Nick Kokonas Interview | The Tim Ferriss Show (Podcast) | Transcription
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"Optimal minimal." "At this altitude I can run flat out for a half mile before my hands start shaking." "Can I also do a personal question?" "Now what a sit-in approach I've been talking about." "I'm a cybernetic organism living tissue of a metal extracellular." "Me too, Ferris, show." This episode is brought to you by 99 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, 99 Designs 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 99 Designs plus a free upgrade that lets you promote your project on the platform, which is an additional $99 value by checking out 99designs.com/tim50. That's T-I-M50.
Personal Stories And Philosophical Ponderings
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Duality of Viruses and Websites Analysis (07:19)
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 Four 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 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. 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 have 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 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. Number two, Nick Cucones. 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 four-hour chef. So I wanted to write off the bat. Thank you for that. It was a lovely experience. Yeah, 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, "Hey, you want to say anything about it?" And I was on a chairlift. And I was like, "By the time I get off this chairlift, I will have a blurb for you." With such pressure. Well, which made a lot. And pressure, I think, is the word to describe 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 guy per se.
From Chicago, food and mediaby Chef Minds (10:43)
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. For instance, how much did that book cost print? How many did it sell? Oddly, those numbers are very hard to come by. I dug from 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 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? Yeah, Taylor. Taylor 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, 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, 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 it even begin with the 20 options that we have here.
How do you create options (12:42)
But maybe you could explain to me how behavioral economics and Richard Thaler fit into this, just for curiosity's sake. Yeah, I mean, well, I'll go back to the word you used options because I started out back in 1992 or three studying options, 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 Wall Street and 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 hundreds and hundreds and hundreds of decisions per day and pretending it's like a big decision tree. And any given decision is probably if you're really good, 48% chance of being wrong. So you have to be really, really good at constantly being comfortable, being wrong, but knowing that your overall number of decisions that you're going to be right more than you're wrong. And so I know there's a big theme. A lot of the folks that you have on, they talk about success or failure or 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 essentially what they're looking at is decision making. What drives people to make certain decisions? 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, you know, picking a mate, like 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 business or starting a company or publishing a book or whatever it may be, you can be intentional about that and realize that 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 like when you said there isn't really a trajectory, like 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, like that's weird. And I studied philosophy in college. So like 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. And that one is interesting too. I'd love to explore for a second and we're going to go into a million different nooks and cranes. Yeah, yeah, yeah. Did you feel like study philosophy undergrad was an asset that then later helped you or was it just an interest you explored on route to other things? No, I can't remotely imagine having not done that.
Thinking specifically. (16:06)
And the way that 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 Belmouth. I was a tenured professor at Colgate for almost 60 years, pulled me aside, introduction to logic 101. And basically said, what are you studying here? And I told him and he said, no, you're going to be a philosophy major. I'm going to tell you, I'm going to teach you how to think. And he was the kind of guy, there's this great scene in a river runs through it where the dad, every time the kid writes an essay, the young fisherman kid writes an essay and he brings it to his father to be graded, he gives it back to him and says, half as long again. And long before that movie ever came out, Professor Belmouth would essentially assign a paper to the class and say it should be about 15 pages. And people would be like, well, how long? How long is a piece of string? It's however long it needs to be. And then he would tell me yours can't be longer than three pages. And people would be jealous. Like, wow, 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 and thinking succinct to 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 got into pen 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 thing. It could 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. 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 training, 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.
Clear your head with chaos around you. (18:56)
And for me, it was like a huge challenge because there were people down there that were 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 talked about. It was about can you show up every day and every day's game day and be really disciplined and very clear headed with chaos around you. How did you get introduced to that world? 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. 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?" And he's like, "Well, I just bought this block. And I'm turning this all over. This is the true story. This is so not like 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 Merck. And now I own like 25 condos and three townhomes. And I trade. And I kind of went like, "Wow, I don't know what." 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. Like, that is 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 true story. Like people lie in 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, the last thing they wanted was someone with a good degree, five beta cap, a magna cum laude, all that stuff. So I faked my resume, got a five dollar job and looked for a mentor. And I found a guy named Frank Sereno, who was at Chicago Research and Trading, which also was founded by a philosophy major. It's actually very common. And why is that common? I don't-- I wish I knew the answer. I don't know the answer. I do know that there's three or four of the largest trading firms in the world run by philosophy majors. And if you look back at my class, just of-- 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. It's a really interesting path. It's not just like studying physics. I know some great physicists who are great in whatever they do. And 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? 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 why question. When you were mentioning the book publishing or a bar, I just looked at some things and I was like, why is that? 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 you can find narrative, I guess. Undervalued skill, by the way, in some cases, right? You've got to be careful, but a very, very, very, very, very, very interesting. I want to pause here partially because I'm over-caffeinated. I was inspired by nostalgia related to your double aspresses. But why did the professor pull you aside?
Professor Veer forced me to earn my grade. (23:51)
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 is 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 a more manageable number. And his method to do that was just to kick your ass. And I remember-- I mean, he probably, as great as he was, I doubt he would survive starting out at a college campus now. I literally saw him light-fired to someone's notebook once when he was asking people examples of how to put out a fire. And this one guy was just stuttering because he was so unfair. And so he just lit his notebook on fire. And he stamped it. And the kid threw it on the ground, stamped it. 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 I remember the specific day. He was literally back to the-- this is like right out of a movie. He is back to the class writing on a chalkboard with some logic problems, symbolic logic. And the guy next to me had no shot at getting it. None. And so he said his name. I wrote on the paper on my desk so he could see it, what the answer was. And then without missing a beat or turning around, he was like, Mr. Conas, please do not help him.
When I was Shut Down In Class. (25:32)
There is no way in hell he could possibly have done that without your help. And this is like two or three weeks in. And he spun around and he saw that I didn't have my book. And he said, Mr. Conas, where is your book? And I said, it's in my dorm room, 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. 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. 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 took me under his wing. I was very fortunate. 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 of his family at his funeral 30 years later. Huh.
I Did Not Know What Did He Record Me? (26:44)
Right? So a really fascinating person, really fascinating, a 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. Then never asked for anything back ever. How did you not know that he liked you? Did he withhold in some way so that you wouldn't get a big head or something along those lines? I did not want to get overly attached to you so he wouldn't express it. 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, it was really-- like he beat the shit out of me in a good way. You know what I mean? 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 you because he didn't think they had a chance. Right. Yeah, he didn't care. He wasn't invested. Yeah. And so with 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.
Did He Dislike Everyone But Me? (27:51)
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? Like all of a sudden that class got hard. I didn't know. I had no idea. And it was just an interesting, lucky, fortunate place to be at that time. So we're going to get back to the mark. But before we do philosophy, I'm endlessly fascinated with 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.
How Do You Know When Youre In The Zone? (28:28)
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 it 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 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 Victor Stein's ideas, but before Victor Stein published. And it's written in plain language. It's not hard to understand. Certainly Nietzsche is more like philosophy with some weird sugar coating of something on top of it. And man, as a young male reading Nietzsche for the first time, I was like, fuck yeah. Like, it's not passive. I think people think of philosophers as like Zen monks sitting there quietly contemplating the universe. I think what it is is it's people grappling with all the same questions and curiosity that we all have if you pause to think about it. And so it's so big that it's not just Descartes, I think, therefore I am. It's kind of every little bit of that. Back to like, Riedle Cretius. Like, he had the atomic-- Could you spell that? I'm going to be the first one to admit that I-- Lucretius? Oh, Lucretius. Lucretius, yeah. Yeah. Lucretius, yeah. I mean, he-- L-U-C-R-I-T-I-U-S. Yeah, I'm a terrible speller. So I give it-- never ask me to spell it. We'll put it in the show notes for you. Yeah, right, right. But like, you know, it's like you read that or read this great book called The Swerve, which is about this monk ages ago that sort of found that book and then rewrote it and saved it for history. Like, that reads like a murder mystery.
