Nick Kokonas on Resurrecting Restaurants, Skin in the Game, and Investing (#429)

“My dad used to run his own business. He was only high-school educated. Every time I tried to complicate things when I was in college and I’d talk to him about his business, he would be like, ‘It’s three shoeboxes, Nick. It’s the money in, the money out, and then the third box is what paid for your college.’ That’s the money that’s left over.” — 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, St. Clair Supper Club, and The Aviary NYC.

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. As an outsider to the restaurant industry, Nick’s approach to the business of restaurants is markedly innovative, and he has been featured in Businessweek, Fast Company, the New York Times, Forbes, and Crain’s Chicago Business, among other publications. He has given talks on innovation, entrepreneurship, and experience design across the country.

He is also the founder and CEO of Tock, Inc., a reservations and CRM system for restaurants, serving more than 10M diners and clients in more than 30 countries. Tock also recently launched a to-go platform, which has helped restaurants pivot to fulfill pickup and delivery orders.

You can find the transcript of this episode here. Transcripts of all episodes can be found here.

Listen to the episode on Apple Podcasts, Spotify, Overcast, Stitcher, Castbox, Google Podcasts, or on your favorite podcast platform.

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#429: Nick Kokonas on Resurrecting Restaurants, Skin in the Game, and Investing

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What was your favorite quote or lesson from this episode? Please let me know in the comments.

SCROLL BELOW FOR LINKS AND SHOW NOTES…

Want to hear Nick’s first time on this podcast? Listen to our nearly three-hour conversation in which we discuss behavioral economics, talent-spotting, cocktails, misleading averages, resources for aspiring entrepreneurs, and much more.

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

SELECTED LINKS FROM THE EPISODE

Connect with Nick Kokonas:

The Alinea Group | Tock | Twitter | Instagram | Facebook

Nick Kokonas — How to Apply World-Class Creativity to Business, Art, and Life, The Tim Ferriss Show #341
Asymmetrical Risk/Reward, Asymmetry Observations
How Ford Avoided the Meltdown that Hit GM, Chrysler, CNBC
Restaurateur Nick Kokonas Isn’t Waiting for Congress to Come to His Rescue, Fast Company
Fyre Festival: How a 25-Year-Old Scammed Investors Out of $26 Million, Make It, CNBC
Clearing, Investopedia
Molecular Gastronomy — The Food Science, Splice
Chef’s Table with Grant (Volume 2, Episode 1)
The 4-Hour Chef: The Simple Path to Cooking Like a Pro, Learning Anything, and Living the Good Life by Timothy Ferriss
Locked In, Investopedia
Nick’s March 8th Warning Tweet to the Hospitality Industry, Twitter
Coronavirus Unemployment Guide: What to Do If You Get Laid Off or Furloughed, The Washington Post
Illinois Governor Orders All Restaurants and Bars Closed for Two Weeks, Eater Chicago
MoMA
My Alinea Experience — 3 Michelin Star Restaurant in Chicago, KamanGround
Beef Wellington, Foods of England
Seven X Ranch
Tock To Go
How a Restaurant Entrepreneur Helped Fine Dining Restaurants Transition to Takeout During the Covid-19 Crisis, Robb Report
Recapitalization, Investopedia
Details Of The Coronavirus Relief Bill, The CARES Act, NPR
Paycheck Protection Program (PPP), SBA
Trading Places
Franklin Barbecue
What Is Distressed Debt?, Bankrate
Pebble Beach
Addo
Will the Post-Pandemic Roaring Twenties Happen? by Aaron Schnoor, Lessons from History, Medium
Dining Bonds Are The New War Bonds…The Restaurant Industry Hopes, LAist
‘Taking Advantage of This Crisis’: Why Some Restaurateurs Are Lashing Out at Yelp, GoFundMe, TODAY
Groupon
World Central Kitchen
Dune by Frank Herbert
Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb
The Black Swan: Second Edition: The Impact of the Highly Improbable by Nassim Nicholas Taleb
Skin in the Game: Hidden Asymmetries in Daily Life by Nassim Nicholas Taleb
A Bob Rubin Trade, Fundamental Finance Playbook
Nick’s Tweets About Airline Bailouts, Twitter
Lambda School
Zoom
Skype
Google Hangouts
Tock Founder Nick Kokonas Is Trying to Hit OpenTable Where It Hurts, Eater
TikTok
Canlis

SHOW NOTES

Nick expands on the idea of asymmetric risk-taking and its opportunities that he presented in his first appearance on this podcast. [08:12]
During the mandatory shutdowns required for containing COVID-19, no sector has been so swiftly decapitated as the arena of restaurants. But when did Nick start assessing the risk of this as a serious possibility, and how did he begin to piece together a plan for salvation? [14:24]
Who is Grant Achatz? [21:30]
How did Nick’s floor-trading experience inform his strategy for the potentially hard times ahead? [22:36]
After assessing the situation, how did Nick break the news to staff in advance of things going sideways, and what steps were immediately put in place for their safety and the safety of their customers? [28:15]
With the Tock startup and his restaurants in peril, what plans did he have in place if a shutdown became mandatory, and how did the unique way the restaurants were already running perhaps give them a better chance than most to get through the crisis? [33:40]
How does a company that specializes in fancy, fine-dining experiences with servers who can pull over $150,000 a year (without tips) pivot to an affordable carryout/delivery option for people under quarantine? [38:27]
How did the first round of the experiment go? [47:12]
How does a high-volume restaurant meet demand while ensuring its staff is maintaining social distance from one another (when it’s open to customers and when it’s not)? [49:16]
How does recapitalization work? [52:56]
How are the kitchens utilized, and do they involve use of induction stovetops? [55:59]
Is Nick running into supply chain disruptions? [57:59]
What types of restaurants does Nick see weathering this pandemic? Of the strategies he sees being used in the hospitality industry, which ones seem most effective — and which seem counterproductive? What opportunities might present themselves to aspiring restauranteers during this time and in the aftermath? [1:00:36]
How has Nick avoided the trap so many other restaurants have fallen into — of buying today’s food with tomorrow’s revenues? [1:16:20]
Nick’s dad’s three-shoebox business finance model. [1:19:24]
It’s not too late. But what comes next? [1:21:08]
Books and resources Nick suggests for people trying to improve themselves during this time, and thoughts on corporate responsibility and bailouts. [1:24:29]
What companies does Nick particularly admire right now? [1:30:24]
How did Nick and the Tock team create the Tock To Go platform in a matter of days instead of months? [1:35:07]
Parting thoughts. [1:42:18]

PEOPLE MENTIONED

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