Yelp: Jeremy Stoppelman

So I've got some more exciting news about the how I built this summit happening this fall in San Francisco. On top of the amazing guests I'll be speaking to on the main stage, we'll have breakout sessions throughout the summit with speakers like Katia Beecham of Birchbox, James Park and Eric Friedman of Fitbit, James Reinhardt of ThreadUp. Sadie Lincoln of Bar Three and many, many more. And also, we've just launched the 2019 How I Built This Fellowship application. The fellowship was started to make the summit accessible to entrepreneurs who are working hard to bring their business ideas to life, but might need a little extra help to get there. This year's sixty fellows will receive free admission to the summit, along with special programs to help their businesses grow. Visit summit.npr.org and For more information, and be sure to apply by July thirty first.

So it was literally an afterthought. that you would be able to write a review on Yelp. That feature almost didn't exist. And it was in fact Russ right before launch that like I remember him peeking over his monitor and be like oh should should there be a way To write a review. You know, if nobody asked you a question, you just wanted to write one, I'm like

No one's gonna do that. Because of course, we didn't think anyone would write reviews for fun. That was preposterous. From NPR, it's how I built this, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

Guy Raz, and on today's show, how Jeremy Stoppelman changed the way we find places to eat, drink, and shop. Yep, yep. Public company now value Two and a half.

Okay, so think about the last time you read a review on the internet, and then use that review to help you make a decision. You know, maybe it was which restaurant to eat at, or which brand of toaster to buy on Amazon, or maybe even which podcast to listen to. Internet reviews? are just kind of a fixture of modern life. And these review sites have put a lot of power into the hands of consumers. And some of that power is great. Customers who love a taco stand or a barber shop can totally boost their popularity. But at the same time, These sites have also irritated a lot of business owners because one bad review can do a lot of damage to a business. Anyway, one of the people who got this whole thing started is Jeremy Stoppelman. Jeremy co-founded Yelp in 2004, and the story of how he did it? Well, in a lot of ways it's a classic Silicon Valley startup story. And along the way, as you will hear, Jeremy crossed paths with some of the most famous names in technology.

Elon Musk, Reed Hoffman, even briefly Steve Jobs. But before any of that, Jeremy grew up in Northern Virginia. He was born in 1977. His dad was a securities lawyer in Washington, DC, and like a lot of the tech founders we've had on the show. Jeremy was still a kid when the PC revolution was happening. And one day his dad brought home a computer for him and his brothers to play with. I mean at first it was just fascinating, you know, to learn how the operating system works. These are the DOS days of the command prompt. Then it became very quickly about video games.

And that really sucked me in. I was curious, well How do you make these things? They're really fun to play, but like what's behind them? And so that started me, you know, on a on a journey. I started reading, you know, the manuals, just started uncovering the mysteries bit by bit. I read that like at age fourteen you h you opened up a Charles Schwab account. How did that happen?

You know, probably ties into uh Yeah, my dad being uh involved in the securities industry and You know, he's very interested in young companies and how they grow and Buying and selling stock sounded

Exciting to me. And then also, you know, even earlier before uh I opened that account, you know, I was trading baseball cards. So even though I wasn't I wasn't much of a baseball fan, I was collecting and trading baseball cards. That was the baseball card bubble. in the early eighties. It was. I yeah, to my mom's chagrin, she still has boxes and boxes. Like a Jose Canseco rookie was going for like forty bucks. Yeah, yeah, it's sad. I I lost a lot of money in that bubble. Did you have a sense of what you wanted to do with your life already at that point? I did dream of starting a tech company.

Mm. That began from a pretty early age. Uh, you know, around the time that I was doing Investing fourteen. You know, I was reading

Forbes and I there was uh You're reading Forbes at fourteen. There was a section, I think it's called Outfront. That would you know tell entrepreneurial stories, you know, not Just similar to this podcast, but a a very brief little, you know, here's a couple of entrepreneurs, here's what they're doing, here's how it's going, it's taking off. And that just was really exciting to me, the idea that you could Take technology, marry it with business, come up with a a novel idea, grow it into a a thriving company like that. It's just there was something about that that seemed exciting.

So Jeremy eventually went off to college at the University of Illinois, where he studied computer engineering. And after graduating in 1999, he moved to San Francisco, where he got a job working for a company called At Home. It was an early provider of high speed cable internet service. But it was a chaotic time for AtHome. They had just completed a huge merger with another internet company. And Jeremy

Didn't last very long there. I was seeing and hearing enough weird stuff. I was just like, this is not the kind of place I think I wanna be long term. And because I you know, I was very lucky That it was nineteen ninety nine. And so that meant my phone was bringing off the hook.

with recruiters trying to get me to go interview at other companies. So I was constantly tempted. Wait, this is like pre LinkedIn. So how are recruiters finding out that you even existed? They would dial into the phone tree. So they would call up the company and then start pressing extensions or just going through the you know the the different trees to try and See if they could reach an engineer and then they would pitch you on, Oh, I've got these startups you should talk to or you should check out this company. Yeah, it was crazy times.

And where did you land? So Yeah, one of the startups that uh I agreed to To me was uh one called X dot com. I had nothing to do uh with anything typically associated with an X. It was just uh an online bank. And it was uh

A little tiny office on University Avenue in Palo Alto. Really bright. individuals that I interviewed with. And then the last person that I met with that Day. Was Elon Musk.

And what was your impression of Elon Musk? Did he make an impression on you at that time? He made a strong impression. Um you know I definitely liked him. Right from the get go. It was also

Inspiring to me that Yeah, here was a twenty eight year old. who had already sold another company. And he had these incredible ambitions for the company. He was gonna he's you know said right out of the gate, Oh, we're gonna take down Visa and MasterCard. And I thought

This is just kinda crazy. Like he's a crazy person, you know, he's got this crazy idea, the these insane ambitions, he's got a lot of confidence. It was kinda mind blowing. I'm like I don't know about this guy, but I just have to see this. I have to see what's gonna happen. Okay, so so X dot com uh

What did they do? Like what was their business? Yes, uh I mean X.com originally started as a bank, an online bank. It was very easy to sign up, take your money from your bank account, and shift it into things like an S P 500 fund. a high yield money market fund. Um so it was doing some kind of Cool cutting edge online banking stuff that was fairly new.