Thoughts On Entrepreneurship And Actualizing Potential
This Murder Mystery Is In My Bookshelf. (31:02)
Like, you don't necessarily need to start with the philosophy. You can start with the things around it. But I, you know, it's like I continue to find sort of the world ideas endlessly inspirational. And then by the way, you know, steal them and use them in whatever you're doing. Like, 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.
Why is intellectual capability so often absent from the most promising lives (31:32)
I want to second Bertrand Russell also. I haven't read Bertrand Russell in so many ages, but it is very digestible. 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 want 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. And those are very readily accessible. Well, and even MIT, OpenCourseWare. Like, so many colleges now have taken that model and put great, great, great classes online. And I know that every now and then, I'm surprised what I find on there and get sucked into an all-nighter of taking some college class that I know nothing about. And it's so far over my head, but it kind of refools you, again, to go like, oh, there are huge gaps where I know nothing. And the 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. I would actually not to pull a nick, actually, sir, on the contrary. On the contrary, sir, my book is doing me a lot of good in my dorm room. 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/gladatorial arena with butchers and PhDees and so on.
what are you doing wrong that you are not realizing your true potential (34:00)
Then what? At what point is there a point when you're like, OK, 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. And this is leading out of the law school. Yeah. And I remember being down there and what I was doing was so brainless. It was literally, you take this piece of paper over to that guy, and then that guy would yell at you, and you'd rip the paper out of your hand, and then you go get another one. It was literally that brain dead. And I was desperately looking to learn what was going on around me. And of course, I bought books on finance and commodities and options and all that. And they were completely ridiculous and opaque and academic. And they looked like they had no relationship to what was going on there at all. 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 time interviewing with big companies like Goldman Sachs and Society of General and whatnot, because I did have the academic background where I would get the interview. I would be able to take the test. I would do well in 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. That's what I was interested in doing. But they could ship me to France and have me do something totally different. I could be an analyst or god knows what. And so when I would question that, they'd be like, man, you should be really happy. We had 300 applicants for this and we offered eight positions. Just take it. And I was kind of like, totally your style. No, I was just kind of like, you know, I grew up, you know, like I'd be remiss not to say that like 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 honorably after 16, 18 months because they were downsizing the Navy. And then he was barely young enough 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, you know, my hero was my dad who was not an academic, who was not what people would think of as like an executive in a suit or whatever, but did really well. You know, he had bought a property in 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. 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 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. And then he said he didn't want to hire me. Like, you don'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, you know, 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 and back then you literally have to take the elevator up to keep punching all the cards into like a computer that was, you know, up on 17 floors away, you know, while ancient times.
Starting His Own Firm (38:28)
And I met him through being introduced to him there. After talking to him, I knew he was a sort of geeky intellectual 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, no, like I will pay you to work for you. And he was like, this is really strange, you know. And I explained to him what I just said. It's like I look up here six months. I set a goal for myself of getting, you know, becoming like 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. Like I need someone that's going to teach me options. And it's fascinating because, you know, he then hired me for, I mean, I want to say it was $400 a week or something like that. And 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, to the point where you're looking, you know, three derivatives in, you know, the, it's not just volatility curve, but the curve of the curve. And you know, as soon as I started grasping this and going deeper down that rabbit hole, the more I liked it as a puzzle, it wasn't certainly the money had an appeal, but it was also, hey, here's this 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, the next one's 50/50, you know, 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 and Wall Street, I have seen. I haven't lived, but I've seen it all. And you know, I started hiring very shortly after. I started trading 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 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 made me a deal that when you analyzed it very carefully, you got worse over time. And I just kind of went, you know, 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 thankfully, this guy, Jim Hanson, who's still one of my dearest friends, sort of had an option to stay, you know, with that company or come at a completely underfunded company. I mean, thinking back is 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, "What, 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 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. And so what did we do? Well, we stood around and we turned people's brains into mush until like I had people punch me cry, run out. It was, no, I mean, it sounds awful, but it was, 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 have felt glacial in pace. Yeah. And there's also something to be said for making the trainer, the training in some or all respects harder than the competition, right? I mean, the adage of the more you sweat during peacetime, unless you bleed during wartime, I mean, 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. That's why we love watching big time sports. Like when it matters, there are certain people that you know are, you can almost look at them and go, ah, that poor, that poor person's going to fade. And then you hope they don't, right? You 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 the exactly the right 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 ten years, is that I, there were moments where I did absolutely, 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. But I made some completely stupid decisions. But mostly on the measure, when things got crazy, I was able to perform more than that. I remember like Greenspan's irrational exuberance speech was like a formative moment where I kind of went like, wow, I can actually, I can not only hang in this environment, I can thrive in it. And you know, you get home, soak in 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 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 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.
Asymmetric Risk, Black Swans, Fooled by Randomness (46:37)
But are there any particular tools or like mental models? Anything that you would recommend? It's really, really hard. I think the mental model is asymmetric risk. I always look for something that the upside is, you know, three to four X, the downside. Obviously, quantifying those is very difficult. But that's the key. Everything I try to do is asymmetric. And then even though Nesim Talib is a bit of a pandantic goofball on Twitter, his book Fooled by Randomness is awesome. That was the one that preceded Black Swan. And I think Black Swan's great. It's fine. But Fooled by Randomness is I think the better of all his books because it just, man, it just encapsulates everything that people price things incorrectly. You have to do this one through a casino. Yeah. And you see everybody pricing their outcomes incorrectly. The entire city is built on that. And 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. And it's like, I would never sit down to a blackjack table because I know that there's a 49 and a half percent chance that I'm going to win. And that's the wrong way. Yeah. Yeah, the Fooler 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. It is an exceptional book, I think, for developing a new lens on life, not just investing. 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. But a lot of... 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... Yeah, 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 their breaks even their first year. And out of that one, take another 100 of those ones and less than one out of 100 of those becomes a millionaire. And I went, "Great." It's like the old dream carry. So you're saying there's chance. Right. And then you go to the restaurant business and people, "Oh yeah, 95% of all restaurants go to business in their first two years." And I'm like, "Oh, great." You know, that's perfect. Why do you have that response? Is it because... Yeah, so I'm doing... Yeah, software startup now. 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, you know? And the other thing is I remember right when I was going to start building millennia 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. 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 and 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 do you respond to that? You know, no one does. That's kind of like what... We'll get to it, I'm sure, but that's like the way I was with the publishing thing. 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 like three or four hundred thousand dollars to write a book." Like, something's remiss here. Like, you know what I mean? I've never written a book before, but yeah, someone's going to write me a four hundred thousand dollars check. There must be a lot of money on the other side of that bet. And so consequently, like, 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 jump through that hoop. It's both more interesting, I think. And I also think getting back to the asymmetry of risk, those are the 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. And second of all, you know, so I think they priced it wrong, so to speak. And then second of all, like, man, that's where the fun is.
Entrepreneurship statistics (51:57)
Like, 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. Right. And I always end up in public Q&A's and things of this type of 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 nine 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 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?
Connections And Their Impact
Correct. Yeah. I mean, the number of, I've been on a couple of graduate school, entrepreneurship, contests and whatnot. And one of the things that always happens there is what I call the time machine. Someone comes up with a business plan that is like, 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 laws of physics, for example, or new pipeline technology, but they have no idea. It's just a pipe dream. They've done none of the engineering. So you kind of look at that and you go, 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 then 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 then app. But you get so many apps pitched to me and 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. You must get that 50 times worse than I did. Yeah. 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 high comma, like not even a first name, or be like, hi Tim or hate him even better. I am the CEO or co-founder of X. 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, hear the docs attached. Yeah, right. Let us know if you're interested in the next 60 minutes, which might end up, my default response to anything like that where people are pressuring me for a fast decision is no. It's just, yeah, correct. It's like I've lost very little money saying no to those things. But the, coming back to the examples that you were giving and what we were talking about, charging over to restaurants and food. So you're being told how restaurants are an awful business. Food is an awful business. And I remember someone told me 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, like at what point do you decide to go into or get involved with restaurants and why?
