Full Transcript for How to find your arbitrage (from the guy who’s done it 3x) ft. Nick Kokonas

If you wake up every day feeling great, you're not taking enough risk. If you wake up every day throwing up, you're taking too much risk. You need to feel a tingle of uncomfortableness. I started with 60 grand. I can't express to you how undercapitalized that is on the trading floor. Essentially, you were looking for arbitrages. You're looking for some sort of mispricing.

I am now convinced that every arb is just about time scale. How much money were you making doing this? Well, I drove to my dad's house and I showed it to him. And he was kind of like, oh shit. He's like, is what you're doing legal? I genuinely believe that geofence, meaning localized, dynamic and variable pricing for time slotted businesses, is something that someone's going to make hundreds of billions of dollars with.

How does a guy who goes from trading and no restaurant experience create the best restaurant in America? Knowing what great is, is making mostly shit 99% of the time. Is it that you're actually seeking the anxiety and fear? It's exciting to be uncomfortable in the sense of...

I feel like I can rule the world. I know I could be what I want to. I put my all in it like no days off. On the road, let's travel never look. All right, today we're hanging out with my friend Nick Kakonis. He is one of the most interesting founders you have never heard of. He is the guy who started off trading options and then went and started one of the best restaurants in the world, then started a software company and sold it for hundreds of millions of dollars.

So an entrepreneur who's played many different games that really he had no business playing and somehow found a way to win. So I came here to hang out and find out how he does it. I'm going to read you a quote. I'm motivated by fear, fear of not living up to the possibilities. If you wake up every day feeling great, you're not taking enough risk.

If you wake up every day throwing up, you're taking too much risk. You need to feel a tingle of uncomfortableness. Yeah, or nausea was the actual quote. Yeah, I have to give credit where credit's due. Keith Goggin, good friend of mine, former business partner. We were traders back in the 90s, early aughts. And we had this ridiculous short position on plug power.

Still a company, weirdly. But he told me that. Like he said that to me because I was like really on the verge of throwing up every morning. And he was like, perfect. That's right where we need to be. That's right where we need to be. He's like, you haven't thrown up yet, correct? Correct. All right, then we got it. We're good, yeah. And so I do think that I internalized that at the time because then when I got comfortable, I was like, oh, we're not taking enough risk now.

We're not learning. We're not pushing the edge of what the possibilities are. And the phrase in my own household from my wife, also someone who pushes me, is AT &A. You know what AT &A is? So I was at your house. Oh, you know, I said that. I told you. But you said it in a hilarious way. You're like, you said it like a cop. It's like we issued an AT &A this morning.

Yeah, yeah, right. But should we have an AT &A? Yeah. So I mean, what does it mean? AT &A means all talk, no action. So you. But you'll do it to your kids. Well, we'll do it to each other. Yeah, right. And, you know, with this place where we're sitting right now for 30 years, this was a like a North Star kind of thing. We came here every year since probably like 95 or 96 when we were very young.

And we kept finding our way back here like a couple times a year. Why not? Like it's beautiful. It's like a blue zone. It feels amazing. The weather is great. You know, all that. And you had the dream. You were like, what? We had the dream. We had just the dream. And the dream is useful. The dream without the credit score. Yes. Yeah. But that's useful.

That's really useful. You know, you do have to have goals. And in many ways, this was an unrealistic goal, I think. And then we were here three years ago and rented a house and we had friends. And this place was for sale. And I kept looking at it. And I kept looking at it. I mean, I like looked at the video of this. They had like people in the pond, you know, the real estate like guy, like pretending like he lived here with a canoe.

And and I watched that video a thousand times. Right. And at some point, my wife just looked at me and go like, you know, you're going to pull the trigger or are you just going to be a TNA on this one? Like that. It's like a slur. It is a very much a slur. And and I put in a super low ball bid and they called me 15 minutes later. Didn't even counter.

And they they hit the bit, which also gives you concern. So because, you know, it's kind of like the Persian rug sale, like where they price the rug super high and then you go low and then they go like, OK. You go. Here's a have more tea and we're good. And you've been like three times too high, even though you got 70 percent off kind of thing.

So you had buyer's remorse. Well, I don't know that I had buyer's remorse. I had fear because I didn't know how any of this worked. I know nothing of agriculture. I know very little of viticulture. I certainly didn't know how irrigation works. You know, I don't know pond management. Like these are all things that we've learned in the last couple of years.

But between the acceptance of that offer and the closing on this, I lost sleep because this is a real commitment. I was 55 at the time and it was like, OK, is that that's your next three decades. Right. You can't half ass this. And I mean, there's a lot of people who do. Actually, I shouldn't say that you can half ass it. It just feels wrong.

Like it just feels like some people just buy a place like this. And so I want to say two ideas. And you tell me if these apply to you or what you think about these. The two brothers actually told me this. So the first brother is the guy who started native deodorant. Moyz Ali. And he decided he's going to go start a deodorant company. His friend was like, weird.

Yeah. No offense. Yeah. Right. When I think deodorant, you're not the guy that comes to mind. Like, do you know anything about the deodorant industry? Yeah. And he goes, I know nothing about the deodorant industry. But I'll tell you what, in six months, I'll know everything there is to know about the deodorant industry. Yes. And he just had this sort of like, you know, a self -belief, but also a bit of a practical approach to if I just obsess over anything for six to 18 months, I can get to the top of any of almost every field of knowledge just through sheer brute force.

That was one brother. And the other brother has this phrase where, you know, he's been very successful. I said, well, why are you doing this new thing? And he said, you know, I think a lot of life is fine. It's like a Jerry Seinfeld clip, like finding the torture that you're comfortable with. Yeah. Yeah. So, you know, being in the prison of my own making.

Yeah. And he's just he's like every decade or so, I set up a new prison of my own choosing. And it's painful and weird and uncomfortable in lots of ways. Yeah. But that's the only way I know how to live. Is that. I relate to that. I mean, we're done. Shut off the cameras. Right. Like, like that is absolutely the case. Every 10 years I've done an entirely new career.

And we should say with some of them more. So you had a finance career. You were a trader. I was a trader. On a trading floor. On a trading floor. Do the do the trading floor. Yell. Last time I was here, you were like, have you. 28, 32, 50 up. You learn how to do that. You know, like we had like a vocal coach come in. Really? And teach people how to do that.

From the opera or what? Yeah. Literally, like we're right next door to the Lyric Opera in Chicago. Because now it's not like that. Now you just. I know. No. But you actually needed to communicate to a guy. Oh, yeah. Like, you know, from here, 20 yards away. And, you know, like the old. This is bid. That sell. This is price. This is quantity.

This is tens. This is singles. I can still do it. Yeah, yeah, yeah. Yeah. But like, to me, that was. Like, I knew nothing about that. I was a philosophy major in college. I knew what I didn't want to do. And I didn't want to sit behind a desk. And I didn't want to limit my upside earnings potential. I thought that like having a salary was the wrong kind of prison.

Like that was a prison of like predictability. Right. My dad's dad died when he was like 14 or 15. And my dad was what he called an entrepreneur by necessity. He got out of the army and the Navy drafted twice and worked at the grocery store that he grew up working at from the time he was 12. And he bought that store when he was 28 or 29. Wow.

And he was like, yeah, no one would hire me. But he didn't want me to go through that struggle. So he wanted me to go to law school or something like that. But I was looking at someone modeling behavior where he could come to my baseball games. He could come to my basketball games. Like he was one of the only dads there. If it was at a two o 'clock game, he could leave work.

And his prison let him out there. Yeah. I mean, well, you know, look, if you own your situation, you have no one to blame. There's no boss man that's gonna say, no, you don't get a bonus this year. We've had a bad year or whatever. And so I just wanted to own my own situation is the best way to phrase it. I didn't know how to articulate that at the time.

I just knew that when I went in for interviews at Goldman Sachs or Sock Gen or any of these firms, you could get a contract and you kind of knew not what your work would be because you kind of didn't even know what that really entailed. Right. But you had, you kind of knew what you were gonna make for the next five years. It was good. Like it was a lot of money in one sense.

And in another sense, it was like really boring because you knew exactly what you were gonna do. And to me, that felt limiting

and scary in the other way. But at the time I was just, I floundered about for years because I was, I knew what I didn't wanna do, but I had no idea what I wanted to do. Right. Which seems common. I mean, I think that's the most common state. Of course. But when you're in that state, you don't think, well, this is common and normal. You feel like you're an idiot who doesn't know what to do and you feel uncertain and everybody else around you seems like they know a little bit more about what they wanna do than you.

I just kind of had a little bit of a chip on my shoulder, but hadn't earned any reason to have that. Right. Which is the worst. Like that's the hubris of being like 23 years old and testosterone fueled male with nowhere to put it. Right. And so if you grew up in Chicago, you know people who were traders. That was a thing. You know, New York was investment bankers.

Chicago was traders. Those are not the same. Like you said, finance career. I do not consider it a finance career. It's a trading career, which is very different, especially back then. What's the difference? I think the best way to become successful is to see how other people did it, whether you're gonna copy them or just use it as inspiration because then now you know what's possible.

So starting at the age of 24, I did this relentlessly and I was very methodical about it. And I created a spreadsheet where I tracked roughly 50 people who were uber successful. And I looked at the year that they were born, the year that they started their apprenticeship, and then the year that they started, the first thing that made them successful, finally the year that they broke through.

And I aggregated all this data along with the stories of what they did to be an apprentice and what they did to finally break through. And I put it together in a database. And HubSpot went and found this thing that I frankly even forgot about, but it did change my life. And they resurfaced it. They made it even better. And they put it into a thing that you can download for free right now.

So if you click the link in the description or click the QR code right here, you can see this database that I made when I was 24 and it changed my life. And so if you're looking to become successful or you're already successful and just want some more inspiration, check it out. In finance, like you were working for investment banks and obviously like they had trading desks, but they also, you know, do, you know, deals on companies and, and, and, you know, IPOs, and all this sorts of, you know, stuff.

And as a trader, you're basically, especially as an independent trader, you basically have like a core nest egg, you know, of whatever, a couple hundred thousand dollars. In those days, I started with 60, which is 60 grand, like, you know, 40 from 20 from me, 40 from a backer. I can't express to you how undercapitalized that is on the trading floor.

And, you know, like you would make trades all day long, just like, you know, now there's day traders, but then you would lease a seat and you'd be on a trading floor. We get one of those colorful coats and it was all written down and you'd make a trade and you'd trade futures options on commodities, currencies, you know, yield curve, whatever it may be, cattle.

And just to set the table, so you have this trading career, you then start what became the best restaurant in America. At one point, some people call it the best restaurant in the world. You created a software company that you sold. You've done on and on and on. Right. And each one of those, all these interesting little sub stories that we're going to go to.

So if we're looking at the trading side, my understanding is you basically applied to a job that you were overqualified for. Yeah, that's right. I mean, so explain that. I wanted to get on the trading floor and if you had my academic career and you went to like a clearing house to get a job as a runner for $5 .25 an hour, they would go like, go work for Sokjan, go work for Goldman, go work for Merrill.

Like, they'll hire you. And so I did that and then I looked at like the contracts and I wanted to be a floor trader and they'd be like, no, no, no, you're going to be on a bond desk somewhere selling bond. I was like, no, no, no, it's not what I want to do. So in order to get that first job as a runner, which is exactly as described, you would take a piece of paper, someone would call, you'd call, you know, your broker, the broker would call the floor, the floor would hand the order to the runner, the runner would physically run it, walk it fast.

You weren't technically allowed to run, but you'd have to walk fast and you would hold it up in the air for a broker who would grab it, read it, call it out to the pit, trade it, write it, hand it back to you, you'd go back. I mean, there's room for arbitrage. It was like a 30 second process, 40 second process. So I had to fake my resume in the wrong direction in order to get the runner job.

What'd you do? I eliminated all college, you know, like, you know, and, and, you know, they hired me for $5 and 25 cents an hour. And did you have the mentality at that point? Like, okay, I'm going to take this job that's like, you know, sort of like I'm over educated for overqualified. I must take this runner job, but I have my eye on the prize.

Like, I'm going to be here in a certain amount of time. Like, did you have, I had a goal. My goal was, I want to be trading in a year. So I need access to the arena. And this, this is like, you know, something Bill Gurley says, like, you know, like move to the place where the shit's happening. Right. Right. So in this case, the arena was literally like an arena.

Like, you know, it was like, it was an octagon, like 30 octagons. This is the trading floor, Chicago Mercantile Exchange, but they all work the same. You know, I needed access to the arena and you get down there and it's very opaque. Like you can't figure out how it doesn't matter if you're smart, you know, or dumb or what, you just don't know how it works.

And then after like running for a little bit, they were like, Oh, you seem sharp. Like, we'll put you on the phone. So then I became a phone clerk. Right. So now I'm the guy writing on the ticket. It is absolutely soulless, banal work, right? Like there's no, nothing to it. And so what I started doing is taking open outcry classes from a guy at, at, after the close, just learning the hand signals and this and that, which might get you to a pit clerk position next.

