Yelp CEO Jeremy Stoppelman was interviewed by Charlie Rose earlier this month on August 15. AllThingsD, which called our attention to the interview, focuses in on Stoppelman’s criticism of Google’s local efforts (17:35 below). However, Rose asked Stoppelman about a wide range of subjects, extending beyond Yelp to tech generally and international competition.
Rose, in his introduction, says that “Steve Jobs called [Stoppelman] to advise him personally against the [Google acquisition] deal.” While the interview never returns to Steve Jobs and what he may or may not have told Stoppelman, the latter does publicly acknowledge (for the first time I’m aware of) that Google tried to buy the review site.
Rose opens the interview by asking Stoppelman, “Tell me what Yelp does?” He responds “It’s word of mouth amplified. We set out to create the new yellow pages, a better way for finding local businesses.”
Stoppelman recounts the event that lead to the idea for Yelp, a story he has told numerous times. He got sick and was trying to find a doctor in San Francisco. He told Rose that it was very difficult to find a recommended doctor online and that was the genesis of the idea for Yelp.
PayPal’s Max Levchin, whose incubator launched Yelp, was initially not enthusiastic about the idea. However he did provide a seed round of $1 million to Stoppelman, which launched the company.
Someone in Levchin’s incubator first proposed the name “Yelp.” Stoppelman told Rose he didn’t like the name because “had a negative connotation … Yelp is a cry for help.” But he was convinced to use it by another person (Scott Bannister) in the incubator who was confident about the value of the name.
Stoppelman also briefly told Rose his personal story, which I hadn’t previously heard.
He was a computer engineering student at the University of Illinois. He says he was “recruited to Silicon Valley” and found his way to Elon Musk’s startup that preceded the merger of companies that created PayPal.
Stoppelman was at PayPal for three and a half years. He began as an engineer (“writing code”) and eventually became VP of engineering following the eBay acquisition of PayPal. Yelp was founded in 2004.
Asked about his motivations for starting Yelp and whether money was one of them, Stoppelman said that when he co-founded Yelp he was trying to solve a consumer problem. He said he had faith that there would be a business model eventually given that connecting consumers with local businesses was ultimately about transactions.
Rose later cites Facebook COO Sheryl Sandberg’s comment about local as the “holy grail” of Internet advertising. Rose asks Stoppelman to define local, which the latter says comprises 10 to 20 million small businesses that collectively spend $100 billion on advertising, “most of which is currently offline.”
“That gets a lot of companies excited, particularly big companies,” observes Stoppelman. Rose then uses that answer into a segue to discuss the Google acquisition offer.
Rose asks about the decision process that resulted in declining Google’s acquisition offer. Unfortunately, Stoppelman doesn’t come back to Steve Jobs or provide much detail about the internal discussions. He makes a number of high-level remarks such as, “In the end it didn’t make sense; we were building a strong, independent company and that has played out.”
Here are some other interesting comments from the interview:
- When the iPhone and app store launched: “I felt like we were back at the starting line . . . what if we don’t get it right on mobile?”
- On competing with Google: “The most important advantage is focus . . . At Google there are a lot of problems to think about . . . there’s a lack of focus . . . They’re really struggling in the [local] space”
- On the review filter: North of 20 percent of our [review] content” is filtered.
- What he’s worried about: “the next big technological change.”
- He relies on Twitter for “breaking news”; he likes Bill Gurley’s blog. He characterizes TechCrunch as a great place to learn about newly funded startups but as otherwise a “bit of a firehose”
- On ad revenue: “We have north of 60,000 payment customers. . .”
What was not discussed:
- Frustrations of many business owners (and some users) with the review filter
- Lawsuits against the company and claims that Yelp manipulates reviews to boost advertising
- Review mills, review buying and other attempts to game the site
- The fact that Yelp wasn’t the first local review site and how it succeeded where others sputtered
You can watch the 24-minute interview below.