But they also made it very easy to transfer money between accounts with just an email address. So if you had an X.com account, Or even if you didn't, I could send you a payment and then you could create an X dot com account very quickly and get your money. PayPal was doing something very similar. The only difference is they weren't running a bank. They were just kind of a money transfer service. So You accept a job with them. You become one of their engineers, I guess. Was there a sense that you were building something Big. Was there like that kind of excitement or

Or not necessarily that pronounced. I mean I I'd say it was more that Yeah, by the time that I joined. There was already a product market fit. It was already growing really fast for use on eBay. Someone would win an auction on eBay, they'd want to pay.

And at that time there weren't a lot of really fast, efficient, easy online options. And so X dot com filled that gap and then also Confinity, which was running the PayPal service. our number one competitor was also doing it. It felt very much like we were in a Very scary race. We were

Worried who was gonna win, who was gonna get ahead, were we growing as fast as they were, and vice versa. So it's just very intense competition. W in that first year at X dot com, do you remember just working all the time? Day in, day out. It was pretty intense. I mean I was only at the company maybe two or three months before

It was announced, you know, PayPal. And exotom merged. Yeah. Um so I had, yeah, an intense two months. A fierce competition and stress. And then all of a sudden We had all these new colleagues. Your enemy becomes your partner. Yeah. It was it was a bit surreal. Like I remember

Yeah, we had a little like happy hour mixer type thing. Where you know the teams got together and it was A little yeah, it was an interesting feeling. Like here's these people that you've been really worried about, really stressed by, but now They're your new colleagues. So in that merger you've got

I mean I'm not gonna name all the names'cause I can't remember them, but Elon Musk is there, Peter Teel is there Max Levchen is there. Um maybe Reed Hoffman was was in that room. Um Was it possible to look around the room and think Everyone in this room. Is

Onto something. I mean I I would say It was a bunch of ambitious Smart people with right skill set. for the right time, but yeah, I d I don't think you could have really predicted it.

Obviously Max was already Pretty far along for a twenty four year old, so it was it was obvious, you know, he was gonna be someone interesting in the industry. You know, Peter Teal, same thing. So you know, I'd say the top executives, you probably had some sense, yeah, they're players in the industry, but I would say the rest of us were just all you know just getting started. You got promoted to be the head of engine or the vice president of engineering Once that merger happened. I mean, you were still really young. You must have been twenty four, twenty five. Mm-hmm. Uh how did you

Do that'cause all of a sudden you're like in charge of at least twenty, thirty, maybe more people. Yeah, I mean in retrospect it it was pretty crazy. That I was twenty five you know, I wouldn't say I was just super well qualified, but you know, we made it work. Uh and we put out a lot of features and functionality. We kept the site up. So that's what's important. But you were a tech guy, and that was your you were a an engineer. You were not a business guy.

Yeah, I mean I I think I did have An interesting combination of being able to connect Communicate. Understand

people in other parts of the organization outside of engineering and then translate that into you know the lingo and the motions of engineering. Um and so as I became an engineering lead and an engineering manager and so forth, it it felt very natural and it felt like I was actually pretty good at it. You know, it it felt right for me. Yeah.

Between X.com and PayPal. It gets sold to eBay, it gets acquired by eBay. you know, we know the stories of of of many of of these founders and where they what they did. Did you walk away from that like Financially set, could you have just Not work ever again, or or no.

No. The company was sold for something like 1.4 or 1.5 billion dollars. Certainly top management got rich and like Max or Peter could have retired if that was their what they su wanted to do. Um but I think that's actually an interesting part of the story is you had all these bright, young, ambitious people. They definitely got capital. I I made some money. But it wasn't so much

That it necessarily was like Oh, what's the point? So you decide at this point. I'm gonna go to business school. Like you've been through a startup an acquisition. As an employee.

You got a little money out of it, but not enough to live off or So Business school. Yeah. Um

After PayPal was bought by eBay. Especially since I'd gone through a merger, X dot com and PayPal the Was pretty. Traumatic, frankly.

Traumatic because you had to combine the two cultures? Yeah, and there was so much drama. within the two companies once they were combined and Elon was pushed out, like it was it was pretty crazy. And so when You know, eBay took over, I had a feeling it would also, you know, not be that fun to be a in a company that was maybe swallowed up by a very different culture and and so forth. And so I it just Like, oh, maybe I could go do business school, maybe I could get in somewhere that would be a pretty good school. Let me look into that.

And then I applied. to a few different schools and and actually Harvard is the only one I got into. Uh so So I was celebratory. I was very excited. I was like, Well, at least I got into one and it was the one I I pretty much wanted to go to. So it I got very lucky on that and then went off to business school. So by going to it sounds like by going to Harvard Business School, you wanted to get a better grasp on like

all the things that go into running a business. I mean part of it was stemmed from The Silicon Valley conventional wisdom at the time Especially post dot com. Bust.

was Founder engineer types. Should Focus on engineering. Um and so I thought by getting an MBA that would

round out my background and give me m more flexibility. And give me more credibility. Like if I did want to start a company, which I still hope to do you know, it would be awfully hard for a venture capitalist who probably has an MBA To say, Oh, you know, I don't think that you should be running the company, you should be the CTO or you should you know be doing Technical work.

Um so I th I thought it would be nice. Useful in that regard. All right. So the summer uh comes summer of after your first year, two thousand four. And you come back to San Francisco to the Bay Area for the summer. What was your plan that summer?