Right. You know, you might get $8 an hour at that point. But I was starting to meet people that were independent traders and I was very much like, I want to find someone who can teach me how to do this. And for like six months, I didn't find anybody, you know, or I found some people, but I was like, ah, that's not the guy. I need someone that can exploit the things I'm good at.

Like I was a philosophy major in college. I studied philosophy of language and logic. I grew up programming, you know, and I was watching creating this system that I felt was going to become digital, really in an analog world at the time.

a guy that would take me to what I call now the smallest, highest hoops. The smallest, highest hoops? Yeah. If you've got a big hoop on the ground, it's easy to jump in. If there's something 30 feet in the air and it's tiny and you've got to figure out how to get up there, not a lot of people are going to follow you up there. You want a good prize and less competition, basically? Yeah, and also difficult to understand.

I felt like I was capable of understanding options and swaps and exotic options. As I was reading books, there is not a good option. There are one or two, but all the options books that you get are academic books on. This is the right but not the obligation to buy by a certain time. Yes, you have to understand all that, but that doesn't get you anywhere in terms of actually, why do I buy this one or sell that one? That doesn't matter if you're making money.

Yeah, or how do they all interrelate and all that? I read all those books and I felt no closer to understanding any of it. I finally met a guy who was super geeky. He had a little HP calculator that had macros in it, like super cool, 48K in it kind of thing.

And he had just hired a clerk. And I was like, no, no, no, no, no, no. You're the guy. You are the guy. He went to the University of Chicago. He studied quantitative finance. And he had worked for Chicago Research and Trading. And they didn't want to put him on the floor. They thought he was a quant. They thought he was too geeky. So he quit.

And he put himself up on the floor, trading very small. And as soon as I met him, I'm like, you're my guy. And he's like, oh, I just hired someone. And I was like, no, no, no. You're the only guy here that understands what I'm trying to get at and can teach it to me. And I literally said, I'll pay you to work for you. And that got his attention.

Because he was like, that's weird. Why? And I explained it. And he was like, okay, I'll pay you like $250 a week. Totally illegal, I'm sure. By today's standards, right? And that was awesome. Like six months later, I had a rudimentary understanding on how to make markets and options. And I put up $20 ,000. He put up $40 ,000. And I started trading Swiss franc options.

It was almost a year to the day, which is a theme that we'll come back to. You asked at the beginning of the question, did you set a goal? And the answer was, within a year, I need to be on a badge in trading. And I was a week late. But I was in process. So I knew I counted it. But it was terrifying. There's nothing harder. I mean, I taught 30, 40 people how to do that after the fact.

And the rule was, on your first day in the pits, you had to make one trade. I cannot express to you how useful that is. Because you have to go into a very zero -sum, hostile, competitive environment, which was physical, loud, chaotic. And you have to open your mouth in front of all those people and risk looking like an idiot. Yeah, what is it about that day one? So I think Facebook had this, too.

Day one, any engineer, you will ship code to production. I didn't know that. They did this for a long time. I didn't know that. But that's wonderful. And it was like blasphemy back then. Yeah. My very first job was at a very first business idea I had. It was a sushi restaurant. I went out to L .A. to train with the chef. Yeah. And sushi is famous for this thing where you, like, spend years just mopping.

Yeah, you're just having rice. Yeah, you're not going to get to the rice. That would be incredible if you got rice. You would do all this menial work before you were allowed. Yeah. The chef that I was going to work under, he said, we're going to open this restaurant up. Can't do that. So the very first day, Daryl from the office came in as a customer, sat down at the bar, and he goes, you're up.

I just watched him do, like, you know, for an hour I'd been watching him, like, try to pay attention. You know, I don't know if you know how to make sushi. You dip your hands in water first. Oh, yeah, yeah. Flat. It's hard. Then you do the seaweed, the rice, et cetera. Yeah. So I didn't understand at that time the clap.

The hands soaking. I thought it's just like a celebratory thing. Why are they clapping? I don't know. It's just a ritual. But it's to get all the water off. To leave only the perfect amount of moisture. Too little water. Rice is stuck to you. Yeah. Too much water. Soggy sushi. I didn't clap. I gave Daryl from the office some soggy sushi. But it was actually very beneficial to just absolutely f*** up.

Yeah, you have to. Right away. You have to just, you know. Break the seal. Break the seal. And, you know, there was a guy who ended up becoming a very good trader, very good friend. And he went, like, three weeks. Performance anxiety. Yeah. I mean, Frank, if you're out there, like, you know, I remember. And every day, like, he'd come back.

And I would just be like, dude, you know, you're a capable human. Just do it. And he would freeze. He'd lock up, you know. And everything else, every 10 years, I kind of did something different. Because it didn't produce that same anxiety. Is it that you're actually seeking the anxiety and fear? Or are you seeking something else? No, anxiety and fear is like the signal to you.

Correct. I found it. Yeah, the latter. What is it? What are you looking for? We're here for whatever. Decades, if we're lucky. And in order to keep learning and keep young and wake up. Like, you guys were coming today. They showed up at, what, 630, 615, something like that. I get excited by that. It's exciting to be uncomfortable in the sense of, hey, we're doing something today.

We're making this little thing here. And who knows what that will lead to and all that. And if you just put yourself out to pasture, essentially, once you get good at something, it's very, very easy to fall into, well, I'm making good money. And I know what I'm doing. I'm kind of an expert in it now. And expertise is such a trap. Right? It's such a trap.

And you know that a non -expert is going to come after you. Like, once you get to expert level, you're screwed. Because somebody who's younger, hungrier. Fresher eyes. More willing to break convention to find the new way through is going to kick your ass. So before your ass gets kicked, you should quit. It's really hard to do. And then go find something new.

And it's really hard. The older you get, the slower you get at doing that. The less incentive you have to do it. Right. Right? Like, there's very little incentive financially and otherwise. If you've had some success to break it. To quit. To go do something new and lose money for a while. You know? What's the quote? You know, most men die at 25.

They're buried at 75. Yeah. You know, I think Naval says as well. Like, the great ones. The truly great ones. They're great because, not because they've reached the top of a mountain. It's because they are willing to go back to the bottom of the mountain and start again and find a new path. Nobody does that. One of the things my dad had on his desk was a little Sisyphus.

I've got that, like, you know, always on my desk. I've had it on my desk forever. And for me, like, the Sisyphus thing is like, shit, we got to wake up. And, you know, I'm building a wine bar here. Like, I got out of the restaurant. But we'll get back to that, I'm sure. But I got out of the restaurant business. I was here for, you know, half the time for two years.

And all of a sudden, I'm walking by. I'm like, oh, shit. I got to rent that place. Build a new restaurant. You know? Bring out the boulder. Yeah. Right, right, right. Found a new hill. Yeah, yeah, yeah. And I was very much like, you know, do I want to do this? And everything in me said, no, I don't want to do it. So that's why I should probably do it.

Well, you're a philosophy guy. You might know this. The story of Sisyphus is about, like, it's the ultimate punishment, right? He's going to push the boulder up the hill. Yeah. And then somebody, I forgot who, but they were like, we must imagine Sisyphus happy. Yes. Meaning that the work is the win. And so he had this sort of alternate take on the idea that this is like the cruelest punishment.

And instead, it's like, no, he's in his element. He's doing exactly what he wants to do and must be doing. And where man is kind of at its best is work is the win. The work is the win. Yeah. Hey, let's take a quick break. You know that feeling when strategy is done, the brief is written, everyone's aligned, and you realize someone still has to sit down and actually create all the content? That someone is usually you, and it's due tomorrow.

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So you talked about trading, how you started as a trader, and my understanding is that essentially you were looking for arbitrages. You were looking for some sort of glitch in the system. You're looking for some sort of mispricing where you can come in and take advantage. And I think trading is a very pure way to do that. But even in your other businesses, I feel like in some ways you found an arb.

Can we talk about arb? Yeah, absolutely. What excites you about an arb? And then explain to me some arb stories. Okay, so I've said no to every podcast for like three years until I got to this one idea, right? And I said yes to this because of you. And also because I am now convinced that every arb is just about timescale. Like this is not something that I've come up with or whatever.

But like it's evident, especially with AI coming in now and everything. Everything is timescale. So at the time, we started talking that like that piece of paper took like 30 seconds to go back and forth. Right. And I was a good trader, not a genius trader. I was certainly capable. And I was quasi -decent at bringing what I called corporate refugees.

So I'd meet someone like at a dinner party who was certainly bright, capable, outgoing, could probably do mental math quickly. And then I'd see that they're miserable being an attorney. Right. And I'd be like, I got a thing for you. Come with me. I'll pay you $7 an hour. And in eight months, you can trade. And I did that dozens of times. That scaled kind of linearly and made– I went from making $5 an hour to thousands of dollars an hour in five or six years.

But I was looking around and there were companies making $10 million a day down there. More. You know, crazy money. And I was like, what we really need to do is figure out a way to bypass that piece of paper going. So if you're in New York trading what was then nascent ETFs, triple Qs, spiders, all that, those are just a basket of the NASDAQ 100 stocks.

We know what those are. And we know their ratios. So if you have 1 ,000 triple Qs, you can figure out exactly how many shares all that is. The natural hedge for that is the futures in Chicago, NASDAQ futures. And then it all comes down to, in the triangle, a cash position. You don't really need to understand it in detail beyond that. But what I wanted to do is, you know, the guys trading the triple Qs in New York would have to pick up a phone or be on the phone constantly with someone who would give someone a piece of paper.

And if I could just talk directly to New York from inside the pit, I've got a 20 -second time window on Goldman Sachs. They can't beat me. What does 20 seconds actually mean and what is that worth? What does it allow you to do? Well, so a trade would take place in the triple Qs. And then the way, you know, if you just bought a million dollars notional and triple Qs, you would sell eight futures roughly in Chicago against it.

Okay. And you'd lock in a little profit there. And you'd be left with a long position in New York and a short position there, but it's all one company. And now, that 30 seconds, if I make that trade there and I can talk to the guy who's actually in the pit bypassing that, I know the pricing information instantly. Exactly. And with, like, the first day, it took me, like, a year to get this all done.

So here's another thing. Okay. Read the rules. Okay. It sounds like... Most people don't read the rules. It sounds like a dumb thing, but read the rules. There are laws. And the CFTC had regulations that were, like, this thick. And all of the people on the board at the Merck and the Amex and all these institutions probably never read them.

They had lawyers. Right. And lawyers probably never read them. They went on case law. They went on practice. They went on what they're used to. And I went, well, if we're on the same tax ID in New York and Chicago, same firm, why can't I talk to somebody there? Like, I don't see the rule. Like, I've read the whole damn thing. I mean, I really did.

It's really long. And this is not when you can just throw it in a computer and be like, find the thing, you know? And I'm like, man, I can't find this. And so I was like, great. I need to put up a partial T1 line for a dedicated phone line between New York and Chicago.

And the Merck wouldn't run, you know, underneath these pits was, like, cabling back then. It wasn't Wi -Fi. And I needed AT &T to run fiber. And I put in permitting and they wouldn't let me do it. Because they kind of got that this would be bad for the broker groups. And who owned the Merck? The broker groups. So I bribed the union guys who did the work with cases of Jameson.

For real. I can say that now. I'm not going to get in trouble anymore. Do you remember the day you kind of had that idea? Well, I remember the day when we turned it on the first time. And it was basically like saying, like, let's say, you know, there's apples here and there's apples on the other side of that pond. And that guy, there's someone who rolls up over there and is willing to pay $5 an apple.

And this guy over here is willing to sell me apples for $3. And there's a guy about to run to the pond going, like, do that trade over there. But meanwhile, we can talk. We got, you know, the string and the tin can. So we made a trade. I went, oh, my God. And we made, I don't know, a couple hundred thousand dollars. Like, instantly. And you're taking no risk at this.

Zero risk. Yeah, yeah. And I immediately. Is that feeling just orgasmic when you find one of these cars? No, it was terrifying. It was terrifying. And the reason it was terrifying was because it was so good that the powers that be would kill you. And I don't mean that as. It's not figurative. I don't mean that as figurative. Like, yeah, it really was.

It really was at that time. I also knew that if we picked the pockets of the big investment banks and we made $2 million that day, that'd be the last $2 million we ever made. So in one sense, I was going like, oh, my God. It is as I thought it was. You know, it's there's this gap here. Right. But then I went, shut it down. And everyone was like, shut it down.

We we've been working on this for seven months. What do you mean? Shut it down. Like, we can't be so blatant. We're much better off picking their pocket a little bit for years. Right. Then we are just destroying them on day one. Right. So I went back and reapplied for, hey, here's all the evidence that we're the natural hedge in Chicago. And these are growing really fast.

This product class, this ETF new innovation. You're going to want to do this kind of thing. So they gave me a pilot program thinking that it would take me six to eight months to get everything wired up. You know, no. And then once they gave me the pilot program, then I could do it in the open and I could do it in a couple of different pits.

And I had partner, the guy, the nausea guy that he was in the New York side and we went to college together. And he was a spreadsheet guru, you know, just great math mind. And we cranked that thing up. So you started where? And at its peak, what were you doing? We were doing a couple percent of the daily volume of the American Stock Exchange within six months.

