Naval Ravikant and Nick Kokonas — The Tim Ferriss Show

Start (00:00:00)

• Tim Ferriss introduces the episode's sponsors: Eight Sleep and Momentus.
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• Listeners can get 20% off Momentus products with the code "Tim" at liv.momentus.com/Tim.

Notes about this supercombo format. (00:04:50)

• Tim Ferriss introduces the super combo episode format, a compilation of the best moments from over 700 episodes of his podcast.
• The goal is to feature both well-known and lesser-known guests who have had a significant impact on Ferriss's life.

Enter Naval Ravikant. (00:06:09)

• Naval Ravikant, co-founder of AngelList and host of the Naval podcast, joins Tim Ferriss for a discussion.

On uncompromising honesty. (00:06:21)

• Ravikant emphasizes the importance of uncompromising honesty in various aspects of life.
• He learned the value of honesty from his childhood idol, physicist Richard Feynman, who stressed the importance of never fooling oneself.
• Growing up in New York, Ravikant witnessed the significance of honesty even in tough environments like the Russian mob, where individuals would trust each other's word even in life-threatening situations.
• Ravikant connects honesty to happiness, explaining that being dishonest creates mental distractions and takes one out of the present moment.
• He recommends a short book that delves deeper into the concept of honesty.

What Naval looks for when deciding to invest in a founder. (00:08:21)

• Intelligence:
  • Founder must have a deep understanding of the problem they are trying to solve.
• Energy:
  • Founders must have the perseverance to succeed in the long run.
• Integrity:
  • Founders must have a strong sense of ethics and values.
  • Integrity is the hardest trait to assess and requires long-term relationships.
• Compatibility:
  • Founders must be compatible with the investor and enjoyable to work with.
  • Founders should be positive, uplifting, and easy to interact with.

Recommended reading from outside the startup world. (00:11:19)

• To enhance investment skills, focus on reducing biases and emotional responses by developing emotional control and self-awareness.
• Self-improvement is a gradual process that involves building skills over time rather than relying on sudden epiphanies.
• Stoic philosophy, Rational Buddhism, and Bruce Lee's writings offer valuable insights into self-mastery and self-improvement.
• Blogs provide a wealth of wisdom despite the prevalence of short-form content on social media.
• Treat books as disposable blog posts or bite-sized pieces of information, allowing for a more efficient and enjoyable reading experience.
• Read multiple books simultaneously, flipping through them as desired, and feel free to skip ahead or start reading from the middle.
• Delete books that become boring or contain incorrect information without feeling obligated to finish them.

Who Naval considers successful. (00:18:54)

• Naval defines success differently from most people.
• For him, successful people are not necessarily those who win the game they are playing, but rather those who create or commercialize something that changes lives.
• Examples of successful people in Naval's view include Steve Jobs, Mark Andries, Satoshi Nakamoto, and Elon Musk.
• However, the real winners, according to Naval, are those who step out of the game entirely and achieve inner peace and self-control.
• These individuals, such as the Polish friend Naval mentioned and historical figures like Buddha and Krishna, are successful because they are not affected by external factors and find happiness within themselves.
• Naval believes that the ability to sit quietly and be happy for 30 minutes is a sign of true success, but few people achieve this state.

Cultivating non-judgmental awareness. (00:21:18)

• Choiceless awareness meditation, inspired by Krishnamurti's teachings, involves accepting the present moment without judgment, leading to a peaceful and grateful state.
• Enlightenment is achieved by creating space between thoughts and being aware of their origins, as most thoughts are fear-based, with desire being another form of fear.
• Lust, as depicted in the Adam and Eve story and the book "Siddhartha," can lead to downfall.
• Meditation, which can be achieved through various methods, helps quiet the mind by recognizing and acknowledging fear-based thoughts, leading to a greater appreciation of life's details and beauty.
• Meditation breaks free from the constant self-narrative, revealing that life is generally good and we are far up Maslow's hierarchy of needs.

