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

  • Nick is a believer in radical transparency in business: I give numbers and burn bridges with big companies because I think a lot of times people don’t ask the basic questions. For publishing: How much did that book cost to print? How many did it sell? Oddly those numbers are very hard to come by. For bars: Why does a bartender wash dishes? And talk to customers? We redesigned the bar experience and won best bar in the world. For restaurants: Why is it the only form of entertainment that has a mutual promise to show up?  (11:10) 

  • How to spot potential business opportunities: Wherever there is opaque information which should be obvious, run to that gap. (12:35) 

  • Always ask the “why” question: Just look at some things and ask: why does it work that way? Often times the people that are most entrenched in the system have no idea why.  (23:00)

  • Book recommendation for entrepreneurs to learn about philosophy: If you are the kind of person who likes to read or explore ideas, I happen to love The Problems of Philosophy by Bertrand Russell. (28:30)

  • The world of ideas is endlessly inspirational: Steal them (ideas) and use them in whatever it is you are doing. They are there for you. (31:18) 

  • What Nick liked about trading options: As soon as I started going deeper down the rabbit hole the more I liked it as a puzzle [to solve]. It is like playing a huge multifaceted chess game that no one is going to get exactly right. (39:52)

  • Nick’s philosophy on hiring: I hired people I considered corporate refugees. People who had worked for companies and had decided that independence was better. (41:15)

  • Book recommendation for people who want to become better investors: Nassim Taleb’s book Fooled by Randomness is awesome. (47:06) 

  • How Nick decides on which business to create: I always try to look for the high, small hoops. The higher and the smaller the hoop, the fewer people playing the game. (49:55)

  • The way Nick thought about publishing: People keep printing books and yet I can’t figure out any of the information. I have never written a book before but someone is going to write me a $300,000 or $400,00 check? Something is remiss here. There must be a lot of money on the other side of that bet. (51:05)

  • How did you decide to quit trading and get involved in restaurants? I was burnt out. I needed a break and didn’t know how to take one. (55:44) 

  • The type of person Nick wants to work with: It is fun to work with someone who is basically like: Even if you aren’t in, get out of the way because I am still going to do this. (1:13:14)

  • How Nick created Tock: Tock is essentially options pricing software on top of a reservation system. The prototype was created by a single programmer in 6 weeks. The first day they turned it on they sold $562,000 of tickets to a restaurant (1:29:16) 

  • Nick’s advice on Uber’s bad press about surge pricing: I always thought Uber could have fixed their surge pricing issues by having discounted pricing when there is no demand. If you move pricing in two directions that whole argument goes away. (1:36:04)

  • Positive unexpected externalities of using a prepaid ticketing system for restaurants: Now on checkout when you purchase tickets to  Alinea, the system asks if you want to buy the Alinea book. 20 people a night do this. That is $400,000 in revenue a year. That’s crazy. (1:37:49)

  • Scratch your own itch: Nick created Tock to fix his own problems. He used it exclusively at his own restaurants for four years before thinking it could be a software product for others. (1:53:09)

  • How he figured out he was going to self publish: I called a print broker and asked how much a cookbook like this would cost to print. He told me it cost $2.23 per book. When I would call publishers and tell them this they would say: We did 40 books last year. Only 5 of them did well. I said I don’t give a shit. That is your problem that you need to spread your portfolio risk. I’m the one you are spreading it on. (2:32:47)

  • Full podcast here.