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<\/p>\n<\/p>\n
You have people in the world who post quotes like the following one on their social media profile in hopes of having you think they are that they all about that renegade lifestyle\u2026<\/p>\n
\nThe reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.<\/p>\n
~George Bernard Shaw<\/p>\n<\/blockquote>\n
But if this same person talking a big game on Instagram unknowingly wore a body cam that rolled for all their waking hours, the reality-based footage of their actual life would reveal they are among the smooth talkers of this quote\u2026<\/p>\n
\nSmooth talkers aren\u2019t usually smooth doers and smooth doers are not usually smooth talkers.<\/p>\n<\/blockquote>\n
My favorite people to model are Smooth Doers<\/strong>.<\/p>\n
People who GENUINELY embody that George Bernard Shaw quote with every fiber of their being and have incredible results to show for it.<\/p>\n
People whose entrepreneurial track record demonstrates that they don\u2019t just talk about it; they BE about it.<\/p>\n
Today I want to introduce you to an entrepreneur who within an hour of listening to him being interviewed for three-hours by Tim Ferriss, I knew that you would love this man\u2019s story if you are a fan of Dan Kennedy\u2019s Renegade Millionaire high concept\u2026<\/p>\n
\nMBA vs. TBFIS<\/strong><\/p>\n
There\u2019s a very good reason why a lot of MBA\u2019s are useless in real business.<\/p>\n
They have no sales experience.<\/p>\n
I prefer a TBFIS: Trial-By-Fire-In-Selling.<\/strong><\/p>\n
If you looked for THE commonality in all the 100+ Renegade Millionaires I\u2019ve worked with, it would be that they know how to sell, have no compunctions about selling, and in 90% of the cases, have, in fact, sold \u201con the street\u201d, nose to nose, toes to toes.<\/p>\n
You would also find this commonality in the majority of the 100 wealthiest Americans list published each year by Forbes \u2013 in fact, if you exempted those on the list with inherited wealth, and analyzed only those who\u2019ve gotten there on their own, you\u2019d find this commonality in better than half, and no other comparable commonality.<\/p>\n
Several years ago, I checked this against the Inc. Magazine list of 100 fastest growing companies; over 70% of their founders had this commonality.<\/p>\n
This \u2018secret\u2019 is so profound, were I hiring a key person, it would be a litmus test.<\/p>\n
And I would rank this kind of hard-nosed direct selling experience far more useful to the entrepreneur than an MBA.<\/p>\n
Your son or daughter will learn and grow more in 6 months selling water purifiers, pool filters, vacuum cleaners or fire alarms to homeowners or imprinted ad specialties, copy machines or coffee service to businesses than from their entire college education.<\/p>\n
One of the many things you learn from such selling is that it is based on a system<\/strong>. Some methodical system(s) for acquiring leads and getting appointments. A very methodical system for actually making the sales presentation and closing the sale.<\/p>\n
It is critical to get comfortable with and competent at selling, and to surround yourself with people who share that comfort and competence.<\/p>\n<\/blockquote>\n
Even though I trust Tim, there are times where I see the name of the person he\u2019s interviewing, don\u2019t recognize it and need to read the text in his intro to see if this is an episode I want to go on a 3 hour journey with.<\/p>\n
I don\u2019t know why I read the following title and intro text and STILL decided to download and start listening to the Nick Kokonas episode<\/a> titled\u2026<\/p>\n
How To Apply World-Class Creativity to Business, Art, and Life<\/strong><\/span><\/h2>\n
\nNick Kokonas (IG: @nkokonas, TW: @NickKokonas) is the co-owner and co-founder of The Alinea Group of restaurants, which includes Alinea, Next, The Aviary, Roister, and The Aviary NYC.<\/p>\n
He is also the founder and CEO of Tock, Inc<\/a>, a reservations and CRM system for restaurants with more than 2.5M diners and clients in more than 20 countries.<\/p>\n
Alinea has been named the Best Restaurant in America and Best Restaurant in The World by organizations and lists as diverse as The James Beard Foundation, World\u2019s 50 Best, TripAdvisor, Yelp, Gourmet Magazine, and Elite Traveler.<\/p>\n
His restaurants have won nearly every accolade afforded to them.<\/p>\n<\/blockquote>\n
I don\u2019t do anything in the \u201cart\u201d space.<\/p>\n
I have zero interest in going into the restaurant business.<\/p>\n
I\u2019m not an aspiring chef.<\/p>\n
I\u2019m not a \u201cfoodie\u201d who makes it a point to tick the \u201cWorld\u2019s 50 Best Restaurants\u201d off of my bucket list.<\/p>\n
I\u2019m usually super leery of generalized promises like \u201chow to be more creative\u201d \u2013 ESPECIALLY when said promises are supposed to magically apply to everything under the sun as Tim has done by tacking on \u201cand Life\u201d to the title of this podcast.<\/p>\n
And yet, after spending six-hours listening to the podcast twice and taking the valuable notes on it that I\u2019m going to share with you here, I\u2019ve come to the conclusion that a MUCH more fitting title for the treasure that is buried in this interview would be\u2026<\/p>\n
How To Succeed In Business By Breaking All The Rules \u2013 A Plan For Entrepreneurs<\/span><\/h2>\n
The thought of FAR too many entrepreneurs passing over this episode based on Tim\u2019s title and intro making them think, \u201cI\u2019m not in the restaurant business\u201d or rolling their eyes at seeing the vague term of \u201chow to be more creative.\u201d<\/p>\n
The creativity gold in this episode to be had specifically for entrepreneurs is in seeing how Nick became wildly successful in MULTIPLE fields he was brand new to by putting into practice what Dan Kennedy describes in his Renegade Millionaire course in 2004 as\u2026<\/p>\n
\nProcess Change<\/strong><\/p>\n
Breakthroughs are rarely complete, total transformation of the core business, but instead come by changing one or more of the Processes within a business or\u2026 one or more processes that are driving the core business.<\/p>\n
For example, one client doubled profits by switching from one-on-one outbound telemarketing follow-up on leads\u2026 to driving leads to a group teleconference.<\/p>\n
Craig Proctor revolutionized listing and selling real estate with automated marketing\u2026 but he did not change the actual service being sold.<\/p>\n
Bill Glazer integrated direct-response, mail-order type advertising and direct mail with retail stores\u2026 but did not change the fact that the core business is a retail store.<\/p>\n<\/blockquote>\n
As you continue reading you\u2019re going to see learn about\u2026<\/p>\n
The Art of Asymmetric Risk-Taking \u2013 \u201cWherever there is opaque information that should be obvious, run to that gap.\u201d ~Nick Kokonas<\/span><\/h2>\n
Where you sit right now is mostly the result of a series of moment-by-moment decisions you\u2019ve made in your life.<\/p>\n
Most of us are making decisions that are steering us\u2026 without even thinking about the decision itself.<\/p>\n
More often than not, even the smartest and dumbest of us make the wrong decisions because we\u2019ve never been taught how to think.<\/p>\n
But Nick was one of the lucky people who had a wise mentor steer him in the right direction when he was still a kid\u2026<\/p>\n
Studying Philosophy In College<\/strong><\/p>\n
Nick dropped out of law school a month into law school to become a $5 dollar an hour employee on the floor of the Chicago Stock Exchange.<\/p>\n
He went from just being a runner on the floor\u2026 to becoming a derivatives trader.<\/p>\n
