Colgate Entrepreneurs: Nick Kokonas '90 on how he plans to reinvent the way we eat again

Long before Alinea, Kokonas was a philosophy major at Col­gate. After graduating, he became a very successful derivatives trad­er which he enjoyed for several years, but, as he said in a recent Fast Company interview, his wife told him "'You're in danger of becoming an asshole.'”


In March, Kokonas and Achantz will open their new Chica­go-based restaurant called "Next." A movie-like trailer announced that Next will have four different menus per year, each evoking the food of a particular place and year in history: 1912 Paris, Sicily 1949, or even Hong Kong 2036. Even more radical, Next will sell tick­ets, not reservations, for each table time slot. The price of tickets will be set depending on the supply and demand of a particular time slot. If you want to eat at 7:00 p.m. on Saturday your meal ticket will cost considerably more than 4:00 p.m. on Wednesday. It is a pricing model that is used by airlines, Broadway shows and sporting events but has never been attempted in the fine-dining world. Kokonas says "Buy tickets to the Cubs, Bruce Spring­steen or a theater and no-show and what happens? You miss the show." It is just another way Koko­nas is re-imagining the fine dining experience as entertainment.

When the Maroon-News first reached out to Kokonas for an in­terview, he was busy sampling 32 classic cocktails with 20 bar-chefs and staff for his third venture, a cocktail bar that he promises will "redefine the cocktail." Kokonas got back to us to discuss his path to cre­ating America's Best Restaurant and how he plans to transform the way we eat.

Raymond: How did you decide to make the transition from deriva­tives trader to restaurateur? What factors were behind this drastic ca­reer change? Did your skills translate or did you have to start over?
Kokonas: I didn't decide really. I had left trading with no intention of doing anything too different. I had invested in Funbrain.com and a few other web start-ups in the late '90s and did a bit of angel investing and thought I would stick with that. However, I met a very amazing chef and person in Grant Achatz and felt compelled to go in that direction.

Chef Grant Achatz and Nick Kokonas

I left trading simply because I was 1) fairly burned out and 2) had a very rough year in 2001. My dad died in February and 9/11 hap­pened later in the year, which pro­duced a serious situation for many of our employees and for the coun­try. I just felt that what I was doing was no longer that important to me. So I quit. In all seriousness, I am not quite sure exactly what my skill set is beyond being very curious and driven. I am a huge proponent of a liberal arts education for just that reason. I can dive in to a variety of businesses and think of them clearly and anew.

R: What courses or professors at Colgate influenced the course of your life or career?
K: Without a doubt Professor Balmuth was a key figure for me while I was at Colgate, though I had several other key professors in the Philosophy department, in­cluding Professors Jacobson and Clark. I loved Astronomy with Professor Aveni.

Really, the overall liberal educa­tion provided so much that I have drawn on – from writing to a knowl­edge of psychology, theater and eco­nomics. I am a strong proponent of a liberal education and believe that ‘business' schools are fine to teach people how to work in a very large company in middle management but do little to produce entrepre­neurs and well rounded, educated people. I would never encourage anyone to study business.

R: How does a business guy strike a balance between what is creative and innovative and what is practical? Is that an issue in the restaurant business?
K: Intuition followed by rigor­ous analysis and detail work. I hate focus groups – I think they breed mediocrity. We have a team of 3 or 4 people at most on almost all of our creative endeavors. The best art, the best businesses create some­thing that people didn't even know they wanted.

I never worried about filling Alinea because I knew that chef Achatz would produce amazing food. I only concerned myself with the marketing... and we did that ourselves as well. Authenticity in marketing is sorely lacking and yet the tools are there for everyone. The ‘trailer' for Next restaurant was made by our designer and me in about 10 days, start to finish...no prior experience. That has itself generated a great deal of press and even a few ad agencies that have called asking who did the video work so that they could hire them. Oddly, I don't consider myself to be ‘in the restaurant business' because what we do is so different than a normal restaurant.

R: How did you decide on the unique pricing for Next? What is the difference between Wednesday at 5PM and Saturday at 7PM?
K: That stemmed from me watching firsthand the fact that we could sell out Saturday night at 7:30 five times over every week but Wednesday not nearly as much. Leveling that demand curve is pret­ty basic but for some reason – other than the early bird specials at din­ers – no one had ever tried to ac­count for that. The pricing model is at this point a guess. Saturday is the high point of the bell curve but the slope of the pricing will vary. My guess is for the first menu that we want to average $85 per person for food so Saturday will be about $110 and Wednesday at 9:30 PM will be about $60. It will not, at first, be algorithmic or real-time, more for psychological reasons of the customers and marketing than our ability to do that.

R: How difficult is it to change conventional wisdom? Are you concerned about alienating your customers?
K: It's really hard and really easy at the same time. I think we have skeptics and frankly that fuels both love and hate and the press as well. It's a good story. Some people will be alienated but I really think that those are precisely the people you don't want as customers. 5 percent of the customers cause 95 percent of the problems... this is our way of fir­ing those customers and rewarding the good ones. How many business­es offer coupons to new customers but treat their regulars like crap? It should be the other way around.

R: There has been very little written about your other venture, Aviary, "a cocktail bar redefined." Can you tell us anything? How do you plan to reinvent the cocktail?
K: Think – a lounge with no bar or bartenders... a restaurant for drinks. But lots to talk about there so get back to me.

R: What advice do you have for students interested in entrepreneurship?
K: Start businesses. My first busi­ness of my own out of Colgate was selling posters to college students in the Midwest at semester changes. I bet there are still the same post­ers in many dorm rooms. I made a reasonable amount of money with minimal work – but more impor­tantly I learned the small things of setting up a business that were a bit murkier back then, pre-Google and pre- Internet. Now, there is just no excuse for not being able to start something quick and lean.

I don't think you can teach entrepreneurship and it isn't easy. Back when I was a derivatives trad­er a friend told me the rule for risk: if you wake up every morning and feel fine you are not taking enough risk. If you wake up every morning and puke you are taking too much risk. If you have a nice, even queasy feeling throughout the day that is just about right. But you have to start something to know how it works...talking about it, planning it out endlessly in business plans and spreadsheets is a nice exercise, but, ultimately, pretty worthless. Find something you really, really want to do and go do it.

R: The recent New York Times piece referred to you as the Medici to Achatz's Michelangelo. What do you make of that comparison?
K: I thought it was absurd! First, it's kind of funny but I think they meant it seriously. I work too hard to be a Medici and, unlike a patron of the arts, I hope and try to create a little of my own.