How to replace bad habits with good habits. (00:26:24)

• Habits are everything and we are trained in habits from childhood.
• Habits become internalized and subconscious, shaping who we are.
• Working out every day, even if it's light, can have a significant positive impact on both physical and mental well-being.
• To achieve lasting change, focus on picking up good habits or discarding bad habits every six months to a year.
• Sustainability is key, so find ways to make healthy habits enjoyable and effortless.
• Bad habits can be replaced with good habits over time.
• It takes time and effort to change habits, but it is possible.
• Find a routine that works for you and stick to it.
• Make small changes to your habits gradually.
• Don't give up if you slip up. Just keep at it and you will eventually reach your goals.

Naval's advice for his younger self. (00:29:47)

• Chill out, don't stress so much, and have less anxiety.
• Be yourself, don't try to live up to other people's expectations.
• Say no to more things and protect your time.
• Don't worry about what other people need, want, or expect from you.
• Live in the moment, have less fear, and give more love.
• If you don't know how to make yourself happy, try to make someone else happy.
• Work on yourself until you no longer need a mate, and then they will appear.
• Be worthy of a mate.
• Work on yourself until you no longer need them, and then they will appear.

Naval's billboard. (00:32:17)

• Desires are contracts with oneself to be unhappy until one gets what they want.
• One should be aware of their desires and choose them carefully.
• Having more than one big desire at a time can lead to suffering.
• Meditation and mantras can help one accept and be present in the moment.
• There are only three options in any situation: change it, accept it, or leave it.
• Struggling against reality is the cause of most misery.
• The phrase "accept" can be used to remind oneself to accept the present moment.

Enter Nick Kokonas. (00:36:02)

• Nick Kokonas is the co-owner and co-founder of the Alinea Group of restaurants.
• Alinea is one of only 13 restaurants in the US to earn the coveted Michelin three-star rating.

Is pressure Nick's default setting, or are perceived risks an illusion? (00:36:21)

• Tim Ferriss thanks Nick Kokonas for joining the show and acknowledges their previous interactions, including Nick's help with the 4-Hour Chef book.
• Tim mentions that pressure seems to be a defining characteristic of Nick's life and trajectory.

How do behavioral economics and Richard Thaler influence Nick's approach? (00:37:11)

• Nick believes in radical transparency in business and gives numbers to support his arguments.
• He questions basic aspects of industries, such as book publishing and the restaurant business, and applies behavioral economics to understand customer behavior.
• Richard Thaler, a Nobel Prize-winning economist, influences Nick's approach with his focus on asymmetric risk-taking and information.
• Nick sees opportunities in opaque information gaps and aims to correct them.
• Nick doesn't view things as successes or failures, but rather as patterns of decisions.
• He emphasizes the importance of making the right decisions consistently, even if individual decisions may not always be correct.
• Behavioral economics studies decision-making, including rational, irrational, and emotional factors that drive people's choices.
• Many decisions are made without conscious awareness, and understanding these unconscious decisions is crucial.
• Nick applies behavioral economics to various aspects of life, including art, commerce, science, and personal relationships.
• He views decision-making as an iterative process and emphasizes intentionality in making decisions.

Nick's transition from philosophy to finance; was philosophy an asset? (00:41:54)

• Nick studied philosophy in college, even though he initially intended to study political science, economics, or pre-law.
• A professor, Professor Drome, encouraged him to major in philosophy and taught him how to think clearly and succinctly.
• Nick's philosophy education helped him develop critical thinking and analytical skills, which were valuable in his later career in finance.

Why Nick's professor gave him shorter assignments than classmates. (00:42:59)

• Professor Drome assigned Nick shorter papers than his classmates, challenging him to be clear and concise in his writing.
• Nick found this more difficult than writing longer papers and credits it with helping him develop his thinking and writing skills.

Nick's introduction to trading; dumbing down academics for clerk job. (00:45:13)

• Nick met a high school acquaintance who had become successful in real estate and trading despite not having a college degree.
• Inspired by this encounter, Nick faked his resume to get a $5 an hour job as a clerk on the trading floor.
• He found a mentor named Frank Zino at Chicago Research and Trading, which was founded by a philosophy major.

Why philosophy majors often become traders. (00:46:58)

• Nick observes that many successful traders have philosophy degrees.
• He suggests that philosophy provides a useful foundation for trading due to its emphasis on abstract thought.

