Trying to find a good doctor inspired this website. Today 80 million users use it to rate products, services and professionals. Learn how two software engineers accidentally created the online review site Yelp!
Jeremy Stoppelman and Russel Simmons were both software engineers at PayPal.
When the company was acquired by eBay, they left to work at a business incubator, a company that creates and develops start-ups, hoping to capture the next big thing.
One day over lunch, the two got to talking about Stoppelman’s experience using the internet to find a local doctor. It was 2004, and the process was frustrating for Stoppelman. He found plenty of doctors, but had no way to know which doctor was good.
They came up with an idea: Why not build a site where users can ask friends for recommendations? The responses would then be posted to a communal database for everyone to see.
They pitched the idea to their boss later that day and he agreed to put $1 million into it.
They launched the site, called Yelp, and it flopped.
Users didn’t get it. Or they didn’t care.
It was disheartening. But there was a silver lining. Just days before launching the site, Stoppelman and Simmons had added a feature they figured no one would use.
The ability to write reviews without being prompted to.
Stoppelman says, “I remember pondering it and thinking, ‘I don’t think anyone’s gonna ever use this feature. No one’s gonna write a review. Why don’t you just bury it a couple pages deep. Just throw it in there somewhere.’ And lo and behold, that ended up being the saving grace of the whole thing.”
Sure enough, it was the only part of the site that people were actually using a lot. As a result, Yelp relaunched its website in 2005, this time emphasizing the ability to write reviews of your own accord.
The difference was “like night and day,” Stoppelman says. People began flocking to the site and using it obsessively.
The first year, Yelp had 12,000 reviewers. The next year, 100,000.
To help increase awareness of the site, they began making “People Love us on Yelp” stickers for local businesses to put on their window.
The Yelp community continued to grow, expanding to cities across the globe.
Pretty soon, Yelp was the go-to website for finding researching and rating local businesses.
Around 2010, Google was in talks to buy Yelp for half a billion dollars. Stoppelman walked away from the deal, and in 2012, Yelp went public. It currently has a market capitalization of $1.22 billion.
It’s also one of the biggest names in online reviews and has an avid community of reviewers.
The site gets 80 million unique visitors a month, and has over 33 million reviews in its database.
Jeremy Stoppelman and Russel Simmons exemplify two our Business Axioms for Entrepreneurs: Think around your frustration and Go with the Flow.
User-generated reviews of local businesses. Now Why Didn’t I Think of That?