Invest Like the Best with Patrick O'Shaughnessy
· Nick Kokonas, Patrick O'Shaughnessy
It's not an art project, it's a business. If we run it well as a business then we can invest more in the art and it becomes a virtuous cycle. I think that the barrier to entry to the restaurant business is actually relatively low compared to many other businesses, especially in terms of actual knowledge requirements. You can't just start a software company as a sole proprietor if you don't know how to program. So the barrier to entry there is fairly high. The barrier to entry to a restaurant is you sign a lease and build a kitchen and start cooking. It's a lot but it's doable. And consequently there's going to be a high failure rate. [00:00:00] S0: I should note for audience that I think the one time I did go to Alinea years ago it was literally ranked the single best restaurant in the world so I think it's very interesting that you say you and Grant agree that you would run it as a business first at its inception. In what ways did that cause your behavior or your plan to depart from the typical new high end restaurant opening?
· Nick Kokonas
[00:00:00] S1: Well, first of all we set it up in a way that the investors ... I was also the largest investor and I was on the management side. But I set up the structure of the business more like if you were setting up a startup. There was an investor group LLC, there was the restaurant itself, and there was a management company. Three different companies to start one company. And I made sure that all of the interests of all three were aligned for the long-term. Which means that 15 years later the investors in Alinea still get a really nice check every year. A lot of restaurants lure people into the investment group by saying, "Well, you'll always have a preferred table," or you'll always have this or that. And we did the opposite. We said every one of the investors will pay, including myself. If I dine there ... All of the investors get 20% off. If you send someone there and you send a friend, you pay. And that way someone who comes there 80 times a year contributes. Same as someone who comes here twice a year. How will we run it in terms of volume? If you're shooting for perfection in a Michelin three star restaurant, you do 40 to 50 to 60 people a night. And that's it. That's a lot easier than doing 120 people a night. Lot easier at that level. So we were always looking for ways to expand revenue, to grow, to come up with innovative ways of actually making it a business. And by making it a business we could then reinvest in the experience of our customers. And if anything, it gives you a giant head start. And so when I'm talking to chefs that are restaurant owners I show a picture of five artists, Picasso and Da Vinci and all these people and I'm like, four of the five of these guys died rich on their art and one of them cut off his ear. If you want to die for your art and cut off your ear, go right ahead. I'm fine with that. I just don't want to be invested in that as a business. Picasso was prolific but he was also really clever and he was a genius. So they're not mutually exclusive. And I think that's the attitude we took right at the beginning. There's an old Picasso documentary from the '20s and I didn't really know Grant very well when we started this whole thing and I dragged him over to my house and was like, "You will watch this." And it was just Picasso painting. It wasn't doing anything else.
· Nick Kokonas, Patrick O'Shaughnessy
And he was like, "Why am I watching this?" I was like, "He made that in the '20s to promote himself. Think about that." The best living artist at that time agreed to do this thing to show the process. Why? And we ran it almost like a political campaign. We had words that we would avoid every interview. [00:00:00] S0: What words would you avoid and what words would you use? That sounds very interesting.
· Nick Kokonas
[00:00:00] S1: Two words that we would avoid were Avant Garde and science. Grant considered his cooking Avant Garde. He even thought about calling the restaurant AG. I was like, "Well, you automatically eliminate 90% of people." No one wants to eat science. It's one thing to talk about the science of what everyone was calling molecular gastronomy, but even that was a misunderstood term because it was actually coined by Hervé This and it was about the component aspect. Almost like Pointillism. It wasn't about manipulating individual molecules. So we would have press call us and ask, "Oh well, you practice molecular gastronomy. You're really into science then because you're moving molecules of food around." The guy's a chef. He's not a physicist. So those two words we avoided because I think that they alienated potential customers. And then the two words that we used in every interview and still do, fun and delicious. Because it's so simple but so hard to find. Because when you go to a great restaurant, whether that be your corner bar or the best Michelin experience you've ever had while you're traveling, I guarantee you it's fun. It's not snooty. It's not someone looking down their nose at you. You feel like you're part of this pageant that's going on in fine dining. And you should be part of it. You should be one of the actors, not an audience member. And then delicious is obvious. It has to be delicious otherwise it's just a farce. Every interview you ever see of us still to this day when someone asks about the science or the process or whatnot ... And I'm doing it right now. Everything we do has to be fun and it has to be delicious or we will not do it.
· Patrick O'Shaughnessy
[00:00:00] S0: I'll just give a quick testimonial. When I was there, the way that dessert was served was that Grant came to our table, laid down this kind of funny latex tablecloth and basically created for like a half an hour a Jackson Pollock dessert. All sorts of different ingredients. Like literally painted the dessert on our table which was incredibly fun. And of course me being me I'm asking him about where does this latex come from? Is it going to impact the taste? He said I was the first person that had asked him that question. And he was talking about its origin in the S&M industry in Europe or something at some crazy place.
· Nick Kokonas
[00:00:00] S1: Yeah, yeah, yeah. That's actually true. So this is a good way to show how in any business you ask the right questions. So one of the questions that we wanted to answer was that we ask the question, well when in your life do you feel like something's new? The older you get the fewer new experiences that you have. And so when you have one you kind of crave that. You're like wow that was really cool. At the same time you become more closed to them as you get older. It's natural I think. We were like, how do you become more childlike? What is a way to make an adult feel like a kid again? A number of the dishes at Alinea came out of that question. One was the balloon dessert. It's like an edible balloon. When you're a kid you get a helium balloon and literally you could play with that thing for hours. It's like magical. It floats. That's really cool. We sorted out how to make an edible helium balloon. It's so simple. It's just like a taffy. It's nothing crazy delicious. But it's wildly fun because you feel like a kid again. How in the word does a Michelin star restaurant give you a floating balloon and then make a mess of yourself while you eat it? We were asking that question. And I remember going to a museum where everything was really big. So they had like a table so that if you were a 5'10" adult and you sat down at a table you would physically feel like you were when you were three. The plates were big, the chairs were big, the counter was really high. I don't even remember where it was but it really stuck in my mind. And I said like, "Well, we should make everything giant to make you feel literally small again." And so I came up with this idea of a table plate. Literally a plate the size of a table. And we made a couple up. It was very Willy Wonka and Alice in Wonderland and all that. Had giant forks knives and stuff. It was really stupid. But as soon as you actually did that it was kind of like, well you're going to hit someone in the head with this 80-pound plate and where are you going to store it and wash it? There's practical considerations. In the midst of all that I would talk to Grant at the pass in the kitchen and he would be plating things and I would be watching him do the saucing and the plating and all that. And occasionally I'd pick up a spoon and I'd do a plate. He'd fix it.