How A Bad DMV Experience Inspired Jonas Frey's Multi-Million Dollar Business
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- When I get together with my entrepreneur friends, we often commiserate about how hard it is to hire, especially when you're on a deadline. It is such a tough hurdle to overcome because it takes a whole lot of time to search for great candidates and then sort through all the applications.

Well, if you're an employer who can relate, I have one question for you. It is the same question I ask my friends. Have you tried ZipRecruiter? ZipRecruiter has figured out how to solve this very problem. In fact, four out of five employers who post on ZipRecruiter get a quality candidate within the first day. Right now, you can try ZipRecruiter for free at ZipRecruiter.com slash money rehab. So I'm sure you want to know, how fast does ZipRecruiter smart technology start showing your job to qualified candidates? Well,

immediately. And you can invite top candidates for your job to apply to encourage them to apply sooner. So relax, employers, and let ZipRecruiter speed up your hiring. See it for yourself. Just go to ZipRecruiter.com slash money rehab right now and try it for free. Again, that's ZipRecruiter.com slash money rehab. ZipRecruiter, the smartest way to hire. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab.

There are some businesses that are created to solve a problem and you think, man, that opportunity was right under my nose. I knew that was a problem and I could have solved that problem and made so much money. Well, when I tell you about this business, you are going to have one of those moments because I did. Today, I'm talking to Jonas Frey, who founded Appointment Trader. It's a company that buys and sells coveted reservations at restaurants, on golf courses, and more. It's a company that

Today, we talk about how Jonas used his rent money to start this company, how the DMV inspired the business idea, and what critics are saying. And honestly, this might be my new side hustle. So if you're in the market for one, stick with me. Jonas Frey, welcome to Money Rehab. Hey, Ms. Lepin, how are you?

I'm good. And I'm so excited to talk to you because when I first saw a story about your company, I was like, damn, why did I not start this company? How did you come up with it? Thank you. Yeah. People always tell me not to tell that story, but I'll still do it. I tried to get an appointment at the DMV in Las Vegas.

and I couldn't get one. There was actually a really long line in front of the DMV and it was really visceral because you see these 150 people lined up in front of the DMV and I said, "Oh, surely it's a special day or something today, so I'll come back tomorrow." And I went back the next day and I saw that same long line and I was standing there and I said, "I'm in the United States of America and I cannot buy an appointment

That's crazy. You can buy anything, any commodity, anything is tradable, but a time slot is not. And I was thinking of these people standing there and I thought, that's 150 people standing and literally over the course of 20 years or 30 years or 50 years, people, 150 people's lives will be wasted standing in line. If you think about it, like over time.

And I thought this was absolutely ridiculous. There should be a solution for that. And that's why it's called appointment trader, not reservation trader, because it was actually the first trade was, I believe, a DMV appointment. Yeah. And you saw money hiding in plain sight. Everybody hates waiting in line at the DMV for sure. I always say this is like time I'm never going to get back in my life. But the DMV isn't your bread and butter. So you said that it's not appointment reservations, which people often think it's appointment trader. But restaurants is really your thing, right? Right.

Yeah.

I want to trade tee times. Yeah. Who was it? Can you tell us? I hope he's not going to be pissed off. It was Nick Carter from the Backstreet Boys. Nick, I'm sorry if you hear this and you hate me for it. I'm very sorry. I've got to buy you a pizza. I think he'll love it. And you don't need to buy him a pizza. You just need to give him all the good tee times. Yeah.

Yeah, he said, hey, is there something we can do together? And it actually made me start thinking about how I can have sponsors of one vertical, that you have different people who really represent one certain vertical that we do. We also have, for instance, RV parking spots. And believe it or not, there is actually a market for that in high seasons. At the end of the day, what I realized as we were doing this, because you were asking about the restaurant reservations, it's actually interesting that

how a price for an appointment builds. You would think, oh, a DMV appointment is so important to people and they really need it. But it's funny, the average trading price for a DMV appointment is around $25, while a restaurant reservation is at,

in off season at 80 and in high season between 100 across literally the last 50,000 trades, it's like literally a hundred bucks. And the interesting part about it is it's whenever people get to take other people with them,

it becomes relevant to the person. Because when you go to a place that's very hard to get into, and that was an interesting observation, it's not my first business that I built, and when I do something consumer-facing, I always think about how can I automate a luxury business

that is currently reserved for people with more buying power. And if you think about it, if you're a really wealthy person, you don't need appointment trader. You probably know the guy at the restaurant or you're used to slipping people a hundred bucks. But if we have this, I have this one story, there's this firefighter that did something really great and his wife wanted to do something for him. And she wrote to us, I always wanted to take him to Delilah Las Vegas. And we're just not in that social circle. We didn't know anyone. And I didn't want to be embarrassed at the door.

