May 15, 2024 • 3hr 16min
#737: Naval Ravikant and Nick Kokonas
The Tim Ferriss Show
Key Takeaways
- Honesty and integrity are core values that guide Naval Ravikant's decision-making and interactions with others
- Naval looks for intelligence, energy, and integrity when evaluating founders and potential investments
- Reading broadly from diverse fields outside one's expertise can provide valuable insights and perspectives
- Cultivating non-judgmental awareness through practices like meditation can help reduce suffering and increase happiness
- Replacing bad habits with positive alternatives, rather than just trying to eliminate the bad habits, is an effective approach to behavior change
- Nick Kokonas' background in philosophy provided a strong foundation for his later success in finance and entrepreneurship
- Kokonas approaches business challenges with an eye for identifying and addressing hidden inefficiencies or "black boxes"
- Kokonas has found creative ways to disrupt traditional models in industries like restaurants and publishing
Introduction
This episode is a "super combo" featuring segments from two previous episodes of The Tim Ferriss Show - episode #97 with Naval Ravikant and episode #341 with Nick Kokonas. The podcast recently celebrated its 10-year anniversary and 1 billion downloads, so this special episode curates some of the best and most impactful conversations from the show's history.
Topics Discussed
Naval Ravikant on Honesty, Investing, and Mindfulness (5:53)
Naval Ravikant discusses his core values and how they guide his decision-making, especially when it comes to investing in founders and startups. He emphasizes the importance of uncompromising honesty, explaining that he learned this from physicist Richard Feynman's admonition to "never fool yourself" as well as from growing up around the Russian mob, where even sworn enemies would keep their word.
When evaluating potential investments, Naval looks for three key traits in founders:
- Intelligence - Founders must have a deep understanding of the problem they're trying to solve
- Energy - Founding a startup is brutally difficult, so founders must have the perseverance to see it through
- Integrity - Founders must have a strong moral compass that rises above financial incentives
Beyond these startup-specific traits, Naval emphasizes the value of reading broadly across diverse fields, including philosophy, to gain new perspectives and insights. He is particularly drawn to the "rational Buddhists" like Sam Harris and Jiddu Krishnamurti, who provide clear reasoning and instruction on training the mind.
Defining Success (18:38)
When asked who he considers successful, Naval rejects the common notion of success being tied to wealth, power, or status. Instead, he defines true success as the ability to be at peace with oneself and one's circumstances, regardless of external factors.
Naval explains that happiness is a skill that must be developed, just like any other, through practices like cultivating non-judgmental awareness. He describes this as the ability to observe one's thoughts and emotions without getting caught up in them, which can reduce suffering and increase overall well-being.
Replacing Bad Habits with Good Ones (26:08)
Naval emphasizes that replacing bad habits with positive alternatives is more effective than simply trying to eliminate the bad habits. He provides the example of his own transition from an average student to a straight-A student, which he attributes to adopting the practice of active recall - the process of retrieving and replicating information from memory rather than passive review.
Naval also discusses the importance of developing "boredom tolerance" and embracing periods of solitude and lack of external stimuli, as these can facilitate deeper learning and self-awareness.
Nick Kokonas on Behavioral Economics, Philosophy, and Disrupting Industries (35:46)
Nick Kokonas, co-founder of the Alinea Group and the software company Tock, shares his background and approach to business. Kokonas explains how his studies in philosophy provided a strong foundation for his later success in finance and entrepreneurship, teaching him to question assumptions and think critically.
Kokonas' interest in behavioral economics, particularly the work of Richard Thaler, has heavily influenced his business strategies. He seeks out opportunities where there are "black boxes" of opaque information that should be obvious, and then works to bring transparency and efficiency to those areas.
Disrupting the Restaurant Industry (48:41)
Kokonas describes how his partnership with chef Grant Achatz to open the acclaimed restaurant Alinea was born out of a chance encounter and a shared passion for rethinking the dining experience. Rather than simply following industry norms, Kokonas and Achatz questioned every aspect of the restaurant experience, from the tables and tableware to the reservation system.
This questioning mindset led Kokonas to develop a revolutionary ticketing system for Alinea and the Aviary bar, which replaced the traditional restaurant reservation model with a more transparent, dynamic pricing approach. Kokonas faced significant resistance from industry players, but ultimately proved the viability of his model through its success.
Disrupting the Publishing Industry (52:52)
Kokonas applied a similar disruptive approach to the publishing industry when creating books for Alinea and the Aviary. Dissatisfied with the opaque economics and practices of traditional publishing, Kokonas negotiated innovative deals that gave the restaurants more control and a larger share of the profits.
For the Aviary book, Kokonas recruited a unique creative team - a visual effects artist and his wife, a graphic designer - to produce a highly ambitious, visually stunning work that defied industry norms. By self-publishing and leveraging modern marketing and distribution tools, Kokonas aims to sell the book directly to consumers in large quantities, potentially upending the traditional publishing model.
Conclusion
This "super combo" episode showcases the insights and perspectives of two highly successful individuals - Naval Ravikant and Nick Kokonas - who have approached business, investing, and life with a commitment to honesty, critical thinking, and a willingness to challenge conventional wisdom.
Ravikant's emphasis on cultivating integrity, energy, and intelligence in founders, as well as his embrace of mindfulness and broad intellectual curiosity, provide a framework for navigating the startup world and life in general. Kokonas' background in philosophy and his application of behavioral economics principles to disrupt industries like restaurants and publishing demonstrate the power of questioning assumptions and seeking out hidden inefficiencies.
Together, the lessons shared by Ravikant and Kokonas underscore the importance of self-awareness, creativity, and a commitment to continuous learning and improvement - qualities that can foster both personal and professional success.