All of this happened AFTER he graduated from college with a degree in Philosophy.<\/p>\n
Nick believes that his philosophy degree was responsible for him being able to succeed as a trader.<\/p>\n
Here\u2019s why\u2026<\/p>\n
When Nick got to college, he had it in his head that he was going to study political economics.<\/p>\n
In his second week of college a professor, who became his advocate and one of best mentors, pulled him aside in his Introduction To Logic 101 class and asked him what he was studying there.<\/p>\n
When he told him Political Economics\/Pre-Law, the Professor told him, \u201cNo. You\u2019re going to be a philosophy major. I\u2019m going to teach you how to think.\u201d<\/strong><\/p>\n
And he did.<\/p>\n
He taught Nick logic and how to look for parallels in different fields and different fields of thought.<\/span><\/p>\n
This man saw something in him and decided he was going to make an extended investment in him by beating the shit out of him with extra attention that manifested as holding him to higher standard than the rest of the students.<\/p>\n
And he favored Nick with care without expecting anything in return.<\/p>\n
Here\u2019s a testament to the truth in this statement\u2026<\/p>\n
Nick never even the knew this professor liked him until 10 years after he graduated\u2026 and later on he was treated as a member of the family at this professor\u2019s funeral 30 years later.<\/p>\n
The two of them didn\u2019t have a buddy-buddy relationship when he was in school.<\/p>\n
The people Nick thought he liked, he was just being nice to because he didn\u2019t think they had a chance and he didn\u2019t want to be a bully to those people. But if he thought you had something special you didn\u2019t get the kid gloves.<\/p>\n
The professor didn\u2019t manipulate the relationship and put him in any situation where he wanted something in return \u2013 adulation, favors, obedience, etc. for taking Nick under his wing.<\/p>\n
The Problems of Philosophy by Bertrand Russell or Lucretius\u2019s book The Nature of Things are two books Nick suggests anyone read who hasn\u2019t been deeply steeped in philosophy, but relishes the idea of sharpening their ability to think.<\/p>\n
\u201cNot about success or failure\u2026 but rather is my pattern of decision-making correct?\u201d<\/p>\n
Philosophy Put In Motion<\/span><\/h2>\n
Nick\u2019s father was an entrepreneur by necessity because his dad died when he was really young.<\/p>\n
He had saved up all the money he had earned while he was in the military and upon returning from duty, he used this money to buy the grocery he had worked at when he was 12.<\/p>\n
His dad prospered as an entrepreneur and was a hero to Nick.<\/p>\n
(Side Note:<\/strong> Back in 2004 Dan Kennedy spoke of how one of the commonalities of Renegade Entrepreneurs was having parents who were also entrepreneurs)<\/em><\/p>\n
His father wasn\u2019t an academic and he wasn\u2019t a self-important executive who strutted around in a suit. Nick respected his dad\u2019s tremendous common-sense.<\/p>\n
This man who boot-strapped his way from nothing to something was crushed when Nick was admitted to law school\u2026 and then dropped out of that school a month into being there.<\/p>\n
Had he provided too good of a living for his family and turned his son into an intellectual bum?<\/p>\n
It was at this time while wandering aimlessly through life that Nick was introduced to the idea of earning a living from the stock exchange.<\/p>\n
He got into trading based on running into a guy on the street he\u2019d gone to high school with who had been far from the best student.<\/p>\n
When Nick asked the guy what he was doing, the guy told him he was rehabbing some properties in the neighborhood. Being that Nick knew this dude hadn\u2019t been a scholastic superstar, he just automatically assumed he was a construction worker.<\/p>\n
Nope.<\/p>\n
Nick asked him what he was doing with the homes and the guy proceeded to tell him that he had just bought that block and Nick was like, \u201cWhat are you talking about?\u201d<\/p>\n
It turns out the dude skipped college, started out as a runner on the floor of the Merc, and now he owned 25 condos, 3 town homes, and earned his living by trading stocks.<\/p>\n
This guy\u2019s improbable and astronomical accomplishment fascinated him.<\/strong><\/p>\n
And part of the reason it inspired him was because this was a story that more closely mimicked his father\u2019s story.<\/p>\n
So Nick filled out a resume to start working at the exchange and he left out any mentions of his degree and academic awards because the last thing they want in a $5 dollar an hour clerk job on the floor is someone who is a \u201cknow it all\u201d school nerd in a completely unrelated field.<\/p>\n
On the floor of the Chicago stock exchange trading floor you could find a wide array of people. You had traders who had degrees from MIT\u2026 and you could find butchers who had ZERO formal schooling who saved up $100K and turned that into a fortune.<\/p>\n
Success on the trading floor was all about being able to show up every day, ready for game day, and be disciplined and clear-headed with chaos unfolding around you.<\/p>\n
It was on the floor that he saw the opportunity to put his philosophy degree to work in the most practical manner\u2026 thinking in ways that allowed you to make smarter decisions.<\/p>\n
Choosing The Most Direct Path To Success<\/span><\/h2>\n
Most people who go into a new profession\/market feel like they\u2019re forced to make one of two decisions\u2026 1) Fall in line with whatever the veterans tell you to do or\u2026 2) Find somewhere else to make a living.<\/p>\n
Almost no one asks themselves how they carve themselves a suitable position somewhere beyond those two options.<\/p>\n
Following in his father\u2019s footsteps, Nick never saw himself working for someone else for any extended period of time.<\/p>\n
Employment was more about education than it was about a life support system you plugged yourself into.<\/p>\n
This is why when he was later interviewing with trading firms like Goldman Sachs, which he could do as the result of including his academic accomplishments and based on doing well on their math and psychology tests, and getting offered jobs as a trader, he looked at the employment contract and noticed that there was a clause in there that said they could do anything they wanted to with you for three years \u2013 ship you anywhere, put you in any position they wanted to.<\/p>\n
Everybody else being offered these jobs coming out of college didn\u2019t give a shit about this. They just chalked it up to the cost of doing business and felt grateful for the opportunity.<\/p>\n
The firms felt they were doing newbies a favor by offering them a servant position when they\u2019d turned down 200 other applicants.<\/p>\n
Nick felt like their \u201cfavor\u201d would the most expensive \u201cgenerosity\u201d he\u2019d ever accepted.<\/strong><\/p>\n
So instead, he found a kindred soul\u2026 another guy one of the mega-firms didn\u2019t want to let trade because he was too much of a Brainiac.<\/p>\n
This guy wanted to prove the \u201ccool kids\u201d wrong so he took some money and started trading currency options on his own.<\/p>\n
When Nick met him, he knew that this was someone who was different from all the other people he\u2019d previously met in this business.<\/p>\n
He sold this guy on teaching him how to trade options NOW instead of hoping 3, 5, 10 years down the road someone in one of these firms would take a shine to him and really show him the ropes.<\/p>\n
He was hired and he got to stand next to this guy all day and learn options theory\u2026 from scratch\u2026 in real time.<\/p>\n