And for $70, I did this for him. And it was such a day. And so I thought it's actually a really cool thing where the very wealthy generally get their availability all of the time, anywhere. And we give that power to anyone.

Yeah, so $70 for Delilah in Vegas might be average, right? But it can get really expensive for some of the bigger spots. Like Carbone in New York can get up to, what, $300? So it's supply and demand, right? Now...

ironically, we sold like 5,000 reservations in a year in all of the carbones. And whenever you go into a carbone that a few tables are from appointment traders, literally have a section there. They don't love that it's that way, but it is that way. Carbone is not as hard to get as, for instance, the Polo Bar. So if you look at the average trading price, you'll notice that Polo Bar trades well over $250 on average across thousands of trades.

And that is the most expensive reservations in the world, Polo Bar, New York. And it's the weirdest thing. You get a burger. But I have to say, that man knows how to do things very well. I love that restaurant. It's great. Whenever I go to New York, I go there. And Carbone, I think Carbone lives very much off of the impression that it's hard to get into.

So explain to me, like, how are you getting all these reservations? I'm not getting any of them. Right. So the way I was looking at it when I did when I first wrote out the initial draft for appointment trader, I said, why is it sometimes hard to get availability and why is it not hard sometimes? Right. And especially in restaurants, there is there are a lot of factors. So restaurants generally don't open their books for prime time, even if they're not sold out.

because they want to appear as if they were hard to get, which is part of the reason why appointment trader works so well. So if you have less in-demand spots, they look like they're sold out, but they're really not, which means that people with means to contact the restaurant will be able to get the reservation. But then there are these spots like Polo Bar in Miami. There is a spot called Boya Day, and they literally have 14 tables. And I know the chef, and the chef says to me, Jonas,

I cannot get a table because we have 15 reservations for our 14 tables. So there you really need a marketplace where a person that is dining gets an incentive to give up their table. So when I was building this, I said, okay, we need to solve this accessibility problem with the marketplace because there is no other way to do it. Because when you have a saturated market, when there is no availability, the only thing you can do is you can offer an incentive for someone not to go.

So you have this, it's like a... Yeah, it's like on the airplane. Who wants to give up their seat for 400 bucks and then it goes up if nobody's doing it? And ironically, plane seats would trade like crazy.

But you can't trade them today when you need a business class seat and there's just nothing available. There's nothing you can do to buy another dude spot. It's just impossible. If you're in the airport and you offer the guy $2,000, the airline will not let you sit there. But you could go up to a person who had a business class ticket, like waiting in the waiting area and say, here's $2,000 cash. Do you want to sit and coach? And I'll give you the

Yeah. So we were actually thinking about implementing a feature that allows exactly that within the platform, but it's illegal. And while it might work sometimes and sometimes it doesn't, you need the consent from the airline. So that's why there we actually have to work with the airlines that they allow that. However, we take about 30% of each trade and the partner we're looking at is that obviously they have a substantial incentive to

in allowing these trades because they'll get a part of the trading fees. And basically, it's a peer-to-peer platform. So I get a reservation at Rayo's or Nobu Malibu or whatever, like a coveted thing a couple months out. And I can't go or I want to put it on Appointment Trader and I want to see how much it could go for. Then I list my reservation to somebody else who is in need of that reservation. And it can be bid up.

Explain how it works. The way the marketplace works is exactly what you just said. So you have a variety of players. You have the restaurants, you have diners, and you have professionals that actually make money in the market.

So if you just go and you have your Rayos reservation and you just change your mind, don't want to go and don't want to be charged no-show fee, literally a button that says trade in your reservation, you click on it, you upload your confirmation, the system will look at what time is it, how far in the future is it, and what kind of comparable trades have happened to indicate a price. So the thing will say, okay, you should list this for $75, for instance. And then depending on how good the price is, it'll

either sell instantly and it'll tell you that if there is if another customer already went in and said hey I'm interested in this reservation I'm offering a reward for anyone who can get me this reservation it'll say hey you can sell this restaurant this reservation instantly for x dollars or you can list it for whatever number you would like to get for it and the thing with and we call those

you can have a bid and an ask. So if you upload your reservation, like in the stock market, like in the stock market, you have an ask, right? And now we rolled out a feature that allows market makers to literally make the market. So it's always liquid. And the way we do this is we buy cell phone data around the world. So we know how many cell phones walk in and out of any restaurant in the world.

