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

Starting point is 00:00:00 At this altitude, I can run flat out for a half mile before my hands start shaking. Can I ask you a personal question? Now would have seemed the perfect time. What if I did the opposite? I'm a cybernetic organism living tissue over a metal endoskeleton. The Tim Ferriss Show. This episode is brought to you by 99designs. 99designs is the global creative platform that makes it easy for designers and clients to work together.

Starting point is 00:00:32 From logos to apps, business cards, packaging to books, you name it, 99designs is the go-to design resource for any budget. Right now, my listeners, that's you guys, can get $50 off a logo and brand identity package from 99designs, plus a free upgrade that lets you promote your project on the platform, which is an additional $99 value by checking out 99designs.com forward slash Tim50. That's T-I-M-5-0. So 99designs.com forward slash Tim 50. As many of you know, I've used 99 designs for many, many years now. I've used them for book covers, including mock-ups for the four-hour body, which went on to become a number one New York Times bestseller illustrations for the multi-volume,

Starting point is 00:01:15 the Tao of Seneca. It's an ebook series basically, and other graphic design projects. And I've been very impressed by the quality of their designers and illustrators. And you can check out all sorts of stuff like the Tao of Seneca to get an idea. They're really mind-boggling. Most recently, I used 99designs to update the illustrations and layout of my Five Morning Rituals ebook. This is a PDF that I offer as an incentive to get people to sign up for my newsletter. The illustrations inside are gorgeous, and I loved working with the designer who we ended up selecting for the project. You can take a look at that. This is a real-world example of the type of thing that I use 99designs for at 99designs.com forward slash Tim50. 99designs designer search tool connects you directly with one designer based on design category or industry specialization, style,

Starting point is 00:02:04 skill level, availability, and more. You just check off the boxes that you need to satisfy the criteria you want, and it will bring up the best matches. Or you can start a contest. You invite the entire community to take a shot at your project, then you pick your favorite. So to get $50 off your first logo and brand identity package, as well as additional promotion on the platform with the free upgrade, please visit 99designs.com forward slash Tim 50. That's 99designs.com forward slash Tim 50 and click on the link on the landing page. Check it out, 99designs.com forward slash tim 50. This episode is brought to you by Charlotte's Web, which makes a CBD oil, a hemp extract that has become one of my go-to tools. Now, I have never really talked

Starting point is 00:02:55 about CBD oil, and cannabis has never really been the plant for me. I know we're talking about hemp, but nonetheless, after several nights of inexplicable insomnia, this was about a year ago, I just could not get to sleep to save my life. And after other fixes failed, so melatonin, California poppy extract, da-da-da-da-da, an elite athlete introduced me to this non-psychoactive extract and bam, problem solved. I had some of the best sleep that I'd had in months. Now, I don't use sleep aids on a daily basis, but this has become part of my toolkit, and I hope to be exploring other applications soon. CBD oil products have exploded in popularity in the health and wellness and fitness worlds, and Charlotte's Web is one of the top players that offers broad-spectrum hemp extract with CBD in the

Starting point is 00:03:43 form of oils, capsules, and topical products. Charlotte's Web products will not get you high, so that maybe that is good news, maybe bad news to you, but it does have some powerful benefits and applications. And it works with your body's existing endocannabinoid system. Endo meaning from within, like endo versus exoskeleton, for instance. So endocannabinoid system works with your body. Some of the most common uses are for relief from everyday stressors, help in supporting restful sleep, which is what I most often use it for, to bring about a sense of calm and focus. A lot of my friends use it for that. CBD is also known

Starting point is 00:04:20 or becoming known for helping athletes to recover from exercise-induced inflammation. Charlotte's Web Hemp Extract has naturally occurring terpenes, flavonoids, and other valuable hemp compounds that work synergistically to heighten positive effects, sometimes referred to as the entourage effect, which you guys can look up, making it more complete than single compound CBD alternatives, or at least that is what I've been told. I do not know much about CBD alternatives nor single compound. In any case, check it out. This stuff has really worked for me. So jump over to cwhemp.com forward slash Tim. CW as in Charlotte's Web. CWHemp.com forward slash Tim to take a quick quiz, which will determine the best product for your particular aims,

Starting point is 00:05:03 lifestyle, et cetera. And they ship to all 50 states. Charlotte's Web are offering listeners of this podcast 10% off of their purchase. While there are some exclusions, I personally use the Extra Strength CBD oils or the Extra Strength capsules. And you can see what might be a fit for you on that page. And there is a 30-day risk-free guarantee. So why not try it out? So get 10% off of your purchase at cwhemp.com forward slash Tim. And disclaimer, these statements

Starting point is 00:05:35 have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease. Enjoy. Why, hello, you sexy little minks. This is Tim Ferriss, and welcome to another episode of The Tim Ferriss Show, where it is my job to interview and deconstruct world-class performers, whether they come from the worlds of chess, sports, business, it really doesn't matter. We're trying to spot patterns of excellence. What are the habits, the routines, the favorite books, the morning exercises, whatever it might be, that you can test and apply in your own lives? And my guest today is a friend. We've been trying to make the podcast happen for quite a few years now, and he is a polymath. You need to listen to this episode. Nick Kokonas is his name. Last name is spelled K-O-K-O-N-A-S. Nick Kokonas on Instagram at N Kokonas, on Twitter at Nick

Starting point is 00:06:34 Kokonas. Nick is the co-owner and co-founder of the Alinea Group of Restaurants, which includes Alinea, Next, the Aviary Royster, I think I'm getting that right, and the Aviary New York City, NYC, that is. He's also the founder and CEO of Talk Inc., a reservations and CRM system for restaurants with more than 2.5 million diners and clients in more than 20 countries. Now, you might be thinking, wait a second, restaurants, food, that's not my thing. Doesn't matter. We're going to get into philosophy. We're going to get into derivatives trading. We're going to get into books like Fooled by Randomness, The Problems of Philosophy, let's see, Peregrinations of an Epicurean, and how Nick seems to break every industry or type of business he goes into in the most productive way possible.

Starting point is 00:07:22 It's a really fun conversation. But back to the bio. Alinea, A-L-I-N-E-A, which by the way, I based basically an entire section of The 4-Hour Chef on, which was one of my books, because I was so impressed. 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. They give James Beard awards out, which are kind of like the Oscars in the food world. World's 50 Best, TripAdvisor, Yelp, Gourmet Magazine, and Elite Traveler. His restaurants have won nearly every accolade afforded to them, despite the fact that he does not, or didn't at least, have any experience whatsoever in restaurants. And he had some amazing, amazing partners we get into.

Starting point is 00:08:11 But that set of beginner's eyes is really, really crucial. And we dig into how he cultivates that a lot. Nick has been, he uses this word, a subversive entrepreneur, which I agree with, and angel investor since 1996. He spent a decade as a very successful 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. I got an early copy. It is stunning. It is just unbelievable what they've done. It is self-published, has already sold, that is pre-sold, nearly a million dollars in copies and is being released right now, shipped right now in October of 2018. It is truly, I think, the most beautiful book I've ever seen and held in my hands. So you can find out all about it. You can see all sorts of photos and samples at

Starting point is 00:09:05 theaviarybook.com. That's www.theaviarybook.com, A-V-I-A-R-Y. Check it out. So I'll leave it at that. Please listen to this episode. Even if you have no interest in food, it doesn't matter. We span so many different businesses, industries, life lessons. I had a blast with this and I hope you do as well. Here to Nick Koukonis. Nick, welcome to the show. Thanks, Tim. Awesome to be here finally. Yeah. Yeah. We have the benefit of having spent some time together, and I have been fed a lot of caffeine by you. And you're also of great help with The 4-Hour Chef, so I wanted to, right off the bat, thank you for that.

Starting point is 00:09:55 It was a really lovely experience. It was kind of a fun thing, because I remember when you sent me a preview of the book, and then you called me to say, like, hey, do you want to say anything about it and i was like on a chairlift and i was like by the time i get off this chairlift i will have a blurb for you uh which is such pressure uh well which which meant a lot and pressure i think is the word to describe uh so much about you and your life. I want to say trajectory, but I'm not even sure that is the right word. And I thought a fun way to kick off the conversation would be to share with people listening some of the back and forth that we had when we were brainstorming what a podcast might look like. Because certainly, I don't think of you first and foremost as a food

Starting point is 00:10:48 guy, per se. And we were having this exchange via text, and then via email. And I thought I'd just read one of your responses as we were swapping different ideas. And I'll probably edit for space a little bit here, but not by much. And here we go. I'm a huge believer in radical transparency in business. I give numbers and burn bridges with big companies because I think that a lot of times people don't ask the basic questions in publishing.

Starting point is 00:11:18 For instance, how much did that book cost to print? How many did it sell? Oddly, those numbers are very hard to come by. I dug for months, years ago to do the Alinea book the right way. For bars, why does a bartender wash dishes and talk to customers? We've redesigned the bar experience and won best bar in the world. For restaurants, why is it the only form of entertainment that has only a mutual promise to show up? And then it goes into behavioral economics. And in parentheses, I don't even know how to pronounce this last name correctly. Richard Thaler, or is it Taylor?

Starting point is 00:11:47 Yeah, Thaler. Thaler is a friend and investor, just won the Nobel Prize. Investing, been beating the market for nearly 30 years. Everything in all caps is about asymmetric risk-taking and information. And yet people's perception of risk or of what I do is that it's risky. It is not. And in a separate exchange, when we were talking about many of the topics that you could talk about outside of, say, restaurants, bars, and so on, even though that's been a big part of your life in recent history, many of these different experiments, explorations, portions of your career, topics that you could talk about,

Starting point is 00:12:25 and then going into what you said, they come down to a single thought, really. Wherever there is opaque information that should be obvious, run to that gap. So I struggle with where to even begin with the 20 options that we have here but maybe you maybe you could maybe you could explain to me how behavioral economics and richard thaler fit into this uh just just for for curiosity's sake yeah i mean well i'll go back to the word you used options because i started out um back in 1992 or three studying options uh trading derivatives, trading. And I think there's a huge misconception about what that is because of movies, because of the big short, because of, you know, Wall Street, all that. It's a bit like playing a game of chess for a living or being the house at a casino, that sort of thing. It's about taking, you know,

Starting point is 00:13:30 hundreds and hundreds and hundreds of decisions per day and pretending it's like a big decision tree. And any given decision is, is probably got, you know, if you're really good, 48% chance of being wrong. So you have to be, you have to be really, really good at constantly being comfortable being wrong, but knowing that your overall number of, of decisions that you're going to be right more than you're wrong. And so like, I know there's like a big theme, a lot of the folks that you have on, like they talk about success or failure, how to measure those things. And I kind of don't look at it as success or failure with anything. I look at it as just like, is my pattern of decisions correct? And then getting back to your actual question with Professor Thaler and behavioral economics. And I mean, essentially what they're looking at is decision making. What drives people to make certain decisions?

Starting point is 00:14:21 What's rational about those decisions? What is mostly irrational or emotional, or what decisions do we make that people don't even realize they're making a decision, which is often the case as well. And then if you think about it, every single form of what we do, art, commerce, science, picking a mate, all those things, comes down to a whole bunch of decisions that you make without often really thinking about the decision itself. Not that you can go around walking around going, wow, I've just made another decision. But when you are doing, you know, business or starting a company or publishing a book or whatever it may be, you can be intentional about that and realize that

Starting point is 00:15:05 it's going to be an iterative process. And so I think that's been not only the case for me in learning how to filter things through that mindset, but when you said there isn't really a trajectory, I kind of look at everything I've done as the same in a way, even though other people look at it and go like, wow, you went from being a derivatives trader to owning restaurants. That's weird. And I studied philosophy in college. So people are like, how do you go from philosophy to finance? And to me, it was all the same thing. How was that particular transition or rather progression, I suppose, from philosophy to finance is one that you and I haven't really talked about.

Starting point is 00:15:48 And that one is interesting. I'd love to explore for a second, and we're going to go into a million different nooks and crannies. Yeah, yeah, yeah. But do you feel like studying philosophy undergrad was an asset that then later helped you, or was it just an interest you explored en route to other things? No, I can't remotely imagine having not done that. And the way that

Starting point is 00:16:12 actually I did it was really interesting. I had no intention of when I got to college, I thought I'd study political science, economics, pre-law kind of thing, something like that. And my very second week at Colgate University, a wonderful professor who just passed away last year at 94 years old, really great mentor to me, Professor Jerome Belmuth, was a tenured professor at Colgate for almost 60 years, pulled me aside, introduction to logic, you know, 101, and basically said, what are you studying here? And I told him, and he said, no, you're going gonna be a philosophy major i'm gonna tell you i'm gonna teach you how to think um and and he would he was the kind of guy

Starting point is 00:16:51 like there's like there's this great scene in a river runs through it where the where the dad you know every time the kid writes an essay like the young uh you know fisherman kid writes an essay and he brings it to his father to be graded. He gives it back to him, says half as long again. And that's like long before that movie ever came out. Professor Belmuth would would essentially assign a paper to the class and say it should be about 15 pages. And people would be like, well, how long? And he'd always say, like, you know, how long is a piece of string? Like, it's however long it needs to be. And then he would tell me yours can't be longer than three pages. And and people would be like jealous, like, wow,

Starting point is 00:17:29 you only have to write three pages. If you take it seriously, that is a much, much harder thing to do. So he really trained me as well as a number of other professors there to be clear in thinking succinct to, to, you know, understand what logic was, to process information, and really to look for parallels in different fields and different fields of thought. And so, man, like, when I got out of school, I went to law school for like a day and a half. I'd gotten into Penn, like a joint JD-PhD program at Penn. And as soon as I kind of knew who the other folks were and what their desires and trajectories were, I was like, oh, this isn't actually a good fit for me. And I remember my future father-in-law told my now wife, then girlfriend, that I was in danger of becoming an intellectual bum because I dropped out of law school before I really entered law school.

Starting point is 00:18:26 And I floundered around for a little while. But if you grew up in Chicago, you end up meeting people who had this unusual lifestyle. And that was back in the days pre-internet, pre-electronic trading, pre-high-frequency trading, where there was literally people on a giant trading floor shouting at each other. And you either were attracted to the, I don't know, almost animalistic nature of that. And for me, it was like a huge challenge because there are people down there that had PhDs from MIT. And then there was people who were like butchers that went down there with $100,000 and just kicked ass. And so it wasn't about your level of education or any of the stuff I already

Starting point is 00:19:13 talked about. It was about, can you show up every day and every day is game day and be really disciplined and very clear-headed with chaos around you. How did you get introduced to that world? You know, if you grew up in Chicago, you know some of these guys. And some of them are flashy. And I can remember the exact moment. I'm not going to name a name here, as you'll find out why in a second. But I was walking down the street. I was like six months out of college, kind of didn't know what I was going to do.

Starting point is 00:19:44 And I was walking down the street, and I bumped into a guy I knew in high school. And he wasn't the best student. He didn't try the hardest. And I was like, hey, what are you doing now? And he was like, well, I'm just rehabbing these homes. And I thought literally like, oh, he's a construction worker. And I was like, what are you doing with him? He's like, well, I just bought this block.

Starting point is 00:20:05 And I'm turning this all over. This is a true story. I mean, this is so not like, you know, a good reason to do something. But I looked at him and I was like, what are you talking about? He's like, yeah, I skipped college. And I started out as a runner on the floor of the Merc. And now I, you know, I own like 25 condos and three townhomes and I trade. And I kind of went like, wow, I don't know what.

Starting point is 00:20:29 I knew a little bit about it. I'd been down on the floor before just visiting. But I was kind of like, that's fascinating. That is a truly fascinating thing. And I went down, visited the floor. I had to fake my resume in the wrong direction to get a job. It's a true story. People lie on their resume all the time. I'm probably the only person that got rid of my degree and my academic awards and all that. Because to get a clerk job on the floor,

Starting point is 00:20:57 the last thing they wanted was someone with a good degree, Phi Beta Kappa, Magna Cum Laude, all that stuff. So I faked my resume, got a $5 an hour job and looked for a mentor. And I found a guy named Frank Zerino, who was at Chicago Research and Trading, which also was founded by a philosophy major. It's actually very common. Why is that common? I wish I knew the answer. I don't know the answer.

Starting point is 00:21:23 I do know that there's three or four of the largest trading firms in the world are run by philosophy majors. Um, and if you look back at my, my class just of, of, you know, there's a few professors in there, but there are people who make movies. There's a guy who runs an ad agency, a large ad agency. Like it was, it's a really interesting path. It's not just like studying physics, you know, like I know some great physicists who, who are great in whatever they do. And I think it's, I think it's a similar discipline of abstract thought. Like I can't think of anything worse than studying business. It just seems like a terrible thing to study to me. Is that because it's like the surface of the waves in the ocean?

Starting point is 00:22:13 Topically, it's just so non transferable in a sense. And then as you go lower and lower to the slower moving layers, that's just more multidisciplinary in terms of studying the basics of how things work or how people think? Yeah, I think it's almost like it's how to do something or how to manage something, but not why to do it. And so if you're taught in 1992, if I went and got an MBA, I would have been taught a certain kind of management that six years later with the internet would have gotten blown up. And so for me, it's like, I always ask the

Starting point is 00:22:51 why question, you know, when we're, you know, you were mentioning like the book publishing or a bar, like, you know, I just looked at some things and it's like, why is that? Like, why does it work that way? And oftentimes the people most entrenched in a system have no idea why. They're like the third or fourth generation of person within that system. And they have no idea why a school bell rings in the morning, for example, or why a bartender is washing the dishes. And often I don't know the real answer, but I come up with alternative ones, at least that suit my narrative, I guess.