This was a billion-times more valuable than trying to learn it theoretically from books. He believes what he learned in this apprenticeship was better than what any college could have taught him.<\/span><\/p>\n
He fell in love with the process of making hundreds of decisions a day where even if ten in row were fails\u2026 the next one coming up is 50\/50.<\/p>\n
Working on the floor was an education in the psychology of standing there while everyone said you were wrong or you\u2019re too little or too educated or too serious by the packs of \u201cbros\u201d in this \u201cFrat house\u201d environment.<\/p>\n
He says that he has seen everything that happened in Wolf of Wall Street among the guys at the Chicago Stock Exchange.<\/p>\n
A year after working side-by-side with this mentor, he started his own company with next to nothing to trade.<\/p>\n
During this same time he also built an options analyst software program.<\/p>\n
This was an asymmetric risk.<\/p>\n
Every opportunity Nick has pursued in business is easy to look at and acknowledge that the failure rate in those pursuits is super high\u2026<\/strong><\/p>\n
\n
- 1 out of 100 people who trade break even in their first year\u2026 take another 100 of those 1\u2019s less than 1 out of those becomes a millionaire<\/li>\n
- 95% of restaurants go out of business in their first two years<\/li>\n
- And he jumped into the software start-up realm where software publishers have a -5.1% net profit margin<\/li>\n<\/ul>\n
For Nick, the and smaller the odds are\u2026 the more interesting it is to figure it out\u2026 and once you get through the hoop into the top 1-5% he loves how there\u2019s fewer people playing that game which means much less competition.<\/p>\n
He looked at those crazy daunting averages and said, \u201cI\u2019m in.\u201d<\/p>\n
It pays to look at the high failure rate statistics and ask yourself, do the majority of businesses fail because of the model and because startups are genuinely that risky or\u2026 are is it because 9 out of 10 people who attempt to start a startup won\u2019t even go through the effort to do any of the necessary due diligence?<\/span><\/p>\n
Both Tim and Nick are constantly bombarded with with people bringing \u201cideas\u201d to them that fit into the latter category.<\/p>\n
These are the people who pitch an app and show up with nothing but an idea and a logo. That\u2019s a great way to blow a half-million dollars on a consultant.<\/p>\n
And even though the following saying is popular in investor circles, Nick still jumped in to the restaurant business with both feet\u2026<\/p>\n
\u201cIf you want to lose money go into magazines or restaurants.\u201d<\/span><\/h2>\n
Nick left the trading business in 2002 with a boat load of money and no idea of what he was going to do next.<\/p>\n
He ended up befriending Grant Achatz by eating at the restaurant Trio where Grant was the head chef.<\/p>\n
One of the really smart things he did was he would show his appreciation for Grant\u2019s meals by giving him books.<\/p>\n
This was far different than what most people do which the equivalent of bringing sand to the beach by say, showing up with a bottle of wine as a gift.<\/p>\n
But he knew that Grant wouldn\u2019t have a lot of time to read so Nick made sure to highlight certain sections of a book that he thought would be of immense value to Grant saying\u2026 \u201cif this were the only part of the book you read, it would be well worth your time\u201d essentially gifting him gems that he would never find his way to any time soon because of his insane work schedule.<\/p>\n
Grant was 28-years-old and was shy and handsome\u2026 the opposite of what was the norm back then for a chef \u2013 older, chubby, gregarious, etc.<\/p>\n
Grant came to trust Nick\u2019s feedback enough to try food out on him because he found that Nick could give nuanced feedback.<\/p>\n
After Grant prepared an exceptional meal customized specifically for his wife\u2019s birthday, Nick sincerely believed that nobody on the planet had eaten a better meal that night and he told him this.<\/p>\n
He asked Grant, \u201cWhat are you gonna do?\u201d<\/p>\n
Grant said, \u201cWhat do you mean?\u201d<\/p>\n
Nick said, \u201cYou\u2019re not going to be here forever.\u201d<\/p>\n
Grant said, \u201cI want to build my own restaurant.\u201d<\/p>\n
Nick said, \u201cI\u2019d be happy to help you do that.\u201d<\/p>\n
Grant said, \u201cWhat kind of restaurant do you want to build?\u201d<\/p>\n
Nick said, \u201cI don\u2019t know.\u201d<\/p>\n
That was the right answer.<\/p>\n
Other people had offered Grant a restaurant they\u2019d already built or a restaurant that they wanted to build.<\/p>\n
Nick was smart enough to know that he didn\u2019t want to be the rich idiot who built a restaurant as a hangout for himself to show off to his friends.<\/p>\n
Grant wanted to work with someone who had an open mind.<\/p>\n
Grant was also oblivious to anything related to architecture, plumbing, design, building, lease, etc.<\/p>\n
So, it was a blessing to work someone like Nick who would take care of all of administrative stuff.<\/p>\n
One year after meeting and forging a bond, they opened Alinea.<\/p>\n
The definition of the word Alinea is \u201cthe beginning of a new train of thought.\u201d<\/p>\n
Nick talks about how prior to making his offer, it had dawned on him that Grant was among the best in the world at what he does\u2026 and nobody knew it yet.<\/p>\n
Together, they asked \u201cWhy\u201d about everything a high-end 20-course restaurant puts in a dining room\u2026 and then they designed it THEIR way in order to create an emotional response in the diner\u2019s heart\/soul\/mind.<\/p>\n
\n
- They didn\u2019t do the reservation podium at the front because it didn\u2019t create the same welcoming vibe as a person would get when they come to home to eat\u2026<\/li>\n
- They didn\u2019t do table clothes but instead opted to buy real high-quality bare wood tables which no one was doing. All the other \u201cWhite Table Cloth\u201d restaurants were covering up piece of shit tables with pretty white linen…<\/li>\n
- They figured out how to get rid of watermarks that linens on the table prevented by finding refrigerators where you set the temperature to just above the dew point which allowed them to get rid of ice<\/li>\n<\/ul>\n
This is one differentiation that actually saved the restaurant $70,000 dollars a year in laundering expenses.<\/strong><\/p>\n
The very first person who ate at Alinea would soon become a famous chef, Sean Brock, and he wrote an amazing review of the restaurant.<\/p>\n
When remembering this article, Nick says that pretty much every untested, counter-intuitive tactic they\u2019d hoped<\/em> would trigger an emotional response in the customer, was something that Sean raved about in his post.<\/p>\n
Nick\u2019s reaction was, \u201cWow. That shit actually worked!\u201d<\/p>\n
Walking Into a Gun Fight Armed Only With Common Sense<\/span><\/h2>\n
Upon starting this restaurant Nick and Grant were well away of the popularly held belief that a restaurant like this couldn\u2019t make money.<\/p>\n
To make matters worse, Nick didn\u2019t know shit about the math of running a restaurant so with nothing but his common sense, he came up with what he called, \u201cThe Universal Restaurant Calculator.\u201d<\/p>\n
Before you get the idea that this was something elaborate, don\u2019t.<\/p>\n
This was a spread sheet that had columns for how many covers a night you can you do, what is the check average for food, what is the check average for beverage, what are your food costs, beverage costs, labor costs, insurance, lease, rent, etc. all the back of the envelope math involved with operating a restaurant.<\/p>\n
He needed these numbers from existing restaurants in order to model them.<\/p>\n