Well, months prior to actually coming back, I had reached out to my old network. And so I reached out to Elon, I reached out to Peter Teal, reached out to Max, uh, and Peter right off the bat offered me an opportunity to come to Clarion Capital, his investment arm. And you know, it was very amorphous. Like we had no idea of what exactly I'd be doing, but he said he he certainly had a spot for me. And so I accepted. And then maybe a month later, like Elon actually took a little while to get back to me. And I think it was about a month later. Elon uh reached out and said oh you should come work for me at SpaceX. It's kind of a funny question.

Of what would have happened if Elon had responded faster, I probably would have gone to SpaceX just because I don't know. Hedge fund versus Rocket ship company. Yeah. I might be tempted by the Rocket Ship Company for the summer. Um yeah, so I arrive in San Francisco and I meet up with Peter in his office and he mentions You know what? Max

has uh opened up an incubator called MRL Ventures. I'm an investor in it. And so he essentially offered me the opportunity instead to go work with Max. So you you connect with Max Left Chin. He said, hey yeah, work at our incubator. So I I got to Max's little office, little dumpy office. Bricklined room. And

You know, they were it was just a b a bunch of different folks working on little internet ideas. Yeah, what's gonna be the next big thing on the internet? Which I actually was intrigued by and I thought Well this is a fun exercise. Like I've always wanted to start a company. Here it is. Like this is This is a good trial run for me to see if I could come up with a compelling idea that I could pitch Max on that he would actually get excited about.

What were some of the ideas that you were thinking about maybe starting? Uh I had a bunch of silly ideas, probably the silliest that I can remember. was An idea for a joke phone call.

Site. So you could go there and you could, you know, pay for a phone call to be sent to a a friend or something like that Another that was actually pretty close to a good idea. was I did realize that

the economics On uh Streaming video had gotten a lot better. But I I didn't have the full insight. I just the there was something going on in video that was intriguing, but I I sort of put that one on the shelf. There was some interest within the incubator around the local space. It was

Yeah, we were observing that Craigslist was killing the newspaper business by carving out classifieds. Yep. And so that put a spotlight on the yellow pages. It's like, hey, here's another old media business that hasn't really been transformed by the internet. You could look up Basic information. You know, an address, a phone number.

And so that got us thinking about what would be, you know, better than the yellow pages. And uh as I thought about and talked about it with my co founder Russ Simmons, who is another early PayPal person Yeah, reviews Capturing word of mouth, bringing it online. You know, marrying it with social networking, which was another technology that was just emerging. You had kind of friends to in MySpace. It seemed intriguing, but we didn't think you could create a social network just around reviewing. We thought

There had to be a mechanism. Trevor Burrus And and Russ Simmons, he was someone you knew from PayPal. He was just uh He was also at MRL Ventures trying to come up with an idea. Yeah. Yeah. And so when it came into the incubator He was you know one of the people that I most frequently, you know, would spitball with and bounce ideas back and forth. And actually

I give him credit for being very encouraging. A couple months, maybe a month and a half or so to really zero in on an idea. And you know, when you're just trying to come up with A new

business idea or in this case, new internet idea. Like you feel like you're spinning your tires, you're not productive. You don't know what you did the whole day as you sat there thinking and like jotting down notes and ideas. So sometimes I feel like I was just getting nowhere and he was you know always very positive and like, No, you're on the right track, let's keep doing this and And so we were actually out. batting around this review and social networking and how but what's the mechanism.

And you know, I said to him, I'm like you know what, like if you ask me a question. Like and what's a good doctor in San Francisco? Like I would I would be h like I love to be the expert. I love to reply and like give you this helpful information. It's out of this sort of like back and forth conversation around questions. Yeah, the idea merged, well maybe we can build

A site around asking friends for recommendations. We had nailed the content. We thought we had a mechanism that would pull reviews out of people because of course we didn't think anyone would write reviews for fun. That was preposterous. And so we got back to the office. And we were just like bubbling with excitement. We solved it. We know how to do this local thing. But what were you gonna recommend? Like what kinds of businesses?

Well, whatever business that you happen to need, you could turn to the service and say, you know, hey I'm looking for a great sushi restaurant in San Francisco. And then that would blast out to your friends. And then your friends would click a link and just be able to type the name of the place and like quick note and then it would be saved in this in this site and so over time it would build up this incredible wealth of knowledge around recommendations in everybody's head. But to be clear, I mean the the initial idea Uh

I the reviews w were not like it wasn't gonna be a site where you could post public reviews like it is today, right? No, when you would be asked you would ask a the the central part was like come and ask a question. Okay. Of your friends. It would email your friends, they would click a link, they could submit reviews back to you. It was a half-baked idea.

Like it was not fully formed. But we were excited, and that's what matters. So you and Russia. come up with this idea to have like a website where people can get recommendations.

you take it to Max Lection and you say Okay, Max, here we go. This is our idea and he says Why? He says hm. I'm not sure.

Yeah, he he's generally like a poker face kinda guy, but he was he was he was like meh I don't know, maybe. You seem really excited about it, so that's good. So why don't you think about it? Overnight. And then if you're still excited about it tomorrow.

Then I guess I'll fund it. But you didn't even have a pitch deck. You didn't you didn't even have a business plan. It was just like Talking about this thing. Yeah. I mean I've I've gone back and talked to Max about that moment. And I think what he would say is

He was just excited at the combination of of me teaming up with Russ and the fact that we were both like engaged and fired up to try something. And he figured Something good will come of it. It might this might not be the idea, but like if they get off to the races and part of it is Max also prides himself on getting people to drop out of school to pursue business opportunities. So I think he also saw it as an opportunity to, you know Steer me in a different direction than finishing business school and and get me involved in a project, which could turn into something interesting. what are you gonna do? Like you're going back to school in a couple of weeks.

I mean that conversation basically started as soon as we got serious like once we had the idea, once Max had signed off on it. That began a process of me figuring out what my options were. So I Yeah, started. Researching

Could I defer at business school? And then fortunately, pretty quickly I realized That it was not Very difficult to defer my degree. Yeah. So you decide all right, I'm gonna I'll drop out for now.

