OpenTable

“We took our salaries to zero and we created a leave of absent plan for our ambassadors so that when it really happened on March 12th, ah, we were prepared and pivoted to creating health pass and connecting people to their test information and ultimately their …”

“Jack GPT is to this generation what Google was to the last. If you think about Google is like the place where, you know, the front door, you go there, that's your big search. But if you want to, like, look for real estate, you go to Zillow. If you want to unde…”

“I don't think it's that different from other consumer tech businesses that you think about. Like, if you think about even Uber, for example, right? They spit up 10 times the amount of technology and services and tools for the driver sides, right? Not just that…”

“In the world, like there isn't anything like hotel tonight or open table for sports that doesn't exist anywhere in the world, really.”

“I completely disagree with that. A great example of this is, is open table. They started off as a booking system and then they become this billionaire billion dollar platform for a marketplace for finding a restaurant. So I completely disagree with that.”

“And if you decided not to invest in that time, you would have missed out on Google, Salesforce, PayPal, Zappos, OpenTable. There are a lot of great companies that were still founded during that time, and Paying market prices for those investments would have be…”

“The fact of the matter is open table saw that we were doing a couple of things and entirely passed on doing them. They saw that we were pricing tables and we were also distinguishing tables. We said, you know, not all restaurant tables are created equal.”

“The idea that more successful restaurants pay more is insane. You pay us a flat fee. Use the software as much as you want it.”

“For Grubhub, that's basically never true because the kitchen is essentially always an underutilized fixed asset. They can always pump out more food. 99.9% of restaurants can pump out more food. It's the front of the house that gets constrained because they're …”

“Open table by contrast had, you know, the target market was 30 or 40 or 50,000 restaurants Almost all of which were the, had one, the owner only managed one restaurant.”

“Open table is pretty interesting because it was a long slog before it became an overnight success because aggregating supply did take time. It was a classic come for the tools, stay for the network. Play. And so early on in a city, when you're just selling the…”

“There was a tipping point in each market. It's something like 10% of the target market supply where diners finally said, okay, this is so much more convenient than calling a restaurant one at a time, getting put on hold, getting voicemail, getting all this and…”

“Open table by contrast had, you know, the target market was 30 or 40 or 50,000 restaurants, almost all of which were the, had one, the owner only managed one restaurant. And so it was brutally hard to aggregate, but once you're aggregated, you know, it's bruta…”

“Open table is pretty interesting because it was a long slog before it became an overnight success because aggregating supply did take time. It was a classic come for the tools, stay for the network. Play.”

“We typically try to go to the very best restaurants and work our way down, so if French laundry's on there. You can't book it, but it's on there. You know, that, that gave some credibility”

“It's something like 10% of the target market supply where diners finally said, okay, this is so much more convenient than calling a restaurant one at a time, getting put on hold, getting voicemail, getting all this and that. So I would, I'm going to forego the…”

“The first product was for OpenTable. It was just allowing someone to make a reservation, put in their credit card number and have it stored. So to the user, it appeared as if I was entering my credit card information in the OpenTable system, when in fact they'…”

“When I got into the company, we were at a point at which the software that we had inside the restaurant was an old Microsoft on-prem distributed database, like not in the cloud.”

“We picked a street in Palo Alto and I said, give it all away for free. I said, I don't care. Don't charge anything. I just want to see if we can get a hundred percent of the restaurants on the street. And what was interesting was they came back and we literall…”

“Had that launched now, it'd be wildly successful because you think, see food delivery businesses and other things like that have changed the paradigm of what point of sale looks like in a restaurant, but we were just early.”

“Reservations are down 50%. And in other places where you would otherwise be, you know, a believer of the rhetoric that Or a believer of, you know, different versions of the news that painted this thing as anything less than a pandemic. What you saw was in some…”

“We don't, we would actually like to, but you know, the way our agreement works, you know mind, body, open table, they don't want us paying their reps you know, to sell our product.”

“They actually make those referrals because it's in their best interest to because once one of their clients is using our product, they're actually stickier and less likely to churn than if they weren't.”

“OpenTable and Airbnb are both typically much more episodic. Most people don't dine at fine dining restaurants with high frequency. Our median user dine twice a year on OpenTable, and so that has completely different marketing implications and user implications…”

“My diligence at OpenTable was I looked at San Francisco, which was their first market, and sales rep productivity grew over time. Restaurant churn decreased over time. The number of diners per restaurant increased over time. The percentage that booked through …”

“OpenTable, when I was managing it, did not pay any money at all to acquire consumers.”

“So my experience of the process in 2009 was we had 46 meetings in rapid succession where we had a flip board presentation and you had to give the presentation the same way every time, you know, so it became one of the most nerve wracking things. Was also one o…”

“Well, we started the process of going public at Open Table in fall, in late summer, 2008. And between the time when we had our bake off and awarded the business and the org meeting between Thursday and Monday Lehman went bankrupt. Merrill, our lead bank traded…”

“A venture-backed technology firm had not gone public in a couple years.”