Starting point is 00:23:30 Undervalued skill, by the way, in some cases, right? You got to be careful, but very, very, very, very, very interesting. I want to pause here partially because I'm over-caffeinated. I was inspired by my nostalgia related to your double espressos. But why did the professor pull you aside? What did that early undergrad professor in Logic 101 see in you, whether he explained it or not later, I don't know, that led him to take a special interest in you? Well, I think I was prepared and earnest because I was mostly terrified. He had a reputation of being kind of like a – he was a Socratic method teacher. He was pretty harsh. Colgate was very small classes, and there was a class of 80 people, and he kind of wanted to whittle it down to someone's notebook once when he was asking people like examples of how to put out a fire

Starting point is 00:24:49 and this one guy was just stuttering because he was so in fear and so he just lit his notebook on fire and he stamped it and the kid threw it on the ground stamped on he's like you could smother it sure and he called everyone he memorized every person's last name and it was mr and ms and um i remember the specific day um he was literally at you know back to the this is like right out of a movie he is back to the class writing on a chalkboard you know some some logic problems symbolic logic and um the guy next to me um uh had no shot at getting it right none? None. Right. And so he, he said his name and, um, and I wrote on the paper on my desk so he could see it, like what, what the answer was. And then without missing a beat or turning around, he was like, Mr. Kikonas, please do not help him.

Starting point is 00:25:37 There is no way in hell he could possibly have done that without your help. And, and this is like two or three weeks in, right? And he spun around and he saw that I didn't have my book. And he said, Mr. Kikonas, where's your book? And I said, it's in my dorm room, you know, professor. And he said, well, a lot of good it's doing you there. I said, on the contrary, it must apparently be doing me a lot of good there. And he said, I'll see you after class. So I thought I was getting kicked out. And there was a line forming to create office hours or to ask to be transferred out or whatever. And when I got to the front, he said, follow me,

Starting point is 00:26:12 and I followed him to his office. And I swear, I mean, he's running through the fall, New England fall, and I thought I was going to get kicked out of the class. And when I closed the door, I turned around, and he has feet up on the desk, and he said, where are you from? What do you want to do here? And that was it. Like he, he, he took me under his wing. I was very fortunate. I, um, and you know, it's like, I never knew, here's the amazing part. I never knew the guy liked me until 10 years after I graduated. And then I was treated like a member

Starting point is 00:26:42 of his family at his funeral 30 years later. Huh. Right? So really fascinating person, really fascinating, you know, moment in my life where, I don't know, someone saw something in me and kind of went like, I'm going to make an investment in this person. They never asked for anything back, you know, ever. How did you not know that he liked you? Did he withhold in some way so that

Starting point is 00:27:07 you wouldn't get a big head or something along those lines? Did he not want to get overly attached to you so he wouldn't express it? No, no, no, no. I think I was 19 years old and I didn't know that the people you like, you hold to a higher standard probably. Right. And so consequently, you know, like it was really like he beat the shit out of me in a good way you know what i mean like he it's like if you have someone who's teaching you something and they invest their time in you and they think you have a chance of being good they work you harder than the folks around you so the people that i thought he liked he was just being nice to because they didn't he didn't think they had a chance right you know yeah he didn't care he wasn't invested yeah and and so with with

Starting point is 00:27:49 me i think it would be like he would be talking to my english professor without me even knowing and being like you know that paper sucks he can do a lot better than that give him a c on that one and i was just like i was like what's going on? All of a sudden, that class got hard. I didn't know. I had no idea. It was an interesting, lucky, fortunate place to be at that time. We're going to get back to the Merc, but before we do, philosophy. I'm endlessly fascinated by philosophy, but I'm also a nerd and kind of academic and pedantic and I've spent a lot of time in school. For people who are listening to this who are, say, already in their careers, or maybe they're in their early 20s thinking of starting a company,

Starting point is 00:28:36 but are entrepreneurially either involved or inclined, would you suggest if they don't have any exposure to philosophy that they read any particular books or resources or explore it in any way? Or would you say, actually, you know what, that was an intermediate step to something else. You would probably be better off studying X, Y, and Z. Is there like a starter kit or something you would recommend to folks who don't have the philosophy exposure? Yeah, you know, I think part of it is if you read a book in isolation, it's not as rich of an experience as discussing those ideas within that context. That said, if it's if you're the kind of person that loves to read and explore ideas, I mean, there's hardly a better place. It's a matter of finding what you enjoy. I happen to love The Problems of Philosophy, which Bertrand Russell wrote, sort of about Wittgenstein's ideas, but before Wittgenstein published. It's written in plain language. It's not hard to understand.

Starting point is 00:29:41 Certainly Nietzsche is more like philosophy with some weird sugar coating of something on top of it um and man like as a young male you know reading nietzsche for the first time i was like fuck yeah like you know like like it's not like it's not passive like i think people think of philosophers as like zen monks sitting there quietly contemplating the universe um i think what it is is it's people grappling with all the same questions and curiosity that that we all have if you pause to think about it and so there it's it's so big you know um that it's it's not just you know descartes you know i think therefore i am it's it. It's kind of every little bit of that. Back to, like, read Lucretius. He had the atomic theory of the universe. Could you spell that?

Starting point is 00:30:30 I'm going to be the first one to admit that. Lucretius? Oh, Lucretius, Lucretius. Yeah, Lucretius, yeah. I mean, you know, he— L-U-C-R-I-T-I-U-S. Yeah, I'm a terrible speller, so never ask me to spell anything. We'll put it in the show notes.

Starting point is 00:30:44 Yeah, right, right. speller so if you never ask me to spell it we'll put it in the show notes yeah right right but like you know it's like you you read read that or read this great book called the swerve which you know is is you know about this this monk ages ago um that that sort of found that book and then rewrote it and saved it for history like that reads like a murder mystery like you don't necessarily need to start with the philosophy you You can start with the things around it. But I continue to find the world of ideas endlessly inspirational. And then, by the way, steal them

Starting point is 00:31:17 and use them in whatever you're doing. They're there for you. Lucretius, L-U-C-R-E-T-I-U-S. Titus Lucretius Carus is a Roman poet and philosopher. We'll put that in the show notes. I want to second Bertrand Russell also. I haven't read Bertrand Russell in so many ages, but it is very digestible.

Starting point is 00:31:42 It is not dressed up in $10 words when 10 cent words would suffice. A lot of his writing is really powerful. And I also just wanted to mention for folks that, and I just thought about this, ages and ages ago, I felt like I had certain gaps in my education after college. And I ended up, I don't know why this didn't occur to me earlier, but somebody mentioned that Stanford, UC Berkeley, these top tier universities all had extended or adult education classes taught by professors and junior professors. I mean, this is the same team who's teaching. Yeah, yeah, yeah. And those are very readily accessible.

Starting point is 00:32:31 Well, and even MIT OpenCourseWare. Like, so many colleges now have taken that model and put great, great, great classes online. And, you know, I know that every now and then i'm surprised what i what i find on there and get sucked into like an all-nighter of of taking some college class you know that i know nothing about and it's so far over my head but it kind of refuels you again to go like oh like there are huge gaps where i know nothing and older you get, the harder it is to start into something new, I find at least, because it feels like the mountain's too big, you know?

Starting point is 00:33:12 I would actually, not to pull a Nick, actually, sir, on the contrary, sir, my book is doing me a lot of good in my dorm room. That's right. I think one of your superpowers is that you ask the fundamental why questions about longstanding assumptions or conventional wisdom in different fields. And the more you have done that, the more obvious it is to you to do it as a starting point in a way. So let's go back to the Merc. We can go in any direction, of course. But you step into this Lord of the Flies slash gladiatorial arena with butchers and PhDs and so on. Then what? At what point is there a point when you're like,

Starting point is 00:34:07 okay, I actually do think I could be good at this? No. No. For real, no. I was down there, and I had made a fatal error of leaving school. And everyone told me it was a fatal error. This is leaving the law school. Yeah, and I remember being down there, and what I was doing was so brainless.

Starting point is 00:34:38 It was literally you take this piece of paper over to that guy, and then that guy would yell at you, and you would rip the paper out of your hand, and then you'd go get another one. It was literally that brain dead. And I was desperately looking to learn what was going on around me. Um, and of course I, I bought books on finance and commodities and options and all that. And they were completely ridiculous and opaque and academic that they looked like they had no relationship to what was going on there at all um i started taking classes that were run at the merc on mock trading and just learning the hand signals and things like that which were fine but didn't really teach you how to trade and i spent you know time interviewing with big companies like goldman sachs and society general and whatnot because i did have

Starting point is 00:35:24 the academic background where i would get the interview, I would be able to take the test, I would do well on their math and psychology tests, I would get offered a job as a trader. And then I would look at the contract. This is a key thing. People get out of college, they get offered a job. I think I'm the only one who ever read the employment contract. And what it said in there was basically like they could do anything they want with me for three years. Like I don't even necessarily need to be a trader. Like I, that's what I was interested in doing, but they could, they could ship me to France and have me do something totally different. I could be an analyst or, you know, God knows what. And so when I would question that, they'd be like,

Starting point is 00:36:00 man, you should be really happy. Like we 300 applicants for this, and we offered eight positions. Just take it. And I was kind of like— Totally your style. No, and I was just kind of like—I grew up—I'd be remiss not to say that my dad modeled—my dad was an entrepreneur by necessity because his dad died when he was really young. He fought both at the end of world war ii he was drafted into the navy at the end of world war ii was dismissed

Starting point is 00:36:29 honorably after 16 18 months because they were downsizing the navy and then he was barely young enough um to be drafted into the army for the korean war and when he got out like you know he had no usable skills so he went to work at the grocery store that he started working at when he was 12 years old, saved up all of his money from the Army and the Navy, and bought the store. And so as I was growing up, my hero was my dad, who was not an academic, who was not what people would think of as an executive in a suit or whatever, but did really well. He had bought property and real estate. He owned a temporary labor office that supplied unskilled laborers to factories and conventions and whatnot. That was a really good business, you know, and he had a lot of common sense smarts.

Starting point is 00:37:21 He was horrified that I didn't go to law school, you know. But meanwhile, I was modeling what he did. And so when I got down there, I was like, you got to own, you have to own your own situation, you know. And so when I was offered those jobs, I was like, well, I don't really see myself working for someone else, you know. And I found a guy who also felt that way. And he was working for a big company and they didn't want to make him a trader because he was too much of a quant like he was really well educated he was really mathematical he wanted to prove them wrong so he took a small amount of money and started trading um currency options and when i found him i instantly knew that this was the right person because I talked to dozens of people and no one was like him.

Starting point is 00:38:09 And then he said he didn't want to hire me. Like he didn't want to hire anyone. How did you meet him? Do you remember how you guys met? Yeah, I was just introduced to him through – he was – back then there were – if you're a trader or even a trading company, you have a clearing firm like Goldman Sachs. At the time, there was a company called First Options, and he cleared First Options. Back then, you would literally have to take the elevator up to key punch in all the cards into a computer that was up on 17 floors away. Wow.

Starting point is 00:38:40 Ancient times. I met him through being introduced to him there. After talking to him, I knew he was a sort of geeky intellectual that I that I needed. And then when he told me like that, he didn't want to hire me because he just hired some clerk. I was like, no, no, no, no. Like, I will pay you to work for you. And he was he was like, this is really strange. And I explained to him what I just said. It's like, look, I've been here six months. I set a goal for myself of getting on a badge, it was called, like leasing a seat and actually trading within a year. And I was like, I need to get going on this. I need someone that's going to teach me options.

Starting point is 00:39:20 And it's fascinating because he then hired me for, I mean, I want to say it was $400 a week or something like that. And, uh, you know, I stood right next to him all day, every day. And he taught me options theory from scratch better than any college ever could. Um, to the point where you're looking, you know, three derivatives in, um, you know, the, it's not just volatility curve, but the curve of the curve. And, um, you know, as soon as I started grasping this and going deeper, deeper down that rabbit hole, the more, the more I liked it as, as a puzzle, it wasn't certainly the money had an appeal, but it was also, Hey, here's this, this

Starting point is 00:40:01 giant competition. It's like paying a huge multifaceted chess game that no one's going to get exactly right. But like I said earlier, it's about making hundreds of decisions a day. And even when you get 10 in a row that come up tails, you know that the next one is 50-50. And that discipline was interesting. That was more about teaching yourself the psychology of standing there while everyone told you you were wrong, or you were like physically small, or you were too educated, or too serious. I mean, you can't imagine how much of a fraternity house that place was. Everything in Wolf of Wall Street, I have seen. I haven't lived, but I've seen it all. And, you know, I started hiring very shortly after.

Starting point is 00:40:56 I started trading, and about a year later, I left and started my own company with almost nothing. And I hired my first employee, who became my business partner for the last 25 years. And I taught him what I what I learned. And I hired people that I considered corporate refugees, people who worked for companies and decided that independence was better. Why did you leave after a year? You know, he was moving over to the Chicago Board of Trade, and I had found a couple of awesome programmers to help build this options analysis software. And he sort of offered me up to run some of the operations at the Mercantile exchange when he went over to trade the bonds at the board of trade. And, you know, I mean, he was a really, really smart guy and he, he made me a deal that when you analyzed it very carefully, it got worse over time.

Starting point is 00:41:56 And I just kind of went, you know, I like, it's been great and I've learned a ton and we've made each other a bunch of money and it's a win-win but i really wanted to do my own thing like i wanted to be the captain of my own ship i guess and uh thankfully this guy jim hansen who's still one of my dearest friends um sort of had an option to to stay you know um with that company or come at a completely underfunded company. I mean, thinking back, it was so stupid, you know, from a risk perspective. But it was asymmetric, you know, far more upside than downside. And it worked out really well. And we spent most of our time as we hired people and taught them how to do this. It was mostly like psychology training. It was mostly standing around after hours and saying,

Starting point is 00:42:49 what's seven times 28 and screaming it at each other like a drill sergeant until the person couldn't remember what nine times three was anymore. And wait, why did you do that? Well, you had to be quick. You had to be quick on basic mental agility. So if you bought 450 contracts and it was a 20 delta, you needed to be able to do what's 20% of 450. It's 90, but you need to do that precisely with numbers that are not so round. You need to be willing to not be perfect and you need to make that decision instantaneously and realizing that it could cost you $50,000 to $100,000 if you get it right or wrong. And you have to be really, really comfortable with that.

Starting point is 00:43:32 And so what did we do? Well, we stood around and we turned people's brains into mush until I had people punch me, cry, run out. It was, no, I mean, it sounds awful, but it's amazing training because the rest of the world moves much slower. So any other decisions that I've made in business since then, um, have felt glacial in pace. Yeah. Um, and there's also something to be said for making the trainer, the training in some or all respects harder than the competition right

Starting point is 00:44:06 i mean the adage of the more you sweat during peacetime the less you bleed during wartime i mean the the best competitors i've met in many many fields often strive to make their training and the toil of their preparation harder than what they expect to face when they actually it's why we love watching big time sports like when it when it matters there are certain people that you know are are you can almost look at them and go oh that poor that poor person's gonna fade and then you you hope they don't right you hope all hope all that training, you know, pays off. When you see someone, I love golf for all the same reasons. It's like, you know, just a series of constant failures. And then so when you look at someone who can pull that rabbit out of the hat, you know, at exactly the right

Starting point is 00:44:59 moment, it's pretty wonderful to see and the thing I loved about my time down there even though I burned out of it after 10 years is that there were moments where I did I mean I have friends they'll listen to this and they'll be like oh yeah I remember that time in the S&P pit you really got this right

Starting point is 00:45:17 but I made some completely stupid decisions but mostly on the measure when things got crazy, I was able to perform more than not. I remember Greenspan's Irrational Exuberance speech was a formative moment where I kind of went like, wow, I can not only hang in this environment, I can thrive in it. And you get home soaking wet with sweat. It was a physical job. I guess with people, it was really blue collar in a lot of ways. And, you know, it's like I got home that day and I was like, that was what I prepped my last six

Starting point is 00:45:56 years for. It was very satisfying. It sounds like an awful, it is an awful thing in a way, right? Like it's just about pure commerce. It serves, you know, a purpose of price discovery and all that. But any individual person isn't really the one doing that, you know. So I think that there are negatives to the whole system as well, in hindsight. But man, at the time, it just felt like great mental training. What would you recommend to people who are listening and are having this flashback to the introductory text exchange about beating the market over a long period of time, who are hoping to become better investors? And you can take that anywhere you want, but are there any particular tools, mental models, anything that you would recommend?

Starting point is 00:46:45 It's really, really hard. I think the mental model is asymmetric risk. I always look for something that the upside is three to four X, the downside. Obviously, quantifying those is very difficult, but that's the key. Everything I try to do is asymmetric um and then even though um nassim talib is a bit of a pedantic goofball on twitter um his book fooled by randomness is awesome yeah that was the one that preceded black swan and i think black swan's great it's fine but um fooled by randomness is is i think the better of all his books because it just, man, it just encapsulates everything that people price things incorrectly. It's a great book. Yeah, you walk through a casino and you see everybody pricing their outcomes incorrectly.

Starting point is 00:47:36 The entire city is built on that. And, you know, if you could get in your head. Literally. Literally. Literally. Yeah, literally. And I don't take any pleasure. Like people are like, oh, you must love gambling or whatever.