But only two restaurants gave him any data to work with which speaks to the level of transparency in this industry.<\/p>\n
So, with only a two-restaurant sample to work from, he made assumptions as to how much revenue other high-end restaurants were making.<\/p>\n
Grant couldn\u2019t believe the number when he saw it.<\/p>\n
He thought there was no way these restaurants were making that much. Well, it turns that years later when Nick pulled out these calculations and asked a legendary chef, Thomas Keller, how close he was, Keller told him he was within 2-3%.<\/p>\n
This \u201cback of the envelope math\u201d is where he recommends any would-be entrepreneur start.<\/strong><\/p>\n
Dan Kennedy harps on this as well citing that business is nothing but psychology and math.<\/p>\n
It\u2019s what his dad called, \u201cThe two-shoe box method\u201d that put Nick through college\u2026 one shoe box is for the money coming in\u2026 the other shoe box is for the money going out\u2026 and whatever is left is profit.<\/p>\n
Both Nick and Tim find that the majority of people are delusional and completely ignore this critical aspect of being an entrepreneur.<\/p>\n
Alinea cost $2.2 million dollars to build \u2013 Nick put up a quarter of that amount and found investors to put up the rest.<\/span><\/p>\n
The first year they made $450-$500,000 dollars on $4-$5 million dollars in sales.<\/span><\/p>\n
Not the greatest. Not the worst.<\/span><\/p>\n
They opened in 2005 and were awarded \u201cBest Restaurant In America\u201d by Gourmet Magazine in 2006\u2026 and this horrified Nick.<\/strong><\/p>\n
Why?<\/p>\n
They\u2019d only been open a year and they\u2019d already reached their \u201cprofessional accolades\u201d ultimate goal.<\/p>\n
Nick is the kind of person who finds the process of becoming to be rewarding and he found that this almost lightning fast ascent to the throne was a letdown.<\/p>\n
Alinea\u2019s journey was a blip and Nick was experiencing the same kind of \u201cWhat\u2019s next?\u201d let down that Olympic athletes experience who are on a biochemical high during the games, and afterwards, return home feeling empty and directionless.<\/p>\n
But Grant being diagnosed with Stage 4 cancer six-months later presented an entirely new journey to embark on.<\/p>\n
A Degree In Philosophy Comes To The Rescue Yet Again<\/span><\/h2>\n
As Nick has gone through life, he has come to find that many people who rose to the top of their field also had philosophy majors.<\/p>\n
For example, 3 of the 4 largest trading firms in the world are run by philosophy majors.<\/p>\n
He believes who majored in physics have a similar super power.<\/p>\n
Nick says, \u201cI can\u2019t think of anything worse than studying \u2018business\u2019 in school. It\u2019s 3-5 years of focusing on how to do something\u2026 how to manage something\u2026 but not why to do it.\u201d<\/span><\/p>\n
He points out that if this had been his major in 1992 he would have been taught a certain kind of management that six years later with the advent of the internet would have been useless.<\/span><\/p>\n
He was taught to ask the \u201cWhy\u201d question.<\/p>\n
He finds that the people most entrenched in a system, 3 or 4 generations deep, have no idea why certain practices are in place.<\/p>\n
All they know is, \u201cthis is what we do.\u201d<\/p>\n
They\u2019re like kids who asked \u201cWhy are we doing X?\u201d and were told by their parents to\u2026 \u201cShut up. We\u2019re doing it this way because I said so.\u201d and were met with a fist if they dared to continue asking why after being issued this warning.<\/p>\n
For Nick, he doesn\u2019t have any illusions that he is coming up with THE answer\u2026 but he knows that by asking the questions he does, he has continually up with potentially viable alternative suggestions\u2026 and in the instances we\u2019ll talk about below, his hunches proved to be vastly effective solutions to challenges that people in the industry had just endured for decades.<\/p>\n
The discipline of abstract thought lays the ground work for you to make smart decisions.<\/p>\n
He can\u2019t imagine not<\/em> having studied philosophy. He considers it to be an ESSENTIAL factor in his winning trajectory.<\/span><\/p>\n
If you know there\u2019s no way that you want to be the big idea person in charge of solving problems and putting out fires\u2026 you definitely want to hitch your wagon to someone who knows how to think.<\/p>\n
Nick had previously had nothing to do with the service aspect of the restaurant \u2013 how the food was prepared\u2026 the orchestration of how it was presented\u2026 reservations, etc.<\/p>\n
He handled the paperwork aspect of the restaurant so that Grant could devote 100% of his attention to the artistic talent of wowing customers who came through the doors.<\/p>\n
This means Nick almost never went to the restaurant during business hours.<\/p>\n
But when Grant was given six months to live, Nick started going in at night anticipating that it might not be long until he would responsible for this part of the restaurant as well.<\/p>\n
And upon doing so, he naturally started asking beginners mind Why questions of their processes which inevitably brought him to the realization that this industry isn\u2019t being run right.<\/p>\n
One of the Most Annoying Problems In The Restaurant Business\u2026 Solved<\/span><\/h2>\n
Nick asked himself the question\u2026 \u201cWhy is fine-dining the only form of entertainment that has only a \u201cmutual promise\u201d to show up?\u201d<\/p>\n
He came upon Tock by asking questions like, \u201cIf we have a wait list for a 100 people on a Wednesday, why do 74 people on Wednesday but 86 on a Saturday?<\/p>\n
The answer that became evident to him was because their incentives were mis-aligned.<\/strong><\/p>\n
The service industry can\u2019t run at 100% every day of the week\u2026 unless they\u2019re incentivized to do so.<\/p>\n
Sure, servers are making more money when more bodies show up\u2026 but if every night were Saturday, they\u2019d be dead people walking.<\/p>\n
Load-balancing is something that would offset overwhelm.<\/p>\n
When no one could give Nick good answers to why load-balancing wasn\u2019t the norm, he set out to make sure that this wouldn\u2019t be the case with his new restaurants.<\/p>\n
Anyone who wasn\u2019t on board with getting rid of the normal way of taking reservations was told this wasn\u2019t the place for them.<\/p>\n
Why?<\/p>\n
Because he didn\u2019t want to work with anybody who wasn\u2019t willing to acknowledge this ugly truth\u2026<\/p>\n
When someone calls a restaurant to make a reservation, one of the two of you are lying to each other.<\/strong><\/p>\n
No other form of entertainment does what restaurants do when selling their seats\u2026<\/p>\n
You don\u2019t call the New York Yankees or the Metropolitan Opera\u2019s ticket office up and tell them that you\u2019ll show up at 7:30 and to hold two seats for you and then\u2026 when you get there\u2026 get told to chill in the lobby for 30-40 minutes because they\u2019re running a little behind tonight.<\/p>\n
The reason they\u2019re running behind is because they overbooked because 15-18% of people who make reservations, don\u2019t show up.<\/strong><\/p>\n
Overbooking<\/em> is the restaurant industry\u2019s answer to this and they\u2019ve trained to market to just deal with it.<\/p>\n
The industry knows that if they tell you over the phone that, even though you have a reservation for a specific time\u2026 you\u2019ll probably still have to wait 30-45 minutes to be seated when you show up\u2026 that you\u2019ll probably go eat somewhere else.<\/p>\n
This is an idiotic way to do business for everyone involved. It leads to restaurants wasting food\u2026 to customers being pissed off. It is shit hospitality.<\/p>\n
