Nick Kokonas fucking hates OpenTable.
In truth, Kokonas despises the entire restaurant industry's approach to reservations. Intent on bringing about a reservation revolution, Kokonas developed a competitive table-booking site called Tock.
But that alone wasn't enough. Recently, Kokonas decided the best way to meaningfully effect change was to troll the shit out of OpenTable.
First, Kokonas created a meta-marketing plan that involved buying the URL opentablesaurus.com. Then, he hatched a scheme to have Tock employees hand out small toy dinosaurs emblazoned with that URL at the National Restaurant Association show this May. To greet passersby, he planned to put an inflatable, 22-foot-tall, 18-foot-long dinosaur outside the convention centre, all in an attempt to show that OpenTable was stuck in the "late Jurassic period of skeuomorphic computer design."
This thing is being passed around law firms. People are saying it's epic.
For its part, OpenTable appears to view the matter as little more than an infringement issue. The company provided MUNCHIES with the following comment: "We, like all companies, value our trademarks. When a company uses a domain name with a trademark it does not own, it's common practice for the trademark owner to request that the use of the trademark be discontinued. So this is really an example of a commonplace, cut-and-dry trademark matter."
We wanted to learn more about Kokonas's troll-marketing tactic, whether he had actually hoped to receive the legal threat, and why he has such a deep disdain for the reservation site.
MUNCHIES: Can you explain how the Opentablesaurus.com idea came about? Nick Kokonas: I had this image in my head of "What could be a better representation of this old, lumbering company than a brontosaurus?" By buying the URL, I knew—or let me use the word "hoped"—I hoped that OpenTable would do exactly what they did. Yeah—I mean, it's really, really predictable that the legal department of a giant, boring company will do the giant, boring thing of giving you a cease-and-desist on a trademark. So when they did it, I was like, "Awesome. I need to write up a really funny blog post." I was kind of hoping they'd sue us. A frivolous lawsuit would be amazing!
What's so bad about Opentable? From the consumer perspective, it's not that big of a problem—I fully admit that. To consumers, it's easy, convenient, and free. But the non-obvious bad stuff is the no-show rate—so the restaurants are going to overbook, and you're going to get worse service. And restaurants don't want to admit that they are doing essentially what the airlines do, right? That's a hated practice. Traditional restaurant reservations are predicated on two people lying to each other. The restaurant says, "We'll have you table ready at 8." And the customer says, "We'll be there." Some meaningful number of times, one of those parties is lying. Plus, their business model is so outdated. OpenTable was built in 1998 and it's very limited as to what you can do—you can only make a traditional reservation.
Why do you think that OpenTable hasn't fundamentally updated their approach if their system is so antiquated? Building a two-sided network is really hard. The holy grail is finding somebody who can build a B to B network that's also a B to C. OpenTable was built in 1998 and was called an ERB—an electronic reservation book. It literally looks like the book Danny Meyer used to keep in 1998. They haven't changed that approach because they didn't need to, but people almost never start their restaurant search on OpenTable. They mostly start on Google and go to OpenTable when they want to book. They do arbitrage using Google. OpenTable knows the average table is 3.2 people and they'll get $3.20 for that table reservation, so they'll just pay up to $2 for an ad on Google. It's savvy, but it's a dying model.
Would you say the industry has tried to address its self-perpetuating reliance on overbooking in any meaningful way? The most meaningful attempt is to take your credit card and charge you say, $75 if you don't cancel within 48 hours. But it's an empty threat for a couple of reasons. You haven't signed a contract of any kind, so it's unenforceable. So if you call your credit card company and just say, I never went there and they never provided me with any service, you're done. They'll give you back your money or the credit card company will say to the restaurant, do us a favour and issue them a gift certificate for the amount. If you issue a gift certificate, the restaurant still suffers the same economic loss. The administrative cost of doing all that crap is huge. Plus people don't want to give their credit card number over the phone—everyone's worried about security now. I would never give my credit card to a non-compliant host.
What has the response to your blog post been like? We're coming up on 20,000 reads. This thing is being passed around law firms. People are saying it's epic. My favourite re-tweet of all is that Sue the T. Rex [at Chicago's Field Museum] retweeted, "Any business that's a fan of dinosaurs, I'm a fan of theirs." I was pretty excited that Sue sent a retweet. It's been really fun. I've received a lot of email from top advertising and marketing firms around the country. Some of my heroes said, "That's a lot of carry on a small purchase." The cost of the whole thing was $19.95.
Why did you feel the need to start an alternative reservations service to OpenTable? The story goes back to 2010, when we were building Next restaurant for the Alinea Group. We had a lot of no-shows and it would be often that even on a Saturday night tables would go empty for no good reason. So I looked toward other forms of entertainment as inspiration, and decided to sell what we called at the time "tickets" to Next. I hired a single programmer and he and I made a [ticketing] system. The first day that we launched it, we sold $562,000 worth of bookings, prepaid to our new restaurant.
How big a problem is overbooking for restaurants overall? It's a massive, massive, massive thing. I was talking to a restaurant in New York today that typically overbooks by 1.4 times because they run a 35-percent no-show rate. In fine dining, overbooking runs probably, like, 8 percent of flat-out no-shows, and then if you add in partially seated tables—a reservation for four that shows up as a two, for example—that takes the no-show rate up to something like 14 percent. So, what a typical restaurant will do is you'll show up at 8 o'clock and they'll say, "We'll get you a table as soon as we can." And then they ship you off to the bar for 45 minutes. It's because they lied to you—they knew they wouldn't have a table ready by 8. But if they told you 9, you would have gone somewhere else. So they just flat-out overbook and lie to you. And I think that's bad hospitality.
Are all restaurants equally suited to benefitting from Tock or does it innately favour certain types of establishments like fine dining restaurants? Any restaurant that is going to take reservations we work for. Typically it's a $20 per person check and up. Any new restaurant that's opening up, literally anywhere in the world—if they don't look at us, they're making a mistake. And any restaurant with different experiences—like an omakase option—can be booked differently. Having choices side by side in any restaurant that offers unique experiences is awesome. We get about 50 inquiries a week of new restaurants. Also, great restaurants—market leaders with really high demand. We offer them a lot of opportunity to reduce no-shows, maximise revenues and all that. We're kind of taking the Tesla approach to that, which is go high-end first and work your way toward the middle market. In about ten days, The French Laundry is coming on. The market leaders keep coming on.
Thanks for speaking with us, Nick.
Editor's note: This interview has been edited for clarity and length.
Nick Kokonas is the co-founder of Tock and the co-owner of Alinea, Next, Roister, and Aviary.