Guide Guy - Interview with Tim Zagat

TZ: I think it’s a good way for people to work together because I don’t like politics in an office. I don’t like people competing with each other by knocking each other down. I think the attitude here is, “Do unto the other what you would want him to do to you.” Think of the other fellow first. If you’re through with what you’re doing, go help somebody else and have a sense of humor about it.

DM: In this type of culture, do you have any employee-retention issues?

TZ: I would say that our biggest problem is we retain too many employees. We don’t ever like to fire anybody, and sometimes you have somebody who’s not working out or isn’t happy, and therefore, they don’t do their best job. You’re not doing yourself or anybody else a favor by having somebody sitting around, not being happy, and exuding those feelings. We virtually never fire people. We hate to do it. It just seems so cold, but I think we need to be a little bit more willing to make judgments because every time we keep somebody who isn’t performing it makes everybody else’s work harder.

I always keep my door open. That’s so people can see what I’m doing, and the same is true for Nina. If people are having problems, we want them to come and tell us. It’s part of the culture here. We try to be as close as possible to the people working here, and that gets harder when you get up over 125 people. And we have 180 part-time people all over the world so, if they’re off in Shanghai, unless I go to Shanghai for a book release, I don’t see them.

On Zagat’s Plate

DM: What do you have planned for the next five years?

TZ: We’re growing geographically and we’re going to be in every major city in the world. We’re already in 90 cities. We have surveys in China, four in Japan, and 28 in Europe, but I want to finish off South America and India. My feeling is we’ll do guides in 20 to 25 more major cities.

Secondly, I want to go into some of the second-level cities in the United States, like Dubuque, Duluth and Des Moines. We want to pick up cities that might have 25 restaurants that are worth knowing about. Somebody shouldn’t drive across the United States without having our content show you where to eat and sleep. By the way, we license our content to the car navigation–system companies and a lot of the major manufacturers use us.

Then we’ve got other verticals. We are in 104 countries for hotel, resort, and spa guides. We’re in 25 cities for nightlife guides. We’re in approximately 25 cities for shopping. There is more and more shopping done online, and so we’re doing a guide for that. We have several different applications for PDAs.

DM: Have you ever considered selling your business?

TZ: About this time last year, we went to Goldman Sachs to help us sell. We went through the process, and Goldman told us they could get us a huge amount of money, which was one of the reasons we went with them. We had 200 companies express interest. We eliminated 100 and ended up getting bids from about 30 companies, including some bids that were very near what we were originally looking to sell for. But Goldman kept saying, “Give us one more round, and we’ll get them over the top.” And that’s when the market started dropping out from under us, and by last summer or fall, there wasn’t a market for this kind of thing. A sale may happen eventually. But right now, we took the company off the market and two or three years from now maybe we’ll come back.

DM: If and when you do sell, will you continue to have a role in the company or will you retire?

TZ: Retire? No. Everybody that we talked to about the sales said they wanted Nina and me to stay on, mainly because they felt that we were the image of the company and we understood where a lot of the bones were buried. But I felt—and I still feel—that any time somebody buys your company, they have the right to decide what they want. If somebody wants to say good-bye, you say good-bye, as long as the money is rig