The Learning Leader Show With Ryan Hawk - 302: Nick Kokonas - How To See The Genius In People

Episode Date: March 17, 2019

The Learning Leader Show With Ryan Hawk 302: Nick Kokonas - How To See The Genius In People Full show notes can be found at www.LearningLeader.com Commonalities of sustaining excellence: Intellectual curiosity - A desire to learn.  Not for the outcome, but for the curiosity to learn more Healthy degree of paranoia - What Jim Collins would call "productive paranoia" In the pursuit of excellence "No one is giving it away for free.  It takes effort." Balance -- "I get manic at times. I'm not always well balanced."  The skill is in being able to turn it on and off... Which can happen over time "I've always been curious about how things worked..." Why it was helpful to go to Colgate University A Liberal Arts school forced Nick to study areas outside of just his major.  Made him more well-rounded He "learned how to learn" -- Forced him to wrestle with existential questions Rhetoric -- Can you understand all sides of an issue? Where does ambiguity exist? Need to learn to think critically -- How you do it is more important that you do it General advice: "Learn to communicate well.  Concisely. Learn to write and speak well. From a psychology perspective, analyze, "what are they really saying?" Why he became a derivatives trader: "I got into law school, but didn't want to go." He tested well, but desired his independence "Prestige as part of pay doesn't matter to me." To be great at anything, you must be disciplined to show up everyday -- "My money has always been at risk everyday. Some think that's crazy.  But I've always worked to have an edge." How to figure out outcomes as soon as possible The decision to leave the world of derivatives trading to open a restaurant... Why? "I took some money off the table... Then my dad died... and I thought, what am I doing?  I had no idea what I was going to do next..." Meeting Grant Achatz and the impact that had on Nick's life... "He reminded me a lot of myself.  He was thoughtful, driven, shy (this was the opposite), and he wasn't afraid of hard work." "I think I have a skill to see the genius in some people." "Grant's work is of artistic genius" Doing what you love and are passionate about: "For me the test is... When I wake up in the morning is it nagging at me to do it?"

I don't think it's about failing fast and often. It's about figuring out the outcomes as quickly as possible. You know, designing experiments or designing aspects of your product that you can test very, very, very quickly. Whatever it is that you're selling, get out there and sell it as fast as you can. And do it, do it often. Everyone loves payday, but loving a payroll provider? That's a little weird.

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slash leader. Welcome to the learning leader show. I am Ryan Hawk. Thank you so much for being here. It is Mindful Monday. Text learners to 44222. In order to join tens of thousands of learning leaders from all over the world,

text learners to 44222-2. Now on tonight's featured leader and wow, it's a great one. Nick Caconas, the co-owner and co-founder of the Alinea group of restaurants, which one of them is Alinia. Alinea has been named the best restaurant in America and best restaurant in the world by every imaginable organization enlist that measures restaurants. Nick is also the CEO of Talk, Inc. a reservations and CRM system for restaurants. Additionally, a best-selling author and previously was a derivative trader for more than 10 years. Nick is a true polymath.

A few of the topics we got into. Advice. The three keys to success in any industry. Then having and sustaining excellence in multiple life categories. The framework to take this to any industry in which you may work. Then why all of us should think about experiential design as a leader and how this applies to the people that we serve. Nick went deep on this near the end of the conversation, and it was so good. Ladies and gentlemen, it's Nick Kekonis.

All right, Nick Kekonis, man, so good to have you here on The Learning Leaders Show. Welcome. Thanks, Ryan. Happy to be here. I'm curious to get us going, man. You have lived quite a life already in not that many years. So this question, I think, is I'm interested to ask you. And that's, when you think about people that you've surrounded yourself with, those who have sustained

excellence. I'm curious from your perspective, what have you found that those people have had in common? Well, two things. The first is curiosity, intellectual curiosity. I think that they want to learn for the sake of learning, not for the outcome of learning. The outcomes are kind of, I don't want to use the word accidental, but unplanned at the start. And then the second thing is that a healthy degree of a little bit of paranoia neuroses a little bit. You know, there's a lot of people that I know who lead balanced lives. And a lot of the people that I know who sustain what a lot of people call excellence are almost a little bit manic in their pursuit of their excellence.

I don't know anyone who gets there easily. and what I always tell people that work for me and whatnot is that no one's given it away for free. Regardless of what that is, it does take effort and over a long period of time to achieve anything. And, you know, that requires a little bit of suspension of disbelief and a little bit of believing in your own abilities and mythology, maybe before you even have a right to do so. I get asked at the end of a keynote. And we'll talk about excellence throughout the course of that time. And they'll say, well, what about balance, you know, having a spouse and kids and everything

that goes in a. And in your answer there, I found it really fascinating. But if you were asked that at the end of a keynote where they said, Nick, how do you find balance? Would your answer? Well, actually, I'll just ask you, is it something that's even possible? or do you try or do you say that's not necessarily for everyone? Yeah, I mean, I also think that all of the above, and I realize that's not very helpful, but I'll expand on that a little bit. I think that I was just having a conversation with our COO of talk this morning, and, you know, I get a little manic at times trying to figure things out.

When I'm in that mode, I'm not terribly well balanced, right? Like, that's all I'm thinking about. That's all I'm working on. That's all I'm really useful for at that point. That is definitely not desirable in the long run or sustainable in the long run. But practicing that means that you can begin to turn it on and off a little bit more readily than you could when you were like 20 or something. And so for me, balance, I'm not the most balanced person, but yet I'm also not awful at some other things as well. You know, I think it's important to be a good family person.

I think it's important to have other passions and pursuits that are, you know, meaningful friendships, those sorts of things. at the same time, that doesn't mean that there can't be a two-week period where I work 20 hours a day. And enjoyably so, I might add. Like, I'm not, like, you know, in the salt mines. Like, I'm enraptured by some sort of problem. And, you know, I mean, to me, you feel very alive when you're in something like that, where you don't even know where 10 hours went. That's really cool.

It doesn't happen all the time. So you can do both, I think. I was told by a mentor one time during a meeting, Nick, that he said, when I'm looking at from a hiring perspective, he was a senior leader at a big company. So when I'm looking for people to hire, I want people who had success in multiple life categories. And as I look across my guest list of more than 300 of these people I've spoken with, and then I look at your career, especially given the fact that you're still young,

you may exemplify that success in multiple life categories more than potentially anybody I've ever spoken to. And so maybe it would be good for us to start near the beginning and then work our way through. And I'm sure I'll have questions that pop up because I think people listening would benefit from hearing how you've made decisions, why you've made them. And also some of the dramatic change in your life and career and why you decided to make some of those changes. So I'd be curious, what was your first real job you ever had? Yeah, I worked part-time at a bicycle repair shop when I was about 15 years old. Okay. And it was just like a neighborhood shop, and I used to like to tinker on bikes.

And I would go in there and like, you know, buy parts or I would have found parts or something and tried to figure out how to do it. So I sort of started hanging out there, and then they kind of offered me a job to do the simple stuff, you know, change the tire, fix a gear, that sort of thing. And, you know, it was for me, it was kind of like, wow, you know, you're going to pay me three bucks an hour to do this? That great, you know, it wasn't like, and it was very loosey-goosey. It wasn't like, you know, now where, you know, you had to fill out all the paperwork and I think it was basically like, yeah, come, come by three days a week in the summer and we'll give you some stuff to do. and, you know, and that was, that was it. Like, it was just one summer. And it was, I remember it fondly just as doing something I enjoyed doing and, you know,

getting paid enough, you know, to buy a hot dog on the way home kind of thing, you know, which was great, right? And then I worked a little bit at a golf driving range for a time one summer. And then the following summer, I got a job at an accounting firm, which was the first time I'd ever been in like an office environment. I was probably 16 or 17. And they literally hired me as like a filing person, which was like Dante's fourth circle of hell for me.

