Think about the best restaurant meal you’ve ever eaten. Who should you thank for producing that experience? The master chef who perfected the recipe, the production chef who prepared your meal, the waiter/waitress who took care of you, the farmers who raised the ingredients, and even (though you probably never think about this) the cleaning staff. You might also thank the owner, who in a small restaurant was probably one or more of the people I’ve already listed.
But none of those people — probably not even the owner, the “small businessman” that conservative rhetoric idolizes — is making much money. None of them approach the wealth of Open Table’s founders, or even of the investment banker who managed Open Table’s IPO, or the speculators who have run up its stock price.
Doug Muder, The Weekly Sift (via kevin)
Interesting post. In my previous life in the DC area, I used OpenTable quite frequently; since moving to Brooklyn, I don’t think I’ve used the service once. Most of the restaurants I frequent in New York either don’t use OpenTable, or don’t even take reservations. Even when I did use OpenTable, I found that when I couldn’t get reservations via OpenTable’s app, I could frequently sneak a reservation in by calling the restaurant directly and speaking politely with the host. Two points for genuine human interaction!
The most interesting point in the article, however, is the charge that network effects drive the creation of pseudo-monopolies. We’ve certainly seen this trend in the last decade or so: Facebook, iTunes, Gmail, Google search; while there’s certainly a long tail for almost any service, it’s hard to find one that’s not dominated by a single player. (It will be interesting to see how geolocation services pan out: Foursquare, Gowalla, and Facebook Places haven’t found a winner yet.) But while network effects may drive users to a single service, the potential for open technologies can work wonders at federalizing the supply chain. The future of small business lies in enabling increased efficiency in supply chain management, rivaling that of large chains, using point-to-point services enabled by the internet.
Restaurants and diners use OpenTable for the same reason: it’s easy. It’s up to web designers and developers to drive the creation of interoperable, open data standards to prevent the “ownership” of any area of customer experience.