Starting point is 00:47:49 And it's like I would never sit down to a blackjack table because I know that, you know, there's a 49.5% chance that I'm going to win. And that's the wrong way. Yeah. Yeah. The Fool of Randomness has come up a number of times. I haven't read it in ages because it is one of his earlier books. But Howard Marks also brought this up recently when I was chatting with him. And it is an exceptional book, I think, for developing a new lens on life, not just investing.

Starting point is 00:48:22 When you are investing for yourself now, how do you think about risk? Because this is a word that has popped up a few times. How do you personally think about risk in your life? Do you, for instance, like some startup founders, look at the risk as the various early stage startups, restaurants, bars, and so on that you're involved with, and then you play it safe in your other kind of asset allocation? How do you think about risk in your life or in investing? Yeah, that's a pretty difficult question. I think that if you look at everything that I've done business-wise, everybody would say that the failure rate is super high in what we do. So trading, they used to say one out of 100 people that goes down there breaks even their first year and fewer out of that one take another 100 of those ones and less than one in 100 of those becomes a millionaire

Starting point is 00:49:30 and i went great it's like the old jim carrey so you're saying there's chance you know right you know and and and and then uh and then you go to uh to the restaurant business and people, 95% of all restaurants go out of business in their first two years. And I'm like going, great. That's perfect. Why do you have that response? Is it because – Yeah. And then I'm going to start – I'm doing a software startup now.

Starting point is 00:49:59 Yeah, go for it. So the higher, the smaller the hoop, the more interesting it is to figure it out. And once you're up there and you know how to jump up through that little hoop, there's fewer people playing that game. And the other thing is I remember right when I was going to start building Alinea with Grant, I was talking to a restaurant owner. And by all accounts, he was pretty successful. He had four or five restaurants. And one of them I really liked a lot. And we'd go there a lot. And I kind of got to know him a little bit.

Starting point is 00:50:36 And he said, so, you know, what are you up to? And I said, well, actually, I'm building a restaurant now. And he looked at me. He said, ah, it's a terrible business. You don't want to do it. Like, incredible failure rate. Terrible. And I was like, why did you build the next four? So whenever, how did he respond to that? You know, no one does. That's kind of like with, you know, we'll get to it, I'm sure. But that's

Starting point is 00:50:59 like the way I was with the publishing thing. It's like, it's like, hey man, people keep printing books and yet I can't figure out any of the information, and yet they're going to give me $300,000 or $400,000 to write a book. Something's remiss here. You know what I mean? I've never written a book before, but yet someone's going to write me a $400,000 check. There must be a lot of money on the other side of that bet. Consequently, I always try to look for the high, small hoops and then I spend my time learning as much as I can. And then I jumped through that hoop. Uh, it's both more interesting, I think. And I also think getting back to the asymmetry of risk, um, those are the

Starting point is 00:51:37 ones that, you know, yeah, you might have a, you know, well, first of all, do you really have a 95% failure rate if you put in all that effort? Yeah. I don't think so. You know? Um, and second of all, do you really have a 95% failure rate if you put in all that effort? Yeah. I don't think so. Second of all, I think they priced it wrong, so to speak. Then second of all, man, that's where the fun is. That gets you up in the morning and going to work. Yeah. Yeah, this is where, among many, many other places, averages can be very, very misleading.

Starting point is 00:52:25 And I always end up in public Q&As and things of this type, hearing various numbers and stats thrown around, many of which I think have no basis on any data whatsoever. But there's the, we only use 10% of our brands, not true. There is the 9 out of 10 startups fail within the first year, or whatever the stat is. And the first question that occurs to me with a number like the latter, or I guess a ratio, is, well, is it because the model is difficult? Is it because startups are inherently that high risk or is it, is, are there other plausible explanations? Is it that nine out of 10 people who attempt to start a startup don't do any of the necessary due diligence? Correct. Yeah. I mean, the number of, the number of, I, you know, I've been on a couple of, uh, like graduate school, you know, entrepreneurship, um, like, you know, contests and whatnot.

Starting point is 00:53:14 And one of the things that always happens there is what I call like the time machine. Someone comes up with a business plan that is like, you know, you know, I'm going to build a time machine. Now, of course it's not really a time machine, but I have seen ones that define the laws of physics, for example, or, you know, new pipeline technology, but they have no idea. Like, it's just a pipe dream. They've done none of the engineering, you know.

Starting point is 00:53:36 So you kind of look at that and you go, you know, you haven't really done the homework yet at all. And then there's a lot of people that come to me and they've spent like six months doing their logo and the name of the company, but they don't actually have a piece of software yet. I'm just going to hire someone to build that for me, or an app.

Starting point is 00:53:58 You know, I get so many apps pitched to me. And, you know, they don't know how to build an app, but they've got a logo and an idea and i was like that's a good way to blow a half million dollars on a consultant oh man i you must get all you must get that 50 times worse than yeah i mean what i tend to get and this is part of the reason why i stopped all the startup stuff a couple of years ago is it got to the point where 90% of the pitches I received, which were unsolicited, would be along the lines of, Hi, comma, like not even a first name, or be like, Hi, Tim, or Hey, Tim, even better. I am the CEO or co-founder of X.

Starting point is 00:54:44 We are raising this at this valuation. We are oversubscribed, but we could squeeze you in for 25K if you're really interested because we admire ABC. Here are the docs attached. Let us know if you're interested in the next 60 minutes. My default response to anything like that where people are pressuring me for a fast decision is no. Like it's just – Yeah, correct. I've lost very little money saying no to those things. But coming back to the examples that you were giving and what we were talking about, bridging over to restaurants and food.

Starting point is 00:55:24 So you're being told how restaurants are an awful business. Food is an awful business. And I remember someone told me a long, long time ago, they're like, yeah, if you want to lose money, go into magazines or restaurants, right? And at what point, and I have a little bit of the backstory, but not all the details.

Starting point is 00:55:44 At what point do you decide to a little bit of the backstory, but not all the details. At what point do you decide to go into or get involved with restaurants and why? Well, so I left trading in about 2002. 2001 was a tough year between 9-11, which was my father died in February of that year. I was burnt out after going really hard for so long. And, you know, we built up a pretty good sized company, too. And I merged with a firm in New York. And I just I kind of needed a break, but didn't know how to how to really take one at the time. And so I left. I left trading and I immediately kind of panicked because here's something that I really genuinely enjoyed, but didn't didn't kind of know what I wanted to do next.

Starting point is 00:56:30 And started doing consulting for a small hedge fund, and then I just didn't know what to do. And I had an awesome wife and a young son, and things were good. But I was kind of panicked. I was playing golf with ex-athletes, because who else is 34 years old and can play golf on a Wednesday afternoon? And so it was just a weird thing. And I kind of looked at them, and I'm like, oh, they don't really seem all that happy, even though they've got this lifestyle. And so I met Grant Ackett, the chef at Dwell Dining at Trio, went to a lunch there one afternoon that some friends set up. And it was a transformative experience. It was artistic, it was intellectual, it was thought provoking. Most of all, it was emotional and those are all things that i would never have associated with

Starting point is 00:57:26 eating a dinner right um and so from from a perspective of like great art experiences like seeing a great movie or a great play or going to an amazing museum opening um we kept get drawing back there like we kept going back and we would go back so frequently that it was absurd because you know it's a big meal and it wasn't cheap and every time we'd go somewhere else we'd go like wow why are why is no one else thinking this way and as i got to know grant a little bit i think like sometimes people bring um you know the chef some wine or beer or whatever and it's like that's kind of sand to the beach, you know? I would bring him books.

Starting point is 00:58:09 And I didn't figure he had a lot of time to read. So I would put like a post-it note on a page of an old book. So I remember I brought him this book called The Peregrinations of an Epicure. Hold on a second. The Peregrinations, like a peregrine falcon? I don't even know what that word is. No, no, no. A peregrination is like a wondering about. Okay.

Starting point is 00:58:26 So it was written just after World War II by an ex-serviceman. And he kind of goes around Paris, I want to say maybe late 40s, early 50s. I can't recall exactly. And there is a chapter in there on La Permide, which was a very classical restaurant, kind of the best in the world at the time. And he described a meal there in emotional terms that resonated with what Grant was doing, even though his technique, his cuisine, everything was completely different. And so I literally just highlight like a couple lines in there and and give him this book which was out of print at the time and um we kind of developed this email relationship back and forth where he would sort of try out

Starting point is 00:59:12 some new food on us and um i would give you know direct honest feedback but not like oh it was delicious it was more like it was more like you more like you're going for a provocation there. And we would go back and forth. And he wrote at the time on a forum called eGullet. And I went on there, and his spelling and grammar notwithstanding, I mean, it was like reading someone who's just really thinking hard about what they were doing. Everything we just talked about, here was this young 28 year old chef from Michigan who looked like Captain America, who would come out,

Starting point is 00:59:49 not, you know, he was like Hollywood in the sense of like, he was good looking and very driven, very clean cut, but he didn't look like, you know, the stereotype central casting of a chef,

Starting point is 00:59:59 right? You know, chubby gregarious guy. He was really quiet and introspective, shy, but then you read and, you know, these, which are still up, you know, you can still Google it He was really quiet and introspective, shy. But then you read these, which are still up. You can still Google it. And he'd go on for four pages about bread service. What's the point of bread? And this is a guy that I could wrap my head around.

Starting point is 01:00:17 And so I remember on January 20th, 2004, It was my wife's birthday. And she said, yeah, I want to go back there. And we'd never been in the kitchen before. And they have a table there, but we'd never eaten in there. And I remember I emailed him and said, she's ethnically Latvian, speaks Japanese, and loves Thai food. Good fucking luck. And I knew exactly what that would do to him. that would put him into 10 days of pure hell because he would research latvian food he would have to redo like he would redo a whole menu 20 courses right and i didn't know they were going to put us in the

Starting point is 01:00:59 kitchen and um they put us in the kitchen i mean it sounds like a jerky thing to do now, but we did have a relationship a little bit at the time. And he served us like the most amazing meal of my life, you know. And it started out with Latvian sorrel soup with braised ham hocks. And, you know, it had flavors of the sea, which was a Japanese dish. It had Thai dishes, but it was all in his style. And so it was his own, and yet it had elements of all these things. And at the end of that meal, he said to me, well, what do you think? And I had watched the kitchen, and it was like a watchmaker shop.

Starting point is 01:01:38 It was not screaming and yelling. It is just as, sorry to interrupt, it is so unlike anything that the vast majority of people listening to this would possibly expect, right? Yeah, it's not Gordon Ramsay. It's not Gordon Ramsay, right? Yeah, it is just complete silence. It is like a watchmaking factory. It is really something else. Anyway, sorry to jump in. Yeah, no, no, no, that's totally fine. And so at the end, I said, you know, I doubt anybody anywhere in the world had a better meal tonight. And he was like, well, well, thank you. And I said, what are you planning on doing with yourself? You know,

Starting point is 01:02:18 I mean, I was like kind of, I had a lot of wine and I kind of looked at him, you know, he sat down with us and I said, what are you, what are you going to do? And he goes, well, what do you mean? I said, well, you're not going to be here forever. And he said, well, I want to build my own restaurant. I said, I'd be happy to help you do that. And he said, well, what kind of restaurant do you want to build? I said, I don't know. I've never built a restaurant before. That was it.

Starting point is 01:02:39 And then like a week later, I got an email with his business plan. I invited him by my house. And a year to the day later of that, that was May 4th, we went back and forth on email. May 4th, we held a dinner at my house for potential investors. And on May 4th, 2005, we opened Alinea. That is nuts in terms of – Completely nuts. We didn't even know each other. I mean, can you put that in perspective for people?

Starting point is 01:03:01 I actually did not realize that was the timeframe. Yeah. Can you, just in the context of normal restaurant world. We argued. So we didn't really know each other very well. But he would come by my house and he didn't. Let me interject for a second. Because you've said we didn't know each other very well.

Starting point is 01:03:22 What did you know about each other nonetheless that gave you guys the like the the push like the impulse and the the sufficient level of trust slash excitement to actually pursue it right there had to be something there it couldn't just be nothing so what was it you didn't know each other well, meaning maybe you didn't know the full scope of each other's backgrounds. Yeah. I mean, I actually studied that. I knew the facts. And I knew what he was putting in front of me. But I didn't know him, like the way you know someone that you're going to become a business partner with. And I think he just thought I was rich. You know, I'm being serious. Like, like, you know, I think everyone else wanted, this is, this is really true. Cause he has said this to me. Everyone else wanted to offer him a restaurant that they had already built or wanted to build. And I actually answered that

Starting point is 01:04:26 question correctly. The I don't know is an awesome thing to say, like 90% of the time of your life, right? And so when he said, what kind of restaurant do you want to build? I could have waxed on about some dream I had or just made some bullshit up at the time. But I just said, I have no idea. That's a big question. We need to sort that out um and i think that was the right answer for him i think that's all he needed to know was like okay the guy's got an open mind he seems to have done well in business he knows like you know apparently how to build something what was really funny is that the stuff that i was concerned about which was like architecture design plumbing you, lease, all of that. He was like, the word oblivious is not too strong of a word.

Starting point is 01:05:11 This is not a criticism of him either, right? It's just like he came to my house and he was just like, yeah, I want Martin to design everything. Martin Kastner, who is a genius designer, has crucial detail, which we've been involved with for 15 years now. He's a designer. He like a an artisan like he built plateware and and he won the book who's to or for the platter he designed for thomas keller and daniel balood's team for the team usa and all that now but back then like i mean this guy's not gonna design plumbing or electrical so i would just look at him going like well no, no, he can't. We need an architect and you need to get city stamps and all that and all that. So I think Grant was just like, yeah, you find a place, you put tables in it and you build a kitchen and you go.

Starting point is 01:05:54 In terms of like, obviously, he knew there were health inspectors and all that. But the process of all this, just about, you know, you either were going to not build it ever eight weeks in because we would have hated each other or we were the kind of people that figured everything out. And we just talked it out, like right down to like what kind of tables, what kind of glassware, what kind of this? Like, you know, we wanted to rethink the why again of everything. Like, why do you put a candle on a table? Why is a candle romantic? Like, that's a question we asked.

Starting point is 01:06:28 Why do we need candles? That's kind of like, why is that romantic? Why is, um, why do people put a little bud vase on a table? Why shouldn't that be an edible thing? That'd be cool.

Starting point is 01:06:38 So, so we did all that and we designed the experience to create emotional responses from the moment that you walked in the front door. So we didn't have the podium. You know, we went, what is a good greeting feel like? Not just, you know, if you're at someone's house, what does that feel like? If you're at a restaurant, what shouldn't it feel like? Well, it shouldn't feel like a computer in front of your face saying, what's your name?

Starting point is 01:07:03 You know, and all that. So we went through every aspect of that and you know i lost almost 20 pounds that year not in a healthy way um just like gc'ing the construction i laid tile in the basement like three days before we opened let me pause for one second so the why question that comes to mind for me is after the finance after battling it out on the front lines and going through 2001 why this as your next thing like why why was this the thing that captured your imagination because you had to know on some level once you started getting into the details like fuck i mean this is going to be yeah it's all in this is gonna be a big this is gonna be all my chips and energetically so why why this you know there

Starting point is 01:07:52 there are occasional times when you wake up in the morning and like that thought comes back to you that that like hey i'm you know i'm i'm really sucked into this, right, you know, and for about three or four months without telling anybody, even, you know, Dagmara, like, even not telling her, like, telling no one, I kept going, like, I should build a restaurant with this guy. Like, like, it would be the best restaurant in the world if it was done all the way, right? And I recognized my inner voice saying, that's a really dumb idea, you know, and you don't know what you're doing. I'd never worked a day in my life in a restaurant, right? And I also recognized, and this is also critical, I recognized that so many people built their living room after they made some money. So they

Starting point is 01:08:43 went like, oh, well, I know how to host a good dinner party. And I know good wine. So I'm going to build me a restaurant. And then they sit there like it's their living room. And that's not good. Like, I didn't want to be that that juicy guy that built the restaurant because my ego was was needed to host a party. And so whenever I would kind of later on broach that subject, and people would say like, well, you know, I could almost hear their brain whispering. Well, of course, that's what he's gonna do. And so that was, again, not the best of motivations in the world, perhaps, but the honest one, that was hugely motivating, eventually. But when we first started, it was this nagging thing, like, I'd wake up in the morning, and I would go, you know, I'm not really into what I'm doing right now. And I've just met somebody

Starting point is 01:09:35 who's the best in the world at what they do. And no one knows it yet. Like, and you know, there was probably met, that's probably happened to me, I'm really fortunate that that's probably happened to me seven or eight times in my life and when it happens and i meet that person whoever it may be no matter what they're doing i i i pause i kind of acknowledge that directly and then i just go like you know can we can we you know grab a glass of wine or coffee or something and like that's something worth marking and going like, wow, this person's really invested in something. And Grant had every aspect of being, being that at 28 years old. And, and it, you know, I mean, in hindsight, like it looks,

Starting point is 01:10:18 it looks smart, but I got to tell you, it was years before it felt smart. Yeah. You mentioned just now that you've met these people seven or eight times who are the best in the world or potentially the best among them. But the key point that jumps out for me is, and the world didn't know it yet. So my question for you is, that sort of brings to the forefront, in my mind at least, the question of what is Nick seeing or feeling that other people are not? Could you talk to that? feeling or a particular type of observation, a particular type of detail that you notice in these people that allows you to scout the talent where other people might miss it or not pay enough attention to it? Yeah. I mean, I think you've written a couple of books about that. It's definitely intangible. I think it's different in every case, but it's interesting because you can tell when someone is fully committed, I guess, to their craft or their art or their business or whatever it is that they're doing, their sport. And it's not because they talk about it all the time, though, of course, you know, if you if you push a little, they're happy to do so. But it's more that like if you look around, like the vast majority of people are not fully committed to whatever, you know.