Why Nick is glad he didn't pursue an MBA in 1992. (00:47:35)

• Nick believes that studying business is not as valuable as studying the underlying principles of how things work or how people think.
• He argues that an MBA education in 1992 would have taught him management practices that became obsolete with the rise of the internet six years later.
• Nick emphasizes the importance of asking "why" and challenging the status quo, rather than blindly following established systems.

Why Nick thinks his professor singled him out from his peers. (00:48:57)

• Nick was prepared and earnest in his studies, despite being terrified of the professor's reputation for being harsh.
• The professor had a reputation for being strict and demanding, and used harsh methods to whittle down the class size.
• One instance Nick recalls is when the professor lit a student's notebook on fire during a discussion about putting out fires.
• The professor memorized every student's last name and addressed them formally as "Mr." or "Ms."
• During a class, Nick helped a struggling classmate by writing the answer to a logic problem on his desk, but the professor caught him and accused him of cheating.
• Nick was surprised when the professor invited him to his office after class, expecting to be reprimanded, but instead, the professor took him under his wing and mentored him.
• Nick was unaware that the professor liked him until 10 years after graduating when he was treated like family at the professor's funeral.
• The professor never asked for anything in return for his mentorship and held Nick to a higher standard than the other students.
• Nick believes the professor saw potential in him and invested his time and effort into helping him improve.

Recommended books for aspiring entrepreneurs without philosophy background. (00:53:08)

• Bertrand Russell's "The Problems of Philosophy" is recommended for its plain language and exploration of fundamental questions.
• "The Swerve" by Stephen Greenblatt is suggested as an engaging read about the rediscovery of an ancient philosophical text.
• Lucretius' "On the Nature of Things" is mentioned for its philosophical insights.
• Stanford, UC Berkeley, and MIT offer accessible online courses taught by professors, providing opportunities for continuous learning.
• Philosophy is seen as a valuable source of inspiration and ideas for entrepreneurs.
• Engaging with philosophical concepts can provide a fresh perspective and stimulate creativity.
• The act of grappling with philosophical questions is likened to a communal exploration of curiosity.
• Philosophy extends beyond abstract contemplation and encompasses practical aspects of life.

Did being a Merc clerk meet Nick's expectations? (00:57:47)

• Nick was a clerk at the Merc, a commodities exchange in Chicago.
• He found the work to be brainless and unfulfilling.
• He tried to learn more about finance and trading but found the resources available to be inadequate.
• He interviewed with big companies like Goldman Sachs but was hesitant to accept their job offers due to the restrictive terms of the employment contracts.
• Nick eventually left the Merc and went on to start his own business.
• He believes that his time at the Merc was valuable because it taught him what he didn't want to do with his life.
• He also learned the importance of asking fundamental "why" questions and challenging conventional wisdom.

How Nick followed his father's entrepreneurial model in trading. (01:00:18)

• Nick's father was an entrepreneur who owned a grocery store and a temporary labor office.
• Nick didn't go to law school but instead followed his father's entrepreneurial model.
• Nick found a trader who was also interested in owning his own situation and started working for him.
• Nick learned options theory from the trader and started his own company a year later.
• Nick hired his first employee, who became his business partner for the last 25 years.

Why Nick left his mentor after a year to start his own company. (01:04:54)

• Nick left his mentor after a year to start his own company because he wanted to be the captain of his own ship.
• He had found programmers to help build options analysis software and was offered a position at the Merkel exchange by his mentor.
• Nick realized that the deal offered by his mentor would make him worse over time, so he decided to take a risk and start his own underfunded company with his friend Jim Hansen.

How Nick and employees trained to quicken mental agility for trading. (01:05:57)

• Nick and his employees spent most of their time training in psychology to improve their mental agility for trading.
• The training involved standing around after hours and practicing quick mental calculations, such as 7 x 28, until they could do it instantaneously.
• They also trained to be comfortable with making quick decisions that could have significant financial consequences.

The moment Nick realized he could thrive in trading. (01:08:33)

• Nick realized he could thrive in the trading environment during Greenspan's irrational exuberant speech.
• He felt a sense of satisfaction after a physically demanding day of trading, knowing that he had prepared for it for the past six years.
• Nick acknowledges the negative aspects of the trading system, such as its focus on pure commerce and the lack of individual fulfillment.