Like I just, it went from everything of like fixing problems and trying to figure something out to here's 20,000 files. And we moved offices and these all need to be alphabetized and filed. You know, pre-digital era. So that's probably 1988 or so. Sorry, 84, graduated high school in 86. So, you know, that was awful. And then I got very lucky one day because the head guy, Sam,

decided that he was going to start to try to codify his employees by giving some tests. Something that he's run with for the last 30 years, he actually created a program to do this for companies. but he was doing a sort of the standard IQ slash cognitive abilities testing and some psych testing. And I just wanted out of the file room desperately. I was like, why don't I get to take this test? And now you have to understand the other 50 employees there, nobody wanted to do this. It was like his little pet project and nobody wanted to sit for eight hours to take a test.

I looked at that as like, hey, it's a day away from filing. And I remember that he basically said, like, if anyone does better than me on the cognitive abilities test, like, I'll take him out to fancy launch. And the answer was that two people in the firm did it, and one of them was me, the high school incident. So he very quickly kind of went like, oh, like, I had no idea that you could do anything like that. I'm going to start teaching you how to do some basic spreadsheets. and you're probably going to be comfortable on a computer, which back then was kind of novel. And he had some real estate operations that he was trying to develop on his own,

aside from the accounting. And that's the first time I ever used VisiCalc back then. And that was really cool. Like I learned about a little bit about business, a little bit about accounting, a little bit about real estate and loans and mortgages. But mostly, like I had no interest. in that. I just wanted to get out of the filing room, which was terrible.

You mentioned at the beginning that the people who you found that sustained excellence have an intellectual curiosity and they learn for the sake of learning, not necessarily for the outcome. Is this something that you've embodied since you were 15, since you raised your hand for that job, or did you have to develop this over time as you matured? Yeah, I mean, I think the answer is both. Like, I didn't recognize it. Like, in hindsight, I'm like, yeah, I was a pretty curious person. I loved to read when I was young. I loved computers from the age of 12 and got very lucky that I was exposed to a friend's dad who was a computer engineer back then.

So I was definitely a geeky kid, but also did sports and also had friends. I mean, I wasn't in a hole somewhere in the basement. You know, I had chemistry kids. I just was a, I just was always curious about how things worked. and, you know, enjoyed a good story. I loved reading. I loved movies. You know, I grew up in that era of kind of like Stranger Things era, right?

Where, like, you know, you hopped on your bike and you went to your buddy's house. And, you know, there was a real neighborhood there. And looking back, it's interesting because a number of people that grew up in that neighborhood are doing really interesting things, you know. And I just feel really fortunate that I was in an environment where that sort of learning was encouraged. And then I got very lucky in going to Colgate University, you know, liberal arts college where that's what that was all about. Like, you know, they very much encouraged you. In fact, required you to take classes and study outside your core interests. And we're not for that.

I probably would have done very different things, you know, in the long run. What do you mean? I had the fortunate circumstance where in my freshman year, I met a professor who convinced me to not study business. You can't really study business at a liberal arts college, but economics. Study philosophy instead. And when I would every now and then worry or fret about how that might apply to some sort of a career in the future, he was very, very much like learn how to learn. And you'll, you know, it's like the teacher man to fish thing, right?

Learn how to learn and you're set, you know. And if you learn how to do that rigorously, you're really set. And so it became a fun intellectual game to, you know, read these people that wrote books hundreds of years ago who were wrestling with a lot of the same sort of existential questions. But I think, you know, when you're a teenager, there's a lot of existential angst going at. And to, you know, read people that lived 400 years ago and had, or 2,000 years ago and had

many of the same questions and concerns really speaks to the universality of the human experience. What's your process? So this could take forever, but I'm curious. So take as much time as you need. But when someone says, learn how to learn, interesting. So how did you go about doing that? I mean, is it, is there a specific process around how you read and take notes?

I mean, tactically, is that what it looks like? Or if somebody is listening to say, I think I'm curious, but I need to do a better job of recalling what I've read or I need to do a better job of, of making sure that I take what I've watched and read and listen to on a podcast and put it into action, actually execute and implement on that. Is that, is that part of a. learning how to learn or how do you, I guess I'm just your overall thoughts on how to do that and then to also take action on it? I guess for, for me, it was more about the rhetoric of it. Can you understand all sides of an issue? Can you argue the opposite of what you believe and make it compelling? Can you understand the logic of a statement or the illogic of a statement? you know where does ambiguity exist within within you know a statement all of that was part of studying

philosophy and breaking down just basic you know a equals a you know totology syllogism all those sorts of classical logic structures and you know it's it's interesting like you watch a political speech or a TV drama or whatever and it becomes this very much part of your way of thinking to be to think critically, I guess, is the right way of phrasing it. And so how you do that is less important than that you do it. I don't walk around with a notepad and pen and try to understand everything around me. But I'm pretty cynical as to, you know, what are the motivations? Does that even mean anything when that person said something?

I mean, I've been in large meetings with large corporations where, you know, and we've all had this experience, I bet, where you sit around a table and in the course of a meeting six different people say what sounds like six different things, but they're all kind of saying nothing. Like there's no call to action. There's no real meat on the bone there. And yet no one wants to call that out because it's impolite or something like that. And so I think being in an environment, the reason I was fortunate is because I was in an environment where wrestling with ideas regardless of what they are. was encouraged. And then being clear and concise with your thoughts was a hallmark, not of being right or wrong, but being precise. And so that, that's the part that ended up leading to, you know, I think some success in business and whatnot. I'm curious if there was a

20-year-old kid listening who is currently in college and they're not. not sure what they want to do yet, which is, is, I got that email yesterday, Ryan. You did. Okay. So what did they say? What was the email and what did you say? I got an email from, from, I get, you know, probably 20 or 30 emails a day from people I do not know, asking for career advice. Gotcha. I've been pretty free with my email address on social media and whatnot because you never know, like, you know, I've met some really interesting people kind of randomly over the years. And I can't sort of get to everybody. But yesterday, someone emailed me early in the morning. And he was at a business college. And he had heard me speak where I said,

you know, I tend to be sound very certain in my opinions. And I said, like, you should never study business. You should study, you know, French literature and, you know, philosophy and whatever, science, biology. And then go into business. And he was at this business. school, and he said that he'd been thinking lately that he was enjoying his liberal arts classes, of which it comprised 25% of his workload, way more than the 75%, which was sort of like the accounting and marketing and management classes. And he always felt like everything in those classes was kind of obvious anyway, or you could figure it out.

Should I quit school and go to a different college? And the answer that I wrote to him was, I don't know you. and you're not me. Like, you know, I can't tell you what's right for you. And what worked for me, you know, your results may vary kind of thing, right? So I'm really hesitant to give, like, universal advice. I mean, if everybody in the world did exactly what I did, that would be a very boring place.