Uh we'll start this thing up and and How much did Max give you guys? Smax committed uh the million dollars. Wow. Uh he got a a large chunk uh of equity, I think it was forty percent. Yeah, and then we just started Working on the product. I mean this is interesting because clearly, like you worked with Max at PayPal. He knew you, he knew.

You didn't have a business plan, you didn't have spread sheets of how much money you would make. He just gave you a million dollars, he must have really believed that you guys could make something work.'Cause that's Even for a rich guy, that's that's a risk.

I mean definitely it was It was bold to commit real money to these very high risk projects. I mean he had essentially three or four I think it might have been four is the total count in the incubator.

Um Yeah, of those two two really worked out. And then two did not. But yeah, I mean I I think that's the nature of the beast in Silicon Valley is You're working on very high risk projects, it's R and D.

By its nature, most of the projects or a good portion of them are not gonna go anywhere. Ideally you want a portfolio approach if you can make that happen. Can I I wanna ask you a kind of a delicate question here, which I think is important for people to to sort of understand when you're starting a business. Max. Had

He gave you a million dollars, which you needed to start this company, but you had to give up forty percent of the company at that point. Do you think that At that point you just did not have a better option. Like that was truly the best option to take.

I would say Given the circumstances of the time it w it was a great deal. You know, two thousand four. We're still recovering from the dot com bust. Yeah. And so the idea that uh

Yeah, twenty six, twenty seven year old Would be working on an internet startup was just very out of favor. Like no like that was part of why I think we ultimately were successful is there were just so few people working on new internet ideas in two thousand three, two thousand four, around that time period. And so you know, Max was early.

And he was one of the few, so I think he, you know, deserves the equity that he got. Um all right, so you you drop out of business school. Uh and and you guys start working on Yelp. And and I I read that in that fall, fall of two thousand four, while you guys are kinda working on this.

The name that you really wanted to call it was Yokel. Like Local. Which I actually think is a great name. What happened to Yoko?

I mean I I thought We would combine local and yokal. And then I went to go and try and buy the domain. And uh there was someone that But I wouldn't part with it uh for any amount of money.

And so that proved frustrating. And uh there was uh another guy in the incubator, David Galbraith. Who was thinking about it as well. And he was the one uh that came up with Yelp. And when he pitched it to us, he was like Yelp help, Yelp Yellow Pages. So it had some really smart connections.

And then it also turned out that you could buy it for five thousand dollars right there just by putting in your credit card, like a domain squatter owned it and had put up a page saying it's for sale. So then Two other folks overheard the conversation in the incubator and came over and One of them was Scott Bannister, who had been involved, funny enough, in the naming of PayPal. So PayPal actually Mm. And so got back a hundred different options and then Scott Bannister was a friend of Mac's.

Pointed out immediately PayPal and was like, It's PayPal, we have to go with PayPal and like Convince Max that that should be the name. And so similarly when he heard Yelp, he's like, That's your name, you're crazy. We're buying it right now. Uh and then he and this other guy, Jared, sat down and and bought the domain for us. And uh

So that was it. Yeah. All right. So you've got to be a little bit more. This thing that you're building and by the way, I mean a million dollars is a lot of money, but you gotta pay people, you've got server space, you gotta right, it's it that's not gonna last that long. So I have to assume you quickly had to go out looking for more money. Yeah. We we got pretty far along.

Uh with building site within a f you know, three or four months. And right before we're launching Yeah, Max encourages us to go pitch. So I went and hit the road. So hit hit Sandhill Road, uh to be specific. And uh talked to maybe ten or fifteen different firms and uh essentially got laughed out of the room for the most important thing. Laughed out of the room. It did not it did not go well. No What were their questions for you? Like, did they not understand what it was? I can understand that, by the way. It wasn't entirely clear at that point. Like w a website Mm. People just volunteer information, it gets emailed around. Like what's going on? Yeah. That's fair.

I don't blame them, I suppose I mean the but the interesting thing is a lot of the Pushback was it actually had nothing to do with the idea so much as The people presenting it. So in our case we're young. We're technical.

kind of like what happened in the late nineties, and so everyone still had PTSD from the dot com bust. And so one of the common refrains to me was, you know, and this is straight to my face, was like, hey, you know, yeah, this idea is kind of interesting. We might be willing to fund it, perhaps, but Would you be willing to step aside so that we can and this is like kind of real quote, so we can bring in a grey haired executive. Wow. Like that was a con conventional wisdom was like we need adult supervision, gray haired executives, uh.

And so there was this feeling that enough with the kids already. You know, we need the established professionals if we're gonna fund some sort of, you know, new venture. Well you were preparing to launch this in I guess

By the end of two thousand four. Right. October two thousand four. Were you able to raise any outside money before then? No. I mean we just had Max's million dollars of financing. Uh we started conversations with Venture capitalists the weeks prior to launch and then they extend it all the way through launch.

And then of course when the launch happened we got some initial press, just little Little industry press. But also our data as people were trying to use the site was not. Super encouraging.

It was not you launched this thing in October of two thousand four and what, no one shows up to the party? Pretty much, uh you know, our moms were on it and uh maybe some friends. Did any part of that sap your confidence? Um yeah. Um that was a very dark period.

I was pretty worried. That I had made a mistake and that I was leading the team off a cliff. Let me come back. Just a moment.

Jeremy and his teelaunched the Yelp website with some important changes. and then started to see people besides their own mothers. Actually use the site. Oh, and also the moment Jeremy got an unexpected phone call and some advice? From Steve Jobs.

