OpenTable is in San Francisco, its CTO is in Los Angeles and here’s why that works


When restaurant reservation service OpenTable recruited him from dating app EHarmony, Joseph Essas received assurances that he could keep living in Los Angeles.

Essas wasn’t sure how, but OpenTable’s then-Chief Executive Matt Roberts said, “Trust me, we’re going to make this work.”

Essas, the chief technology officer, commuted weekly to OpenTable’s San Francisco headquarters for two months, leaving behind his wife and five children for days at a time. But after getting his bearings, he saw an easy way to persuade the company to cut his commute.


Hiring software developers in San Francisco is cumbersome and expensive. In Los Angeles, it’s easier — and Essas could pull from his network of contacts developed in four prior executive roles in the region.

Essas opened OpenTable’s Hollywood engineering office in 2012, and so began one of the more unusual management arrangements in California tech: A chief-level tech executive based in Los Angeles with most of the individual’s team in the San Francisco Bay Area. Several Los Angeles tech leaders said they couldn’t recall a similar setup since, though there’s one brewing at a recently formed start-up.

OpenTable’s Los Angeles crew, which includes teams working on data processing and the consumer-oriented app, is up to about 50 people and growing fast. But he also oversees hundreds of technologists in San Francisco, along with teams in Britain, Australia and India.

He enjoys having engineers across the world because they tend to bring varied perspectives. And he thrives on getting as much feedback as possible. He exhorts his team any time they are out eating to talk with restaurant employees about how they use technology in the workplace.

“Don’t go to table until you schmooze a little,” he said. “Simple.”

His team member’s informal consultations with restaurants around the world inspired an iPhone app aimed at owners so they could get immediately notified about VIP bookings.

Essas said he’s gravitated toward employers such as Yahoo, EHarmony and OpenTable because they are well-recognized and do something everyone tends to understand.


That means when he walks into any meeting or setting, each participant has something to say about the company.

“It feeds my spirit of innovation,” Essas said. “I’m always asking, ‘What else should we be doing?’ ”

One such conversation with an acquaintance and frequent traveler led to unifying users’ accounts globally so they could use the same log-in for reservations anywhere, Essas said.

Recently, Essas has been fixated on issues including data analysis. For diners, he promises better search results later this year that learn from their habits and preferences. They’ll also have new ways of leaving reviews and drawing conclusions from them.

On the restaurant side, a big focus is helping eateries “make people feel like a million bucks right when they walk in,” Essas said. The goal is to learn about how diners feel and what they’ve been up to and share that intelligence beforehand with the restaurant.


“I look at tech as an enabler of business ideas, in this case good hospitality,” Essas said.

For example, OpenTable could detect a person is on a business trip because the individual is in a new location on a weeknight and dining alone compared with the usual two. The restaurant could push some higher-priced items on the diner, assuming the corporate card’s paying.

In other cases, OpenTable is using data on its end to steer diners in a certain direction. A consumer might want to dine at 6:30 p.m. But the service could encourage the user — taking an educated guess, based on certain factors, that the user is open to alternative times — to come at 5:30 p.m. even if there’s a later opening. The early reservation gives the restaurant a chance to turn over the table an extra time that night.

Use of data will improve as OpenTable persuades more of its 40,000 restaurant partners to replace legacy data-storage systems with the company’s online version. The older OpenTable systems are remnants of a different era, but they’re part of the baggage that comes with the company launching in 1998.

OpenTable went public for $432 million in 2009 and was acquired by Priceline for $2.4 billion in 2014. Priceline took a nearly $1-billion hit last year when writing off OpenTable’s struggles to grow abroad. But Priceline, which generated $10.7 billion in sales last year, doesn’t separately break out OpenTable’s financial performance.

It has beat back plenty of competitors over the years. Essas doesn’t expect that to be any different with the latest crop of start-up rivals such as Nowait, Reserve and Tock.


“It forces us to think more creatively,” he said. “Our product needs to be so much better that even irrational spending by a start-up can’t catch up — that they can’t even buy their way into the market.”

But new, much larger names are eyeing a greater piece of the restaurant industry, including Yelp, Facebook and its Instagram division. Yelp was the most downloaded food and drink app on Apple’s U.S. App Store last quarter, according to research firm Sensor Tower. OpenTable was 10th.

Essas insists legacy has one big benefit though: “No one understands restaurants better than us.”

Snap’s no-vote IPO is keeping it off Russell 3000

Snap Inc.’s decision to issue only nonvoting shares in its initial public stock offering is starting to visibly cost the Venice company.

Stock market index provider FTSE Russell reiterated Monday that the Snapchat maker’s potential inclusion on the Russell 3000 list will be delayed, potentially indefinitely, over investor concerns about the lack of say they’ll have in Snap’s corporate governance.

