Totally useless.

Then came Yelp. I find it helpful. In fact, just last month I used it to find a place to take my out of town guests for dinner at a reasonable price AND with parking. So, I’m glad it’s out there. PS - it was Dragonfly in the Inner Richmond - delicious and reasonable.

I use the reviews as a guideline. Everyone can have a bad night or bad service or perhaps the reviewer is just a jerk. Who knows? If there is only one or two bad reviews out of several, I can chalk that up to one of the above.

And for John C., who posted 1 review 2 months ago with no replies…your review still counts - whatever it was for. You can’t really expect people to respond if you don’t interact.

Geez, maybe I should go work for them. Yelp! Hire Me!

Maybe one day soon my posts about my IM start-up won’t be getting blocked either.

Cheers!

$16M in funding looks more like a telecom play than a user review play, but to be fair, Yelp’s model is to really nail a city down - to have a local presence through feet on the street, parties, etc. It takes cash to do that on a national level - a lot of cash.

The concept of “trusted” recommendation engines has been around ever since the web 1.0 days. Some one will crack it and as a service it will have immense value for all of us but only if the reviews are relevant to our personal profile.

You and I get buffet style staff parites at the legion while multimillion $ funded companies hire some entertainment and offer free drinks. It’s all about scale perspective.

The only objectionable issue here is the extra funding. I find it odd that a company couldn’t bring themselves into the forefront of public conciousness with their initial $6M investment and required an additional 10…

Especially when there are plenty of other Web 1x and 2.0 sites that came from virtual obscrurity. Maybe the business landscape is changing as a whole now that you’ve introduced money into it.

Back when the baby boomers were planting the seeds of their fortunes they didn’t have much big $ competition. There weren’t other, better funded start-ups trying to take your share of the pie. Now that these boomers have nothing better to do with their money, they’re investing in new startups, which begins to skew the situation in favor of those with funding.

Money ruins everything! :p

Any Girls Gone Wild fan (i.e. Jeremey and Russel?) would be better off starting a GGW clone and maybe their investors would actually make some money. At least they would get the lifestyle they want and wouldn’t have to worry about running a boring company like Yelp.

I think the parties that should be criticized the most, and that are the big losers in these types of deals are the VCs (and those investors that have put money into their funds). Obviously, Benchmark has a lot more insight into Yelp’s business than we do (revenues, growth, etc.), but how the first $6 million was spent and what the additional $10 million is needed for are valid questions. You don’t need access to any confidential information to see that Yelp is a simple business with a non-defensible product/technology in a market where it is competing with other startups as well as big players. Thus, the risk is huge.

VCs are typically looked at by the general public as being smart, disciplined investors, especially if you’re a “top-tier” firm like Benchmark. I think the type of funding we’ve been seeing indicates that’s not very accurate and that there’s definitely a herd mentality out there right now. One of the biggest factors in any VC investment decision is supposedly the management team. Where did the money from the first round go? According to startup.in’s post, at least a small part of it was spent on parties. The VentureBeat article is very interesting. When asked where they want to be in 5 years, Jeremy Stoppelman, Yelp’s co-founder, said “Sitting on top of a pile of money … [in unison with Simmons] … surrounded by women! Yeah! [high five].” Obviously, most founders would like to make a ton of money and some would like a certain lifestyle, but the more appropriate answer to this question, at least publicly, is “I’d like to build Yelp into a profitable company that is the leader in the space.” I question the judgment, and focus, of any founder that made a comment like Jeremy’s. It’s inappropriate at best and makes you question whether his objectives are aligned with the best interests of the company and its shareholders. Is a guy that says something like this actually capable of making decisions and executing on a business plan that creates value for the shareholders? Any VC that would fund this type of management team loses a lot of credibility in my mind. They deserve the loss there’s a good chance they’ll get. I don’t care who they are and how “top-tier” people consider them to be, I question the intelligence of any VC that invests in a management team that is, in my opinion, apparently this dumb and immature.

Yelp’s best bet is an acquisition, but the higher they raise the bar on the valuation, the tougher that becomes. It is imperative that startups do not rely solely on the acquisition exit because there are a lot of things that could happen very quickly that take this away (a slowdown in the ad market, recession, etc.). Startups prove themselves in tough times more than they do in boom (or bubble) times. Any Girls Gone Wild fan (i.e.

pwb: Sales and marketing are very important, but if a large chunk of this $10 million is earmarked for these things, I think it’s a losing proposition. Some of Yelp’s competitors can and do spend more than this on just a few marketing campaigns. Microsoft, for instance, will probably do individual campaigns for Live.com that exceed $10 million. One of the things that has made many Web 2.0 companies so compelling as investments is that viral growth potential eliminates much of the marketing needs most startups have. In fact, many of the more successful Web 2.0 companies are said to have spent little to no money on marketing and were still able to hit critical mass. The selling point that you don’t need a huge marketing budget mitigates against some of the risk these startups have due to the fact that these sites can be cloned very easily. If these startups start asking for large amounts of money to spend on marketing, they become much less compelling as investments, and actually may become black holes.

http://weblogs.hitwise.com/lee....._grow.html

But Drama 2.0 has a good point - where’s the first 6 million (it’s not in any defensible technology for sure)? Moreover, I do feel that these recent investments don’t make a lot of sense. I think one vc finds something cool so the others have to have a horse in the race which just bids up valuations.

I should point out that my title is slightly misleading. By local reviews, I mean in the United States and only selected cities. The idea behind Yelp is a website that allows users to write and share reviews of local businesses. And since they don&#821…

I’ve been a subscriber to yelp newsletters and I do like their map integration, but the socialness of it all actually takes away from the quality of the product… which should be honest reviews on restaurants, bars, and shops.

And if you can get 10m USD at a good valuation, why not take it? It allows for better long-term planning. And the game is not won yet.

We (www.dialo.de) are doing the same in Germany. And after reading the Forbes piece and seeing the Flickr pics I will reallocate some marketing budgets.

These guys have done a great job creating buzz…girls only kissing!?! Someone once told me that Yelp is all about secretaries figuring out where their next date shall invite them to. But that might be changing.

1.5m uniques are great, especially considering that Yelp so far has focussed primarily on the Bay area. With their war chest they have a chance to scale across the U.S.