Stay with us, I'm Guy Roz, and you're listening to How I Built This. From NPR. Oh, and one more thing, if you love how I built this. Check out my new podcast, Wisdom from the Top. It's a show about how some of the greatest leaders in business and politic managed some of the biggest corporate and professional crises you can ever imagine. You can find wisdom exclusively on Luminary. It's a new app that allows you to listen to all your favorite podcasts, plus a bunch of amazing exclusive shows.

just for subscribers. Shows from people like Lena Dunham, Trevor Noah, Russell Brand, Leon Nafock, the creator of Slow Burn, and many, many others. Download the Luminary app at your app store or go to luminary.link slash guy. For a free, no strings attached trial. Hey, welcome back to How I Built This from NPR. I'm Guy Raz. So it's late 2004, right after Jeremy Stoppelman and his co-founder Russ Simmons launch Yelp. And really no one is signing up or using the service.

But remember, at this point, Yelp is primarily a website where people ask their friends and Only their friends. for specific recommendations. And since that model Clearly isn't taking off?

Jeremy sits down. to get an idea of what people are doing on the site. You know, there was one really critical Insight. that we had as we were looking at the data.

Which uh centered around review writing, so it was literally an afterthought. that you would be able to write a review on Yelp without being asked a question. That feature almost didn't exist. І невоз і факт Рос. right before launch that like I remember him peeking over his monitor and be like, Oh, should should there be a way To write a review. If nobody asked you a question, you just wanted to write one. I'm like

No one's gonna do that. But yeah. You know what? Why don't we add it in somewhere, just bury it, you know, a couple of pages deep. And it turns out

Yeah, some precocious users would find that feature and when they'd write That first review, they would then go on to write a second or a third, or even you could see in the data, like I could just see that when someone wrote a review, more often than not, they would write several reviews. And so there was something obviously entertaining or interesting or cathartic about writing reviews. And so with that insight we started rethinking how we designed the site.

And so instead of being about Asking friends for recommendations. Maybe it should be a platform for you. to recommend things just to the wider world. And so we redesigned, you know, put the emphasis on you. We gave you a profile that was sort of borrowed from the social media world.

We also, you know, took a page out of the blogging playbook and so your reviews show in a chronological order on your profile. And so a bunch of this features and functionality we bundled up and essentially relaunched the site in february two thousand five. You're sort of thinking, Okay, let's relaunch this and Give people

you know, the power to evaluate this thing, whatever they're using. And then We'll see what happens then. You know, the idea shifted from Hey, the only way that we're gonna get reviews is if you're asked a question to

Hey, maybe reviews are a form of self-expression. You know, just like someone writes a blog for fun to talk about what's going on in their life or what have you. Like some people want to talk about restaurants or some people wanna You know, talk about a great mom and pop business that they patronized and like There's actually people out there that want to do that. And frankly, I could identify as one of those people. Like as I was doing it, I was getting it. I was like

This is fun. I want to do this. So You relaunch uh with the opportunity to review and then d does it Blow up or is it still kinda quiet?

With the relaunch February two thousand five, it did feel Viserily different. You know, when we rolled out all the new features and functionality within hours we were seeing people pop up on the site that we didn't know. Wasn't a relative, wasn't a friend. Like we have no idea who that person is and they're writing reviews. That's pretty cool. Yeah. It didn't mean that we were like, Oh, you know, job's done, let's lean back and like wait for the site to to grow. Like we still had Tons of things to figure out and work to do.

You know, soon after launch, we started thinking about well, how do we really gel the community that's here in San Francisco that's trying to participate on our site? Yeah. We did our first in person meetup uh with some early users, and that was A total surprise. You invited them to like Gather and what Talk about restaurants or yeah, like what would you do?

Yeah, interestingly, like at right around the time that we were about to relaunch, I hired a marketing person. And so this marketing person ish One of his first suggestions right as soon as we had some users was Let's meet him. And I'm like woo, no, no, we

We work on the product. Like I do the wireframes and I work with Russ and we figure stuff out. I don't go and meet people. That's not I don't do that. You know, uh, but he's like, No no no, you gotta do it, you gotta do it. And so he arranged a meetup. It was like two users. People we had no idea who they were. And we met up, you know, for a happy hour at a nearby bar. And uh the crazy thing, I assumed

that the first users of Yelp would be tech early adopters. You know, in my mind we're a technology site. But I would actually say the early users of Yelp were urban early adopters. Like they're looking for what's new and cool and interesting in their city. Their focus is like, what's the hot new restaurant? Oh, have you been to that boutique? That's really cool. You know, and frankly the demographics were different. It wasn't all a bunch of engineers and, you know, men. Uh those first two users were both women actually.

So You got that million dollars in the summer of Two thousand four. I read that it was only in like November of oh five where you got Really the first

outside raise, which was five million dollars. So that million dollars. Was it running out? We were definitely getting down to the lower end of uh that initial financing round. I think by the time we secured

our A round of financing We were pretty close. But One thing that did seem to be happening is like it did feel like The company was alive. I mean we had passionate users, we had traffic numbers going up and to the right.

Yeah, it certainly wasn't all figured out and I wasn't a hundred percent confident I was still a little gun shy because we had been shot down. So badly, uh, you know, the year prior But You know, as I gauge the reaction that I was getting from venture capitalists, I did some sense of like I think we have enough to raise.

Um, definitely. Yeah. I mean especially like actually it proved to be super valuable You know, when Max pushed us to do the fundraise right at the first launch in October two thousand four in one of his reasons that he gave why we should do it is just like practice.

Doesn't hurt. And Yeah, that ended it like I was super nervous, I'm sure. that time around because I didn't know what I was getting into. I had never talked to a venture capitalist really. Like I I just had no idea what was going on. Yeah. And uh so when we went around the second time, I at least knew what the offices looked like, I knew what the people looked like, I knew what some of the questions would be. It came with more experience, I'm sure it came through. But I was still, you know, young and just figuring things out. So I'm sure I wasn't totally confident. I mean did you have like an inner voice that was sort of

I'm imagining you're in your twenties. You've got a bunch of people now who've put their lot in with you in this company. Who are you? Why do you think you can make this work? I mean my biggest fear was We had some obviously we knew that we could

Build you know, a useful internet service. Like we can make it functional. We could design features. We could engineer them, we could put it out there. The question was could we connect the parts so that it turned into something that people really loved? And then you know, also top of mind was Max was one of my most valuable, you know, professional contacts and he had committed a million dollars, which seemed like an awful lot of money. Yeah. And so I was terrified that I was gonna let him down. And and I probably would only get one shot at this.

