Sarah Lacy wrote a good blog post about OpenTable today, a service that honestly, I haven't used much myself. Trouble with having a 7 year old, we just don't go out to dinner to restaurants where we care about reservations. Sad, but true. But, I really loved what she had to say about Zappos and the importance of building for your customers first. Far too many companies are run for their investors first and then everyone else second. I think companies like Zappos show that if you focus on doing a great job for your customers, investors will be happy too.
As I said above, I get all this. And I get the climate during which OpenTable was founded. But compare the attitude to that of Zappos; a company founded at the same time and under the same harsh scrutiny. Zappos's core competency is customer service, even to the detriment of the company's bottom line. Zappos is doing about $1 billion in annual revenues-- the company could clearly cancel free overnight shipping and returns and move its call centers off-shore and have a beautiful balance sheet Wall Street would drool over. But its management actually gets what building a company for the long haul entails. (Emphasis mine)Mark my words: In ten years Zappos will be a far bigger, far more relevant business than OpenTable. Because while the convenience of booking a reservation online is great, it's not so great that you can ignore the users that make it all possible. I've long hoped Yelp might get into this game. I know they'd never get in the console/software business, but maybe there's another way to use the Web to solve the reservation problem. A quick Compete graph shows by focusing on community, the far younger Yelp has grown to 20 million uniques, per month, while OpenTable spent the last year flat at around 1 million.
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