Todd Reed

Top-Top

04/03/2015

Todd Reed is the founder of Top-Top, a Chicago-based restaurant reservation service.

What motivated you to create this service?

I moved to Chicago going on eleven years ago. I met a midwestern girl and we wanted to get out of California, get back to the Midwest. We knew hardly anyone when we first moved here, so we spent our weekends going out with each other a lot. We were really looking forward to being in the big city, and we were really amazed at how embracing the city was. The accessibility was much higher than we had assumed it was going to be. All the restaurants that you’ve heard of before, you just assume you’re not going to be able to get into those places.

But for a table for two, we’d get home every Friday after work and start to look around at 6:00, and we were amazed that we were able to get into the places we wanted to get into. That really was a surprising thing for us, and was something that keyed our energy into watching how things grow. How the industry has changed so much from that point to now.

Chicago’s always been about food and architecture. Those are the two big draws, big attractions, particularly for people who are new to the city. That’s where you’re initially drawn, to the best food in town, the architectural elements of the city, the parks and all that fun stuff. And in the ten years that we’ve been here, being in real estate, I got to have a very first-hand view to the explosion, and how fast it really progressed, particularly in the West Loop.

It’s much more creative, people are out there doing new things all the time, we’re seeing more and more people being stimulated by that, and that’s creating compression in the market, and it’s making it harder and harder to get into restaurants these days. That’s somewhat new to Chicago, it’s just a threshold that was eclipsed because it’s something that you see happening in New York and San Francisco.

So is Top-Top an attempt to fight against the notion of exclusivity?

What we’ve tried to do is create a platform that can be used by anyone depending on what their needs and likes are. We’ve given them a couple of levers to push and play with. We are about convenience. We want the consumer to be able to look up a list on our site, and see a list of things that are going on, rather than a list of things that are left over. By setting a low flat price we want it to be very inclusive. Our business structure says we can’t be about exclusivity, we’ll never make any money. [laughs]

How specifically does Top-Top work?

We provide week-of reservations, a simple exchange of convenience for security. Right now, if you’re a consumer, convenience erodes as the landscape changes. If I want to get a reservation I have to do it earlier and earlier, two or three weeks out. That’s a lack of convenience, that’s going in the wrong direction. It’s becoming less and less convenient and more challenging for me to do that.

What Top-Top aims to do is to ask: why does the reservation landscape exist the way it does now? It’s because there’s only so many ways to do it. You can do it online, you can do it by phone, or you can do it by walk-in. And online is dominated by OpenTable, a system that’s free to consumers. Being free to consumers is a strength, but that business has to make money somehow, and they make money through restaurants. The restaurants give a certain number of reservations to OpenTable, and because they’re free they go two and three weeks out. People feel like they’re getting good bargains.

At a certain point the restaurants say: that’s enough, we’re not paying for it anymore, we can stop that flow. We can open our front doors and people will walk in. It’ll reduce their costs and they’re comfortable that they’ll still hit the same revenue marks that they otherwise would. That point, particularly for high-demand restaurants, is a ways out. That’s not happening a day or two before a Friday, a Saturday, or a high-demand period. Sometimes with the really high demand restaurants, it’s way further out. Nick Kokonas will tell you it happens two months ahead of time, at Next six months ahead of time.

We take that point, and we try to create a system that’s mutually beneficial both to the restaurant and to the guests. We start with the restaurants, and we say: if you still have, let’s call it a week, where you’ve stopped your flow of reservations coming in from OpenTable, and you’re not taking any more until people actually come through the door, that’s a week of risk to you, right? What you’ve said by stopping that flow is that you’re in high-demand--- and we agree, you have limited tables left over. So what you should be doing is getting something back for that.

Every table that you let go at that point, you should make sure that you’re getting what you want out of it. There are a couple terms that apply. The first is a minimum spend: by setting a level of consumption the restaurants now know that the people who are sitting down at that table are going to be engaged. It costs a certain amount of money to have appetizers, a number of main courses, perhaps you’re sharing dishes, you’re having desserts, you’re ordering bottles of wine.

That’s not to say the price is any different, because a steak costs the same on Friday as it costs on Monday. But holding those tables back for that convenience, we want to know you’re the type of guest that’s going to come in and engage and enjoy everything that’s there. There’s also a no-show fee. I still need to find someone to use that table and maybe they’re not the same kind of consumer that you promised me you were going to be. That’s only fair.

Those are the real functional elements of it. But really where it can start to be beneficial for the restaurant and the guest is when they start to look at the experiences they have inside their restaurant and find new ways to market those experiences. The other thing we noticed is that reservations are homogenous.

If I go to OpenTable, or if I call the restaurant, all I get is a reservation. I can pick a time and a number of seats that I want at that table, and my name is in a book. That’s pretty much as far as it goes. But in every single restaurant there’s so much more than that. There are the good tables and the not so good tables, there are the different experiences that I want to have. If I’m on a date I probably want the two-top over in a corner where we can have a nice, quiet conversation. If I’m entertaining someone, maybe I want something that’s center stage, something that has a lot more activity, a more entertaining environment.

Those things all exist in almost every restaurant, but people don’t know what to ask for, they don’t know where they’re supposed to be pointed. There’s no way for them to communicate that to the restaurant on their way in the door. And even if they do, there’s no assurance they’re going to get it when they walk in.

We think that all adds up to a situation where we can help to benefit both parties. Top-Top does this in a number of ways. First, by satisfying the restaurants, making sure that practical needs are taken care of from that point forward. Second, it satisfies the guest by creating convenience. We believe wholeheartedly that most guests don’t want to be booking two, three weeks out. And third, turning that corner and finding things that are much more interesting inside of the restaurant, not just a homogenous reservation.