Starting point is 01:11:55 And I think part of what you do is you try to steer people to find those things that that they can commit to. Or you can try to lower a barrier to show them like hey the commitment's not as hard as you think in this particular area right right but these folks are like they're all in they're 99 and that's what they do often to the detriment frankly of of other aspects of their lives um and i guess you get better at noticing them, you know? And I mean, now, like, that's like, boy, I live for that. Like, I love meeting people that even if it's not something I'm interested in, that are all in, you know? And that's an interesting, you know, weirdly really I've never really thought about it that way.

Starting point is 01:12:49 But like it was just very clear to me that Grant was all in. Like if here's the thing, if he wasn't going to do with me, he was still going to do it. Yeah, I was I was I was a helper. I, you know, over time, I certainly contributed, you know, a great deal to it. Not just he contributed a great deal to business. Not just, he contributed a great deal to business. And then I also contributed to the art. But that took time, you know. But I could tell that he was all in. And that was fun.

Starting point is 01:13:14 I mean, it's fun to work with somebody who is basically like, okay, man, if you're not in, like, get out of the way because I'm still going. And for, for anyone who has the opportunity, I don't even know if they would have the opportunity, but to watch observe grant even for 60 seconds. Well, chef's table on Netflix is great. Chef's table. Yeah. Great. Perfect. So everybody should have the experience of observing grant working and focusing it is i've i've met a lot of people who are good at focusing who have abnormal focusing abilities and spending the time that we did together in chicago and the time that i had to observe grant is it is a next level of focus. It's really hard to encapsulate in words. So Chef's Table, fantastic. People should check it out and just watch the level of focus that is permeates the appearance, the air, the atmosphere. It's really something else. So to that point, focus. One of my favorite aspects of speaking with you and having conversations is the questions that you raised, right? Like candle, not just should

Starting point is 01:14:38 we have candles? Like that's maybe a good question, but it's probably not the right first question. Like why do restaurants use candles in the first place? Furthermore, why are candles considered romantic, right? Like kind of stepping back. Basic stuff. Yeah. What are other questions that you asked related to Alinea or you could certainly bridge to other, you know, I think it makes sense to chat about aviary as well. But what are some other questions that you guys asked that people might not think to ask? Yeah, I mean, Grant set the tone for that in our first meeting, not really knowing me. And we started talking, but we didn't even know where to start, right? And he said, well, I know one thing. I want to have wooden tables.

Starting point is 01:15:24 I want to have bare wood tables and i said why he said well why do tables why do fancy restaurants have white tablecloths they literally call it a white tablecloth restaurant if it's fancy why and i couldn't really i came up with dumb answers like oh it feels good or it absorbs like a spill or whatever it may be um and he said no it's because the table underneath is a piece of shit. And he's like, he goes, and you know that, like, as soon as you say it, everyone goes, oh yeah, I knew that. And you've been at weddings and stuff where you feel under the table and you're like, oh, it's plywood.

Starting point is 01:16:00 Right. But if you go to like a really fancy restaurant, you feel under the table. Guess what? Also plywood, just a little thicker. And he's like's like you know when you rest your arms on the table even if it doesn't come forefront in your mind you kind of subconsciously know that they're kind of fooling you and he's like why can't we just have like black beautiful tables it'll show the food great it'll show the plate we're great and then I kind of went like, well, yeah, but like, you know, the health department doesn't let you put in Chicago doesn't let you put silverware right on the table. And if you put a glass there, the condensation will form a little ring and then you have a wear issue. But you'll save $70,000 a year in laundering linens. And so we started going like, well, how do we solve the water problem? Well, you create a fridge that's just above the dew point, 44 degrees, you know, in the winter,

Starting point is 01:16:51 maybe a little warmer in the summer because it's higher humidity in Chicago. And you just get rid of ice. So you have these cascading decisions that like become part of the art of the place that some of them start from from a really practical thing, like, hey, we want to have a quality table. And then all of a sudden you need a little pillow that the silverware goes on, that Martin designed, because we didn't want to have placemats.

Starting point is 01:17:19 That's too cheap. So all of a sudden we had to design a silverware holder. So it just became this cascade of like interesting little art projects that were there for good reasons and really created a unique atmosphere. And it was like one of those things like we never tested it until the day we opened. Like you couldn't test those things. And the very first guy through the door is now a famous chef, Chef Sean Brock of Husk. Oh, fantastic. Yeah, excellent spot. He was not yet a chef then, 2005.

Starting point is 01:17:55 And he was the first guy through the door. And he wrote this giant blog post, and he'd call it with pictures and everything. You can go see it. And every single thing that we hoped would create an emotional you know trigger an emotional reaction it's almost all there like i remember going home and seeing that the next day and going wow like that shit actually worked and you know and it's like right down to the front hallway that was you know a reverse perspective and you know stolen from shark cathedral and and and inverted you know um so all of my interests of architecture and art and science and all of

Starting point is 01:18:32 grant's you know food and all that like all came together in like a year-long conversation on how to do something and we really fought with the architect and designers and and all that because people would tell us the practical reasons why you needed to do this or that and we would just go nope no host stand like you know we want to greet people in an open way um and so just little things like that and then we've taken that on you know um through everything that we've we've done we took, you know, seven years, six years to build our next place, because we didn't have that idea that kept us up at night again. And so, you know, when we did, then we did it. And I think editing yourself and each other in an open way is really, really painful, but really, really important.

Starting point is 01:19:28 And coming back to something you mentioned related to the living room, the well-off who then creates, say, an art project that is not, it may be beautiful, but is most often not a viable business. What, how did you apply those questions and rethink the business model to make any of this work financially? Yeah, well, I mean, you don't want to be a dilettante right um and and so you know my biggest fear is that um it would work in an artistic way but wouldn't work as a business uh and so you know the the the answer is at the beginning we didn't i didn't do much um i handled all of our marketing and PR. I wrote everything myself. Really thought about open sourcing the building of the restaurant. You can still go online and see the original business plans and what logos we were considering using and the test kitchen, which was in my house.

Starting point is 01:20:43 We didn't tell anyone at the time, but that was my house at the time and see the development of this restaurant. And I felt like the open source movement in that way was a good model for what we were trying to accomplish. And part of that was people would say like a restaurant like this can't make money. And, you know, I wrote this little spreadsheet that I called the universal restaurant calculator. And can people find that online? No, no, no. But it's, but it would be very unimpressive if they could, but it was, it was basically like how many covers per night. I mean, this is back of the envelope stuff. How many covers per night can you do? What's the check average for food check average for beverage, what are your food costs, beverage costs, labor costs, what's insurance costs, you know, your, your lease, your rent, like all those

Starting point is 01:21:29 things. Right. Um, and I had enough experience with most of those things to at least give good estimates to it. And so what I started doing is I started modeling other restaurants using the universal restaurant calculator. And, um, I had, again, this goes to the transparency of data, I had real data for only two restaurants. And from those two, I would then make assumptions about restaurants like the French Laundry, where Grant used to work. One of the greatest restaurants in the history of America, certainly. And I came up with a number that Grant went, there's no way their revenue is that high or they make that much money. That's impossible. And it was really funny because years later, you know, I now work with Chef Keller, and he's a friend all these years later. And I literally pulled that out one day with Grant being there and went like, how close am I on this back in 2005?

Starting point is 01:22:17 And he's like, oh, you're within like 2% or 3%, you know. And Grant was just like – and we're talking about back of the envelope stuff. And so, you know, you ask like where can people start to start a business start on the back of an envelope like one of my favorite exercises is to sit in a restaurant or a small business of some sort and just literally do the back of the envelope that is the kind of calculation my dad called it the two shoebox method put me through college, right? Like money coming in in one shoebox, money going out in the other. Whatever's left is profit, you know. You know, start that basic.

Starting point is 01:22:51 And we did that. And I didn't really think about the – we did well, but we didn't make a ton of money. Alinea cost $2.2 million to build. I put up a little over a quarter of that myself and found investors for the rest, all of whom I knew. And, you know, in the first year we did, you know, we made about $450,000 to $500,000 on four or $5 million in sales. Not a great return, not a terrible return. We then won you know best restaurant in america from gourmet magazine and i was horrified that we won that frankly um i remember grant called me

Starting point is 01:23:32 and said yep i just got a call from ruth reichel and like we had some stated goals of like how would we know if this is a success and one of of the things we wrote down was Ruth Reichel declares it the best restaurant in America. And we wrote that because in 1997, she wrote the most exciting place to eat in America is the French Laundry. And Grant was there and cooked that meal and said that the energy of having someone that he respected so much, because Ruth is just a great writer. She's one of the unimpeachable food critics in the history of America. And having her write that in New York Times propelled that restaurant to its permanent status. I think that can't happen nowadays, honestly, for other reasons. But this is kind of pre-internet,

Starting point is 01:24:18 pre-Yelp, all that. And then all of a sudden we got that and I was like horrified because, you know, one of the goals was completed so early. We would have we wouldn't have our like our lodestar, you know. And so he was like, dear God, can you let me enjoy it for like a minute? To you. Yeah. Yeah. Yeah. He was getting really mad at me. I was like, that's terrible. You know, I mean, I was happy, but I was also like, oh, no. Now what do we do we need to we need to find another artificial construct here to like go after and enough of this i need to find happiness and get this other happiness out of my out of my face

Starting point is 01:24:56 yeah for sure yeah no it's about i really do believe that actually um that it's often the process is is so rewarding that when you get something done, it can be a letdown, you know. And I wanted that process to go. And then unfortunately, six months later, Grant was diagnosed with stage four cancer and given six months to live. And so weirdly, that was the moment where after he was going through treatment, where I started going into the restaurant at night, because remember, I'm not a service professional. I was running the business of the restaurant. I was going in at night and asking really dumb questions again.

Starting point is 01:25:36 And, you know, weirdly, our goal was to keep Alinea open for when he came back. And mind you, he only missed like 12 days, 14 days of service during really intense chemo and radiation. But he was given six months to live. And when people are in that situation and their livelihood is tied to this restaurant, even despite their loyalties, oftentimes they just need to find another job because they're like, hey, in four months, this place is going

Starting point is 01:26:10 to be closed. So it was, and in the midst of that, we decided to do our first book, really to chronicle, you know, his, his, you know, what he had accomplished, because for him, he felt like that would be his legacy. He thought he was going to die. He was told he was going to die. Trying to do that differently and then keeping a dwindling staff motivated, trying to let him know that it would still be there when he got well, all that. I started going, this place is run in strange ways, man. This industry is not run right, you know. And I started asking, like, basic questions. Like, if we have a wait list for 100 people on a Wednesday, why do we do 74 people on a Wednesday, but 86 on a Saturday? And the answer was because our incentives were misaligned. You know, the service industry as a

Starting point is 01:27:13 whole can't run at 100% every single day of the week, unless they're incentivized to do so. And you could go like, well, yeah, but every server, they'll make an extra 100 bucks a night or whatever. But they're kind of going like, look, if every night was Saturday, I'd be dead. It's really hard work, you know? So you need to figure out ways of load balancing that and making every day the same and you end up way ahead. So from a business perspective, that's when my sort of self-education in this industry came forward. And it came forward in a way that I think I was less patient with everything because we were also going through this really difficult emotional time. And so consequently, when I didn't get answers

Starting point is 01:27:59 that made any sense, instead of being diplomatic about it, I would just be like, well, that's stupid. You know, which cut some of the normal social filter off and i'm sure it wasn't a pleasant time to be around anybody but i also think it was accepted within that environment at that time because everyone knew what we were going through and so when we you know years years later when we finally like we're kind of like hey we've got some ideas to build next and the aviary. That's when I kind of went like, well, we're going to do things totally differently here. And anyone who's not on board, even though they work for us, like, if you're not on board all the way in, like, on getting rid of normal reservations and not using telephones and doing all these things, I'm not, you know, we don't have a place for you here. And, man, it really worked.

Starting point is 01:28:48 You know, that was the basis of, you know, I talked to every software company in the industry asking for their APIs, asking to build essentially what's options pricing software on top of reservation systems. And OpenTable told me no, and the POS systems told me no. I called theaters and went like, what ticketing system do you use? And all of those told me no. And so I hired a

Starting point is 01:29:13 single programmer. And he and I, in six weeks, built a really rudimentary booking system. But the first day we turned it on, we sold $562,000 of tickets to a restaurant for the first time ever. Okay, so pause here for a second. I know we're way ahead. No, $562,000 of tickets to a restaurant for the first time ever. Okay, so pause here for a second. I know we're way ahead. No, no. No, this is great. This is great.

Starting point is 01:29:29 So a few things for folks who are not familiar. API, Application Programming Interface, it's how you can effectively link into someone else's software. POS, point of sale, not piece of shit. But it is a piece of shit. Oh, it may also be a piece of shit. What were the design specs that you were looking for? In other words, before you get to the 500,000 plus,

Starting point is 01:29:54 the snap of the fingers, what were you trying to fix or what were you trying to create? So I get a lot of grief for this, for saying this in the industry and in the press. But basically, whenever you make a restaurant reservation, one of the two of you talking is lying to each other. If you think about it, no other industry, form of entertainment, which dining out is a form of entertainment. I know it's sustenance. I know there's so much culture embedded in it and all that. But you could eat at home, right? Um, no other form of entertainment. You just call them up and say, Hey, hold a seat to the bears game or the Cubs game or the opera. And I'll show up around seven 30. And then they tell you, yeah, yeah, we'll have a seat ready for you at seven 30.

Starting point is 01:30:43 And then when you get there, they go, oh, you know what? Go wait over there for 30 or 40 minutes because we're running a little behind tonight. You know, the reason that they're running behind is because they overbooked because about 15 to 18 percent of people just don't show up. So they overbook. They also know that if they tell you that they'll really seat you at nine and you wanted an 815, you'll just go to the restaurant down the street from them that will lie to them. Right? Right. So they do that.

Starting point is 01:31:12 And ultimately, it's just bad all around. It's bad for the restaurant. It's wasteful for food. And it's bad hospitality. Like, and that's like, there are so many pop culture references and entire sitcom, you know, episodes built around someone trying to get into a restaurant, right? It's absurd. It's completely absurd. And, you know, I looked at our no show rate at Alinea, data driven, tracked it.

Starting point is 01:31:40 I looked at our, what we call short seated tables, like the number of tables that were four people, but only two showed up. And the dirty secret there is like, people would go like, well, what do you have available? Well, I have an 830 for four. Okay, we'll take that. And they never intended to bring the other two people. Well, that's just as bad as a two-top, no showing. We only have 74 people in there. And so it's a yield management, or 74 seats, so it's a yield management problem. And so 5% to 8% of our revenue every night was being lost to that transaction. That was a non-transaction, right? And so I wanted to figure out ways to do two things.

Starting point is 01:32:18 One, I wanted to figure out ways to make it transactional because, again, you asked about Professor Thaler. One of the key tenets is there's a little bit of skin in the game, right? When people have a small vested interest in something, in the outcome of something, or even if I gave you a pencil as a gift and then 30 minutes later I want to take it back, you will get so mad even though you didn't care about that pencil. Right. Right? Because you're like, what was that? Yeah. Dude gave me a gift.

Starting point is 01:32:44 Now he's pulling it back you know it's like the expected it's like the expected value of a mug if you ask them how much they would spend to buy the mug versus giving them the mug and saying how much will you accept to sell it you know the differential yes huge so you know that came to me one day because i my my kids wanted to go see a movie at night that I did not want to go see. And I was really, really like I would have easily paid 50 bucks to not go to this movie. Right. Yeah.

Starting point is 01:33:15 And then my wife basically says, hey, well, let's go to that movie. So I go on Fandango. I buy four tickets, 60 bucks, whatever it was. And at like 530 nights, pouring rain and everyone's napping. And they're like, yeah, I don't want to go. And I'm like, get your asses in the car. We're going to the movie, man. Now, I would have easily paid that $60 to not go to the movie,

Starting point is 01:33:37 but once I had the sunk cost of paying for the movie, my psychology totally flipped. And I was like, we're going to this movie that I don't want to go to like and i literally irrationally made everyone go to the movie like which weirdly cost you know i mean from an emotional family standpoint all bad all the way around right and um so i i thought about it and i was like wow what if people what if people put down a small deposit on times when demand exceeds supply like right so saturday night eight o'clock great that's a that's What if people put down a small deposit on times when demand exceeds supply?