And then we buy event data and have our own data, a whole bunch of mix it together and rate an hour on a scale from zero to 10. And then we say, okay, a popularity score 10 in 14 days from today in Miami in this season generally sells for $180, a table of four, for instance, right? Now the market makers go in and say, okay, I'm interested in all popularity scores, seven and up, and I'm bidding $30. And then they place 10,000 bits in one go.

Right. And or they go in and say, I want to buy up all of Art Basel or I want to buy up all of Fashion Week in New York. So now when you, Nicole, want to sell your reservation system, we'll say, hey, you can sell it instantly for 25 or 30 or 35, whatever number there is, or you can list it for 75, whatever you want to do. So now we have these professional traders that literally just leverage and say, OK, I'm going to buy these tables in the future.

And I'm buying him for 90 days in the future. And the trading price is $30, but 30 days in closer to the date, it'll go for 70. And then right now, because it spreads huge and there's not that many players doing it, people can double their money in 30 days just with, and there is limited liquidity also, right? It's not that you can do any number. It's not that you can put $50 million in there and then double it in a month, but in a smaller scale, it works like that.

How many of these professionals are trading and how much money are they actually making? So the first professional tier we got were people that have connections in the industry, like concierges, hustlers, people who know the industry. And when you go to our top list, there's a little button that says money network. You can actually see how much money people make. And the top guy has been at $35,000 a month doing this for the last...

three, four months. But last year, the biggest 1099 that we send out was $270,000 to one guy that he made in one year. And the top 10 in May, the top 10 people together made 200 grand.

10 people. How much are you making? So we take 30% of a completed trade and the marketplace volume right now is 6.35 million. You can actually see it when you go on the website, we have a live ticker and show you how much we traded in the last 24 hours. And in the last 12 months, it's all live data. And like last year, we were at a little under 3 million, I think at this time for 12 month trailing. So 1.5 million ish.

Yeah, something in that. I always look at 12-month trailing because we've been growing. Luckily, we've been growing pretty heavily, so I'm always looking at 12-month trailing. Is that what you expected when you started this? I was in a really shit situation when I started this. I had a different tech business, and it went out over COVID.

And I remember sitting in my apartment with my wife and one of my neighbors was an executive for Facebook. And he goes, Hey, Jonas, you're a good techie. Don't you want to work for Facebook? And they offered me a position at $300 an hour or something like that was going to be around $300 an hour. And I really had no money. I was completely fucked. I had absolutely no cash in the bank. All my money was in the old business. And I had one credit card that had $30,000 limit left.

And I said to my wife, listen, I can't do this. I've been an entrepreneur my whole life. I'm sorry. We're going to have to rough it. And we're going to have to somehow live off of that credit card. While I'm building this, I have this idea. And she goes, what's the idea? And I said, it's called appointment traders. She goes, appointment what? And as an appointment trader, people can exchange reservations. Are you nuts? But I guess sounds crazy.

good enough. She was still pissed off that deal or not pissed off, but she was really upset that our old business failed because we were on it for five years and day and night and raised a lot of money for it. And it was just very heartfelt situation, but you know what you're going to do? You're going to have to live. And I said, I have 30 grand in a credit card. Hopefully they're not going to cancel it on me. And this is our window that we can use to build the next business. That's just what we're going to have to do.

And then I sat down and she always described that she would always bring me Red Bull and sandwiches, like from left and right. I was sitting there coding and building the business. So I was hoping that it would work, but you didn't know until it worked. You needed it to work. I had no chance. Yeah, there was no other option. Really, it was crazy. When I was a couple months in, I called my landlord and I said,

Listen, I just wired you rent. I will not be able to pay the next rent. I just, I told him, I said, I'm very sorry. It's not, I don't want to be this guy, but I will not be able to make next rent. This is the thing I'm working on. Our old business failed. This is the new thing I'm working on. And I'm, he was actually the first guy to get a presentation. Did you offer him equity in exchange? I did. I did. But he said, no, it's fine. I really like that you, that you're on it. Everybody else pays late and then calls me.

He's like, nah, it's fine. Keep it. And then like a year later, shit, I should have taken the equity. Yeah. Cause how much would that have been worth? Have you guys raised money? Have you put a valuation on this thing? No. So it's the funniest thing. I never raised any money for the business. I completely bootstrapped it. However, I had a bunch of employees before and we raised like $12 million for the old business. And we had a payroll of $250,000 a month. And I

The thing is, when you start a business, you need to be as agile as a freaking judo artist. It's because you got to go with the flow. You got to see what are the customers. You might have an idea, but maybe part of it is correct. Everything else is just crap. And then you need to do what the customer wants to do. When I had a big team, that agility goes away.