So I can only really speak to what worked for me. But what I do see, like you asked earlier about successful people or excellence that sustained over time. And for me, the thing that I will say, and I see as a failure in a lot of companies that I work with, is an inability to communicate well, to write well, to write concisely. You know, we all write so many emails every day now that that is a skill that can be mentored and learned. and it's something that I really require if I beat up on my own team in any way it's like when I get a sloppy long drawn-out email

that could have been one-eighth the length and a couple of well-focused bullet points that's so much more effective in business than writing a flowerly long four-paragraph email that kind of goes nowhere. I think there's a real skill to that. Yeah. And so, yeah, where do you learn that?

Well, you tend to learn that in English class more than biology class, right? Yeah. Yeah. Yeah. Yeah. I don't mean you shouldn't study biology or chemistry or astronomy or whatever you're interested in. I'm proud to say that, like, he's a really good writer of emails. You know, he sends me some things he's working on, and I'm like, oh, I don't know anything

about that, but this email is damn solid. It's interesting to hear you say that because when I have a similar request, I'd say similarly to you, you know, I don't know that situation, so I can't give you a solid answer. But I will say the things that are the three I would tell everybody universally is learn to speak, learn to write, and learn to sell. Because in your life, you're going to have to do all of those things all the time. And the ones who do it well give you, have such a better opportunity just, regardless because everyone's like, I'm not going to go into sales.

And I say, yes, you will. No matter what you decide to do, you will work in sales. And so learn to speak, learn to write, and learn to sell. It's very interesting because how do you learn to sell? That's human psychology. Yep. Right? Yeah.

And being attuned and attenuated to what people say back to you, which means that you need to learn to not just listen, but to analyze, to, you know, going back to what I said earlier, you have to, you have to be able to go back to what are they really saying? What is the motivation here? And that's a learnable skill. And, you know, whether you study philosophy or you read, you know, 19th century Russian literature, it's all in there. Like people have been selling in, you know, forever. It's absolutely the case. Everything I've ever done, I've had to sell something. And if nothing else, you have to sell your idea. So, like, when I was a derivatives trader, I wasn't selling anything ever. I was solely trading. But what I did have to do is I had to sell my own worth and ideas to other people to join in, in, like,

my company and my ideas. And so I was selling my own vision at that point to other people to join me. like it's very rare that you can do anything just sitting out on an island by yourself can you explain that more what what exactly is a day in the life i mean so we're we're we're moving along in your life and career like i said normally i don't no no no normally i don't take this kind of linear process but i think for you it makes more sense because it's it's it's it's very interesting but we move we move forward now and and you're what we call a derivative trader which i first loved you to describe what that what that means and what you were doing on a daily basis because I like that you brought up the selling aspect of it

and maybe you can go a little bit deeper there so that for those of us who have never done that work could could go inside and feel what it's like to do that. Well, we've probably all heard of, you know, people who day trade for a living, you know, just buying and selling stocks or something like that. And then there is a category of people who do that who are called market makers. And what a market maker does is that they make a two-sided market. I'll buy or sell X, Y, Z at two prices. Pretty simple.

You know, if a stock's trading at $100 fair value, I'll buy it for $99.98. I'll sell it for $100 and $2. That's a 2% edge, just like the casino has in Blackjack. And when you go on to your, you know, Fidelity account or whatever and you buy stock and you see the bid and the ask, that is now a computer doing that. But for many, many, many years, you know, well over 100, it was an actual human being setting that two-sided price. And then on top of all the stocks, you have futures and commodities markets. And on top of those, you have options, which give you the right, but not the obligation to either buy or sell the underlying security or stock. You don't need to go into too much detail about the complexity of that.

But it kind of gets a bad rap. I think that we've all heard of the rogue trader who blew out their firm for $100 billion and people are like, how did that happen? That seems ridiculous. We've all heard of Enron and the smartest guys in the room and how they bankrupted everything. And then again, in 2008 with the mortgage-backed securities market. So that's all very real. And there are obviously a lot of bad players in any system.

But back in the day in Chicago, where I'm from, we had trading floors here. and, you know, just like that movie trading places with Eddie Murphy, Dan Aykroyd, you know, you'd go down to the floor every day and you'd make markets by screaming and yelling, the bid ask. As somebody who went to a good school and did very well, I had gotten into law school and decided not to go at the last minute. And I kind of also knew that the life of being in an office daily probably wasn't for me either. And so I found my way down to the floor of the exchange and took a very low-paying job, despite having interviewed with major Wall Street firms and done very well in those interviews because I tested well and I did well in the psych profiles and all that. But I also wanted a degree of independence.

My dad was what he said, an entrepreneur by necessity. His dad died when he was very young. He helped raise his brother and three sisters. and he was the son of Greek immigrants. So I grew up with an environment that was, you know, my dad went to every one of my basketball and baseball games as a kid because he owned a business and he could just leave and go to that, which is, you know, the balance we were talking about earlier. And so I was kind of like, I don't really see myself working for Goldman Sachs or Society

General or something like that. There was definitely an appeal to that because, you know, it had prestige. And, you know, to a lot of extent, whenever someone's offering, you prestige as part of your pay, that's a false currency. I don't really care about the prestige of things. Like if I can sell hot dogs on the street, make $100,000 a year, or Goldman Sachs can pay me 50, I'd rather take the $100 grand and see what I can do with it personally for me. Like, I really care about the suit and tie. So I went down to the floor and I learned options theory from a guy who was very well educated, very, very smart, very much an anomaly down there

at the time. And I started with a $60,000 trading account, making markets on currency options. Started in the Swiss franc option pit. Very physical job. You stand all day. You scream all day. It was very challenging mentally. A bit like playing 3D chess for a living. There aren't the right answers. And there's a lot of outcomes every day. But it gave me a lot of. lot of discipline into showing up every day, grinding out the work, understanding the statistics involved that if I made more trades and made more right decisions, the odds that I would lose would be going down more and more. If you walk into a casino, let's say you are the casino and people walk in. One guy bets a million dollars on the hand of blackjack wins and walks out.

it's fine because he only had a 48.5% chance of winning. And you know that there's going to be thousands of other people as well. If you're a market maker, you want to make thousands and thousands and thousands of small trades. Because statistically, if you're doing your job right, you're going to be like the house at the casino. It was a really great experience, really hard mentally. There's no base pay. There's no commission. There's no clients.

You either make money. or you do not make money. And if you make money, that money is at risk. And at no point since then has my money not been at risk, which is also pretty crazy and cool. So for the past 22, 23 years, I've always had the vast majority of my capital at risk. Yet I don't consider it risky because I am monitoring it. I'm making lots of decisions. And I feel like I have an edge, basically.

That's what traders call it when you when you have the odds in your favor. How do you develop an edge in what seems like a mentally and physically taxing type of a role? There is math to it. You know, it's like when you're making markets, you know, if you, if that's in my analogy with the $100 stock, you know, if you can sell it for $100 and $2 and when it was worth $100, even though it might go to $100 in $500 in $500, even though it might go to $100 in $500. five cents right away and you lose three cents, your expectancy is still positive over time. And so that becomes hard. In trading, it's very easy to like look at the math and kind of go like,

oh, that makes sense. If you're playing blackjack, that makes sense. It's much harder if you're a manager in a big company and the decision that you might make, it takes six months to a year to play out and see if it was the right decision or not. And so what, you know, there's a saying in Silicon Valley that, like, know, fail fast and fail often. And I always thought that that was misstated a little bit.