What does that mean in dollars? How much money were you making doing this? Well, I think that year we made over 100 million. In a year? In a year. Back when $100 million was a lot of money. And I had like not, I had a small- $100 million is not a lot of money. Well, apparently not. I mean, it is for me, but it's not for the world. Yeah, it's nothing, right? You know, it's like, oh, $100 million.

But like- That's profit? That's revenue? What does that mean? Well, it's trading. It's not like a GMV. That's like your tape. That's what you made. Yeah, it was arbitrage. Arbitrage profits. I mean, the overhead on that was relatively small. And obviously we hired a lot of people and, you know, paid out a lot of salaries. Did you call home? Like, hey, mom, dad had a good year? I had money this year.

What happened? So I had- Because you didn't grow up rich. No, no, no. I had a minority, a tiny little percentage of that company because I needed the capital. The one thing I didn't have then was I probably had, you know, my first million probably happened when I was 28 or so. And all that money was at risk. And so what age are we talking about right now when you figure- 31.

Okay. Right. But all that money was at risk. Right. So I had it, but it very much felt fragile. Right. It was your bankroll. It was the bankroll to trade. Yeah. And as we grew the company, you know, my first employee became my business partner, still my best friend, Jim Hansen. And we grew the company. And we hired the corporate refugees.

And we built to like 35 guys. But in order to do this arb at scale, we needed capital. So we merged our firm with a firm in New York that had some more capital. No one knew how to run a company. Like, let's just be clear. Like, I had no idea how to manage people. What were you like back then? An asshole. I don't know. I was trying to come up with a good way.

You woke up every day at 5 .30 in the morning, and I got on the floor at 6 .30, and it was game day, and I was fueled by espresso and agitas. I was just like, you found this thing. Let's f***ing go, right? And one of the things that my dad was still around then, and you asked, did you call the parents? I remember, whoever says rich people don't pay taxes, trust me, if people have figured it out, I have not.

That year, I remember that I had a giant tax bill, a multi -million dollar tax bill, and had to then figure out, well, I need to remove money from the trading firm and pay the taxes and all that. And I remember writing a check. The biggest check I'd written before that was probably like $3 ,000 for a down payment on a car or something. So I write this multi -million dollar IRS check, and I drove to my dad's house, and I showed it to him.

And he was kind of like, oh, s***. He's like, is what you're doing legal? So first question, like, yo, Greek guy who grew up in a grocery store. Fair question. Fair question. I said, of course, yes. And he went, okay, it won't last. Like, you know, he is a product of the Great Depression. And he was like, it won't last. Put it away. No boats, no women, no drugs.

Like, you know, gave me that, like, little talk. And then he said, just, like, remember that this is, like, the great country that your grandparents came to. Pay that. It's your patriotic duty to pay that. That's why I sacrifice. That's why they sacrifice. And I went, shit, I was hoping for a little, a little sip at the other tax bill here.

But I remember it vividly. Yeah, we need a name for that speech. It's like, we have the birds and the bees speech. Yeah, yeah, yeah. What's the IRS? Some money, son. No, no. Pay your taxes. Yeah. No boats, no liquors, no ladies. Yeah, yeah. I mean, really, that's what he said. And then he's like, I will allow you to take me out to dinner this time.

And that was it. Like, there was no, like, hurrah, congrats. It was more just like a cautious tale of optimism, in a way, of like, save it. Don't do stupid shit. Go home. And wake up the next day and do it again. Like, the other thing that my dad really taught me was, like, at the beginning, you were kind of like, oh, you have this great mind and all that stuff.

And that might or might not be true. But what's really the case is that you show up. Like, my dad was just like, show up every day, on time, early. Early, you know, the old adage, like, early is on time, on time is late, and late means get the f*** out of here. And I literally feel that way. Most people don't show up. Most people don't follow through.

Yeah, yeah. And showing up means not just showing up. Like, look, there's two kinds of showing up. There's showing up prepared, and then there's showing up unprepared but admitting that you're unprepared. Both of those count, by the way. But then, like, show up late. Don't show up. Cancel. Move it. Like, when you text me, how long does it take to get a text back? Almost instantaneous.

Almost instantaneous. Because if you consistently do that, it's not very hard. Right. Like, I don't need to plan something three weeks out. Like, you text me, let's get on the phone right now. Let's hash it out. And if you do that consistently, it accrues so many benefits over time. Right. So you learn that from your dad. Yeah, a thousand percent.

And you have this amazing year. I assume these things don't last forever. Well, so the following year, you know, of course, any arbitrage is going to be a window that closes. And they close quickly or slowly, but they're always going to close. So the timescale of that kept getting shorter. Other people figured it out. We started adding computation onto it.

What had happened is that some of the older partners in New York made so much money that year that they went, this is what I've been waiting for for 30 years. I'm out. Yeah. And at that time, we were taking, like, we'd see, like, a small trading company that was distressed in Boston. It's a Boston Stock Exchange. We'd be like, how much do they need to, like, keep them in business? Okay.

Next thing you know, I'm on a plane to Boston. And some 30 -year -old dude with a computer is telling these guys who've been there for 40 years, like, here's how we're going to run your business now. Right. That did not go well. Like, you know what I mean? So there was over -expansion, not because of anything other than, like, oh, yeah, well, we'll take what we've learned and we'll apply it to new things.

But we didn't know how to build a business. We didn't know how to build a layer of management and accounting. And we were terrible at that. And some of the guys the following year made half of what they made in, call it, 2000, 2001. So 2002 comes along, trading volumes go down. We're not doing anything wrong. We're just making a lot less money.

So a guy that made $2 million. You know, he was making 50 grand when I met him. And he makes $2 million. He's like athletes or something. Now a million fields from poverty. Yeah. And then all of a sudden, it's like they make $800 ,000 two years later. And they're like, this is bullshit. Right. And then you get the rock band syndrome, you know, where everyone's starting to, you know, get a little salty and all that.

But we're all super fortunate. And I just got, like I've said eight times in the beginning, I was a terrible manager of people. I probably still am. And I just didn't enjoy it. Like I got to the point where I had run really hard for 10 years. My dad died in 01. I was very close with him. 9 -11 happens. We had people that worked on Wall Street.

Everyone was okay. But I definitely knew people who were not. And I left that year going, what am I doing? Like I need to dial this back. And I wasn't a good parent. I wasn't a good husband. I just wasn't being a good person. I go to dinner parties. And I'm like, can we just move shit along, people? Like, you know. Because it's like, it just felt like there's not the trading floor.

Yeah. I mean, the world felt slow. Yeah. And I grew up caddying. I'm a lifelong golfer. So all of a sudden I would find myself playing golf with ex -professional athletes who were in their 30s who were famous, big time guys. And they were like miserable. And like they took golf way too seriously. And they played for big money. And I was like, there's no edge.

Like, why are they gambling on golf? Like, you know, I don't understand what's going on. I didn't consider myself a gambler. I consider myself an arbitrageur. And I just looked at them. And I got the nudge from the wife. Like, hey, you're not pleasant to be around and all that. It wasn't really a nudge. It was a slap in the face. To her credit.

Like, you know. Right. Deserve it. Yeah. And I just remember one day going, waking up, going, I think I'm out. Like, I think I need to like take a sabbatical. It sounds like I remember I called Keith and I was like, I think I need to take six months off. He's like, f*** that. Like, you don't get six months off. Like, you want to take six months off and get paid.

And meanwhile, the options group that you're building is not doing as well as the, you know, XYZ. You know, I was like, man, what am I doing here? You know, like, I kind of figured something out. I'm not enjoying it anymore. I should quit. And I did. I walked into like a group and they were all infighting one morning. And I was like, guys, just so you know, like, this is my last week here.

And you're all getting paid out. And some of you will get some equity and I'm gone. And people are like, what are you talking about? Like, this is bizarre, you know? And in hindsight, I probably didn't do a good job of, of that in terms of like, I was with my partners. I was super communicative, but like, also like, you can't go, Hey, I might be leaving in the month.

Right. You know, that's just not something you can do. And so I did. And, you know, we had a young son and, and now there's no game to play. Right.

And all of a sudden I was thinking about those athletes. Don't want to be them. And I'm going like, you know, what do they all say? I'm going to ask you, what do they all say when they retire? They say, I'm retiring too. I don't know. Spend more time with my family. Spend more time with the family. Yeah. Classic. Michael Jordan retires. He's going to spend more time with the family.

It's the best. CEO resignation. I've decided to spend more time with the family. Yes. And the board has decided you're not the CEO anymore. That's right. Yes. Yeah. I mean, you know, when I, when I left talk, like, you know, it's, or when I sold the Alinea group, what do you, the statement you put out is I'm allowing more opportunity for the people like in the organization or whatever.

But the reality of course, is that either like you sold for good reasons because something was not, you know, you were no longer a good fit or you got your ass kicked out of it. Did you ever read the Groupon CEO's letter when he did that? I don't think so. He's a Chicago guy. Lewkowski. Yeah. No, no, no. Uh, Mason, Andrew Mason. Oh yeah. Yeah.

Yeah. When he's like, he's like, I've decided to spend more time with my family. Just kidding. I got fired. I got fired. Yeah. The second line of the thing was, that sounds like it. I've met him a couple of times. Yeah. By the way, when you're, you told the story to me once about how you cross paths with the early Jane street folks. Yeah.

Yeah. Yeah. You were doing the arbitraging and they were the smartest guy. Can you tell that story? I thought that was awesome. Yeah. I mean, in 99, we started doing ADR arbitrage, American depository receipts. And I was not hugely involved with it. It was out of New York, but the guys who had built the best robo box of doing that were the early Jane street guys.

And my partners were like, these guys are better, smarter, faster, you know, have these Dell boxes on a desk that are doing things. And of course now, like, you know, you could see the dorkish podcast and they've got, you know, the data center, this is the public, you know, I, I can't really say much about, about the great thing about Jane street is that, you know, it's like fight club.

Um, and, and I've honored that for 30 years. You don't say much about Jane street, but I will say that they are incredibly. Smart, incredibly dedicated, fiercely independent of thought and high integrity. And I know some of people are going to watch this and they're going to go, but the India thing that's public or this, or, you know, it's like, yeah.

Okay. Well, you know, again, read the rules. Yeah. You had an idea at the beginning. You said three years, I haven't said yesterday podcast, but I have a new kind of like thought or idea around everything. Would you say everything's an arbitrage, but it's just a question of the time. Yeah. Would you say, yeah, roughly. What do you mean by that? Once I was in the restaurant business, the slow thing became, how do people make reservations? That was the equivalent of the, the 32nd piece of paper.

Right. And people still call restaurants. It's so weird. There's nothing worse experience at a restaurant than going up to host stand, hearing a phone ring and getting this. I'll be right with you. And you're the customer. And the first thing you see is. Right. Might as well be the middle finger. I'm on the phone. Right. And then they hang up and they go, essentially, who are you? And do you belong here? That's terrible hospitality, but that's every restaurant.

So we got into starting to build the linea. And I was like, we got to get rid of that. And then, okay, well, how do you get rid of that? How do you know who's walking in the front door without them telling you who they are? Not, it's not that hard. Right. You know, how do you get rid of the host stand? So it doesn't feel off -putting. How do you then get like, I, the analogy I used at the time was like, it's like going to a sweater store and you see all these different color sweaters and tile styles and sweater.

You're like, Hey, I want that blue cardigan cashmere sweater. Can't have it. What can I have? I don't know. Guess it. One of the other 300 sweaters. And that's what open table was like in 2005. That's what the software was dismal. They wanted to intermediate the relationship between the customer and the restaurant. That's how they, that was their arbitrage.

And so, you know, talk was born out of my frustration with not knowing the customer. It was a, it was a KYC thing, you know, know your customer. Then it was overlaying the value of that customer, which is different on a Tuesday night at 9 PM in Chicago, when no one goes out to dinner than it is on a Saturday night, 7 PM, when everyone goes out to dinner.

Right. Those two things should be priced differently. And they're not, that was obvious to you, but was not obvious to the world. It's still not obvious to the world. Right. You know, I don't want to get political here, but Elizabeth Warren, a couple months ago tweeted, we need to make a law against dynamic pricing. Everything's dynamically priced.

This table is dynamically priced. It's just really slow. So this is dynamically priced. This water, everything is dynamically priced. Like it's not, nothing's fixed forever. Yeah. And what she's really saying is, is that we don't want to squeeze people when bad things happen. Agreed. But the best way to do that is to dynamically price things as fast as you possibly can.

Right. And so like Uber, when Uber did surge pricing, that is the dumbest way you could possibly name something. Right. And they got in a lot of trouble for it. Chose the wrong word. For the right idea. Correct. And Travis tried to explain it. He was, they were like, how, you know, on new year's Eve, you guys are going to be gouging people with this surge pricing.

