If you enjoyed my Dish interview on Zhang Tao, which was published in the magazine, here’s a lot more of that good stuff: the full interview with the lovable Dianping.com CEO with a mind like a steel-trap and a passion for all things delicious—especially the hot pot restaurant Haidilao.

What are YOUR thoughts on Zhang Tao’s interview or the dining scene in general? Leave a comment below.

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I have thought of Zhang Tao frequently in the years since I met him in 2004. I first interviewed Zhang for a business story about Chinese returning home to start their own businesses after studying abroad. Since that time, the little website that Zhang launched in April 2003 has grown into an influential industry giant—Dianping has almost 20,000 restaurants listed in Shanghai alone. It’s far and away the largest restaurant review site in China. It covers over 160 cities with more than 3 million restaurant reviews and over 6 million unique visits per month.

I recently chatted with Zhang, a native Shanghainese with an MBA from Wharton, about his job as CEO, his thoughts on the industry, and of course, his favorite restaurants. Friendly and well-spoken, Zhang, is clearly a creative and visionary leader who is constantly learning on the job.

What is the Dianping concept?

I want to provide a platform where consumers can read and write reviews on the places they go. I want to make word-of-mouth systemized. This kind of user-generated content is more reliable, more objective, and—when you have enough people participating—it’s actually more accurate than a few professional reviews. It’s more comprehensive.

The inspiration came from some different sources, one is Zagat in the US, it’s user-generated content (UGC) in an offline form, but what I really wanted to do was online based, which was inspired by Amazon.com and the Wikipedia phenomenon, combined with my own interest in food and dining out.

How did you launch Dianping?

When I came back to China after finishing my Wharton MBA, my wife got a good job, so I knew I could start something more adventurous, more risky. At the beginning I didn’t take a salary myself and it was kind of a one-man shop. The expenses were pretty low in China for building a website and getting bandwidth, so it was not a very capital intensive investment.

We launched in April 2003 and it was pretty popular from the beginning. People loved the site. You could immediately see the early adoptors, and the power of word-of-mouth and viral growth. Originally I just asked my own friends to write reviews, even my dad who is 70 years old and who had never gone online before. From the beginning my dad was one of the top 20 reviewers. My dad is someone who really loves to try new things and he loves to dine out.

What are your biggest challenges as CEO?

Obviously my role changes all the time. At the beginning I was more like a project manager responsible for the website. Just last year we doubled our size to 120 employees. Something I have observed is that when you go over 50-60 people you become a real company, you need a lot of support functions. Firstly, I need to set the company goals, the vision, the goal for 2008 and for three years from now, what kind of major strategies we will take. But besides that, one of my goals is to make sure the organizational structure is right, so the company has the right sort of structure and processes.

How do you grow a small company with everything being freewheeling to becoming to a lasting company?--You need a foundation of company structure. Definitely my role has changed a bit. Before it was more entrepreneurial and now it’s half-entrepreneur and half-manager. The process is both challenging and rewarding. It’s really tough to get something right.

How has the dining scene in Shanghai developed since you started Dianping?

The dining scene has become more professionally managed. There are more non-restaurant sector people, a lot of advertising and media people, coming into the industry and being pretty successful. The scene is now more focused on not just going out for good food, but on the dining experience angle.

And another thing that goes with the growing prosperity in China and Shanghai, is that you see restaurants spreading out. It used to be restaurants were only concentrated in the downtown areas. Now you see popular restaurants farther out, like in Zhabei and Pudong. And I would say the overall dining quality is getting much better.

Who is doing well now, and what's the future of dining in China?

Chains are doing very well; this is an observation which really changed my perspective. When I first started, I had thought the best restaurants could only be family-owned. Because for a restaurant to be good, the chef is so important, how can you hire so many chefs and still ensure that the food is good? But the facts speak louder than whatever you want to theorize about. Actually the chains usually get higher ratings and they are more consistent. So, even though chefs are important, management is even more important.

Restaurants in China have a much bigger potential than in the U.S. because demand is so high and management has become really sophisticated over time. It’s really amazing, in many of the chains, you have three stories and so many people dining at the same time. From a management perspective, Google is a simple business, while restaurants are very complex: the ingredients, the suppliers, the chefs, the service, reservation management, and all these things.

