Yelping for Dollars
When chemistry graduate student Lisa Green walked into her first party hosted by review site Yelp.com, she was impressed—and relieved. The scene was Oola, a restaurant and bar in San Francisco's SOMA district. Waiters circulated trays of seared tuna and truffle-soaked French fries. Hip twenty- and thirtysomethings sipped pomegranate-and-vodka cocktails and watermelon cosmopolitans. Nowhere were the Internet nerds Green secretly feared she'd find.
For four weeks, Green had been volunteering her writing services for Yelp, which draws its lifeblood from users' unvarnished reviews of local shops, eateries, and services across the country. The evening out was her just desserts, and it's one of many ways Yelp keeps users like Green engaged. "These were fun, outgoing people, definitely people I wanted to be friends with," she says. "I don't think I would have continued if they hadn't been." The efforts are paying off. Since that party in June, 2005, Green has written more than 200 reviews for the site and she's among the legions who helped turn Yelp into a San Francisco phenomenon to rival Zagat's.
Now founders Jeremy Stoppelman and Russel Simmons want to replicate that success across the U.S. "There's no reason this couldn't be a local destination site for every big city in America," Simmons says. And they're using a small part of the $16 million in venture capital they've raised to create a sophisticated system of compensation that could create a model for building buzz around a fledgling Web site—or test the limits of paying users to contribute online content.
Here's how it works: To help get established in a new locale, Yelp recruits paid "marketing assistants," to promote the site not only through everyday interaction, but also by kicking off online discussions and adding comments to other people's reviews to encourage reviewers to keep up the good work. Essentially, they help make Yelp appear to be a vibrant and outgoing community in hopes that it will actually become one. In some cities, higher-level community managers handle some of those same tasks, but also coordinate social events.
Accountant and freelance writer Maria Christensen, 42, played that role to help get Yelp established in Seattle, working 10 to 20 hours a week for $15 an hour. "We'd watch [the user base] grow from a handful to a few hundred, to more," she says. The marketing assistants are also encouraged to write reviews, but that's not their main job. Yelp tried paying $1 a pop for reviews in new cities, but that often failed to yield quality content.
Yelp's strategy cuts to the heart of the challenge facing companies that want to harness the power of online social networks: how to attract users to a site, and once there, have them stay plugged in—and even do your work for you. When it works, armies of volunteers can create massive encyclopedias like Wikipedia or sprawling online communities like News Corp.'s (NWS) MySpace. When it fails, a site can quickly fade out of view. Just ask Friendster. Yelp's task is especially daunting because it has to create that spark in every city it enters. After all, it's competing with the likes of Zagat's or IAC/InterActiveCorp's (IACI) CitySearch, which combines user reviews with those produced by professionals.
User or Used?
Some reviewers may be turned off by the notion that an ostensibly disinterested fellow user is getting paid to compliment their writing. Two marketing assistants interviewed by BusinessWeek.com said that while they would tell anyone who asked that they worked for Yelp, they didn't always disclose it when interacting with users. Owning up to working for Yelp felt "weird," says Christensen. "I don't think most people knew that I was an employee…We were mostly keeping that quiet ahead of when a full-time Yelp marketing person was hired in Seattle." Yelp Chief Operating Officer Geoff Donaker says to his knowledge, the site hasn't "encountered any negative user feedback about either community management or the marketing assistants in our new cities."
Yelp's not alone in paying users to generate content—though it may be more successful. Netscape.com's Jason Calacanis offered to pay top contributors to social-bookmarking sites like Digg and Reddit if they would quit and do the same work for his site. Few made the jump. "It isn't a money thing," says Karim Yergaliyev, a sophomore at the University of Maryland, whom Calacanis tried to lure away. "I like my friends there, I know what to look for," he says. "I like the Digg community." Calacanis didn't respond to requests for comment.
Yelp's Simmons says that all employees are expected to be transparent about their relationship with Yelp. He adds that the main emphasis for marketing assistants isn't generating activity on the site, but rather offline promotions.
That's something Yelp, founded in July, 2004, has down to a social science. Like Tom Sawyer convincing pals that it's fun to paint a fence, the founders and Yelp Community Manager Nish Nadaraja used charm and trendy friends to make writing reviews for Yelp feel like a big party for San Francisco locals. Already influential in Silicon Valley, the PayPal alums persuaded trendsetting friends with a deep knowledge of the city to write for them to get off the ground. Then the team began throwing parties for "elite squad" users, those members who had written numerous high-quality reviews. The network effect took over, and now more than 4,500 restaurants and 2,600 shops are up on Yelp, and most locations have more than one review. More than a handful of users have written more than a thousand reviews apiece.
Building buzz is a lot harder when Yelp enters new cities. Last year the team grappled with how to take off in markets such as Chicago, New York, Boston, and Seattle. At first they tried a simple approach: For the first few weeks they would pay people $1 per review, in order to stock those areas with reviews. That filled the site with content, but not all of it was good. And it failed to give the community legs. "It didn't do anything to build an initial community," says Yelp's Donaker. "These weren't passionate users."
The job was a lot easier in nearby Los Angeles. Even without goading by Yelp management, dedicated users from San Francisco had begun writing reviews of places they had visited while on trips to the city, and San Francisco transplants to L.A. began to take an active interest in building up the site and encouraging fellow Angelenos to do the same. "We had a burgeoning little community on our hands," says Donaker. To keep the growth going in that city, the team hired a Community Manager for Los Angeles, who would throw "elite" parties like the ones in San Francisco, send out weekly newsletters with events in the city, and "keep the site warm" says Donaker, by complimenting new users' reviews and starting conversations on the talk boards.
For the cities that don't yet have communities to manage, Yelp is hiring go-getter marketing assistants to stoke the fire both on and offline. This fall it advertised the jobs in Austin, San Diego, Washington, D.C., and Atlanta. "Could Yelp.com be the next YouTube?," asked a Nov. 9 ad on Craigslist in Atlanta. "According to Time magazine we could be. This critical role includes: writing witty and insightful reviews…getting your well-written friends (and their friends) to join Yelp…moderating Talk Boards, creating Lists, sending Compliments…[and] spreading the word about Yelp to the broader community."
If Yelp can attract such loyal users in every market and keep them involved, it can grow into a valuable resource for users and a lucrative ad magnet. But it has a lot riding on identifying cool, influential people and inducing them to spark interest—even if it has to use money to do it.