the importance of user experience for yelp inc

The Importance of User ExperienceYelp Inc.

Team 3Chia-Hsin, Fan(Carrie); Chun-Yu, Fan(Claudia);

Ittitep Tepkasetkul(Jim); Kanlayarat Santiwijit(Tipp); Nawaporn Chirananondh(Wow);

Pakanun Poolvoralaks(Ib); Pei-Jung Huang(Patti)

Dr. Barry Unger

4/17/2014

AD741 D2 (Spring 2014) The Innovation Process: Developing New Products and Services

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

2

BackgroundBackground:• Founder: Jeremy Stoppelman and Russel Simmons in 2004

(ex-employees from PayPal)• Motivation: the perfect pizza (yellow page only have paid

ads)

IPO in 2012/3/2

Small group of contributors that Yelp “Take the lead”

Current situation & Dilemma: • Charging local businesses (current) vs. readers• They don’t know what they are

4/17/2014AD741 D2 (Spring 2014) The Innovation Process: Developing New Products and Services

Team3 Carrie, Claudia, Jim, Tipp, Wow, Ib, Patti - Yelp

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

3

What is Yelp?

4/17/2014

What they think their product is

AD741 D2 (Spring 2014) The Innovation Process: Developing New Products and Services Team3 Carrie, Claudia, Jim, Tipp, Wow, Ib, Patti - Yelp

http://www.youtube.com/watch?v=PniMEnM89iY

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

4

Ideal Product

Generic Product

ExpectedProduct

Whole Product

For Business: messaging system, account managerFor Reader: Order Delivery, Deals & Coupon, Health ScoreSponsorship ProgramYelp AdsBanner AdsActivity Feed (Free)PlatformData (Click Rate, Review)

Community

Product Analysis

4/17/2014

What their product actually is


Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

5

Target Customer & Revenue Model

4/17/2014

Contributor

Readers(Community)

Local Business

Partner

ProductTarget Market

Revenue ModelSponsorship ProgramYelp AdsBanner Ads


Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege Expense Causes Loss

Expand new markets increases revenuebut also increase expense• Sales & Marketing costs 55%• Sales Staff’s commissionOnce achieve saturation point, Yelp will die.

4/17/2014 6

S&M55%

Expenses in 2013

Why Yelp isn’t profitable?


2010 2011 2012 2013

-50

0

50

100

150

200

250

RevenueExpensesNet Loss

In m

illio

n

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege Industry Analysis

4/17/2014 7

Threat:• Low-profitable

industry•Powerful substitutes

Opportunity:•Highly dependent

users(readers)

Existing Rivalry- User Review Site• High competition• Low-profitable (advertising

expense, sales force)• Keep changing revenue model

New Entrant- Info Media• Low entry barriers• Capital requirement

Potential Substitute- Social Network• Similar feature can easily replace• Large financial support• Large loyal community


Winners must find theBlue Ocean to contain users


Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

8

Complaints about Yelp




Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

9

Losing Business ClientsYelp is useless due to neglect of user experience• Not enough local database to attract readers• Biased comments or fake reviews• Unfriendly user interface• Unprofessional interaction and communication• Poor customer services

New idea of product, “Filters”, but it’s overwhelming

“Old tech isn’t surpassed by disruptive tech but because the market demand” (Bower & Christensen, 1994)

4/17/2014



Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

10

Prick the Bubble of Engineer (1/2)

4/17/2014

Tactics

Kick It (UI) Simple and Stupid• Website: make homepage simple and

focus on searching • Mobile: make it ease to share (i.e.

picture menu, restaurant atmosphere)Create “Pick for Me” (advising feature)• Randomly select three 4-stars-

restaurants by location

ExceptedProduct Platform

Strategy Enhance features


Recommendation

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

11

Prick the Bubble of Engineer (2/2)

4/17/2014

Tactics

Click rate: “Activity Feed” (= Google Analytics)

Reviews: Filter by system and then monitor by user-support team • Fake: Delete biased reviews to maintain

reputation (= Google Scorecard)

• Negative: Consulting Program Accumulate more database

ExceptedProduct Data (Click Rate & Review)

