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

Episode of My First Million · October 26, 2026 · 2 h 7 min

Shaan Puri talks with Nick Kokonas about finding arbitrages across trading, the restaurant Alinea, Tock, Napa winemaking and an immersive magic venue.

Summary

Shaan Puri hosted Nick Kokonas, who described changing careers roughly every decade and seeking a deliberate level of discomfort. Kokonas recounted faking his resume downward to get a $5.25-an-hour runner job at the Chicago Mercantile Exchange, apprenticing himself to a quant-minded trader, and later building a phone-line arbitrage between ETF trading in New York and futures in Chicago after reading regulators' rules closely. He said the firm made over $100 million in one year, that he deliberately throttled the trade to avoid provoking large banks, and that he left trading after his father's death and 9/11 because he had become a poor manager and an unpleasant person to be around.

Kokonas argued that every arbitrage is a question of timescale, applying the idea to restaurant reservations and dynamic pricing, which led to Tock. He criticized calls to ban dynamic pricing and predicted that localized, variable pricing for time-slotted businesses would eventually be worth hundreds of billions of dollars. He discussed co-founding Alinea with chef Grant Achatz, building it in public through the eGullet forum, designing the dining experience like theater and borrowing techniques from magicians, and said investors received roughly 27 to 28 times their money by the time he sold the Alinea Group in 2023.

The conversation also covered podcast format ideas, his criticism of media coverage of restaurants and of Michael Lewis's Flash Boys, how his team completed Squarespace's due diligence list in three days without an investment bank, and a keynote he gave to Napa grape growers. It closed with Strange House, an immersive illusion-based venue he is developing with magician Nate Staniforth in a 90,000-square-foot space under Wall Street, which Kokonas argued fits a growing demand for in-person human connection as AI spreads.

Chapters

1:02
Fear, risk and the 'AT&A' rule
Puri introduces Kokonas, who explains the nausea-as-signal approach to risk he learned from partner Keith Goggin and his wife's 'all talk, no action' phrase.
5:19
A new career every decade
Puri shares stories of self-chosen 'prisons' and Kokonas explains why he avoided salaried jobs and was drawn to owning his own situation.
9:51
Getting onto the trading floor
Kokonas describes faking his resume downward to become a runner, paying to apprentice with a trader, and the rule of making a trade on day one.
20:50
The comfort trap
Kokonas argues expertise is a trap and that he quits once things become comfortable, invoking Sisyphus.
23:57
The New York–Chicago arbitrage
Kokonas explains how a dedicated line between ETF and futures pits exploited a 20-second information gap and earned over $100 million in a year.
32:53
No boats, no women, no drugs
Kokonas recalls his father's reaction to a multimillion-dollar tax check and his lesson about showing up consistently.
36:47
Leaving trading
Kokonas describes the arbitrage closing, overexpansion, burnout and his decision to quit after his father's death and 9/11.
43:50
Everything is an arbitrage: reservations and dynamic pricing
Kokonas applies timescale arbitrage to restaurant reservations, Tock and dynamic pricing, criticizing OpenTable and calls to ban dynamic pricing.
48:26
Building Alinea
Kokonas discusses Grant Achatz, the value of relentless iteration, and open-sourcing Alinea's business plan on eGullet.
1:04:08
Theater, magic and controlling attention
Kokonas explains designing Alinea like Stop Making Sense and borrowing magicians' techniques for service and sales.
1:20:40
Remixing podcast formats
The two discuss authenticity, Hot Ones, Diary of a CEO and putting 'a little trouble in the way' of interviews.
1:27:56
Restaurant economics, media and selling Tock
Kokonas criticizes media narratives about restaurants and Flash Boys and recounts running Tock's sale to Squarespace without bankers.
1:41:05
Napa and owning your mistakes
Kokonas reflects on Market Wizards, killing failing projects and his keynote to Napa grape growers.
1:46:08
Strange House
Kokonas describes the immersive illusion venue he is developing with Nate Staniforth and why he believes in-person experiences will grow in importance.

Key points

What was said, by whom, with the exact words. Timestamps jump to the moment.