Why Did Grant Have a Particular Impact? (55:38)
Well, so I left trading in about 2002, 2001, it 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 we built up a pretty good size company too, and I merged with the firm in New York. And I just, I kind of needed a break, but didn't know how to really take one at the time. And so I left trading and I immediately kind of panicked because here's something that I really genuinely enjoyed, but didn't kind of know what I wanted to do next and started doing consulting for a small hedge fund. And then, you know, 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 like 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 Akkitz, the chef at Duall 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 were all things that I would never have associated with eating a dinner, right? And so from a perspective of like great art experiences, like seeing a great movie or a great play or going to an amazing museum opening, we kept drawing back there. Like we kept going back and we would go back so frequently that it was absurd because, you know, it was a big meal and it wasn't cheap. And every time we'd go somewhere else, we'd go like, wow, why is no one else thinking this way? But as I got to know Grant a little bit, I think like sometimes people bring 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. 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 Paragranations of an Epicure. Hold on a second. The Paragranations, like a Paragran Falcon? I don't even know what that is.
Not a Tularian (58:22)
No, no, no. The Paragranation is like a wondering about. Okay. So it was written just after World War II by an ex-servicemen and he kind of goes around, you know, Paris. I want to say maybe late 40s, early 50s. I can't recall exactly. And there is a chapter in there on La Péramide, 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 of lines in there and give him this book, which was out of print at the time. And we kind of developed this email relationship back and forth where he would sort of try out some new food on us. And I would give, you know, direct, honest feedback, but not like, oh, it was delicious. It was more like... You know, like you're going for a provocation there, but if you know... And we would go back and forth. And he wrote at the time on a forum called Eagle It. And I went on there and his spelling grammar not with standing. 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 not... 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 the stereotype central casting of a chef, right? You know, Chubby, Gregarious guy. He was really quiet and introspective, shy.
Meeting Grant A Findrep (01:00:04)
But then you read, and you know, these, which are still up, you know, you could still Google it. And you'd go like, you know, he'd go on for like four pages about bread service. Like, what's the point of bread? You know? And this is the guy that I could wrap my head around. And so I remember on January 20th, 2004, 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, 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 health. Because if you 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 kitchen. And 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 the most amazing meal of my life. And it started out with Latvian sorrel soup with braised ham hocks. And 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'd watched the kitchen, and it was like a watchmaker shop. It was not screaming and yelling. It is just as I started interrupting. It is so unlike anything that the vast majority of people listening to this would possibly expect. Yeah, it's not Gordon Ramsay. It's not Gordon Ramsay. 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. It'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, thank you." And I said, "What are you planning on doing with yourself?" I was like, I had a lot of wine. And I kind of looked at him. He sat down with us, and I said, "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." And I said, "I'd be happy to help you do that." And he said, "What kind of restaurant do you want to build?" I said, "I don't know. I've never built a restaurant before."
The Lung Upty Mait Mainly Restaurant (01:02:37)
That was it. 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, you know, I 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 a linear. 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? I actually did not realize that was the timeframe. Yeah. I mean, can you just in the context of like normal restaurant world? We argued like, 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. What did you know about each other? Nonetheless, that gave you guys the push, like the impulse and the sufficient level of trust/excitement to actually pursue it. There had to be something there. It couldn't just be nothing.
Did They Know Each Other? (01:03:43)
So what was it? You didn't know each other well, I mean, maybe you didn't know the full scope of each other's back. I thought, yeah, I mean, I actually studied that. Like that I actually knew, I knew the facts, you know. And I knew what he was putting in front of me. But I didn't know him, you know, 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'd be serious. Like, you know, I think everyone else wanted... This is really true because he has said this to me. Everyone else wanted to offer him a restaurant that they had already built or wanted to build.
Evolving Ideas And Projects
Nobody Could Imagine What LGrad Is Going To Become. (01:04:25)
And I actually answered that question correctly. 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, like, I have no idea. Like, we got... That's a big question. We need to sort that out. 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 know, building, lease, all of that, he was like... The word oblivious is not too strong of a word. Yeah, like, you know, this is not a criticism of him either, right? It's just like he came to my house and he was just like, yeah, you know, I want Martin to design everything. Martin Kasner, who is a genius designer, has crucial detail, which we've been involved with for 15 years now. He's a designer. He's like an artisan. Like he built plateware and he won the bookuusto ore for the platter he designed for Thomas Keller and Daniel Belude's team for the team USA and all that now. But back then, like, I mean, this guy's not going to design plumbing or electrical. So I would just look at him going like, well, no, we need an architect and you need to get like 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 know, build a kitchen and you go, you know, in terms of like, obviously he knew that there were health inspectors and all that. But the process of all this just about, you know, either we're going to not build it ever eight weeks in because we were to hate 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. Why do we need candles? That's kind of like, why is that romantic? Why is, why do people put a little bud vase on a table? Why shouldn't that be an edible thing? That'd be cool. 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, you know, and all that. So we, we went through every aspect of that and, you know, I lost almost 20 pounds that year, not in a healthy way. Just like GCing, the construction, I laid tile in the basement like three days before we opened it. 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? 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 going to be all my chips energetically.
Designing the Restaurant. (01:07:48)
So why, why this? You know, there are occasional times when you wake up in the morning and like that thought comes back to you that like, hey, I'm, you know, I'm really sucked into this, right? You know, and for about three or four months without telling anybody, even, you know, Mara, like you're 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, 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 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 do you see 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 going to do. And, and, 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.
How to find people who are the best in the world (01:09:30)
And I've just met somebody who's the best in the world at what they do. And no one knows it yet. Like and you know, there's 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, it looks smart, but I got to tell you, it was years before it felt smart. 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. Yeah, among them. But the, the, the key point that jumps out for me is, and the world didn't know it yet. So my question for you is that that sort of brings to the forefront, in my mind, at least the, the question of what is a nixying or feeling that other people are not. So could you talk to that? I mean, when, like, is there a 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, about that. It's, it's, it's definitely intangible. Yeah. You know, it's, I think it's different in every case. But it's, 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, 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, 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 commitments, 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. 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, and there, that's, that's an interesting, you know, I, I really have never really thought about it that way. But like, it was just very clear to me that Grant was all in. Like, if, if, here's the thing, if, if he wasn't going to do it with me, he was still going to do it. Yeah. 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. 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. 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. Mm hmm. And for, for anyone who has the opportunity, I don't even know if they would have the opportunity, but to watch a reserve grant, even for 60 seconds. Well, Chef's table on Netflix is great. Yeah, Chef's table. Yeah. Great. Perfect. 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, 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, to, to that point, focus, one of the, my favorite aspects of, of speaking with you and having conversations is the question, the questions that you raised, right? Like what candle? Not just should 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. Yeah. Basic stuff. Yeah. What are other questions that you asked related to a linear or you could certainly bridge to, to other, you know, I think it makes sense to, to chat about aviary as well. But what are some other questions that, that you guys asked that people might, might not think to ask?
Table decisions (01:15:03)
Yeah. I mean, you know, Grant set the tone for that in our first meeting, not really knowing me and we started talking, we didn't even know where to start, right? And he said, well, I, I know one thing. I, I want to have wooden tables. Like, 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, it feels good or it absorbs like a spill or whatever it may be. 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. Right. But if you go to like a really fancy restaurant and you feel under the table, guess what? Also plywood, just a little thicker. And he'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 grade. It'll show the plate where 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, maybe a little warmer in the summer because it's higher humidity in Chicago and you just give it a vice. And it's, you know, it says, so you have these cascading decisions that like become part of the art of the place that some of them start from like 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 because that Martin designed because you can't put, we didn't want to have placemats. That's too cheap.