It sounds good, but I don't think it's about failing fast and often. It's about figuring out the outcomes as quickly as possible. You know, designing experiments or designing aspects of your product that you can test very, very, very, very quickly. Whatever it is that you're selling, get out there and sell it as fast as you can and do it, do it often. You know, if you fail like for a week, you know, and you bet zero, that might not mean anything. Like, you know, you need a sufficient number of outcomes before you know what you're doing is right or wrong. And that's the trick in a lot of businesses is that the cycle

is so long that it's hard to design experiments to be fast, I guess. So you spent a good, I guess, 10 years plus as that in that type of a role. And for those who don't already know you, I think what you decided to do next may be surprising as I was doing my research and reading about you and learning about you. It surprised me. Me too. So why the dramatic left turn for the next part of your career? And maybe you could introduce and share the story that led into why you decided to do

something, I think, dramatically different? Yeah. The short answer is fear. Okay. But yeah, I own a restaurant group now and a software company, and the restaurant group stemmed from meeting chef Grant Ackett's, who is now considered one of the best chefs in the world and building a linear restaurant with him in 2004 and 5. We opened May 4th, 2005.

In 2000, well, in 1998, I started working on a project to arbitrage exchange traded funds, which are like NASDAQs and spiders and all that, which were relatively new products back then, ETFs, between the Chicago Mercantile Exchange and the American Stock Exchange. And in doing so, I re-hooked up with a friend of mine from college who was a really brilliant guy, auto-didact sort of mathematician, statistician. But he studied journalism. He actually went to Columbia Journalism School afterwards. And we merged our firms. And by 2002 or so, I was pretty burnt out. I had spent 10 years working on this. I had a lot of capital at risk all the time. It was not unusual to make or lose six figures like before breakfast, before I even like went to work. And at some point, I mean, no matter how. I mean, could I ask what percentage of your net worth six figures? figures was at that time? Well, I mean, when I started, I started with a $60,000 account. And the goal

was to sort of, you know, break even the first year, which they say is, is you're doing very well if you break even your first year of trading. That first year, I made about $180,000 on the $60,000. And about half that went to my backer who put up the risk capital. By year two, I went out on my owned with a couple hundred thousand dollars of backing and actually hired a guy to um who's been my business partner ever since um and you know at at that time our total trading account was millions of dollars so it wasn't it's the appropriate percentage of of of um you know when you when you play poker and i don't play poker but but you know your ante and your betting is based on how big of a stack you have for a reason. You don't, you know, you don't go all in unless you're like 99th percentile

that you're going to win or you're at the very end of a tournament. Early on, it's about cash management. So it is, it was very much wise cash management for, for me to make or lose, you know, $50,000 to $100,000 a day. And some days when things were volatile, I mean, I remember, I think this is like the 20 or 25th anniversary of the yen moving, of their, the Japanese government moving their interest rates to zero, which caused all sorts of chaos in the currency markets. It was one of the craziest days of my life. And that day, I made a tremendous amount of money because we were positioned correctly for it and were mentally ready to, like, you know, trade for 48 hours straight and being exhausted on it.

That said, I was also, I had value, I personally valued the money. I was not unaware that if I lost a half a million dollars in a day, that was worth more than my house. You can't. There are very few jobs that if you walk in and do a shitty job, they take away a half a million bucks. Like, I can't think of many, right? Like, you could be a manager at a big company and you could get fired, but they don't, like, claw back what you made for the last year, right? And similarly, like, even with sports, like, I'm friends with. some pro golfers and you know it's like they could go two months without making a dime and spend

all the money flying around the world and all that um you know the top 10 guys make fortunes but you know if you're 200th in the world you're really damn good at what you do um but it's more of a struggle to to make a really good living at it but if you're a football player basketball you're getting paid like it doesn't matter this is a really weird weird job and so it takes a toll on you mentally if you're sane. Now I do know people that didn't value the money at all. Like it was simply, which is the ideal. Like I was not the ideal. Like I knew, hey, I just lost more than the value of my house today. That sucks. And I was not in a good mood, right? I do know people who were really, really good traders who could lose $2 million in a day and not even think about it. And not because

they were wildly wealthy, just because they never thought about it. That's how they got wildly wealthy. They didn't care about the outcome. They cared about making the right decisions. So we trained people to do that, but even doing that yourself was very hard. And so by 2002, I had merged with this firm in New York, and then I kind of went like, you know what? I think it's time to take the money off, you know, to leave the table, right, and take six months off and figure out what I want to do. And my dad had died that year in 2001. In February, I was very close to him. And then September 11th happened. And that was really just, I mean, obviously a terrible day for the nation, really a formative day for me where we had employees in New York who thankfully were all safe. But there was definitely 12 hours where we didn't know that that was true.

And I kind of assessed, I think like many Americans did like, okay, what am I doing right now? Like, you know, I need to like get some perspective here. And so I decided to leave the firm and almost kind of quickly. Like I kind of went through in February and just kind of went, you know what? I'm kind of done for a while. Like I need to figure out what it is else that I'm interested in doing. And I certainly never thought it would be restaurants. Like I had no intention of that whatsoever.

I thought I would take four to six months off and then sort of start up a new trading firm or something and try to figure out how to do it electronically because it was clear to me that it was going to move in that direction. And what happened was I kind of got back in. into it a little bit, but didn't love, like, not being on the floor, and I didn't love trading anymore. Like, I felt like I got out of that what I could get out of it intellectually. And I was fortunate enough where I had enough money saved where I could take some risk, but I also had no idea what I was going to do, like, which is really a daunting prospect, even if you're successful. And maybe, I don't want to say more than if you didn't,

weren't successful, but like I wasn't just going to go get a job somewhere. Like that that wasn't really an option. Yeah. How old were you at this time? I'd be about 34. Wow. Okay. So like right in your prime, got money.

And it's like you said, you're not going to go just find an office job or work for a big company. Right. And so I invested in some internet stocks in 96 that we sold in March of 2000, some startups. and I was pretty into the startup world. Remember, I grew up on computers when I was a kid. So when the internet collapsed, I made about four or five investments of between two and $500,000 each. And in companies that were essentially good companies, but the internet bubble burst and

they were kind of struggling to find backers and investors. So I invested in a few of those. I was working with them to sort of. helped them come out of that, you know, that period of time. But it wasn't full-time work. I was kind of like a board member and advisor. And while I got involved in it, I was very frustrated that I couldn't do more. So I was going to do something along those lines and had, you know, come up with a couple

of business plans. But then I met Grant Ackett's very randomly at Trio Restaurant in Evanston. And what I found was a great artisan. and a great artist, but also someone who was very, very thoughtful about what they were doing. I knew very, very little about food. I grew up a very picky eater, but I was discovering, like, wow, anything done well is great. And there's this whole world of travel and food. And I suddenly had a little time to do that.

And when I met Grant, I was like, wow, I went to Spain and France to, like, you know, seek out some of these experiences. and 10 minutes from my home, the best one I've ever had is right here. And he was very much, he reminded me of myself eight years younger. He was just in a different, he was in a different industry, but very driven, very thoughtful, kind of quiet and shy, which I'm not. But he was very much like on a path where I recognize that this guy was going to be very successful. And I didn't really know much about him. But what I did know is that he grew up in a diner working at his parents' diner from a young age. So he wasn't, um, he wasn't afraid of

hard work. Like his parents were, you know, in rural Michigan running a diner. He was cleaning out chest freezers and walk-ins when he was 12. Real quick, uh, Nick, when it comes to grant, because I think your, your partnership is, is one of those ones that I think will be studied by, by, by many people. What was it about him? You said he's thoughtful, he's driven, he had kind of an introverted demeanor, it sounds like, but he also grew up knowing how to work. Is it those qualities?

