Nick Kokonas — How to Apply World-Class Creativity to Business, Art, and Life (#341)

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“I just look at some things and go, ‘Why is that? Why does it work that way?’ Oftentimes, the people most entrenched in a system have no idea why.”
— Nick Kokonas

Nick Kokonas (IG: @nkokonas, TW: @NickKokonas) is the co-owner and co-founder of The Alinea Group of restaurants, which includes Alinea, Next, The Aviary, Roister, and The Aviary NYC. He is also the founder and CEO of Tock, Inc, a reservations and CRM system for restaurants with more than 2.5M diners and clients in more than 20 countries.

Alinea has been named the Best Restaurant in America and Best Restaurant in The World by organizations and lists as diverse as The James Beard Foundation, World’s 50 Best, TripAdvisor, Yelp, Gourmet Magazine, and Elite Traveler. His restaurants have won nearly every accolade afforded to them.

Nick has been a subversive entrepreneur and angel investor since 1996. He spent a decade as a derivatives trader, has co-written three books, and believes in radical transparency in markets and business. His latest effort is The Aviary Cocktail Book, which is perhaps the most gorgeous book I’ve ever seen. It is self-published, has already pre-sold nearly $1M in copies, and is being released and shipped in October of 2018.

We’ve been trying to get this interview going ever since Nick was of immense help to me for The 4-Hour Chef, so I hope you enjoy this as much as I did. We talk about much more than the restaurant business, including philosophy, derivatives trading, favorite books, and how Nick tends to break every industry he enters in the most productive way possible! Enjoy!

#341: Nick Kokonas — How to Apply World-Class Creativity to Business, Art, and Life
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Want to hear another episode with someone else who understands that the most interesting way to do something isn’t always the easiest? — Listen to this episode with Astro Teller, CEO of X on moonshot thinking, mutilated checkerboards, “safety third,” and much more. (Stream below or right-click here to download.):

#309: Astro Teller, CEO of X – How to Think 10x Bigger
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QUESTION(S) OF THE DAY: What was your favorite quote or lesson from this episode? Please let me know in the comments.

Scroll below for links and show notes…

SELECTED LINKS FROM THE EPISODE

  • Connect with Nick Kokonas:

