How About a Nice Game of Chess? (A Post About Yelp)

Yelp and similar review sites are a lightning rod in the world of community-based small business owners — a world which includes almost all independent restaurants. Restaurants which, at least to the untrained eye, appear to be the bread-and-butter providers of review fodder for Yelp.

I don’t think you can find many small business owners that really like Yelp. From the perspective of most small businesses, the underlying business does all the real work, while Yelp runs a kind of high-tech “protection” racket.

Personally, my thoughts about Yelp and similar sites have evolved a little over the years. At first, I didn’t think these site would even catch on. Obviously, at least to a certain extent, I was mistaken about that. That said, I’m still convinced that Yelp reviews are far less important to any business than good word-of-mouth within a target market.

As these review sites become popular in my market, I experienced what I think every small business owner does — concern about the online reviewers who didn’t get what we were trying to do, fear that they might scare away people who would otherwise appreciate our work. This, I think, is where a lot of business owners stress out. It’s from this emotional place that we often make the mistake of engaging with the haters, in order to try to control the public discourse about our efforts.

I made that same mistake — engaging trolls and haters — not with Yelp, but in the comments section of our own blog in the first few years of the Linkery. Fortunately, however, that meant I didn’t really ever have the time to engage people on Yelp. I guess I figured that those conversations were stressful enough that I didn’t want to also help someone else make money off of them.

By 2008 I had pulled back a lot, and I had a much better understanding the ways in which Yelp and similar sites hurt both businesses and consumers. I saw that, whether an individual review is positive or negative, the real damage it does is in turning a community business into mere reviewable content. A product or service that could make a difference to the community becomes instead just grist for the review mill.

In a post on the Linkery blog, I wrote:

Some businesses are frustrated by what they read on Yelp, others are elated…. But in every case, the people are robbed of opportunities to build something better, as the mentality takes hold that it the business’ job to guess and deliver what the consumer wants, and the consumer’s job to evaluate the experience after the fact.

Over time, ignoring Yelp in particular became quite easy for me, as I saw that the vast majority of Yelpers in San Diego (where our businesses were located) weren’t interested in the kind of food we were interested in serving. Yelp San Diego came to establish itself as a platform for 1) sharing opinions about dirt cheap, late-night-style eats, 2) practicing clever/snarky writing, and 3) venting emotional/family/personal/whatever issues that have nothing to do with the business or its aims. For the last few years, Yelp has been a thing that I know exists, but doesn’t have any effect on my life.

Now that I’ve moved to San Francisco, however, I am periodically shaken alert to the presence of Yelp. I regularly meet normal, thoughtful, tasteful, persons who actually use the site to make decisions about where to eat, or who at least treat the site as relevant. It seems that Yelp has an actual presence here. Or maybe it’s just that a lot more business owners in the Bay believe it’s important to have good Yelp reviews. I’m not sure.

For years I’ve felt that the only important metric on Yelp for a business is the amount of reviews it has. The number of reviews is a marker of how many people are coming to your place; having a lot of guests is better than not having a lot of guests. But it’s really easy to find successful places with 3 starts and places that fold despite their 5 star rating. It’s also easy to find brilliant places with a bad rating, and horrible places with a great rating (particularly if they serve really cheap food). Any thoughtful person will see quickly that there’s a pretty weak correlation between reviews and quality or value.

Which means that, whatever Yelp is offering, it isn’t a consumer guide. I think to some extent Yelp is offering its users the sense of being in a community. Even more importantly, Yelp and other review sites offer their users the feeling of power over the businesses they patronize. The users think they are influencing the businesses, punishing them for their mistakes, and rewarding their quality — even though the businesses know that the reviews they get don’t correlate to service quality. In fact, the business owners see that reviews are more dependent on the reviewer than on any objective factor.

Sound like a familiar dynamic?

Billions of dollars of venture capital are spent in the tech industry, with the goal of turning community businesses into content that can be bookmarked, checked-in at, “liked”, and reviewed. This is a willful perversion of the basic principle of a business creating something of value, and selling it to a consumer. Instead there is now a parasitic third business that has stepped in, with the intent selling something else to the consumer — a powerful feeling of control over their real-life service providers. In this model, the parasitic tech business is totally agnostic about the “subject” (underlying) enterprise — restaurants and stores will come and go, but the rush of writing a one-star review after a bad experience can be repeated over and over again, forever.

The loser here, unknowingly, is the “user” — the guest or the customer. By engaging primarily with the online enterprise instead of with the in-person business, the “Yelper” perpetuates the social detachment of the very kind of enterprises — small, independent, flexible — that could easily partner with him to become an important part of his life. That local independent business, perhaps started by a neighbor with a passion for doing going work and making a difference in her community, instead is encouraged to pursue an unsustainable race to the bottom: ever-lower prices, ever-smaller margins, ever-decreasing quality. Eventually that business is no longer capable of responding to the needs of its patrons, and can only dish out the worst products at the bottomest prices.

So here’s the paradox: while good online reviews probably do help drive traffic to independent businesses, for these businesses to mature, over the years, into truly compelling entities, they have do more than just not read their reviews. They have to ignore the very framework of the review system itself.

Call it the WarGames truism: The only winning move is not to play.