Key Takeaways

  • Nick Kokonas generated $100 million in profit in a single year by finding pricing slippage between early ETFs and their underlying equities.
  • His trading firm ran physical fiber optic cables directly between exchanges to execute trades before other participants could react.
  • Kokonas applied that same arbitrage lens to fine dining at Alinea, generating $26 million in annual revenue at nearly 20% margins.
  • Natural money-makers never turn the instinct off, as Kokonas showed by buying a $1 million private wine collection for $150,000.

Kokonas Found $100 Million in Fiber Optic Cables

Shaan Puri points to Nick Kokonas as the classic example of a natural money-maker. Kokonas started in the Chicago trading pits, where decisions were immediate and unforgiving. As Puri put it, a trader “runs their own book of business... you would basically walk away and you either won or lost a house.”

In the early days of exchange-traded funds, Kokonas spotted a structural gap that the rest of the market overlooked. Puri explained the mechanism: “So what he realized was as ETFs were getting popular at the early days, the cost of the ETF, like let's say the 100 stocks that you were trying to buy was not the same as if you actually go and find each of the hundred stocks of their current price in real time. There was a little spread, a little slippage.”

Kokonas did not just notice the difference; he committed serious capital to capture it instantly. His trading firm ran physical fiber optic cables directly between exchanges to front-run the delay. Puri noted that in “his best year, his company made a 100 million in profit off of one arbitrage that he found.” Most founders build complicated products and fight for modest margins. Kokonas found two prices that were supposed to match, exploited the spread between them, and walked away with nine figures.

Alinea Proved Restaurant Margins Are a Choice

Most people who make nine figures in financial trading walk away from stressful businesses altogether. Kokonas did the opposite: he partnered with chef Grant Achatz to open Alinea, an ultra-high-end restaurant in Chicago.

Opening a restaurant is typically financial suicide. Puri highlighted the standard industry math: “And in a in an industry that famously sucks as a business. Like if you say, what are some of the worst worst businesses you could start? A restaurant would be up there. And yet as a natural money maker, he goes and creates this thing that at its peak, Elini was doing, you know, 26 million a year in revenue with almost 20% profit.”

He reached those numbers by rejecting standard hospitality customs. Kokonas treated empty seats on off-peak nights and empty tables from cancellations as pricing errors rather than inevitable costs of doing business. Traditional restaurateurs accept late cancellations and ingredient spoilage as normal friction. Kokonas approached the entire operation like a trading book, using dynamic ticketing and non-refundable reservations to lock in profits before service even began.

Arbitrageurs Hunt Mispricings Everywhere

The behavioral trait that separates pure arbitrageurs from traditional founders is that they view every transaction as an asset spread. They cannot turn the mental filter off.

Puri recalled a conversation with Kokonas right after recording an interview: “And while I'm talking, as soon as we get off air, he's telling me about this like current arbitrage he's found with wine collections. And he's like, 'Dude, I just bought this million-dollar wine collection for 150,000.'”

Private sellers frequently inherit or liquidate extensive wine collections without the infrastructure to test, store, or sell individual bottles at fair market value. Kokonas recognized an illiquid seller who valued speed over price, matched it against an active secondary retail market, and took the spread. He absorbed the friction, solved the logistics, and captured an $850,000 discount in a single transaction.

What to Do With This

Audit your company for inventory or time that you give away for free because of traditional industry habits. If clients cancel meetings late, demand unbilled custom changes, or expect flexible delivery schedules, stop accepting that friction as a normal cost. Introduce mandatory upfront deposits or non-refundable pricing tiers this week to turn your operational leakage into guaranteed revenue.