John Mackey Founded Whole Foods on Lofty Ideals. Compromise Made It a Massive Business

When John Mackey was 22 years old, he moved into a vegetarian co-op, in part because he thought he might meet interesting people. There he learned a clean-eating ethic that he would continue to embrace throughout his life. 

Within two years, he opened up a vegetarian natural-foods store in Austin, Texas, alongside his girlfriend, on $45,000 of borrowed money. It was niche–it didn’t sell any sugar, meat, or alcohol products. It was tiny, in the ground floor of a house. It also didn’t do much business.

“We realized if we’re going to be successful, we have to meet the marketplace where we find it,” he said on Inc.’s latest What I Know podcast. That meant compromising on his ideals of selling only the healthiest products–and it meant merging with another local natural grocer to create Whole Foods Market in a new 10,000-square-foot location that sold natural foods alongside household staples like coffee, seafood, and meat. “We hit the sweet spot in the market,” Mackey said.

The act of compromise influenced him deeply. “You have to meet the marketplace where you find it. You have to satisfy customers. You’re in business to satisfy customers and if you can’t do that, you’re going to fail,” Mackey said. “You can be idealistic and fail, or you can be more pragmatic and succeed–while continuing to fulfill your ideals as best you can.”

His learned pragmatism served him in particular in 2017–when Amazon acquired Whole Foods Market for more than $13 billion. He compared the merger to a marriage. “I love almost everything about my wife, but do I love everything about my wife? No. And I’m sure she doesn’t love everything about me,” he said. “And with a big merger like Amazon, do I love everything about Amazon? No, I don’t.”

But, three years in, Mackey said he’d happily make the same deal again.

Listen to the full interview in the player below, or wherever you get your podcasts. And please subscribe to What I Know, Inc.’s podcast series featuring entrepreneurs and visionaries retelling how they’ve gotten where they are–and what they’ve discovered along the way.