Feeding Frenzy! OpenTable Goes Public And Parties Like It's 1999
In an economy where IPOs have been deemed a thing of the past and restaurants are shuttering left and right, SF-based OpenTable defied it all today and very successfully went public to much hullabaloo. “Partying like it was 1999,” as Siliconvalley.com put it. “The region had gone a record 15 months without a venture-backed initial public offering on U.S. markets.” Shares started at $20 and ended at $31.89. Anyone that thought they couldn’t do it "has been proven grossly mistaken," said Digital Daily. It was the best performance since 2007," said the Wall Street Journal.
Hard to imagine that there was a time when you actually had to speak to someone in order to book your dinner reservation. Joe Hargrave (my boyfriend and owner of Laiola restaurant) and I were just talking about this, and he was harking back to when he worked as the GM of Lulu. In a very official phone interview I just conducted with Mr. Hargrave, he recalled: “It was sometime around 1997 or ’98 when founder [and then CEO] of OpenTable, Chuck Templeton, came into Lulu with nothing but his laptop—OpenTable wasn’t a viable thing yet. He just wanted me and [chef] Jody Denton to shoot holes in it. And there were a lot! When he left the meeting it seemed like there was a lot of work to do but six months later he came back and it was good to go. When I went to work at Azie, we used it. We were one of the first restaurants to try it.”
Today—in the eyes of many diners—if a restaurant doesn’t exist on OpenTable, they don’t exist at all. (Unless, of course, you’re Delfina, who continues to defy the typical path to restaurant success.) But what many people don’t know is that, for small restaurants, OpenTable makes for some hidden costs: It’s $199 per month per terminal to have the software (most restaurants have more than one terminal), and $1 per person that reserves a table through OT (in other words, a party of four costs the restaurant $4). Do the math: Say you get 500 diners a month this way (which isn’t that much), and you have two terminals—you’re looking at about $1000 a month. A lot for a small establishment.
Not that I'm advising you actually pick up the phone, but just know that if a restaurant doesn't partake in OpenTable, they might still be open for business—just probably not as financially secure as Chuck Templeton.