What to do with a $150,000 Idea (01:17:20)
So all of a sudden we had to design like, you know, 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 was is now a famous chef, chef Sean Brock of husk. Oh, fantastic. Yeah. He was not, he was not yet a chef then 2005. And he was the first guy through the door. And he wrote this giant blog post and he got 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, it's like right down to the front hallway that was, you know, a reverse perspective and stolen from a shirt cathedral and inverted, you know. So all of my interests of architecture and art and science and all of 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 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. And so just little things like that. And then we've taken that on, you know, through everything that we've done where 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, I think editing, editing yourself and each other is in an open way is really, really painful, but really, really important. And coming back to something you mentioned related to the living room, the well off, who then create say an art project that is not maybe beautiful, but is most often not a viable business. How did you apply those questions and rethink the business model to make any of this work financially?
OpenSource and Karp Cutura (01:19:57)
Yeah, well, I mean, you don't want to be a dill-tot, right? And so, you know, my biggest fear is that it would work in an artistic way, but wouldn't work as a business. And so, you know, the answer is at the beginning, we didn't, I didn't do much. I handled all of our marketing and PR, like I wrote everything, you know, myself. What you 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, you know, 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 would be very unimpressive if they could. But 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 does insurance cost? You know, your lease, your rent, like all those things, right? 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 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 a grant used to work. And I'd like 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, 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?" And he's like, "Oh, you're within like two or three percent." And Grant was just like, "We're talking about back of the envelope stuff." And so you ask, "Where can people start a business?" Start on the back of an envelope.
Struggling And Overcoming Obstacles
Raised funding to build my first restaurant (01:22:30)
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. Like money coming in in one shoebox, money going out in the other, whatever's left is profit. Start that basic. And we did that. And I didn't really think about the, we did well, but we didn't make a ton of money. A linear cost of $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 in the first year, we made about $450,000 to $500,000 on $4 or $5 million in sales.
Winning Gourmets Best Restaurant in America (01:23:12)
Not a great return. Not a terrible return. We then won Best Restaurant in America from Gourmet Magazine. And I was horrified that we won that, frankly. I remember Grant called me and said, "Yep, I just got a call from Ruth Reichl." And we had some stated goals of how would we know if this is a success? And one of the things we wrote down was Ruth Reichl declared Best Restaurant in America. And we wrote that because in 1997, she wrote the most exciting place to eat in America is the French Andre. 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, pre-help, all that. And then all of a sudden, we got that. And I was horrified because one of the goals was completed so early. We wouldn't have our load star. And so he was like, "Dear God, can you let me enjoy it for like a minute?" To you. Yeah, he was genuinely mad at me. I was like, "That's terrible." I was happy, but I was also like, "Oh, no. Now what do we do?" We need to find another artificial construct here that like, "Go after." And enough of this, I need to find happiness and get this other happiness out of my face. I'm like, "We're not for sure." Yeah, no, it's about, I really do believe that actually, that it's often the process is so rewarding that when you get something done, it can be a letdown. 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.
Grants cancer diagnosis (01:25:14)
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. And weirdly, our goal was to keep a linear 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 to be closed." So it was, and in the midst of that, we decided to do our first book, "Really Decronical." You know, his, 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. So in the midst of managing a self-created, self-published book and 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 of that. I started going, "This place is run in strange ways, man. This industry is not run right." And I started asking basic questions. 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.
Pasts sudden death (01:27:12)
The service industry as a 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 there will 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." 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 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 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 later, when we finally were 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 like, you know, we don't have a place for you here. And man, it really worked. You know, that was the basis of, you know, I talked to every software company in the industry asking for their API, asking to build essentially what's options pricing software on top of reservation systems. And OpenTable told me no, and the POI 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 heard a 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. First time ever.
First-time use of smart software (01:29:25)
Okay, so pause here for some. I know a way ahead. No, no, no, this is great. This is great. So a few things for folks who are not familiar, API application programming interface, 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. 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 the snap of the fingers, like 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? 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 7.30. And then they tell you, "Yeah, yeah, we'll have a seat ready for you at 7.30." 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."
No show rate (01:30:50)
The reason that they're running behind is because they overbooked because about 15 to 18% of the people just don't show up. So they overbook. They also know that if they tell you that they'll really seat you at 9 and you wanted an 8.15, you'll just go to the restaurant down the street from them that will lie to them. Right? Right. So they do that and ultimately it's just bad all around. It's bad for the restaurant. It's wasteful for food. And it's bad hospitality. And there are so many pop culture references and entire sitcom episodes built around, someone trying to get into a restaurant. It's absurd. It's completely absurd. And I looked at our no-show rate at Elinia, data-driven, tracked it. I looked at what we call short-seated tables, the number of tables that were four people, but only two showed up. And the dirty secret there is people would go, "Well, what do you have available?" "Well, I have an 8.30 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 we, 5 to 8 percent 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. One, I wanted to figure out ways to make it transactional.
Innovation And Pricing Strategies
5:15 becomes 8:15 becomes 10:30 (01:32:23)
Because again, you asked about Professor Thaler, one of the key tenants is a little bit of skin in the game. 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?" Dude gave me a gift.
House edge is real for guests and hosts (01:32:45)
Now he's pulling it back. 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. Right. Yes, huge. So, you know, that came to me one day because 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.
Putting deposits down for seats (01:33:10)
Right? Yeah. My wife basically says, "Hey, well, let's go to that movie." So I go on a friend and go, "I buy four tickets, 60 bucks," whatever it was. And at like 5.39 it's 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 dollars to not go to the movie. 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." And I literally, irrationally, made everyone go to the movie. Which weirdly costs, you know, I mean, from an emotional family standpoint, all bad all the way around, right? And so I thought about it and I was like, "Wow, what if people put down a small deposit on times when demand exceeds supply?" Like, right? So Saturday night at 8 o'clock? Great. That's the best seats at the opera house. Let's see if people will prepay for that or put down 20 bucks 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 do that." Like this is not the way it works. But if you look back historically, and this is the interesting part, again, it's about like digging in deep on something. If you look back historically, restaurant reservations started with the telephone.
Price by day and time (01:34:39)
And at the time that we were starting to do this, the telephone was dying. And I didn't know that at the time. I 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. And similarly, calling a restaurant isn't an anacwaded thing to do at this point. But long before the telephone, people got room and board. And what room and board 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 there was hundreds of years of that long before there was a telephone and people called and said, "Yep, Mike, I'd like to eat at your restaurant. Sure, we'll let you in." And so as the technology for the telephone is morphed into 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.
Instant Innovation (01:35:56)
I always thought Uber could affix their surge pricing issues by having discounted pricing when there was no demand, like just pricing in two directions. And if you move pricing in two directions, then that whole argument goes away. And so we did that. We priced out different prices by day of the week and times of day. So 5pm on Wednesday at a linear is still cheaper than 8pm on a Saturday. By a lot, by 80 to $100 a person. And you know what happens? And this is now we have hundreds of restaurants doing this on our software called Talk. What happens is people buy the most expensive seats first and the cheapest seats first. Which is exactly what you'd expect actually. Because there's some people 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 5 o'clock on a Tuesday. Great.
Like I can save 400 bucks." And then there's some people that go like, "I only eat at 8pm on Saturday." Well, okay, that's fine. Pay a little more. Or they're attracted to the fact that it is the most expensive. Sure. That happens too. And then there's a whole bunch of tools that over time we built on top of that to sell wine pairings or sell books. We sell 20 linear books a day on checkout with the booking process. That's all ton. Because we're not going to exit through the gift shop at a linear. It's a Michelin 3-star restaurant. So we would subtly have one book near the restrooms that people could peruse, but it didn't say, "Buy the book," or anything like that. So typically we'd sell one or two per night. Now on checkout, when you book a linear, it says, "Hey, would you like to buy a linear book personalized?" And 20 people a night get it. That is $400,000 in revenue a year. Yeah, that's incredible. 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.