What kind of restaurants do you want to use the service?

There has to be a period of high demand, where we know the restaurant is going to be full at a certain point in time. But that can really be anything. We’re at Moe’s Cantina, for example, where they’re a huge restaurant, they probably have three hundred seats. For dinner it’s not as much of a challenge to get in, but the clock strikes 10:30pm and there’s a line out the door. They saw Top-Top as a way for their guests to skip the line and have a place to sit once they actually get in. We were really encouraged to see a restaurant looking at it from that perspective.

There isn’t any specific genre or specific type that we want, it’s free for restaurants to use so if a restaurant wants to sign up we’ll sign them up. We then want to sit and work with them and create experiences that they’re going to be able to market. At the end of the day it does cost a certain amount of money so the consumer has to know that they’re getting something great for it. Hopefully that’s engaging for the restaurants also, we’re working hand in hand to extract those things and make them marketable.

What has it been like creating a tech startup in Chicago?

We’re all from Chicago, so this is where it makes sense for us to do it. We have forays into restaurants, we know people, we’ve done our research. This is the landscape we saw change, and we really believe that it’s ready now. There’s no one else out there doing what we want to do. A lot of people that we talked to told us: if you want to be successful you should do this somewhere else. You should do this in Los Angeles, you should do it in New York, you should do it in San Francisco in particular, where technology is really embraced.

The Midwest is a slow-growth environment, people are accustomed to doing things the way they do it, and unless they can already see it working in another place typically they don’t change. A testament to that is the way that our venture capital system works. If we were talking in San Francisco and you sat down with a business plan and you had something on your phone that you can show somebody, you can raise money to put that into play.

In Chicago you can’t do that. In Chicago you have to have it in restaurants, making money already, you have to have traction before anybody will even pay any attention to you. I think that’s fairly common around the entire culture. So it is a struggle, it’s a struggle to go to restaurants and they say: unless we can see it working we’re not interested, and then you talk to consumers and they say: unless we see it in restaurants... You talk to finance people and they say: unless those guys are embracing it, how am I supposed to do it?

I still think that Chicago’s the right place, because there is that accessibility. We can sit down and talk to the heads of large restaurants and hear what they have to say. The Melmans will actually get back to you and talk with you about it. If you’re in New York I don’t know if that’s the case. This is our town, so this is where we’re gonna do it.

You mentioned wanting to enhance not only the reservation process but the meal itself. How do you do both?

Normally, the most inhospitable portion is just getting in the door, right? If you’re lucky enough to be able to find a good table, a way to get into a good restaurant, it likely took you more energy than you wanted it to take. It was likely more confrontational than you wanted it to be.

You probably had to call four or five restaurants, really plan things out in advance, when you didn’t really know if your whole party was able to go yet. Those variables that cause strain and stress for you as a consumer. By the time you sit down, you probably had to wait at the bar for forty minutes still even though you had a reservation. Then you’re rushed through because they’re trying to turn a table and focus on making money. Lost in that is your ability as a consumer to make decisions and explain to the restaurant what you like, and the restaurant’s ability to interpret that and show you what they would give you back.

There’s got to be a lot more opportunities for that dialog to take place, and it should happen before the consumer gets there. We just set a level of expectation so everybody understands what they should be doing. Then they walk in feeling happy, they’ve already thought about it in their minds, they’ve mentally budgeted for the way the evening is going to go, and they have a good picture of it.

Then we want to have the chef come out, explain what these dishes are, tell us the stories. We document these things as they’re going on so we can make sure that the restaurant’s story is actually being told, we want to be show each one of those explanations in his words. It further engages the idea that inside of every restaurant there are so many more stories to be told beyond what the guests are normally seeing. Way too often we get lost in this comparison between OpenTable, what we’re doing, and what any other system is doing. Those things will all figure themselves out. If we can turn that conversation to what’s actually happening inside the restaurant, then we’re having fun.

That’s why we’re ultimately doing this. When I sit down and there’s a level of consumption set, you know it’s going to include having a good time, it means you’re going to try a lot of things, it begs the question when you sit down: what does the chef recommend? There should be freedom to say:  I see two or three things on the menu that we want to try, but beyond that I want to hear what the chef likes. I want the chef to bring it to us, to explain it to us, and that’s what those people love, that’s hospitality. Hopefully Top-Top becomes a platform for them to present that dialogue in a more thoughtful manner.

What do you like most about the Chicago restaurant scene?

I’m very encouraged by the amount of diversity that’s started to expand. When we first moved to Chicago, the notion was that it was about steakhouses and Italian. If you can nail that in Chicago you’re doing pretty well. The old guard has always been that way, but now what you’re seeing is what Brendan Sodikoff is doing, he’s taking some of those traditional mediums and he’s applying some variability to it. So he’s putting twists to things, he’s making them interesting, he’s doing it in a very thoughtful and appreciative way, he’s adding value to those same mediums.

A group like Boka, they’re doing completely experimental, creative, super cool stuff, and making it accessible. It’s not that get-your-reservation-six-months-in-advance type of a model. They want to put enough volume to it to show a lot of people what’s happening at the cutting edge of food. That’s encouraging. Beyond that, I love that you can walk and within a stone’s throw you can get high quality, great neighborhood food, very authentic food. It’s not a chain town, by any means--- people are out there doing it on their own, thoughtfully presenting great food. You can go and go and go and never have the same thing twice.

I just want to be a part of it and continue to watch it grow. It’s got a mind of it’s own. I hope it stays that way, I hope it stays away from being too mechanized, too much of a machine that’s there to make money, and let it be a little bit about the artistry and a little bit about making money. Making a living.

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