Welcome to Fully Baked, our Sunday newsletter serving up startup ideas as validated as your dog's enthusiasm for literally any meal 🐶
In today’s edition:
💡 The $300B restaurant industry's biggest problem
🔬 The steps we took to validate this idea
🚀 The go-to-market playbook to start and scale this business
🤑 The unit economics of this idea
⚔️ Are there competitors in this market?
❓ The verdict on this idea (go or no-go)
Let’s goooo 🚀
🍽️ Marketplace for Restaurant Reservations
Food for thought
Available domain: Seateat.co
The Problem: Getting a table at a hot restaurant has become a blood sport. People set midnight alarms for Resy drops like they're buying Taylor Swift tickets. And as with any market with sky-high demand and limited supply, a black market has emerged, in this case where scalpers use bots to mass-book primetime tables and flip them for hundreds of dollars. So why not build a legitimate marketplace to buy and sell restaurant reservations? Paul Graham thinks there’s a great startup idea here, and we tend to agree with him (mostly). Here's what we're thinking.
The Solution:
💡 The Idea: A marketplace where users can buy and sell restaurant reservations with transparent pricing, like a stock exchange for dinner tables.
🛠️ Product:
Users list reservations they can't use - say you booked Friday 8pm at Carbone but plans changed. Set your Ask price, let buyers bid. The marketplace shows the latest transaction price for full transparency.
Sellers set Ask prices, buyers set Bid prices, transactions happen when they match.
Restaurants sign up to earn a cut of every resale, with analytics on demand patterns and peak pricing.
🧑💻 Prototyping: Check out the demo (built on Base44) | Get the demo prompt
💡 How to Win the Baked44 Challenge
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Tips from builders who ship:
Start specific - "Build a client portal with invoicing and a dashboard" beats "build me something cool"
Iterate through chat - ask Base44 to tweak layouts, add features, change colors
Solve a real problem - tools you'd actually use tend to be tools others want too
Claim your free credits and you could have a working app by tonight.
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🔬 Validation
🔍 Desktop Research (Googling, using AI to read legislative records and restaurant industry reports)
The reservation software market is dominated by OpenTable (46% share, 55,000+ restaurants), Resy (13%), and fast-growing entrants like Toast Tables. This space is mature and fiercely competitive.
Someone already built a similar product to this. Appointment Trader launched in 2021 and hit $7M in trades by 2024 with 50,000 users and a 20-30% take rate. Their top seller made $365,000 in a year. Sounds like validation right? Keep reading.
📋 Survey (100 responses via Pollfish, $1.50/response, ~$150 total)
68% had tried and failed to get a reservation at a popular restaurant in the last 6 months. Of those, 41% would pay $50-100 to secure a table.
But only 29% said they'd trust a third-party app with their reservation details and payment info. The transaction feels like scalping (even though the restaurant makes the majority of the revenue), and that's a problem.
📣 Smoke Test ($150 Instagram ads over 5 days to a landing page, targeting foodies aged 25-40 in NYC and LA)
11.2% of visitors signed up for the waitlist.
1 waitlist signup DMed us unprompted asking "is this legal?" - not the question you want from early adopters.
And here's where it gets tricky. Despite proving real demand, the entire business model has been legislated out of existence. New York banned unauthorized reservation reselling in December 2024. Since then, Florida, Louisiana, Illinois, and Philadelphia passed similar laws, with California, Nevada, and New Jersey in the works. The federal SEAT Act is pending. All passed with near-unanimous bipartisan support.
Why? Resy's data showed no-show rates from bots and brokers were 4x normal users. One restaurant group reported 25% of reservations becoming no-shows. But can we salvage something here?
🚀 Go-to-Market
👥 Early Users
Foodie communities: Reddit's r/FoodNYC, r/chicagofood, and a 12,000-member Facebook group for French Laundry reservations prove the demand is there. But onboarding these users at scale paints a regulatory target on your back.
Restaurant partnerships: The idea assumes restaurants will sign up to earn a cut. In reality, the National Restaurant Association and Michelin-starred chefs have publicly condemned reservation reselling. You're asking restaurants to endorse something their industry is lobbying to ban.
📈 Scaling Acquisition
City-by-city expansion: You'd need to launch in cities that haven't banned it yet. But the legislative trend is one-directional - more bans, not fewer. Every new city is a countdown clock.
Paid social: Instagram/TikTok ads to foodies could work short-term, but Appointment Trader spent years building to $7M in GMV only to lose its largest market in a single bill signing.
🤑 Business Model
🏷️ Pricing
Free for diners: No fees to browse or list - you want maximum liquidity.
Commission on transactions (20-30%): At an average trade of $80-100, the platform earns $16-30 per transaction.
🧮 Unit Economics
Target CAC (cost to acquire a customer/user): $15-25 via Instagram/TikTok. Sellers near-zero via word of mouth.
Target LTV (lifetime value of a user): $40-80 per buyer (3-5 transactions/year at $80 avg, 25% take).
LTV:CAC ratio: 2-3x - decent but not spectacular.
⚔️ Competitive Landscape
🏷️ Primary Competitors
OpenTable ($249-449/month for restaurants): 55,000+ restaurants, 46% market share, owned by Booking Holdings. Partnered with Visa for premium cardholder access.
Resy (tiered pricing for restaurants): Owned by American Express (who also bought Tock in 2024). Dominates the "cool restaurant" segment. Their moat is Amex cardholder perks - exclusive tables you can't get elsewhere.
Dorsia (members-only): The legitimate premium reservation platform that partners with restaurants and shares revenue. Business surged 35% after New York's anti-scalping law - because they work WITH restaurants, not around them.
🎯 The Gap
The demand is real and consumer pull clearly exists.
But the gap isn't "no one has built this" - it's that the one company that did got legislated into oblivion. The market is moving toward restaurant-authorized premium access (Amex perks, Tock prepaid reservations, Dorsia), not third-party scalping.
❌ Verdict: NO-GO
The demand is undeniable. A similar product has been built, achieved meaningful traction, and then been systematically banned across multiple states with federal legislation in the works.
The restaurant industry is spending millions lobbying to make your core business illegal, with bipartisan support. You're not fighting a market problem. You're fighting every state legislature in America.
👋 That’s All Folks!
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