Nick looked at the data on No-shows, and short-seated reservations (people taking a reservation for a four-person table because a two-person table wasn\u2019t available which is just as bad as a two-person reservation not showing up) and saw that 5-8% of their revenue being lost to this way of taking reservations.<\/p>\n
Buying movie tickets for his family gave him the idea for the first part of what he wanted to change this practice.<\/h3>\n
Nick\u2019s kids talked him into buying tickets on Fandango to go see a movie he had no interest in seeing.<\/p>\n
The movie was hours away and when it came time to get ready to leave the house to go to the theater, the kids didn\u2019t want to leave because it was raining and they\u2019d settled into something else that allowed them to be lazy.<\/p>\n
Of course, he was like, \u201cFUCK THAT. I already bought the tickets. Get your shit on and let\u2019s go.\u201d<\/p>\n
He talks about how BEFORE he bought the tickets, he totally would have been willing to pay $60 bucks to NOT have to go to the movie\u2026 but AFTER he bought them, there was no way in hell he was going to \u201cLose $60 dollars\u201d because his kids didn\u2019t want get up from a nap and go out in the rain.<\/p>\n
His rationalizations made him think, \u201cWhat would happen with dinner reservations if people had to put $20 dollars down as a deposit that would go towards the cost of their meal in order to even place a reservation?\u201d<\/em><\/p>\n
Everyone he brought the idea up to told him that it was a stupid and that customers wouldn\u2019t do it.<\/p>\n
He was also crazy enough to bring up the idea that Tuesday night at 5 PM should be cheaper than Saturday nights.<\/p>\n
He points out that Uber could have easily lowered complaints about their Surge Pricing (escalated fees for busy times\/bad weather conditions) if they would also have discounted pricing when there was no demand.<\/p>\n
In spite of \u201cindustry experts\u201d telling him that this was a stupid idea, he went ahead with BOTH the idea for a reservation deposit AND having weeknight menus being cheaper than weekends \u2013 by $80-$100 per person.<\/span><\/p>\n
He now has 100\u2019s of restaurants doing this on his software called Tock and what the data shows is that the seats that sell out first are the most expensive ones<\/span>\u2026 and the cheapest ones<\/span> offered in non-prime hours.<\/strong><\/p>\n
This is exactly what he expected would happen.<\/p>\n
Some people would ONLY eat at a fine-dining establishment if they could save $400 bucks by eating there on Tuesday at 5 PM \u2013 a time that the restaurant consistently had seats that were previously going unsold.<\/p>\n
And then of course, you have the segment of the market that refuses to eat at an upscale restaurant during non-prime hours because they want the bragging rights of paying full price and being in company of other like-minded people.<\/p>\n
With this reservation system\u2026 they\u2019ve also been able to sell 20 Alinea books a day at the checkout of the booking process.<\/strong><\/p>\n
This is a FUCK TON.<\/p>\n
There is no gift shop gauntlet exit route in a three Michelin Star restaurant like there is at Cracker Barrel. I<\/p>\n
t would distasteful for them to even have a table set up where books were for sale like you\u2019d see at a book store.<\/p>\n
These people making the reservations are doing so because they value an above average experience.<\/p>\n
These are the same kind of people who want to know the story behind WHY they\u2019re paying $1,000 dollars for one meal while a massive number of people are having dinner that night off the dollar menu at McDonald’s.<\/p>\n
Alinea went from maybe selling one or two books a day\u2026 to selling TWENTY which equals $400,000 dollars in revenue a year.<\/span><\/p>\n
He says, \u201cPeople can\u2019t buy what they can\u2019t see and people don\u2019t want to be upsold in a restaurant.\u201d<\/p>\n
Nick\u2019s belief in transparency is the opposite of the \u201cI\u2019m overbooked and there\u2019s a bar to wait in\u201d stance which is the standard approach that is totally congruent with poor hospitality which seems counter intuitive being that these high-end places are jumping through hoops to bedazzle you with a culinary performance and ambiance.<\/p>\n
Like seals, we\u2019ve been trained that having our time dis-respected is an indicator that we\u2019re getting full value for what we\u2019re paying for.<\/p>\n
It\u2019s as if getting bumped and made to wait in the bar for 45 minutes is a certificate of authenticity\u2026 the \u201cscreenshot or it didn\u2019t happen\u201d of fine dining.<\/p>\n
Nick talks about how this is the equivalent of going into Nordstroms and saying, \u201cI\u2019m looking for a blue cashmere sweater\u2026\u201d and them telling you, \u201cNope. Guess again.\u201d<\/p>\n
Or, calling the dentist and having zero idea as to when you\u2019ll be able to go in.<\/p>\n
Just show me what day you can clean my teeth and I\u2019ll pick the day and time and show my ass up\u2026 ESPECIALLY if you make me put a deposit down in order to reserve a spot.<\/p>\n
If You Wait Until Everyone Believes In You, You Might Die of Old Age Waiting<\/span><\/h2>\n
Nick didn\u2019t know shit about software when he launched Tock in 2010.<\/p>\n
Here\u2019s the quick overview of what the software is from his site\u2026<\/p>\n
\nTock is a reservations system that allows restaurants to offer more than an open table \u2013 it helps restaurants sell their unique offerings, from chef\u2019s tables to omakase menus, private dining, and even cookbooks.<\/p>\n
Nick Kokonas began experimenting with new and novel ways of booking Next in 2011. After applying dynamic and variable pricing, prepayment of reservations, and improved CRM to his own restaurants, he founded Tock in 2014 to bring his software to the restaurant industry.<\/p>\n
In the two years since its founding, Tock has partnered with restaurants in 51 cities in 14 countries.<\/p>\n
It has processed over $200 million in pre-paid reservations. Tock has been featured in Fast Company, Business Week, The New York Times, The Wall Street Journal, and many other publications around the world.<\/p>\n<\/blockquote>\n
Here\u2019s how Fast Company succinctly describes what this program is\u2026<\/p>\n
\nTock is an online reservation system through which diners can pay in full or put a deposit down for dinner.<\/p>\n
It helps make restaurants more efficient (chefs can plan ahead) and cuts down on no-shows from diners (to 1%).<\/p>\n
Tock\u2019s approach to reservations is to brand them as an experience, not unlike buying a ticket to a concert.<\/p>\n<\/blockquote>\n
For me, when I was introduced to the concept of this software and how it works, it made me think of last weekend when I got on the app for the luxury movie theater I go to and seeing EXACTLY what seats were available for the show I wanted to go to\u2026 right on the screen of my phone.<\/p>\n
I didn\u2019t call have to call\u2026 I didn\u2019t have to show up super early or.. show up just on time and hope there were some good seats left and I could decide before I even got ready that it wouldn\u2019t be worth going if I saw that only the neck-breaker, blind-you-to-death seats in the first two rows were available.<\/p>\n
When Nick first had the idea to start this venture he reached out and asked OpenTable, Point of Sales systems, and movie theater system ticket companies what API (Application Programming Interface) they used.<\/p>\n
They all told him to get lost.<\/strong><\/p>\n
Nobody would help him.<\/p>\n
Potential allies, OpenTable (who had a monopoly on the reservation business at the time), and even people in his company all thought he was an idiot for pursuing this.<\/p>\n