Because you have a project lead and developers and they said, we just defined this four weeks ago and we're currently in the sprint of doing this and we can't just change it all the time. So I said, you know what, I'm going to build the first prototype all by myself. And I haven't coded in 10 years before that. So I sat down and I'm like, okay, how did that work again? Yeah.

And so I just ended up buying a server on eBay because AWS is so goddamn expensive. It's really nuts. It's insane how expensive it is. So I went on eBay and bought like a four-year or five-year-old server. And I literally, I screwed it together by myself. My wife was looking at me and I was doing this. And then I called my, we lived in a high rise and they had Fiber.

in the high rise. And I called the guy because I somehow met him before. I said, Hey dude, can you put a fiber line in my apartment? He goes, why? I want to run a server. And he literally put a 10 gigabit line into my apartment. And I put this big server on the ground next to the washing machine and turn it on. And this thing was just screaming in our, in, in, in our closet. And then I built a software. And ironically, I,

And because my cost infrastructure was so low, we at least didn't lose a lot of money relatively quickly. And I had another 10 grand that I put in. There were 15 that kind of held us over water. But then I was two months late on my rent.

And I didn't tell anyone what I was doing and everybody knew me. And then this buddy calls me and he's dude, what the fuck are you doing? I want to know now, what are you doing? Yeah. Okay. I would just turn first revenue. He's the first revenue. Okay. What is it? And then I showed him appointment trader and he goes, fuck, that's cool. I can basically buy my spot. And can I buy into this company? And I didn't show him with that intent. I'm like,

Well, I really need money. Yeah, that would be awesome. But you're going to have to buy my equity because I'm going to sell you my equity. The business is fine. It's running on its own, doesn't have any employees and per transaction it works. And then he bought 25% of my equity for $62,500. And last year I sold like point something percent for 250 grand.

Secondary. In one transaction, right? So his stake is now worth well over $10 million. Wow. What timing does to... Yeah, but if he... It's the funny thing. He sent me $60,000 and I remember I paid the landlord. And if he didn't pay me that money...

appointment trader wouldn't be there today. I just wouldn't be there. I just wouldn't be there. But the funny thing is ever since I only sold secondary equity the whole time around, and actually some of the investors were able to resell some of their equity, unless you really need money to build a business,

It's a cool way of taking a little bit home before you sell the whole thing. What a quintessential entrepreneurial success story. Congratulations. It's a big deal. It's not that exciting yet. Well, it sounds like you've come a long way. I want to get into a little bit more about how the business works. So if I'm going on and I buy somebody's reservation, it's in their name, right? Yeah.

So if I go on OpenTable and I get one of these fancy reservations, it's under my name. So I list it on the site and somebody buys it. And then do they go and say my name when they go to the restaurant?

Most repeat customers do that. The most new customers use a service that we call transfer service. You buy someone's reservation and you can pay 25 bucks or depending if it was a more expensive reservation, it goes up to 75. And then a concierge of that city where you're in will call the restaurant for you and change the name. However, some restaurants don't love what we do. So that's sometimes a reason for them to cancel it.

And it generally creates more trouble than it solves. The thing is, new customers are always so worried, like, oh, but my name's not Pierce Brosnan. But the reality is you walk up to that desk and they ask, what's the reservation for? And he's Brosnan. Oh, yeah, great for two. Okay, sit down. And then most repeat customers, and we have people who use us literally hundreds of times. You can see that on the website. And

They actually then report back and say, yeah, I love this because these restaurants can't send me emails. Oh. Yeah. So it's a privacy feature. So we actually do have some celebrities that we see using the service. And I think. On the buy side or the sell side? No, on the buy side. I think they don't need to. They only do that so they don't use your own name. Hold on to your wallets. Money Rehab will be right back.

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I read an article about one of your traders, Alex Eisler, is a college kid who earned 100 grand in a year and a half, which is wild. What is he just like on these websites calling these places nonstop to get all of these reservations? How is he doing this? I know Alex, but I don't know exactly how he does it. The success of appointment trader is that we're actually a marketplace and not just pretending to be one.

Because there are many forces that are trying to prevent what we're doing. And because everybody does different, you can't turn it off. So Alex has a different strategy than...

The 15,000 other sellers said that there are some of them I know literally walk to the restaurant with a 50 in their hand. And if the bid's high enough, they go in and say, Hey, can you put in this reservation for me? And they give the host 50 bucks and they'll do it. So it's really, that's the power of a marketplace. You can't like there's you just that the, so New York's trying to stop it. All right. They, I'm not sure if you read about that. It's actually super interesting. Yeah.

It was actually Amix and Resi and then a few of the restaurants proposed a legislation that would prevent a diner to sell their reservation unless the restaurant agrees to the reservation being sold. And this is, for me, extremely interesting to see because the argument is, oh, because of appointment rate, there are no reservations available.

