Crains New York - June 17, 2013 - (Page 30)

Continued from Page 29 maximize their revenue and fill spots,” he added. He sees the new trend as an evolution of the daily-deal business, propelled by the growth of smartphones. Upward of 40% of Last Minute’s appointments are made on smartphones. “New and emerging technologies such as mobile adoption and wireless proliferation have enabled last-minute services to exist and thrive,” said Ben McKean, founder of Savored, a popular dining discount site now owned by Groupon. Groupon may have kicked off the digital discount craze during the depths of the 2008 recession,but the arena of getting services faster and cheaper continues to expand. The spa industry is just the latest to join the fold. Bargains always welcome Of course, the business model is not new; TKTS for four decades has been allowing fans to buy Broadway show tickets for up to half off for same-day performances. People have and always will be looking for a bargain, especially during periods of economic uncertainty. “This economy may be officially over the recession, but people are still struggling,” said Laura Mandala, managing director of Mandala Research, a leading market-research firm specializing in travel and tourism. “Companies are realizing they’ve got to offer the best product at a great price.” HotelTonight, a pioneer in same-day online hotel bookings, was conceived two years ago. More than 100 of its 2,500 hotel clients are based in New York, where users can save 30% on average, and up to 70% if they’re lucky. “At any given moment, 40% of hotel rooms are empty nationwide,” said Sam Shank, chief executive of HotelTonight. “We help fill those rooms by matching consumers and hotels. Fifty percent of our clients ordinarily would not have spent the Lower prices for nice hotels are ‘a huge allure’ night in a hotel. Instead, these folks would have gone home, stayed home or slept on someone’s couch.” According to HotelTonight, same-day bookings represent 15% of the $100 billion U.S. online travel market. The company’s app has been downloaded more than 5 million times, and revenue is expected to be up 300% in 2013, compared with 2012. “Ten billion dollars is lost [annually] by consumers who book a ho- tel in advance and are unable to cancel because of policies,” Mr. Shank explained. “Booking on demand is very liberating to them.” Andres Barreto, an entrepreneur who invests in technology startups, travels nine months a year and stays at hotels almost 20 times a month. “It’s impossible to plan ahead because I never know where I’m going until that day,” he said. Two Manhattan favorites he’s found from HotelTonight are boutique properties, the Gem Hotel and TriBeCa Blu. “The fact you have really nice hotels at prices that normally wouldn’t be available is a huge allure.” Price is main factor Some consumers still prefer the peace of mind that comes with making plans in advance. “Last-minute deals don’t always provide what you want,” said Daniel Burrus, CEO of Burrus Research Associates, a firm that monitors global technology trends. “These sites offer customization, but they’re not yet personalized. I can put down a date and time and find the best price. But there are factors that are being overlooked, like being able to cater to what I really want.” For example, Mr. Burrus said, he is used to flying first-class. “Lastminute sites don’t offer that,” he said, “but a human can. These sites are filling a need for a certain percentage of the population who are only focusing on price.” Ⅲ betterment.com Immediate gratification SOURCE LUNCH: JON STEIN by Ali Elkin An aggressive firm’s casual approach J on Stein is on the hunt for a Flatiron lunch spot. Betterment, the online investing company he founded three years ago, is about to move into a bigger office on West 23rd Street from its current SoHo home. The site is geared toward professionals who’d rather deal with a computer than an investment adviser. It creates diversified portfolios using basic user information and the smarts of a computer algorithm.The company has 37 employees and manages about $215 million in assets. It’s a bittersweet moment for Mr. Stein, 33, who will have to bid adieu to Café Select, the cozy casual Swiss restaurant where he frequently meets with investors and prospective hires. The place is a hub for a new kind of power lunch, in which investors dressing down in checkered shirts and dark-wash jeans bro out with stubble-faced startup CEOs. How did you get the idea to start Betterment? kind of build up a core customer base. Who is the typical Betterment customer? A lot of our clients are people like you and me. They are professionals who are making money who get to a certain point where they re-evaluate their finances and they think, “I could pay an adviser,” or they do a search and they come across Betterment and they think, “It seems to automate and do it all for me but without the expensive fees of these traditional brick-and-mortar investment services.” I hear this restaurant is important to you. We’re moving to West 23rd Street, and I’m vocally concerned about how I will find a replacement for Café Select. This place is really special. Everyone loves it. You can always get a table in here. This is like an ad for Café Select. The prices are good, the food is good, and it’s casual. You don’t see many people in suits. In fact, I love that about it. People come here wearing a suit and tie and they feel uncomfortable. I CAFÉ SELECT love putting them on the 212 Lafayette St. (212) 925-9322 defensive. WHERE THEY DINED My background is in consulting to the world’s www.cafeselect biggest banks and bronyc.com So Betterment is a finance kers. I did risk manageAMBIENCE: company without the suits ment, product developHipster cozy. Plaid and ties? ment and corporate shirt and beard Sometimes on Fridays we strategy. And in the suggested but have a joking formal-Friday process of doing that, I not required. thing. But we’re casual. If found so many opportuWHAT THEY ATE: you want to keep that part nities to improve upon Ⅲ Schnitzel of your wardrobe fresh, forwhat they were doing. sandwich with a side salad mal Friday is the opportuAt the same time in Ⅲ Rösti with Black nity. Why just have a suit my personal life, I had Forest ham, sitting in the closet? They opened several different Gruyère and egg don’t stay in style forever. brokerage accounts, and I TOTAL: $28, was just searching for including tip You hear about fast-growing something great to do tech companies finding good with my money, and nobody was providing the product that deals in the financial district. Did you I wanted. I felt like I had some of the look there? right experience.What I was lacking People tell me there’s this progreswas any sort of development knowl- sion. You start in SoHo. You move edge. I started learning to code a bit. into Union Square or maybe Flatiron. I was lucky to have a roommate who Then you move into midtown. Then was an engineer at Google. And he you move downtown as you need was able to help me build some of the more space. I think I’ll resist ever early site and coach me through moving downtown.One of the things what I needed to learn to put togeth- we look for in places is good street life and good food around. Flatiron is er the first iteration. pretty healthy in that regard.We’re on How did you first build your client base? the same block there as Eataly, and We launched at TechCrunch Dis- we’re down the street from Shake rupt here in New York, and we won Shack, though that’s kind of a false the best startup in New York, which option because you can never actualwas a huge early win.That was a great ly wait in that line. But we get team way to get a lot of attention and get lunches a few times a week, and some early users. We used that to maybe we’ll do some from there. Ⅲ INSIDE TIP: There’s a small fondue room in the back of the restaurant. 30 | Crain’s New York Business | June 17, 2013 http://www.betterment.com http://www.cafeselect.nyc.com http://www.cafeselect.nyc.com http://crainsnewyork.com/fast50 http://crainsnewyork.com/fast50

Table of Contents for the Digital Edition of Crains New York - June 17, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
BUSINESS PEOPLE
OPINION
GREG DAVID
FOR THE RECORD
REPORT: FORTUNATE 100
THE LIST
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

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