“And the only IPO prior to Open Table in 2009 was a company called Mead Johnson, so a very defensive company, the type of thing that should go out in 2009 in consumer products.”

“The best companies often open windows that were then previously closed. So the best companies can go out whenever they want. The good companies typically want to wait for, till the investors are feeling good. The mediocre and bad companies want to get out When…”

“All due respect to Merrill at the time, they were, you know, they were not the top of the pyramid in terms of tech bankers, so we, because we were the only IPO, we had every bank wanted to do it.”

“Yeah, I know. So when we the original documents had a 12 to 14 dollar price range, I think we updated it to 16 to 18 over the course of the roadshow, because the roadshow was going well. The first two investors said, I want a full allocation. So it quickly bec…”

“Turned out the attorneys had, when they did the last turn, had attached the wrong attachments. The SEC had proved something. That we actually knew was Erroneous. And so if we started trading on erroneous document, there's a chance the SEC could say, no, no, no…”

“We were in the teens growth year over year growth rate. According to the analyst models, when we went out, that's not really a strong growth company. Then we increased growth in the 30, 40 plus percent.”

“I called the three largest holders and I said, should I give guidance? All three said no.”

“They build a suite of tools that they charge 200 dollars for and laboriously rolled out one restaurant at a Time throughout, you know, the country that had enough utility that a restaurant was saying, okay, I'll adopt that in the absence of a network.”

“And so the sales rep that initially in San Francisco and New York sold three restaurants a month, The same reps, in most cases, seven, eight years later, were selling 20.”

“And so in OpenTable, the entirety of my diligence on the company was, show me San Francisco. You've been in San Francisco the longest. Show me how the key metrics are going in San Francisco.”

“A lot of the best networks that are platformed here aren't spending anything on, on acquisition. I mean, it's just, it's kind of an interesting thing in marketplace. Facebook, no. WhatsApp, no. Medium, no. You know, just OpenTable, no. Just, you know, just, th…”

“Open table got raised enough money and spent it so slowly they were able to survive. The two direct competitors didn't open table ran unopposed for five years, which is the only reason they were able to get to their network effect.”

“The other was we forced a redirect from the Morton's website to the OpenTable, Morton's page on OpenTable to create the brand awareness, and that forced off, that forced redirect, the fact that we Converted restaurant people searching on Google for Morton Chic…”

“Over the weekend, the business, the entire restaurant consumption market dropped 15% because of the panic, and we worked Monday morning. That one lasted for, like, 15 months”

“OpenTable was an example of that. Early on, we sold tools because we needed to digitize the restaurant's inventory. Our entry strategy to get the restaurant, because we didn't have a network when the company started, was to give them tools. Once they had the t…”

“We, you know, we had a man century of development into our reservation system.”

“I think we had 40, 45% EBITDA margins in the S-One.”

“One competitor Urban Spoon, built a competing service on an iPad and gave the iPad to the restaurants with the free service. And said, you know, you don't have to use OpenTable anymore. A lot of restaurants tried it, and they came right back to OpenTable becau…”

“We went public in May, 2009 when I announced I was leaving in May, 20 11. The price was a 120. ... You know, but this is five X increase in value in under, just under two years.”

“It's about 32,000 restaurants, so we provide software that sits inside those restaurants, and allows restaurants to manage their inventory.”

“We sit about sixteen million diners a month”

“The way restaurants talk about themselves is not always how diners view them. And many times it's actually it's actually interesting that restaurants not even thinking about certain things, that diners who go there express themselves kind of on social media an…”

“All of our events flowing through Kafka, they've been populated into Cassandra, which then we run Spark instances that kind of model on top of the data.”

“We have thirty million reviews in, in our, kind of, in our database.”

“Every review that a person leaves, they only allow to leave if they, we know for a fact that they actually dined in that restaurant.”

“Non-negative matrix factorization allowed us to break things into just make them much simpler and find topics easier.”

“In San Francisco, people talk a lot about the view of the Bay, the view of the bridge. In New York, people talk about, ah, a view of the river, or view of the Hudson, ah, while in Chicago, ah, people talk about the city and the lake.”

“We also can teach our restaurants how to market on, on themselves on using words and descriptions that they wouldn't think about otherwise.”

“So, our, literally, it's our most polarizing day on reviews basis, based on one-star review versus five-star reviews.”

“For example, New York City, just looked, looked it up before I came to speak here there's a huge trend in cauliflower.”

“The model started to get smarter, so the model started to understand things like to die for, crispy, and moist are all positive words, which wouldn't, you wouldn't necessarily understand otherwise.”