Why are users so dumb? Yelp.com Case Study

February 13, 2006 - Get free updates of new posts here

Let me run a scenario by you. What if someone said I am starting a business and I am going to make the customers give me all the money and the products for free while I sit back and relax? You would think this is completely ridiculous and never believe it could work…well it is..kinda…

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This is not a rant but more of a general thing about why website users are so dumb. I am trying to understand why they do things and maybe you can help me.

What are the incentives to review restaurants and provide info for free to websites?

For those who don’t know, Yelp.com is a social network where users can review restaurants and other businesses. Think of a Fodors book written by the general public. The site initially got growth in SF by sponsoring parties and using personal connections of the team. Expanding beyond that I see a huge challenge. Why would anyone besides people who hate or love specific restaurants want to spend time reviewing places for this site.

Other sites provide benefits for people to provide content:

1- Epinions pays people based on the quality of their writing.

2- Judysbook gave away free ipods to encourage people to write about places.

3- Del.icio.us allows people to bookmark their own favorite sites and from the personal benefit a group benefit happens by aggregating what’s popular

4- Facebook, MySpace are on the border…

For Yelp to be really successful they have to answer the question of Why users will want to keep helping them grow their business. The current offer is an ‘elite’ badge showing you are the biggest sucker on the website for writing tons of reviews.

Why are so many users doing all this work for free?

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27 responses to “Why are users so dumb? Yelp.com Case Study

  1. Wen Reply

    People like to hear themselves talk. People like it even more when others get to hear them talk. Plus, yelp is pretty damn useful, especially when you review something and send it to your friends as a recommendation – its easier than getting on the phone and calling like all 10 of them going “let’s go to xyz bar, i heard its cool….)

  2. Nedra Reply

    I don’t think it’s that users are dumb. People do things because they see a benefit to themselves in it — whether it’s tangible or more psychic. By Yelp giving them a forum to share their experiences, they feel that their opinions matter and are considered important by other people. They feel part of a community, both giving and receiving information in a way that recognizes their contribution. Why do you blog or leave comments for free? Are you stupid for sharing the potentially valuable information in your head with others? I assume you do it for the same reasons listed above. And hopefully, it’s not just to hear yourself talk. We all would like to feel that what we say and do is interesting and important, and yelp facilitates that feeling for many.

  3. Stefan Hayden Reply

    Every time there is a walled garden like Yelp I think about how much better an open format could do the exact same thing but better. Microformats.com has great ways of embedding info in ANY web page just waiting for an aggregator to find it.

    Some one just needs to build a service that makes it fall over easy to add microformats to web pages.

  4. Brian C Reply

    While it would be difficult to specify all the reasons why a person would enter data into a site for free, it is obvious that the concept of business models based on user-generated data aren’t a flighty trend. Examples of successes are easy to identify. Wikipedia, Flickr, Flagr, Facebook, match.com, 43things, ratemyprofessor…the list goes on. The trick, I guess is to offer value to the user-generated data. eBay provides millions of eyes with open wallets. match.com provides a matching technology as well as contact structure to help you find “the one”. Facebook helps you socialize with friends and much more. Granted, some models add more value to the content you post than others. At the end of the day, though, user-generated data sites are going to be a big part of Web 2.0. The trick with most of them will be first, how do you add value. Second, they will have to prioritize how to monetize their traffic and make money off the community they create. (Assuming, of course, that making money is what they’re about)

  5. Noah Kagan Reply

    Great comments. I am not opposed or totally disagree with the notion that people want to express things and help their friends. I am just surprised more users don’t realize they are creating this valuable data/content for the company to license/sell/utilize in making money.

  6. Brian C Reply

    That’s a good point, Noah. I think people are tangentially aware that their content is of value to the company, but I think the focus is on what value the company can add to their content. People don’t care to be paid a nominal sum to create a Facebook account or post a review in Yelp, etc. They care less about monetary compensation and more about the substance of what the company does with their data. They’d rather find their friends online, find the love of their life, share their opinions, rant or rave about their favorite shop…so much so that they are willing to pay for some companies to post their content. eBay adds so much value to user-generated content (shoppers) that they can charge for users to post data to their site. They obviously are just sharing in the money a user makes. But Snapfish, shutterfly and even Flickr charge for more premium services.