That's, of course, complete horseshit because the only reason that appointment trader exists is that you couldn't get a reservation. Otherwise, nobody would be paying for it. And we actually have quality controls. If you upload 10 reservations and you only sell one of them, your account will be locked. You need to sell at least 25% and then you're in a warning state and you're only getting out of that warning state if you sell 50% or more of your reservation. So it's actually a market problem.

And I'm comparing that a little bit. I'm not very political, but I do listen to what's being talked about. And

Kamala Harris was just talking about price controls on food, right? And it's so clear that the government printed so much money. That's why inflation happened. You don't need to be a rocket scientist to understand that. And New York kind of goes into those footsteps with that proposed legislation. It's basically saying, oh, you can only sell your reservation if the restaurant agrees to it, meaning if you are OpenTable or Resi that has the contract. However, they don't allow you to resell your reservation.

So I always compared with, imagine Sony would have to agree to you selling your PlayStation on eBay. Then when there's not enough PlayStations, you just can't buy it.

So you don't sound scared by this. You don't think this is going to shut your business down? Oh, I'm scared shitless, of course. What are you talking about? It's New York. It's not the neighborhood village. That's against it. I would be a complete fool not to take it with the most seriousness. I was lucky enough, we got a lot of press exposure. I actually just did a thing with ABC and there was the Wall Street Journal that reported about it a couple weeks back and the New York Times.

And what I'm trying to put out there is that we're solving a problem rather than creating one. There are not enough restaurants to support the 18 million people that live in New York City, and especially the fancy ones. They are being overpopulated. And Major Food Group is the owner of Carbone. They created a platform called Dorsia where you can pay thousands of dollars in food.

guaranteed spend to get a table. And this is literally advancing their business model. It's a very interest-driven bill. It's literally sponsored by the people that make money off of you not being able to get a reservation and they're trying to sell it. And the average ticket on appointment traders is $80, meaning anyone can do it. But the average ticket on Dorsia is in the many of hundreds, right? So I'm trying to show that you're shutting down an open market

And that generally is because we're not selling anything. It's not us doing that, right? It's literally a market. So I'm trying to educate. I'm trying to get Mrs. Hockhull, Governor Hockhull to sit down with me and at least hear me out on that.

So that's what I'm trying to do. Yeah, absolutely. I'm on it. I'm on it. Jonas, you also told NBC that your business put some people up in arms, so to speak. You got cease and desist letters from restaurants when you first started. Did that scare you?

Yeah, the reason why humans are scared is so they don't die, right? If you're not scared of a tiger, you'll die. Being scared in my mind is a human thing you should always allow to be, right? You can't be so scared that you'll run away, but you need to take everything in that happens in the market. And of course, when the first season desist letters came in, I was also scared because it was in the beginning.

of our business, but I didn't run away from it. What I did was the seasoned assistants came in and they were claiming that we're confusing consumers, that the consumer thinks this is the official site.

And I'm like, the wind, that was the wind that set that in, I'm like, and the Huxholt group. And then I sent them screenshots saying, look, like 10 other restaurants, there's an appointment trade or a marketplace for reservations. It does not say we're the official Bagatelle website. So that never got anywhere. And that's why they resorted to actually creating a law to make it illegal. Oh, wow.

And I always think when you, you know, like one of the things that we started doing was we allow restaurants to use Appointment Trader as their operating system so that they can actually issue their own reservations and it's free of charge. So what they can do with Resi is manage your tables, the floor plan, everything's free on Appointment Trader and we monetize when you're oversold.

Now that eats the lunch of Resi and Open Table. I think that's what got them so pissed off that they're not saying, OK, we've got to shut this guy down. I think there's two sides of this, right? It's that people make these reservations by and large for really expensive restaurants. You're not going on this thing to get a reservation at Shake Shack, right? You're going to get reservations at all the restaurants we've already mentioned.

like fancy, expensive restaurants. So people making these appointments can afford them, whether they're celebrities or rich people who want to look cool. And so that premium, you're getting that premium for giving people access to this experience, not unlike the concierges or the travel agents of the world. But then some people are like, yo, Jonas, this is

making dining even more exclusive for these people. And these experiences are like pay for play. What happens to just like allowing democratizing anyone to go to these fancy places? So what would you say to the people that think

Your business is part of the problem, not the solution. I would say you should look into what democracy means and what communism means. I'm from Germany and I actually was in Eastern Germany and I saw the differences. And in Eastern Germany, there were price controls and anyone could get a car. You just had to wait for 20 years to get one.