I believe that Shanghai restaurants are some of the top in the world and that in 5 to 10 years Shanghai will have the best managed restaurant industry in the whole world. Shanghainese people love to dine out and they are very demanding. It’s survival of the fittest.

Are there differences between Chinese and Western expectations for dining?

In the U.S., dining is a social event, you may dine for 3 hours and have 5 different courses with wine, but for a lot of Chinese people that’s too long and it’s boring. I have an appetizer and then have to wait half an hour for the next dish? Chinese want all the dishes to come at the same time, so Chinese and Western ideas of what is good service are very different.”

Among nearly 20,000 restaurants in Shanghai, Haidilao is always in the top three. But Westerners would not think it’s the top. Chinese really don’t want too much formality or stuffiness. For me I actually really like Laris, but it’s not my favorite restaurant, it’s too formal. I seldom go to “5-star” restaurants—it’s too formal, it’s stuffy, and the dining goes for too long. I prefer the Haidilao [Hot Pot] kind of experience, it’s more casual and more warm.

The serving level will probably never be the same as in the West. In the U.S., you have a lot of college students working as waitstaff, but here the social class is different. I don’t see that changing in the near future. The food, the décor probably has a bit of a higher weight than the service. The service level goes with customer demand. If Chinese really demand service, like Japanese people do, it will rise. But if not, the importance of that will lose out to other things.

To Chinese people the food quality itself is really important, even more so than to Americans and British, maybe more on par with French people. They demand food quality and food variety.

Do you use Dianping when you go out to eat?

Yes, of course it’s the only source I use. If I try a new restaurant it must have a good rating on the website, otherwise I will not try it, it’s too risky.

What are your favorite restaurants?

I go to Zhizhen a lot for Shanghainese and Cantonese. I like places where every dish is good and consistent, a restaurant which allows me to try different things, not a place like a one-trick pony. The way I evaluate a restaurant is if I can order a dish which is not necessarily put forward by the menu or on Dianping, and no matter what I order, everything will be good across the board. I like A Yi Baoyu [Shark Fin and Abalone], the Xiao Nanguo [Shanghainese] on Hongmei Lu--it’s better than the other ones, and the pizza and pasta at Pasta Fresca da Salvatore.

If I go to Western restaurants I go for the appetizers and soup and desserts, I’m usually disappointed with the main dishes. I’ve been to all the top restaurants, even those in Philadelphia and New York and it’s the same phenomenon.

How does Dianping influence the industry?

More and more restaurant owners are using the site to do research to improve their management. Some of our top online groups are operated by restaurant owners. They use Dianping as a management tool. If they see some good points from consumers they will use that to improve. And they use it to see what their competitors are doing, in terms of shop location and menu offerings.

We have been sued 4 times. The last time was 2 years ago. But now you can see a change in people’s reactions. Before, restaurant owners didn’t understand our platform. They thought if they had bad reviews the first thing to do is demand we remove them. They took the reviews personally and negatively. But now more of them use Dianping as an opportunity to improve. That’s another big change, their mindset and also their management are more sophisticated.

What about the Dianping influence on typical consumers?

On the consumer side, people are becoming more and more demanding in general. Before they learn about Dianping, they may have thought they were pretty selective, and they thought they knew a lot. But after they start to use Dianping, they become pickier and more demanding and then they exclusively go to the restaurants which have high reviews.

If one of our top reviewers writes about a new restaurant it could be very influential. Being a top reviewer on Dianping is a big thing, it’s a badge of honor. If they are in the top ten and they see number 11 or 12 are catching up, they will write a whole bunch of reviews to stay on top.

Why are you such a die-hard Haidilao fan?

Haidilao has the best service I’ve ever had, even better than in a five-star hotel, because they are very attentive and very warm. They even polish your shoes! It’s even better than in a five-star hotel. At some fancy places, the people are too cold, too dressed-up, and you feel a bit stuffy.

We had an award ceremony in Beijing and I met a leader of Haidilao’s Beijing operations. And he’s only 20-something. All the Haidilao employees can all move up quickly, they start from around 17 to 18 years old and they can become shop manager and then general manager.

If I had money I would invest in Haidilao because their management is really good. They really motivate their employees; you can see they have genuine smiles. They empower their employees and trust their judgment. I tell my employees ‘you have to have Haidilao spirit!’