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Harvard Business Case Study Marquee

Nightlife impresario Noah Tepperberg is on a tear. He and his partners in the Tao Group have opened six venues in two years, including a major revamp of the 10-year-old nightclub Marquee NYC, which has been the focus of a graduate class at Harvard Business School since 2009. The Ivy League institution has been studying Marquee's longevity—an unusual distinction in a fickle industry. Altogether, Tao Group employs 3,000 and operates a dozen restaurants and clubs.

Mr. Tepperberg, 37, who owns hot spots Lavo in New York and Las Vegas and Tao at the Venetian in Las Vegas, recently opened a high-end chophouse in New York, the Arlington Club, with celebrity chef Laurent Tourondel.

How did you get into the business?

My father was a pediatric neurologist, and my mother is a travel writer. I got exposed to nightlife through my brother, who had a band that was very popular in New York City in the 1980s. I grew up in the West Village, so I lived close to the clubs. I started working in the business when I was 16, handing out fliers and helping my brother set up his band at different places.

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What's the state of New York nightlife?

It's thriving, with more places opening than ever. But it's way more regulated. There are changes to codes and the processes to get permits and licenses to make sure that things are being done properly.

The nature of nightlife has changed. People aren't going to one place but to two or three a night. And there are more clusters of neighborhoods where nightlife is happening.

What's the biggest change at Marquee NYC, which recently reopened after a four-month renovation?

People are not going there now to see a certain crowd. They are going there for the music, the dancers, the whole ambience rather than the scene. It's more of a DJ-driven venue now, and that's why we moved the DJ booth to the middle of the stage from the side.

What was your reaction when Harvard approached you to do a case study on Marquee?

WHERE THEY DINED

I asked my mom whether I should do this because it would take a lot of time, and they wanted to follow us around and expose a lot of things. I didn't realize how significant it was. Then my friends who went to other Ivy League master's programs told me it was a real honor.

The class is taught one semester a year. It focuses on how we extended the lifespan of the club.

So what's the answer?

You have to come to the class.

Do you fit the stereotype of the nightlife executive who indulges too much in the lifestyle?

No, I'm balanced. When I'm out, I'm always the sober guy in the place. I don't drink much. I don't do drugs, and I've always been that way, because I'm really working when I'm out. Having that discipline is key. I enjoy seeing these places that we built come alive at night, but I'm here to work.

What are your hours?

I like to say that I have a 9-to-5 job—except it's 5 a.m.! I start answering emails at 9 a.m. And I start my night around 10:30.

What would people be surprised to learn about you?

They are mostly shocked that I'm a chess player. It's one of my favorite hobbies. I feel like people are always surprised to learn that I have two brothers and two sisters. Not that many people expect someone who grew up in Manhattan to have a big family.

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MMarquee recently reopened in New York and has quickly returned to its rightful spot in the top-tier of New York nightclubs.  Marquee originally opened in late 2003. It managed to stay towards the top of the New York nightlife scene for over 5 years.  Towards the end of their first run in 2009, Harvard Business School published a case study looking at Marquee and how it became so successful.  Eventually the owners made the smart decision to close, renovate and relaunch the club.  The early reports suggest that they have done so quite successfully.

The concept of bottle service had become fairly standard by the time Marquee opened in 2003.  Anyone who has woken up on a Sunday morning with a massive hangover and a $2,000 receipt in their wallet knows these clubs are big businesses.  The HBS case study confirmed what everyone suspected.  In fact, it put a spotlight on how profitable these clubs can be.  While the idea of a 22 page case study going viral seems a bit out there, it was the talk of New York when it made the rounds.  People were fascinated with the precision owners Noah Tepperberg and Jason Strauss displayed on everything from door policy to coat check.  While dated, this is still an amazing read for anyone interested in learning more about the club business.  Interestingly, the case study indicates they did $15 million in revenue in 2007.  To get a sense as to how big the club business has gotten, the top clubs in the country last year did north of $60 million in revenue.  Given the track record of Tepperberg and Strauss, it is no shocker that Marquee Las Vegas comes in #1 at an estimated $70-80 million.

Click below for the Harvard Business School case study Marquee: The Business of Nightlife:
Marquee Harvard Business School Case Study

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