The list of alumni who have earnedtheir MBA (Master of Business Administration) from the renowned Harvard Business School reads like a greatest hits compilation of uber-successful entrepreneurs, executives, and trailblazers: billionaire New York City Mayor Michael Bloomberg; New England Patriots owner Robert Kraft; former Chairman and CEO of Goldman Sachs and the 74th U.S. Treasury Secretary Henry Paulson. It’s a veritable pantheon of highly intelligent people, all educated at one of the world’s most prestigious sanctums of higher learning.
At Marquee, perennially one of New York City’s top nightclubs the past six years, Paris Hilton is a regular.
A synergy between these two institutions may, at first glance, seem hard to fathom. Common ground does not exactly pave a path beneath their respective clientele. But in fact, Harvard and Marquee recently entered into a mutually beneficial—as well as respectful—relationship based around one simple concept: success.
Associate Professor Anita Elberse has been at Harvard Business School (HBS) for six years. Armed with a Ph.D from London Business School, she teaches a course called Strategic Marketing in Creative Industries to MBA candidates who are interested in potential careers in some of today’s more innovative fields of industry.
“Anita focuses on entertainment marketing, sports marekting, etc.,” reports Jim Aisner, Director of Media Relations at HBS. “Here, we use cases, which are documents that tell a story of a particular business situation, be it with marketing or finance or organizational behavior.
“Cases have a protagonist, and oftentimes that protagonist will come to class, listen to the students, and then comment on the comments, as it were. For her second-year elective MBA program, Anita has written a case on the Marquee club.”
Enter Noah Tepperberg and Jason Strauss, co-proprietors of New York’s most relentlessly able nightclub. As the protagonists in Prof. Elberse’s case study on Marquee, the two owners were invited to sit in on the discussion at HBS’s leafy Cambridge, Massachusetts campus. Far from the pounding bass of Marquee’s dance floor and its celebrity-heavy crowds, Tepperberg and Strauss found themselves ensconced in academia, teaching the ways of their club’s impressive durability.
“The idea is that students read the case before coming to class, and the class time is really a discussion centered around what the protagonist—in this case Noah and Jason—should do,” says Elberse. “The key decision here is should they keep the club open, or is it time to close shop and focus their attention elsewhere? And that leads to a larger discussion on what we know about these clubs, what makes them successful, what are some typical problems, and why most clubs don’t stick around for longer than a year-and-a-half.”
Indeed, Marquee is a model of consistency. As a nightclub in the always percolating New York City market, its unprecedented six-year stint of success and popularity is nearly unheard of. First opening its doors in December 2003, it was an instant draw for A-list celebrities and socialites nationwide; six years later it remains the same. The 600-capacity club even earned accolades from Forbes.com, which wrote, “Marquee has managed to preserve its precious allure and keep the fickle and fashionable coming back for more.”
Nonetheless, Tepperberg and Strauss must address the times. With the co-owners recently opening a new lounge in the same New York City neighborhood (the duo also own Tao and Lavo in Las Vegas), Marquee’s future remains a question mark, regardless of its unquestionable success. What better environment to host a discussion about economics and best practices than with the future business leaders of HBS on hand.
“On a personal level, the process of helping to write the study and presenting the two cases has been one of the most exciting experiences of our professional careers to date,” says Tepperberg. “We were hoping the students would look past the celebrity aspect and realize the business of running a successful club is what happens during the day, not what people read in the gossip columns.”
This unusual marriage between Ivy League classroom and club curators began to take shape months before Tepperberg and Strauss eventually landed on Harvard’s campus in March. Marquee’s model was first brought to the attention of Prof. Elberse by two former students, Ryan Barlow and Sheldon Wong, who ended up as co-authors of the case along with Elberse. “They thought there were some interesting parallels between managing, say, a Hollywood movie set or media companies to managing a nightlife business,” says Elberse. “So they developed the project and talked to people in the industry, and the more I saw, the more I realized there was actually more to it, and that it could make for a great case study.”
The group reached out to Tepperberg and Strauss, voicing their fascination with the duration of Marquee’s success, and that their approach to business could help educate the MBA candidates.
“Noah and Jason were a great source throughout the case-writing process,” says Elberse. “It’s not just us studying it from the outside, but also talking directly with them and asking, ‘What makes your business work?’ That makes for better discussions because we have detailed information.”
The resulting case is a 22-page document titled Marquee: The Business of Nightlife, that quite simply contains some of the most insightful and informative rhetoric on successful club ownership and management ever put to paper. The collaborators being Harvard educators and proven proprietors of the highest level makes a formidable case for this study being as close to bulletproof in theory and practice as would seem possible. Prof. Alberse mentions, offhand, that the study has even “leaked” into the private sector in some business circles, coveted as research beyond value.
“This is the first time I’ve included the nightclub model in my curriculum,” says Elberse. “And it is the first—and as far as I know, the only—case on the nightclub industry.”
Tepperberg and Strauss journeyed to the Harvard campus for their interaction with the students on March 30th.
The meeting of the two cultures created less of stir than one might expect within the student-subject dynamic, as both sides recognized the inherent value of such a lofty conversation. “Their interaction with the students was great,” says Elberse. “The students loved the case, as they’d never had discussions on this type of business before, and they thought it was quite interesting. And to have the protagonists there in person is obviously a real treat for the students. It was one of those sessions where you think, ‘This is what makes the [case study] model work really, really well.’ It was a terrific session.”
The focus of the discussion, adds Alberse, centered around the typical lifecycle of a club, how revenues and costs evolve over time, and the ability of the Marquee team to navigate those currents for so long. “We learned as much from the students as they did from us during discussion that took place in the classroom on the day we were there,” says Tepperberg. “It was insightful to hear some of the top young business minds in the world analyze our model. The case study focused on the prior three years (2006,2007, and 2008), so the current economic crisis didn’t really play into the study. But we did touch on it in the conversation we had with the classes.”
Prof. Alberse was very happy with the interaction between her students and Tepperberg and Strauss, and she emphasized how the face-to-face aspect helps to drive home points. “Again, Noah and Jason were a great source throughout the case-writing process,” she says. “But in the discussion, what they can do is point to students and say, ‘You’ve got it right,’ or ‘You haven’t thought about this particular issue.’ So they make it much more tangible, what it means to run a nightlife business. Sometimes it’s basic details that you might not think about and sometimes it’s really high-level thinking that is based on experience.
“I’ll be teaching this course again next year, and I’m definitely going to have this case be part of it. I hope that Noah and Jason can stop by.”
As for Tepperberg and Strauss, their future, and that of Marquee, it’s still a matter of discussion, and who knows whether that conversation will take place in a boardroom or a classroom. Either way, Tepperberg isn’t too worried about passing along business tips to potential future competitors at HBS. “I don’t think we should expect to see more bar owners with MBAs,” he says. “Success in the nightlife business is more about the letters ‘PR’ (personal relationships) than the letters MBA. That said, I think the fact that Harvard Business School did a case study on Marquee makes the club the ‘Ivy League standard.’”
FROM JUNE 2009