Starting point is 01:34:07 So Saturday night, 8 o'clock, great. That's the best seats at the opera house. Let's see if people prepay for that or put down $20 for it. That's fully credited at the end of their meal. It's not a cover charge. I'm not trying to squeeze people on the actual cost of the meal. I'm just trying to go like, yeah, let's see if people make a commitment. And everybody told me, no, no one's going to to do that like this is not the way it works but if you look back historically this is the interesting part again it's about like digging in deep on something if you look

Starting point is 01:34:34 back historically um restaurant reservations started with the telephone and at the time that we were starting to do this the telephone was dying and I didn't know that at the time that we were starting to do this, the telephone was dying. And I didn't know that at the time. You know, that was eight years ago. But I have a computer in my pocket, and if you ring me and I don't know your number, I don't want to talk to you. I don't answer it. I'd much rather receive, like, a little piece of text letting me know what's going on than a phone call. Similarly, like, calling a restaurant is an antiquated thing to do at this point. But long before the telephone, people got room and board. And what room and board

Starting point is 01:35:12 was literally, it was like, you go to an inn, and you get a room for the night. And then do you need food? Okay, well, you get a board of food. That was literally it, And you'd prepay for it. And so, you know, there was hundreds of years of that long before there was a telephone and people called and said, yep, like, you know, I'd like to eat at your restaurant. Sure, we'll let you in. And so as the technology for the telephone has morphed into, you know, what we all have in our pockets now. I just wanted to update that whole transaction. And so I also wanted to acknowledge that Tuesday nights should be cheaper than a Saturday night. So it has to work in both ways. I always thought Uber could have fixed their surge pricing issues by having discounted pricing when there was no demand.

Starting point is 01:36:02 Like just move pricing in two directions. And if you move pricing in two directions, then like that whole argument goes away. Right. Um, and so, so we did that. We, we, we priced out different prices by day of the week and times a day. So 5 PM on Wednesday at Alinea is still cheaper than 8 PM on a Saturday by a lot, by 80 to a hundred dollars a person. Wow. Um, and, and you know what happens? Um, and this is now we have, you know, hundreds of restaurants doing this on our software called talk. Um, what happens is people buy the most expensive seats first and the cheapest seats first, which is exactly what you'd expect actually. Right. Because there's some people

Starting point is 01:36:43 who are price conscious and go like wow this is a really expensive meal but holy cow i don't really care if i eat at five o'clock on a tuesday great like i can save 400 bucks um and then there's some people that go like i only eat at 8 p.m on saturday well okay that's fine pay a little more or they're or they're attracted to the fact that it is the most expensive sure that happens too and then there, there's a whole bunch of tools that over time we built on top of that to sell wine pairings or sell books. You know, we sell 20 Alinea books a day on checkout with the booking process. That's a ton. Cause we're not going to exit through the gift shop at Alinea. It's a Michelin three-star restaurant. So, so like we would subtly have like one book, like near the restrooms that people could peruse, but it didn't say buy the book or anything like that.

Starting point is 01:37:27 So typically we'd sell one or two per night. Now on checkout, when you book Alinea, it says, hey, would you like to buy an Alinea book, personalized? And 20 people a night get it. That is $400,000 in revenue a year. Yeah, that's incredible. It's crazy, right? And it's amazing to me that no one did that beforehand. Because ultimately, people can't buy what they don't see. And people don't want to be upsold inside of a restaurant.

Starting point is 01:37:55 There's nothing worse in my mind than, you know, some places that today's special is today's special and it's real. And you kind of know that. But sometimes it's just the old fish right sunday night yeah right and we all know these things and like i think no restaurant wants to like raise their hand and go yep that's all true like we were aligned to our customers and and we're not going to really see you at 8 15 and so i think when i said that like you can look back through some articles um i remember that there's an article, I think it was in GQ, that they interviewed like a grizzled veteran, you know, and he didn't use his name

Starting point is 01:38:34 and said, you know, overbook and a bar to wait in has always worked for me. And I was just like, how does that not sound like terrible hospitality to everyone reading that? Yeah, for sure. Yeah, there's so many systems that have similar overbooking load balancing issues, right? You look at airlines, you look at hospitality. My dentist. Yeah? I have a great dentist. They only do it via phone call or email

Starting point is 01:39:06 and so i have to play a guessing game it's like going into a clothing store and going like yeah i'm looking for a blue v-neck cashmere sweater like nah don't have one guess again it's like put this shit on display man like just tell me what day you could clean my teeth show me and i'll just go online and hit the button. When you then debuted the ticketing option, if I'm labeling it properly, how did you prime the pump for that? Did you need to prime the pump to have this what seems like certainly a windfall well we did yeah we did a a uh a video where you

Starting point is 01:39:55 know next restaurant was about a restaurant that's always new essentially like what's what's one of the big problems uh of the restaurant industry well when you open a new restaurant, doesn't matter what it is, people are going to show up for like five or six months. And then after that, you know, you got to struggle to like get regulars and, you know, like find new audiences and all that. But people like the new quote unquote, right? The other problem is, is that our own staff and chefs were the kind of people who I said to Grant one time, he cooked this amazing French dish for me at Alinea right in the middle of his sickness because I had driven down from Michigan. I've never eaten before or after in the Alinea kitchen, but he whipped up this little French dish for me of duck. And I was like, man, let's open a French restaurant someday.

Starting point is 01:40:39 And he went like, we'll get bored after six months. And then I was at one of our chef's homes on a day off Tuesday. And he loves Thai food. And he made this amazing Thai meal. Amazing. And I was like, wow. I had no idea these guys were so versatile. And then it made sense. Hey, these are passionate, amazingly talented people.

Starting point is 01:41:00 And it kind of dawned on me, let's just change the restaurant every four months. Let's do and then we dwelled on that for like a year thinking like it was kind of impossible um to do and then you know grant said i said well like let's start with a french menu he's like well what does that mean like there's southern france there's loire valley there's france that's the nouvelle cuisine and there's france from like you know 100 years ago totally different and i was like yep paris 1906 i don't need to explain to you what that is you'd want to eat that if i just said like if someone said hey new restaurant opening what's the menu it's paris 1906 i'd go like cool like i want to do a little time travel and see what that was like and so as soon as we had like a city in a time,

Starting point is 01:41:50 we instantly knew that was the idea that kept us up at night, you know, where we went like, wow, look at all these different places we can travel. And what does that restaurant look like? And how do you create a kitchen versatile enough to make all these different cuisines? And how do you make it not feel like Disneyland, where one time you have a theme of Paris, and the next time you have a theme of Japan. So you have to go with like an austere minimalism, you know. Is there a particular reason why you chose the year 1906? You know, doing some research, and I may get the exact date wrong, because this is eight years ago I did the research, but I believe the Seine flooded in 1908 um it somewhere around there um and so um escoffier um like the father of french cuisine um was at the ritz then and that was kind of like the height of that era of cuisine

Starting point is 01:42:36 and then after the sun flooded that's where you got sort of your brasseries and bistros because they had to kind of go to a more casual it opened up for more people it took the price point down it made it more approachable and it wiped out dozens of these fancy restaurants and so like rank got cheap and all of a sudden like hey like we're gonna get this new style of restaurant that's roughly as i recall it's going to listen to this and tell me I'm all wrong. But that's where we landed because we could do this Escoffier menu. And, boy, we argued about that, too. Like, they didn't have blenders then. So, like, electric blenders.

Starting point is 01:43:14 So, I mean, we did like a preview. So you wanted to mimic the production? Well, I did. Grant did not. So we were, I remember, we invited the press to a practice dinner. Grant's like, hey pal, you don't have to make the food. Well, partly that, but partly he was like, should we make it intentionally worse than we can?

Starting point is 01:43:36 Yeah. Because the recipes were really vague. They didn't even call for salt. So in the middle of this press dinner where we had like the new york times there we had all sorts of these people there which we i'll never do again right that was just a genuine error like and like like we were still arguing out conceptually what this thing would be and then we served dinner and and we were like openly like he'd come out of the kitchen and we would openly argue about it you know and and this is this is at the press dinner yeah yeah yeah and and i remember he brought the soup out and it was

Starting point is 01:44:12 like you know he was like i was like oh they they must have used like the actual blenders right like modern blenders because it was like the mouthfeel was like perfect right and so i was like oh you you use the blenders. And he was like, the recipe didn't call for salt either, did it? But should I have not used that and had it taste like shit? And then I was like, well, maybe you don't know that they didn't have refrigeration then either. And they packed the vegetables in salt as a desiccant. And so they were almost all pre-salted by the time they get to Paris.

Starting point is 01:44:43 And that was it. People were just like these guys don't like each other at all but but that was that was that's our method like that's what we did you know and um i mean to the day we opened we we had those those arguments um and then you know in terms of the software like man like i didn't sleep for a week um we set it up on rack space it didn't work right. I had never done anything like that before. You know, it was like no one would help.

Starting point is 01:45:11 I think like, you know, nobody would help. When you say nobody would help, you mean competitors, potential, I don't know. Potential allies, potential like potential software companies. I got it. Why wouldn't they help i don't i you know like in the case of open table they had a monopoly right so why that makes sense to me that makes sense um in terms of everyone else i think they just didn't get it um but even people within my own company thought this was a fool's errand you know like grant for sure like he will fully admit this

Starting point is 01:45:44 now thought it was a terrible idea. Why did he think it was a terrible idea? Because it's not hospitable. It's not hospitality. It's not, it's not, it's not, it's low touch, not high touch. Correct. And, and, and hugely the case where, you know, all of a sudden the price is different every day. Like, are people going to get that? And I just kept looking to other industries and I'm like, no one has a problem with it when they go to a baseball game they're not sitting on the you know above the dugout and then like the guy who's in the third deck back row looks down

Starting point is 01:46:13 and go oh that guy like he totally stole that ticket from me like two different price points you know yeah and i just feel like people inherently get that without having to explain it to them how and if i may how far in advance of the opening were you were you hoping to launch the software and when did you end up launching the software yeah um i launched it about seven hours before the first dinner holy shit um i hope to have done it four to five weeks ahead of that. It was literally a one-man operation plus me, like one programmer and me. When we launched it, Rackspace, this is 2010. I'm not saying anything bad about Rackspace. I probably set it up wrong.

Starting point is 01:46:58 2010, it's supposed to auto-load and self propagate. And it neither happened. I was expecting we had 17,000 people on our email list that signed up on the website to like be notified when when the bookings went on sale. And I was expecting maybe, you know, 700 show up like should be fine. And something like eight or 9000 showed up and everyone just kept hitting the refresh key. And here's another fatal error of stupidity, and this is not the way our software is built now because we have professionals here. But basically my admin login was on the very same server

Starting point is 01:47:35 as everybody's public access. Oh, God. So I couldn't even go into configure and up. So the good news on this is that I couldn't answer like hundreds of angry emails all at once. So I created a Facebook group for the business, which in 2010, not very many people did. And so if you go back and scroll all the way down to the beginning of that, you'll see me going like, hey, if everyone could please stop refreshing, I can sort this out. And what was really cool is that people felt part of something. They felt like, wow, holy shit, this guy is actually doing this himself. We're part of this experiment. And we're on the inside of it. I got

Starting point is 01:48:19 a lot of empathy from the customers, even though they were the ones that were unable to get what they wanted. And then when it finally started working, I mean, I literally not showered in five days. I had pizza boxes laying around. It looked like a bad movie startup thing. I had a beard. I was just strung out manic. And I remember I called Grant and it was opening day and he said, how many should I prep for? And I said, prep for full, because if not, we'll turn on the phones. What I didn't tell him was that I didn't order the phones, because I didn't want to have a fail-safe. You'd burn the ships. Yeah, I just wanted to make sure I forced myself to work.

Starting point is 01:48:57 So we had no phone line. And when it started working, I would double-click. One of the functions was I could double-click on a table, and if it was yellow, it was held. The public couldn't see it. I could make it available by double-clicking it. It would turn green. And then when it was sold, it would turn red. But the first time I did that to let more inventory out and clearly things were working, it turned red so fast, I thought it was broken. And so then I went into the credit card processing and saw, oh my gosh, someone bought that that fast. And I

Starting point is 01:49:32 called Grant. I said, dude, you got to come to my house. And he was like, we're opening a restaurant in like six hours. What's going on? I said, as the guy who helped save your life, get in a fucking taxi and come over here because I need to show you something. And he looked at me and kind of went like, what is wrong with you? Right. And and I took him upstairs to my office and I said, I explained what I just to him. I just explained to you. And I said, click on one of those, make it available. And he said, which one? I go, anyone in the next month. And he clicked like three weeks out at 9 30 and it instantly turned red and in another window i had the credit card thing up and i go look mr jones bought that and he went really and i'm like yep there are you know 4 000 people waiting for you

Starting point is 01:50:18 to do that right now and that was the moment at which i was basically like, this is the best thing I've ever built. Because it was functionally different than any way that anybody was doing this. It wasn't novel. It was just applied in a novel way. And so, you know, what was interesting is that, of course, the software itself sucked. But as a proof of concept, it was awesome. Quick question on that, if you're comfortable answering. How much money had you put into developing the software at that point?

Starting point is 01:50:57 Yeah. Roughly? I'm going to say $115,000. Yeah. Roughly. So in your mind, were you completely confident it would work? And it doesn't have to be A or B. There could be C, D, E, F.

Starting point is 01:51:10 Or were you like, you know what? For $115,000 or whatever it might be, even if you budgeted for less and it overran, even if there is a 20% chance that this works is it is worth risking the hours and time because it will so completely transform what we're doing. And if it fucking fails, who cares? Correct. Yeah.

Starting point is 01:51:32 The latter one. Yeah. Again, it's about the asymmetric risk, right? And it was also about this thing that as I dug into how Alinea ran, there's like things that you can fix and control and there's things you can't. Right.

Starting point is 01:51:46 And this was the one that, you know, I would answer phones at Alinea and I would, it was like being a therapist. People would go like, I would like to, you know, make a reservation on my anniversary,

Starting point is 01:51:58 you know, seven weeks from now on a Thursday. And you're like, I'm really sorry, sir. It's totally full. And a hundred percent of time they thought you were lying to them. And, and, and so consequently're like, I'm really sorry, sir. It's totally full. And a hundred percent of time, they thought you were lying to them. And, and, and so consequently, like I realized that we were saying no to people more than we were saying yes. And that even when we said no in a nice way and

Starting point is 01:52:17 took 10 minutes to do so, um, people thought that we were lying or that they weren't important to us or any of those things. And so I felt that transparency was actually more important than the actual money and the actual yield management. I felt like allowing people to see the entirety of the inventory was the most important thing. And I had this – same, same thing with like, you know, the trading markets, they've moved to more and more and more transparency, more and more speed. This is true across every industry. And I just felt like, wow, this industry I found myself in was so backwards. And so I just wanted to make the whole thing more transparent. And so even if it didn't go beyond my own restaurants, I was totally fine with that. In fact, I didn't do anything with it for four years,

Starting point is 01:53:12 and I didn't really intend on making it a software product. I intended on fixing my own problems, and I think often that's where good ideas come from. Oh, super often, yeah, the scratching of your own itch at least you know you have a market of one gas guaranteed market of one and i also want to point out we were talking about asymmetric risk earlier and you're like well i want to stand to make three to four x what i stand to lose and if you run the math and i'm sure i'm missing a lot of subtleties here but when you said we booked 500 next thousand dollars and it cost 115, like we're getting very much within the ballpark of that. But I didn't even like, I mean, well, I mean, since then it's like, we've taken our margins at our restaurants from 10 to 12% to, you know, at times in good months, 20 to 25%.

Starting point is 01:54:00 In an industry that over the last five years, if you read, I give a talk called Tuesday is not Saturday and seven things you already know, but are doing nothing about. It's a talk that I give to the restaurant industry. And, you know, one of the things that, that I point out in there is that, you know, there's so many obvious things that you could be doing to improve your hospitality, to improve your booking process, to get rid of food waste. But people tend to just kind of move along because it's a really chaotic environment. It's hard to make change in it because every day is game day. Like you wake up every day and a hundred people are going to come through the door. And if your fishmonger doesn't show up, well, you need to figure out what to do with that, you know? And so it's, it's not really about

Starting point is 01:54:49 the return on that one investment at that one moment. It's more like, you know, a thousand small improvements over time. And, you know, if I look back at that system that I built then compared to what we have now, um, you know, it's a minuscule part of what it turned into. Um, but it was the seed of an idea, which is more important, which is, Hey, let's, let's shake things up. And then I got a great CFO, um, who was at Bain consulting and he, he came on to like help manage the building of the project of Next. And when he started wanting to build out a business team, I was like, great, run with it. And so we've built out food cost analysis that uses Marimekko charts. It's totally different because it's visual and you give that to the chef.

Starting point is 01:55:37 It uses what charts? Ah, Marimekko. If you don't know Marimekko, if you get nothing out of this, one of the greatest visualizations in charts that you could do in Excel or whatever, hard to do vocally. But imagine a square where each of your x-axis is the percentage of, let's say, food costs. And then each square within there is like, I't know meat or produce but the whole of the square is 100 the y-axis is 100 of one metric and the x-axis is 100 of another so you could kind of look at any given square and see how much that impacts the whole it becomes like a big lego

Starting point is 01:56:20 building with different colors um if you give a busy chef 400 receipts and say, hey, every Friday, look through all these and figure out what we're spending too much on. Or worse, hey, your food costs last month were 36%. I need them at 32%. You can't take percentages to the bank. Let's talk about dollars. Let's see where we can save some dollars. Or the revenue could have just gone down that month for whatever reason. It's August in New York. So it's not really a good way to look at it. But you give this person this chart, this Marimekko.