Solo Ventures And Taking Risks
And people don't want to be upsold inside of a restaurant. There's nothing worse in my mind than 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. And we all know these things. And I think no restaurant wants to raise their hand and go, "Yep, that's all true." We were aligned to our customers and we were not going to release it at 8.15. And so I think when I said that, you can look back through some articles. I remember that there was an article, I think it was in GQ, that they interviewed a grizzled veteran and he didn't use his name and said, "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. Yeah. There's so many systems that have similar overbooking load balancing issues. Right. You look at airlines, you look at hospitality. Yep. My dentist. Yeah. I have a great dentist. They only do it via phone call or email. 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." They're like, "Nah, don't have one. Guess again." It's like, "Put the shit on display, man. Just tell me what day you could clean my teeth. Show me." And I'll just go online and hit the button. So when you then debuted the ticketing option, if I'm labeling it properly, how did you prime the pump for that? Was there anything, did you need to prime the pump to have this, what seems like, certainly a windfall? Well, we did. We did a video where next restaurant was about a restaurant that's always new, essentially.
Like, what's one of the big problems of the restaurant industry? Well, when you open a new restaurant, it doesn't matter what it is, people are going to show up for like five or six months. And then after that, you got to struggle to get regulars and find new audiences and all that. But people like the new quote unquote, right? The other problem 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 a linea right in the middle of his sickness because I had driven down from Michigan. I've never eaten before after in the linea 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. 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, like I had no idea these guys were so versatile, you know? And then it made sense. Hey, these are passionate, amazingly talented people. And it kind of dawned on me like, let's just change the restaurant every four months. Like, let's do, and then we dwelled on that for like a year thinking like it was kind of impossible to do. And then, you know, Grant said, I said, well, like, let's start with the French menu. He's like, well, what does that mean? Like there's Southern France, there's the Loire Valley, there's France, that's the new Val cuisine. And then 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. And 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, 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 a steer minimalism, you know. And so you do the 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 sin flooded in 1908, somewhere around there. And so scaffier, like the father of French cuisine, was at the ritz then. And that was kind of like the height of that era of cuisine. And then after the sin flooded, that's where you got sort of your groceries 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. As roughly as I recall it, somebody's gonna listen to this and tell me I'm all wrong. But that's where we landed because we could do this is scaffier menu.
The recipes (01:43:08)
And boy, we argued about that too. Like didn't have blenders then. So, like electric blenders. So I mean, we just, so you wanted to mimic the production. Well, I did. Grant did not.
You can mimic the production (01:43:22)
So, so we were, I remember we were at a, we invited the press to a practice. And we had a landslide capel. You don't have to make the first. Well, partly that, partly he was like, should we make it intentionally worse than we can? Yeah. Because the recipes were really vague. They didn't even call for salt. Yeah. So, 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 I'll never do again, right? That was just a genuine error. Like, 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 he's, this is, this is at the press dinner. Yeah. Yeah. And I remember he brought the soup out and it was 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 mouth feel was like perfect, right? And so I was like, oh, you, you use the blenders, you know? And he was like, the recipe didn't call for salt either, did it, but I should, I have not used that and had it taste like shit. Yeah. And, 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. And that was it. Like 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 I mean, to the day we opened, we, we had those, those arguments. And then, you know, in terms of the software, like, man, like I didn't sleep for a week. 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. I think like, like, you know, nobody would help. No one would, you say nobody would help? You mean competitors potential. I don't know. I don't know why potential like these are people. I got it. Speak, why wouldn't they help? Don't I, you know, like in the case of open table, they had a monopoly. Right. So why, why? That makes sense to me. That makes sense. In terms of everyone else, I think they just didn't get it. 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 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, I'll send the prices 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 and go, oh, that guy, like he totally stole that ticket from me. You're doing two different price points, you know. Yeah, yeah. And I just feel like people inherently get that without having to explain it to them. How, if I, if I may, how far in advance of the opening, where you, where you hoping to launch the software and when did you end up launching the software? Yeah.
Going it alone (01:46:35)
I launched it about seven hours before the first dinner. Holy shit. I hope to have done it four to five weeks ahead of that. It was literally 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. It was, I didn't, I probably set it up wrong. 2010, it did not, like it's supposed to auto load correct and self propagate and it neither happened. I was expecting, we had 17,000 people on our email list that had 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 nine thousand 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 as everybody's public access. Oh God. So I couldn't even go into configure, you know, so I, 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. So 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 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 right, I look like a bad movie startup thing. I had a beard like I was, you know, just strung out manic. And I remember I called Grant and it was opening day and he said, how many should I prep for I said prep for full? Like, because if not, we'll turn on the phones. But I didn't tell him was I didn't order the phones because I didn't want to have a fail safe. You'd burn the ships. I just wanted to make sure it I forced myself to work. So we had no phone line. And when it started working, I would double click. You know, 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 act 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 called Grant and 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 getting a fucking taxi, you can 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 I took him upstairs to my office. And I explained to him what I just explained to you. And I said, click on one of those and 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 4,000 people waiting for you 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 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? Yeah, yeah, roughly. I'm going to say $115,000 roughly. In your mind, were you completely confident it would work?
Risking it all (01:51:08)
And it doesn't have to be ARB. There could be CDEF. Or were you like, you know what, for 115k or whatever it might be, even if you budgeted for less and it overran, even if there is a 20% chance that this works, 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. 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 Elinia ran, there's things that you can fix and control and there's things you can't, right? And this was the one that, you know, I would answer phones at Elinia and it was like being a therapist. People would go like, I would like to, you know, make a reservation on my anniversary, you know, seven weeks from now on a Thursday and you're like, I'm really sorry, sir, it's totally full. And 100% of the time they thought you were lying to them. Right. 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 took 10 minutes to do so, 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, like 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. And I didn't really intend on making it, you know, like 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.
Risk And Pr Management
Gads guaranteed market of one. And I also want to point out when we're 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 caused 115, like we're getting very much within the ballpark of that. Yeah, 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%. 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 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 100 people are going to come through the door. And if your fish migrant doesn't show up, all you need to figure out what to do with that, you know. And so it's not really about 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, you know, it's a minuscule part of what it turned into. But it was the seed of an idea which is more important, which is, hey, let's shake things up. And then I got a great CFO who was at Bain Consulting and 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, like, run with it. And so we've built out food cost analysis that uses Merimeco charts and it's totally different because it's visual and you give that to the chef. It uses what charts? Ah, Merimeco. If you don't know Merimeco, if you get nothing out of this, one of the greatest visualizations in charts that you could like, you know, do an 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 don'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 building with different colors. If you give a busy chef 400 receipts and say, hey, every Friday, look through all these and, you know, figure out what we're spending too much on or worse, hey, your food costs last month were 36%, I need to admit 32%. You can't take percentages to the bank. Let's talk about dollars. Let's see where we can say some dollars. Or the revenue could have just gone down that month for whatever reason.
Merriamento Charts (01:56:48)
It's August in New York. And so it's not really a good way to look at it. But you give this person this chart, this Merameco. No, Merameco. It's got his name. Yeah. It's M-A-R-I-M-E-K-K-O chart. Is that right? Again, not good at spelling the chart. I think so. There is a Google result which is how to make a Merameco chart in Excel. So I'm guessing that's probably it. There's some YouTube videos as well. I'll put this in the show notes for people. Man, I got to tell you, from a utility perspective, you show that to a person, you explain it visually. When you see it, it makes much more sense.
Food Costs Analysis (01:57:25)
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 last month." You know? And this can be used for things outside. Everything. Everything. Yeah. It's not just food, not just restaurants. Oh, no, no, no. It's 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 the best consultant that I've ever hired, who's now my partner in CFO, he came up with this. And as soon as I saw it, I was like, "How did this not enter my life until my 40th year?
Pointless PR (01:58:01)
This makes no sense." It's just incredibly useful. But my point is that we went through everything in the restaurant and went like, "Well, what are the biggest spending areas that we can analyze?" And it's true in any endeavor that you're doing. There's no point in looking at the dimes if you've got something that costs $1,000. Start there. So, you know, and this, you know, getting into our thoughts on our publicity, our PR, we don't have a professional PR person and haven't in 14 and a half years.