Recommended resources for becoming a better investor. (01:09:18)

• Look for asymmetric risk, where the potential upside is significantly greater than the potential downside.
• Read Nassim Taleb's book "Fooled by Randomness" to understand how people misprice things and make incorrect assumptions.
• Avoid activities with a high probability of loss, such as gambling, unless the potential upside is significant.
• Risk assessment is complex and challenging.
• Consider the various risks associated with different investments and life choices, such as early-stage startups and asset allocation.
• Develop a personal approach to managing risk that aligns with your goals and risk tolerance.

Nick seeks out "high, small hoops" for investment risks. (01:11:38)

• Nick looks for investment opportunities with a high potential for success and a low competition, which he refers to as "high, small hoops".
• He mentions examples of industries with high failure rates, such as trading, restaurants, and software startups, but he sees these challenges as opportunities rather than deterrents.
• Nick highlights the importance of learning and gaining expertise in a chosen field to increase the chances of success.
• He believes that the high failure rates in certain industries are often overstated and that there is potential for success if one is willing to put in the effort and learn the necessary skills.
• Nick finds the challenge and excitement of pursuing these high-risk, high-reward opportunities motivating and enjoyable.

Do businesses fail due to difficult model or lack of due diligence? (01:14:16)

• Averages can be misleading when discussing business failures.
• The statistic that nine out of ten startups fail within the first year may not be accurate.
• Possible explanations for business failures include lack of due diligence, unrealistic business plans, and insufficient preparation.
• Many entrepreneurs focus on branding and logos without developing a viable product or service.
• Unsolicited investment pitches often lack substance and pressure for quick decisions.

When and why Nick decided to enter the restaurant business. (01:17:11)

• Nick left trading in 2001 due to burnout and personal circumstances.
• He initially panicked about his next move but started consulting for a small hedge fund.
• Feeling unfulfilled, Nick sought a new direction and found himself playing golf with ex-athletes.
• Observing their lack of happiness, he questioned the conventional path and considered alternative options.

The dinner leading to Nick and Grant Achatz's partnership. (01:18:42)

• Grant Achatz, a young and introspective chef at Trio, impressed the speaker with his transformative and thought-provoking cuisine.
• The speaker and Grant developed a close relationship through email discussions about food and cooking.
• On the speaker's wife's birthday, they had an exceptional meal in Trio's kitchen, where Grant served a unique Latvian sorrel soup with braised ham hocks that blended Japanese and Thai flavors.
• Nick Kokonas and Naval Ravikant, who met at a dinner, decided to open a restaurant together within a year despite not knowing each other well.
• Kokonas and Ravikant collaborated closely to design every aspect of the restaurant, from the menu to the decor, with the aim of creating a unique and memorable dining experience.
• The speaker and his team designed a restaurant experience that aimed to evoke emotional responses from customers from the moment they entered, eliminating the traditional podium and focusing on a welcoming and personal greeting.
• The speaker personally invested a lot of effort into the restaurant's preparation, including losing weight and even laying tiles in the basement just days before the opening.

Why Nick chose to open a restaurant out of many risky options. (01:28:08)

• Nick had a nagging feeling that he wasn't passionate about what he was doing.
• He met Grant, who was the best in the world at what he did, and was inspired by his passion and dedication.
• Nick wanted to create the best restaurant in the world, not just as a hobby or ego boost, but as a true passion project.

How Nick spots talent early that others notice late. (01:30:49)

• Nick can identify exceptional individuals who are not yet widely recognized.
• He notices a complete commitment and dedication to their craft or pursuit.
• These individuals are often "all in" and focused on their passion, even if it means neglecting other aspects of their lives.
• Nick finds joy in meeting and observing such highly committed individuals, regardless of his personal interest in their field.
• Grant Achatz, featured in the Netflix series "Chef's Table," exemplifies this level of focus and dedication.
• Grant's exceptional focus is evident in his work and creates a unique atmosphere that permeates the environment.

Questioning restaurant conventions like candles and white tablecloths. (01:34:23)

• Grant Achatz wanted to use wooden tables instead of white tablecloths in Alinea.
• White tablecloths are used in fancy restaurants to hide the fact that the tables are made of cheap materials.
• Using wooden tables would save money on laundering linens and create a unique atmosphere.
• The health department in Chicago did not allow silverware to be placed directly on the table due to condensation.
• To solve this issue, Alinea created a fridge above the table that kept the temperature at 44 degrees Fahrenheit, eliminating condensation.

