Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is OpenTable Worth it?

incanto.biz

Post reply on HN
Print view View original

71–80 of 87 posts

Re: Is OpenTable Worth it?

#71

Post by scottrafer »

I've looked at how OPEN's vulnerable a couple of times. What's not covered yet in these comments are the host's notes on each diner. When I make a reso, if the restaurant has made a note about me (tips great, gets pissy about being near the kitchen/lav, hard of hearing, whatever), it comes up when I check in. Those notes are not shared between restaurants.

There seems to be no global diner profile in the system and there's certainly no social aspect to figuring out where your friends have reservations or like to eat. That's where I think OPEN can be undermined. I'm not an Urbanspoon user, but I don't think they've cracked that nut either.

Re: Is OpenTable Worth it?

#72

Post by stevenwei »

jamiequint wrote: post #70
stevenwei wrote: post #63

Earlier quoted context omitted.

Yup, and accessing table availability requires integrating with the restaurant's point of sale system so you can track when tables are getting seated and cleared. Innovating technology wise in the restaurant space is pretty tough cause sooner or later you're going to hit the wall of having to integrate with a dozen or more point of sale providers, no matter what you're trying to do (mobile/online ordering, reservatio…

How bad is the barrier to entry though on the software side really? It's my understanding that Micros/Aloha (Radiant Systems) own 50-80% of the restaurant industry. If you hit that percentage with just two integrations it's really not that bad right?

Micros and Aloha are definitely the biggest two, and it makes the most sense to start there. But you also have to keep in mind that they both have multiple product lines (plus legacy systems), each with different capabilities and SDKs.

The worst part is dealing across vendors though. The APIs are incredibly inconsistent between them, and some are frankly, crippled.

Re: Is OpenTable Worth it?

#73

Post by ladon86 »

d2viant wrote: post #43
krosaen wrote: post #41

Earlier quoted context omitted.

I would hope so, but I remember reading that the hardware was one of the keys to their success; "here plug this in, it will do your table management. And by the way, people can make reservations now too." Maybe now a competitor could get by just having a really good ipad app for the restaurants (is this what urban spoon's rez is?)

Here's what I'm thinking. I'm already working on a startup, so I'll give this one away for free. Build the web app portion that allows reservations to be made from the customers perspective, just like they have now. Integrate it with Twilio so that the restaurant receives an automated call and can confirm/deny the reservation on their end, without having to deal with a bunch of new hardware. You just tell them that t…

I had this idea about 2 months ago and thought quite seriously about it, for the reasons you described.

But there are a lot of issues. How do you confirm to the customer that their booking went through? What if no-one answers? The customer experience just isn't that great.

Re: Is OpenTable Worth it?

#75

Post by illumin8 »

sandGorgon wrote: post #54
rubyrescue wrote: post #2

My sense is the point of sale aspect of OpenTable is what makes them so entrenched... it's not easy to replace the hardware, retrain staff, etc, and the article doesn't touch on this. Is there a startup competing in this space directly against OpenTable? Is Yelp the biggest potential contender (though i can't see them getting into the POS business)? Or Google?I could see google offering android-powered POS devices...

[ with 200$ 10.1' android multi-touch devices e.g. http://goo.gl/S5JHs (I would suspect that wholesale costs would be closer to 100$). ] For seeding 10000 restaurants, you would barely need a million and half dollars (not counting android app development). I daresay that you could make the interface close enough without infringing on copyright issues. The key is to lock down a hardware manufacturer who can supply the…

Or, spend a little more money and provide an iPad app. You get a proven reliable hardware platform plus it becomes a marketing tool - "choose our platform and you get a free iPad."

Re: Is OpenTable Worth it?

#76

Post by ig1 »

sp4rki wrote: post #49
ig1 wrote: post #15

Earlier quoted context omitted.

Gross or Net ? - 50% gross profit is common, I doubt you could find any developed country where 50% net profit was the norm for restaurants.

Net. I didn't say this thinking the US should have similar percentages though. This is attributed to the fact that labor costs in my country is easily one third to one half as expensive as labor in the USA. Perhaps there is also less overhead in getting ingredients. I'd understand a 10% ~ 20% percentage net yearly profit, having most restaurants in the lower bracket of course, but 4% or 5% seems extremely low to me.

It's not about labour/ingredient costs, but rather the competitiveness of the market. A healthy competitive market drives profit margin to the lowest sustainable point.

Supermarkets often have profit margins as low as 3-4%.

Re: Is OpenTable Worth it?

#77

Post by mattmanser »

rubyrescue wrote: post #2

My sense is the point of sale aspect of OpenTable is what makes them so entrenched... it's not easy to replace the hardware, retrain staff, etc, and the article doesn't touch on this. Is there a startup competing in this space directly against OpenTable? Is Yelp the biggest potential contender (though i can't see them getting into the POS business)? Or Google?I could see google offering android-powered POS devices...

In the UK there's at least http://www.godine.co.uk, who recently won our local startup of the year:

http://notttuesday.com/2010/11/11/and-the-winner-is/

Re: Is OpenTable Worth it?

#79

Post by smackfu »

tptacek wrote: post #7
philtoronto wrote: post #5

I want to call shenanigans on the profit margin in the restaurant business being 5%... OK, shenanigans.

Based on the 2004 Restaurant Industry Operations Report published by Deloitte & Touche LLP, average pre-tax profit margins range from 4-7% (4% for Full... Literally in the article summary right there on the first result of the SERP [restaurant profit margin].

The question is how many failing unprofitable restaurants are included in those stats. We all know the average new restaurant doesn't last long and hemorrhages money.

Re: Is OpenTable Worth it?

#80

Post by smackfu »

stevenwei wrote: post #65
d2viant wrote: post #19

This is an interesting opportunity to profit from. This company has massive expectations baked into it's stock price (NASDAQ: OPEN), trading at over a hundred times earnings. It's being massively shorted by the hedge funds. Combine the fact that there's relatively no barrier to entry with the rumors that their customer base isn't very satisfied makes for a huge opportunity to profit in the short/medium term.

I think people generally underestimate the sales challenges associated with selling tech to restaurants. Restaurant owners are too busy running their restaurants to be looking for this stuff themselves. That's why Groupon, Yelp, and OpenTable all have massive sales forces dedicated to finding and acquiring new restaurants. This costs money. The same pretty much applies to every other restaurant technology company, ev…

It's also worth noting that the $10.04 in the article includes a portion of the startup fees. So dropping OpenTable for some new solution wouldn't necessarily make financial sense since you would need to pay the startup fees for the new solution. And retrain your staff, etc.

It's debatable whether the startup fees should be included in the per-table cost anyways, given that is a sunk cost.

Post reply on HN