Nick Kokonas
Kokonas argues that expertise is a trap because a hungrier non-expert will eventually displace you.
“expertise is such a trap, right? It's such a trap. And you know that a non-expert is going to come after you”
Listen from 21:37 · Entrepreneurship
Nick Kokonas
Kokonas argues that every arbitrage comes down to timescale.
“I am now convinced that every arb is just about time scale”
Listen from 25:00 · Arbitrage
Linked moment · 30:09Skip to 30:09 using a listen link in the info box.
Nick Kokonas
Kokonas says his trading firm made over $100 million in one year from the New York–Chicago arbitrage.
“Well, I think that year we made over $100 million”
Listen from 30:09 · Arbitrage
Nick Kokonas
Kokonas says he deliberately shut down the initial arbitrage to avoid provoking the big investment banks, preferring modest gains over years.
“We're much better off picking their pocket a little bit for years than we are just destroying them on day one”
Listen from 30:54 · Arbitrage
Nick Kokonas
Kokonas argues, against calls to ban dynamic pricing, that the best way to avoid gouging is to price dynamically as quickly as possible.
“But the best way to do that is to dynamically price things as fast as you possibly can”
Listen from 46:24 · Dynamic pricing
Nick Kokonas
Kokonas believes localized dynamic pricing for time-slotted businesses will be worth hundreds of billions of dollars to someone.
“geofenced, meaning localized, dynamic and variable pricing for time slotted businesses is something that someone's going to make hundreds of billions of dollars with”
Listen from 47:00 · Dynamic pricing
Shaan Puri
Puri, citing Chris Rock's advice about writing jokes daily, argues that most professionals do not do the daily grind work.
“Even amongst the professionals, most are not doing that”
Listen from 51:37 · Entrepreneurship
Nick Kokonas
Kokonas argues that excellence comes from producing many mostly bad attempts, as with Grant Achatz testing many versions of a sauce.
“You have to know what great is. And knowing what great is, is making mostly shit 99% of the time”
Listen from 54:04 · Alinea (restaurant)
Nick Kokonas
Kokonas argues that being open about why you are doing something wins as long as it is authentic.
“the more open you can be about why you're doing it, as long as it's authentic, you win. Period”
Listen from 1:02:06 · Building in public
Nick Kokonas
Kokonas says he deliberately designs software with dead ends to guide users on a journey, contrary to most UX designers.
“I like to build dead ends in software that every software designer hates”
Listen from 1:09:44 · Tock
Nick Kokonas
Kokonas says Alinea adopted a magician's technique of having servers stand beside diners, on their side, rather than across from them.
“We're going to start doing service in a way where we are on the side of the diner”
Listen from 1:13:22 · Close-up magic
Nick Kokonas
Kokonas criticizes a famous TV chef who claimed during COVID that restaurants make only 2–3%, saying the chef was not a skilled restaurant operator.
“But he was a very successful TV chef, not a very successful restaurant owner”
Listen from 1:29:07 · Restaurant industry economics
Nick Kokonas
Kokonas says Alinea Group investors received quarterly distributions from 2005 until he sold the group in 2023.
“Our investors got quarterly distributions from the time I started it in 2005 all the way to when I sold it in 2023”
Listen from 1:29:34 · Alinea (restaurant)
Nick Kokonas
Kokonas argues that Michael Lewis's Flash Boys was wrong because traders tell journalists only strategies that no longer work.
“When he finally wrote about something I actually knew about, I went, this is all wrong. Flash Boys is all bullshit”
Listen from 1:31:36 · Flash Boys
Nick Kokonas
Kokonas says his team answered Squarespace's roughly 900-question diligence list in three days without an investment bank.
“And we did that whole list in three days. We just stayed up”
Listen from 1:34:33 · Mergers and acquisitions due diligence
Shaan Puri
Puri argues that winners differ less in strategy than in the intensity they apply.
“I have this phrase that intensity is the strategy”
Listen from 1:40:19 · Entrepreneurship
Nick Kokonas
Kokonas told Napa grape growers they were wrong to assume decades of rising prices would never reverse.
“you had 30 years up into the right and you thought you weren't going to get kicked in the face at some point”
Listen from 1:45:23 · Napa Valley wine industry
Nick Kokonas
Kokonas says Strange House has secured a 90,000-square-foot space beneath Wall Street after lengthy lease negotiations.
“90,000 square feet underneath Wall Street in Manhattan, six months of negotiating the LOI on the lease”
Listen from 2:00:50 · Strange House
Nick Kokonas
Kokonas predicts in-person experiences will become more important every year as AI spreads.
“In-person experiences are going to be more important every single year from now till we hit deep, like the holodeck”
Listen from 2:05:19 · Strange House

People

In the conversation

Shaan PuriEntrepreneur and investor, co-host of My First Million, former Twitch executive
Nick KokonasAmerican former options trader, co-founder of the restaurant Alinea and founder of the reservation software company Tock

Discussed

Grant AchatzAmerican chef and co-founder of Alinea
Keith GogginKokonas's former trading partner
Nate StaniforthAmerican magician and author of Finding Real Magic, Kokonas's partner on Strange House
Jeff TweedyFrontman and songwriter of Wilco
Chris RockComedian Devine cites as showing up to clubs alone without an entourage
Michael LewisAmerican nonfiction author of Moneyball, The Big Short, The Fifth Risk and Blockers: Rebels in the Deep State
Elizabeth WarrenU.S. Senator from Massachusetts
Travis KalanickUber co-founder working on industrialized restaurant kitchens
David ByrneMusician and frontman of Talking Heads
Derren BrownBritish mentalist and illusionist
David BlaineAmerican magician and endurance performer
Charlie TrotterChicago chef whose restaurant put the city on the culinary map
Elan LeeGame designer and co-creator of Exploding Kittens
Steven BartlettBritish entrepreneur and host of The Diary Of A CEO podcast
Moiz AliFounder of Native Deodorant

Topics

From the publisher

Database on how long it takes to become a millionaire: https://clickhubspot.com/tyvc Episode 876: Shaan Puri ( https://x.com/ShaanVP ) sits down with Nick Kokonas ( https://x.com/nickkokonas ) to talk about finding arbitrages and how to win an many different games. — Show Notes: (0:00) Intro (9:45) How I Became a Trader With $60K (18:15) Surviving Day 1 of Anything (20:35) The Comfort Trap (23:50) Finding Your Arb (32:00) No Boats. No Women. No Drugs. (34:55) Showing Up (43:15) Everything Is an Arbitrage (47:55) Greatness (55:55) Working Backwards (1:03:40) The Magic of Alinea (1:10:35) Controlling Attention (1:19:10) Remixing Old Mechanics — Links: • Alinea – https://www.alinearestaurant.com/ • Tock – https://www.exploretock.com/ — Check Out Sam's Stuff: • Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Shaan uses Mercury across all of his companies. you can too: http://mercury.com/ Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N.A., Members FDIC • I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out: beehiiv.com/mfm-challenge My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /

Summary, chapters and key points were generated from the episode transcript on November 7, 2026. Quotes are checked word for word against the transcript.

Categories: Entrepreneurship·Food·Investing