

How Opentable makes money - daviday
http://www.businessinsider.com/10-things-investors-need-to-know-before-opentables-ipo-2009-5

======
binarymovement
My startup is working on an Opentable competitor (beta this fall, very
excited). The article points out the most important part of the online
reservation business..."restaurants are really paying $515 to gain 197 new
customers [average]".

They're charging for the wrong thing (big software/hardware cost upfront, and
price per reservation), and not focusing on the real value that they provide
which is generating new customers. The software should be almost free upfront
and easy to use. The focus of the business should be generating new customers
and helping restaurants better monetize and market to the diners that use the
system.

~~~
aaronblohowiak
They do charge per reservation and a monthly fee. The "big" purchase up front
is well-known in the restaurant industry as POS equipment is quite pricey, so
they may not mind the initial investment. The higher barrier to entry for OT
may also help keep up quality. Do you have a particular insight into the
restaurant industry that would suggest otherwise?