And in my mind, democracy means that everybody has the same opportunity to do something. And in the restaurant space, it's actually not that case. If you are a celebrity, if you know the chef, then you have a better chance of getting the table as if you are someone who doesn't frequently go dining. So when you look at our average ticket, and we do look very much at the customers who use us,

They're not wealthy people. They're born between 1990 and 2000. That's by far the biggest cohort of people doing this. It's young professionals, I want to say $70,000 and up in income, $50,000 sometimes, depending on the price point. But we're not...

If you go on Dorsia and you're ready to spend $1,500 for next weekend's prepaid meal, you're a wealthy person generally. You're not the Gen Z that works for a living. We're actually the exact opposite. The reason why this works is because we enable anyone

to get that special reservation. So we are actually the democratization of that. You're saying is that you could always buy this stuff. It was just always really expensive, whether you're slipping hundreds at the door or you're hiring a concierge service for a couple thousand bucks a month, or you're paying the chef or you're investing in the restaurant or you're going on this other platform that's like thousands of dollars of minimum spend. You're saying that it was always buyable. You're just doing it at a lower price tag.

Yeah, exactly. And all this is available is not really true because the restaurants, what they did is they've released reservations 30 days in the future at midnight or some crazy thing like that. Now, you can't tell me that a working person says, you know what? I'm going to stay up until midnight and I'm going to get a reservation for in 30 days from today. It's just unrealistic.

The only reason why they did that was to seem exclusive, to be in an exclusive club. That is really my argument. The reason why it is like that is because it's not capitalistic. It's free, so people make five reservations, go to one. And for instance, one interesting number I have, so the average no-show rate across industries in Great Britain, I think last year was about 20%, and there was a report that

from seven rooms, they said in the U of S it's about 17% no-show rate to the reservations. No-show rate on appointment trader across the last 25,000 reservations is 0.8%. Hmm.

No-shows also cost the restaurant money too, right? Like you pay the fee, but your bill would have been more. Yeah. And you're penalizing a consumer. So that's why I'm saying, obviously, because somebody said, oh, I'm paying $70 for this reservation. Our no-show rate is 20 times better than the industry's no-show rate. So I think this is actually an argument towards the restaurants that if you sell a ticket to your experience, that's really what that is. You're paying a ticket to the show.

Yeah. And you're creating a marketplace. So you're incentivizing people like Alex, like this college kid to make a ton of money because he's crafty. We don't know his strategies exactly. So if a listener thinks I want to get in on this, maybe I know the secret sauce for when reservations are released. Like, how do you even figure that stuff out?

It's like with any market. I say you're best in your area. So if you live in New York, do it for New York. If you live in Miami, do it for Miami. Because the best way is to build relationships with the restaurants. It's literally where you have a real edge is when you're on the ground, you can go there and you can make $1,000 a day doing this. You just go around the restaurants and literally fill bids, those rewards that are on the website.

But it goes also a little further. AppointmentDrawer doesn't have any employees at all. We literally have zero employees. You? Yeah, but I'm more...

I'm more of the government of the platform because we have to, there are so many bad actors. When this thing on X blew up, we got like 15,000 sellers in a week to sign up. And I would say 90% of them were trying to scam the system, try to buy their own reservations with stolen credit cards and upload fake reservations, all this stuff. And we have all these metrics that

identify these bad actors. Now, on the operational side, the way we do it is, do you know what open source software is? You've heard of that? Like Linux, for instance, right? You have a community of people contributing to Linux, building Linux. Yeah, it's like...

Exactly. And I leveraged that and monetized it. So if you work for appointment Twitter, you're not an employee, but you're contributing, you can contribute to support, you can contribute to marketing, you can contribute to accounting even, and you're paid per result that you deliver.

You can actually make a lot of money just doing administrative work on Appointment Trader without having to go through an interview at all. It's all, and we don't see whether you're female or male. We don't see if you're black or white or Asian, doesn't matter. You just have a scrambled username on Appointment Trader. They all have these funny usernames, but you don't even, so you don't know if what ethnicity you might be. The only thing this thing looks at is your metrics. So you start off and you can only do $150 contracts. And then the more of them you get,

That goes up and you can make more money. So you can make money selling, but you can also make money actually working for the business, but without having to go through the traditional employment cycle. No, I think it's cool. I think it's really innovative. It's kind of like the crypto mining that anyone can do. Oh, yeah. That's funny. You're right. Yeah. What's the most expensive reservation you've ever sold?

I think it was Uchi for non-prepay, where there's no value included, just a table. It was Uchi Austin for Formula One, a table of eight, I think $2,500. Is there a restaurant that you've never been able to get into? Me, personally? Have you purchased restaurants? Oh, yeah. Oh, absolutely. No, whenever I'm in Vegas, I buy Delilah.