And he's like, we need to get more drivers onto the road to meet the demand. We need the supply to rise to meet the demand. How do you get the supply to rise? You give it an incentive that you're going to make more money. I will say that I was a little too autist on like Travis was on that. Yeah. Like, I remember that. And I was like, dude, just call it dynamic.

Like, get rid of the surge word. Like, you know, just, and you know, my original pitches to restaurant was like, look, you're paying people to sell to your rivals. Like if you're full and you're really busy on a Wednesday, all they're going to do is say, well, you should go to this restaurant down the street, you know, which is terrible. Like you should just change your pricing.

Right. But people are like, well, we print our menus once every quarter. So that time scales off. You should print your menu in some respect every day or every hour or every minute. So you still, even after talk and selling talk for hundreds of millions, you still see that this problem is like, you know, just fundamentally not solved across the economy.

I genuinely believe that geofence, meaning localized dynamic and variable pricing for time slotted businesses is something that someone's going to make hundreds of billions of dollars with. And I simply got tired of convincing people of it. Right. You know, it's like trying to convince a restaurant owner who every day is game. And I understand why every day is game day.

That's not their core business. That is what they self -selected out of when they got into the restaurant business. They want to do accounting. You need a big dumb button that you hit once that says make more money. Right. And then the whole back end. And now with AI, maybe we have that big dumb button. You have that big dumb button. So let me ask you a question.

How does a guy who goes from trading and no restaurant experience create the best restaurant in America? That that's a mind blowing sentence that that happened. Yes. What is the explanation for that? Part of it is Grant Ackett's. Great, great young chef who I met. Part of it is the willingness to go, man, like, it's really weird that like no one's seeing that like, you know, Chicago should have the next Charlie Trotter.

Trotter's was open 15 years at that point or whatever. He put Chicago on the map. And I was just like that thing I said earlier. You know, every 15 years, someone's going to come along and kick someone's ass. And I met Grant and I was like, ha, we have the ass kicker. We have the guy who can do it. And this is kind of the same thing you said about trading where you met that guy and you were like, you're the guy.

You're the guy. And you had this moment with Grant. We're the guy. You're the guy. Right. And I asked you, I go, how did you know? You go, you said something like every bite of food the guy put in my mouth was the best thing I'd ever tasted. Yeah. Yeah. But there might be more to it where like there was something either entrepreneurial or creative or something about the person.

The showing up part. It is the showing up part because, look, I mean, for good and bad, he was me when I was a trader. He would show up and he would stay there till four in the morning and he would come up with the next thing and he would do the stuff, the hard work, and grind it out. Everything's grind. Like, if you are a great songwriter, you write songs every day.

You throw out 98% of them. I love Wilco. I love those guys. I met Jeff once in the loft in Chicago and he doesn't like people being there much. He was writing a song and it was honestly not good. You know what I mean? Yeah. And it was a wonderful thing for me to see because one of my favorite songwriters. And so finally I mustered up the courage to ask him, like, why do you come in here every day? And he was like, I have to write like two or three songs every week because otherwise I won't have 12 good ones at the end of the year.

Right. And I was like, oh man, like you want that artistic thing to be, you wake up in the middle of the night and yesterday is just done, you know? And the answer is like that might happen once in a while, but most people are Picasso. And what you do is you grind out a lot of shit to get to something that's great. And when you find people that do that, those are your folks.

Chris Rock has a great quote on this. He was talking to some young comedian and the comedian was like, hey, any advice for me to make it? And this is Chris Rock, you know, so he says, what are you doing today? And he goes, I got two shows tonight. Big day. I got two shows, one at seven, one at nine. So I'm just getting ready for that. He goes, no, I said, that's tonight.

I said, what are you doing today? He goes, well, I'm just getting, you know, prepping, get some food, you know, whatever. He goes, you want the advice? The advice is you write jokes every morning. The money is made in the day. We just happened to collect it at night. Yeah. And, you know, the stuff you're doing on the stage is the byproduct of the daily writing of bad jokes.

If you're not doing the daily writing of bad jokes, like that's the whole racket. That's the whole racket. There's nothing else to it besides doing that. And that sounds simple. But guess what? Even amongst the professionals, most are not doing that. I gave the commencement address at the Culinary Institute of America in Hyde Park years ago.

And I was like, what do I tell? Like, you know, these people are all, they all are chefs. And it's in the era of TV chefs. Right. And, you know, I always liked the commencement address where you can't tell three stories. Right. Like, you don't really, they don't even need to seem to connect. People will try to connect. Steve Jobs. Steve Jobs.

Yeah. Perfect. So I watched, you know, a couple of great commencement speeches. And I was like, okay. And I finally thought of it like the morning of. And the day we were going to open next, which is a restaurant that the idea was every four months, we're going to have an entirely new cuisine, entirely new menu, entirely new everything. We were opening with this Paris 1906 menu, time and place.

You don't, the great thing about that concept was as soon as we had that idea, Paris 1906, I don't need to tell you anything more. Right. It's like. Already has aura to it. It's got, you want to go. Like, what was it? Like, I like, I like French food. What was it like in the Scoffier 1906? Fantastic. So there was a sauce on the lamb dish that was off in the practice thing.

And I had to go back early in the morning at like 6 a .m. to like, I don't know, do vinyl tile in the basement to pass the inspection or something like that.

And on the pass were like 20 small sauce, a pans this big with blue tape in front of them labeled like, you know, a through P or whatever.

And I was like, what are you doing here? And Grant was there and he was like, I'm fixing that sauce that you emailed me about. Like, I knew it was off. Like, you know, I didn't make it. And so in my head, I'm like, well, of course, he just knows how to make this classic sauce. And the reality was he made the base of it in the middle. And then he made these a little sweeter and these a little more like salty and acidic.

And somewhere along that spectrum was the right one. But no one knows what it's supposed to taste like. It was from 1906. Right. And also, like, no one really knows how to make it. Those recipes were kind of miserably, you know, they went down to the gram. That's for sure.

And that was what I told the commencement. I was like, if you want to be a great chef, you show up at 6 a .m. and you make 25 sauces. Yeah, I better see 20 sauces on the counter with blue tape. You don't simply go like, well, here's the recipe and it should taste like this. You have to know what great is. And knowing what great is, is making mostly shit 99% of the time.

And then you go like, oh, well, this one's kind of, I don't hate this one. That's probably actually really good, you know. And I get a lot of people that blind email me. My email's out there in the public and I'm fine with it. And I get a lot of, like, young entrepreneurs going like, hey, I've got this idea and I want to do this or that. And I was like, cool.

Go do it. Come back to me in five weeks. I don't care about your logo. Right. Like, everyone wants to make the logo. Right. You know, logo first. I got a great name for a restaurant. Awesome. That's terrific. Make the 50 sauces. You know. Have you ever read that book, Art and Fear? I think they have to use this, the pottery class example.

Do you know this story? I don't. Perfect example for this. So the story is there's a professor in Florida at university. I think he was actually teaching a photography class. And they changed it to pottery. But the story is the same either way. Splits his class in two. And he basically tells the first group when they come in, hey, for this pottery class, I'm going to grade you on your pottery.

But it's really simple. At the end of the semester, you turn in your best pot and I will grade you only on your best work. And you get to pick which one is your best. You submit that one. I'll give you a grade. They leave. Group two, he says, you'll be graded based on the volume of pots that you make. Like, so at the end of the year, at the end of the semester, you're going to give me a haul based on volume.

I will give you your grade. Yeah. Easy enough. I feel like I know where this is going. So you know where this is going. At the end of the semester, obviously, the volume people made more volume. They also made the better pots. Of course. And like, you know, basically, this is like this principle is just everywhere. It's so obvious. And yet, even I, who espouse this stuff.

Wake up, try to make a great pot. When I, well, no. And also when I met, you know, Jeff that time, I left going, God, am I an idiot? Of course, that's what he does every day. Right. Like, of course, that's what he's doing. The weird part is he's doing it after 30 years. Because for him, that's, that's the process. You know, I like to do that and I like to change it.

And I get miserable when I don't have pots to make, I guess. Like, I'm fearful of not finding more quests, side quests. So I've gotten to know you a little bit. One thing I think you're very good at is you're good at having an inspiring vision, which sounds obvious, but that's a skill to like be able to do that. A vision that's compelling, that gets people excited.

A story that you want to be a part of that will get you to jump out of bed every day and like go do hard things, go do minutiae bullshit. Yeah. 20 sauces. Yeah. You're really good at the vision part and you're really good at working backwards. And I think the story of Alinea, you told me that I knew it was this great three Michelin star restaurant.

What I didn't know was that before you made it, you declared this will be a three. This will be a Michelin star restaurant. But Michelin wasn't in America. Michelin wasn't even in America. You said something even better. You go, we need to make it so that it will look bad for Michelin. If they're not even coming to America, like us not being there will be bad on them.

That's right. Which is a stated goal, which is a stated goal. That is, I would say unusual. And you said you posted this on some forum on the internet year before you even launched. Can you tell us? I don't think this is a well -told story. Yeah. So like, so there was eGullet at the time, like there was the, you know, the, what do you call it? Boards, you know, like BBS forum.

Yeah. Yeah. Forum boards. There's a foodie one called eGullet at the time You can still look at it The archives are up And I was kind of fascinated With open source software at the time And I do what I always do And I start reading How to run a restaurant Like Restaurant for Dummies And I'm reading all these books Just like with the options I'm like, I feel like none of these actually is They're not teaching me anything on how to run a restaurant Okay So I'm now building a restaurant But I don't know how to run a restaurant I wrote this one spreadsheet That was, I call it the Universal Restaurant Calculator It was literally one tab with like 80 cells So any input that I

could think of Like cost of insurance Like that's a cell, right? And I couldn't think of any more cells Like at the end of the day Like anybody listening to this Could probably, if they sat in a restaurant long enough And really thought about it You could come up with the cells It's not that, it's not that big And that's why restaurants fail Because the actual bar to entry Is really kind of pretty low You know, anyone who has a good dinner party Or thinks they can cook something Can start a restaurant So I just started like going Okay, what How can we learn from our customers And maybe there's someone else out there That I can learn from And so I was like Let's just open

source the whole business plan So I created this thing called The Alinea Project on eGollet And it was like Hey, here's Here's how we're thinking about naming the place And here are all the names we didn't take And here are the ones we did take Here's the menu development These are foodies? These are chefs? Who's in this forum? So it turns out it was a lot of people I mean, we got hundreds of thousands of views So suddenly the press was interested So, you know, Food and Wine And Gourmet Magazine And, you know, the New York Times The Wall Street Journal Were all like Oh, this is interesting Like, these people are building a restaurant And did you say openly Like, we're

trying to build A Michelin star restaurant in Chicago? I didn't say I don't think I said Michelin star I think we're trying to build The best restaurant in America Trying to build the best restaurant in America Yeah And it needs to be profitable You start building in public Or open sourcing your ideas Yeah And you're saying you're doing it Because you kind of want Smart people to be I wanted two things I wanted I wanted feedback from people That might come across it And then I wanted to Drum up future customers Because when people have an engagement Where they feel like Oh, I watched that And now it's open Right I feel like a little bit like The origin story is already

known Right? It's like one of my favorite documentaries Of all time That I literally watch once a year Is Hearts of Darkness It's the making of Apocalypse Now You want to talk about fear? Every time I'm like Oh, I'm doing too much I watch Francis Ford Coppola Like, you know With the With the Philippine You know Like Navy And Air Force Like Actually going You know Ferdinand Marcos Or whatever Going to like You know Get Dennis Hopper out of there They're actually going to start shooting You know He mortgaged his house twice All that stuff, right? So I'm not really taking much risk By doing a vineyard here Compared to that So It's very comforting And I felt like By putting

that out to the world People would have this engagement Of like They see the process They see how we're thinking about it Like we would write Like I look back at some Like There's You cringe always Oh yeah It's cringy Like you know The purpose of bread Like Why do you think That most restaurants give you bread? Well it fills you up They can give you less of everything else Like That could have been the whole post It's Americans like fat And bread is a good vehicle for butter Right Or oil And we can cut down our portion size If we give them a big basket of bread Right That is literally why they do it And It's delicious Bread's delicious You know But Like We wrote like 4

,000 words On the purpose of bread But You know We had hundreds of thousands of people And one of the coolest things Was that the Sean Brock Who's a very famous chef now He was the first customer Through the door on the first day Wow And he wrote on there So did you have like a wait list By the time you launched or Yeah we had We had like Opening night We had New York Times there Head food critic Michael Rollman told us like That guy is the head critic Of the New York Times So you didn't know what anyone Looked like back then So you couldn't know this But If you hadn't been Publishing that stuff But you opened the same restaurant There's no chance It would have been as

good No chance That was Like Such a marketing Feat And how do you think about Product Marketing Storytelling Like what's your kind of Theory or thesis Or philosophy on this The more open you can be About why you're doing it As long as it's authentic You win Period Like You can also lose on that Like Look Like You win period You can also Well I'm thinking of I'm thinking of Dario And Sam right now Like You know It's like There are real concerns Around AI And You know If you run around saying Everything you think Everything you think Might not be the best thing All the time You know At the end of the day Like a restaurant Is a pretty benign thing No one's gonna live or die

