OpenTable, the online reservation service, is one of the few venture-backed companies to go public this year. Its secret ingredient? Technology that restaurateurs actually like.
When online reservation service OpenTable (OPEN) went public in May, tech pundits gushed like foodies at a five-star restaurant. Some entrepreneurs and financiers hailed the $60 million initial public offering as a sign that tech startups -- and their valuations -- were poised to rebound from the economic downturn. "This was an overwhelmingly successful offering," a CNBC columnist declared, "and now others are lining up."
There's a delicious irony to OpenTable's status as a symbol of the (still unrealized) IPO renaissance: The San Francisco–based company almost didn't survive, let alone make it to a Nasdaq listing.
Formed during the dotcom boom, the company veered from one strategy to the next, burning through cash, and its venture capitalists nearly closed its doors. Eventually the backers brought in new executives, who reined in OpenTable's efforts to build a consumer brand and instead focused on forging relationships with restaurateurs -- a painstakingly slow and labor-intensive process that proved to be crucial to the company's success.
Today the outfit provides reservation services and, perhaps more important, customer-management software to more than 10,600 establishments worldwide. More
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