A now-famous chef was Alinea's first customer. (01:37:25)

• Chef Sean Brock was the first customer at Alinea.
• He wrote a blog post about his experience, which helped to create a buzz about the restaurant.
• Alinea's unique design and atmosphere were the result of a year-long conversation between Grant Achatz and Nick Kokonas.

Nick and Grant wouldn't let designers override their ideas. (01:38:19)

• Nick and Grant didn't allow designers to override their ideas.
• They had a clear vision of what they wanted and stuck to it, even when presented with practical reasons for doing otherwise.
• This approach has been consistent throughout their work, including taking seven years to build their next place because they didn't have an idea that kept them up at night.
• Editing themselves and each other in an open way is painful but important.

How Nick contributed effectively as a restaurant industry newcomer. (01:39:03)

• Nick Kokonas used a "universal restaurant calculator" to analyze the financial viability of restaurants like The French Laundry.
• Despite initial financial struggles, Kokonas and his team achieved success after winning the "best restaurant in America" award from Gourmet magazine.
• Kokonas stresses the significance of starting a business with a clear financial plan and realistic expectations, employing simple methods like the "two shoe box method" to track income and expenses.
• After achieving success, Kokonas expressed both happiness and concern about finding a new artificial construct to pursue, feeling the need to find happiness beyond their current accomplishments.

Grant's cancer diagnosis; writing a book and revolutionizing reservations. (01:44:06)

• After Grant was diagnosed with stage four cancer and given six months to live, Nick started going into the restaurant at night and asking questions about the business.
• Their goal was to keep the restaurant open for when Grant came back, and Grant only missed 12-14 days of service during treatment.
• In the midst of managing a self-published book, keeping staff motivated, and letting Grant know the restaurant would still be there when he got well, Nick realized the industry was not run right.

Traditional restaurant reservation systems and Nick's improvements. (01:45:44)

• Nick Kokonas discusses the challenges of managing reservations and waitlists in the service industry, highlighting the misalignment of incentives between restaurants and customers.
• He emphasizes the importance of load balancing and creating a consistent customer experience, criticizing the lack of innovation and resistance to new systems in the industry.
• Kokonas describes his success in building a rudimentary booking system that significantly increased ticket sales and proposes a dynamic pricing strategy to better manage demand and revenue.
• He suggests implementing a small deposit or prepayment system during high-demand times to reduce the high no-show rate and improve table management.
• Kokonas introduces Tock, a software created by his team that allows restaurants to sell their most expensive and cheapest seats first, generating significant revenue through additional features like selling wine pairings and books.

Bickering at press dinner; avoiding Next becoming "Disneyland of cuisine." (01:57:33)

• Nick Kokonas and his team at Next Restaurant created a unique dining experience by changing the restaurant's menu every four months, each with a different city and time period as the theme.
• The first themed menu, "Paris 1906," was inspired by French cuisine before World War I, specifically the period after the Seine River flooded and led to a shift in culinary styles.
• There was debate among the team about how authentically to recreate the historical menus, with some arguing for a more modern interpretation.
• The speaker had a disagreement with someone about a recipe that didn't call for salt, arguing that the vegetables used were likely pre-salted as a desiccant due to the lack of refrigeration in the past.
• The disagreement led to the impression that the speaker and the other person didn't like each other, and the arguments continued until the day they opened their business.

Reservation software problems; variable pricing based on day of week. (02:02:30)

• Nick Kokonas discusses the challenges he faced when setting up reservation software for his restaurant.
• Competitors were not helpful, and even people within his own company thought it was a bad idea.
• Kokonas was concerned that customers would not understand the concept of variable pricing based on the day of the week.
• He launched the software about 7 hours before the first dinner service, which resulted in technical issues due to the high number of people trying to access the website.
• Kokonas created a Facebook group to communicate with customers and build a sense of community.
• On opening day, Kokonas was unprepared for the high demand and did not have enough staff or phones to handle the volume of customers.
• He decided not to order phones as a fail-safe to force his team to find a solution.