Placement in an index can boost the value of a company’s shares because some investors design their portfolio to mimic certain indexes. The Russell 3000 and Standard & Poor’s 500 are among well-known benchmarks.


FTSE Russell said it won’t make a permanent decision on Snap’s exclusion until at least July, giving it time to consult with index customers and other financial industry leaders.

Other index providers and several regulatory bodies are weighing policies around nonvoting shares too. Snap declined to comment on FTSE Russell’s announcement.

Uber opens downtown office in L.A. Times building

Uber Technologies opened an office for several dozen people in late February on the 10th floor of the downtown building that houses the Los Angeles Times. The app-based ride-hailing company’s regional headquarters remain in Santa Monica, where hundreds of people oversee Southern California operations for Uber and UberEats.

The downtown Los Angeles office is focused on working specifically with drivers across the U.S. and Canada. Uber executives recently pledged greater support for drivers, including giving their complaints and requests the same respect as those from riders.

Southern California IPO activity dominated the first quarter

In what’s likely a first for the Southern California business community, the region produced more IPOs than the rest of the state in the first quarter of this year, according to data from financial consulting firm Ernst & Young.

Snap and analytics software developer Alteryx were the most well-known. But also going public were Foundation Building Materials, a Tustin construction goods seller, and AnaptysBio, a San Diego biotech firm aiming to develop antibody-based drugs. In addition, Ernst & Young counted Global Benefits Group, a British insurer that has its administrative center in Foothill Ranch.


Not including Snap’s $3.9 billion in IPO proceeds, the Southland crew generated more than $458 million from joining stock exchanges.

The only other West Coast IPO in 2017 belonged to San Francisco tech start-up MuleSoft, which raised $254 million. Nineteen companies across the U.S. have gone public this year, reflecting a rebound from early last year. Increasing market stability has taken the pause button off for many potential new listings.

Survey says: SoCal start-ups think it’s hard to raise cash

The latest start-up survey from Silicon Valley Bank confirms several assumptions about the Southern California tech industry and shows it’s not considerably better than peers on issues such as employee diversity.

The survey conducted from November through January found that Southern California tech start-ups were more likely to be involved in consumer services and healthcare than the U.S. overall. They had lower sales, but better prospects of profitability. Part of that could be the enduring perception that it’s harder to raise money in Southern California. About 37% of the region’s survey respondents said getting investment cash is “extremely challenging,” compared with 23% nationwide.

Another consequence of profitability: Companies can stay private longer. That could explain why just 4% of Southern California companies surveyed expect to go public, compared with 16% nationally.

On other matters, Southern California businesses fell along national trend lines. About 1 in 4 said they moved some nonsales operations outside the U.S. because of tax and immigration policy and other regulatory issues. More than half don’t have a female executive and nearly two-thirds don’t have a female board member.


The survey included about 580 U.S. companies, of which about 90 were in Southern California.

Elsewhere on the Web

Dog walking start-up Wag raised $15 million from investment firm Sherpa last fall, according to TechCrunch.

Etsy hired Chief Financial Officer Rachel Glaser away from Santa Monica digital media company Leaf Group, which was formerly known as Demand Media, according to a news release.

Movie ticketing service Fandango is centralizing its tech operations in Los Angeles and relocating employees from San Francisco in the process, according to Variety.

Two Bits Circus, a Los Angeles company founded by the son of the man behind Chuck E. Cheese, is hoping to develop tiny amusement parks for millennials, according to Bloomberg.

In case you missed it

Though investors and users might have preferred aspects of DogVacay’s business, it simply didn’t have the cash to catch up in getting pet-owners’ attention as fast as Rover, which acquired DogVacay last week.

Baseball player Ichiro Suzuki sold an Arts District condo for $2.45 million to e-sports entrepreneur Alex Garfield, who sold a marketing consulting firm and professional e-sports teams to Twitch in 2014. Garfield left Twitch last year.

A state lawmaker who amid strong opposition last year dropped a bid to allow ride-hailing drivers for Uber and other companies to organize, hopes to write a new bill that would reach the governor’s desk by the end of 2018.


Snapchat enabled searching through public posts for first time.

Palmer Luckey, the Long Beach entrepreneur whose zeal for virtual reality kick-started mass investment in the technology, has left Facebook three years after selling his start-up Oculus VR to the social media giant for $2 billion.

Elon Musk is starting yet another company, this time to create implantable brain chips to treat neurological disorders and one day, perhaps, protect us from evil robot overlords.

Coming up

Events include fireside chats with Dan Rosensweig, chief executive of textbook rental service Chegg, at 6:30 p.m. Tuesday at Cross Campus in Santa Monica and with Dave McClure, founding partner of investment group 500 Startups, at 6:30 p.m. Wednesday at the WeWork Gas Tower in downtown Los Angeles.

Twitter: @peard33