TableXChange: A $250K Virtual Investment
Posted by Andrew | Posted in Startups | Posted on
Tags: $250K Virtual Investment, Advisor Garage, Entrepreneurial, Million Dollar Startup Game, Retail Innovation, Startups
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TableXChange is exactly what the name implies – a website that helps people secure hard to get reservations at some of the most exclusive restaurants. Want to impress by taking a date to Il Mulino’s to sample the divine Italian food of Chefs Fernando and Gino Masci but didn’t think to book ahead? If you’re lucky then you can buy someone’s existing reservation – the price for a secured reservation for two this Friday at 8pm is $35 bucks. Not too outrageous when you consider that’s the cost of three jars of Pomodoro Pasta Sauce through Il Mulino’s website.
Business Model:
Sellers can list as many reservations as they wish on TableXChange. There is a $40 cap on the amount that they can charge reservation ‘buyers’. How does TableXChange make money? Simple, for every reservation ‘sold’ TableXChange makes 12% of the agreed price. If the reservation does not sell, no harm no foul, it was free to list and the failed ‘seller’ does not owe TableXChange any cash at all. So, sell a reservation for $30, then TableXChange takes a $3.60 cut. You get $26.40 – not bad since you didn’t actually pay anything for the reservation – just five minutes on the telephone. Even at AT&T rates – that’s still a pretty good deal! 
Some Core Functionality:
- Free to list and free to search by restaurant, date, time, neighborhood and price
- Free to cancel the sale at any time as long as it’s not sold.Â
- No personal information is shared between parties – accept probably the name of the reservation i.e. Table for 2 for Smith but this only occurs when the reservation is sold
- Only three (3) reservations max at the same restaurant per night allowed
- Payment within 48 hours of reservation sale
- Pay and receive payment via Paypal. Easy!
Likes:
A neat idea!  Could do favors to buyers, sellers and restaurants especially if restaurants fill more tables if reservation makers sell their reservations rather than being ‘no shows’. As a busy married guy the ability to get reservations at the last minute at great restaurants could really help…especially for this special days when I know I should have booked 45 days beforehand, but let’s face it, who really thinks that far ahead? Â
Dislikes:
Just a few questions/concerns:
- As there is a $40 cap on the reservation price and a maximum of three reservations per restaurant per night, the very ‘special’ restaurant, in high demand will not be at the real market rate and should be snapped up quickly. This means that the really great restaurants that should ‘drive’ the adoption of this site may not actually be on the site for too long. If they are not there, why should I go?
- At some point these guys should try to integrate into a larger site that offers users the ability to see if there are reservations available without needing to buy it through the system. It would be plain annoying if I find I could have just called and booked direct for free.
- One obvious one is that TableXChange is just New York City and the Hamptons at this time. More place please.
Suggestions:
- Lost revenue opportunity: Members need paypal, they refer people to paypal but don’t use a paypal referral number. Odd! They could be making additional revenue from paypal for referals. This doesn’t cost members anything but is a ‘thank you’ from paypal.
- The restaurant listings do not include restaurant website links, descriptions or reviews. I know I should know every restaurant on the site by reputation but the reality is, I don’t! If I’m going to pay someone $30 for a reservation, I’d first like to check out the restaurant, the Zagat rating (here’s another potential revenue stream for TableXChange) and customer reviews.
My Virtual Investment:
With my virtual $1M, IÂ would virtually invest $250K! Today New York and the Hamptons, Tomorrow the United States, and Friday the World! There are some obvious spinoff opportunities but I’ll leave that for dessert!
Andrew – Founder
http://www.AdvisorGarage.com/community
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But what will the restaurants themselves think if the start getting lots of reservations that are purely those looking to resell them…