And I love Delilah. I love that restaurant. I actually met the founder of Delilah. I know who you are. I said, I know who you are. You're this guy from Appointment Trader. And then I drank a nice glass of wine with him and explained my motives. And I hope it actually calmed it down a little bit. Is there a world to like work with them directly?

Yeah, we got a lot of the first partners now. It makes sense. You're literally, if you're a top thousand restaurant and employment trader, you're throwing away so much money. You're like literally throwing it away by not working with us. And now we're starting to see more inbound that restaurants come to us and say, hey, I heard I can use your infrastructure instead of Resi. I say, is it true that I don't pay a subscription fee? And I'm like, yeah, absolutely.

It's free. And we take a fee if we sell your reservation. But if you're reservation, you can also issue free reservations if you're not oversold. And then there's just no cost at all. So we're starting to see restaurants that open up new that started onboarding to this because it's just an expensive item that they can save on.

Because to be listed, so just for anyone who doesn't know, to be listed on OpenTable or Resi is not free for the restaurants. No, it's not. You got to pay a subscription fee for the software. And it's actually pretty substantial. It's a substantial cost item. And we turned to Zeramza instead of paying per reservation, which is crazy, we actually pay you per reservation. And one thing, think about it. Usually they have these OpenTable or Resi widgets on their website.

So they're literally driving traffic to OpenTable that they're paying for. This is insane. Like the restaurants, they pay for the service that they give their customers to. And OpenTable gets all these people to sign up from the customer that is paying for their service. I guess that's what spurred the regular or the insti lobbying in New York because we started, we're now at about 70,000 customers, which is still, that's not anything new.

big, but we were at 20,000 customers last year. And they're saying, shit, if they get to a million customers and they do this model where the restaurants don't have to pay for the software, this could be a real problem. I think it could be a real problem for sure. It could also be a real problem for consumers because then you're not getting any reservations for free. Yeah, but that's not true because it's a market. If there is less demand than supply,

then the restaurants will go empty and that costs the restaurants. So we literally, like when we partner with restaurants, they can put in a dial at which percentage occupancy they start monetizing the reservations. They can say, okay, when we're under 70% load, reservations are free. And then there's $0 reservation. And this is similar to an airline ticket. When you book it six months in advance, it's 50 bucks. And then when you book it day off, it's 400.

because there are like four seats left. So they have a dial. They can say, okay. They can also say 100% of the reservations are free and it's purely aftermarket. That they issue every reservation for free and just the consumers are reselling it. And then the restaurant gets 50% of our net fees for every secondary trade. So if you, so the restaurant might issue- That's how it currently works. Yes. So if you just sell your Polo Bar reservation and they opted to work with us, we would give them half of our net fees of that trade. Right.

Why would you want to work with them? Because why would you want to give up your margin? Because if they are partners of us, they implement our widget on their website. So they link to us. So all they need to do is just link to us and say, hey, you can resell your reservation on Appointment Trader. And that drives customers to us, which then use us for other restaurants, right? Like on average, customers use us 12 times a year. So it's not just that we get a customer from Polo Bar and then they'll use us in Miami, right?

So we've been talking a lot about restaurants, but obviously appointment trader started as DMV appointments. You have other things, tea times. Are you expanding beyond your offerings? The vision I have, A, I need to make it less ugly because everybody tells us we're so ugly and I really need to change that. But the vision that I have for the company is literally to make waiting for appointments a thing of the past. So if you need a doctor's appointment in Europe,

currently, unless you're dying, you got to wait three months. If you're just anyone, you literally have to wait. That's not just Europe. That's everywhere. And the US is less bad, I feel. But you're right. The problem with Canada has the same issue, right? So doctor's appointments is a thing that we're rolling out in Europe and we're getting a lot of media echo on it. It's generally negative. But what I'm saying is the reason that you cannot get a doctor's appointment is because it's so hard to get them and they're free.

People who need doctor's appointments make six for a year just so they have one every other month if they need it.

Right. They hoard them. Yeah. People who need an appointment. It's anything that's free and is of value will be hoarded by people. It's always like that. It's for anything. And people hoard things that are free and have value. But that's scary if people hoard doctor's appointments just so they can sell them. No, they hoard them today. So they have one if they need it.

So, let's say a 70-year-old patient that knows they need to go to the doctor, they literally scheduled a doctor's appointment for three years out. So, they know I have one every other month if I really need one because I have to wait so long to get one.