His chef and business partner Grant Achatz thought is was a terrible idea because it went completely against the norm.<\/p>\n
Grant also thought that prices being different on different days would be confusing.<\/p>\n
Nick continually looked to other industries and knew that, for instance, at a concert, nobody in the nose bleed seats is looking at the people in the front row and feeling like they got ripped off or that that person stole their tickets.<\/p>\n
It\u2019s easy to see and justify there being two different price points for two different experiences.<\/p>\n
Well, anyone who makes it a habit of seeking out reservations to award-winning restaurants knows that more people want to go out to eat at these places on weekends than on weeknights.<\/p>\n
You don\u2019t have to explain this to people.<\/p>\n
If Grant didn\u2019t believe in it, it\u2019s not hard to see why no else was on board with it.<\/p>\n
People didn\u2019t get what he was trying to do.<\/p>\n
He launched the software about 7 hours before the first dinner. It was a two-person operation\u2026 the programmer and him.<\/p>\n
When he launched Tock, he set it up on Rack Space and it didn\u2019t work right because he had never done anything like this before.<\/p>\n
He had 17,000 emails of people who wanted to be notified when it went live. He expected around 700 people to show up.<\/p>\n
Instead, 8-9,000 people showed up to the site and everyone kept hitting the refresh button and it completely fried it.<\/p>\n
Nick couldn\u2019t even log in himself and resorted to starting a Facebook group for the site as a way to get people to stop mashing the refresh button.<\/p>\n
He was surprised that he got a ton of empathy from the customers as the result of reaching out them like this.<\/p>\n
So, on opening day for Alinea<\/a>, Grant asked him how many people he should prep for and Nick told him to prep for a full house.<\/p>\n
He told him that if this software didn\u2019t sell the seats out, he would turn on the phones.<\/p>\n
What Nick didn\u2019t tell Grant is that there were no phone lines because he hadn\u2019t ordered any. He didn\u2019t want any fail safe in place that would let him bail out of getting the software ready so he essentially burned the ships.<\/p>\n
When they fixed the site, they could see that the tables were selling out as fast as they made them available. There were 4,000 people standing by waiting for tables to become available for them to buy.<\/h3>\n
Nobody was doing reservations this way.<\/p>\n
In six weeks, he and one programmer built a super basic booking system and on the first day they sold $562,000 worth of tickets for their restaurant.<\/strong><\/p>\n
He didn\u2019t invent the wheel. He just applied something that everybody was extremely familiar in other fields\u2026 to this industry.<\/strong><\/p>\n
Process Change.<\/strong><\/p>\n
He\u2019d put in roughly $115,000 dollars into the software and readily admits that it was shit\u2026 but it was good enough to demonstrate proof of concept.<\/p>\n
He believes in taking asymmetric risks \u2013 the long shots and willing to lose all of that money banking on the fact that if this did work, it\u2019d totally be worth the risk.<\/p>\n
When you think about what his risk aversion is\u2026 think of Jim Carrey in that scene from Dumb and Dumber, \u201cSo you\u2019re telling me there\u2019s a chance!\u201d<\/p>\n
He knew that the problem of having to turn people away when they called seven weeks in advance because they were full\u2026 and the person on the other line thinking they were lying\u2026 was a solvable problem.<\/p>\n
The fame of their restaurant forced them to say, \u201cNo\u201d more than they could say \u201cYes\u201d, and yet even when they were totally nice when denying people, they couldn\u2019t help but have people think they were being pretentious assholes and were personally rejecting them.<\/p>\n
Transparency in this setting is something he valued more than the money.<\/p>\n
He wanted people to see the entirety of the inventory.<\/p>\n
He didn\u2019t create the software so that he could sell it to the industry. He created it for his restaurants and didn\u2019t even offer up to the public until four years later.<\/p>\n
Fixing his own problem gave him at bare minimum a market of one.<\/p>\n
\u201cIt is remarkable how much long-term advantage people like us have gotten by trying consistently to not be stupid instead of trying to be very intelligent.\u201d<\/span><\/h2>\n
~Charlie Munger<\/span><\/h2>\n
Nick took their margins at their restaurants from 10-12%\u2026 to 20-25% in their best months using this software.<\/p>\n
(Marimekko Charts<\/a> were HUGE in helping them to do this.)<\/p>\n
In 14 \u00bd years they\u2019ve never had a professional PR person.<\/strong><\/p>\n
They don\u2019t spend money on any of the traditional promotions. The only money they spend is on social media because they can track their ROI down to the penny.<\/p>\n
Chefs and their business partners are not dumb.<\/p>\n
And yet over the years they all engaged in stupid behavior that costs them dearly in an industry where there isn\u2019t a whole lot of room for mistakes.<\/p>\n
Where are you being stupid because you\u2019re stuck in the way everyone else in the industry is doing business?<\/strong><\/p>\n
Whenever you see a process where the practices are opaque \u2013 heavily shrouded in mystery \u2013 instances where you can\u2019t see the numbers, you can rest assured that there is someone, somewhere behind the scenes protecting their golden goose.<\/span><\/p>\n
The businesses of buying truffles and the book publishing are both infamous for this.<\/p>\n
He\u2019s looking forward one day to building a Truffle Exchange that makes pricing fair and transparent in that industry.<\/p>\n
You can rest assured that when you\u2019re faced with a black box\u2026 you are not getting the good end of this deal.<\/strong><\/p>\n
When Nick was trading, he fought the Commodities Trading Commission for a year and-a-half to get rid of the phone brokers in the middle who were blocking the average person from having full transparency into ETF trading.<\/p>\n
He found that the people who were governing the exchanges had never even read the rules.<\/p>\n
They would quote to him that what he was proposing was against the rules but they themselves only had vague ideas about what the \u201cgeneral tenor\u201d of the rules were.<\/p>\n
He presented them with the seven volumes of rules and told them to show him where it said he couldn\u2019t do what he was proposing. If they couldn\u2019t, he just went ahead and did what they told him not to do.<\/p>\n
But if he thought the trade commission was bad or the restaurant business, he definitely had his work cut out for him in this business\u2026<\/p>\n
Process Change Applied To The Publishing Black Box Of Doom<\/strong><\/span><\/h2>\n
The serious chef\u2019s ultimate wet dream is to have their own cook book published and distributed in all the major book stores.<\/p>\n
In this realm, having your own book is the equivalent of winning a Super Bowl ring for a football player, an Olympic gold medal for an athlete, or an actor getting an Oscar.<\/p>\n
It is a symbol that you\u2019ve arrived.<\/p>\n
There is something sacred about having YOUR ideas manifested in beautiful book that will sell all over the world, hopefully for decades, that isn\u2019t quite there with say, a James Beard award that only fine dining insiders and peers are impressed by.<\/p>\n
When Alinea started getting well known, of course the offers started rolling in from publishers.<\/p>\n
The typical deals came in:<\/p>\n
A $250,000-$300,000 advance and out of this advance you pay for the designer, the photographer (a 30-day photo shoot), the guidelines for how many photos you need, etc.<\/p>\n