Based on Me opening a restaurant And But so Why was I opening it We had really pure reasons Like You know Do we have ambition For sure At the time There was A real culture Of people Finding these things And there wasn't Instagram And there weren't You know The social media Outlets And so This was novel To have that Now Like one of the problems I think Is that You know If you're going to Paris You're gonna email Hey where should I eat Okay I love You should go there You're gonna go on And look You're gonna see all of it Before you get there It's really hard to be surprised In life right now And so You know A lot of what we were doing Was creating desire

And enough engagement That you felt like You knew people People always want to buy From people You always want to Have an engagement You know One of the successes Of this podcast Is you People see you And you're genuinely curious That's authentic That's the secret We can do so many bad things Like making dumb questions Or dumb answers Or And as long as you're Authentically Like engaged And so that's the marketing Yeah Finding that And being willing To put it out there Is A little bit Scary A little bit invasive A little bit You know Like not everything you do Is good You know You might not like The way you look Or sound on camera All that But you have to Keep doing it You

told me another thing That I thought was really Awesome Because I've never been to Olenia Most people who listen to this Will have never been there Right So like for 99% of us We've never actually Experienced What made it The best restaurant in America But you've told me A little bit about like Kind of every detail So you know How were you greeted At the door You know What was the experience Like you know The balloon For dessert You know Where you're eating This candy apple Or this green apple Balloon for dessert And you've talked about like All the different elements Of the experience What are like Three or four things Where you are proud Of like How you kind of

Rethought Reinvented Or just even a small touch I think there are Dozens of those And what I would say Is that we looked at it Like a theater Like you know If you write a great Piece of theater Or read a great novel Or whatever The term of art Would be a callback Right So like you write You were talking About Chris Rock Like the great thing About great comedians And what not Is that they They'll set something up At the beginning Of their set And then they go through A whole bunch Of unrelated stuff And then somehow There's a satisfying Callback There's a satisfying Callback Which makes The beginning And the end Funnier Right Right And when you leave You're going Oh You

know So We viewed The experience From the time You got out of your car To you walk down In a hallway To you're at a table Which was a complete cop of David Byrne. Like, you know, like, stop making sense. I saw in 1984, I was at Harvard Summer School as a teenager. And I haven't seen it. What would I have? Yeah.

Stop everything. Really? Are you kidding? Oh, my God. When you said the name, I had to decide. Oh, dear God. You're a generationally. Oh, my dear God. Well, I know what I'm giving you for your birthday. Okay. So the great thing about Stop Making Sense, that concert, was that David Byrne walks out. No one else is on stage. He has a boombox, which just plays.

You know, before drum machines and all that. And so, yeah, cassette tapes. And then he, you know, he starts playing the guitar. And then the stage builds. The stage builds. And then pretty soon, he gets smaller and smaller because he starts wearing the bigger and bigger suit. You've seen them dancing in that big suit. That big suit is, as the world around him gets bigger, he gets literally smaller by stagecraft, right? It's brilliant.

And I remember when we were building Alinea, Grant had said, like, why do fancy restaurants have tablecloths? And the answer is because the table underneath is a piece of shit. And so he was like, we want great tables because you'll feel it, you know, and you'll see it and all that. And then we were like, well, start with nothing. You know, you go to I'm a fancy restaurant, you got like 18 different forks and knives and that's stressful because you're like, I don't even know how to use them.

I'm not like a 19th century French aristocrat. And even then they have somebody, so you should probably use the fish. Right. Like fork or whatever. A reprimand. Yeah, yeah, right, right. For bigger customers. Right, yeah, yeah, yeah. Soup away. Like we didn't want any of that. And I remember thinking of Stop Making Sense and going like, let's start with an empty stage.

And so when someone comes, you get, you know, something that hits the table. What's the point of that? What's the callback for later? So it could be, you know, a honeycomb or it could be, you know, what looks just like a flower arrangement. But as it turns out, there's edible things in there, but you don't find that out until hour two. Right.

So these were all intentional things. Now, none of this sounds particularly revolutionary now because there's tons of restaurants that do that. I mean, that was the influence of not just Alinea, but like a lot of other restaurants that push that envelope. And so that's we we worked really, really hard to hone. All of the little things that would make you feel something.

Right. So if I said to you, I'll ask you not your favorite meal in a restaurant necessarily, but what's your like most memorable meal of your life? You know, I know what came to mind right away. I remember when I was 21, 22 years old, we were doing the sushi restaurant thing or wanted to start a sushi restaurant. We went to Las Vegas and my, my buddy Trevor's girlfriend, her dad was wealthy.

And he said, take the boys out to Nobu and say the word omakase when you go in. Yeah, yeah, yeah. We didn't know. We got 20 years old. Of course. Why would you know? A school in North Carolina. Not a great sushi scene. Not a lot of omakase going on there. So we go to Nobu and we say the word magic word omakase and they say, we got you. We got you.

Yeah. And they start bringing dish after dish. We don't even know what's happening. We're trying this like miso glazed cod. It's like, wow, every bite tasted, you know, unique and great. And the whole bill was paid for by this other guy, by, you know, the, the, her dad. And the whole thing just felt like totally taken care of and new and novel.

I just remember also where we were at in life. Like it was just like a relief from like the stress of trying to build something and being broke. So now how do you make that happen every night for people? Like, you know, and that's, that's a real thing. So we would ask staff, like best experiences, best experiences. What? Okay. We're coming into fall.

What does that mean? Well, it means something very different. Like we're in October here. We filmed really early today because it's going to be a hundred degrees in Chicago. The leaves are already down and it smells different and it's wet. And so as you're trying to craft these experiences, we just ask those very simple questions. And when we built software, there's a lot of different theories of software building.

I like to build dead ends in software that every software designer hates. If you could hit every button at every page, I can't take you on the journey where I want you to go. Right. Right. So I kind of build like dead end caves that every, every software designer hates. Right. Like, you know, UX designer. Cause they want like the Microsoft version of, I want every button, every option at every time.

Right. My older son is very much like a windows guy because he can tinker with everything. Right. But like in a great experience, like that omakase that you had, you had no choice. Right. It's a defined, it's a defined thing. Yeah. And sometimes it's great to have a lot of choice and sometimes it's great to just be taken on a journey, you know? You know? And so studying that was fun, you know, and that's what we did.

You also study. So as I'm kind of deconstructing what you do, one of the things you do is you, you learn, but not from only within the industry. You steal from the sort of adjacency. Yeah. Yeah. Yeah. You don't look at a restaurant and say, well, how do the best restaurants do what restaurants do? You know, you say, in fact, you try very hard not to do that.

You say, what do they do? And then what's the, how do we invert some expectation? Or what are they missing? Like, I'm fine with stealing the best stuff. What are they missing? Right. And then what, if this was theater, how would a theater guy do this? If dinner was, was like a theater show, what would it be? Right. Right. So like taking these adjacent, you also told me about magicians and how you were studying magicians and this kind of new stuff that we're doing.

But you told me the story of selling a bottle of wine to a table. Yeah. And you were able to go in and you were able to sell a bottle of wine that maybe the waiter wasn't going to do. And he was kind of asked you like, how'd you know how to do that? Today's podcast is brought to you by my friends at Mercury. They make the world's best banking product.

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I will fist fight anybody who disagrees with me on that. Go to Mercury .com slash personal and learn more. Mercury is a fintech, not an FDIC insured bank. Banking services are provided through Choice Financial Group and column NA members FDIC. So when I was a kid, like every kid, you get a box, a magic box that has like the rope that with the little peanut in it that like holds.

Yeah. The hidden coin thing that the roller that does the dollar bills on it. And there's somewhere exists a video of me that my mom put me in a little tuxedo and I did the show for like the relatives and everything went wrong. That's why, you know, it's so great. But of course, I'm like doing the tricks and I'm like, oh, don't worry about that thing.

Right. You know, I'm like five or whatever. Right. And so like almost everyone, that sense of wonder and awe and all that is something that as you build out experiences for people, magic is a wonderful thing to study. But it's also a wonderful thing to study in everything else. It's marketing, sales and all of that, because, you know, for sure that I can't change a ten dollar bill into a hundred dollar bill.

Right. You know that everyone knows that. And then when you do it, if you do it really well, it will appear as though you did it, even though intellectually you have to suspend your disbelief. And so how do magicians do that? Well, you know that they control your attention and where they stand, where they look at you, where they look, you know, not at you.

All of those things are cues that are incredibly practiced. They know exactly when they're working and when they're not. And as you're building out experiences for people in restaurants, anywhere else, if you read the books on restaurants, I just hate them. I don't like them at all. But if you read a book on written by a magician. To say.

The effect, they always start with the effect. The effect is that the bill will become a hundred dollar bill. OK, that's the effect. And then they go through the method. The method is, well, you've already got the hundred and you're going to fold it like this. Then there's beyond the method, the craft of what you're doing. So the presentation.

Yeah. Yeah. If you read 150 year old books on magic from anywhere in the world, they have all of these wonderful things. Like, well, if you want to gain people's trust, you don't sit across from them or stand across from them. You will stand next to them. So if I present this to you.

And I'm standing here and I just go, this is the best water in the world, you know, whatever. Like, you're going to be going like, I got to sell me water. If I go around the other side and stand next to you. So we're both looking at it. First of all, I could be doing a lot of different things there. I could be signaling someone they bring more water.

He's a little low. I can be doing all sorts of stuff in a restaurant. You know, your attention can't be on the water and behind me at the same time. Right. So I Kind Of Own That Space Back There So In Reading These Things And Thinking About Alinea It Wasn't Just The Callbacks And It Wasn't Just Hey We Need To Make A Dish That Transmogrifies Into Something Else Or Whatever We're Going To Start Doing Service In A Way Where We Are On The Side Of The Diner We're Going To Present Some Weird Stuff We're Going To Present A Dish That Look That's Hanging At The End Of A Skewer That Makes You Uncomfortable Because You Know You're Supposed To Kind Of Right Do That And One Of The

Things That We Kind Of Realized Was If You If You're Going To Have People Eat Something That Looks Like Glass You Should Put It On A Plate And If You're Going To Have Something At The End Of A Skewer That's Bobbing Around It Looks Like You Have To Give It Head You Probably Should Make It Make It Taste Like Cherry Pie You Can't Like Challenge People In Two Directions Right But The Way That You Describe That Should Also Not Be Adversarial It Should Be Like You're On The Same Team Hey And The Waiter Comes Around To The Side They Look At It With You And They Go Look What He's Putting Out Today Now He Might Have Been Putting It Out For Three Months Right Right Right Right But

You Know It's Like And That Was A Very Stayed Thing You Have To Be On The Team Not Team Restaurant Team Customer Team Diner Right And With That Story With The Wine You Know This One Table Of Six Like We Did Wine Pairings Mostly This One Table Of Six Wanted To Buy All The Wrong Wine Okay So Big Red Wines Don't Really Go With Our Food You're Probably Not Going To Sell Them A Riesling If You're A Somme And You Just Go Like Oh They're Going To Buy A $1 ,000 Bottle Of The Wrong Wine Well You Want To Sell The $1 ,000 Bottle But Where We're At We're Like Well You Probably Shouldn't Get That That's Not Really Appropriate For The Food You Don't Want To Say That Don't Embarrass The

Person You Don't Want To Say That And So You Know I'm Looking And I'm Looking At Their Shoes And The Wife's Wearing Brand New Lebatons How Do You Know They're Brand New Well The Red Is Absolutely Perfect Those Things Cost About $1 ,200 And That Guy Over There Has Got A Watch That's A $55 ,000 Watch That Guy Who's Actually Ordering The Stuff Is Aspirational Because He Didn't Have Any Of That So He's Either The Really Rich Guy Because The Really Rich Guys Don't Do Any Of That Shit Or He's Trying To Impress These People And It Felt Like That So Rather Than Say To Them You Probably Shouldn't Get That I Walk Over I'm Like Hey I'm Nick I Love Wine I'm The Owner Of The Place

What Did You Order And I Go What Would You Drink On Tuesday With A Pizza Now I Know He's Probably Not Going To Answer Honestly Right Right I Go Oh That Goes Really Well With The Pizza I Said You Know Like We've Got A Couple Like You Know You Could Probably Get Two Or Three Bottles For What You Ordered But They'll Pair Wonderfully Just Like That Super Tuscan With That Pizza You'll Get Like A Better And I Didn't Make It About Him I Didn't Cut Down The Spend At All Right And Then The Waiter Was Like That's Amazing Like How Did You Do That I'm Like She's Wearing Lebutons That Guy's Got A $55 ,000 Like You Have To Know What You're Looking At Right And That's What Magicians Do

All The Time They Look At Their Environment They Assess Their Environment And Then They Put Themselves Into That Environment In A Way That Accomplishes The Effect And So I Got Really Into Reading That Stuff The Theme Here Of Going Okay I See An Effect That I Really Like I Am Going To Reverse Engineer How I Would Do That Not Because I Want To Perform It Ever Or I Want To Like Know The Trick Right But Because I Want To Know How He Got To Understand All The Positioning You Needed The Site Angles The Psychology Of The Person Seeing It And Then How Can We Apply That To Our Sales Team At Talk Selling Software Or How Can We Teach Our Waiters That Standing In Front Of A Table Is