Because I think there's a lot of people listening who have leadership roles and part of their job as leaders, which we'll get to because you do this too, in addition to partnering with people, but part of their roles is hiring people. And as a manager, as a leader of a business, you will be made or you will be put out of business by the decisions and choices you make for the people you decide to bring on to your team. And the Who is pretty much, it's close to everything. If you get that right, it can solve a lot of the problems ahead of the time and you guys can figure some things out creatively. What, like, how could, what, I don't know if I'd say you ask you for advice, but maybe you can share more about grant or your overall. process on being able to see some of the genius in people maybe that others aren't able to see?

Yeah, I mean, that's a big question. I don't. So hiring people and partnering with them are two very different things, I think. There's a lot of times when we have to hire someone where I have to hire someone. Like, we have five sales roles and next month we will hire five more salespeople. the odds of me finding a game-changing person in the next four weeks for those five positions, this is real, by the way, it's a crapshoot. It would be great if that were the case, but even if that is not the case, I will hire five people in the next month.

Pivoting your life to start a different business is a much different proposition. and I've done it a couple times and for me the the test on any project that I'm going to take on which which is going to take me years to to accomplish is when I wake up in the morning is that like is it nagging at me right and if that's a person or an idea they're kind of weighted equally. You know, I would, I literally would, for four months, five months of going and meeting Grant and going to that restaurant, I kept going, wow, there is a huge wasted opportunity here. Like, it was a wonderful restaurant, but it was in suburban Chicago. The decor wasn't great. But meanwhile, this guy was just putting out like artistic works of genius that regardless of what

medium he was in, you just go, wow, that's real talent. Now, I mean, there's whole TV shows built around like, you know, America's got talent and the voice and like all these things, right? It's not unlike that, but that happens in business that happens in life, you know, on everyday life. You don't need to make a game show out of it, right? It was like one of those things where I met the guy and just went like something is really different here. And then he kept putting out better and better stuff. And every time I would ask him a question, he would come back with a thoughtful answer or no answer at all, which is equally valid, which is like, I don't know. I don't know. That's not what I do. I don't think of it that way. That meant to me that he was very confident in his trajectory and what he

was trying to accomplish. And for me, like, we found each other at the right time. And there's a certain degree of serendipity to things. And I don't, you know, I remember that I emailed him, one night, you know, or I took my wife to her birthday dinner. And at the end of that meal, I just basically said, like, what are you going to do after you're here? And he said, well, I want to open my own restaurant. He said, I'd like to help you do that. Now, I assumed that I would help in such a way that like I did with investing in, you know, an internet company. I would be on the board. I would help do it. And he kind of said, well, what kind of restaurant do you want to build? And I said, I don't know. I never built a restaurant before. It better be

fucking great, you know. because I don't want to be involved with anything mediocre. And he just kind of looked at me and he walked away. And then, you know, the next morning, early in the morning I woke up and there's this email from him a couple days later that was really, really thoughtful. And at the end of it, I remember it said, you know, if this isn't something you're interested in, you know, it's always a pleasure to speak with you. And, you know, I continue to look forward to seeing you and cooking for you.

and it was just a really thoughtful email and I could tell that you know we were talking earlier about like the power of a good email that that was in 2004 in February 2004 on March 4th 2005 we opened a linea wow like I he came by my house he had I found the business plan I have it he wrote up a very you know a templated business plan that had like it was kind of naive in its assumptions and littered with errors but I was impressed that he even did that Like, you know, it wasn't like, I mean, the guys, he's a cook. He's a chef. He's not a business person.

But yet he did all that. He had it at the ready. And, you know, it was just one of those things where we were, he was assessing me to be like, are you committed to doing this? Like, will you help do this? Was this just a random, by the way, a random chance meeting from a meal or was there an introduction to say, hey, Grant, this is this guy's got some money. Basically what happened was we went there. We had some friends a year before that email. We had some friends invite us to lunch there,

and then they got sick and didn't show up. And then we were so taken by the experience that we had that over the course of the next year, we probably went there 20 times. Wow. Like if you were visiting me back then, I would, you know, from New York or San Francisco or whatever, I would go like, oh, the best restaurant in the countries.

you know, 10 minutes from here in suburban Chicago. And everybody from New York would just think that's the most absurd statement they'd ever hear. And then we'd go there and then they'd want to fly their friends out. You know, I mean, it was like, it was like, you know, it's like you remember when you were a kid and you heard like a band, you know, for the first time. Yeah.

And you're like, oh my God, these guys are going to be huge. You know, this is great stuff. And it really speaks to me. It was just like that. I mean, it sounds great or whatever. But it was really like, wow, this is different. It's unique. it's harder to do that now, I find, because when something new comes around, it propagates

through the internet so quickly that it's imitated around the world. Like when we come up with something new for our restaurants now, I can see 10 copies of it all around the world get email back to me or Instagram back to me within weeks, which is awesome for the progress of humanity. it makes it makes finding these hidden gems i think a little bit more special um but that's what happened and we you know my goal was not to quit what i was doing and and build a restaurant with him but i rapidly came to understand that i had knowledge and skills that he just didn't have and there wasn't anyone else to do it so things like hiring an architect and going to city hall and getting a liquor license like i had no experience in getting a liquor license like i had no experience in getting a liquor

license in the city of Chicago. But I did know that almost no restaurant opened on time with liquor license. So I was like, well, you know, there has to be something to this process other than paying someone off. I'm just going to sit at City Hall for a week until someone talks to me. So that's what I did. Like, I mean, these are not sexy things to do. Like people are always like, wow, like you must have great business insight. And it's like, show the fuck up. like that's like like it's like it's not sexy to show up every day and work and it's not sexy to go you know I remember there was this one lady at city hall and by like the second day I was sitting there she was just looking at me going like just filed the paperwork and hire an expediter and a lawyer

and you know two months after you open you'll have a liquor license and I would go ma'am we're not opening a restaurant you don't understand this is different this is different this is special. This is going to be completely different than anything you've ever experienced. And you don't want to be the one to not let me in. You just don't. Like, you'll go down in history. He's the person that didn't let me in. And I would say crazy shit like that. And I would just, the next day, I would like bring her a box of chocolates, you know, and be like, those thing is though we're going to be sitting here on our third date. I thought I'd bring you chocolates today. And she started softening up, you know, like, who is this crazy white dude sitting here

looking at me like, you know, and talking to me about my kids. And, and, and talking to me about my kids. and like, you know, all that. So, you know, human nature takes over. And pretty soon she's like, okay, I know where to take you. Like, we'll get this done for you. It was like that one thing after another. And we got the place built in a year and opened. And day one when we opened, I thought that was the end of my involvement.

Like, okay, I got this bill. I lost 20 pounds in the process because I was just there dealing with the trades people trying to get it done on time. we open sourced all of the, you know, rather than build a website right away, I was like, hey, let's just go on E. Gallet, which was a big, you know, chat board about food at the time, and open source our business plan. So if you go on there now, you type in E. Gallet and Alinea project, you can still see in 2004 our posts where we're going on like, okay, we're going to try to figure out a logo for our restaurant.