All the offers that came in were within 10% of each other which told Nick that the pricing model was unusual.<\/strong><\/p>\n
The thought that occurred to him was that this model wasn\u2019t all that different from the music industry\u2026 artists get signed and get $250,000 advance BUT\u2026 all of your studio costs come out of that and you don\u2019t recoup another dime until X amount of albums are sold.<\/p>\n
Another sneaky thing the publishers were inserting into the contract was a line saying that the restaurant was guaranteeing to buy 2,500 books themselves at half of retail price.<\/p>\n
That\u2019s like $80,000 just right here that goes directly back to the publisher.<\/p>\n
Nick gave serious thought to is the fact that these publishers were not just handing away $250,000-$400,000 checks out of their goodness of their hearts. He thought that if they\u2019ll willing to do this, there a must be a fuck-ton of money on the other side of that bet.<\/span><\/p>\n
This made Nick ask himself the question, \u201cWhat does it cost to print a book?\u201d<\/strong><\/p>\n
The first people he asked were the publishers who were courting them.<\/p>\n
ALL of them played dumb.<\/strong><\/p>\n
They all deflected and said, \u201cThat\u2019s not my department.\u201d<\/p>\n
All WILLFULLY sought plausible deniability via ignorance.<\/p>\n
Nick didn\u2019t accept this bullshit answer so he went on his own detective mission starting with Google.<\/p>\n
He started by asking how many copies of mega-popular books like The French Laundry book sold and fifty other books that he and Grant admired and were in the same category.<\/p>\n
Getting an answer to these questions from publishers was akin to trying to find out what the Coca-Cola recipe is.<\/p>\n
They came to find that getting on New York Times Best-Seller list is a gameable system because there are so many variables and so much wiggle room that allows for fudging the numbers which means that even this industry gold standard is a flawed reference for trying to gain an accurate assessment of how many books were sold.<\/p>\n
It is the opposite of an objective scoring system like the Olympics swimming races where 1st, 2nd, and 3rd place are clearly evident based on the specific rules of the performance witnessed.<\/p>\n
The more Nick dug, the angrier he got at how this business worked.<\/p>\n
But rather than be mad at the system, Grant was pissed off at Nick because he felt like he was fucking up his opportunity to have a major cookbook.<\/p>\n
Grant didn\u2019t care about the crooked math of the business.<\/p>\n
He was willing to just take it in the ass like all the other chefs who just accepted, \u201cthat\u2019s just the way it\u2019s done\u201d and felt that the book getting published was THE ULTIMATE PAYOFF and whatever money came in from it was a cherry on top.<\/p>\n
Nick had to point out that if they went the traditional route, with the advances being offered, Grant would not get the quality of book that he wanted\u2026 the photography shoots would be of lesser quality\u2026 the paper would be of less quality\u2026 they wouldn\u2019t be able to get pictures of every dish \u2013 which in turn totally fucks up a person\u2019s inspiration to actually cook the thing because people want to see what it is supposed to look like in order to get excited about cooking it – etc.<\/p>\n
These realities got Grant\u2019s attention.<\/p>\n
Just as he wouldn\u2019t want his cooking or his restaurant compromised by cutting corners\u2026 he didn\u2019t want his life\u2019s work to get cheated by the scumbag math of the publishing industry.<\/p>\n
When Nick came up specs for the dream book\u2026 one of the best publishers in the nation told him\u2026 there was no way they would sell more than 5,000 of them\u2026 no one would publish based on your math\u2026 you can\u2019t use metrics or a gram scale\u2026 you can\u2019t have that font\u2026 and you can\u2019t have all those pictures in full color bleed because it will cost way too much to print.<\/p>\n
A month and half later Nick got in touch with a print broker who had brokered the printing of one of the famous cook books and Nick was expecting that if the book retailed for $60 bucks, it would cost $15-$20 dollars to print.<\/p>\n
The broker told him it\u2019d be $2.33 to print per 30,000 copy run.<\/span><\/p>\n
Nick\u2019s reaction was, \u201cNO WAY!\u201d<\/span><\/p>\n
The broker mistook this reaction as Nick thinking this was too high when it reality Nick was stupefied with how inexpensive it was and said, \u201cWell, it\u2019s probably less now.\u201d<\/span><\/p>\n
This was an \u201cOh Shit!\u201d moment for Nick where everything started making sense.<\/span><\/p>\n
When he called publishers and revealed that he knew this, they would come back and tell him, \u201cWe\u2019ve done 40 prints of these kinds of books. Only 5 of them did well.\u201d<\/p>\n
Nick told them, \u201cThat\u2019s on you. As the marketer of the books that\u2019s YOUR fault.\u201d<\/p>\n
Nick knew they would sell well.<\/p>\n
He said, \u201cI don\u2019t give a shit that you\u2019re getting your ass kicked 35% of the time and now you\u2019re spreading your portfolio risk. I\u2019m the one you\u2019re spreading it on.\u201d<\/strong><\/p>\n
So, with the Alinea book<\/a>, they put together 20 pages and they shipped it out to eight different publishers they liked \u2013 two of which were art houses that have never published cook books.<\/p>\n
All but one publisher came back with the same \u201ccan\u2019t be done\u201d response all the major publishers did except for one \u2013 Ten Speed Press.<\/p>\n
He came back to them and said, \u201cI\u2019m going to make you an unusual offer \u2013 No advance at all and we\u2019ll essentially just be the distributor. We\u2019ll help you with the printing and the editing, which we\u2019re both really good at.\u201d<\/p>\n
They struck a deal in 10 minutes\u2026 Any books Nick bought and sold themselves\u2026 he would only pay the actually printing cost \u2013 NOT wholesale price.<\/p>\n
Anything Ten Speed Press sold, they would get 27% of the sale price which means Nick and Grant got 73%.<\/p>\n
Nobody Reveals ANY Of These Numbers In This Industry<\/strong><\/span><\/h2>\n
With this arrangement, Nick knew that when they sold 100,000 books, in terms of dollars made, someone who went the traditional publishing route would need to have had sold 500,000 books in order to make the same amount of money.<\/p>\n
But what made his approach even better was that they got to control the quality of the end product.<\/p>\n
The Alinea book won both the James Beard award for best cooking from a professional point of view category (the Oscar award equivalent for cook books) \u2013 Best Cook Book of The Year\u2026 and the designers of the book won the Communication Arts award (the Oscar award equivalent for designers).<\/span><\/p>\n
This was icing on the vindication cake.<\/p>\n
9 years later the book still sells 7-8,000 copies a year at $35-$40 bucks a pop.<\/p>\n
When they were seeking a publisher for Grant\u2019s memoir, Life on The Line, Nick\u2019s behind the scenes industry knowledge allowed to scoff at offers that poured in from serious publishers.<\/p>\n
Nick secured a GIANT multiple of the highest bid that people were initially offering by doing a reverse Dutch auction \u2013 starting at a super high price and then working his way down.<\/p>\n
He told the publishers he wanted 4x the base average offer.<\/p>\n
People told him he was crazy and that he\u2019d never get this amount. Especially since he and Grant had never even written a book before. (And yes, they told him that \u201ccook books\u201d don\u2019t count.)<\/p>\n
