Sometimes You Have To Smother Your Hubris To Succeed—Just Ask Yelp

The cofounders of Yelp thought they were "super geniuses." Then their users fled. Here's what they learned in the process.

Back in 2003, Jeremy Stoppelman and Russel Simmons were in an enviable position. They were junior members of the PayPal Mafia—think Elon Musk, Peter Thiel, Max Levchin. More than that, they had a great idea for changing the way people discovered awesome stuff around them—a site called Yelp—that would capture the way we naturally make recommendations.

"If we could create something online that could capture word of mouth," Stoppelman recalls in a video for Reaction Power, "that would create an amazing resource to find only the best local businesses."

How to misplace an insight

So when they launched Yelp, it was like a Quora for local businesses—you had to ask your friends for reviews and recommendations of where to go and what to do. This was before the IPO, the glowing cover stories, and the Most Innovative lists. That initial model was enough to get some press coverage and gain some user interest—though they soon left.

User behavior was not, you could say, as Yelp expected: Users would maybe ask a question, but they weren't inviting their friends to come play, too. This site that was such a perfect idea and all the momentum the young entrepreneurs had behind them was starting to fizzle.

"Consumer reaction?" Stoppelman asks his former self. "Total flop."

Finding the silver lining

Gone was the feeling of being "super geniuses." Thankfully, their hubris didn't quite kill them, as they threw in a feature to let you write reviews without a prompt. It was an afterthought—Stoppelman thought no one would ever use it—but then they realized something strange: The libertine reviewers had insane engagement.

It was time to pivot.

Fast-forward to February 2005: Yelp launches again with writing reviews at the center of the service. And users immediately loved it, Stoppelman says; people were expressing themselves, connecting with others, and writing buckets of reviews. All because of a tiny feature that got tucked in back before launch.

Bottom Line: Your initial idea won't be perfect, so build in ways to move to the value that you didn't know about when you started. When you pinpoint where the engagement is, make that your killer app.

[People Talking image: Toonstyle via Shutterstock]

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  • Ken Simpson

    Yelp {a}!

    Their service was {b}. All the {c} had {d} attitudes.  The {e} arrived {f} minutes {late/early}.  I conspicuously pulled out my {iPhone/Android}, and they {g} offered to give me free {h}.  I will {i} go there again.