  7. Mike Rowehl Reply

    The same thing applies to Wikipedia or open source projects like Linux. If you want some academic talk about what happens search for commons-based peer production, a phrase coined by Yochai Benkler. Personally I think it’s just that some people actually do think about long term benefits sometimes. Sure, I’m creating a bit of content that maybe I could get 50 cents or a dollar for today. Or I can throw it into a bucket for free and hope that when I come back there’s a resource that’s worth hundreds or thousands of dollars, and that I will be able to make use of.

    Sure it’s possible that others will just rip the content off, or use it and not contribute, but one the keys is that my donation is relatively small. So what if the 2 or 3 dollars of value I created didn’t turn into a useful project? It’s a relatively small risk for me. But take that relatively small risk and multiply it by hundres or thousands and it turns into something interesting. No one personal necessarily would have been willing to take on the whole risk of contributing, but by opening up the project and letting everyone work on it that effort and risk is spread around. That way projects can get done that no one would necessarily undertake on their own, and stil if it fails no one really loses out all that much.

  8. Alexis Madrigal Reply

    Sorry to restart this thread, but I just happened to pop by via C. Cheever. Anyway, this is not new with the Web 2.0, the Web, or even the Internet. The vast majority of people who write books make just about nothing. Why do they put in all that time and effort? Notoriety is the main reason, for me at least. That and the dream that maybe you write a bestseller.

  9. Mike W Reply

    I can speak from the point of view of somebody who got sucked into yelp.com, and even became one of their “elite” members. As lower minion in the tech world, I’ve occasionally wondered if I could become a writer. I knew how to write to individuals…Yelp allowed me to practice learning to write to an audience. Furthermore, it started off like many unreguated forums….with a large audience of intelligent, creative, and interesting people. Months later I’d racked up almost 200 reviews, all at leasta 1000 words each. I’d even been noticed and written up by a collumnist in the SF Weekly. To sweeten the deal, Yelp threw monthly parties that were well-stocked with free booze and attractive people. The downside? It was eventually sniffed out by teeming hordes of losers looking to get drunk and laid. Most of the interesting people have split, and the quality of the user-base in presently in a state of irreversible decline. The ship looks like it’s sinking, despite $10 Million in VC-floatation that they’ve recently secured via Benchmark Capital. The main reason I did it? It was fun. It allowed me to interact with some fascinating people. But once the fascinating people dissapeared it ceased to be fun. Malignant tumors such as the ones that infest MySpace seem to have metasized themselves into Yelp’s user base. Management is presently squandering their last chance to excorcise the demons that are poisoning the well from within. The longer the wait, the more insurmountable the task will become. Bluntly put, Yelp’s long-term viablilty isn’t a bet I’d take unless I could wager pocket change on astronomically long odds…

  10. Jessica Ma Reply

    Thsi simple question can be answered in the similar way to”why millions of people upload video to Youtube for free?” Yelp is a very useful site and carries valid business model. I do have much better thoughts on incentives for writers than just giving out small gifts. I’ll disclose that only until I join Yelp.com

  11. Jacob Kerlerec Reply

    Why are Yelp users do dumb? Hm.

    Better question: What’s the enormous benefit of this site to someone living, for example, in L.A., where the choices for fun are overwhelming and discovering new and exciting places to eat (from Koreatown to West Hollywood, Little Ethiopia, etc.) and socialize is a wonderful way of life. (But you need tips, or your head will spin trying to figure out where to go first.)

    Believe it or not, there are still people in the world — lots of them, in fact — who date, socialize, network, and go to bed at night with a smile on their collective face.

    As one of these people, Yelp helps me meet new people, discover new places, and I’m more than happy to share my experiences and tips with others, because I know they’ll turn *me* on to new ideas.

    Not everyone is trying to turn a dime in the narrowest sense of “profit.”