But what that does is it clogs up the system for everybody else. So what I'm saying is if you have an efficient market for appointments generally, it should always be available for the right price. And if you, let's say a doctor's appointment I see is going to be pretty similar to a DMV appointment, I think they'll trade for around $20 to $30. And what's better, to wait three months to go to the doctor or to be able to pay $30 and go tomorrow? It depends how much.

disposable income you have. So some people, lower income, need to get into the doctor. What I worry about is if somebody then, not the 70-year-old who needs appointments regularly, but some college kid who wants to make money or whatever, goes and hoards a bunch of appointments, puts them up to make money. So we prevent that, right? That's the thing. We have this thing we call sell-through rate. If you are under 50% sell-through rate, your account is in a warning state.

But that means 50% of everything you upload needs to sell. And there are many reasons that something wouldn't sell. 50% is a very high margin. So if you just hoard reservations to try to sell them and you don't sell them, you have a problem because it's a real market. The market price reflects what customers are willing to pay for it. And the example with the 20 bucks for a doctor's appointment, I would argue that almost everybody who takes part in our society and has health insurance and is able to go to the doctor is

otherwise spends $20 a week on beer or wine, whatever, something they'll leverage. I don't think that $20 stops you from going to the doctor if you're actually sick.

And the reason why I'm saying $20 is what we see at DMV. In the restaurants, you have people impressing other people, but DMV trends to $15 to $25. Because they're free to make too. Restaurant reservations are also free. However, the DMV customer is anyone. It's your truck driver that needs to extend their license. Well, sometimes. Like you were saying, go into a restaurant, pay the person $50.

Well, okay, yeah, there's a basis. You can't go to the DMV. You will get arrested if you try to. No, you're right. So there is, you're right, there sometimes is a basis. But the average customer that buys DMV appointments is a complete random. Anyone, this is like with doctor's appointments, actually the problem of that category, anyone buys those. So it's horrible to advertise for. It's absolute shit show. So the only way you can do this is by having a strong customer base that already uses it for something else.

and then get them to add that into their bucket. But it's the old thing, is capitalism evil? I don't think so. I think capitalism most closely represents how humans work. I agree with you. I'm not a big fan of price controls either, but I wonder if there's some element of...

frequency controls of people going into restaurants, scooping all of them up so that other people can't have them so that they're incentivized by these capitalistic gains. No, I agree. I think there's some controls over how many people can get. So we don't really go by how many, we go by how well do you do it?

If you sell a thousand reservations a month, that means you sent probably 3,000 people to restaurants and you were able to price your reservation correctly and you were able to get the right time. And you actually rendered a service to these 3,000 people because they're only paying for it because they couldn't have gotten it otherwise. So in my mind, a sold reservation is a good reservation. What is bad is people trying to make a reservation

randomly with the hopes of selling it. And we had that in the beginning that people would make a hundred reservations, sell three of them. And that's a real problem because you're clogging up restaurants or any vendor for that matter. And we stopped that. Like we literally put in there, the people go, those people who did that were very angry that we did that, but we, we stopped that, that, that is stopped. Like that's a, because that would have broken our model and we stopped that. But

the capitalistic incentive makes you wonder, okay, which restaurants are actually in demand at which time. And then if it's free, a few lucky ones will scoop it up.

But before appointment trader, then they sold it on Craigslist or eBay with no refund. The reason why appointment traders started growing is we have a real refund mechanism. So if you sell a reservation and the guy doesn't show up to your reservation and you get charged $100 no-show fee, you can actually get it back from appointment trader. We'll guarantee you that we'll give you the money back even if the guy doesn't pay us. And when you buy a reservation and the thing is fake,

We give you the money back as well. We take it from the seller and you can see, oh, this seller has so much positive track record and all this stuff. It's just optimized for appointments. It's literally a marketplace that's optimized for time slots. And before appointment trader, the same thing happened just on other markets. Yes. Your full-time job is being the government of this. So

It sounds like you have your work cut out for you. Jonas, we end all of our episodes by asking our guests for one tip listeners can take straight to the bank. Do you have a tip for people who have a business idea, want to get it off the ground maybe, or even just want to get into the appointment trading business? So in general for business, the reason why the capitalistic system worked so well is because you're incentivized by profits that you will make if you improve the lives of many people.

So when you have a business idea, don't think about the money that you can make. Think about the improvement of life quality that you will provide to your customers and think about if they can have it today or not. And then think about, is there a category of people that already has that? Is that category very wealthy? And if yes, can you make that process more efficient so more people can have it? And then if you improve millions of people's lives, you'll make a lot of money.

I think I would always think about the improvement of life quality before making money because it's only a result of what you're doing. Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes.

Do you need some money rehab? And let's be honest, we all do. So email us your money questions, [email protected] to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram @moneynews and TikTok @moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.