The Alinea Group | Tock | Twitter | Instagram | Facebook

SHOW NOTES

  • Is pressure Nick’s default setting, or are the risks the world perceives he takes somewhat of an illusion? [09:35]
  • How do behavioral economics and Nobel Prize-winning investor Richard Thaler fit into Nick’s way of doing things? [12:35]
  • How did Nick make the transit from philosophy to finance, and does he feel philosophy was an asset to what came later? [14:55]
  • Why did a legendary philosophy professor at Colgate give Nick’s classmates 15-page assignments while capping his limit at three pages? [16:21]
  • What was Nick’s introduction to the world of trading at a time when his future father-in-law was predicting he’d become an intellectual bum, and why did he have to dumb down the academics on his rÈsumÈ to get a clerk job on the Merc floor? [18:12]
  • Why is it common for philosophy majors to become traders? [21:03]
  • Why Nick is glad he didn’t pursue an MBA in 1992. [22:00]
  • Going back to Nick’s professor at Colgate, why does he think he was singled out from his peers? [23:48]
  • Books and other resources Nick recommends for aspiring entrepreneurs who don’t have the benefit of a philosophy background (or a tough professor to keep them grounded). [28:15]
  • Did Nick find that being a clerk on the floor of the Merc was everything he dreamed it could be? [33:48]
  • How Nick followed his entrepreneurial father’s model for owning his own situation when entering the world of trading, and found someone who was doing business in a way no one else was doing it. [36:10]
  • Why did Nick leave his mentor after a year and start his own company? [40:53]
  • How did Nick and his employees train to quicken their mental agility required for trading? [42:34]
  • The formative moment when Nick realized he could thrive in the trading environment. [45:31]
  • Resources and books Nick recommends to anyone who wants to learn to become a better investor. [46:21]
  • When it comes to taking investment risks these days, Nick seeks out the “high, small hoops.” [48:22]
  • Averages can be misleading. Do so many businesses fail because the model is difficult, or because too few do enough due diligence before diving into the fray? [52:00]
  • At what point did Nick decide to leave trading and get into the restaurant business — in spite of being warned of the high failure rate to be found there? [55:15]
  • The dinner and conversation that led to Nick teaming up with Grant Achatz — even though they didn’t really know each other very well by that point — and the decisions they made together along the way. [1:00:18]
  • Out of so many equally risky and exciting options, why did Nick pick opening a restaurant as his next “thing?” [1:07:17]
  • How does Nick spot talent early in others that most people are late to notice? [1:10:23]
  • Why do restaurants have candles, why do fancy restaurants have white tablecloths, and other questions that Nick and Grant have pondered. [1:14:22]
  • Incidentally, a now-famous chef was Alinea’s first customer. [1:17:25]
  • Nick and Grant would never let an architect or designer shoot down their ideas just because the way things have always been done happen to be practical. [1:18:39]
  • As someone who had never run a restaurant before, how did Nick contribute to the business effectively without simply falling into the role of financial donor dilettante? [1:19:29]
  • Why was Nick “horrified” when Alinea won Best Restaurant in America from Gourmet magazine in 2006? [1:23:24]
  • Grant was diagnosed with stage IV cancer and given six months to live — so of course he and Nick wrote a book and worked on revolutionizing the way their industry handled reservations while supervising a dwindling staff. [1:24:51]
  • Sometimes a PoS really is a PoS. Nick explains how reservations have been traditionally booked in the restaurant industry and what he’s done to improve upon this in ways that go beyond holding a table. [1:29:29]
  • Partner bickering at a time-traveling press dinner and using austere minimalism to avoid Next becoming the Disneyland of cuisine. [1:39:51]
  • Dealing with reservation software problems seven hours before the first dinner and the novelty of variable price points based on the day of the week. [1:44:58]
  • The moment a bearded, unwashed, and somewhat slightly dazed Nick was able to say “This is the best thing I’ve ever built.” [1:47:44]
  • Why the rewards of such a reservation system were worth their asymmetric risks on several levels. [1:51:02]
  • Marimekko charts can be used to instantly see anything from how much your restaurant’s sending to the fishmonger every month to what the ROI of sponsoring a podcast might be. [1:55:15]
  • The next industry Nick wants to disrupt? Truffles. Here’s why. [2:00:41]
  • How does Nick choose the black boxes worth trying to illuminate and examine, and what role do his more ambitious employees play in bringing them to light? [2:04:24]
  • On the confining self-selection of roles many people fall into on the job (for better or for worse), and how Nick’s hiring process is different today than it was 20 years ago. [2:10:31]
  • Nick deals with a lot of email. What systems does he have in place to help him cope? [2:16:41]
  • Social media can be hard to keep up with, but we both agree it’s important to demonstrate that we’re paying attention by engaging when possible — even if we can’t respond to it all. [2:22:49]
  • What “puzzle” filters and other mini-hurdles in correspondence accomplish. [2:24:06]
  • We compare notes about the somewhat slimy similarities between the music and publishing industries. [2:26:02]
  • Another black box: the agency problem. [2:35:25]
  • On the Hembergers and The Alinea Project, and the upcoming Aviary Book being released independently. [2:41:23]
  • A little cocktail talk. [2:48:37]
  • Books Nick has gifted most, and how he personalizes the gifts he gives. [2:53:47]
  • What would Nick’s billboard say? [2:55:44]
  • Parting thoughts. [2:57:34]

PEOPLE MENTIONED

Posted on: October 18, 2018.

Please check out Tribe of Mentors, my newest book, which shares short, tactical life advice from 100+ world-class performers. Many of the world's most famous entrepreneurs, athletes, investors, poker players, and artists are part of the book. The tips and strategies in Tribe of Mentors have already changed my life, and I hope the same for you. Click here for a sample chapter and full details. Roughly 90% of the guests have never appeared on my podcast.

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20 comments on “Nick Kokonas — How to Apply World-Class Creativity to Business, Art, and Life (#341)

  1. I appreciate Nick’s awareness Tim. To succeed and love the ride you need to totally immerse yourself in a space well outside of conventional thinking lines. Like a different plane. Plus you need to begin to genuinely question the status quo. I find being curious while creating my rear off helps me stand out in my niche. Excellent insights as always.

