Matt Roberts believes that reservations for dinner, just like airline tickets and hotel rooms, should be made online.
As the new CEO of OpenTable Inc., a 13-year-old company that lets foodies do just that, Roberts is eyeing an untapped market that could provide big growth opportunities. But he also faces the challenges of a competitive industry, a weak economy, and the fact that most people don’t seem to mind making restaurant reservations with an old-fashioned phone call. He estimates that only about 9 percent of restaurant reservations in North America are made online.
Still, the reservations capacity is what sets OpenTable apart in a sea of websites that let users write restaurant reviews or buy coupons for dining out — functions that OpenTable has added to stay competitive.
“Some (websites) might be able to tell you about restaurants, but they’re unable to tell you whether you can act on that by booking a reservation there,” Roberts said.
His San Francisco company has more than 20,000 restaurant locations in its database, covering North America, Germany, Japan and the U.K. The company recorded about $34 million in revenue in the second quarter, nearly twice what it made in the same period two years ago. It has turned a profit every quarter since going public in May 2009.
The company makes money by charging restaurants up to $1 for every customer who uses OpenTable to book a reservation. It also charges restaurants for the software that lets their hosts record reservations in an electronic database. Diners don’t pay to use the website.
Despite the revenue growth, OpenTable’s shares have been mostly in a free fall since April, when it topped out at more than $115. Some analysts say the stock was overvalued and is simply coming back to a sustainable level. But investors were also unnerved by former CEO Jeff Jordan’s surprise exit in May; Google’s purchase of restaurant reviewer Zagat in September; and concerns that the weak economy will crimp dining at the upscale restaurants that OpenTable focuses on, such as Morton’s and Ruth’s Chris Steak House.
The stock closed Wednesday at $46.20.
Roberts, 43, took over the top job on June 1, after his former boss left for the well-known venture capital firm Andreessen Horowitz. Roberts had been OpenTable’s chief financial officer for six years.
He talked recently with The Associated Press about how to run a meeting, take over a CEO job from a friend, and let go of his old responsibilities.
Q: What’s your leadership style?
A: Let’s say we have a particular decision to make. I value the input of folks around the table and I’ll get everybody’s feedback. But we are going to emerge from the meeting with a decision, rather than a pattern of continuous consensus building. I value all the input and I also value making decisions.
I’m fairly hands-off in the tactical aspects. I believe my job is to hire incredibly talented people and then not get in their way.
Q: How did you find out that Jeff Jordan was leaving and you would be the new CEO?
A: We’re all in cubicles, but Jeff and I stepped into a conference room and he let me know. I didn’t need to go through the stages of grief because I knew that Jeff would still be there for me as a supportive professional and friend. I actually had lunch with him yesterday. But sure, I was surprised, because it was new news.
Q: Every new leader has to win over skeptics. Has anyone ever told you that Jeff was the better CEO?
A: Fortunately I had a very active role as CFO in investor relations, so I’m pretty well-known to the investment community. A lot of the emails we sent were from Jeff-slash-Matt, so it wasn’t an abrupt change for folks. That made it a lot easier.
Q: Jeff is the executive chairman of your board, and another former CEO, Thomas Layton, is also on your board. Doesn’t that get awkward?
A: I can see how it could, but it really doesn’t. I am thrilled to have their collective understanding of the business available to me when I want to pick up the phone and brainstorm. It’s actually a significant advantage for a CEO — to the extent the individuals are respectful of the fact that they’re not the CEO any more. And I’m very fortunate that neither Thomas nor Jeff is trying to be the CEO in any way, shape or form.
Q: You picked your new CFO, Duncan Robertson, from outside the company. Why?
A: We were looking for somebody who had already proven themselves in the CFO world. Some of the risk of CFOs getting promoted to CEO is that unless they have someone experienced to step into their old role, they may try to stay in that old role too much. That’s not what I wanted to do and it’s not the right thing for the business.
Q: Are you worried that people are going to stop eating at higher-end restaurants because of the weak economy?
A: It’s not a focus of concern. Our opportunity in good times and challenging times is to help restaurants fill seats. Restaurants are a fixed-cost business, so when they aren’t full, it’s costing them profitability. What we saw last quarter is that our restaurants were up in terms of their seats filled by about 3 percent versus the second quarter of 2010.
Q: Are you worried about OpenTable’s share price?
A: Our business is growing at a very rapid pace so we think we’re doing very well. We’re hiring folks, we’re building new products and services — our belief is that’s the best and greatest use of our time. To the extent that investors are invested in the growth opportunities ahead of us, then they understand where we are in the cycle.