An Interview with Justin Overdorff from Yelp
— Justin M. Overdorff (@jmover) June 15, 2015
Justin took the stage with Chris Moody to talk about Yelp and the platform’s unique data. Chris shared that one of the things that brings everyone in the room together – competitors and peers alike – is talk about the platforms creating this social data. Justin shared that Yelp’s goal is to connect customers with the business around them. He said that Yelp is search and discovery for local business. Yelp is now in 33 countries with Malaysia, and they are actively growing in additional international markets. Justin said that MAU’s are a key measure of their success, as is overall review counts.
Chris asked how Yelp uses data internally, and Justin shared that the structured business listing data (name, phone number, address, etc.) is sourced along with certain open-ended answers provided by the SMB’s themselves. (ie. kid friendly, wheelchair accessible, etc.) While the latter can be somewhat unstructured, their bread and butter unstructured data comes in the form of the long-form user-generated reviews on the site. This data is extremely valuable not only to customers looking for the nearest good restaurant, but lots of businesses are interested in this data as well.
One example can be found in financial services. Justin shared that hedge funds and investors ask Yelp for review data around companies such as Starbucks and other large brands to judge the sentiment around them. Another example is in those alternative lending institutions that put together loan packages for SMBs. A use case that Justin never expected which was brought to Yelp when they opened the doors to their data was in commercial real estate. He said that investors in real estate would use the geo-relevant data and sentiment of reviews to decide where in the city was an up-and-coming area worth investing in. He also mentioned that Yelp data can be a very valuable input when measuring the viability of a small business.
Chris next asked about geo-based data. Justin shared that when you search for sushi in a specific city on Bing, you get branded Yelp reviews back in the returned data. National brands also use Yelp data both in dashboard-format as well as raw JSON feeds to understand what is being shared about their products and offerings. Justin then shared that advertising will always be their core source of revenue, but monetization of the review data is another growing opportunity for Yelp. To point, he said that the “doors have really blown wide open” on Yelp’s data business, and nearly a third of the audience raised their hands when Chris asked who would like to work with Yelp data.
One of the really unique things about Yelp data is how self-correcting it is. With over 140M active monthly users, the folks reading and writing reviews actually update information for them. The SMBs also contribute to keeping the data up to date, and as a result you are always reading the most current information about a business in its reviews.
Chris asked about entrepreneurship and where they were seeing new opportunities. Justin shared that Yelp has a Small Business Council made up of SMBs from across the country. Once a quarter, these council members come to Yelp HQ to share feedback around the platform and its features. Yelp gives the SMBs many tools to improve not only their listings on Yelp, but business as a whole. From a best practices perspective, Justin shared that it really is unique from one business to the next. Sometimes not answering a particularly ugly review is the best course of action to pursue.
Once the audience was able to ask questions they started with a question about Beacons and how they might remove friction from engaging with businesses. Justin said Yelp is constantly looking at new types of technology and hardware, and that there is a cost-factor that needs to considered with Beacons. The battery life right now is another limiting factor of the technology, and they want to see Beacon hardware last more than just a few months. On a whole, Yelp is still a few years away from investing heavily in Beacon technology while the hardware itself matures and improves behind the scenes.
The audience then asked about fake reviews and how Yelp addresses these. Justin shared that they have a team of PhDs and spend a large amount of resources to filter out fake reviews. They don’t delete them, but rather don’t recommend them so they don’t appear above the fold on the review page.
— donheider (@donheider) June 15, 2015
The final audience question was about the permanence of reviews. When a company starts out, an early negative review can leave a lasting “black eye”. Justin shared that recency is important to remember, as the reviews and reviewers take care of themselves if you have honestly improved. This self-correcting behavior shows that a business has truly bettered itself since the initial negative review, but it is important for the users to see this as well. A positive consumer experience is Yelp’s key driver, and they work hard to maintain the best one possible.