at the store all the time anyway. Why don’t we just move into the third floor?” The story I love to tell is that we didn’t have a shower. It was zoned commercial. So we used to take baths in the Hobart dishwasher, which had a little hose that hung down. And Barton Springs, of course.
ES: Could you ever have envisioned going from there to here? Was that even your ambition?
JM: No, of course not. We started the business because, first, we thought it would be fun. Second, we needed to earn a living, and third, we wanted to earn a living in some way that we thought would be beneficial to other people. We were young and idealistic. I was 25, and she was 21—when you’re young you don’t know what you can’t do. If someone had said, “You’re going to open a whole bunch of stores and have a $4 billion company,” I would have thought that was the most ridiculous thing I had ever heard.
ES: Would it have upset or offended you?
JM: At a lot of companies founded on principles, the notion of making money is almost antithetical to the ethos of the place. From the very beginning our business has existed to meet the needs and desires of multiple constituencies: customers, team members, vendors, shareholders, the community. So I always wanted to make money. I never thought profit was bad or evil. To be sustainable, business has to be profitable. A business that is not profitable is going to fail. At the same time, I’ve never felt comfortable with people who think the purpose of business is to make a profit. That doesn’t make any sense to me. It’s like saying that the purpose of life is to eat. Well, you can’t live if you don’t eat, but you don’t live to eat. And neither does business exist primarily to make a profit. It exists to fulfill its purpose, whatever that might be.
ES: How did you learn how to do your job?
JM: Not everyone is born to run a $4 billion company. There is no magic formula. I’ve learned, and I’ve grown by learning. That’s why I’ve enjoyed being in business so much: It’s stretched me. I’ve had to learn about myself, I’ve had to learn about other people, and I’ve had to learn about how things work. I’ve always seen it as a kind of game. I like games that are complex—the deeper you get into the game, the more there is to learn. There’s a stereotype out there in the world that businesspeople are stupid. In fact, business is not simple. It’s very difficult.
ES: What’s the most difficult part?
JM: Every one of our stakeholders wants more. I can’t go to a party without somebody commenting on Whole Foods’ prices—you know, “Whole Paycheck,” “You guys are so expensive”—and yet our team members forever think they’re underpaid. They’re not getting enough: “Look how rich and successful this company is.” Shareholders beat the drum for more profits and more growth. The community’s requests for donations are infinite. We give away millions of dollars, but the more you give away, the more that people want you to give away. Then there’s the government. Do you know that when your company gets as large as Whole Foods, you actually have to create office space for the IRS? They permanently audit you.
My point is that the art o f business is in some ways balancing so that everyone wins, so that everybody flourishes: customers flourish, team members flourish, shareholders flourish, the community flourishes, government flourishes. But understand that those balances are always temporary, because it’s human nature not to be satisfied for long. People want to know, “What have you done for me lately?” You have to continue to rebalance as the business grows.
ES: Other than the “Whole Paycheck” example, are there other ways in which you think the public’s perception of the company doesn’t square with the way you see it?
JM: For ten, maybe fifteen years, I used to resent the fact that people romanticize Whole Foods and unfairly project these aspirations onto the company. I always wanted to shake them and say, “Gosh, we’re just a grocery store! We’re not going to save the world!” And then there are the people who just hate us. We’ve been attacked so viciously. I’ve seen my name run into the dirt by the unions and people on the left. I used to really resent it and resist it. And then I stopped resisting it. I got it. Whole Foods, for better or worse, is a very dynamic brand—it’s very alive. And I don’t think that’s a bad thing if we lead by example. With great power comes great responsibility. What the world wants business to do is to care about