Tripleseat: Building the Next OpenTable Outside the Valley System
Over the last week I’ve gotten several pitches from companies taking a new twist on OpenTable’s business. One of two things has happened: Either there’s a new flurry of activity around the restaurant reservation/recommendation/lead generation space or having groused about OpenTable and recently posed a question on whether they should be disrupted, I’ve just become the go-to target for anyone launching a business in this space. Either way if you’re a restauranteur looking for a better way, watch this space, because the topic will keep coming up.
One pitch that caught my attention was Tripleseat, and the company is announcing a $500,000 round of funding later today from Omaha-based Dundee Venture Capital. (More on that round in a second.) TripleSeat isn’t really trying to be an “OpenTable killer.” It’s focused on streamlining the experience of booking and organizing private events, not just one-off restaurant reservations. And its business is not limited to restaurants. Its customers include other places you’d have events like large hotel chains, bowling alleys and boats. (Note to Heather Harde: Can we have our Christmas party on a boat? I’m envisioning something like the one above, and Arrington wearing a hat like Michael Scott in the Booze Cruise episode of The Office. Awesome.)
Tripleseat’s founder, Jonathan Morse, says an average client makes 30% of their income from private events and managing them is a huge headache, because they take a lot more coordination and details than a restaurant full of individual diners. Especially since private events tend to come in clumps, especially during the Holidays. As someone with 20 years experience in the hospitality and restaurant business, he’s seen the pain first-hand. OpenTable isn’tÂ optimizedÂ to handle it and most restaurants are just using pen and paper and basic Excel files.
But the opportunity aside, one reason to watch Tripleseat is that they’re building the company completely outside the usual Silicon Valley Web echo-chamber. The company is headquartered in Boston, and turned to Omaha for its Web development and, now, its funding. Until now the company has been bootstrapped, and it’s done pretty well with no cash: It manages $140 million in event revenues for about 100 customers, many of which are sizable hotel and restaurant groups. The company’s revenues are a fraction of that, they charge between $100 and $300 a month for their software as a service package. But it’s an indication of their value to a restaurant or hotel.
Morse and a handful of sales people have built the company since 2008, mostly doing meetings over the Web and cold-calling, boldly saying his business doesn’t need a big on-the-ground-sales team. I’m not so sure he’s right, at least if he wants to become a large company. Software as a service products are great for getting revenues quickly, but most of the big ones have built huge salesforces and taken a decade or more of work to get to point where they could go public. OpenTable, although a hardware and software solution, is a great example of that playbook done well. But I respect Morse’s staunchly anti-Valley mindset. He believes this business will take time to build no matter what and organic and sensible growth is safer than rather than raising a ton of money and throwing dozens of sales people at the problem all at once.
Every week on my TechCrunchTV show, Ask a VC, we get questions on how cities like Omaha and entrepreneurs like Morse who have deep domain expertise, but aren’t coders and are outside the Valley system can get attention from VCs. And nearly every guest always says look to your own community first, build something good and money and attention will come. Maybe Tripleseat will take double the time to get to OpenTable’s size, but the company deserves props for taking that advice and building a solid business whether they get the Valley’s blessing or not.