Strategy Develop new business model


Recommendation

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

12

Prick the Bubble of CEOReducing marketing expense• Suspend expanding international markets• Decrease budget on Elite program

Collect more user experience• Setup feedback feature on site• Encourage Yelper to give feedbacks• Fix the problems seriously

Develop new products• Host event advertising (i.e. restaurant week)• Create “Consulting Program”

Find a big brother: Sell to Facebook4/17/2014


Recommendation

Met

ropo

litan

Col

lege

Met

ropo

litan

Col

lege

13

References• Darwell, B. (2013, 4 30). Facebook earnings preview: changes to ads, payments, gifts and other revenue streams in Q1. Retrieved 3 31, 2014, from

InsideFacebook: http://www.insidefacebook.com/2013/04/30/facebook-earnings-preview-changes-to-ads-payments-gifts-and-other-revenue-streams-in-q1/• Lardinois, F. (2012, 10 10). Shrink To Grow: Citysearch And Urbanspoon Parent Company CityGrid Lays Off 15% Of Its Employees. Retrieved 3 30,

2014, from TechCrunch: http://techcrunch.com/2012/10/10/shrink-to-grow-citysearch-and-urbanspoon-parent-company-citygrid-lays-off-15-of-its-employees/

• Piskorski, M. J., Chen, D., & Smith, A. (2013). Yelp. Boston: Harvard Business School.• Tsai, L. (2009, 12 9). Chowhound Comes of Age (For Better or Worse). Retrieved 3 31,2014, from East Bay Express:

http://www.eastbayexpress.com/oakland/chowhound-comes-of-age-for-better-or-worse/Content?oid=1524763&showFullText=true.html• Chris Silver Smith (2010). Is “Yellow Pages” Becoming An Obsolete Concept?. Retrieved 3 31, 2014 from

Searchengineland:http://searchengineland.com/is-yellow-pages-becoming-an-obsolete-concept-38752• Nick Stamoulis (2012). Why Yellow Pages Will Be Dead in Five Years. Retrived 3 31,2014 from searchenginejournal:

http://www.searchenginejournal.com/why-yellow-pages-will-be-dead-in-five-years/40008/• Rusell Perkin (2011). Rating the Zagat. http://infocommerce.typepad.com/my-blog/2011/09/rating-the-zagat-deal.html• Laurent Kirchner (2011). Zagat Remains a Profitable Brand. Retrieved 4 1, 2014, from

CJR:http://www.cjr.org/the_news_frontier/zagat_remains_a_profitable_bra.php?page=all• Tsuruoka, D. (2012, 07 24). TripAdvisor Q2 Sales Miss Analyst Views; Shares Down. Retrieved 4 1, 2014, from investors:

http://news.investors.com/technology/072412-619352-tripadvisor-second-quarter-sales-miss-estimates.htm?p=full• Trefis Team. (2013, 09 05). TripAdvisor Revised To $79: Advertising Business Has A Brighter Future. Retrieved 4 1, 2014, from Trefis:

http://www.trefis.com/stock/trip/articles/201440/tripadvisor-revised-to-79-advertising-business-has-a-brighter-future/2013-09-05• Bussgang, J. (2012, 08 17). Scaling is Hard, Case Study: TripAdvisor. Retrieved 4 1, 2014, from Inc: http://www.inc.com/jeff-bussgang/scaling-is-hard-

case-study-tripadvisor.html• SAUL HANSELL. (2008, 05 12). Why Yelp works. Retrieved 4 1,2014, from New york times.• Paula Forbes. (2013, 4 22). SF Restaurant Calls For Yelp Boycott: 'Stop the Bully’. Retrieved 4 1, 2014, from EATER.• Michael Luca. (2011, 9 16). Reviews, Reputation, and Revenue: The Case of Yelp.com. Retrieved 4 1,2014, from Harvard business school case study.• Sandy Banks. (2013, 4 22). Putting Yelp in their rear-review mirror. Retrieved 4 1,2014, from Los Angeles Times.• THE YETI. (2013, 10 29). 4 Reasons Why You Shouldn’t Trust Yelp Nightclub Reviews. Retrieved 4 1,2014, from THE YETI