Not Nearly As Good As Standing Alongside A Table And These Little Things Like You Know It'S So Like I Would Not Do Training Very Often Because A Lot Of The Training Is Literally Like You Don'T Backhand Someone Like You Know If You're Pouring Wine And I'm Pouring From Here I'm Not Going To Do This I'm Going To Use My Right Hand And Open Hand It'S In The Labels There Like Small Things And At That Level I'M Not The Person To Teach That But Then I Would Show Them A Darren Brown Video You Know And I'd Be Like Today We're Going To Watch A Magic Trick And It Doesn'T Look Like A Magic Trick The Great Thing About Darren Brown Is He'S On The Street And It Doesn'T Look Like Magic So

I Would Then Walk Them Through The Anchoring And The Wrist And The Hold And If You Watch This Is What He'S Going To Do Every Time And It Seems Like It Flows Like Water It Just Flows Perfectly Out Of Him So It Never Feels Like When He Backs Up And They're Walking With Him Hey They're Engaged It'S Easy To Assess Engagement With People So All Of Those Things Are Studied In Practice And When You When You Kind Of Gamify That For Your Team Whether It'S A Marketing Team A Sales Team Whatever It May Be It Becomes Really Fun You Know And You Can Do That In A Smarmy Way Like The Jordan Belfort Way Right You Know Sell Me The Pen Yeah You Know And All That Like Yo How Long Have You

Been In The Market For A Pen That'S Not What I'M Talking About And So The Great Thing About Magicians Is That There'S A Suspension Of Disbelief That You 'Re Being Sold A Bill Of Goods You Know That It'S Literally Called A Trick And Yet You 'Re Fine With It That'S Where You Want To Get To Right You Know And That'S Why We Studied It And That'S Why I Studied It And That'S Why I'M Still Fascinated With It So How Would You Use Your Brain On A Podcast So Let'S Say Oh Gee Let'S Say You're Me And You're Gonna Try To Do Something Whether It'S This Podcast Or A New Podcast What Are Some Of The Questions Or Some Of The Way To Think About This I'M Just Curious Huh That'S A Really

Great Question And I Don'T Know The Answer That'S Okay You Don'T Have A Good Answer Yeah I Don'T You Know I Feel Nervous All Of Sudden Stop That'S A Good Nausea That'S A Good Question Yeah That'S A Good Question So I Listen To Podcasts I Listen To Your Podcast A Lot And I Think One Of The Things I Would Do Is I Would Never Send Any Questions Ahead You Did Not With Me Right I Don'T Know If You Ever Do Or If People Request It But I Have On A Lot Of Podcasts Where Someone Sent Me A List Of The Questions Before An Interview I Never Look At Them Right Like If You 'Re Running A Podcast Do Not Send Out Any Information Ahead You Know Because It Will Not Feel Real And Authentic

Like I Didn'T Know You Were Going To Ask That Right My Response Is Is Much Better Because Of That You 'Ve Done A Very Good Job Of Being Yourself And Then The Thing That I Would Say Next Is What'S The Next Format Like I Don'T Know What That Answer Is But Podcast That'S A Thing You'D Be Thinking About Oh I Need To Know Like How Are How Do You Get This How Do You Get This Down Into Something That'S Going To Be Consumed In The Next Format Because It Went It Went From Listening To Podcasts I Mean All In Like The Last 10 Years To Now We 'Re Visually Doing It To Something Here Will Be A Sound Byte That Will Get Down To Like The Clip 15 Second Short Video That Will Probably Go

Like I Do Better You Know A Couple Of Podcasts I 'Ve Done Have Been Long Form And They 'Ve Helped Me Immensely In Business Simply Because People Who I Think Wouldn'T Listen To It Did Right And Then They Feel Like They Know Me Because It'S Authentic Have You Seen The Hot Ones I Don'T Think Oh Yes Yeah You Mean The Wings Yeah I Love It So It'S A Simple Mechanic Where The Guy Basically Says Well For Celebrities Coming In And Every Celebrity He Uses Like Real Hollywood Celebrity Yeah Yeah Yeah I 'Ve Seen It They 'Re All PR Trained And They Do A Thousand Of These Things It'S Like Actually Not That Novel To Have Access To Them Anymore But What What Do You Not Have Access To In

That Person It'S Like You Get To See Them Sweat Yes It'S Like But In A Likeable Understandable Way You 'Re Not Like Putting Them Under So Much Pressure Right And It'S Also Like And It'S Relatable sweat It's hot It's spice Everybody can kind of imagine what it looks like And there's a progression So you kind of, wherever they start There's a built -in retention book And you also know it's coming And you want to see what the finale is How bad does it get And they can use clips of them like drinking milk And gas, you know, oh man, it gets bad Yeah, yeah, yeah So already it's like That guy took interviews And with one mechanic Yeah Changed it And if you look at our space, for

example Like in the business space Nobody does that Nobody does anything like that I will say that I wanted to Because I'm a golf fan It would be really fun If we were walking up the hill behind here Like one of the things I thought of And got rid of Was like And I didn't know that you'd have like a production So it wouldn't have worked anyway But like Like doing some activity like that Is super cool Right I've been very fortunate to golf with amazing people Not just like professional golfers But just amazing people And Four hours on a golf course Is a great filter Right Because Golf is a game of utter failure Like no matter how good you are You're going to do bad You're

going to do poorly How they react to that is fascinating And human And human and all of that Yeah And Some people are really enjoyable to golf with And some people are not And It's unpredictable Like I can't So one of the things I want to do Is like You know Bill Gates loves to golf If I was going to interview Bill Gates I'd be like Cool Let's go to the Muni golf course Right And we're just going to go And there's going to be like A little handheld camera around And we're just going to play golf And we'll interview you about your history Of software and AI Or whatever But we're going to We're going to Watch you look miserable In the middle Because he's not a very good

golfer From what I hear That's a really humanizing thing Like it's great to talk about All the things I do well Like thank you But like There's a lot of things I'm miserable at Like Let's Put a little Trouble in the way Which I guess is what Your point is with the hot ones Yeah Put a little trouble in the way I think that's a good like principle How might we Put a little trouble in the way And then you can come up with 10 ideas Yeah Another one would be You know You talked about like If you want to learn How to manipulate Let's say attention Or make Immediately disarm people Or be suggestive We can learn from magicians Or if you want to Create a three hour experience We

can learn from theater Yeah So I wonder like Who should I have been studying Like should I have been studying You know How does a Kind of interrogators For the You know The CIA What do they do To really get somebody To be honest Yeah And I'm not going to Interrogate somebody But it would be very useful To go to that level Of extreme Thousand percent Just listen to how podcasters Like me do What we do Right Well and also You're trying to break down Like for the audience Like oh you've had like Four different careers How and why Right How did that work Why were you successful at it What can people get out of it It's a show don't tell thing Like here we're forced to tell

Right It'd be cool if we just Could show it somehow Right Like Steve Bartlett From Diary of the CEO Early on The effect of every episode Was the guest was going to cry And so how do we achieve that effect Yeah right The method was I'm going to surprise you At some point With a photo Of your mother Who has passed away recently But it's a Yeah yeah yeah Like a really wonderful thing And then I got Your third grade teacher To write this letter Yes And I want you to read it Here live And then the effect was The guest would always Get emotional Yeah And you never used to see That Yeah that person The person The high achiever Get emotional Yeah And that became a calling card

For his show And then it was like This flywheel thing Where the guests kind of know Oh I better open up I'm like I'm not behaving I watched that Bear Grill show You know He's like that outdoor Survivor man Survivor man kind of thing And he did a series Where he takes celebrities And In the wild Takes them somewhere And talks about their career And I love the concept of it But the execution of it Even though I love When he does it Obviously they can't put These people in actual danger It feels dangerous But like you know They can't They can't really suffer You know Like Uma Thurman Is not gonna go I mean she was one of the people I'm a big Uma fan I was gonna say That was

a random reference I know it wasn't that random My wife's gonna be like Yeah okay Uma Thurman Always Uma Always Uma So But like You know I watched that And I went like Oh that wasn't Like That wasn't all that interesting Because she never felt Actually Right Like emotional I don't think Yeah I guess the thing I take from it is I consider myself a creative person And it sounds like When I'm hearing about How you go to the restaurant industry Or how you did You found arbitrages Or you know With talk How you did talk You know I've heard you tell some of these stories And I realize Oh wow There's levels to this game Of how to Truly live in that Kind of creative mindset And

you know There's common patterns Like Where can we go What adjacencies Or like Totally unrelated Spaces Could we go learn from And pull One or two things That might be really out Well I mean And that's the Philosophy training To me Was like Figure out The first principles Thinking When we were building Alinea It was Great customer experience Great business Because then you've got A flywheel Where if the restaurant's Making money You can reinvest In the customer experience Which makes you An even better restaurant Which means that you're Making more money That you make more money Yeah And I think that There's a lot of The garage band Mentality among chefs Even some of the

Famous ones I mean I almost Broke my My TV in my basement When COVID started And They had famous chefs On CNN Going This is the kind Of business Where at best You make two or three percent And you pay You know this month's bills With next month's revenue And all that And this very famous chef Was on TV all the time Saying that And that we need to Print two billion dollars For the restaurant Industry and all that And I was like F*** this guy I mean I literally Emailed him I was like Stop saying that That's not true He's like What part of it's not true Like my restaurants Make two percent I'm like Well that's because You don't actually You haven't figured it out Like you

should be The last spokesperson On there But he was a very Successful TV chef Not a very successful Restaurant owner And those are Two different things And the press doesn't get That they're two Different things You know For a lot of these Industries that are Like kind of Art craft based Openly desiring Running it as a good Business Is sort of Low status Low status You lose some Cool points That's what I mean By the garage band thing Like oh you sold out Like you know It's like For me I'm really really proud I sold the Alinea group Three years ago Our investors Got quarterly distributions From the time I started it In 2005 All the way to when I sold it in 2023 And then

they got 8x their initial Investment walking out The door Right so I think Overall it was like 27 or 28x Right So if you put in $100 ,000 in 2005 Into a restaurant That you thought Was an art project In 2019 You got about A quarter million back See this is why I got mad at you Last time I was like Dude I used to always Just say restaurants Are a horrible business And I realized No no no You were actually My bad hat I thought you was Horrible at the Restaurant business It's a skill issue Well and you know Look I mean We could have gotten Lucky but like At the end of the day Like the end of Whatever Is relatively small Like you could say Like well you caught The right thing

And this and that But you know The first year We did Alineo It did about 5 million in sales And made like 8% 7% It was considered Really good And I'm going like Well that's a Giant downgrade From my previous career And a lot more work And then At the peak Like it was doing 20 some million dollars A year And making you know 18 -20% And like that was I needed to build A software company To do that We need to get rid Of all the phone lines To do that You know Steve Bernacki Our CFO Came up with Merameco charts To do To do all of the Food costing That wasn't me That was You know A guy that I Helped to mentor And then I learned From him And you know It's like All of those

things We disseminated Freely To the industry No one wanted to do them And so, like, you find yourself during COVID Looking at the TV Going, oh my god Like, it's so broken The information that comes out And then the thing that happens to me is I go What else is like that? And as it turns out, probably everything Like, you know, if I do know awesome food reporters I know awesome economic reporters And all that But chances are that If you're going to write a book about trading I'm going to pick on Michael Lewis here Great writer, great writer Love his books, love reading them When he finally wrote about something I actually knew about I went, oh, this is all wrong Right?