Starting point is 01:56:56 No, Marimekko. It's a guy's name. Yeah, it's M-A-R-I-M-E-K-K-O chart. Is that right? Again, not good at spelling, but sure. I think so. There is a Google result, which is how to make a Marimekko chart in Excel. So I right? Again, not good. I think so. I think so. There is a Google result, which is how to make a Marimekko chart in Excel. So I'm guessing that's probably it. There's some YouTube videos as well. So I'll, I'll put this in the show notes for people, man. I gotta tell you,

Starting point is 01:57:15 like from a utility perspective, you show that to a person, you explain it visually. Like when you see it, it makes much more sense. And they instantly get it. And they look at it and they're like, oh, there's no way I spent that much on facial asthma. And this can be used for things outside. Everything. Yeah. It's not just food, not just restaurants. Oh, no, no, no. It's just a great visualization of utility. And consultants love it. And I got to tell you, I don't love consultants in general, but if I've learned anything from, from the best consultant that I've ever hired, like who, who is now my partner and CFO, um, he, you know, he came up with this. And as soon as I saw it,

Starting point is 01:57:57 I was like, how did this not enter my life until my 40th year? This makes no sense. You know? Um, it's just incredibly useful. But my point is, is that we, we kind of went through everything in the restaurant and went like, well, what are the biggest spending areas that we can like analyze? And, um, it's true in any endeavor, uh, that you're doing, you, you know, there's no point looking at the dimes. If you've got something that costs a thousand dollars, start there. So, um, you know, and that so um you know and that's you know getting into like our thoughts on our publicity our pr like we don't have a professional pr person and haven't in 14 and a half years um we we don't spend money on any promotions other than social media. And then with the social media, we track all of that.

Starting point is 01:58:48 We can see what our ROI is on a boosted post. We can see what our ROI is if we advertise on your podcast. That's why these mediums are working is because they're measurable. You know, I was looking up just as you were chatting and as I was also looking for Marimekko, a quote that I think applies, and you may certainly feel free to disagree, but applies very well to a lot of the breakthroughs that you have experienced and also helped to catalyze in a lot of what you've done. And it's a quote from Charlie Munger, who, for those who don't know,

Starting point is 01:59:33 you should definitely take a look at Poor Charlie's Almanac. He's the right hand, or I shouldn't even say that. He is the investing partner of Warren Buffett and a fascinating, fascinating human being. But one of the quotes of his that I really return to a lot when I think I might be outsmarting myself in some way, or in general, as a reminder, is, quote, it is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid instead of trying to be very intelligent.

Starting point is 02:00:13 Yeah, I mean, because you, you, as you noted earlier, you have these practices that are being implemented by otherwise, in many cases, smart people who've just not taken the time to ask, why are we doing this? Why does this exist as a thing? Why does, like you pointed out, it's so obvious once you reframe it, like you walk into a clothing store and they're like, okay, what are you looking for? Nope, sorry, guess again. It's like, that's fucking ridiculous, right? And yet, that's exactly the way it works in many other places. Yeah, yeah. And that's, you know, once you start down that road of thinking that way, it will drive you a little nutty because you start like you can't do every business, you know. And, you know, there's a couple of things that I've got in my back pocket that I'm kind of like, you know, one day I'm going to arbitrage truffles because it's like there's an opaque market that's absurd. Like, you know,

Starting point is 02:01:06 it's like, here's an example. I'm going to give somebody out there, call me up because this is a real business idea. Um, and I've been wanting to do it for years, but you know, black and white truffles, not the kind, not the chocolate ones, but the kind that the dogs dig up in France and Italy, um, are as expensive as the most expensive drugs in the world um you order them as if it were an illegal drug of course they're perfectly legal but you call up a truffle dealer um and you go like you know what do they cost well they're you know 650 a pound right now for black truffles 1600 for white you try to talk them down a little bit you make sure that you get the best quality because hey we're alinea and we will ship you back the stuff we don't like and all that.

Starting point is 02:01:47 And then in an unmarked box stacked with newspaper will come $20,000 of truffles. Good for like a week, by the way. This is not like a big supply. And it is completely opaque as a market. There is no mycologist touching these. There are knockoffs from – well, not knockoffs. There's different species and quality from Australia, from Tennessee, from China, et cetera, et cetera, that they cut into it. Sounds familiar.

Starting point is 02:02:22 And, like, it was my – like, we spend a lot of money on truffles every year. And try to figure out what the U.S. market in the fall truffle season is worth. You can't. It's exactly like publishing. You can't find numbers. And so whenever I see something like that, I'm'm like someone's guarding their their golden goose you know right whenever whenever it's a black box you're like i feel like i am not on the best side of this trade that's right that's right and and that's that's what i did um you know i did um a

Starting point is 02:02:59 closed-end seller network between the merc and the amex to arbitrage ETFs to get rid of the phone brokers in the middle. That took me like a year and a half to get through the Merck and Amex powers that be. Read like most of the CFTC. So when they would tell me it's not like in the rules or not legal or whatever. What is the CFTC Chicago Trade something commission? No, no, no. This is the Federal Commodities Trading Commission. I see. Okay.

Starting point is 02:03:27 It's like the SEC, but for commodities. I got you. And, you know, again, sit down and actually read that someday. Like, what's amazing is that the experts never – it's like the members of Congress who don't read the bill. And then if you ask them detailed instructions on it, they're like, oh, yeah, I don't really know. But the general tenor is this or that. The people who were governing the exchanges had never read the rules. So they would just quote to me like, oh, it's against the rules. I'd be like, well, here are the seven volumes. Please show me where. If not, I'm going to do it. Like truffles, same thing. The booking for the restaurants, same thing. Open Table had a monopoly.

Starting point is 02:04:07 They wouldn't tell you who your customers were. They would sell your customers. They still do to other restaurants. If you're full one night, they'll just send you down the street to a Japanese restaurant down the street. They don't care. So I wanted to get rid of all that, so I built the software for that. Truffles, I will someday build a truffle exchange. So question for you. This is something also for,

Starting point is 02:04:27 this is maybe just turning this into a therapy session slash coaching session for myself, but I get attracted like a moth to the flame to puzzles. Oh, I've got a puzzle for you. No, no, no. I don't need any more puzzles. I need no more puzzles. But there are many,

Starting point is 02:04:45 many black boxes out there, right? You have truffles. And like you said, it's like, all right, what's the market size of the truffle exchange at X point in time? Don't know, right? Although you guys as one establishment or multiple establishments buy a lot. There might be a hundred different black boxes like that, that you run into. How do you choose the black boxes worth trying to shine light on like a detective? Because it's going to consume energy. It's going to consume time. How do you pick and choose which to go after? Yeah, it's like the manic test, right?

Starting point is 02:05:26 It's like the one that bothers me the most. Like I kind of start doing, you know? And then it's iterative from there. Like sometimes you find yourself in a construction of your own doing that was accidental. Like all of a sudden, you know, you kind of opened your mouth and said something like the truffle thing. And all of a sudden, like, well, okay, I guess we're building the truffle exchange. You know, I feel like, I feel like the boring company is like that for Musk. Like, like, like he, he opened his mouth and be like, yeah, just big, big, you know, dig big

Starting point is 02:05:58 tunnels. And he's got enough credibility now where some engineers went like, yeah, we could build, you know, we could dig tunnels that are seismically fine and like hey you work for spacex okay like let's see if you could build dig a tunnel i don't think that was like a business plan you know right um and and he just has a lot of credibility um you know at this point um i think that to a certain extent like a lot of people have a lot of ideas they They just don't dig down that rabbit hole. I do some as a hobby. I do some where I have someone that I like within our company and say,

Starting point is 02:06:36 well, if you really wanted to be independent and do something cool, here's a project. Learn more about this and start researching it. You know, we have, you know, 300 and some employees on the restaurant side and about 50 on talk. Many of them are incredibly hardworking and intelligent. And when someone says, hey, I want to learn how to be more entrepreneurial, I take one of my black boxes out and say, well, let's see if that's true. Because this is going to take you six months of independent work without any guidance, and you're going to get tired of it really fast. Or you're going to take you six months of independent work without any guidance and you're going to get tired of it really fast or you're going to come back to me and say hey you know what like i can't figure out the total value of the truffle market in the united states and i'm

Starting point is 02:07:16 like yeah no shit that's why i asked you to do it now when you give them an assignment like this you know what boss i really want to be an entrepreneur you're like congratulations i'm now giving you a project and a it's on your time and you're not getting paid for it or do you know no it's not oh no no i i never never never take every single intern that works at our restaurants for a minute is paid gotcha so even yeah so i don't so they do get paid for the black box time oh yeah of course, of course. Yeah, yeah. I think one of the things that I really dislike, actually, are industries where they say, hey, you're in college or whatever, be an intern. And then your parents say, yeah, that's a great opportunity for you to learn something and all that. And it's like, well, if you're not getting paid, you're not being valued, frankly. And for me, we pay everybody.

Starting point is 02:08:07 Like I don't, nobody who's working here, if they're, you know, I do expect that, you know, salaried people are going to work more than just the time here. And I think that people who are passionately curious will be given a problem like that, and will come up with interesting solutions to finding out what the answer may be. And that's enough, you know? So I want to add some sort of commentary on the question that I asked, which is, I think it's incredible that you do pay them for that independent research, which is also acting as entrepreneurial training slash filtering for them. But I wouldn't have judged you harshly at all if you said, no, that's on their own time. And the reason I say that is that if you are going to be investigating black boxes as an entrepreneur,

Starting point is 02:08:56 there are going to be periods of time where you are doing it in the evenings, you're doing it on the weekends, you are doing it without a clear road to immediate cash flow, right? So I wouldn't have judged you if you said, you know what, I am paying them full time for their normal job. But if they want to tackle one of these black boxes, that's considered extracurricular time. So I wouldn't have judged you harshly, if you had responded in the in the negative on that. Yeah, I mean, I guess to back up a little bit, when there are people who I don't know who do not work for a company

Starting point is 02:09:30 and they call me up and say, hey, I've got this idea for XYZ or whatever, and it's intriguing enough, I will pose some more difficult questions, but they're not working for me. You know what I mean? Like there's a guy who brought me a food product that, you know, about a year ago and it was interesting, but not

Starting point is 02:09:50 super compelling. And I said, Hey, if you did these five things, it would be a lot more compelling for me to be involved and to help with it and all that. And yesterday I got a box in the mail and he had done not only the five things I said, but said, hey, when I started doing those, these seven other things popped up. Here's where the product is. Here's the people we signed. Here's the airline we just signed to carry the product. I would love to have you still involved, even though we're so much farther down the road than I thought I'd be a year later. That's super cool.

Starting point is 02:10:21 I didn't pay that guy, obviously, but there's a person who's truly entrepreneurial, right. And did this on his own time. Um, but if they're working here, if they work for the linear group, if they work for talk, like for sure there, you know, you could take time during your day, like doing your normal business. That's a project that we're working on. And, um, you know, we, we also try not to have such harshly defined roles, not within the restaurant. Like, look, if you're a server, if you're a captain, if you're a line cook, you're probably not working on my truffle project. I mean, realistically, that's not – but on the business side, we certainly have people who work in roles as like a lawyer or an analyst or something like that who want to get involved with our publishing project or who want to get involved with the Truffle Project or whatever it may be. And I'm happy to pull them in and try to include them. And like you said, you used a

Starting point is 02:11:20 word as an entrepreneurial filter. I would say 95% of the time people filter themselves out. Right. Yeah, I agree with that. I mean, they're going to self-select or self-select out. Yeah. Are there any particular books or resources that you've found useful on hiring or managing? God, if you found one, let me know. No, hiring is so hard. I think it's the hardest of all things to do. And I think my style of interviewing people is totally different than it was 20 years ago. We used the word self-selecting just a moment ago, and it's exactly what I do. I kind of bring people in. I let them know what I'm

Starting point is 02:12:06 about, what the company is about. They've probably already been interviewed by other people before they get to me. And so at that point, I let them know like what are the upsides and downsides of working here, you know, and I kind of let them know what the expectations are. And I tell them like people self-select into a job and you don't want to come here if you're going to fail because that would be terrible. And I don't want you to come here and fail because that would be a waste of my time and resources

Starting point is 02:12:35 and would also feel awful. It's never good to let go of someone. It feels terrible. So let's see if you are self-selecting in. What do you want to know? I'll be completely transparent about what's good, what's bad, what's good about working for me personally. The fact that maybe you'll never see me again. It's like a big enough organization where there are definitely people working here who I don't know at all.

Starting point is 02:13:02 But people tend to join organizations where they want to work. And so I, I try to make that process. I try to make them be able to say no easier than they can say yes. What would be some examples of how you do that? You know, I, I kind of judge the person by what their pain points are. And so if someone says like – one of the things I like to ask, which it kind of resonates probably with you, is I say, hey, what are the last five books you read? And I got to tell you, that's a really hard question to, because even if you're a voracious reader, it's really like, you remember like a book from two years ago, but you can't remember the one you read two months ago. Sometimes, at least I can't, you know? And so that is a great filter

Starting point is 02:13:54 on people because a couple of things will happen. One, the person who's a voracious reader will go like, Oh my God, I swear to God, I read like 20 books this year. Um, let's see. And they will really start going, Oh, I read one like three months ago. That was this. And it was about that. And you could tell that they're intellectually curious and and read a lot. You'll also get a person who goes, look, I haven't read a book in 20 years, but every night I go home and I do woodworking. And that's my outlet. Like that's where I focus. That's my Zen moment. And that's a valid answer to that question, too. You don't have to be a reader.

Starting point is 02:14:28 Some people will just lie through their teeth. And they'll answer what they think is the smart answer to that question. And I don't want that person there. I read War and Peace, and then I went to the Problems of Philosophy. Yes, yes, yes. And then the 4-Hour Workweek. Definitely not the right answer. Right.

Starting point is 02:14:48 So there's that. And I ask that kind of question. But then things like, do you enjoy writing? One of my things is if someone doesn't like to write, when people ask what I do for a living, I say, I'm a writer. And they go, oh, you've written a couple books. And I go, no, no, no. I write about 400 emails a day. And that skill is hugely important right now. If someone doesn't like to write, they're not gonna want to work for me. Because when, when they send out an email, and I'm CC done it, and it isn't a well thought out little thing, the answer coming back is like, Hey, here's four ways to improve

Starting point is 02:15:26 this. Um, and at some point it'll be like, really, you, you did that same mistake again. Like it comes off kind of harsh in email, you know? Um, and so if you're the kind of person that doesn't take feedback well, or doesn't want to learn, like i don't i i'm lacking patience for that at this point in my life um and i let them know that and some people like look at you and just go like yeah dude i don't want to work there like more than i would think which is great yeah simplifies matters yeah and it's not it's not it's done with a smile you know i'm not like trying to like terrorize people when they come in an interview. And then there's some people that go, awesome, that's exactly what I want.

Starting point is 02:16:17 And we have everything from double PhD engineers to people who've never attended a university for a minute. But they've self-selected into an organization that people ask a lot of questions. I love that I can be in a room and come up with an idea, and everyone there will just be like, well, that's a great idea. There's no way we're going to be able to do that in the next six months because that's not in our capacity at our size right now. I think a question on a lot of people's minds and a pain point for most people listening will be email. So you seem to be at least confident in your treatment of email. 400 is a lot of email. Do you have any particular commandments, do's, do nots, times you check, things you check first, any types of systems or approaches that allow you to maintain a degree of sanity with the amount of email that you must receive? You're going to hate this answer.

Starting point is 02:17:17 I am terrible at it. It used to be not so long ago that I personally replied to absolutely every single email that came in myself. And I used to have an auto sign that basically was like, if I don't reply to you within five minutes, I'm dead or asleep. And it's the opposite of everything that you stand for. I know that. It's like I was listening to Jason Fried. So Jason Fried's a friend. I was listening to his podcast with you. And I don't get it at all. nothing more than, um, you know, to rework or to not work, um, you know, you know, work four day

Starting point is 02:18:07 weeks or to have six week projects and all of the stuff that he espouses. Um, he's a friend, he's an investor in, in one of my businesses. Um, but man, I don't, that's not how I function at all. Um, and I weirdly think that he misses cause and effect a little bit. Like he has a very successful company and that's the cause that allows the effect, which is the ability to manage your time really well. I live really paranoid. I'm more comfortable that way. And also, I kind of feel like a weird moral responsibility to reply to the people who've taken their time out of their day to write us a note, you know, even if it's not like critical business for me. And one of the things I did for about 10 years

Starting point is 02:18:51 that I loved doing when we first started Alinea is that I would have Google Alerts set up and I would find some blog, you know, that only like some woman and her mother read, you know, and I would reply personally, like say, wow, thank you for the great write up of Linnea. And there'd be kind of mind blown that I found it. And, you know, all that. I treated email that way for a long period of time. Unfortunately, now, I can't quite do that. So I do have a bunch of filters and whatnot. But I didn't even set them up. My business partner, Brian Fitzpatrick, who used to be the head of Google Chicago, and he runs the engineering team. He's the CTO of Talk.

Starting point is 02:19:28 He kind of said, like, dude, you're slipping, man. Like, you know, you need to create some filters and get some stuff that's directly to you. So he went into my Gmail accounts and kind of forced the issue for me. So now I can't quite do that. I do wake up in the morning and look at our bazillion social media messages and whatnot, kind of pick a random one and just answer it. I want to be involved in knowing what our customers are asking, what they're doing, what they're saying, what they're replying. Anything that's a complaint actually gets brought directly via email to a complaint tracker that me and Grant see. And so luckily, there aren't that many of those. But anytime you serve five or six thousand people a week,

Starting point is 02:20:12 you're going to get, you know, some something going wrong. But man, I'm terrible at it, honestly. And I've tried. I will tell you a funny thing is that when I go away on vacation, I do try to concoct a pretty funny – I basically say like, look, I'm going to be in a mountain or on a boat or whatever, and I'm not going to be able to reply. And so I would make these elaborate stories up, almost as like a fun piece of art project as to why i couldn't do it and so one year um i i every year every time i went away i basically said like i'm going to visit a panda that i adopted back to chicago and it ended the year around christmas time when i went on break with a with a with a picture of a baby panda and and a really kind of mediocre photoshop job of me standing there and and and the chicago tribune called me up like three days later going you know is it going to the lincoln park zoo like and i was like no dear god it's not and the following there is no panda like that's

Starting point is 02:21:17 what i wrote back though that was my entire reply to that and then the following year i said like um i like to talk as you might be able to tell. And so everyone who knows me knows that, like, I can just go on and on, right? And so I said I was going to a combination of a tantric sex retreat and silence retreat for eight days to explore my both inner and outer self. And, you know, some elaborate story. This is your out-of-office reply reply that's my out of office reply and and i mean and you know anybody would get that right and so i thought that was really funny and then about two years later i bumped into um some guy who worked for a very big corporation and they wanted to do um some work with with the only group, and it was kind of a consulting project, very lucrative.

