I am still waiting for the day someone takes down opentable. I'm at an incubator right now, and one of the partners had suggested we compete with them head-on because they operate so traditionally, especially with their equipment and high fees. There is definitely room for someone to take them on with a new software based model, but I think most start-ups are probably afraid of the sales effort and skills they'll need.<p>I'm invested in the hospitality industry right now and their profit margins are razor thin at 3-8% for those that survive. Of course on top of high sales it's not too bad, but most say that they were better off before opentable.
As they say in the article, a great app and an iPad can easily dethrone opentable.<p>I hate business like opentabke and groupon who wuck the blood of their customers just because they are the only game in town.<p>Until a better alternative hits them by surprise...
This is what success looks like. As a two-sided marketplace OpenTable is a fantastic business with very high barriers to entry. This is classic case of investor patience paying off.
If it didn't help their business, they wouldn't be on the system.<p>It's an ultracompetitive business. I'm sure any restaurant owner thinks he'd be doing great if it wasn't for credit card fees and rapacious landlords and city codes and taxes and whatnot. But if those went away the business environment would still get as tough as it needs to get to keep out the non-hackers.
This is one of several articles that expand on an essay written by SF restaurateur Mark Pastore and published in the SFGate and on his site.<p>The original is also well worth reading: <a href="http://incanto.biz/2010/10/22/is-opentable-worth-it/" rel="nofollow">http://incanto.biz/2010/10/22/is-opentable-worth-it/</a>
For those who are interested, the incanti.biz blog post was discussed on here about a month ago.<p><a href="http://news.ycombinator.com/item?id=1904689" rel="nofollow">http://news.ycombinator.com/item?id=1904689</a>