Bringing extra to the table
In a previous life Craig Winkler was the founder of MYOB. Now, the tables have turned with the launch of YumTable
Last-minute restaurant bookings for dinner might be a long way from developing accounting software, but it’s been a perfectly natural progression for former MYOB head Craig Winkler.
Together with several other ex-MYOB staff, Winkler formed Madewell Enterprises, an innovation group that develops separate lines of business from concept through to development.
The latest item on the menu is YumTable.
“The idea is pretty simple in essence. Melbourne is a great place to visit, but what we found what was missing was how do you decide “There’s something great nearby that I haven’t had a look at before, how do I give it a go?”,” Winkler said. “There are plenty of restaurant review sites, but we felt there was a real gap for restaurateurs being able to pitch themselves to diners in a last-minute way. It’s really last-minute restaurant deals – that’s the core of it.
“When the desire hits and you feel like going out for dinner or lunch it is easy to have a look on the web or your smartphone. It knows where you are so it brings up the local promotions with a list of deals that are available.”
After being involved with a number of start-ups, Winkler said the team took time to develop a proper model.
“We talked a lot about the market nature of this particular service,” he said.
“We really tried to make sure we understood how both sides would work. With any market, you need to decide where to start. Do you start with generating demand for the service, or do you start with supply? Probably the most important decision we made with this one was ensuring we had supply first. We are launching it with 100 restaurants already signed up – it is important that people using it today find there is plenty available.”
For the restaurateur, the system provides a solution to the perennial problem of no-shows and last-minute cancellations.
“The restaurant business is extremely challenging with difficult margins, and one of the key challenges is when people come and book and don’t show,” he said.
“Imagine if you are a restaurant with a booking for 10 at 7pm, but at 6pm they call you to let you know they are not coming. What do you do? You have your staff and produce ready. It’s a big hit. YumTable gives them the flexibility to cover their costs so they can do a great deal where you get a free desert with every meal or something like that. They can control how many tables they allow for that deal and that way they can actually do something about it.
“The response has been really good, it has been interesting to watch especially from the smart restaurateurs who are right on top of it. There have been so many different people approaching them from booking engines and review sites, but this is different because it gives them the ability to manage what they are offering.
“The restaurant only makes a payment when they get a booking. We only get paid when they get paid. We thought that was the fairest approach. It’s simple, really easy to understand – we’re not trying to take a cut of the meal value or anything like that, it is just a flat fee structure. There’s no upfront cost to get involved, but restaurants have to commit to a billing relationship. A restaurant can sign themselves up if they want to.”
Although the initial launch is for Melbourne only, the plan is to establish the brand in the local market before looking interstate and internationally.
“From the business perspective it is very scalable. There are things we want to extend it with, but it is working and is able to scale up to much larger numbers without a dramatically higher cost,” Winkler said.
“We expect it will grow fairly quickly. There are 40,000 restaurants in Australia so we have our work cut out for us in this market for a little while. We have a fair bit of work to do to ensure both diners and restaurants get the most out of YumTable, which of course then grows our business in the meantime.”
Although Madewell Enterprises is developing several business concepts – it has already launched BillsTrust as a stand-alone – Winkler said it was critical to remember the basics of business to ensure each venture’s success.
“You need to make sure you know what your unique selling proposition is – why are you special? You have to know that,” he said.
“You need to understand how you make money, and then what flows from that naturally is really watching your cash flow. That’s always been true in every business I have ever seen.
“You have got to stick to those essentials. The next stage if you have that is to understand how you can grow and how expensive that growth is. I’ve seen plenty of businesses almost grow themselves to death. A lot of that comes back to cash flow, but you can actually get into the situation where you grow so fast you nearly die in the process. I went through that myself with MYOB, where we were growing so fast it was difficult to keep on that horse.”
At a glance:
Name: Craig Winkler
History: founder of MYOB
Latest: YumTable (YumTable.com.au)
Signed up: 100 restaurants
Australian market: 40,000 restaurants