And my thought then was like there was an open source movement software. development and I was like well I don't know how to build a restaurant so maybe someone else will have some good ideas or at least we'll get people interested and that thing got over a quarter million views in the six months we were building the place wow and who were the people that showed up on day one well all the people that were following us online um in the pre social media days right um and we also did a trailer like I was like movies do a pretty good job of building hype let's do a movie trailer. So we did all that stuff back in 2004 and five, and it worked, you know, and it wouldn't

have worked if we then put out a shitty product, but Grant, like I said, he was, he's the real deal. And, you know, I remember an opening night, we had the New York Times there. We had Bon Appetit magazine. We had Michael Rollman, the food writer. I mean, it was crazy the people that showed up on opening day to a restaurant in Chicago. And kind of terrifying.

And it didn't, what happened was the food wasn't half as good as it was at Trio where I found him. And I was kind of confused as to why. And he's like, why? I've got 10 new cooks. Like, it's a new place. Like, it takes time to figure these things out. And I remember, he, like, grabbed me by the tie and said, like, you know, get the table 22 and make sure they're doing the silverware right. And I realized, like, oh, my God, I'm the only other person here that knows how we made all.

they shit up. And so I never stopped. I didn't work at night in the restaurants, but I set up all the spreadsheets. I set up our booking templates. And, you know, it was years before I ever started experimenting on the restaurants themselves and trying to figure out the real business of that. And we made a modest amount of money in our first year. But it was also just intriguing. because now instead of being like this isolated intellectual trader, I was serving humans. I was selling now, right? Well, selling in a way that's very visceral and very culturally relevant to people. And I've seen you speak about experiential design.

And so I'd love to get your overall philosophy now when it comes to not just the food, Because we can talk about all the awards you've won. But the experience, I haven't been in one of your restaurants yet. I, it's definitely something that I want to, want to do here soon. But I'd love to just for you to walk us inside one of them and the experience of it. And then your thought process behind and the meticulousness to how you, how you guys think about attention to detail and what's important and why it's important and everything that goes into. because I think this could be applicable to all aspects of life, not just people who own or want to buy or work in a restaurant, but people who work in any facet of life.

Yeah, I mean, let's just break down like going to the dentist. Okay, okay. Right? So let's skip the restaurant for a second. This is how our thought processed worked. And if you want to go to the dentist, maybe you go to a very modern dentist, I don't, I don't know. but like what do you have to do to go to the dentist? You want to get your teeth cleaned next week.

I have to call them and set in a, right. Right. That's the first thing you do. You have to call them. Right. That's really weird now in 2015. Definitely. And I have a good dentist, by the way, but yes.

Yeah, my dentist is awesome too. They still don't have an online booking system. Right. And you call the dentist and it's like playing a game. It's like I imagine going into like, a sweater store and you can't see any of the sweaters. And they go, well, we got a lot of sweaters. What do you want?

And you go like, well, I want a black v-neck cashmere sweater. Like, you know, and they go, not, don't have it. Guess again. Like, that's just not how the world should be set up. And yet so many businesses are set up like that. So the booking system at a restaurant is terrible. Like, it's the same thing. It's like Open Table asks you how many people,

what time, what day. All Saturday, seven o'clock, two people. Nope, don't have it. How about next Wednesday? The fuck are you giving me you next Wednesday for? Like, I want to go on Wednesday. I want to go Saturday. And so what do you do? You pick up the phone because you know that they didn't put all their inventory online. And that sort of stuff drives me baddie, right? So then, like, let's say you finally make your appointment at your dentist and you show up. What happens when you get there? Wait. Yeah. Who are you? Yeah. Like, I mean, just step by step. Like, there's someone behind a counter. sometimes behind a little pane of glass maybe not but they're behind a counter of some sort and you know someone's about to like inflict pain on you give them a warmer welcome and some something other than

some magazines and a shitty Jerry Springer show on TV right like hospitality it should be universal like everyone knows what a good experience is and everyone knows what a bad experience is and if you look to the theater or movies or any of the arts, it's about evoking certain emotions, right? Now, a doctor's office will tell you, well, it's important to have those people behind the counter in a white lab coat, even though they're just a receptionist, because it lends some gravitas to, you know, the expertise of the dentistry experience or something like that, right? I would argue probably not anymore. It's like once you get back there and you see the actual dentist or the dental hygienist,

you know, you kind of know what you're getting. Every aspect of what you do in interacting with the public, whether that's U.S. design on a computer and software or arriving at a restaurant or going to your dentist, from the moment that that consumer and that customer reaches out to you, there are a whole host of decisions that that person is going to make. And creating sort of a goal first of what do I want that person to feel really lends a lot of decisions for you. It lends some ideas to how you want those decisions to be made

and what you want that experience to feel like. And sometimes the answers are not as obvious. as you'd think. Like if you want people to feel really, really welcome at a restaurant, maybe you'll get rid of the podium, right? Because that's like a barrier between you and the guest. But maybe what you do is you know, and this is what we did at Alinea, is that you create some tension first. Am I in the right place? Is the opposite of what you'd think that you would do at a restaurant. And I remember we thought of that because we had gone to this one restaurant in New York and there was a walk-up next door, you know, like an apartment walk-up. And it looked like the door

to the restaurant was this door to the walk-up. And it was locked. But it really looked like that's the way to go in. And then we finally somehow got into the walk-up and started walking up. We're like, we're in an apartment. We're not even in the right place. And then when we finally figured out the door of the restaurant, we got into the restaurant and I was like, oh, my God, what a relief. It felt so good to be greeted. Right. And so if you think about it, Every movie does that. Every play does that. Every great book does that.

It creates some tension and then relieves it. This is why you study liberal arts. Like Joseph Campbell, the hero's journey. Like, just break that down into an experience of going to the dentist. And you're fine. Now, it's going to be at a micro level and it's not going to be quite so as exciting as, you know, Odysseus. But it's not far off. So that's what we tried to do.

We try to create a series of emotional experience. for the diner. And to try to do that in a way that feels effortless to them. Like they don't know what's happening. It should be like a good magic trick. Like there it is. It happened. Whoa.

How did that happen? Cool. And by the time they're thinking that, wondering how did you accomplish that, something else is happening. Like, I haven't experienced it yet. And so maybe you don't want to share because you want people to actually experience it in the restaurant. but what are some examples of that?

Well, you know, one of the things that Grant, I'm stealing this from him, but from the time that you're a little baby, you're given sort of like a spoon or fork or in the Eastern culture is chopsticks, and you're shoveling the food from the plate to your mouth, right? And that becomes a very mindless act, right?

Like you don't think about cut it up a steak and eating it, and that's just what you do. It's how you get the food into your mouth. One of the things that we started playing with many years ago was how do I break up that cycle so that the person is forced to be present? Right. How do you make them pause and go, oh my God, how do I eat that? Now that sounds like pretentious, awful shit. It certainly can be.

I mean, I've been to restaurants where like they're trying to, you know, there's a whole Reddit, a whole subreddit was, It's called like something like put it on a damn plate or something like that. I'll find it so you can link to it. Okay. But like, you know, it's like there are numerous examples of people putting tacos into stupid things and then serving them hanging from wires and it doesn't work. But if done really intelligently and artistically and smartly, it causes a diner to pause and go, oh, what's this? and, you know, if something looks really scary, like if I served you something at the end of a skewer that looked beautiful, but it looked sharp, and we go like, nope, take it in one bite, don't use your hands,

and you lean over and you bite off the skewer, and everything that looks sharp is actually, you know, really soft and it's pumpkin pie. It's mind-blowing, right? Because you're like, your tensions up and you're going, God, I feel silly doing this, and it looks like it's going to hurt my mouth, and then you eat it, and it's come comfort food. That is the essence of all good art, I think. And that's the kind of thing that we sweat over for a long time is to go, basic question, it's fall. What does fall feel like? What is the essence of fall of autumn? And we would ask like, well, campfires. Well, hey, right?

