Content Matters

Sometimes, to find the innovators you have to look at the simple applications that just deliver what they promise.  For more than 25 years, Zagat has been delivering just what their users need.

Founded in 1979, by husband and wife attorneys Tim and Nina Zagat, the Zagat Surveys have become the staple of diners in virtually every major city.  The ubiquitous burgundy books sit on bookshelves in every major office and household.

Early on, the Zagats caught on to the magic of customer feedback, in this case restaurant reviews.  Ratings you could rely upon, combined with anecdotal feedback, made users confident in their choices.  Keeping it light, they would infuse local flavor and humor in the listings (my all-time favorite review was for the former Triplets Roumanian Restaurant in Brooklyn and opened with “Like a Yiddish themepark…”).  For better usability, Zagat provided various indices in the book (cuisine, location and special features) and also provided a set of rankings up front (top food, top by location, best value, etc.).

During the dot.com boom, many thought Zagat would be replaced by one of the many web-based city sites, such as CitySearch.  It would not have been surprising to see Zagat shy away from the web, seeing it as a threat to their business.  Instead, Zagat embraced electronic delivery, creating applications for PDAs as well as the web.  They have effectively balanced free content vs. subscription content, periodically moving more and more content behind the subscriber wall.  All the while, they have seen their print sales continue to rise.

In 2000, Zagat raised an estimated $31M in outside capital, led by General Atlantic Partners, Allen & Company and Kleiner Perkins.  Funds were used to revamp the web applications and dramatically expand the geographic coverage of the Zagat Restaurant Surveys to more than 70 markets globally.  More recently, Zagat has leveraged their brand to do ratings of hotels, golf courses, nightlife and more.

Over the years, I’ve seen countless business plans describe their model as being the “Zagat of (insert market here)”.  There can be no higher praise than to see your trademark brand become a generic noun.  Revenues for privately held Zagat were estimated to be $27M at year-end 2003, according to CorpTech, while Zagat employs about 110 people.  It's estimated that more than 650,000 copies of the Zagat New York City Restaurants Survey are sold at retail each year, with hundreds of thousands more custom imprints.

As an early pioneer in ratings and rankings, who has navigated the changing publishing market successfully, all the while strengthening its core brand, Zagat is clearly one of the 50 Content Companies that Matter.

P.S. To resolve the age-old question, the correct pronunciation is “Zuh-GAT”, not Zagg-it or Zay-git.  Then again, when Tim Zagat was asked that question on CNN a few years ago, his answer was simply “it doesn’t matter; just buy the book”.