Just to be clear, Reservationhop--the line jumping fake name reservation making most hated startup idea on the internet right now--is not a particularly good idea.
- It's too small of a market with too little monetization per transaction.
- It's rather easily foiled by ID checking.
- It doesn't provide restaurants with any value.
It is not, however, any more morally bankrupt than what a lot of other startup people fawn over. I'm finding all the ethical hemming and hawing over this to be rather inconsistant.
Napster was totally cool because you got free music, which all us regular people and poor college kids love, while sticking it to The Man (record labels). Totally illegal, but I don't remember too many internet people questioning its ethics.
YouTube was totally cool because "Look, video! And no plugin!" Remember all those things you haven't seen in forever? Yeah, all here. Yay free copyrighted material! Did I miss the ethical posturing at the time?
And when affordable housing advocates complain about Airbnb, they're just standing in the way of innovation, right? Screw the law!
Tor's cool, right? Go Tor! IP masking FTW! Because it's not like we're all using it to watch things we're not legally allowed to because of broadcast rules.
And damn that Supreme Court for forcing Aereo to pay for TV rights the same way all the other TV providers need to!
But, God forbid anyone should mess with Opentable. Jesus, Mary and Joseph! People are up in arms over Reservationhop--the service that sells off hard to get reservations made under assumed names. It's ruining the restaurant business! How dare they!
Ok, let's get something straight. No one funded this thing. There's no board. It's just a guy poking holes in a system testing out demand.
We normally ok this kind of startup tactic. "Don't ask for permission. Ask for forgiveness."
We tell startups to poke the bear and become a thorn in the side of big companies so that they have to buy you or at least bring you into talk about deals. Maybe Reservationhop becomes so annoying to Opentable that they talk about a deal?
Or is the ethical issue with auctioning off a place in line?
Let anyone who has never hired a Taskrabbit to buy a cronut or a Shakespeare in the Park ticket cast the first stone.
Restaurant reservations are a totally bullshit process. If you were Jennifer Lawrence and you walked into any hard to get into restaurant at any time, there would undoubtedly be a table for you--almost immediately.
In fact, I got pitched by a startup that told me nearly a quarter of all peak reservations at top places get cancelled the same day. People are already doing Reservationhop--but they're doing it giving their real name, using their assistant. The system is already full of fake reservations that are just placeholders.
Plus, these are places where there's probably an hour and a half long line of people not in the Opentable system that are just waiting at the bar for an opening.
So instead of dismissing the idea with such disgust, you could have just as easily said, "Hey, this doesn't work at scale, because restaurants will just start checking IDs."
But that doesn't mean it isn't worth doing.
Maybe it exposes something really potentially valuable to restaurants that they don't have: A list of the people who want to eat at that place so badly that they're willing to pay extra money.
Wouldn't most restaurants want that list--not to charge them but to make them their best regular costomers?
There's a pony in there somewhere--and it isn't charging the customer $5 extra bucks. Actually, money probably isn't even the best currency. What about someone with half a million Twitter followers. Is it wrong for a restaurant to open their doors to that person ahead of others because they need the marketing channel? Let's not dismiss the idea of even asking the question and lambasting experimentation around it.
Reservationhop isn't messing with the restaurants so much as it is messing with a monopolistic middleman that has long overstayed its welcome. Restaurants deserve a better, more economical, way to distribute tables, and customers deserve more transparency and fairness.
Opentable is a near monopoly in the reservation space--and most of the restaurants don't even like it. They have to pay a ton of money for each customer when their margins are already super thin. It deserves to be messed with just like the music publishers or TV broadcasters who have taken too big of a cut for too long.
Fairness, you say?
Yeah. If you told me I could get a reservation now for $10, I'd call that fair. Douchey? Sure. But, at least I know what I'd need to do to get it. Right now, I need to tell my assistant to pre-book three months in advance and cancel every day that I don't use it--because that's what everyone else's assistant is doing. Or, I need to be some reality show celeb on whatever the current hot reality show is. That's less fair than the $10 in my mind.
I wouldn't fund Reservationhop because it's probably not a big enough problem worth solving. Most places you can get into just fine--and the really hard to get into places--well, there just aren't that many of them to create a big enough marketplace to get into them.
But, I'd never fault the entrepreneur for the act of trying something where no one really gets seriously hurt--and I'm just not seeing a lot of hurt here.
The tactic is questionable, but *more* importantly, it's just not scalable. That's where it breaks down first for me--not because the reservation is fake. A huge number of them are fake--because tons of people have no intention of really eating there at that time. Perhaps if you poke around this broken system enough, you find a real solution. You don't get there, however, without some experiments.
Sometimes, those experiments mean building arrays of little antennae and going to court. Other times, it means offering up your apartment, uploading videos, or putting taxis on the road while you're being taken to court. We tell startups to break eggshells all the time. Let's at least be consistant about it.
Plus, if anyone really did find a way to take down Opentable, I'd be all about that.