OpenTable was a great story. (I wrote about it almost exactly three years ago here.) To refresh your memory, the company went public in March, 2009 at the bottom of the stock market with a market cap of $700 million. Two years later its market cap rose to 5-6x that figure, before falling back to $900 million. At that point, many pundits wrote OpenTable off for “dead”, but it worked its way back to a market cap of $2.6 billion when Priceline bought it this past July.
As you know, OpenTable helped diners make reservations at restaurants and helped restaurants get rid of their paper reservation book. But what about casual dining restaurants that do not take reservations–take TGI Fridays, Buffalo Wild Wings, or Little Serow, the hottest little restaurant in DC? These restaurants typically ask you to call or come in, put you on a paper wait list that looks sketchy, and then may hand you one of those plastic disks that lights up and buzzes when your table is ready. A few restaurants may take your phone number and text when your table is ready.
NoWait, which just raised $10 million in their Series B, aims to improve this process for the restaurant and their diners alike. Using their smart phones, diners can find and get in line at participating restaurants without physically being there. The NoWait app (http://nowaitapp.com/dining/) clearly shows wait times and place in line, and confirmations are delivered by text message. Who wants to wait in the restaurant lobby when you could wait at home, go shopping, or have a drink somewhere?
For the restaurant, NoWait offers complete wait list, notification, and floor map management for the front of house, delivered via iPad and/or smart phone. By putting this process in the cloud on an iPad, adding a seating chart and some analytics, adding some ability to make promotional offers in the text to the “waitee” and presumably helping restaurants build a diner database–NoWait hopes restaurants will buy their app and toss out those plastic, flashing, buzzy disks!
Statistically, NoWait appears to be a much bigger idea than Open Table in some ways. After all, only a tiny percentage of restaurants take reservations–though one has to remove fast food from the target market. And this idea could extend to any business with wait times, not just restaurants–how about the DMV, for instance?!!!
On the other hand, many of the target restaurants may not have a big wait list problem and if they do, they will be unlikely to pay the fees that Open Table was getting. (Ironically, Open Table was starting to get some pressure on its fees and some restaurants stopped taking reservations just to avoid them!)
In any case, there is a lot of room between this $10 million B round for NoWait and $2.6 billion for OpenTable. Personally, I cannot wait to see how this one develops!