Flash Boys is all bullshit Because if you show up and start asking traders Hey, how did you do that? And you engender their trust in order to betray it Because they know you're going to write a book What do you tell them? Well, you tell them the shit that worked five years ago If my arbitrage between the Amex and the Merck Was working right now We would not be sitting here talking about it Right? I'd be going like, oh, really hard Stay away No, that's going to work And so, you read that And then you go, oh, man And I think that's a lot of where The current frustration with the press comes from Is that when you have all of these people Who can see information freely In

each of their silos Where they're really learned All of a sudden you go, oh, that's not what I said Or that's not, you know I love doing these long form things Because if I put my foot in my mouth Everyone can see it But it's really hard to take it out of context Or if you did take it out of context You could go, well, go look at that And it was direct It wasn't filtered Yeah, right So, you know, I feel like That's part of the disconnect Politically these days That's part of the disconnect with all of that Is that you have, again Different timescales of information And I have a really good friend That gets all of his media consumption For lack of a better term Filtered

through three things And I get it from The unfiltered messy versions Of X and Reddit And boards And, like, I'm a geek, right? So I'm in all that And by the time he reads it I'm like, that's two weeks ago, man Right Like, and also it's wrong That's actually not what happened Or not what was said Or you're not getting the context of that thing And so I'm like, oh my god I'm consuming, you know, for sure I'm also consuming it wrong Right Because I'm not close enough to it To really fully get it So what I try to do is I'm fortunate enough being 58 years old That I just try to, like, get to the person Like, if I see something And I'm like, that probably doesn't seem right I

just email the person that One of my favorite stories you told me Was when you were selling talk And I've gone through M &A And I think every entrepreneur Should try to listen to more M &A stories Because if you ever get to that point It's going to be basically your life's work Yeah You know, 5, 15 years However long you've been doing this company And then in this, like, 3 to 6 month span You're going to have this huge swing In the outcome that you're going to have Price Yeah Maybe the deal falls apart Which happens all the time And you're doing this thing Where the other side of the table Knows a hell of a lot more about this Has done this 10 times more than you have

Yeah And so you're kind of going into the gunfight With a, you know, butter knife Trying to do this And you told this great story That resonated with me About when you were selling talk And how you treated the lawyers And the diligence process Where you kind of, like, took control of it Entrepreneurially Rather than being a passenger to the process We had incredible growth during COVID And the trader in me was like We are going to lap this growth

And we're still going to do well But we're not going to go 200% next year Right This is my moment Like, it looks really good right now And with technology You know, you could have something that That's, you know, growing 200% a year And then all of a sudden you grow 50% one year And even though that's amazing The world of M &A and VC just goes Oh, tries that Like, you are on your way down And pretty soon you're going to be like a legacy You're Comcast pretty soon You know, even though it's not true So, Steve Bernacki, Jeff Kaplan, my COO, myself The lawyers would go like Well, we just got the diligence list And it's 896 questions

And we would convert it from Excel into Google Docs And then Steve would go through And he would color code it all And we would assign it to the people That could answer all the questions And, of course, like the investment bankers And lawyers kind of thing Would go Okay, well, this will take like Four to six weeks Right And I was like We built dashboards for all this I could have it in like two days But then they realize They ain't getting paid If it's in two days Right Right You know, it's like They're billing hourly And there's four of them So they're incentive Yeah You're at $3 ,200 an hour Or whatever Every time you get on a Zoom call with them And then, you know The

investment bankers want whatever 3% to 4% or whatever So we just went We don't need an investment bank Like there's nothing here That we can't figure out on our own And, of course, the board hated that idea But we still had a controlling interest And so I just said like Awesome We'll do it for 2% Does that make you feel better? For real And they So you, your own investment bankers Yeah And I'm like I wasn't going to do that But they were so adamant that it was hard And I said, well You know, like, look They're getting paid 4% I'll save you 2% We'll take it And that way we'll be beholden If we don't get it done Like you can You know, we won't get paid Which is weird They

should just say no to that But they didn't say no They said yes And we did that whole list in 3 days We just stayed up Hey, you just locked yourself in a room Locked yourself in a room Did the whole thing in 3 days There was like You know, there was a lot of questions That were like unclear What this What you're asking here You know, or irrelevant But And then they just went What is this? And we're like That's your diligence It's done You gotta tell the Spock The Spock story Oh God There was I'm not letting you up Okay, yeah There was a guy On the other side We won't use his name Or the firm But You know, there'd be This is during COVID too So they wouldn't be in person

And there'd be like 30 people I mean, I have screenshots Zoom call Zoom call of 30 people All lawyers All lawyers Our side, their side A couple people from Squarespace And then The three of us, basically And we knew the answers To all this stuff Because we did it ourselves There's no one to parse it through Or whatever And so then I would just ask a question Or Steve would ask a question Or Jeff would ask a question And the lawyer would literally go I will take that to my clients And I'd be like Your client's on the Like I can see your Like we're here We've got two weeks left Let's not leave it Till like And it had to be done One of the critical things And the reason it

got done Is because They were going to go public The following quarter And all of their S1 information And whatnot Need to be locked down End of Q1 Which happened to be On March 31st Okay Like it actually followed The calendar year So March 31 We had to be done Otherwise It was Not going to happen For six months to a year And maybe never Right And finally I just looked And I was like Hey Spock Shut the f*** out And everyone Even some people On his own team Were kind of like You know Kind of trying not to giggle But you could see them You know And I was taking Screenshots the whole time Because this guy It takes guts to say that To the other side Well I was so angry

Because Like Did he wonder why You were calling him Spock No No No No This was His entire strategy Was simply To Close At noon On the last day possible Right Because that's how They could get The most out of it Right And That's one of the You know You were We were talking earlier Like one of the superpowers Is not a superpower It's just What What is this Person's motivation If they're on your team even, are your incentives aligned? I learned very quickly at Alinea that my manager's incentives on a Wednesday night were not to be full.

And I learned it because this one guy said to me, Nick, if every day was Saturday, we would be so tired and burned out. Because I'd be like, we have 140 person waitlist, we're doing 80 people tonight and 94 people Saturday. Why is every day not Saturday? Why are we not doing 94 people every night? And he said, well, I'm holding back those because otherwise we'd be too tired.

And I'm like, but you don't get that, like, we could hire 10 more people and you could work four days a week instead of five and get paid more. Right. He did not last much longer. Like, because I literally went into the primitive pre -talk talk and opened up 110 seats for every day for the next two weeks. And we sold all 110. And I went in the kitchen and I told Grant, we're doing 110 every day for the next two weeks.

And he's like, okay. And then I knew that they would make it happen. And then the guy just kind of walked off like, you know, and so you just go like, okay, like I, that was my fault in a lot of ways. Like in hindsight, I did not align the incentives. I did not explain, explain that every day should be Saturday. And you know, it's like, there's a certain group of people that'd be like, you know, yes, every day is Saturday.

Like it's game day. So I have this phrase that intensity is the strategy. And what I mean by that is I spent a lot of my life searching for the better way, the better strategy, the hack, the shortcut, the whatever. As I hang out With Enough Winners, you realize the difference is not that they knew something I didn't know or they had some magic formula, but they applied a greater level of intensity to a pretty visible strategy that I could have seen.

And actually, the intensity almost changes the strategy over time. Yeah, and also when you're wrong, you go like, oh, I was really wrong. I mean, I just said, in hindsight, thinking about it, I did that wrong. He did not know why that was important to the business or why it could make his life better. That was my fault. But do you think that you had, was the trading floor like the formative period where you found back to here? So I will tell you a great, I will tell you an exact thing that is a tautological stupidity that is in a book called Market Wizards.

So this book called Market Wizards, it's one of the rare trading books that's great. Now, everything in it's out of date in terms of the process of like the floor traders and all that. But what's not out of date with the Market Wizards book, the mentality of the people that he profiles in there and interviews is great. And one of them was called One Lot Wonders.

And so this guy would just trade one contract at a time, really small. And one of the questions I remember this and I think about it all the time is that he asked the trader, what should a failing trader do to become a successful trader? And he goes, well, that's a dumb question because a successful trader will figure that out. And it sounds stupid, right? And all he's saying is like, well, no, like if you're a success, if you're going to be a successful trader, you will stop doing all the stupid shit.

And I don't know what stupid shit you're doing. You know, I can't know. And I can't put it in this book and in this interview, but it's a mark of a successful person that they will at the end of every day, like kind of what you were saying about Chris Rock. At the end of every trading day, you do the postmortem or whatever, you know, it's the Google version of it, postmortem, you know, like something goes wrong.

You analyze what went wrong. One of the things I tell people is like no one likes getting punched in the face. But there's a certainly a lot of people that when they get punched in a face a lot, instead of saying like, maybe I should learn to bob and weave a little, they blame the puncher or they blame the referee or they're like, maybe I shouldn't be in the ring or whatever it is.

Right. And, you know, that's why, you know, that's the flip side is the Mike Tyson quote, right? You know, everybody's got to play until they get punched in the face. Well, it's true. You got to play. I said impression. Thank you. You know, and I love that, too. You know, I used to show that to people because I'd be like, yeah, like we have a plan.

Our plan is changing. Right. Because we we are absolutely getting destroyed right now. And I was wrong. And one of the things I hate about managers and when I have worked in other organizations, you know, I'd be sitting in a meeting for two hours and like I'd be like, can we just all admit that this is stupid? Like we should not like I don't care who's who owned it or whatever.

Like it's just not working. Right. Kill it. Like this one company bought this other small company. And I'm like, you have 14 different competitors now and it'll never be monetized. Right. Can we admit that that's never going to make a dime? Now, you could keep it for strategic reasons, but you probably shouldn't spend 10 million dollars a year developing.

And everyone's like everyone who had ownership of it. No one would just go like, yeah, right. We screwed that up. We shouldn't have bought that. I love that the successful trader will figure out how to be a successful trader, which is that he will edit out the stupid shit he's doing. Yes. He'll just over time every night edit out, snip out some of the stupidity until there's not enough left.

Yeah. And he'll be successful. I mean, look, like everything around us here. I'm not a viticulturalist at all. I am. I don't know agriculture. I'm learning. But I got this place and got here and it was very scared. I didn't know how to shut off the sprinklers in this lawn today because it all changed in the last couple of weeks. And you learn, you know, you start going around and you start learning.

And I got asked to be the keynote speaker at the Napa Valley Grape Growers Association this past spring. And I said, oh, you've got the wrong person. You know, I don't know anything about grape growing really. And I'm learning. And but some of my heroes in this industry are the people who started that 30, 40 years ago. Right. And so I'm like, I'm not I'm not going in there and telling Randy Dunn like anything about grape growing.

Right. And they said, no, you're the only optimist left here. Like you're building you're planting grapes and you're building a wine bar in town and you're you bought property when everyone's selling property. We just want to know your why. So I was like, OK, I'll show up. And the first thing I said is, I know nothing about grape growing.

I hope to learn from all of you. They all big smiles on the face because they thought I was going to get up there, be like new new rich guy comes to Napa and tells people how to grow grapes. Right. And then the software guy, because they all use talk. The software guy is going to tell us that the tasting rooms are doing great now, even though we know they're not.

Right. Right. OK. And all that. And what I said was you had 30 years up into the right. You thought you weren't going to get kicked in the face at some point. Prices weren't going to go down. Really? Who told you that? Was it the hippies that came here in the 50s? Right. You know, it's like they couldn't have imagined thirty eight thousand dollars a ton.

What makes you think that you're owed that? Walked out and people were like, yeah, yeah. Like, let's go, you know. And this cycle is going to be like any other cycle. This time scale is really long. These grapes won't be good until I'm 70. And so, like, that's weird. You can't yell at the grapes and have them grow faster. But the way that they run their businesses can feel different.

Right. And I think I just gave a little hope in that. Like, you have copium or hopium. And I'm more of a hopium, like, figure out, you know, kind of guy. Right. It's like the Matrix red pill blue. Yeah, yeah, yeah. You choose one of these. Yeah. We got to talk about Strange House. So you got to tell this story because this is one of the coolest projects that.

I hope it happens. Sean, are we going to make this happen? It's got to happen. I mean, you know, how can you listen? You should listen to this podcast and be like, that guy would make that happen. You know what I mean? Yeah. If anyone's listening to this, I'm going to look at the camera. If anyone's listening to this. Put down the barrel.

We are building the weirdest, coolest thing. I say we. We are now, after like a couple conversations. Okay. Like, where to begin? And it's just another one of these. You have no business doing this. A thousand percent. But I'm going to do it anyways. Yes. And I'm going to shoot to the very top when I try to do this. And because of that, I'm going to like, I'm going to go figure this out.

All right. I'm going to figure this out one step at a time. So tell the back story. Okay. The back story is I was doing what I do on like a Wednesday night at 10 o 'clock. And I open up a bottle of wine too late and everyone's like going to bed. I start watching some random YouTube magic thing, you know, and there was a guy who I'd never seen, you know, comes up on the feed, Nate Staniforth does the lottery trick.

And the effect is that he's in an, he's in a theater. They throw around, you know, a beach ball or like a little crumpled piece of paper in this case. And six people call out a number. And at the end, the last person comes up and in the wallet that's been sitting, you know, at the beginning, he puts it on a stool. On a stool there, you know, that comes up on stage and he opens up the wallet and he pulls out the lottery ticket from whatever state they're in.

And the guy reads off the numbers of, of the, uh, what the random people, random people. And they're, they're genuinely random. Like you can tell that they're genuinely random. They're not stooges. They're not plays balls bouncing around. And, and the people are clearly, you could see the audience going by the time they named the third number, like, you know, that the lottery trick, right.

And Nate gives such, it's kind of like that, that stopped making sense. Empty stage, just one stool. It's very elegant. He's very quiet about a big fog machine. There's no craziness. And boy, I like this effect a lot. But the thing that I didn't like was that he called out the numbers in the order that the audience called them out and every lottery ticket, I thought, and then I had to look it up.