The moment Nick realized "This is the best thing I've ever built." (02:06:04)

• Nick created a reservation system that allowed customers to see the availability of tables in real-time.
• When he first made inventory available, it sold out so quickly that he thought the system was broken.
• He realized that the system was a success and felt it was the best thing he had ever built.
• The software itself had issues, but as a proof of concept, it was excellent.

Why the reservation system's rewards were worth the asymmetric risks. (02:07:57)

• Nick had invested approximately $115,000 in developing the software.
• He was willing to take the risk because the potential rewards were significant, even if there was a chance of failure.
• Nick believed that transparency was more important than money and yield management.
• He wanted to allow customers to see the entire inventory and make the industry more transparent.
• Nick initially intended to solve his own problems and didn't plan to turn it into a software product.

Using Marimekko charts to visualize restaurant and sponsorship data. (02:10:32)

• Nick Kokonas significantly increased his restaurant's margins by implementing numerous small improvements over time.
• He developed a food cost analysis tool called the "Mari Mekko chart," which helps chefs identify areas for cost savings by visualizing the impact of different expenses on the overall food cost.
• The Mari Mekko chart is a versatile visualization tool applicable to various industries, particularly valuable for consultants.
• Kokonas emphasizes analyzing the most significant spending areas first, rather than focusing on minor expenses.
• The company relies on social media for advertising and closely tracks its return on investment (ROI).
• Charlie Munger's advice to avoid stupidity rather than striving for high intelligence is highlighted.
• An example of inefficient customer service in a clothing store is presented.

The next industry Nick wants to disrupt: truffles. (02:17:13)

• Nick wants to disrupt the truffle industry because it is an opaque market with absurd prices.
• Black and white truffles are as expensive as the most expensive drugs in the world.
• Truffle dealers sell truffles in unmarked boxes stacked with newspaper.
• The US market for truffles in the fall season is worth a lot of money, but the exact value is unknown.
• Nick believes that someone is guarding the truffle industry's "Golden Goose."

Illuminating black boxes. (02:19:11)

• Naval Ravikant emphasizes the importance of identifying and eliminating "black boxes" or opaque systems that create inefficiencies and disadvantages in various industries.
• He stresses the need to carefully select which problems to tackle, as they can be time-consuming and energy-draining.
• Ravikant describes his approach of assigning challenging projects to employees as a way to assess their entrepreneurial potential and drive.
• Nick Kokonas, who pays all interns at his restaurants, believes that truly entrepreneurial individuals will invest time and effort in investigating black boxes, even without immediate financial rewards.
• Kokonas is willing to support people with intriguing ideas, but expects them to make progress on their own before he gets involved.

Self-selection of job roles; how Nick's hiring process has changed. (02:26:40)

• Nick Kokonas and Naval Ravikant prioritize self-selection in the hiring process, allowing candidates to assess if the job aligns with their interests and capabilities.
• They evaluate candidates through various methods, including discussions about pain points, interests, and writing skills, to gauge their potential fit for the company.
• Clear communication and setting expectations are crucial during the hiring process to ensure a shared understanding of roles and responsibilities.
• Naval Ravikant provides direct feedback, acknowledging those who respond positively and letting go of those who resist learning or are not a good fit for the company's culture.
• The company embraces diversity in its employees, ranging from highly educated engineers to individuals without university degrees, united by their shared inquisitive nature.
• When Ravikant proposes an idea, his colleagues acknowledge its potential while also offering practical insights into its implementation within the company's current capacity and timeline.

Systems Nick uses to cope with a lot of email. (02:32:17)

• Naval Ravikant struggles to manage his 400 daily emails and now uses filters set up by his business partner to manage his inbox.
• He still tries to engage with customers by randomly answering social media messages.
• Complaints are directly sent to a complaint tracker for review by him and his business partner.
• While on vacation, he creates elaborate out-of-office replies, such as visiting an adopted panda or attending a tantric sex and silence retreat.
• One potential business opportunity was lost because the recipient took his out-of-office reply too seriously and found it inappropriate.
• Maintaining a balance between seriousness and humor in professional communication is crucial to avoid burnout and missed opportunities.