- Focus on Measurable Systems (01:58:31)
We don't spend money on any promotions other than social media. And then with the social media, we track all of that. You know, we can see what our ROI is on a boosted post. We can see what our ROI is if we advertise on your podcast. You know, 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 a Marameco 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. It's a quote from Charlie Munger who, for those who don't know, 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 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." Yeah. Right. Yeah. I mean, because you, as you noted earlier, you have these practices that are being implemented by otherwise, in many cases, smart people who have 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?
- Lowest Friction, Highest Probability (02:00:32)
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. Yeah. Once you start down that road of thinking that way, it will drive you a little nutty. Because you can't do every business. And there's a couple 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, here's an example. I'm going to give somebody out there, call me up because this is a real business idea and I've been wanting to do it for years. But black and white truffles, not the kind, not the chocolate ones, but the kind that the dogs dig up in France and Italy are as expensive as the most expensive drugs in the world. You order them as if it were an illegal drug. Of course, they're perfectly illegal. But you call up a truffled dealer and you go like, "What do they cost?" You call their 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 Alineia and we will ship you back to stuff we don't like," and all that. And then in an unmarked box stacked with newspaper will come $20,000 of truffles. Good for like a week, by the way. Like not. Like this is not like a big supply. And is completely opaque as a market. There's 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. Sound familiar? And like, we spend a lot of money on truffles every year. And try to figure out what the US 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 like someone's guarding their golden goose. Right. 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 that's what I did. I did a closing and selling network between the Merck 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. Red like most of the CFTC. So when they would tell me it's not like in the rules or not legal or whatever. What does the CFTC Chicago trade? No, no, no, the Federal Commodities Trading Commission. I see. It's like the SEC but for commodities. I gotcha. And, you know, again, sit down and actually read that someday. What's amazing is that the experts, 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."
Employee And Feedback Dynamics
- Rethinking Experience (02:03:38)
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. They would just quote to me, like, "It's against the rules." I'd be like, "Well, here are the seven volumes. Police show me where. If not, I'm going to do it." And so similarly, like truffles, same thing. The booking for the restaurants, same thing. Open table had a monopoly. 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 the truffle extreme. So you question for your... This is something also for... This is maybe just turning this into a therapy session/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, well, no, no. I don't need any more puzzles. I need no more puzzles. But you... There are many, many black boxes out there. You have truffles. And like you said, it's like, "What's the market size of the truffle exchange at x point in time? Don't know." Although you guys want 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?
Accidental Entrepreneurs (02:05:17)
Because it's going to consume energy, it's going to consume time. How do you pick and choose which to go after? It's like the manic test, right? 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." I feel like the boring company is like that from us. Like he opened his mouth and we're like, "Yeah, just big, big tunnels." And he's got enough credibility now where some engineers are like, "Yeah, we could build, you know, we could dig tunnels that are seismically fine." And like, "Hey, you worked for SpaceX, okay. Like, let's see if you can build a, dig a tunnel." I don't think that was like a business plan, you know? And he just has a lot of credibility, you know, at this point. I think that to a certain extent, like a lot of people have a lot of ideas. They just don't dig down that rabbit hole. And so, you know, I do some as like a hobby. I do some where I kind of have someone that I like within our company and say, "Well, if you really want to be independent and do something cool, like here's a project. Like 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 come back to me and say, "Hey, you know what? I can't figure out the total value of the truffle market in the United States." And I'm like, "Yeah, no shit. That's why I asked you to do it." Now when you give them an assignment like this, you're like, "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 get-- Oh, no, no, no, no. It's not-- oh, no, no, no. I never, never, never take every single intern that works at our restaurants for a minute is paid. Gotcha. Yeah, so they do get paid for the black box time. Oh, yeah, of course. Yeah, yeah. I would never-- I think one of the things that I really dislike actually are industries like where they say, "Hey, you're in college or whatever, you know, 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, you're probably not-- if you're not getting paid, you're not being valued, frankly." And for me, we pay everybody. Nobody who's working here, if they're-- I do expect that salary 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?
Paying interns for independent research (02:08:31)
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/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, there are going to be periods of time where you are doing it in the evenings. You are doing it without a clear road to immediate cash flow. 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 negative on that. Yeah, I mean, I guess to back up a little bit, like when there are people who I don't know who do not work for a company 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? There's a guy who brought me a food product that about a year ago. And it was interesting but not 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 of 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. And I would love to have you still involved, even though we're so much farther down the road than I thought it'd be a year later." That's super cool. I didn't pay that guy, obviously, but there's a person who's truly entrepreneurial, right? And did this on his own time. But if they're working here, if they work for the Elenie group, if they work for talk, for sure, you could take time during your day doing your normal business. That's a project that we're working on. And we also try not to have such harshly defined roles. Not within the restaurant.
Entrepreneurial fluidity (02:10:45)
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. Realistically, that's not... But on the business side, we certainly have people who work in roles as 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 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 found useful on hiring or managing? God, if you found one, let me know. Now, hiring is so hard.
Hiring & management (02:11:47)
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 about, what the company's about. They've probably already been interviewed by other people before they get to me. And so at that point, I let them know what are the upsides and downsides of working here. And I kind of let them know what the expectations are. And I tell them, people self-select into the 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 buy time and resources and would also feel awful. It's never good to go if someone 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. But people tend to join organizations where they want to work.
How to Filters Employees for Work Ethics (02:13:01)
And so 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? I kind of judge the person by what their pain points are. And so if someone says, one of the things I like to ask, which kind of resonates probably with you, as I say, "Hey, where are the last five books you read?" And I got to tell you, that's a really hard question to answer. 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. Totally. At least I can't, you know. And so that is a great filter 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. 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 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.
Writing And Communication Methods
Why Tim Loves Writing (02:14:21)
That's where I focus, that's my Zen moment. And that's a valid answer to that question too, you know? Like, you don't have to be a reader. 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 and... Yes, yes, yes. And then the four hour work week. So definitely not the right answer. So there's that and I ask that kind of question. But then like things like, "Do you enjoy writing?" Like one of my things is like, "If someone doesn't like to write, what do we...when people ask what I do for a living, I say, 'I'm a writer.'" And they go like, "Oh, you've written a couple books." And I go, "No, no, no. I've read about 400 emails a day." And that skill is hugely important right now.
Understanding The Art of Giving and Receiving Feedback (02:15:11)
If someone doesn't like to write, they're not going to want to work for me. Because when they send out an email and I'm CC'd on it and it isn't a well thought out little thing, the answer coming back is like, "Hey, here's four ways to improve this." And at some point it'll be like, "Really? You did that same mistake again?" It comes off kind of harsh an email, you know? And so if you're the kind of person that doesn't take feedback well or doesn't want to learn, like, "Man, I'm lacking patience for that at this point in my life." And I let them know that. And some people like, "Look at you and just go, 'I can't, dude, I don't want to work there.'" Like more than I would think, which is great. Yeah, simplifies matters. Yeah. And it's done with a smile. I'm not trying to terrorize people when they come in an interview. And then there's some people that go like, "Awesome, that's exactly what I want." 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 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 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, Cheek.