Starting point is 02:22:06 And he was looking at me really funny, you know? And I said, like, what's up? And he said, well, you know, I really wish we had worked together, but then you went to that sex retreat, and I just couldn't get it past everybody. And I was just like, I was looking at him going like, what are you talking about? And then I remembered like four years earlier, my out of office reply. And I told him like that it was kind of a joke, like the panda. And he did not find any humor in it.

Starting point is 02:22:37 And I did. I thought it was hilarious. Even though we lost the business, I thought it was really funny. So if you ever get a really unusual out of office reply from me, it's fiction, probably. I love that. I mean, if you're serious all the time, you're never going to get the actual serious work done. You're going to burn out before that ever happens. I also want to underscore one thing. And then I want to ask you about a black box that you and I have talked about quite a bit, which is publishing. The fact that you pick a message to reply to, even if it's one, is really important. And I've

Starting point is 02:23:11 noticed this certainly with the audience that I have, listeners, readers, etc. It is not physically possible for me to reply to everyone. It would also be anathema to everything that I'm espousing in many of the books. But I do want to demonstrate that I am listening. And I think that it goes a really long way, even if you do not personally reply to people, if you are able to prove that you're paying attention. And that seems to resolve a lot, or at least act as a salve for people out there who very seldom feel heard, which does not always necessitate a response. So I just wanted to point out that it might seem like a drop in the ocean, but it actually has much more further reaching implications when you, when you do it, what, what you were describing. Yeah. I, I feel like, um, it's genuine. First of all, I'm always curious,

Starting point is 02:24:10 like what, what, what are people writing about, um, to the restaurants? What are they writing about to me? Um, my LinkedIn profile, basically, like I don't really read LinkedIn at all. I keep it. Uh, I think it's important to have it. Um, but I don't ever read the messages on there. But in my bio, it basically says, if you can find my email address, I will incite this. I will reply to you. And so that gets rid of all of the marketing crap that comes in. But every now and then, I get a subject line to the email address that's on there that says basically like, you know,

Starting point is 02:24:45 hey, via your LinkedIn bio, and I'll read that and reply. And it just shows me that like, hey, there's an actual human on the other line. It's not just a marketing thing. And be like, they really, really do have something that they want to talk about. And so, you know, it's like little things like that are kind of puzzle filters, I guess, that I call them, like where I just create like that are kind of puzzle filters, I guess, that I call them. Like where I just create like a little bit of a barrier. And if you're really into it and you really want to talk to me, you can pretty much find me pretty easily. I'm not that hidden.

Starting point is 02:25:17 Yeah, and the detail is really important here. The mini hurdle. I have a friend. I'm not going to mention my name because he'll get deluged. But he is a very, very successful author and journalist. And when he is hiring for different positions, part-time or full-time, at the bottom of the job description on a job site or wherever it might be, in small print at the very bottom, it will say, do not send a message on this platform. Do not send an email, even though email addresses have been given earlier, call this number and leave a

Starting point is 02:25:51 voicemail answering the following things. And automatically he takes the pool of a thousand people who are going to do the wrong thing and finds the 10 people who are actually paying attention. Yep. A hundred percent. So publishing, what is, we didn't really is we didn't really we didn't really talk much about it but can you give a little bit just a tiny bit of background on the aviary and then some of your uh related publishing investigations which i think is is not i think is not a miss not an inappropriate word, if you could give people a little bit of context. Yeah, I mean, I'm going to back up before the aviary just a little bit and just go like, you know, for a chef, doing a cookbook is something that they dream about if they're a serious chef from the time they're 15. You know, just like if you're a basketball player,

Starting point is 02:26:43 you want to make the NBA or, you know, if you're a basketball player, you want to make the NBA, or if you're a runner, you want to be in the Olympics or whatever. To Grant, to a bunch of chefs, having their own ideas in a physical, beautiful cookbook is kind of a holy grail for them. It's very sacred. And what was interesting is that

Starting point is 02:27:04 just before Grant was sick, we started getting a lot of publishing offers. And the natural inclination was to go to what he knew, which was Artisan Press, which published the French Laundry book, which is one of the best-selling high-end cookbooks ever. And it's certainly beautiful. It was very revolutionary at its time. I think it was published in about 98, 99, something like that. And the typical publishing deal kind of came into us, which was great that they were coming in. And it was $250,000 to $300,000. And they would basically say, well, out of that, you're going to pay for the designer and the photographer, and you need a 30-day photo shoot, and here are the guidelines for

Starting point is 02:27:53 how many photos you want in the book to keep costs down and this and that. And I kind of looked at all of that, and all the offers came in within about 10% of each other, which immediately, the hair on the back of my neck, like the spidey sense, the spidey sense starts telling me that something back there is pricing this in an unusual way. And then I started going like, oh, this is actually like the music industry. Very much so. music industry very much because i knew i knew people in in bands that would get signed to a record label back in the day and they would get a quarter million dollar advance you know shit that's seems like a lot of money right and then all of a sudden all your studio time comes out of that and you don't recoup another dime until you've sold you know X number of records or CDs, or in this case, books.

Starting point is 02:28:46 And then in the contract, it actually said, and the restaurant guarantees that they will buy 2,500 books at half of retail price. And I was like, whoa, whoa, whoa, that's, you know, you're looking at something like $80,000 right there. That goes right back to them, in essence. Like, and then I kind of went like well i wonder what a book costs to print and i mean i just called i asked them like well how much is this book going to cost to print well i don't really know and so what they would do is that they would

Starting point is 02:29:18 always have layers of people so that they said well that's not what i do like i am the person that does this the lawyers give the contract. The printer does the printing. There's always plausible deniability or plausible ignorance. Yes, willful, plausible ignorance. And so I do what I start doing. I'm like, well, let's just Google that up and see what it costs to print a book. Or, hey, how many copies of the French laundry book sold?

Starting point is 02:29:49 How many copies of 50 other books that we wanted to emulate or that we thought were well done sold? And, man, it's like asking for, like, you know, keys to the Vatican or something when you call a publisher and ask them that. I'm sure you know this, right? You probably know now because you've been so entrenched in the industry. You know your numbers, and you might know that of some of your colleagues and friends, right? But if you wanted to actually do a meaningful comparison across the industry, it's almost impossible to do it even though that there's a company that does that then you start trying to reverse engineer it and you go to the new york times which you can go to the new york times website and just look at how is the new york times

Starting point is 02:30:33 uh you know bestseller list um created and on their own site they say it's a compendium of known publishers like publishing houses as well as these like top 50 retailers you know back in the day um and it's a gameable system right like the way that that the publisher publishers want to do it is that they want to ship out all the books at the same time because that's how they're accounted for the new york times bestseller list and stuff i should also know it's not only gameable but it's also conversely highly subjective within the new york times so there there's a lot of wiggle room in other words it is not like the olympics where you're like okay clear gold silver bronze video replay we know exactly how this was was uh was it was tabulated um yeah

Starting point is 02:31:21 so the more that we dug the more that that we got like, curious, like more and more curious, a little bit angry, actually. And but Grant was weirdly angry at me, because he's going like, well, dude, like, why do you care? Like, you know, it's like, I've been wanting this since I was 15. And I was like, well, look, if this is our budget, it's not going to be the book you want. It's not gonna be as good as you want it to be because we're not going to be able to spend six months doing the photography. We're not going to be able to get great pages. We're not going to be able to get a picture of every dish. Like if what do people cook in a cookbook? Well, they tend to cook those pages where they see a picture of the final dish because you know what it looks delicious.

Starting point is 02:32:00 You know, it's supposed to look like you got something to emulate at least. Right. And so when we did the specs for the book, I had one of the best publishers in America say, if you do that book, there's no way you sell more than 5,000 of them. No way. And no one's going to publish it. And you can't use metric. And you can't use a gram scale. And you can't have that font. And you can't have those pictures in full bleed and it'll cost way too much to print and so it took about a month and a half before i got lucky and i called a print broker who had actually printed what you know brokered the print job of one of the famous books and i was expecting that the book retailed for 60 it would cost like 15 to print 20. I didn't know anything about it. And when he told me it was like $2 and 23 cents per book to print per 30,000, you know, 30,000 copy run. I went no way like that. And he went, well, it's probably less now. Like he thought I meant it was like too much. Right. And, and instantaneously i went oh shit like everything makes sense and when i would call publishers and tell them this they would go oh yeah but look like we did 40 different prints

Starting point is 02:33:15 lat you know 40 different books last year only five of them did well and i'm like that's your problem man like i know what we're gonna sell well I don't really give a shit if you lost 35% of the time and need to spread your portfolio risk. I'm the one you're spreading it on. Right? And so we decided with the Alinea book, we put together like 20 pages. And Martin made this beautiful stainless steel bracketing system. And we shipped it out to eight different publishers we like two of which were art houses that had never done

Starting point is 02:33:49 a cookbook and they all came back and and same all the usual criticism except for aaron wainer at 10 speed press yeah smart smart guy by the way yeah and he basically said i'm gonna make you an unusual offer no advance at all, and we can negotiate. Essentially, we'll just be the distributor. We'll negotiate out what that looks like, and we'll help you with the printing, and we'll help you with the editing, which we're both really good at. Within 10 minutes, we had struck a deal whereby any of the books that we bought or sold for ourselves for our restaurants, we paid actual printing costs, not wholesale, actual printing costs. Anything that they sold and distributed through their channels, they would get about 27% of the sale price, which means that we got 73%

Starting point is 02:34:38 of that. These are like state secrets, right? Like nobody tells this stuff. And so for years I was walking around with this knowledge where if we sold a hundred thousand books, say, um, that would be the equivalent of selling like 500,000 books on any other deal. And we got to control the quality of it. And we won both the James Beard award for best, um, cooking from a professional point of view, best cookbook of the year. And we won, um, I say we Martin and Laura Kastner won the, um, communication arts award, where if you're a designer, that's like their annual is like, that's like getting the, the Oscar, right? Yeah. Similarly for people who don't know, I mean, the James Beard awards are also very much like the Oscars. Yeah. So,

Starting point is 02:35:28 so we felt like really vindicated on that. Um, the book still sells, this is eight years later. Um, we still sell seven, 8,000 copies a year. Um, and when we did the aviary,

Starting point is 02:35:36 um, which is our bar, that's a non bar, um, that we talked about earlier, um, you know, we started getting all of the same offers again.

Starting point is 02:35:46 And this time it was really easy to go like, just kind of like, Oh, like, Oh, that's cute. Like, you know, um, and so I should add that we did, I wrote a book of, um, Grant and I wrote his memoir together that we didn't use a ghostwriter. We wrote it ourselves called Life on the Line. And for that one, we did a traditional book deal. But after our agent kind of got it halfway, I got on a plane, flew out there, and then brokered the deal myself. And I got a giant multiple of the highest bid by doing essentially a reverse Dutch auction, starting at a really high price and working my way downward. Can you explain to people just briefly what that means? Yeah.

Starting point is 02:36:30 So basically, I'll do this. So I think one of the great problems to solve, one of the black boxes, is the agency problem. Let's say you want to sell your house. You put it on the market, and the agent's going to get, I don't know, four to five percent of the sale price. That's a lot for something that's like your most biggest investment in your life. But they kind of say like they control the information, they control the MLS, all that. Will they, if they're the seller's agent, get the highest price for you? And the answer is almost certainly not.

Starting point is 02:37:03 Because they, let's say a house is going to sell for $500,000. They're going to get 4% of that. That's $20,000. If they get $490,000, it's almost no difference to them, right? $400 difference. But if they lose the deal over that last $10,000, it's a lot. So they want to price a home so that it sells quickly, so that they can keep their deal flow going.

Starting point is 02:37:25 And they don't really care about maximizing their last dollar. Whereas for you, that last dollar is actually like $9,600. It's a lot more money. So what I do whenever I've sold real estate is that I figure out what the intrinsic value is of the house. Like what's the bare minimum that I'd be willing to sell it for? And I price it just slightly higher than that. And I tell all the agents in the whole town, I will pay you 50% of everything over 10% higher than that. And they all say, oh, that's against the real estate ethics code, or I would never do that deal because it would subvert all my other deals or whatever. And then what happens

Starting point is 02:38:03 is two days later, you get like a dozen phone calls and they've priced it like 40% higher. And it sells in two days. Yeah, that's amazing. Because now they're actually working for you, right? Well, similarly, I went into that publishing negotiation and I was kind of like, by the way, the agent, it's probably look up,

Starting point is 02:38:25 she's great, like great person. I don't think she even knows that that's what was happening. Do you know what I mean? Like, I don't even think she, she just knows that like, Hey, she was brought up in this, in this industry for this company. And that's the way it works. And she would for sure dispute everything I just said. She would say, I always try to get the highest price, but I went in and I just went like, look, I'm not going to spend my time doing this for X. So I need four times that. And she was like, there's no way you'll ever get that. You've never written a book before. And I said, well, we did the Alinea book. That's a cookbook. It doesn't count. These are words. So I went to

Starting point is 02:39:01 the publishers that all bid on it. And I just got them all on a conference call and just started at a really high price. And every couple seconds, I went down $10,000. And then one of them blinked and bought it. What was the – That's a great way – that's a great method of price discovery. Like if you think about it, most auctions, even like you go to a charity event or whatever, and they start low and they try to get interest going high, it's often the case that if they start really, really high and start going down, people start going like, oh my god, someone's going to say something. I would pay that. Someone else must as well. They could be off by a factor

Starting point is 02:39:38 of 30% and they'll never even know it because there's only one bid that ever happened. So no one knows how off they are. Now, on that phone call where you're like, hey guys, would love to get you on the phone, and then publisher... I guess my question is, did they know that they were signing up for

Starting point is 02:39:57 a Mexican standoff? Oh, they did. They did. I went and met with them all personally kind of said you're like john i'd love to get you on the phone and it's like all right congratulations guys yeah you can't you can't ambush people to a mexican standoff yes you can't do that okay um i i mean you could it might be fun but i didn't do that i went and talked uh i

Starting point is 02:40:19 created enticement i i like sold on my ability to actually do it um it was a bit like um doing the no phones um with the software like i was like well if i get a really big contract off to figure out how to write a book and that'll be a lot of pressure um and so so i did that and um and and and i wrote it and i turned it in on time which apparently no one does very very rare yeah yeah because which is to them like on the day it was due they went what's this i'm like that's the manuscript yeah they went oh that's cute well it's kind of like showing up at the restaurant on time as a diner and then being seated at the appointed time it's just this like open open lie do you turn your books in on time

Starting point is 02:41:02 i do actually yeah i believe that yeah i do turn my books in on time, and we could get into that separate time. I just wanted to ask you a question. No, I do. I do. I do not turn them in at the expected length. No longer, perhaps. Yeah, I do tend to turn them in on time. I believe that.

Starting point is 02:41:23 So what happened with the aviary is that we basically couldn't figure out how to do another book because the Alinea book was such a project and Martin was on to other things. And we didn't want to do it traditionally, and I didn't know anyone who could do what we wanted to do. And then there was this guy, Alan Hemberger. And, boy, if you get nothing else from this whole talk and you've made it this far, go see – go Google Alan and Alinea. Alan is a procedural effects artist. He worked at Weta Studios on all the Hobbit movies doing, like, hair and water and things like that. So he writes the physics that then makes the magic, right? And then he worked at Pixar.

Starting point is 02:42:14 And while he was at Pixar and his wife, Sarah, worked at Industrial Light and Magic as a graphics designer, he was given by Sarah a copy of the Alinea book to go full circle and became just fascinated with it. Was not a cook, didn't know how to cook and did the Julie and Julia thing. He spent five years, not only cooking his way through the entire book, but also would do things like, well, I don't know where to get this plate. And I've always wanted to learn how to fire porcelain. Alan, for people wondering is A-L-L-E-N. There are also videos of Allen and Alinea.

Starting point is 02:42:52 Yeah, and he's an autodidact. This guy learns and learns and learns and is the kind of person that goes to the black box and goes, I'm going to learn how to forge knives, and I'm going to learn how to fire porcelain. And by the way, I'm going to cook everything in there, and I'm going to take pictures of it, and I'm going to learn how to fire porcelain and by the way i'm going to cook everything in there and i'm going to take pictures of it i'm going to make a book documenting that and when he asked if he could use like we had kind of a little email relationship and he came out to linea once to ask grant some questions about how to make something because it wasn't working and when grant kind of threw up his arms go well the book might be wrong like alan's world view was shattered it was like and he was kind of like, what do you mean it could be wrong? He goes, well, you know, we did have some errata in there. Like, I mean, we documented

Starting point is 02:43:29 hundreds of recipes. It could be wrong. And at that point, Alan, like his mentality changed. It's in the video. And, and we got to know him and I got to know him. And when he sent me the book, it wasn't what I was expecting. I was expecting like a homegrown book. And what I got to know him. And when he sent me the book, it wasn't what I was expecting. I was expecting like a homegrown book. And what I got was, you know, a 400 page, beautifully, beautifully illustrated, beautifully written, um, book about a person's journey of learning. Um, and it was called the Alinea project. And I had no, no idea that he had done anything like this. And so suddenly I thought to myself immediately, and it's in the intro to the Aviary book, I texted him and said, holy shit, you're crazy. And I have ideas. And after waiting for like four or five years to do a book on the Aviiary, I immediately was like, this is the guy to do the book.