So, he reached out to all the publishers who bid on it, told them he was a hosting a conference call where if they showed up, they would be participating in a reverse Dutch auction.<\/p>\n
He sold them on why his book was valuable, gave them the number, and told them what day and time to call if they were interested.<\/p>\n
On the call, he started at an exorbitant price and every few seconds he would drop the price by $10K. It didn\u2019t talk long at all for one of them blink and buy it.<\/p>\n
This is a WAY better than the usual method of doing auctions where you start low and hope that it goes high.<\/p>\n
You get people who show up with their max spend in mind and they CAN\u2019T help but think that someone else will have at least this amount to spend as well and will steal this from them if they don\u2019t act fast.<\/p>\n
They could be off by 30% and never know it because only one bid is being made.<\/p>\n
ANOTHER BLACK BOX SUCCESSFULLY ADDRESSED\u2026<\/span><\/h2>\n
Think about Real Estate Agencies (another black box industry) here\u2026<\/strong><\/p>\n
Realtors stand to get 4-5% of whatever they sell your house for.<\/p>\n
They control all the information\u2026 all the negotiations\u2026 etc.<\/p>\n
The question you have to ask is, \u201cWill they always get the highest price for you?\u201d<\/p>\n
The answer is almost certainly not.<\/span><\/p>\n
Why?<\/p>\n
Because if they sell your house for $490,000 dollars instead of $500,000 dollars, the difference in THEIR commission is minuscule – $400 bucks.<\/p>\n
But if they lose the deal over standing firm at $500K\u2026 that\u2019s a HUGE loss for them \u2013 that\u2019s $20,000 dollars that just walked out the door.<\/p>\n
Their primary interest is in selling the home fast so that they can keep their deal flow going. Maximizing a transaction by dragging it out for $400 dollars more is a hindrance for them.<\/strong><\/p>\n
For you, maximization is DEFINITELY in your best interest because that\u2019s $9,600 more dollars.<\/strong><\/span><\/p>\n
So, when Nick sells his homes, he figures out what the intrinsic value of the house is, the bare-minimum he\u2019s willing to sell it for, and he prices it slightly higher than that and he tells all the agents that he will pay them 50% of anything above 10% his asking price.<\/span><\/p>\n
They all tell him that this is against the \u201creal estate ethics code\u201d or\u2026 tell him they would never do a deal like this because it would subvert all their other deals\u2026 but mysteriously whenever he puts this offer out, two days later he\u2019s getting a dozen calls from people who have priced it 40% higher and the place ends up selling in two days.<\/p>\n
This happens because these people have a fire under their ass and a proper incentive to move your property at a higher price NOW.<\/p>\n
YET ANOTHER BLACK BOX SOLUTION ADDRESSED\u2026<\/span><\/h2>\n
Secret to Selling a Cocktail Book For $85-$135 Dollars<\/span><\/h2>\n
Naturally, Nick brought all of his previous industry wisdom into the process of publishing their next book which gives the recipes for the cocktails they serve at their 22-seat cocktail lounge named Aviary<\/a>.<\/p>\n
Allen Hemberger, while working for Pixar, over the span of five-years, documented his journey of cooking every recipe in the Alinea cook book.<\/p>\n
His blog<\/a> which he also turned into a book, is his version of the Julie and Julia story.<\/p>\n
Here\u2019s how he describes it\u2026<\/p>\n
\nMy name\u2019s Allen; I\u2019m a visual effects artist, and I like learning new things. I\u2019m from Kentucky originally, but live in San Francisco now. In my free time, one of the things I like to do is cook.<\/p>\n
One of my most memorable meals was at Chicago\u2019s Alinea restaurant, which has a fantastically-amazing cookbook that appeals exactly to my obsessive-compulsive and meticulous nature. My girlfriend Sarah gave the book to me for Christmas in December of 2008, and I flipped through it a few times, incredulous. The book struck me as some sort of bluff, as if the chefs at Alinea were saying to the world \u201cOk, you wanna know how we do this? Here you go, knock yourself out.\u201d Because I\u2019m stubborn and often slightly delusional, I thought I\u2019d call their bluff and try making something from the book. Then I decided to try making something else. Then I just\u2026kept going. I started this blog as sort of an online journal for myself, to keep track of what I was doing, corrections I needed to make, etc., as well as to share this little hobby with friends.<\/p>\n
My job (as sort of a technical artist) and schooling (as a computer engineer) both veer towards the realm of precision, understanding how things work, meticulousness, and a sense of satisfaction with \u2018correct\u2019, elegant solutions to problems. That sounds boring as hell, I\u2019m sorry. It\u2019s really not! I just mention it because most of my artistic pursuits tend to be described by friends as \u201chighly technical\u201d, which never really struck me as a compliment so much as just a benign thing you say, like \u201chey, you got a haircut\u201d or \u201cyou\u2019re wearing those Tron-themed sneakers again, I see.\u201d I like trying to find ways to turn that comment into an asset, and find the exploration of that challenge very fulfilling.<\/p>\n
This project is providing me with lots of excuses to buy exotic kitchen equipment and ingredients and avoid doing my laundry. I also enjoy photography, so I wanted to turn an attempt to work my way through the Alinea cookbook into a cooking project, a photo project, and a writing project all in one. This blog reflects my best attempt at all of this.<\/p>\n<\/blockquote>\n
Allen\u2019s blog is a masterpiece manifested by a raving fan.<\/strong><\/p>\n
As an amateur, he succeeded in all three outcomes highlighted above\u2026 a photography project\u2026 a cooking project\u2026 and a writing project.<\/p>\n
If you want a guaranteed way to get on an authority\u2019s radar who sells information, you would be wise to follow in Allen\u2019s footsteps.<\/strong><\/p>\n
Through the process of Allen going on this quest, he developed a relationship with Nick and Grant.<\/p>\n
The blog-converted-to-a-book \u2013 The Alinea Project – that Allen put together was 400 pages of gorgeous photography and beautifully written prose.<\/p>\n
Upon seeing it, Nick was blown away.<\/p>\n
Immediately upon taking it in, after 5 years of putting off doing a book for The Aviary, he knew that Allen was the guy they wanted to produce their next book.<\/p>\n
Now before we go ahead, let\u2019s make sure that you\u2019re familiar with what The Aviary with this description from the Alinea site\u2026<\/p>\n
\nThe Aviary, is a 22-seat speakeasy that boasts one of the world\u2019s largest collections of rare, vintage spirits. One chef, one bartender, and one server work together to create one-off cocktail riffs to suit your desires and mood.<\/p>\n
The Aviary was named Outstanding Bar Program in the U.S. by the James Beard Foundation in 2013. It won the coveted Spirited Award for the World\u2019s Best Cocktail Menu in 2014 and has three times been featured on Drinks International\u2019s The World\u2019s 50 Best Bar list.<\/p>\n<\/blockquote>\n
Nick sought to redesign the Bar experience by asking some counter-intuitive questions like, \u201cWhy should a bartender wash dishes and talk to customers?\u201d and by doing this they won Best Bar in The World.<\/p>\n
So when Nick saw what Allen did with The Alinea Project, he knew this was the guy who should do the Aviary book.<\/p>\n
What made it even better was that Allen\u2019s wife, Sarah, worked at Industrial Light and Magic as a graphic designer so this was a match made in heaven.<\/p>\n
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