Gawker: valleywag, whole foods

How John Mackey almost gave himself away — and I missed it

Owen Thomas — Wed, 18 Jul 2007 12:01:52 EDT

After initially insisting he'd done nothing wrong, Whole Foods Market CEO John Mackey has apologized for posting messages about his company and the competition under the pseudonym "Rahodeb." Most people are celebrating the reversal. But I'm kicking myself. I should have known. I, of all people, should have known.

When I was reporting on the meltdown of Mackey's dotcom spinoff, WholePeople, some Whole Foods employees whispered to me about Mackey's love of Yahoo Finance's message boards. It was a tip I didn't have time to follow up on as I chased down the details of how Mackey's absences, followed by meddling, botched WholePeople's launch. Towards the very end of my reporting, days before the story went to press, Mackey answered some questions by email. And that's where he almost — almost — gave himself away.

Whole Foods had agreed to sell what was left of WholePeople to Gaiam, an e-commerce company founded by Jirka Rysavy, a close friend of Mackey. Mackey agreed to be Gaiam's co-CEO. I asked him if that role would distract him from running Whole Foods. Here's what he told me on July 15, 2000:

I'll decrease my involvement there as the transition is complete.... My title of co-CEO of Gaiam.com is largely titular and transitional.

And here's what "Rahodeb," Mackey's online alter ego on Yahoo, posted that same month, according to the Wall Street Journal:

I doubt Mackey will stay heavily involved with Gaiam.com. I expect his CEO role is more transitional and titular.

If only I'd seen that post, I'd have known instantly who "Rahodeb" was. But it's strangely reassuring to find out, seven years later, that Mackey really was just as dishonest and deceitful as his employees were telling me he was.

When executives don fake identities

Tim Faulkner — Mon, 16 Jul 2007 18:13:09 EDT

Whole Foods Market CEO John Mackey is not the only person using a fictional identity online to fluff his ego and advance his business aims. The New York Times refers to the practice as sock-puppeting , "the act of creating a fake online identity to praise, defend or create the illusion of support for one's self, allies or company." It provides several examples of executives, writers, politicos, and bloggers whose alter egos ultimately caught up with them. Most notable is conspiracy theorist and CEO of Overstock.com, Patrick M. Byrne.

Byrne, not shy to open his mouth, often uses the handle "Hannibal" (which he apparently wants everyone to know is a reference to the historic general who failed to conquer Rome rather than the fictional cannibal) to post at Overstock.com's Investor Village and other discussion boards. The CEO claims "he never hides his true identity and always signs his name when he posts under his online handle," but Gary Weiss observes that Byrne does not always make his true identity transparent.

Paul Kedrosky, who we enjoy and link to often, tells the Times he thinks the practice is widespread:

'I'm convinced it's broader than anybody knows," he said, "I'm convinced this is the tip of the iceberg.' Mr. Kedrosky said that one chief executive recently told him that he almost had to 'chew off my right arm to keep from participating' in an online forum. He declined to name the company but said, 'It's a hard temptation to walk away from.'

Unlike his CEO pal, Kedrosky is man enough to jump in the comments under his own name when the temptation to respond online is too great to resist. I, myself, have to admit to making the mistake of using a false identity. But not everyone is gutsy enough to admit it. So, readers, do you know of, or suspect, any executives or bloggers who are secretly posting online under a false identity? If so, send them in.

John Mackey's sordid e-commerce fling

Owen Thomas — Fri, 13 Jul 2007 10:22:33 EDT

The "Rahodeb" incident, in which Whole Foods Market CEO John Mackey was caught touting his company's stock on Yahoo Finance message boards, is not the first time Mackey has shown extremely poor judgment when it comes to the Internet. Around the same time he started posting on Yahoo Finance as "Rahodeb," a handle taken from the name of his wife, Deborah Morin, he launched a dotcom called WholePeople, which turned out to be an out-and-out disaster, as I wrote back in 2000. But as I reported that story, I also heard persistent rumors that there was a lot of sleeping around going on at Whole Foods, starting at the top. Sounds like the kind of thing we approve of. In most cases. But not the way Mackey did it. Here's why:

Whole Foods is run more like a hippie commune than a business — which seems to work well for the grocery business. For Mackey's dotcom, however, free love and blurred lines of responsibility added up to a toxic workplace. Here's what one longtime Whole Foods employee told me:
It is very public that John Mackey has long-term relationships outside of his marriage. He once opened a speech saying, "About the same time my wife took her second lover... " Once you get past all the whispering about it, it does change the feel of the environment — combined with the fact that there are a lot of young people working there.
Mackey picked Carl Morris, a personal friend and the chief information officer of Whole Foods, to run WholePeople. And who, rumor had it, was Deborah Morin's second lover? None other than Carl Morris.
Not that Mackey had a problem with that. Office gossip had it that he was sleeping with Carl's wife, Donna, in an arrangement the parties involved approved of. Supposedly.
All of which seems like it would add up to nothing more than one heck of an office Christmas party. Except that Carl hired Morin to work on WholePeople, with disastrous results. Morin, thought just a consultant, wreaked havoc on WholePeople's tight launch schedule with design demands for the "Heart" website section she ran.

Morin's hiring, of course, was just one of many bad, hasty decisions that Mackey and Morris made in their e-commerce misadventure. The result? A dotcom which ended up losing $500,000 a week. A site that was shuttered three months after it launched. 177 people laid off. Millions of dollars of venture capital wasted. And how did Mackey get WholePeople, at last, off Whole Foods' hands? Why, by calling on a friend, office-supplies magnate Jirka Rysavy, to whom he unloaded it on the cheap. As the debacle unfolded, Mackey complained bitterly to a close associate, "I'll never get venture capital for anything.... I'll be a grocer for the rest of my life." Who knew, at the time, he had such a career ahead of him as a message-board poster? And that he'd drag Deborah, willy-nilly, into another dotcom disaster?

Whole Foods CEO proud to be an Internet blowhard

Tim Faulkner — Thu, 12 Jul 2007 14:00:05 EDT

John Mackey, the eccentric chief executive of flabbergastingly expensive grocery chain Whole Foods Market, has been exposed, the Wall Street Journal reports, for posting comments on Yahoo Finance message boards cheerleading himself and the company he co-founded, and bashing then-competitor Wild Oats. How long has this gone on? Eight years, which is plenty of time for him, in theory, to boost Whole Foods' stock price and dent Wild Oats' enough so that his company could take over its rival, in a deal that's now drawing scrutiny from the government. Illegal? Who knows. Arrogant, narcissistic, foolish, and compulsive? You bet, and that's why we love it.

Mackey's cheerleading, under the moniker "Rahodeb," for Whole Foods was enthusiastic and unconstrained. In January of 2005, he predicted:

13 years from now Whole Foods will be a $800+ stock before splits."

In the last year and a half, the stock has fallen nearly 50 percent after its last stock split. (In his long-winded blog defense, Mackey responds, "My opinions are just that — opinions. I am often wrong." No kidding.)

But we'll leave his financial comments for analysis by FTC and SEC regulators. What really impresses are Mackey's comments about himself. He's got a mancrush on himself:

"I like Mackey's haircut. I think he looks cute!"

Impressed by his own accomplishments:

"While I'm not a 'Mackey groupie, I do admire what the man has accomplished."

On his blog, now speaking as himself, for himself, and about himself, he defends his high self-opinion as personal drive — just like most narcissists:

"I have been called both 'arrogant' and a 'fool' most of my life. I prefer to think of myself as self-confident and committed to my ideals."

We all have our preferences.

The strangest defense offered by the CEO does not surface on his blog, but rather in a list of FAQs at the corporate website related to the pending FTC scrutiny of the Wild Oats acquisition:

"Who is "rahodeb" and why does the FTC quote this person?"

Mackey casts an online fictitious persona as normal and appropriate behavior. It's as if Rahodeb is Mackey's own personal Fake Steve, as if Mackey can remove all responsibility by casting Rahodeb off as a crazed multiple personality out of his control. If so, that would make Rahodeb the one thing Mackey, the ultimate control freak, believes he can't command by sheer force of personality.