So it was yeah, there was a lot going on. I was definitely worried about the implications if if we didn't figure it out. Yeah. Um There is a an almost a fetishization of Failure in Silicon Valley, you know, this culture of of fail fast, fail hard. And I think it's a little misleading because it's it's oftentimes it's people

people who've already had some success or you know, that the stakes of failure aren't that high. And it sounds like you were actually really Terrified of failing. Yeah, there's no glory in failure. Uh, nobody wants to fail. I mean I obviously I I do think Silicon Valley can be quite forgiving of failure, it's true.

But it's still not pleasant, and you don't want to do it. If you can avoid it. Yeah, I remember a a guy who was branded a serial entrepreneur. Told me. I'm only a serial entrepreneur because it hasn't worked out. Nobody wants to be a serial entrepreneur.

Yeah. So when you finally raised money After the first million that Max gave you. When the investor said, Okay, how are you gonna make money? This is in two thousand five.

What did you say? What was your plan? I mean, we hadn't given it a ton of thought, but between looking at Google and how they were making money uh off search ads And looking at City Search, which you know had something similar, you know, in the local space, it felt like oh there's some obvious business models. We don't have to worry too much, uh, you know, in that time is is something that makes sense and It was worth pursuing.

Diddy yelp. Pretty much naturally kind of just become primarily a restaurant. review site initially, was that just how how it happened? Definitely when users join Yelp.

Uh and get excited about reviewing. They tend to start with restaurants. And part of that is because you have so many top of mind And it's really fun to talk about all your favorites and the dishes that you had. And it's super frequent. So just living your life, you will always experience more restaurants and have more to talk about. Whereas You know, hopefully you only you don't use a plumber very often.

I mean, maybe you have a great plumber and you you know, obviously people do talk about that on Yelp and that's great. But it's not a great starting point uh for fun. And frankly that was that's part of the key to Yelp's success is we tried to make Yelp For the reviewers. Really about fun.

Uh you know, why are they spending their time with us? Why are they writing these great, funny, interesting reviews? It's because it's a hobby. It's something to do. Uh, you know, it contributes. And so we always try to focus on making sure that Yelp is fun. So Initially like a so as you continue to raise money, five million, then ten million Was there any

Revenue coming in or was it just The idea at the at least initially was just to get more and more users. Mostly it was focused on yeah, growing the community of reviewers. More content, more reviews. Uh we eventually added photos.

And also, you know, with all that content came more traffic because the more review content we had, generally the more we would show up within Google's Web search. And therefore that would attract more users, which would increase the size of the community, you know, and sort of created this positive feedback loop. You know, from a business model standpoint, it was something on our minds. So it was probably end of two thousand six that we really got serious about building out, you know, our advertising products.

And eventually landed on a pretty simple ad model. And that's actually how the Yellow Pages business works, how the newspaper business works, how the magazine business works. So we just started with that because it was the The least friction. Businesses already knew what we were talking about. At what point were you and Russ like able to actually see that. This wasn't just turning a corner, but this was actually

becoming quite big,'cause you guys I think you hit a million unique visitors by the middle of two thousand six, so Two years after you y you know, you kind of bring this idea to Max Levchen. That's a lot of unique Visitors. February two thousand five.

was really about getting the You know, getting the initial momentum, which was really San Francisco. So getting a San Francisco community of contributors, writers, reviewers. Going. And you know, showing that that would result in traffic. Once we got

financing the question became, well can you do it anywhere else? Is this just the San Francisco phenomenon? And actually like that was the funny thing trying to raise That round of financing. Іно the most common question was like well San Francisco Isn't that just unique? It's a bunch of hippies. They like to help other people. This isn't gonna work in New York.

And you know, so that was what once we had the money on board That's what we aim to figure out is like can we get it to grow and happen in New York? Can we get it in LA? Can we get it in Seattle? And so two thousand six. That's really what we were focused on was spreading city by city, both to Make sure that that we filled the gap and you know a competitor couldn't beat us.

But also to prove that the model really did scale, at least across the US and then maybe beyond. When when the iPhone came out, you guys were pretty early, I think you were one of the earliest apps on there. So did you know or did you feel like right away this is gonna be this is gonna change everything? For us? Yeah, I mean we had enough experience with mobile, like we had built it was called a WAP site. Which was like a early version of the web for really crappy mobile phones. Yeah. And you know, it was very stripped down and pretty much unusable.

And so we knew the internet really wasn't happening on mobile devices. Until we saw the iPhone. Uh it was just obvious that okay, finally the web has arrived on the phone. This is really exciting. So we knew we we had to get involved, we had to play some role, we had to adapt our site. Something was gonna happen to to make room and and service the iPhone. So we actually had a an app ready to go day one.

Uh when the app store open. W when you launched on in the app store, did that Have an impact on your business? Pretty quickly. It didn't have no. I mean the there was no real business impact right away.

It did feel like very important for the future and the long term health of the company. You know, we're a tiny we're a pretty small startup still. We have very scarce resources, so committing real resources to building an app was controversial within the company. But it did feel like This is a historic device. This is the future. We have to be there. We can't

rest on our laurels and think that we're gonna still be winning this game if we don't Win the windmobile. So with this kind of product, right? With a review site. With that territory comes.

some really pissed off business owners, right? Because There are gonna be restaurants that get three or four star reviews or bad reviews. And you guys start to get hit with some class action lawsuits. I mean yeah, yelp has always been controversial.

Uh Because We host people's opinions and Uh and not every business uh wants to hear the feedback or is open to the feedback. It's not.

