I was recently invited to write an opinion piece for the San Francisco Chronicle discussing Yelp, issues of free speech, and what it all means for local businesses. My thanks to the editors for dedicating the space. Below is my submission (printed in Monday's paper)...
One day in the summer of 2004, I got sick and needed to see a doctor. I asked friends for referrals, but most of them were Bay Area transplants and didn't have any good recommendations. I searched on Google, but found only generic lists on health insurance Web sites. I wanted a doctor that fit my needs, not just any doctor. I wondered why it was so easy to find consumer reviews for products like books and electronics, but so hard to find good referrals for local service providers like doctors and plumbers. My frustration turned to opportunity when I started Yelp with my friend, Russ Simmons. The Yelp website helps people share their knowledge about local businesses. Yelp usage has grown quickly; last month 17 million consumers used the site to read 4.5 million reviews about local businesses in the United States, Canada and the United Kingdom.
Yelp's increasing influence on local commerce has led business owners (and local press) to ask: Is Yelp a good thing for small business? For those businesses who treat their customers well (the vast majority of businesses, as it turns out), the answer is yes, because Yelp offers a phenomenal source of free marketing. Before Yelp, businesses could only reach new consumers through word of mouth and advertising. Word of mouth is great, but it travels slowly, reaching perhaps just a handful of friends. Traditional advertising has been very expensive; it can cost $60,000 or more for a full page ad in the Yellow Pages. And because Yelp is basically word-of-mouth online, it brings all the pros and cons of real referrals with the speed of the Web. So what might be the downside? That businesses can't control what their customers are saying about them on the site (just like word of mouth offline). However, when consumers research a business on Yelp, they are taking in the whole picture, including reviews, photos and service offerings — not just honing in on one errant viewpoint.
With the cacophony of opinions on the site, it's natural to wonder whether "anything goes" on Yelp. Absolutely not. While we don't referee factual disputes, we do try to ensure that reviews reflect a firsthand experience and don't betray any obvious conflict of interest. We field inquiries daily from business owners and consumers alike, and we consider each one carefully. We've even built sophisticated, automated software to suppress suspicious reviews that might have been written by an employee, owner or competitor. As a result, most businesses will see reviews come and go from their Yelp page (whether they are a Yelp advertiser or not) as we work to ensure the site remains a trusted resource.
Local media's coverage of Yelp has often focused on the downside for businesses of negative reviews, even though 85 percent of the reviews rate businesses with three stars (out of five) or higher, and such content is helpful to consumers. As a business owner myself, I empathize with how personal a bad review can feel. In very rare cases, businesses have become so distraught over negative reviews that they have taken to the courts (as recently highlighted in two Chronicle reports). Fortunately for consumers, the core legal issues have long been settled and very clearly allow people to share their opinions — online or otherwise. In most cases, however, savvy business owners use negative reviews as an opportunity to reach out to that customer or to improve their service.
My once frustrating dilemma of finding a medical provider is history. Today, I returned to a dentist I found a couple years ago on Yelp; she now has 59 five-star reviews and a huge new office that overlooks Union Square. To create the Yelp site, we've ceded unprecedented power to consumers, but this simply means power once wielded by an elite few is now in the hands of all.