Smoors. Smores. Yeah, all these things, right? Yeah. So then you go, okay, well, how do you do that in such a way that is shocking and surprising. That's not obvious. That's physically beautiful. How do you invoke nostalgia? How do you make someone reminded of their grandmother's house when they were a child? And yet you don't even know who they are.

So you start going to the olfactory sense and you start thinking about, you know, what is fall in New England smell like. And you find these little touchstones in different cultures. and in different periods of time. And, you know, you figure out ways over a long period of time to make people feel like a child and like a sense of wonder. And, man, like, it's really hard to do it well. And I've seen restaurants do it well, and I've seen restaurants do it very poorly.

And we've done it really well and really poorly, by the way. There are definitely things that we've done that, like, you know, two months into doing them, we're like, eh, it didn't really work. Let's get rid of it. That's the essence of all good business, too. is being a good editor. Like, you know, you have to be willing to cut your losses to kind of go like, well, that was a potentially good idea, but it was like a good first idea, not like the tenth

iteration of that. Let's hold off on that for a while. And, you know, also I'd say we've got like in 15 years, we've won kind of every accolade you can win, best restaurant U.S., best restaurant in the world, like all those sorts of things. I'd say we had five game-changing ideas. like dishes, like food dishes that grant or our team has come up with in 15 years. That's one every three years.

It doesn't sound like a lot, but, you know, that's kind of like, you know, there's a few iconic ideas and dishes that have been copied all over the world. But when they're done in the context of a, you know, three-hour experience that is highly curated and highly comfortable, and dare I say fun, it has to be fun. We've all been at those pretentious restaurants where it's fine dining and it's not fun. And one of the things I like is on Reddit every now and then like a dish for millennial come up. And it'll make its way up to the top of Reddit. And about half or three quarters of the people will be like, just give me a burger.

Like that's pretentious, terrible bullshit. And they haven't been there. And then there will always be a few people that say, look, my wife dragged me there. It was the most fun I've ever had at a restaurant. And it's like, you know, I mean, the internet loves to hate on things like this. So, like, I see people kind of going on there and defending, like, you know what? It's not what you think it is. That's what I would say to your listeners, too, about design any experience.

Real quality wins out. And a really great experience wins out. And if you don't need a focus group to figure that out, like, if you're trying to focus group something out, you kind of just don't, you really don't have an opinion. You don't know where you're going. I hate focus groups because there isn't a focus group in the world that would ever tell us that we need to have an edible balloon or we need to serve dessert on a giant canvas or any of these things which again you're listening to me some of that stuff I think that sounds terrible but if they Google it up you'll see it's people love it no focus group in the world who have told me it's a good idea to quit my job and build a restaurant and then build software for that restaurant you know which is now what I spend 80% of my time doing

And yet all of a sudden, like when I get on these things, people go like, oh, cool, how do I do that? It's really fascinating to me because from my point of view, it's like I wake up every morning terrified. I was having a – I'm 51 years old now. I was talking to my wife yesterday, and she was kind of like, what's the five-year plan? She'll get a kick out of this. We're going to skip right to this for her. She knows the rest of the story. She's like, what's the five-year plan?

And I'm like, I don't have one. I can't have one. I don't know. And she's like, well, that's kind of not helpful. Like, you know, our younger son will be out of high school in a couple of years and going off to college. What's the plan? And I just went like, I don't know. Like, I wake up every day.

Like, all the restaurants might be closed in a year and we might be broke. I don't know. Wow. And I, but that's, the thing is that everyone would go like, oh, that sounds terrible. And this guy, you know, but I, that's sort of by design because that's what forces. you will to keep innovating you know you know Jim Collins calls it a productive paranoia and that's a commonality among high performers and a lot of professions through his course of study and we talked about it here on this show and I and I

found productive I mean paranoia and a and a to be productive and a lot of the high performers that I've been fortunate enough to speak with and to meet is that almost without it it's not sustainable and I and it sounds weird I think putting that all together and even even hearing their words come out of mouth, but it's true. And I've written about it. You get it. What is sustained excellence?

And my second part of that was like fear basically, right? Well, you're paranoid. I mean, paranoid about things. And I think as well, same with the five year plan. I think it's hard. It's hard enough to make like a six month plan. But you said it briefly, but just for the people who don't know, I mean, your restaurant, Alinea is won literally every award there is.

I mean, named the best restaurant in the world by these. big names like James Beer Foundation World's 50s best restaurants all I mean every single award you can get your rest. Yelp and Triplifies too which I love yeah that's the opposite of those hoity well I mean those are yeah those are like the regular people just going out to eat or not the like you said the ones you're you're winning from the the same big time critics as well as then just the everyday person so it's not like you just started a restaurant and it went pretty well you happened to start a restaurant and it ended up being the best restaurant in the world, which is

amazing. And then on top of that, you see another, which I've heard you call Black Box, another area of the world that he briefly talked about at the beginning of that experiential design answer when it comes to, wait, there's something wrong here. I see another problem and I want to tackle it myself. And in fact, not only going to tackle, but I want to build a company to help with another problem. And can you share more about talk and what that does and how it's going to help with this issue? Well, talk is sort of the non-obvious but logical conversion of my last two careers,

which is, you know, trading and the hospitality business. When you, we've all probably had the experience of booking reservation. And essentially what a reservation is is a mutual promise. It's, I'll hold a table for you and you'll show up. right and that's it but we know how often that goes wrong um there are entire sitcom you know episodes built around showing up at a restaurant and i'm not having your table ready in time you know there's just this sense of like well i made the reservation but i don't feel like going out tonight because it's raining it is the bane of the existence of restaurants trying to figure out how many people are going to show up how much food do i prepare how do i manage all these people

how do I make their experience great? What you have to understand is that every restaurant opens with the desire of pleasing people. I don't think there's a single restaurant that opens and says, oh yeah, I want to make everyone who comes in here unhappy. The core goal of every restaurant is to make people happy. They could eat at home. They don't need to come out.

And booking the restaurant is the crux of the problem or the difficulty in managing the restaurant because you don't know how many people are going to show up on any given day. You don't know who they are. You don't know what their preferences are. You just have this sort of vague mutual promise, you know. And at the high level of what we were doing with the Linnea, I was consistently amazed by the variance.

We'd have 100 people on the wait list, and we'd have four tables up eat one night. It just didn't show up, you know. And I not only felt bad for us that, hey, there goes all of our profit for the day, because it's a narrow margin business. I felt bad for the other, like, you know, 100 people on the wait list, some of whom had birthdays or anniversaries or whoever,

who I could have gladly made happy. They had been ecstatic to get the call at 4 o'clock. Just didn't know. So, man, I called everybody in the world up about this in my own industry, you know, in other restaurant owners. And I called Open Table and said, give me your API so I can write some programming on top of, of it. And to me, it looked like an expiring option, right? Like, you had a seat that was going to

become worthless at 10 p.m. every night. And it was exactly like a worthless option that I used to trade. And I went like, well, what's the marginal value of that seat? Like, it's something less than the full price. Like, you know, and how can I change people's behavior so that they just let me know if they're not going to come, you know? And, you know, restaurants have tried. And restaurants have a million different things to do that. Sometimes they take it to credit card and say, well, we're going to charge you afterwards if you don't show up. But that doesn't really work. It doesn't change the behavior because people don't think about penalties.

