How to find your arbitrage (from the guy who’s done it 3x)
📚 Main topics
- A career built on new challengesNick Kokonas describes moving from trading to restaurants and software, repeatedly choosing unfamiliar fields rather than settling into expertise. He sees discomfort as a signal that he is learning and taking meaningful risks. 20:43
- Finding arbitrage in timingKokonas says arbitrage often comes from a time-scale mismatch. In trading, he used a dedicated connection to close a delay between markets; in restaurants, he saw opportunities in outdated reservation systems and inflexible pricing. 23:49
- Building Alinea around an experienceWith chef Grant Achatz, Kokonas aimed to create the best restaurant in America, designing its food, service, and atmosphere as a carefully constructed theatrical experience. 47:55
- A new immersive projectKokonas and magician Nate Staniforth are developing Strange House, an immersive magic experience intended to create wonder and connection among guests. 1:51:50
✨ Key takeaways
- Get into the arenaKokonas took an entry-level job on the trading floor to gain access, then sought out a mentor who could teach him the work. He argues that taking action on day one helps break through fear and hesitation. 13:31
- Study the system yourselfRather than rely on convention, he read the trading rules closely and found an opportunity others had overlooked. His advice is to understand the actual rules and incentives before assuming something cannot be done. 27:26
- Design the whole experienceAt Alinea, small details—from the first greeting to the final course—were planned to guide guests through a memorable journey. Kokonas drew inspiration from theater and magic, especially how they direct attention and create surprise. 1:04:12
- Open up the processSharing Alinea’s development publicly brought feedback, press attention, and early customers who felt invested in the restaurant’s story. Kokonas says openness works when it is authentic. 58:01
🧠 Lessons learned
- Make the work the winKokonas values the daily process of practicing, testing, and improving—not just the eventual success. Great chefs, songwriters, and other creators produce plenty of imperfect work to find the exceptional results. 49:14
- Intensity mattersStrong execution often comes from applying sustained effort to a visible strategy, rather than waiting for a clever shortcut. Showing up prepared, following through, and reviewing mistakes can compound over time. 1:38:58
- Align incentivesA business can lose opportunities when employees’ incentives do not match the company’s goals. Kokonas reflects that he should have explained the importance of filling more seats and structured roles accordingly. 1:37:26
- Know when to change courseArbitrages close as others catch on, and expertise can become a trap. Kokonas recommends recognizing when an approach is no longer working and being willing to start again. 21:15
🏁 Conclusion/next steps
- Keep looking for the next boulderKokonas’s recurring pattern is to choose a difficult new challenge, learn the field through action, and build toward an ambitious goal. He sees Strange House as his next major undertaking. 2:04:09
- Turn the idea into realityStrange House still requires the right space, funding, and execution. Kokonas says the concept deserves to exist, but it will take concrete next steps to make it happen. 2:04:41
Transcript excerpt
0:00 If you wake up every day feeling great, you're not taking enough risk. If you wake up every day throwing up, you're taking too much risk. You need to feel a tingle of uncomfortableness. I started with 60 grand. I can't express to you how under capitalized that is on the trading floor. >> Essentially, you were looking for arbitrage. You're looking for some sort of mispricing. I am now convinced that every ARB is just about time scale. >> How much money were you making doing this? >> Well, I drove to my dad's house and I showed it to him and he was kind of like, "Oh shit." He's like, "Is what you're doing legal?" I genuinely believe that geoence, meaning localized, dynamic and variable
0:31 pricing for time slotted businesses, is something that someone's going to make hundreds of billions of dollars with. >> How does a guy who goes from trading and no restaurant experience create the best restaurant in America? >> Knowing what great is is making mostly 99% of the time. >> Is it that you're actually seeking the anxiety and fear? >> It's exciting to be uncomfortable in the sense of All right, today we're hanging out with my friend Nick Kokonas. He is one of the
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Questions & Answers
Common questions about this video
What does Nick Kokonas mean when he says arbitrage is about time scale?
How did Nick get started as a trader with limited capital?
How did Nick find an arbitrage opportunity between New York and Chicago?
Why did Nick shut down the arbitrage after its first big success?
What did Nick learn from starting Alinea without restaurant experience?
Why did Nick share Alinea's development publicly before it opened?
What is Nick's advice about taking on unfamiliar work?
What is Strange House, and what experience is it meant to create?
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