Remote work, email (02:17:18)
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 Frieds, a friend. I was listening to his podcast with you. And I don't get it at all. I would love nothing more than to rework or to not work, work four days weeks or to have six week projects and all the stuff that he espouses. He's a friend. He's an investor in one of my businesses. Man, that's not how I function at all. And I weirdly think that he misses cause and effect a little bit. 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, even if it's not critical business for me. And one of the things I did for about 10 years that I loved doing when we first started Linea is that I would have Google Alert set up and I would find some blog that only like some woman and her mother read. And I would reply personally, like, say, "Wow, thank you for the great write up at Linea." And there'd be kind of mind blown that I found it and 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 a CTO of talk. He kind of said, like, "Dude, you're slipping, man." Like, "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. But so now I can't quite do that. I do wake up in the morning and look at sort of our bazillion social media messages and whatnot. Kind of pick a random one and just answer it. Like I want to be involved in knowing what our customers are asking, what they're doing, what they're saying, what they're replying. Getting it to 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 5 or 6,000 people a week, you're going to get something going wrong. But man, I'm terrible at it, honestly. I think I've tried. I will tell you a funny thing is that when I go away in vacation, I do try to concoct a pretty funny, I basically say, like, "Look, I'm going to be in a mountain or a mountain or on a boat or whatever." And I might be able to reply. And so I would make these elaborate stories up. Almost it's like a fun piece of art project as to why I couldn't do it. And so one year every time I went away, I basically said, like, "I'm going to visit a panda that I adopted." In fact, in Chicago. And it ended the year around Christmas time when I went on break with a picture of a baby panda. And a really mediocre Photoshop job of me standing there. And the Chicago Tribune called me up three days later going, "Is it going to the Lincoln Park Zoo?" And I was like, "No, dear God, it's not." And the following, there's no panda. That's why I went back. That was my time to reply to that. And then the following year I said, "I like to talk, as you might be able to tell." And so everyone who knows me knows that I can just go on and on. And so I said I was going to a combination of a tantric sex retreat and silence retreat for eight days to explore both inner and outer self. And this is your out of office reply. That's my out of office reply. And anybody would get that, right? And so I thought that was really funny. And then about two years later I bumped into some guy who worked for a very big corporation. And they wanted to do some work with the Elany group. And it was kind of a consulting project, very lucrative. And he was looking at me really funny. And I said, "What's up?" And he said, "Well, I really wish we had worked together." But then you went to that sex retreat. I just couldn't get it past everybody. And I was just like, I was looking at him going, "What are you talking about?" And then I remembered like four years earlier my out of office reply. And I told him that it was kind of a joke, like the panda. And he did not find any humor in it. 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 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 do it, what you were describing. Yeah, I feel like it's genuine.
First of all, I'm always curious, what are people writing about to the restaurants? What are they writing about? To me, my LinkedIn profile, basically, I don't really read LinkedIn at all. I keep it. I think it's important to have it. 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, hey, via your LinkedIn bio. And I'll read that and reply. And it just shows me that, hey, there's an actual human on the other line. It's not just a marketing thing. And B, they really, really do have something that they want to talk about. And so little things like that are puzzle filters, I guess, that I call them, where I just create 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. Yeah. And the detail is really important here.
The mini hurdle. I have a friend. I'm not going to mention it by name. So I'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, given earlier, call this number and leave a 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. Yeah, 100%. So publishing. What is, 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 related publishing investigations, which I think is not a mis, 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. Just like if you're a basketball player, you want to make the NBA or, you know, if you're a runner, you don't want to be in the Olympics or whatever, like to grant to a bunch of chefs, giving 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 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 Andre 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 and '99, something like that. And the typical publishing deal, like kind of came into us, which was great that they were coming in. And it was, you know, $250 to $300,000. And they would basically say, well, out of that, like, you're going to pay for the designer and the photographer. And you need like a 30-day photo shoot. And you know, here are the guidelines for how many photos you want in the book and, you know, to keep costs down and this and that. And I kind of looked at all that. And all the offers came in within about 10% of each other, which immediately, you know, 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 usual way. And then I started going like, oh, this is actually like the music industry. Very much so.
Too many cooks in the kitchen (02:28:23)
I knew people 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 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. 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. And then I kind of went like, well, I wonder what a book cost to print. And I mean, I just called, I asked them, like, well, how much does this book cost to print? Well, I don't really know. And so what they would do is that they would 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. Like 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 how many, how many copies of the French Audre book sold? 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 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 out of some of your colleagues and friends. 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 bestseller list 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. And it's a gameable system, right? Like the way that the 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 counted 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's a lot of wiggle room. In other words, it is not like the Olympics. We're like, okay, clear gold, silver bronze video replay. We know exactly how this was tabulated. Yeah, so the more that we dug, the more that we got like more and more curious, a little bit angry actually.
Publication And Profitability Strategies
Why Grant never wanted to publish a cookbook until now. (02:31:28)
And but Grant was weirdly angry at me because he's going like, well, dude, like, why do you care? 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 going to 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. You know what it's supposed to look like. You got something that emulated 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. 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, 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 $2.23 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. 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, 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 going to 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. And so we decided with the Elinia 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 a cookbook. And they all came back and same, all the usual criticism, except for Aaron Wainer, a 10 speed press. Yeah, smart smart guy, by the way.
Angairs offloading costs: Lets the restaurant, WD-50, sell the books at a wholesale (02:33:59)
Yeah. And he basically said, I'm going to make you an unusual offer, no advance at all. And we can negotiate, essentially we'll just be the distributor and we'll negotiate out like 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. And 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% 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 100,000 books, say, 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 cooking from a professional point of view, best cookbook of the year. And we won, I say we, Martin and Laura Casner won the Communication Arts Award, where if you're a designer, that's like their annual is like, that's like getting the Oscar, right?
Yeah, similarly for people who don't know it, I mean the James Beard Awards are also very much like the Oscars. Yeah. So we felt like really vindicated on that. The book still sells, this is eight years later, we still sell 7,000, 8,000 copies a year. And when we did the aviary, which is our bar that's a non-bar that we talked about earlier, we started getting all of the same offers again. And this time it was really easy to go like, just kind of like, oh, that's cute. And so I should add that we did, I wrote a book of, Grant and I wrote his memoir together that we didn't use a Ghostwriter, we wrote 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 and 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 with them? Yeah. Yeah. So basically like, here, I'll do this. But let's say, so I think one of the great problems, like 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, 4% to 5% of the sale price.
How to price your home at the very highest level (02:36:46)
That's a lot for something. It'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 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, 400 bucks 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. And they don't really care about maximizing their last dollar. But as 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. 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 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. 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-upable. 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 just knows that like, hey, she was brought up 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. I've never written a book before. I said, well, we did the Elinia book. That's a cookbook. It doesn't count. These are words. So I went to the publishers that I'll 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 method of price discovery. If you think about it, most auctions, even like you go to a charity event or whatever, 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 of 30%. They'll never even know it because there's only one bid that ever happened. So no one knows how off they are.
Alinia to Making the Roots Female Shkpfy Worked a Little Better in Our Case (02:39:45)
No, on that phone call where you're like, hey guys, we'd love to get you on the phone and then... Publisher, it popped right away. I guess my question is, did they know that they were signing up for a Mexican standoff slash? Yes, they did. They did. So sorry, I winked at them all personally. Well, if you're like, John, I'd love to get you on the phone. And that's like, alright, congratulations guys. Yeah, you can't ambush people until a Mexican standoff. Yes, you can't do that. I mean, you could. It might be fun, but I didn't do that. I wouldn't talk. I created enticement. I sold on my ability to actually do it. It was a bit like doing the no phones with the software. Like I was like, well, if I get a really big contract, I'll have to figure out how to write a book and then it'll be a lot of pressure. And so I did that and I wrote it and I turned it in on time, which apparently no one does. Very, very rare. Yeah, because which is to them, like on the day it was due, they went, what's this? And I'm like, that's the manuscript. Yeah, it's 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 point of time. Yeah, it's just this like open, open lie. Do you turn your books in on time? I do actually. I believe that. Yeah, I do turn my books in on time and we could get into that separate time. I just want to ask you a question. No, I do. I do not turn them in at the expected length. But I do. Longer perhaps. Yeah, I do tend to turn them in on time. So what happened with the aviary is that we like we basically couldn't figure out how to do another book because the linear 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, Ellen 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.
Alynas Illiniya becoming a juggler (02:41:53)
He worked at Weta Studios and all the Hobbit movies doing like hair and water and things like that. So he writes the physics that then makes the makes the magic, right? And then he worked at Pixar. And while he was at Pixar and his wife, Sarah worked at Industrial Light Magic as the 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 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 Alan and Alinea. Yeah. And he's an auto-dedact. Like 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 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 up to a linear ones to ask Grant some questions about how to make something because it wasn't working. And when Grant kind of threw up his arms and goes, well, the book might be wrong. Like Alan's worldview 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 Marata in there. Like, I mean, we documented hundreds of recipes. It could be wrong. And at that point, Alan, like his mentality changed. It's in the video. 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 was, you know, a 400 page beautifully, beautifully illustrated, beautifully written book about a person's journey of learning. And it was called the Illiniya Project. And I had 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 aviary, I immediately was like, this is the guy to do the book. 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.
