Given that we’ve recently had a run in with Yelp and their way of handling business to business relations, I’ve had this post in my thoughts for some time. Understand that despite the fact I work for Samuelson’s, I am sympathetic to Yelp’s position. I am, however, not an idealist; nor do I strictly believe that Yelp’s founders or operators are idealists either. Given some of the news that has come out lately – allegations of misconduct on Yelp’s part regarding advertisement plans and quid-quo-pro arrangements – I decided I’d finally give my opinion.

Yelp Is An Idea

First, it’s helpful to understand that Yelp is not a scam. Or rather, Yelp was not created to be a scam (perhaps a lightweight cult, but not a scam…) but that the ways which it seems to guys in our position that Yelp is a scam, is because of what Yelp has to do to make their model work.

The idea as I understand it is to be a form of free yellow pages with a social network built into it, which connects people via interests, places they visit, and regular social connections (friendships, etc.) The goal is to become the REAL source of independent reviews of restaurants and other businesses (primarily restaurants – more on that in a moment.) In order to do this, Yelp!, unlike Google or WeddingWire or others, actually takes it upon themselves to help weed out reviews that are fake.

But what constitutes a fake review? That’s a non-trivial problem, and given that, the simplest solution is to allow all reviews to stand and let the normal non-trivial processor (the human being) figure it out using old-fashioned judgment. Most people do not take one or two five-star reviews at face value; but they also may have a good first impression even if they read and doubt.

But Yelp, as I have already stated, has a bit of idealism in them: They want to actually be the Real Reviews by Real People service, and not just in press releases.

So they take it on themselves to figure out what a ‘real’ review is. In doing so they send conflicting messages: they don’t want to you send people who had a good experience to them, since obviously this can skew results. But why would a business let anyone know Yelp exists if they don’t have some chance of benefiting from it? (And the more popular Yelp is, the more crucial this becomes!)

Additionally, restaurants are something people tend to want to make reviews on, whereas other experiences (a grocery store for instance?) do not share this impetus; therefore the ability to get ‘real‘ reviews of anything other than restaurants, maybe spas, resorts and other service industries of that type – is limited.

If you are in a place where Yelp is big, you may have some recourse; there should be enough Yelpers to get a good perspective on your business without you doing any seeding on your own. But for the cities which Yelp has as of yet neglected – you will be stuck fighting getting reviews from first-time Yelpers who may have no credit, even if they are truly Real Reviews. (Yelp has recently tried some measures to reduce the effect of this.) Because Yelp has left this decision to an algorithm, therefore the judgment is guaranteed to be poor. Like with Wikipedia, articles that are not viewed or edited much will have poor quality. You might think it’s the other way around, but it’s not. (hint: the more something is edited, the more the editors pay attention to it.)

Yelp! Is A Business

Enter the practical side of Yelp. They need to make money somehow. This I think is why they enter cities one at a time only – only the largest and most potentially profitable markets. If they don’t do this, they will probably tank.

Now, consider the pragmatic side’s logic: It makes sense to offer benefits to paying customers – and a great benefit to businesses on a site like this would be to have more control over how you appear. Advertising makes sense, but the pragmatist might even say, we should let the businesses challenge reviews and have them removed if they are a paying customer. Why should they not? Do they pay to get punished by irate customers?

Now this would be fine if Yelp’s idealistic side had not dictated already that they were to be the site for Real Reviews – meaning, they want to project the image of being a complete listing of businesses – and to allow, as per social media / web 2.0 standards, people to add their own content, including letting Yelp know about businesses that are not on their map.

So what happens? Businesses get ‘opted in’ without their consent: Therefore the idea of offering benefits to paying customers, which in one case would seem like a benefit, now to some businesses seems like extortion. (And again, the more successful Yelp is, the worse the extortion will seem!) If I voluntarily enter into Yelp for free with knowledge that I may receive bad reviews and not be able to remove them – but such is the risk I take – there would be no problem. Then I could pay and have more control. That makes a lot of sense.

This is (still) not the case, however! And that brings us to our inevitable news.

Yelp Is Having Some ‘Issues’

Of all the news – the only bit of which I find interesting is this:

Lawyers representing plaintiffs dismiss an assertion Mr. Stoppelman has made on Yelp’s blog that they’re just going after the start-up’s money. …

It is an interesting accusation, and it tells me that probably the following has occurred: (These are not accusations, but pure conjecture!)

1. Yelp originally intended to create some kind of quid-quo-pro relationship with businesses, but the auto-opt-in I discussed above has made such a thing impossible. That Mr. Stoppelman even stoops to claim that they’re just after his money is a sign that he knows he’s not totally clean.
2. In all likelihood, a Yelp employee somewhere along the line in fact did offer the quid-quo-pro – once – and that employee was immediately fired. (As they should have been!) However, Yelp failed to come clean about it since popularity on the internet is like sainthood, ‘Your righteousness must exceed that even of the Pharisees.’ Any doubt is every doubt, when doubt is viral. This is simply to say, I believe that Yelp does not extort.

Yelp has recently taken action to try to appease small business owners, but it amounts to allowing people to view the filtered reviews after filling out a captcha (they couldn’t before!) – this is to prevent bots and search engines from indexing these reviews.

What Should We Do?

In conclusion, I do not have a solution for Yelp (or for us, really) except for one idea. To allow businesses to opt-out of Yelp would be a great step in the right direction. Businesses who do not have a good experience with Yelp because of the inherent randomness should not be punished unduly. And indeed, the experience model with different businesses varies extremely.

Yelp, like Microsoft, will find that its success punishes it: The more successful Yelp is, the more pressure there will be on businesses who did not ask to be listed to deal with Yelp – and the more pressure there will be on Yelp to offer some kind of real reconciliation between irate businesses and irate customers, and to deliver a satisfactory experience to two groups who historically hate each other in our society: ‘consumers’ and ‘corporations’.

And indeed, more pressure to find ‘real reviews’ – with an algorithm? Good luck with that one, fellas.