    Liked by 1 person

  2. Great guest. Really enjoyed this episode. Just one thing: At 2:04:39 Nick says he has a puzzle but don’t want to hear it. Maybe next time just ask the name of the puzzle so others who do want to hear it can look it up. Thanks!

    Liked by 1 person

  3. Tim, I am so sorry for the loss of not one but two important and close people in your life. Words always fail me during these times so I won’t try but I hope your memories of them always make you smile.

    Liked by 1 person

  4. “I will teach you how to think.” That is the comment of a great educator/mentor. My mentor was a math teacher who said the same thing. I guess philosophy classes did the same—except not in grad school.

    Like

  5. [2:37:40] “I’ll pay you 50% of everything over 10% higher than that.”

    A hypothetical of Nick’s real estate sale

    $90k; intrinsic value
    $100k; his listing price
    $110k; anything over this agent gets 50%

    Does he mean he’ll give the agent 50% of the money over $110k?

    Sold @ $160k
    Agent gets $25k

    Or does he mean 50% of typical commission?
    4% of $110k and 2% on anything over

    Sold @ $160k
    Agent gets:
    4% of $110k, plus 2% of $50k = $5,400

    I’m assuming the latter.

    Like

  6. Been an avid listener for many years but never left a comment. This is hands down the best Podcast you can listen to and this is an awesome episode. I could listen to 5 more hours of this conversation. Great in so many ways and as always, so many takeaways. Keep up the great work Tim and I need to look into Nick’s story more. Dude is wicked smart.

    Like

  7. Wow. Absolutely one of my favourite episodes. Loved this! So much to love. Such fascination with with deep understanding, with the abstract, with seeing and understanding the connection in EVERYTHING, with attracting the best of the best, with being the best for nothing other than the sheer joy of the journey that IS true excellence, with the fullest artistic expression.
    Beautiful and uplifting!
    Loved the humour. The fun. And I COMPLETELY loved the dismissiveness of statistics and facts. YES!!
    Huge kuods for Nick’s disappointment in achieving his epic, far flung goal so early into the restaurant career. He is truly living what we all “know” in theory but can rarely live by- it’s not the result, but the journey that matters the most. I I love his love of the process in reaching, striving, crafting, dedicating…
    Cannot wait to listen to this again.
    Cracking episode. Thank you so much Tim, thank you Nick.
    What a joy!
    Claudine

    Like

  8. Hi Tim, probably this is the only way to ask you a questions:-) Why american people think big and we european not so. I have read you book 4hww … and now I want create my own business. Not idea what but I want. Thank you that you change my mind. What should I do to think BIG? Why the biggest copmany come from usa? something muss be different…What should we change? I will be verry happy if you find a moment to reply. Cheers Andrzej

    Like

  9. Good morning! I love these 5 bullet Fridays! Thank you! If you like honey, you should try Halo as the next beverage you try. You can only get it in Delaware, Maryland and a couple of places in DC right now. It’s a little start-up making a traditional Eastern European spiced honey Liqueur. It’s DELICIOUS! [Moderator: link removed.]

    Have a great weekend!

    Ginny

    Like

  10. Reminded me of some of the restaurants in Astana, Kazakhstan like Kiku Matsuri – you should add it to you list of travel both the new and the old capital, it will blow your mind.

    Like

  11. How can you find the size of the US truffle market:

    Execution is difficult and their is likely a better way but I think this would help size the market.

    Back of envelope
    1. Find a list of all restaurants
    1. Option one: Liquor license (Collect from all 50 states
    2. Option two: Use the Yelp API
    2. Google write a script that googles them using name. (Will likely require duck duck go)
    3. Collect the data from their websites
    4. Reg x those data for truffles to find all restaurants with truffles
    5. Make an initial estimate from there

    Narrowing in
    1. Reg x website data to find emails
    2. Email restaurants with a survey to get a sample.
    3. Assuming n is sufficient take average of restaurants to find a more accurate estimate.

    Like