Reflections On Work Philosophy And Influence
Is it possible to bear fruit and create something remarkable? (02:44:44)
We had some conversations about what they 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. 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, 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 out of your comfort zone and have a child and have that change of life. And they thought I was like, punting on them just because like in a discriminatory way. And I said, nope, we're not going to do this with anyone else. We will 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 over half doing this book. Did a Kickstarter to just essentially raise awareness for it. We raised almost a half million dollars in the Kickstarter. We sold about another $300,000 a book since then. It comes out in October. You can go to theillyniabook.com. And the coolest part of that website is it-- It's theillyniabook.com. Oh, sorry, theillyniabook.com. All right. Very lead, Nick. Very lead. What genius marketing right there. So yeah, theillyniabook.com. But the coolest part of that is, other than, of course, your ability to buy said book, is 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-- One of the things that every single book publisher told me is that you can't sell a cocktail book from $130. 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. I think that because certain things like fire are really hard to photograph, there's a great picture in there of this one cocktail where we spray 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. It's a Batavia Rock cocktail. And 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 how 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. And I think we're going to set-- Man, I don't know. 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 not a 995 book either, which it shouldn't be. Right? I mean, it's $85. We've invested close to $1 million 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 all ourselves too. It's really like a five-person project. It's deep enough that if a professional gets it, they're going to learn a lot.
Elinas Work Philosophy (02:48:15)
But I'd say about 35%, 40% of it can be done at home because unlike the Elinie book where, hey, you've got to go out and buy a duck. And your local grocer, you might not have this kind of duck or whatever. If you need some florida kind of rum or a certain kind of tequila or whatever, you just go to your local liquor store. It's exactly the same thing that we use. That product is universal. I read somewhere-- I don't think it's taking us too far afield.
Nick Krauss, food lover or agent provocateur? (02:48:41)
I read somewhere that you consider yourself a tequila guy, or at least in part a tequila guy. Any favorite tequilas or concussions? Well, there's-- so I'm going to do a little video promo for the book that we just filmed last week where essentially I work with Eric Jeffers, who's one of our bartenders in the office, which is our little speakeasy below the aviary. Which is amazing. Yeah. If people have the opportunity to check it out. It's basically Grant just said, hey, everything upstairs, people are going to think it's Elinia Smoke and Mirrors. We need to prove we can make a real cocktail. So one of the foundational cocktails for me is a daiquiri. I say three ingredients and a million ways to fuck it up. It's just lime, sugar, and rum. That's all it is. And yet, most bars you go into will make a terrible daiquiri, or they'll blend it or blah, blah, blah. But a great daiquiri is really, really transformative. So did a video on that. And then I always make a half mezcal margarita. That's my favorite drink. All I'm doing is I'm taking some ripposado and a little bit of mezcal and equal weights along with some, you know, Grandma Nae or Quantro 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, old gin like there's a growing movement to kind of rediscover some of the distilleries in America that were really, really, really great that don't exist anymore, that were more artisanal at the time.
10 Best Dark Spirits (02:50:09)
You can still find those bottles around. It's a little bit easier than like, you know, someone like wine collecting or something like that. And man, it's like an endlessly fascinating thing. I don't consider myself a cocktail person 10 years ago. I really loved wine. 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, avocatonic's just boozing and it's just getting drunk. That's not what we're trying to do here. We're trying to make 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 the, 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. There is 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. But 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 some ice with pastriode spitters 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. Doing some of these things at home is not hard. 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 a 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'd bring in and, you know, that you, you know, a 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. You know, the one that I discovered that party was a Frisco sour had like been a dictine whiskey and lemon, you know, that was really delicious. So it can be, it can be more than just like a strong cocktail. It can be really delicate and interesting. And people can learn all about this at the aviarybook.com.
Where to Find Nick & Aviary Books (02:52:43)
That's right. Yep. Well, Nick, I have two rapid fire questions that are unrelated. And then I think we're going to, we're going to, we're going to bring this neat and tidy round one podcast to, to, to a close. But we've talked about books and everybody should not only check out the aviary book, 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. I can at the aviary. So it is a bit of a, I hesitate to call it a workaround, 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, 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. The food by randomness, almost everyone in my office is forced to read that. And I've definitely given that away. Boy, that's a tricky one because I, just like I said, I can't remember, I can't remember books very well. But that's certainly probably number one on a business side of things. And then on the other side, 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. Paragriditions of an Epicurean, something like that. Yeah, I mean, at the end of the day, like 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. I try to get it something that you can't buy, right? And so I bought an old typewriter and I write, 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, no. I can't really think of like the number one. I'm sure once we, we, we in 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, the answer is more interesting with the typewriter. So I, 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, this next one can be tough at times for folks, but the billboard questions.
Non-commercial billboard (02:55:50)
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, does anything come to mind that you might put on that billboard? I don't know why this came to mind, but the, but the word would be pause. Hmm. That's it. I have no idea why that came to mind, but I think in, in talking through this whole thing, I, you know, it's, you kept asking me like, why are you digging in this black box or whatever, or it'd be like, um, curiosity. Like, and I think of those are two, I'm thinking of those in the same way. I'm not saying pause like stop. I'm saying think, right? And so I think, um, you know, the hallmark of, of the people that I like as friends the best, what we try to instill in our kids, 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, uh, at high speed a lot of the time, there are a lot of pauses built into that speed, if that makes sense from what I've noticed. I mean, you were, you were simultaneously one of the craziest fuckers I know and least craziest fuckers I know, if that makes, that's, that's a great compliment. Thank you. I'll take it. I'll take it. And where can people find you? I know you have, of course, the, the linear group.com, you have explore talk.com, the aviarybook.com, which is the 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 best best places, best handles for that?
Discovering Services And Mindset Shifts
Where to find him (02:57:47)
Yep. Instagram, uh, which is nkconus, k-o-k-o-n-s and, uh, Twitter is, uh, Nick kconus and Ick. And, uh, hey, it's all Googleable, right? Like, so beyond that, if you could figure out my email address, I'll probably answer. Although given the, given the reach of, of, 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. TBD. Good problem to have, I suppose. Good problem to have, uh, Nick, this is 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 this, I think another trip to Chicago may be in order soon.
Hey friends (02:58:33)
I hope we see you here. 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/podcast as with this episode and, uh, certainly every other episode.
PHYBBZ FRIDAY EDTIONAL EMAIL (02:58:41)
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. Number one. This is Phyble at 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 for the weekend? And Phyble at 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. 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 is 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 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 is 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, blah, blah, blah, and a lead athlete introduced me to this non-psychoactive extract and bam! Problem solved. I had some of the best sleep that I've 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 of 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, endocannabinoid system works with your body. Some of the most common uses are for relief from everyday stressors, called in supporting restful sleep, which is what I most often use for.
6 Shifts to Find Your Mindset (03:01:20)
To bring about a sense of calm and focus, a lot of my friends use 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 height 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 why not much about CBD alternative to nor single compound. In any case, check it out. This stuff has really worked for me. So jump over to cw hemp.com/tim. Cw is in Charlotte's Web. Cw hemp.com/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. Charlotte's Web are offering listeners at 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 up to 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 cw hemp.com/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 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, 99 Designs is the go-to design resource for any budget. Right now, my listeners that see you guys can get $50 off a logo and brand identity package from 99 Designs plus a free upgrade that lets you promote your project on the platform, which is an additional $99 value by checking out 99designs.com/tim50. 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 For Our Body, which went on to become a number one New York Times bestseller illustrations for the multi-volume The Tow of Seneca, the 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 stuff like Towave Seneca to get an idea. They're really mind-boggling. Most recently, I used 99 Designs to update the illustrations and layout of my five-warning rituals ebook. And 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.
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99Designs Final Outro (03:05:06)
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