You know, it's like they think about sunk costs very differently than they think about potential penalties. So I ended up building for myself a very basic system with one programmer and me. And on the first day that we turned it on for our new restaurant that we opened in 2011 called Next, restaurant. We did prepaid reservations so that you basically just booked your whole experience ahead, bought it like you were going to the theater or a Cubs game or any other form of entertainment, a concert. And everybody in the industry told me that wasn't going to work. I mean, I literally had luminaries of the industry going. There is no way that you ever, ever, ever are able to get people to prepay for a meal. And on the very first day, we sold $562,000 of bookings.

Jeez. Like so many that the system broke. Like I didn't have it set up for that kind of volume, you know? And since then, we have, well, we've done, you know, over $400 million of bookings for restaurants in 23 countries. We have over 1,000 restaurants using Talk now, which in 2014. So between 2010 to 14, I was running experiments on my restaurant and 16 other restaurants. And then the head of Google, Chicago, Brian Fitzpatrick, quit his job at Google and became my partner in starting this up. And so it's not just about the booking process from the consumer side and giving them the choices at wineries and restaurants and the chef's tables and all these cool experiences.

It's also on the restaurant side of getting to know who that customer is and allowing each business, each restaurant or winery or whatever it may be because we have museums. is using it now, own that relationship with their customer. Open table and other reservation systems want to be the intermediary there. And they want to essentially own you as a customer and then sell you to other restaurants. That's how they make their money. As a restaurant owner, I always found that offensive. Like if I build a great restaurant and I have 200,000 customers a year, I would rather email them directly or use my social media to,

let them know, hey, I'm opening a new restaurant. Or I've got this chef series I'm running, or whatever it may be, all these, you know, Mother's Day, Valentine's Day, New Year's Eve. And Open Table and others don't want to do that because they want to charge the restaurant every time a new customer comes in. So we built out this system. And, you know, it's always an uphill climb when there's a monopoly within a big industry. You know, restaurant industry is about four or five percent of GDP.

It's huge. Right? I mean, every fortunate person in the world has to eat, right? We all have to eat. And, you know, we're fortunate enough that we have these things, these restaurants that we can go and just order food. The process of adding modern software, cloud-based software, to the CRM, to the booking, to yield management, it reduces food waste. It reduces labor costs. it just smooths out the process for everyone.

And so now, you know, we've got, you know, millions of lines of code, a really vital system that with, you know, millisecond response times. And it took years of, you know, engineering to do that. We have about 60 people in the company. We've raised just under $20 million total. That's why I spent an awful lot of my time doing. It's taking what I've learned in the restaurant business, codifying it into, talk and solving some of those problems for my own businesses and now really doing an educational sale to other restaurants, hotel groups and whatnot. You have to remember like, you know,

no one in OpenTable didn't come around until 1998. They were sold to booking.com in 2014. It's kind of the comcast of the restaurant industry. You know, no one ever got fired for using it, but no one loves it. What's the biggest difference if you had just for the consumer on the consumer side for us who are booking? What's the biggest difference in why is talk better? Yeah, because talk actually gives you choices and it improves the hospitality once you get there. What I mean by choices is that in addition to just making a normal free reservation, which you can at about 90% of talk restaurants.

You also have that. The restaurant is also able to offer that chef's counter. instead of waiting to get there and hoping that they have a seat at the great counter, if you're willing to put down a small deposit, hey, you get the counter seat. There's also full transparency because we don't charge the restaurant that dollar to $7 per cover to sell you the consumer to the restaurant. The restaurant has no reason to hold back in the inventory. So the reason why an open table you don't see a 7 o'clock reservation, but yet when you call,

you can still get it half the time is because they don't want to pay it. that charged open table. With talk, because our business model doesn't include, you know, per cover charges, per diner charges, you're going to see the full inventory with full transparency. And then on top of that, all of your preferences per restaurant group, not universally, but per restaurant group, are kept within talk. So they know what you've ordered. They know what you preferred. You know, they even know if you needed a cab on the way home last time or whatnot. And all that information is surfaced in a way that is really, really easily used by the restaurant to improve your hospitality. And so if you look at the caliber of restaurants that are moving over,

that are early adopters onto what we're doing, we have 90% of all the Michelin three stars and two stars in America already on talk. We are in 23 countries, but yet we have no marketing dollars spent outside the U.S. at all. Wow. There's really no other system that improves not only the service that you get as a customer, but improves the ability of restaurants to service their clientele in an ongoing basis. Wow. Man, Nick, so much here.

I really, just going through your career is pretty amazing. And I appreciate you deep diving for me because I think it's helpful for those who are working and striving to improve and get better. And whether they have a current side hustle or, maybe they're just trying to get promoted within her company, to think about kind of the frameworks you're used to think about life, work, career, experience, all of that, man, I think is really helpful. So I appreciate you investing your time with me today, man.

Thanks, Ryan. I really appreciate it. Where would you send my listeners to learn more online? Well, you can go to exploretok.com, of course, to see all the great restaurants on there. If you are in the hospitality industry, if you look in the upper right hand corner there, You can click, you know, to learn more about talk as a restaurant owner or client. Tons of articles have written on Medium. So I have a Medium channel where I kind of deep dive into publishing industry,

restaurant industry, business in general. I tend to fire off like not a lot of those, like one or two a year, but they're pretty long. And, you know, there's obviously my Twitter and Instagram and Kekonis on Instagram. Nick Koconos on Twitter. And I tend to, you know, I'm findable. So, you know, every now and then when I do these, I always tell people, like, don't be afraid to reach out. And while I can't necessarily get to every single one, I do read the vast majority of responses

I get, just like that kid who emailed me yesterday from college. And same with me. I mean, that's, I saw, I kind of did some deep diving online, found a way to get a hold of you, and sent you a cold email. appreciate your response and then not only responding but but investing even more time with me here today. You sent a good email. Thank you. Thank you.

I appreciate that. I appreciate it. I know you're getting, you're probably getting hammered. So I do. And I say, um, I am excited to, uh, to go to Alinea. It's definitely, uh, something on my list to do in Chicago here soon. I should have, uh, one last time I was there. I want to see Hamilton and, uh, would have been the perfect way to, to lead off a great night.

but definitely next time, man. Awesome. Well, thank you, Ryan. Thank you, Ryan. Thank you. Thanks so much, Nick. Absolutely. Take care.

Bye. Wow. What a fascinating conversation that went to so much depth with Nick. I really appreciate the level of thought and care he puts into this investment of his time. And his response to my cold email that meant a lot to me. What I found most impressive was the detail behind. his experiential design, how this applies to anything that we decide to do, whether it's a restaurant or a dentist or running your business or being a manager at a big company. You have control

over the experience of the people that you lead or the people that you're taking care of, and that meant a lot to me to learn more from Nick about that. I hope you enjoyed this as much as I did. If so, I would love it if you would tell a friend, perhaps one that has never listened to a podcast before or never listen to the Learning Leaders Show and tell them to check this out, listen to someone as smart and thoughtful and kind as Nick Kekonis and see how it could help impact their life. Thank you so much for giving me the opportunity to continue to do what I love on a daily basis. I will talk with you next week. Can't wait. This episode is once again brought you by Gusto.

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