Arbitrage as a Business Strategy
Nick Kokonas via My First Million · Interview on My First Million (2026)
Identifying and exploiting arbitrage — mismatches in price, value, or experience — is a powerful approach to building businesses across industries. Nick Kokonas used this lens to transition from derivatives trading to high‑end dining (Alinea) to restaurant software (Tock), each time finding inefficiencies that technology or innovation could capture.
Core Concepts
The Problem
Entrepreneurs often look for entirely new ideas rather than repositioning existing models to capture value gaps.
The Claim
Businesses can be built by systematically searching for inefficiencies in existing processes and applying cross‑industry mechanics to close the gap.
Key Evidence
- •Kokonas co‑founded Alinea by recognizing that fine dining could be priced like a theater ticket rather than a per‑item meal, solving the no‑show problem and maximizing revenue.
- •His ticketing platform Tock emerged from the frustration with traditional reservation systems, applying the arbitrage principle to the restaurant industry itself.
Practical Implication
This framework encourages founders to look for broken experiences and repackage proven solutions from other domains.
Nuance & Limits
Not all arbitrages are sustainable; many close quickly. The key is to find those with high barriers to imitation, such as deep industry knowledge or a unique cross‑disciplinary combination.
Source Material
Citation Density
Emerging
Gaps
- ⚠ Needs broader citation beyond Kokonas’s own experience—other entrepreneurs who explicitly use an arbitrage lens to build companies.
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