Totally dissimilar to a restaurant critic, like restaurants have a love hate relationship with their local restaurant critic, or certainly did, you know, in the years past. Where sure if they got a great review, they thought. The restaurant critic was wonderful, but if they got a negative review, they were upset, it was unfair, et cetera. So you know, take that and multiply it times millions of users. And uh it gets to be an interesting conversation.

But you know, ultimately Having all this word of mouth that exists anyways. Bring it online. Uh creates a lot of value for society, both for small business owners who can now stand out, you know, with relatively modest marketing budgets. If they deliver great value, great service

You know, their word of mouth is right there for everyone to see. Their great reviews are there. But it does come with obviously the occasional Negative review, everyone gets them. And that that hurts. You know, on the on the flip side, I mean I feel like everyone has had this experience where uh you look up your favorite restaurant or you know, whatever it is on Yelp, and it has a lower rating than you'd expect, and you're thinking, you know, though what like I love that place, this cannot be right.

Well, you know, everyone's entitled to their opinion. So if you think, you know, the four star place should be five, well, you hop in there and write a review. You know, I think the reason why Yelp has been successful for so long and such a strong brand is because like more often than not, we're right. When it says four and a half stars and there's a couple thousand reviews there, you can be pretty darn confident that business is doing something pretty impressive. Cause that's hard. Guys got an offer from Google. In two I think it was two thousand nine. buy you out for half a billion dollars.

That could have been Totally life-changing money for you. And your partners and investors, like you all could have walked away. and then you could have started your next thing.

Why didn't you take it? Um Yeah, it was a complicated dynamic. Uh you know, we're doing quite well. It's interesting at that time to have considered

Cozying up uh to Google, which has a worldwide presence as we're contemplating sort of international expansion. Wasn't an easy call. And there's of course like you know, behind the scenes dynamic between executives and you know We had we had been a Staunch critic of Google.

Uh even then and and it's continued, you know, to this day. The internet and taking the reviews and Presenting it. We started by licensing our content to them in a way that

we thought was reasonable and then over time it became clear that they really wanted to compete with us directly. and collect reviews themselves. And and so then they said to us, Well, we're gonna collect reviews, but we still want your content. And we said, we're not gonna compete with ourselves in your Yelp like property that you're building. That makes no sense. So thank you very much. Like we're done. And so that actually prompted the conversation of like, well maybe we should acquire you after all. Right. And so we're like, all right, well, you know, we're venture backed, we have to have the you know, we have to take that seriously. And we contemplated it. Uh and ultimately, you know, the two w the two sides couldn't get together and we saw a very exciting independent path and

taking additional financing and then going public. And that was equally exciting to me than you know getting swallowed up by Google. When when Google offered to buy you, I read that Steve Jobs called you. And said don't don't take the deal. Yeah. That's true.

Was that crazy to get a call from Steve Jobs? It was crazy. It was probably one of the craziest moments of my career still to this day. What did he say to you? Um You know, he said. Don't sell to Google. Uh, we think you're a great company.

We think what you're doing's really interesting. He didn't say, Oh, well, Apple, you know, is interested in you, but he did say Is this about money? Because Apple has a lot of money. And if you need financing or something like that, you you have my number now, so you should call me.

And uh You know, I thought that was probably blowing smoke. But yeah, it was it was pretty wild. It was very surreal.'Cause he was you know, it was like when I picked up the phone I And heard his voice. I was just like it was like talking to God.

Yeah. So right. W when that deal with Google was on the table, and half a billion dollars in two thousand nine. It must have been difficult to say to say no and to walk away from that, right?

Yeah. It was definitely not a an easy decision for anyone involved. uh financially but it also felt like We don't have to do it. We have a bright future. We could take the company public. We had full confidence that we could do that. We knew that there were investors ready to finance us. But

The independent path, like Prior to that moment, I did see myself as kind of like Young entrepreneur. I'm not a public company CEO. I really didn't think that I would ever be a public company CEO. But that moment forced me to

Seriously contemplate. Yeah, was that true? Could I never imagine myself as a public company CO and The more I thought about it, more uh, you know. might not be comfortable, but some of my best decisions are the ones that push me out of my comfort zone.

And so I you know, the more I thought about it, the more exciting. Might maybe I'm gonna fall on my face, but It's pretty exciting nonetheless. And also I'm growing into being a real you know, what I would call a real CEO as I headed towards the public markets. Um Or at least see myself that way. I'm I'm curious, Jeremy.

When you get criticized. Like I I read you did an AMA on Reddit a couple years back and There's some people who just said mean things, right? And that's that's normal. You're you're in the sort of the public eye. Um I get m mean comments. and social media and

Do you care about any of that? Does any of it ever get you down? I think if you're doing anything important in the world Then you will have critics. You will have people that don't like the dynamic Uh that's being created. They don't like the power shift.

You know, they like the old way of doing things. And so y you do have to take it with a grain of salt. Like certainly at moments you get down. Especially if you spend too much time reading all the critiques. But You know, and there's also room to learn.

from critics. And at times we've adapted or we've we've you know kind of heard what people are saying and tried to you know, mitigate some of the problems that people are trying to bring to our attention. So you don't want to completely cover your ears. And and then frankly that's what I would tell you know, local businesses that don't want to hear it from their reviewers. But the fact of the matter is, like, and and this is true with Yelp too, most people actually like you. Human nature is to focus on the negative. We all do it. Uh we remember it more strongly. Yeah.

And so I think it's important to try and like pay attention to the positive, uh, and that'll keep you going. When you think about where Yelp is today. You're a public company, you're the C of a public company. Heading towards I guess a billion dollars in revenue.

Does that blow your mind? I mean t yeah, we I mean we're talking about You going down sand hill road like nervously kind of pitching to VCs who were poking holes in your idea and Not particularly impressed. It wasn't that long ago.

Yeah. But I do feel like you know the Proverbial frog in the pot. It's been slowly warming.