Starting point is 02:44:29 Now I need to lure him out of Pixar, which is about the best place to work in the world. And then I found out his wife worked at Industrial Light and Magic, and she did all the graphic design, and I was like, this is perfect. You guys need to quit your jobs and move to Chicago. And they flew out. We had some conversations about what that might look like. It was very much a partnership. They would have equity in the book. We would have creative freedom to do it exactly the way we wanted.

Starting point is 02:44:55 We knew more about the printing and the bidding and all that. So I wasn't worried about the economics of it anymore. I was worried about trying to make something really awesome. And right as they were about to say yes, they found out they were going to have a baby. So they called me up one day and said, oh, my God. And I was like, oh, they got cold feet. Oh, no. And they said, you know, we're pregnant. We're going to have a baby. And I said, OK, well, we're going to wait a year because there's no way in the world I'm letting you move out of your comfort zone and have a child and have that change of life. And they thought I was punting on them just because in a discriminatory way.

Starting point is 02:45:33 I said, nope, we're not going to do this with anyone else. We'll wait as long as it takes. And about a year and a half later, they moved to Chicago. And we spent the last year and a half, set up a studio of our own, spent the last year and a half um set up a studio of our own spent the last year and a half doing this book um did a kickstarter to just essentially raise awareness for it we raised almost a half million dollars in the kickstarter we've sold about another three hundred thousand dollars a book since then uh it comes out in october um you can go to the alinea book.com and the coolest part of that website is that if you look at the alinea book oh sorry the aviarybook.com all right great neck

Starting point is 02:46:05 bury the lead nick very genius marketing right there so um yeah the aviarybook.com but if you the coolest part of that is other than of course your ability to buy said book is um alan kept a blog on there called our progress and in it he details every single aspect of what it takes to make a book like this right down to line screens and compositing photos of you know like one of the things that every single book publisher told me is that you can't sell a cocktail book for more than 30 dollars there's no market for it and you don't need pictures because it's just liquid in a glass and i think we blew that out of the water with what the book looks like um i think that because certain things like fire are really hard to photograph um there's a great picture in there of this one cocktail where we

Starting point is 02:46:57 we spray um some anise and we light it on fire and it creates an aroma into the bowl that it's served in it's called loaded to the gun walls um it's a batavia rock cocktail and like that took a composite of 18 different photographs and so he breaks down the photography techniques and also the new york times bestseller list and i showed him like how you know google target marketing works and facebook ads work and all that and all of a sudden he went holy shit i had no idea you could do this so we are going completely without a distributor or publisher at this time um and i think we're gonna set a man i don't know like i'm either completely delusional it wouldn't surprise me if we sold a half million of these yeah in the next two or three years and it's It's not a $9.95 book either,

Starting point is 02:47:48 which it shouldn't be, right? I mean, this is... No, it's $85. We've invested close to a million dollars all the way in around it. And it looks like it, I think, I hope. Yeah. From what I've seen, it looks like it would cost more than that. Yeah. Well, we did it, you know, we did it all ourselves too. Um, you know, it's really like a five person project. Um, it's, it's deep enough that if, if a professional gets it, they're going to learn a lot. Um, but I'd say about 35, 40% of it can be done at home because unlike the Alinea book where, Hey, you got to go out and buy a duck, like, you know, and your local grocery might not have this kind of duck or whatever.

Starting point is 02:48:24 If you, um, need some Florida kind of rum or, you know, um, you know to go out and buy a duck. Like, you know, in your local grocery, you might not have this kind of duck or whatever. If you need some Florida kind of rum or, you know, a certain kind of tequila or whatever, you just go to your local liquor store. It's exactly the same thing that we use. You know, that product is universal. I read somewhere that I don't think is taking us too far afield. I read somewhere that you consider yourself a tequila guy or at least in part a tequila guy do you have any favorite tequilas or concoctions well there's so i just i'm going to do a little video promo for um for the book that we just filmed last week where essentially i work with eric jeffis who's one of our bartenders in the office which is our little speakeasy below the aviary which is amazing amazing. If people have the opportunity, they should check it out.

Starting point is 02:49:09 It's basically Grant just said, hey, everything upstairs, people are going to think it's Alinea smoke and mirrors. We need to prove we can make a real cocktail. So one of the foundational cocktails for me is a daiquiri. It's, I say, three ingredients and a million ways to fuck it up you know it's it's just um lime sugar and rum that's all it is and uh and yet like most bars you go into will make a terrible daiquiri or they'll blend it or blah blah blah right but a great daiquiri is really really transformative so did a video on that um and then i always make a half mezcal margarita that's my favorite drink all i'm doing is i'm taking some reposado I always make a half mezcal margarita. That's my favorite drink.

Starting point is 02:49:45 All I'm doing is I'm taking some Reposado and a little bit of mezcal in equal weights along with some Grand Marnier or Cointreau equivalent and lime and simple syrup. That's it. That's all there is to it. Man, I love simple stuff like that. And then we have a whole section in the book on old whiskeys, dusty bottles, um, old gins. Like there's a growing movement to kind of rediscover some of the distilleries in America that were really, really, really great, um, that don't exist anymore. Um, that were more artisanal at the time.

Starting point is 02:50:19 You can still find those bottles, um, around, uh, it's a little bit easier than like, you know, someone like wine collecting or something like that. And, um, man, it's, it's like an endlessly fascinating thing. I don't consider myself a cocktail person 10 years ago. I really loved wine. Um, I felt like from a health perspective, it was better as well, but just like anything else, if you have a well-constructed cocktail and something of high quality, it's an additive thing. Like you can have it in a meal and it can make the meal better. You know, whereas it's like, you know, a vodka tonic is just boozing and it's just getting drunk. That's not what we're trying to do here. We're trying to make

Starting point is 02:50:59 things that are, it's really a culinary approach to cocktails. And man, it's endlessly fascinating, just like anything else in this world. And I would also say, just contrasting, say, someone who wants to recreate something from Alinea, which you certainly could do. I mean, Alan proved that with something from the Aviary. the aviary the there's also a tremendous amount of theater and presentation dynamism that you can create with cocktails that does not have to be super expensive or super complicated uh that uh and i mean certainly you guys are able to go as complex as you want to go which is stunning and i've spent time at the aviary but it's also you can easily make um some ice with patriots bitters in it or something like that and then as the ice melts in the cocktail it's going to change the flavor and it's going to look really cool too um doing some of these things at home is is not hard

Starting point is 02:51:54 um i did a dinner party once where it was like you know a cocktail party probably had 40 people at my house and each room in my house had all of the ingredients for the cocktail and then little instructions on how to make it themselves so that took away the need for a bartender because they're terrible anyway anyone that you bring in and you know that you know caterer or something like that and the other cool thing is that people got really into it they went like oh like now i know how to make it old-fashioned i know how to make a manhattan um you know uh i the one that i discovered that party was a frisco sour had like benedictine whiskey and lemon you know it was really delicious so it it can be it can be more

Starting point is 02:52:33 than just like a strong cocktail it can be really delicate and interesting and people can learn all about this at theaviarybook.com. Is that right? That's right. Yep. Well, Nick, I have two rapid-fire questions that are unrelated, and then I think we're going to bring this neat and tidy round one podcast to a close. But we've talked about books, and everybody should not only check out the aviary book,

Starting point is 02:53:07 but also if they have a chance, go to the aviary. It is, it is tremendous. And you can also get some delicious bites and food. At least last time I was there at the aviary. So it is a bit of a, I hesitate to call it a workaround,

Starting point is 02:53:25 but you guys have some very, very popular establishments. If you want to sample the food, this is also a great way to do it. And the drinks are just incredible. So it's a real sort of destination that makes a trip to Chicago worth it in and of itself. So I would recommend not only checking out the book, but also checking out a lot of what you guys are up to. Aside from that, books you have gifted the most to other people outside of those that you've made yourself? What are the books that you've gifted the most to other people? Yeah, I named one of them already.

Starting point is 02:53:59 Fooled by Randomness. Almost everyone in my office is forced to read that. Um, you know, um, and I've, I've definitely given that away. Um, boy, that's a tricky one because I, just like I said, I can't remember, I can't remember books, um, very well, but that's certainly probably number one, um, on a business side of things. And then the, on the other side, um, I tend to give away what I would call vintage art books. So it's not a book people can buy. I'm sorry to say, but occasionally I'll be at like a used bookstore and I'll find some of these great old art books and I buy a few of them. And then when I, when I want to thank someone for something, I send them that pair of gradations of an Epicurean, something like that. Paragradations of an Epicurean, something like that. Yeah. I mean, at the end

Starting point is 02:54:45 of the day, like I, I bought, like when I want to give someone something, I try to make it something that you, and I really want to make it a great gift. Um, I try to get it something that you can't buy. Right. And so, um, I bought an old typewriter and I write and when I write a thank you note, I type it up on the old typewriter. And it is the most confounding thing to people because they look at it and they go, how did you do that? I'm like, on a 1922 typewriter. It's like a personal artisanal thing. But I know that that's not what you're getting at. No, no, no. I can't really think of the number one.

Starting point is 02:55:27 I'm sure once we end this, I'll immediately think of it. And if I do, I'll send it to you so you can link to it. I think the answer is more interesting with the typewriter. So I think what I'm getting at was whatever you just offered. So that's perfect. And if you come up with anything else, we can put it in the show notes. This next one can be tough at times for folks, but the billboard questions. So metaphorically speaking, non-commercial, no advertising, but if you could get a word, a quote, a sentence, a question up on a billboard to transmit something to millions or billions of people,

Starting point is 02:56:04 does anything come to mind that you might put on that billboard? I don't know why this came to mind, but the word would be pause. I have no idea why that came to mind. But I think in talking through this whole thing, you kept asking me, like, why are are you digging this black box or whatever. Or it would be like curiosity. And I think those are two – I'm thinking of those in the same way. I'm not saying pause, like stop.

Starting point is 02:56:34 I'm saying think, right? And so I think, you know, the hallmark of the people that I like friends, the best is what we try to instill in our kids. Uh, you know, and, and the reason I like my wife so much and all that is that intellectual curiosity is everything. And so, um, I don't know, how do you get that on a billboard? I think pause or, you know, be curious or something like that. I know it's cliche, but I, I think that's the thing, the thread that ties everything together. Yeah, you do pause a lot. Even though on a macro level, you seem to be moving at hyper speed a lot of the time,

Starting point is 02:57:22 there are a lot of pauses built into that speed, if that makes sense, from what I've noticed. I mean, you are simultaneously one of the craziest fuckers I know and least craziest fuckers I know, if that makes sense. Oh, that's a great compliment. Thank you. I'll take it. I'll take it. And where can people find you?

Starting point is 02:57:37 I know you have, of course, the AleniorGroup.com, you have ExploreTalk.com, TheAviaryBook.com, which is sort of the most timely for people to check out right now. If people want to say hello or follow you on social, where are the best places, best handles for that? Yep.

Starting point is 02:57:58 Instagram, which is NKOKONAS, K-O-K-O-N-A-S. And Twitter is NickKOKONAS, N-I-C-K. And, hey, it's all Google-able, right? So beyond that, if you could figure out my email address, I'll probably answer. Although given the reach of your podcast, perhaps I will be inundated. It might take a while. Yeah, that might be a hug-of-death situation, but we will. That's okay.

Starting point is 02:58:20 TBD. Good problem to have, I suppose. Good problem to have. Nick, this was a blast. Thank you so much for taking the time. I really, really appreciate it. Thank you, Sam. And many more conversations to be had. I think another trip to Chicago may be in order soon.

Starting point is 02:58:33 I was going to say, I hope we see you here soon. I know. I need to get back. And to everybody listening, we've made mention of the show notes, links to everything we've discussed, which you will be able to find at tim.blog forward slash podcast, as with this episode and certainly every other episode. And until next time, thank you so much for listening. Hey guys, this is Tim again. Just a few more things before you take off.

Starting point is 02:59:01 Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little morsel of fun before the weekend? And Five Bullet Friday is a very short email where I share the coolest things I've found or that I've been pondering over the week. That could include favorite new albums that I've discovered.

Starting point is 02:59:24 It could include gizmos and gadgets and all sorts of weird shit that I've somehow dug up in the world of the esoteric as I do. It could include favorite articles that I've read and that I've shared with my close friends, for instance. And it's very short. It's just a little tiny bite of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to 4hourworkweek.com. That's 4hourworkweek.com all spelled out and just drop in your email and you will get the very next one. And if you sign up, I hope you enjoy it. This episode is brought to you by Charlotte's Web, which makes a CBD oil, a hemp extract that has become one of my go-to

Starting point is 03:00:06 tools now i have never really talked about cbd oil and cannabis has never really been the plant for me i know we're talking about hemp but nonetheless after several nights of inexplicable insomnia this was about a year ago i just could not get to sleep to save my life and after other fixes failed so melatonin, California poppy extract, da da da da da, an elite athlete introduced me to this non-psychoactive extract and bam, problem solved. I had some of the best sleep that I'd had in months. Now I don't use sleep aids on a daily basis, but this has become part of my toolkit and I hope to be exploring other applications soon. CBD oil products have exploded

Starting point is 03:00:47 in popularity in the health and wellness and fitness worlds. And Charlotte's Web is one of the top players that offers a broad spectrum hemp extract with CBD in the form of oils, capsules, and topical products. Charlotte's Web products will not get you high. So that maybe that is good news, maybe bad news to you, but it does have some powerful benefits and applications. And it works with your body's existing endocannabinoid system. Endo meaning from within, like endo versus exoskeleton, for instance. So endocannabinoid system works with your body. Some of the most common uses are for relief from everyday stressors, help in supporting

Starting point is 03:01:25 restful sleep, which is what I most often use it for, to bring about a sense of calm and focus. A lot of my friends use it for that. CBD is also known or becoming known for helping athletes to recover from exercise-induced inflammation. Charlotte's Web Hemp Extract has naturally occurring terpenes, flavonoids, and other valuable hemp compounds that work synergistically to heighten positive effects, sometimes referred to as the entourage effect, which you guys can look up, making it more complete than single compound CBD alternatives,

Starting point is 03:01:53 or at least that is what I've been told. I do not know much about CBD alternatives nor single compound. In any case, check it out. This stuff has really worked for me. So jump over to cwhemp.com forward slash Tim. CW as in Charlotte's Web. cwhemp.com forward slash Tim to take a quick quiz which will determine the best product for your particular aims, lifestyle, etc. And they ship to all 50 states.

Starting point is 03:02:19 Charlotte's Web are offering listeners of this podcast 10% off of their purchase. While there are some exclusions, I personally use the extra strength CBD oils or the extra strength capsules. And you can see what might be a fit for you on that page. And there is a 30 day risk free guarantee. So why not try it out? So get 10% off of your purchase at cwhemp.com forward slash Tim. And disclaimer, these statements have not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease. Enjoy. This episode is brought to you by 99

Starting point is 03:02:59 Designs. 99 Designs is the global creative platform that makes it easy for designers and clients to work together. From logos to apps, business cards, packaging to books, you name it, 99designs is the go-to design resource for any budget. Right now, my listeners, that's you guys, can get $50 off a logo and brand identity package from 99designs, plus a free upgrade that lets you promote your project on the platform, which is an additional $99 value by checking out 99designs.com forward slash Tim50. That's T-I-M-5-0. So 99designs.com forward slash Tim50. As many of you know, I've used 99designs for many, many years now. I've used them for book covers, including mock-ups for The 4-Hour Body, which went on to become a number one New York Times bestseller, illustrations for the multi-volume The Tao of Seneca e-book series, basically, and other graphic design projects. And I've been very impressed by the quality of their designers and illustrators. And you can check out all sorts of

Starting point is 03:03:58 stuff like Tao of Seneca to get an idea. They're really mind-boggling. Most recently, I used 99designs to update the illustrations and layout of my Five Morning Rituals ebook. This is a PDF that I offer as an incentive to get people to sign up for my newsletter. The illustrations inside are gorgeous, and I loved working with the designer who we ended up selecting for the project. You can take a look at that. This is a real- world example of the type of thing that I use 99designs for at 99designs.com forward slash Tim 50. 99designs designer search tool connects you directly with one designer based on design category or industry specialization, style, skill level, availability, and more. You just check off the boxes that you need to satisfy the criteria you want, and it will bring up the

Starting point is 03:04:46 best matches. Or you can start a contest. You invite the entire community to take a shot at your project, then you pick your favorite. So to get $50 off your first logo and brand identity package, as well as additional promotion on the platform with the free upgrade, please visit 99designs.com forward slash Tim 50. That's 99designs.com forward slash Tim 50 and click on the link on the landing page. Check it out 99designs.com forward slash Tim 50.

Pet Camera - EBO Air 2

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

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.

Your Ad Here

Pet Camera - EBO Air 2

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

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.