Importance of engaging on social media, even if unable to respond to all. (02:37:59)

• Demonstrating that you are listening and paying attention can go a long way, even if you don't personally reply to everyone.
• Publishing the fact that you pick a message to reply to, even if it's just one, is important.
• It shows that there's an actual human on the other line and not just a marketing thing.

What "puzzle" filters and mini-hurdles in correspondence accomplish. (02:39:51)

• Creating "puzzle" filters and mini-hurdles in correspondence can help you find the people who are genuinely interested and willing to put in the effort to reach you.
• For example, including a request for applicants to call a specific number and leave a voicemail with certain information in a job description can help you identify the candidates who are paying attention and following instructions.

Comparing similarities between the music and publishing industries. (02:40:52)

• Chefs Nick Kokonas and Grant Achatz faced challenges in publishing their cookbook due to traditional publishing deals that required them to pay for design, photography, and adhere to specific guidelines while offering relatively low advances.
• Kokonas discovered that publishing contracts included a clause where the restaurant would guarantee to buy a significant number of books at half the retail price, benefiting the publisher.
• Despite skepticism from traditional publishers about the book's unconventional format and predicted low sales, Kokonas found a print broker who offered a much lower printing cost, making the project financially viable.
• He negotiated a unique deal with 10 Speed Press, where they would act as a distributor and receive a percentage of sales instead of an advance, allowing Kokonas to retain a higher profit margin.
• The book, "The Alinea Cookbook," became a success, winning awards and selling well, demonstrating the importance of understanding the business side of publishing and negotiating favorable terms.

The agency problem as another black box. (02:50:11)

• To maximize the sale price of a house, the speaker developed a reverse Dutch auction strategy, setting a high initial price and offering a substantial commission for any amount above a specific threshold, which incentivized agents to work harder and resulted in multiple offers exceeding the highest initial bid.
• In book negotiations, the speaker employed a similar strategy, starting with an exceptionally high price and gradually lowering it until a publisher agreed to the terms, securing a favorable deal without the need for an agent.
• Naval Ravikant, known for his punctuality in the publishing industry, believes in turning books in on time, even if they are longer than expected.

The Hembergers, The Alinea Project, and the upcoming independent Aviary Book. (02:55:14)

• Allen Hamburger, a procedural effects artist, spent five years cooking his way through the Alinea cookbook and learning various skills. He then created a beautifully illustrated and written book called "The Alinea Project," documenting his culinary journey.
• Nick Kokonas saw Allen's book and convinced him and his wife, Sarah, to quit their jobs and move to Chicago to work on a book about The Aviary.
• Due to Sarah's pregnancy, the project was delayed for a year and a half. They eventually set up a studio in Chicago and launched a Kickstarter campaign, successfully raising almost half a million dollars.
• The book, titled "The Aviary," is set to be released in October and has already sold an additional $300,000 worth of pre-orders.
• Nick Kokonas and Alan Spear created "The Aviary Book," which details every aspect of making the book, including photography techniques and marketing strategies. They decided to self-publish the book without a distributor or publisher.
• Priced at $85, significantly higher than the typical price for a cocktail book, they believe they can sell half a million copies in the next two to three years.
• Designed to be accessible to both professional bartenders and home enthusiasts, 35-40% of the techniques are doable at home.
• The book includes high-quality photographs, some of which required compositing multiple images.

A brief discussion about cocktails. (03:01:58)

• Nick Kokonas considers himself a tequila guy.
• His favorite drinks are a daquiri, a half mescal Margarita, and old whiskies.
• He believes in a culinary approach to cocktails, making them additive to a meal rather than just getting drunk.
• Cocktails can be simple or complex, and they don't have to be expensive or complicated to make.
• Nick hosted a dinner party where each room had all the ingredients and instructions for guests to make their own cocktails, which was a hit.

Books Nick has gifted most and how he personalizes gifts. (03:05:58)

• Nick frequently gifts the book "The Fool by Randomness" to his colleagues and friends.
• He also gives away vintage art books that he finds at used bookstores.
• To make his gifts more personal, Nick types thank-you notes on an old typewriter.
• Nick Kokonas and Naval Ravikant discuss the importance of reading and sharing books.
• Nick recommends the book "The Avery" and suggests visiting the restaurant of the same name in Chicago for its delicious food and drinks.

Nick's billboard. (03:08:26)

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