Certainly now as you lay it out, I'm like, Okay, yeah, that is pretty wild. But it has felt like a just very natural progression and you know, always challenging and there's you know, always new Things coming up that Uh problems you're trying to solve and goals you're trying to meet. It's a twisty turny path. It hasn't been like a straight line.

And I don't anticipate, you know, the years ahead will be a straight line either. How much of your success do you think was because of your hard work and intelligence and how much do you think had to do with just Being lucky. Um

I'd probably give it sixty percent luck would be my breakdown. I do feel like Circumstances played a big role. Uh you know, obviously I worked hard to Be able to understand technology and

But you know, you have to look at the timing of the fact that I joined PayPal, PayPal was a success, that entire group of people. was sort of dumped out back into Silicon Valley, all with capital. At a moment that Yeah, people

weren't really focused on building new internet companies. And so you had all these confident technologists from PayPal all working on new internet ideas with capital at a time where It's kind of wide open. Uh that's lucky, in my view. Yeah. But you know, you If you're unprepared for that, you can miss out, obviously. So there is a preparation aspect, but you have to Definitely pay attention to the luck too and and know it's not just all you.

That's Jeremy Stoppelman, co-founder of Yelp. And as of the first quarter of two thousand nineteen. Help users had posted 184 million reviews. And of course, with that many reviews. You do find some gems, for instance.

Grand Canyon National Park. One star. Quote Every 500 feet, a new vantage point of the same thing! A really big hole in the ground. Or

Yosemite National Park One star quote. No concierge or valet parking. Just forget about this place. And my personal favorite? A two star review of a jail.

Washington D C quote. I spent a few nights here. The police weren't very nice. And it was so cold. But I made some friends.

Hapateria lasagna. Was dope. Hey, thanks for sticking around because it's time now for how you built that. And for a few moments, I want you to imagine the secret life. of an outdoor cat. So an outdoor cat that's not being fed by a human, they will spend eighty percent of their waking hours hunting for food. This is veterinarize. Where they hunt, catch, then play with their prey, and then eat that small meal. And that small meal is probably a mouse, and if you're a cat just roaming around in the wild,

You might eat several mice a day. But when it comes to indoor cats. They'll wake you up at four, five, or six in the morning to be fed. They gobble up their food and vomit it back up. They can be aggressive or destructive.

All of this is because indoor cats get stressed out when they can't hunt and kill their food. So even if your cat has never lived outside, Mother Nature has ingrained that predatory behavior, that need into it. And it wants to recreate it. Okay, but how? How do you recreate the hunting experience in, say, your one bedroom apartment with a totally spoiled indoor cat? Well the answer to that question just kind of came to Liz a few years ago when she was driving home from a veterinary conference. I mean it was pretty instantaneous. So from the time I drove home, I drew it. In I mean five minutes. And what she drew?

was mice. Five little mice that had a fabric exterior so the cat could use their teeth and claws in the in the play part of it if they wanted to. And inside would be that little mouse size portion of food. It's really only 30 or 35 calories per portion of food that a cat needs at a time. But the important thing is you wouldn't just plunk these mice down where the cat's food bowl is supposed to be. You would hide them in different parts of the house. And then they really start. hunting and they maybe will get down, you know, in that praying position where their their front feet are lower than their butt and go running around looking for it. It's really fun. Anyway, at this point came all of the typical stops on the entrepreneurial journey. So the very next day I'm walking past like a totally chance meeting at a neighbor's house with the most perfect person you could imagine. And he said, I am an inventor and a medical device manufacturer. And I said, Well, you need to sit down. And then

took on some partners and worked on the first design. Uh and my partner Sue and I sewed it ourselves in her kitchen with her mother's sewing machine. She tried out the first prototype. I would go to my my colleagues at work and say, hey take this one home, see what your cat thinks of it and so we had to Then of course she raised some money. $136,000 to be exact. Day four of Kickstarter when we met our goal and we all were on the phone together when we hit the number and that was super fun. And then she went to a big industry conference and got a lot of buzz. It's the largest pet product convention in America, and they have a new product. category. And gosh darn it, we won. But of course during this whole happy sounding journey, Liz was also experiencing a ton of stress. Oh sleepless nights. Many. And one of the biggest issues, as always, was money. Money goes lightning fast. Each spend for the website, for the packaging, for a designer, um, is it a good spend? Are are we doing the right thing and h where am I gonna get more money from? And it's a lot of worry.

But things have now kind of settled down for Liz. Since launching the cat feeder in 2016, she's gotten it onto Amazon and Chewy.com and into small pet stores across the country. And she just partnered with a pet supply distributor that's working to get her product overseas. And all that is great, but Liz actually has bigger ambitions. She wants to completely change the way our cats eat. One plastic mouse at a time. There's 96 million cats living in homes in America. And most of those cats are still eating from bowls.

But if we can really get people to understand cat behavior and have the tools to to change it in their homes, This is the opportunity of a lifetime. That's veterinarian Liz Bails from Philadelphia. Liz has now put her veterinary practice on hold to manage her business full time. It's called Doc and Phoebe's Cat Company. Her product is called the indoor hunting feeder. And if you want to find out more about it or hear previous episodes, head to our podcast page, howibuilthis.npr.org. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're building.

And thanks for listening to the show this week. You can subscribe at Apple Podcasts or wherever you get your podcasts, and while you're there, please do give us a review. You can also write to us at hibtnpr.org, and if you want us at a tweet, it's at how I built this. Our show is produced this week by Casey Herman, with original music composed by Ramtina Rablui. Thanks also to Julia Carney, Sanaz Meshkinpur, Neva Grant. and Jeff Rogers. Our intern is David Jobs. I'm Guy Roz, and you've been listening?

to how I built this.

What you see above is a preview of the first minutes. One unlock costs 3 credits and covers this episode forever: full segment and word-level timestamps on this page, plus .txt, .srt, .vtt and word-level JSON downloads, as many times as you like.