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Yelp's Jeremy Stoppelman: 'What the Hell Am I Doing?'

When Yelp launched in 2004, Jeremy Stoppelman and his co-founder thought they were super geniuses. But the site flopped.

How I Did It: Jeremy Stoppelman, Yelp

When Yelp launched in 2004, Jeremy Stoppelman and his co-founder thought they were super geniuses. But the site flopped.

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Video Transcript

00:07 Jeremy Stoppelman: What the hell am I doing? What have I done with my investors' money? These poor employees that are relying on me, what were they thinking?

In 2004, Jeremy Stoppleman co-founded Yelp, a site with reviews of local businesses.

At first, Yelp focused on helping users ask their friends for recommendations and reviews.

00:26 Stoppelman: What we realized was word-of-mouth is the way we wanna find great local business. That's what we all naturally do. And if we could create something online that could capture word-of-mouth, that would create an amazing resource to find only the best local businesses. So, it felt like a winner idea. We were very excited about it. From the moment we got it we were extremely passionate, started building it, sinking 90-hour weeks into coding and designing the thing and we launched in October 2004. We got a little bit of press. There was some buzz. Users started flowing in. And then we started seeing that actually users weren't getting it. They just weren't taking to it. They might ask a question but they weren't inviting enough friends and it really felt like this wasn't gonna work. And so, we saw that the site starting to fizzle right before our eyes.

In the first three months, Yelp got significantly less traffic than the founders had expected.

01:24 Stoppelman: Prior to that, we felt like we were super geniuses. This idea was going to work. We wouldn't tell anyone what it was. We were in stealth mode and we were just waiting for that moment to open it up and let consumers stream in. The consumer reaction? Total flop. People came in. They tried to invite their friends. They tried to ask questions looking for recommendations. Some of them got answers but just not enough and it wasn't working. From the moment that we launched and started seeing the site not working as expected, it was huge let down. And in fact, it was a real struggle to keep the team together. We had a lot of turnover in that time period, but there was this one silver lining which was just a couple of days before launch literally as an afterthought. My co-founder Ross, peers over his monitor and says to me, "Should there be a way to write a review without being asked a question?" And I literally... 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.

Yelp's data showed that users who found the "Write a Review" feature were spending many hours on it, sometimes writing 15 reviews a day.

In February 2005, Yelp relaunched its site, with a new design that let users more readily write reviews.

02:40 Stoppelman: It happened the day that we opened up that sort of revamped site, it was like night and day, two totally different experiences. Consumers immediately got what we were all about. And we started seeing people express themselves connecting with other users, writing lots of reviews of their favorite local businesses, getting really excited and passionate about our concept, our idea and the site that we had built. And they started using words like, "Oh, wow. This is really addictive." And that's when we knew we actually had something and we had crossed that chasm from an initial idea, into something that was actually going to start working. When we launched the initial concept for Yelp, I was diligently watching. I was like, "Okay. I hope this works out." But if it doesn't, I wanna be ready for that next move. I want to be ready to capture the value that is there that we haven't yet discovered. And I think that's always there for any entrepreneur. There's always, even when everything's going wrong, there's some silver lining in there. There's some piece of data that you could take, there's some lesson that you can learn that if you apply it, could lead to success down the road.

Today, Yelp gets more than 80 million unique visitors per month. Its users have written 33 million reviews.

Yelp went public in March 2012; it recently had a market capitalization of $1.22 billion.

Last updated: Dec 4, 2012