Zima Red ep 130: Nick Kokonas - Trader, Michelin Restaurateur, Tech Founder With A $400m Exit
Primer: Nick Kokonas has a hand in everything. He is a former trader, a Michelin Restaurateur, a tech founder, and has published multiple books. He is into crypto and NFTs as well. In this Zima Red episode, he shares about his varied experiences with host Andrew Steinwold.
Background
Studied Philosophy at college
Went into floor trading
“It was very physical work back then. You were on the trading floor for 10 hours a day, yelling and screaming. And I loved it. I did very well at it.”
- Nick Kokonas
Met chef Grant Achatz
The first restaurant he built was Alinea
Built Tock, a restaurant reservations platform
Fascinated with what’s new and tries to stay exposed to what’s happening in the future
Books He Wrote
Done a few cookbooks
Wrote Life, on the Line, a memoir of Grant Achatz
How Does He Identify An Edge When Entering A New Field?
Gets very curious about the subject
Starts to read stuff on the subject and ask questions on the internet
Tend not to look at the experts. Does not assume that the experts are correct
Realized early on in trading that if people know what they are doing, they would do it themselves and not share it
“You have to be passionately curious, and grind. It's a grind, everything's a grind.”
- Nick Kokonas
Does He Look At Tech To Improve The Businesses He Created?
Critical to have information that’s organized and accessible
Have done it wrong before
The simplest way is often the best
Seen plenty of tech platforms trying to enter the restaurant business with more screens. If servers are looking at a screen, it feels like they are not paying attention to guests
How Does He Create Things That Are Inevitable In Hindsight?
Every restaurant in America is busy on Friday and Saturday nights
Yet, it’s weird that they are priced the same as other days
Imagines a world where price for services change in real time
Tock can template days of the week/time of the day. For example, it will be cheaper to go to Alinea on a Tuesday night than a Saturday night
Tock is the industry leader in winery tastings and tours. Was myopic and did not expect Tock to take off in this sector
Thoughts On Crypto
Getting Into Crypto
His son called him a luddite because he wasn’t diving deep into crypto
Learned about crypto in 2010 from Wired magazine. Mined a few Bitcoin but forgot about it
Found Bitcoin interesting conceptually
Many aspects of crypto are solutions in search of a problem
Have invested in both crypto and NFTs. More to learn than to be active in it
Thoughts On Bitcoin
Anything can be a store of value as long as people agree to it
Used to trade currencies that are more fragile than what people think of it
There’s inflation right now and the public does not understand that
The decentralization and immutability of crypto is an important point
Thoughts On The Idea That The Future Of Crypto Is Amazing
Many who are bright and dedicated are investing massive amounts to make the tech better, usable, safer, and secure
Lived through the Dotcom bust
His attitude was that there were some deals out there because the internet is not going anywhere
5 in 6 companies that he invested in nearly went out of business. Exited profitably from all but one of them
Thinks that the same thing will happen for crypto
Thoughts On NFTs
Restaurant NFTs
Knows a famous guy who is a bit of a grifter
That person started an NFT restaurant, raising money and memberships by selling NFTs
In this context, NFTs do not bring anything new
Does He See Himself Utilizing NFTs In The Future?
15 years ago, if you publish a book, you do not know who your audience is
The traceability of NFTs is valuable
Title insurance could be solvable with NFTs
Thoughts On The Market Environment
As the Fed raises interest rates, the stock market and the crypto market values will go down
A lot of unsophisticated investors are dumping money into companies that are unprofitable
The Fed is winding things down slowly, such that the market goes down 2-3% everyday
Have kept a lot of cash over the last 2 years for this
Thoughts On The Fed
The Fed has a mandate for a 2% annual inflation and stable markets that function as freely as possible
For 50 years, it has worked well, with a couple of major exceptions
Unemployment, as measured by the government, is bizarrely low
For someone like him who employs hundreds of people, it’s a very tight labour market
Bankers were very anti-crypto and have made negative remarks about it, but they putting hundreds of millions into building it
Have to look at what people do, not what they say
Thoughts On The Metaverse
30 years ago, he heard about Virtual Reality. The first VR headset was huge and had a backpack
People his age are dismissive of the Metaverse because they have been hearing about it for 30 years
Even the Oculus is not quite there yet
Coolest thing he has seen is DALL-E 2, the OpenAI project for text-to-image generation
Progress is happening slowly and, one day, it will be there
What Is He Working On Today?
Getting his restaurants back running
Mentoring younger entrepreneurs
Started writing again
Working on a couple of projects that he can’t talk about yet
What Is He Bullish And Bearish On?
Bullish
Bullish on digital innovation
Bearish
Bearish on politics
What Do People Misunderstand About Him?
Had 2-3 public controversial confrontations with restaurant customers
Was not picking a fight to defend himself, but to support his team and employees
He’s passionate and will argue with people. If he’s wrong, he will admit it
He’s less obstinate and less of a jerk than people think he is
His Biggest Failure And Lessons Learnt
Have made some miserably stupid trades
The old saying that cutting your losses is real
How Does He Define Success?
Defining what you want to accomplish and iterating as you go
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