Yelp doesn't need small business owners. Not the way it needs customers, anyway. It's customers who write the reviews that generate traffic — and therefore ad revenue — for Yelp, and so it's customers whose needs the website serves. Business owners don't even need to know their page exists in order for critical diners, shoppers and homeowners to rate them. In Silicon Valley, this user-focused approach is basically second nature. It's the network that creates value — just ask Facebook. Or WhatsApp. Or Google.
But to the millions of small business owners whose livelihoods are up for debate on Yelp, and whose financial stability can hang in the balance of a one-star review, that logic is less intuitive. Business owners have long complained that Yelp should be more responsive to their problems, and less aggressive about selling ads. In recent years, the tension between the website and the people being reviewed on it has escalated, with accusations of extortion and even Mafia-like behavior. But until now, the company has done very little to address those concerns with the business owners directly.
Earlier this month, Yelp flew 100 small-business owners from around the world to its headquarters in San Francisco for a summit called Coast to Coast. Invitees were selected by local community managers who work for Yelp. It was an eclectic group. One woman arrived wearing what could have passed as a Little Red Riding Hood costume; a few feet away, crowded into the Yelp offices' in-house coffeeshop, sat a white-haired, pony-tailed, many-earringed hot dog slinger from Philadelphia. The espresso drinks were gratis.
Corey Dane, Yelp's manager of local business outreach, told the assembled audience that calling them to say they were getting an all-expenses-paid trip to California made him feel like Oprah. But the business owners made it clear that the free trip wouldn't be enough to pull the wool over their eyes. "We all said, what's your angle," an audience member heckled Dane. The room exploded with laughter.
Yelp doesn't need small business owners — but it still wants them to like the company. After years of making the reviewers the number-one priority — pouring considerable resources, for example, into developing and growing the Yelp Elite program — it would seem that Yelp is interested in changing how small business owners think about the company. I asked CEO Jeremy Stoppelman, after he was done posing for photographs with attendees, if Coast to Coast was about wooing small business owners, a stab at repairing the damage of last few years. "You're not changing an entire ecosystem with one event," he said.
Officially, the motivation for organizing Coast to Coast was to have business owners of all stripes meet each other, contribute feedback, and learn how to use the site. A group of product managers for the company discussed various features they're working on, including advanced messaging.
Yelp has offered food delivery since 2013 and recently acquired Eat24; the company is currently developing tools for users to book services like massages and dental cleanings without leaving the platform. Apps that offer on-demand services are hot in San Francisco right now, and the idea that Yelp might take on niche competitors like Thumbtack and Homeadvisor — not to mention heavyweights like Google and Amazon — was certainly in the air at Coast to Coast. In a breakout session, product managers tried to get a read for how Coast to Coast attendees felt about the idea. Which makes sense: On-demand services would certainly require buy-in from business owners.
But updates to the app aren't what the the business owners wanted to talk about. The biggest problem seem to have with Yelp is not a lack of new products, but lack of accountability.
For example, business owners are under a lot of pressure from Yelp to advertise, sometimes receiving four phone calls a week or more. But exactly what that payoff of that investment is unclear. Advertising, which starts at $25 a month, means paying for things like having your company appear at the top of a list of search results. Some business owners spend upwards of $1,000 a month on Yelp advertising. Yelp says that for approximately every dollar spent on advertising, an advertiser can expect a threefold return on investment. But Robert Tabz, co-owner of Jougert bar in Burlingame, California, said that language is intentionally vague. "If they showed the dollar amount," he said, "they'd get caught with their hand in the cookie jar."
But even businesses that that don't pay for advertising can feel the impact of Yelp on their bottom line. Like many sites, Yelp uses a recommendation algorithm to sort content. In theory, it surfaces the most accurate, helpful, fair reviews a company receives, and helps protect the platform against bad actors — people who will write positive reviews in exchange for money, or angry competitors who might spam a business with bad reviews. But exactly how it does that is unclear, a fact that becomes especially frustrating to business owners when it's good reviews, and not bad reviews, that go missing from the page. "Nobody gets the algorithm," said a hairdresser from Arizona. "They don't want you to."
JJ Gonson owns a music venue and catering company in Somerville, Massachusetts called Cuisine En Locale. Like many attendees, she described receiving one-star ratings on Yelp as "heartbreaking," but also frustrating when the comments are inaccurate or personal, and there's nothing Yelp's customer service team will do about it. Recently, she said, a customer made a Yelp account just to insult her; Yelp assured her that, because the reviewer isn't a repeat user with an active network on the site, the comment would disappear within a week. But Yelp said that's not quite right; the review might be "un-recommended," but it won't be taken down. The algorithm will conceal it, but it won't get in the way of Yelp's lifeblood — the constant churn of content in the form of reviews.
At Yelp, these incorrect assumptions about what the site's algorithm does and doesn't do are known as myths. The most pernicious myth is the suggestion that Yelp's advertising team will remove negative ads if you pay them. In an on stage interview, Stoppelman vehemently contested this accusation, comparing the belief that Yelp removes comments for cash to the belief that vaccinating children can make them sick. "It's obvious," he said, "that the things we're accused of are insane ramblings." (Insane or not, rambling about Yelp officially became a national pastime when South Park aired an episode — "You're Not Yelping" — in which users of a Yelp-like site are ultimately compared to terrorists. Stoppelman addressed the episode laughingly on stage. "You can't make fun of something for thirty minutes straight," he said, "unless you're somehow aware of how important it is to our country.")
Bad reviews don't just take hurt a business owner's financials — there's an emotional toll as well. Wade Lombard, owner of Square Cow Movers, gave a presentation at Coast to Coast that was easily the most popular of the day. During it, he said, "I know what a one-star review does to me and my dignity. It strips it away." Before starting his business, Lombard said, he was quick to give local restaurants low ratings for poor service. Now, he said, "the cook could spit in my soup and I'd be like, You're getting four stars!"
Lombard said the trick is not to react to bad reviews with anger; but that can be hard for vulnerable business owners to feel personally insulted. After a while, the conversation started to feel a little like group therapy. One attendee even suggested that, in the future, he might write out his initial response to criticism on a piece of paper and then rip it up before typing up a more professional response on Yelp.
Yelp doesn't need small business owners. Stoppelman made this point pretty clear. "If you can't build an audience and have millions of consumers trust you and rely on a tool to steer you to a great local business… there's no point for small business owners to engage with it," he said. "They're the critical piece. If there were no consumers, then there would be no impact." One would expect that small business owners would take this news — that, more or less, Yelp will always prioritize user interests above theirs — pretty hard. But, by the end of the day, after several workshops, a lot of commiserating, and who knows how many free coffees, they didn't seem mad, or even jaded. In fact, they seemed happy.
Tabz, of the Jougert bar, said that while Stoppelman was talking, "something just clicked." He realized for the first time that his business and Stoppelman's business — Yelp — are actually aligned. Both of them want customers to feel satisfied. He was finally able to see Yelp not as the enemy, but simply as a business that it was in his interest to cooperate with.
He wasn't the only one who got caught up in all the "the user is always right" fervor. Greg Menna is the very enthusiastic owner of District Doughnut in Washington, D.C. I asked him why business owners, many of whom have legitimate gripes with Yelp, were lining up to take photos with the company's CEO. "People are attracted to power," he said. Menna wants his donuts to become national brand one day, and hearing Stoppelman talk about claiming one's business and engaging with customers had him all fired up.
"My mind is changed about Yelp," he said. "It's not their fault."
CORRECTION
Yelp says "it does not offer review ordering" to advertisers. A previous version of this article mischaracterized that policy.