If you buy and I played lottery for No Edge So They're An Ordinal Number Right So If You Go In And Scratch Off A Lotto Ticket Or Call It In Or Whatever It's Always Going To Go From 1, 3, 17 Whatever But In His It Would Go 17, 3 Whatever The Audience Called It Out So This Upset Me Greatly Right You Know I Was Like Watching It Going Like This Is Like One Of The Greatest Delusions Ever Given My Disorders Bothered Me To No End This Bothered Me To No End Because I Thought He He Did Such A Wonderful Thing And At The End He Just Messed It Up Just Like A Hair You Know And So I Reverse Engineered How I Would Make That Lottery Ticket Appear In That Wallet And Starting At The End

Working Backwards Which Is Kind Of Like Like I Think Of Everything Like You Know Those Mazes As A Kid And There's Like The Mouse In The Middle And The The Cheese In The Middle And The Mouse In The End You Have To Like Do The Maze You Know I Would Always Like You're Like You're Not Supposed To In The Classroom But Of Course You Start Start With The Cheese And Work Your Way Out Right So That's That's It In A Nutshell Start With The Cheese And Work Your Way To The Mouse Right And So I Did That With This And You Know Had A Reasonable Solution I Thought For How It Would Happen But I Was Really Bothered By This Thing So I'm Like Well You Know I Don't Think I'm Giving Anything

Away That Like Everyone Knows That The Ticket Couldn't Have Been In There The Whole Time So Clearly It's Getting Printed At Some Point Here I Don't Think Nate's Going To Get Angry With Me On That So I Was Just Like Well I Could Write Like A Little Arduino Algorithm Or However He's Doing This For Him And So I Wrote Him This Long Cold Email You Know As I Want To Do Say Love Your Stuff I've Watched All The Stuff Now And Like Man I Love That Effect So You Gotta Get The Numbers Right And Much To My Amazement Like Five Minutes Later My Phone Rings I Expect To Never Hear From This Guy Because Magicians Also Are Kind Of Like F*** You Who Are You That You're Reverse Engineering My

Guy On YouTube Yeah Yeah Yeah Right And Nate Was Who Are You And What What's Going On And I Was Like Well You Know I Own Restaurants And I Kind Of Like Look At Magic He's Like No No This Is This Is A Great Email This Is A Great Like This Is Weird Like Only One Other Person Has Ever Noticed That And I Was Like And He's Like One Of The Best Magicians In The World Like You're Not A Magician I Go No This Is Really Weird And Then He Said Something To Me That I Was Really Mad At Myself For Not Noticing And That Was Hey I Did It That Way Of Course But The Audience Couldn't Follow Along And Because Two People Out Of Five Million Notice The Numbers Wrong Doesn't Matter Matters To

You Kind Of Matter To Me Too When I First Did It Not The Best Way To Do The Effect And I Went Of Course It's Not Like I Just Went That's It I Thought Nothing More Of It Right But We Exchanged Books He Sent Me A Book He Wrote Called Finding Real Magic He Went To India I Read It After You Read It Unbelievable Wonderful Guy Like Great Thinker Great Everything And Then He Was Working As A Consultant On Building Magic For David Blaine And I Went And Saw The Vegas Show Because I Don't Go To Vegas I Don't Gamble But My Wife And I Happened To Have To Go There And Then We Got Stuck There For A Night And I Was Like Oh I Know That Guy I Know The Guy Who's Working On That And We Went

To The Blaine Show And That Version Of It I Didn't Love But When I Had Breakfast With Nate The Next Morning And He Said How'd You Like The Show What Am I Gonna Say Two Choices Be Nice I Was Nice Okay It's Not It's Not Typically Me But I Was Like Oh It Was Great And He Just Looked At Me He Goes Nick I Read People For A Living What Didn't You Like Like Instantly And I Said Well I Had Done Another Email But I Didn't Send It And I Pulled It Out And He Looked At It And He Said Did Blaine Put You Up To That And I Go No Because Blaine Had Been To Alinea A Couple Times I Had Never Met Him But You Know And I Go No No No No I Just I Wrote That Like When I Got Back From The Show

Last Night So It Was Fresh In My Head But I Felt Like A Jerk Sending It To You And He Goes I Gotta Show You Something And He Had Written Almost The Same Email To All The Production Team Like A Week Earlier And He Was Like That's Extraordinary And Then We Started Talking About The Business Of Magic Which I Had Never Really Thought About Before Okay And He Was Kind Of Lamenting The Fact That The Next David Blaine Is Not Gonna Get Minted That Kind Of TV Doesn't Happen And He's Got Tons Of Views On YouTube And It Doesn't Monetize And You Know He's Been Doing Magic And Looks At It As An Art Form And A Love Of His Like Many Magicians And There's This Guild Of People That Do It

But They're Kind Of Seen As Outsiders Right You Know It's Like You're Either The The Weirdo That Does The Kids You Know Birthday Party With The Balloons At The End Or Whatever And A Lot Of People Don't See The Art Of It And I Think He Saw That I Did See The Art Of It And The Complexity Of It And Then I Just Said To Him Like Yeah I Had An Idea Years Ago For A Restaurant Would Have A Narrative Arc Through It And People Would Move Through It Like Disney's Haunted House Because One Of The Problems Of The Restaurant Is You Have 50 Seats They're Gonna Sit There For Two Hours You're Gonna Get A Turn A Turn And A Half Maybe You Do 120 People At Those 50 Seats Maybe You Can Only

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Caps Caps Caps Caps Caps Caps Caps year And I'll be completely off the grid So I'm sitting up there And I got a lot of shit to worry about here And I read the whole thing And every like 10th page There was a QR code

And you'd look at it And it would be him and his studio With a scale model of a room

And the first one When it first came on I just assumed like Oh, these are videos he's done But it would be like Hey Nick, okay Room 3 is the car And I would be like Oh my god, he made all of the videos For me And then I got to the spreadsheets And the insurance and all that And a lot of that was like Verifiably, like kind of wrong But here he was doing it all Like it wasn't just like a business plan Of like the thing he was great at It included all of the things To do a proof of concept That this would indeed be a great business And I had put a limit A bottom line I said, look If you build something like that It can't gross under 20 million Like it sounds like a big

number But like when you do the throughput And the math It's actually not that big of a number At $120 ticket price or something And that's what it is You know And I started going through Like whenever I go to like the sphere I'm like What are the economics of the sphere? You're not watching the show I can't help myself Right? So it was a great business plan And by the time he got out Of the Canadian wild I'd read it like three times And my first thing I said to him I was like This is the last thing I need In my life right now But there's no way We can't do this Right And that was three years ago And in the past three years We have scoured the world For real estate

Because the real estate Is the thing you get married to It's like the Ray Kroc story Like they're not in the business Of selling hamburgers They're in the business of real estate I learned long ago That the deal that you make For a restaurant Or for a show Or whatever In this case You are not renting a theater On Broadway You are building A purpose built theater That is a small high hoop Right There are very few people That are going to do that And I knew the guys For years Who did Sleep No More And Sleep No More Was a similar idea Where traditionally The theater is You sit in a chair It's happening on the stage You watch the thing Show's over Sleep No More Was like you

go to this Hotel Motel Yeah And the play is happening In and around you And it makes no sense It's not linear It's not like It can't Because you go to a different room A different scene is going on Yeah I don't know what the hell is happening They're dancing Not talking And it's Hamlet And like But the thing was like It was sold out Made like hundreds of millions In revenue Yeah And it also like The first time I did it It was like nothing I'd ever seen And While this is different Because it

Utilizes illusion To create that sense Of childlike wonder And awe That we were talking about earlier Right And that's what we were trying to do With Alinea That's the cheese That's the cheese That's the customer's cheese Yeah A moment of wonder And I would say That as much as I love AI And I love I live mostly here I would like to connect My body more to my mind Like you know Like I'm not as disciplined About exercise As I should be And things like that But Theater Great theater Great music Is about human connection And utilizing Illusion Now In an immersive thing That you cannot get Any other way Feels like it's going to be More important Two years from now Then it is

less important Two years from now Yeah Because More and more and more Things are going to go The AI route They're going to go In the non -person route You know They don't need to be Person to person anymore Agents are going to be Doing things I love all that I am all in on all of it I still believe That sitting down To a table is important I still believe That growing the wine In ten years Is important And I want to create Human connection Among complete strangers Because You don't meet People don't meet Each other anymore And All the discourse Is That's an other That person's an other And I guarantee you You can take any two people Put them in the environment That we're

creating They could hate each other Politically They could be from Opposite ends of the earth And at the end of that We need to make them Love each other Right That's it And so how do you do that? Well Creating moments of awe And wonder Where you feel like You're five years old again Is what Strange House Is about And it's gonna be Really hard to build And really expensive to build And we found a space 90 ,000 square feet Underneath Wall Street In Manhattan Six months Of negotiating The LOI On the lease Because when you go To a REIT And you go Ah I've got just the thing It's kind of a magic show But not really Right In fact There's no magician And there's no stage And

it's kind of more like Disney's haunted house But there's nothing haunted And it's about human connection Nothing like this has ever existed Yes And so there's no comparables And they just go Yeah well We've listened to your podcast And we've seen that you're successful But like What do you know about doing this? Right And so then They go like Well Nate And they're like Yeah you know He's got some YouTube views He's a magician Like we don't really want to lease Out 90 ,000 square feet To a magician So then you start talking To the powers that be In other things So like Alon Lee Who's a friend of yours Who connected us Did Exploding Kittens I actually playtested that At a

thing called Ord Camp That was run at Google And you meet these creators These builders And the people who build Are the people like That one lot wonder trader guy Who you know I sent this to Alon And Alon was like This is what I've been waiting for My entire life And he goes He tells the same story About magic that I told And when you watch his videos On how to build games And all that They are about human connection And about getting a small group Of people together And a family together And my family My wife And my younger son Do the New York Times Crossword puzzle every day They do British cryptic crosswords That I can't remotely get to And my wife builds puzzles For

family Thanksgiving To like do things like that And all that So you meet Alon And he has passionately Thought about these things And built amazing things So we're trying to put together The dream team On this And we're running out of time Because real estate Only sits for so long Yeah So I don't know If it's going to happen Is it going to happen Sean? It has everything it needs Except for A lot of the things That you talked about Earlier in this episode Which is basically If you look at When you were talking about Building the arbitrage And you had to run fiber Into the thing And they don't let you Have the permit And you bribe the guy With the Jameis You figure out the

way You know It's like okay You do it with Alinea And we got no experience Or whatever Okay we're going to start Posting about this We're going to open source Everything that we're doing We're going to build this waitlist So that on day one We have the right people Who understand the story And are bought in You found the way So like to me The question of Is it going to happen or not Is always like A self -referential question It's like well You make it happen or not It's like The dumb trader Like the dumb theater producer Will not get it done And the good one Obviously it's going to get done Right? Exactly I think Choice more than it is Like a question Yeah I think what

we're trying to do That's challenging for people To wrap their heads around Is It works at scale And not at Not scale Can't do a small You can't play test it Right Like a board game And this is not Alon's problem I'm just using it as an analogy You know It's like Some of the illusions That we've crafted And that Nate has done A technical guide That's hundreds of pages long That we don't want to Really show to that many people Really smart people Will look at it and go How do you know it will work? And it's like Well we've spent the last Three years working on it Like we have the best people In the world Who build these sorts of things Building it Like the people Who built

Taylor Swift's stage Are going to build Room 3 For real Like that's literally true But Until you spend a couple million dollars to build Room 3, you don't have Room 3. So you could make walkthrough videos and VR things and all that. And part of me is a little bit pissy in that, well, I didn't know anything about restaurants. They got 28X.

And the tech people that I talk to go, oh yeah, well, you know technology, but you don't know theater. And I'm like, nah, you said no to me eight years ago and said I didn't know how to build a software company. So, you know, and I get that. Like that's part of human nature. And then they're kind of like, what's the point? And the point is, it's going to be a great business.

It has the throughput of Disney. It could be like Cirque du Soleil. You could build five of these things. But the point is, it's hitting the market with the right thing at the right moment. It's the Gretzky skate to where the puck's going to be. In -person experiences are going to be more important every single year from now until we hit the holodeck.

Right. Like, you know, and this is a different one. It's not a concert. It's not a theater. It is its own thing, which makes it really hard to reproduce. Yeah. I think people will get it. I mean, I, you got it in five minutes. Yeah. Yeah. Like, oh, this is amazing. There's going to be a one in a one in the world type of thing that exists.

Yes. You read Nate's book. You're like, all right. Yeah. It's doable. Nate's wonderful. This guy's like, you know, he spent his whole life basically preparing for this. So you sort of figured that part out. Yeah. I think it's going to happen. I think we've got to figure out the way. Yeah, I agree. I still feel that way. I'm like, that's the last thing I need.

And then every time I pick up the phone, which is every day and we, Nate and I talk through something, I, you know, I'm often walking up the hill up there or whatever with the dog and I get off the phone. I'm like, man, I need to, like, we need to start. We need to get the next step. Yeah. Because if we don't get the next step, we're not going to get it done.

And it deserves to exist. Yeah. Like it's a great enough thing that it deserves to exist. Well, you found your next boulder. We found the next boulder. Nick, thanks for coming on. Thanks, John. Appreciate you, man. Always good to see you.

All right. Let's take a quick break. I want to tell you about marketing school. It is a podcast that is part of the HubSpot podcast network, and it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you.

Check it out wherever you get your podcasts.