    Not everyone is obsessed with the bitter question of: “Well, what’s the *other guy* getting? Should I be demanding more for my labor than a barter of very useful tips?”

    Yes, not everyone sits back pondering the minutia of marketing strategems day in and day out, and passing judgement in blogs that are boring even to describe.

    But judging by the bitter tone of your blog, you knew that already.

  12. yaddayaddayadda Reply

    I am Yelp Elite.

    I actually like to help people and I appreciate the help I have received from others, be it finding a good place to eat, do yoga or wash my car.

    Thanks Yelp!!!
    XOXOXOXOXOXOXOXOXO

  13. mchiu Reply

    I think you are looking at this from a very one-sided perspective. Sure, the users on Yelp are writing reviews for free, but also remember that Yelp doesn’t charge anything for looking through the reviews. So are the users really providing something for free if they are getting something back in return?

  14. Josh Reply

    First off, I have a good amount of downtime at work sometimes, and trolling the news and myspace can only take up so much time. Yelp is enjoyable to add to because it gives a lot back…. and knowing that I’m feeding the helpful fire is nice. How does yelp reward me? I get to go to places I know stand a good chance of being good… like when I had my car smogged, the guy was nice, fast, and a yelper even pointed me to a $10 off coupon.

  15. Heather Reply

    Do you know what fun is? Or do you only consider what you can monetarily get out of a situation.

    Are you getting paid to do this blog? What’s your incentive?
    What’s my incentive to read it? I can’t find one…

  16. Damon Billian Reply

    “For Yelp to be really successful they have to answer the question of Why users will want to keep helping them grow their business.”

    A couple of reasons it works for Yelp:
    1. Unlike Epinions, Yelp is focused on only services of some sort (restaurants, bars, etc.)
    2. While sites like Yahoo local may have huge traffic, the customers aren’t engaged in any manner. People are just searching for what they want & then leave.
    3. Yelp does a good job with organizing events to meet people in person.
    4. It engages people that enjoy doing those types of activities on a regular basis (going out, eating, etc.)
    5. Yelp has a coolness factor going for it. I am pretty sure that their demographics probably sit very highly w/in the 18-35 range.

    Some of the sites you listed can’t really be compared to Yelp, IMHO. How many times have you bookmarked a restaurant on del.icio.us?

  17. Noah Kagan Reply

    damon,

    i think i will eat my words on this post. i have found Yelp useful for myself just for book-marking. it could be looked at as a game where people get rewards, points, social capital, etc… for using Yelp. Also, it feels good to tell people about things and get noticed for that.

  18. adamvonwillis Reply

    Jacob Kerlerec was spot on. Your comments about Yelp seems pessimistic and very negative. Reviewing companies on Yelp is fun and actually does help people out. It’s a really great service and I am proud to say that I am contributing to it’s success.

  19. lpn training Reply

    This is very self explanatory… “Karma”. You do something good to someone and you probably get something good out of your good deed. Say you wanted to find fair and unbiased review of a product, especially something related to information product, you probably go to a related forum and read a number of different opinions from different angle and you make your decision without someone telling you how it is. Trust me if you save some money or time because you get some tip from a bunch of strangers without any specific vested interest on the subject matter, you will also feel obliged to contribute to the discussion and help someone on the go.

  20. james Reply

    It’s a win-win situation. When I do good review on restaurants, people will 1st visit my website for reviews before heading to that particular restaurants. So when I have my own readers, then advertiser will come in and voila, I can earn money through free reviews for restaurants.

  21. Charlie Reply

    I feel that your views on this are a little misguided, considering that you taking the time to blog about this opinion is a contradiction to your whole point. There are numerous sites that give people the opportunity to create and contribute. In fact, I would wager that one of the more socially valuable aspects of the internet’s development is that it has enticed the public to contribute by simply giving them the chance. I celebrate sites that encourage something other than mindless consumption, if that makes me “dumb” than so be it. But I think you should examine your reasoning behind writing this article. Was it to serve only this site? If it was than I apologize, but I truly think you also enjoy writing and the feeling of contribution.