Related Expertise: Technology Industry
In his role as vice president of business operations and strategy at Yelp, Matt Halprin (Chicago, San Francisco 1987-89, 1992-2002) says his biggest challenge—and the thing he enjoys most about his job—are one and the same: dealing with the company’s dizzying rate of growth.
“Yelp is growing superfast—we’ve enjoyed ten consecutive quarters of greater than 60 percent revenue growth—within an industry that itself is growing superfast and where innovation is happening at top speed. We want not only to continue that pace of success but also to find ways to actually accelerate it.
“One day we were a $50 million revenue business and then suddenly we’re a $375 million business. Finding and hiring great people and then keeping them productive and developing them effectively is key,” explained Matt.
Yelp is a website and mobile app that provides consumers with crowd-sourced reviews and other information about local businesses. Yelp users have provided 61 million reviews.
“With people posting reviews about local restaurants, plumbers, dentists, and such, we are a way for consumers to connect to great local businesses. The reviews are fun, often witty, and sometimes even a bit edgy. People love to read them,” said Matt.
He describes the company’s business model as a "wheel," building communities city by city. A local manager cultivates a community of people who want to freely share their opinions about local businesses, securing them to write reviews and tips and upload photos and short-form video content. As the audience for this content grows, members of that audience themselves then sign up for Yelp and contribute content of their own, all of which produces more page views.
“And so the wheel goes around and around,” said Matt. “Having built an audience of millions, Yelp can now monetize by marketing to small businesses trying to reach and connect with that audience.” Businesses and services are willing to pay Yelp to place ads above natural search results; in a great many markets, Yelp steals traffic and revenue from the Yellow Pages business. In the two years since Matt started with the company, its number of unique visitors has more than doubled from 65 million to around 140 million per month across 28 countries.
And he revels in the breakneck pace of it all.
“It keeps things interesting. As somebody with BCG DNA, I want to work in an environment that keeps me fully engaged. It’s unusual to find a business of this scale growing this fast. There’s no chance of my getting bored.”
Consider, too, that Yelp’s success is built around the relatively new and disruptive phenomenon of user-generated content (UGC).
“There are a lot of really interesting business challenges that go into making sure our UGC is both useful and credible. How do we make sure that our reviewers aren’t steering people wrong? How do we stop people from gaming the system?”
And how to remain scalable?
“If you’re doing it algorithmically, scaling is actually no problem. However, while we of course take advantage of algorithms and big data where we can, it would be a mistake for Yelp not to have a human heart. We need a personal touch to our service for those times when things don’t go well. We’re careful to invest in people; we want to get the balance right.”
Another aspect of the job that Matt says he enjoys is something he feels to be unique to a software/Internet-type business like Yelp—what he describes as the “ability to test and learn.”
“When somebody has an idea, we are able to put it out there on, say, 1 percent of our site, and we’ll find out in as little as one week whether that idea is likely to work or not. That’s the beauty of being online and having real-time feedback. If it’s not working, you bag it and try something else.”
Having moved from BCG to such a fast-growing industry—he went first to eBay and spent six years there as that company’s trust and safety officer—Matt says he’s had to get comfortable with making decisions more quickly and with trusting his gut. "In a business operating environment—particularly in the UGC and Internet-based world where everything moves so rapidly—we gather as much data as we can, but we then make quick decisions and run with them."
"If you make a mistake, that’s OK, it will help improve your judgment next time. At BCG, we’d just chalk it up to experience. If you get it right every time, you’re probably not accumulating much experience.”
Indeed, working in the world of start-ups and user-generated content, he says, has added greatly to his skill set.
“At a start-up, you’ve got to do things that, frankly, often don’t make sense—if they made sense, they’d already be happening at some other big company, right? That was a hard thing for an ex-BCGer like me to wrap my mind around. As consultants, we’re trained to find the hole in the logic—and it’s pretty easy to find the hole in the logic of any start-up."
Matt adds that BCG taught him the importance of building long-term relationships, a skill, he says, that’s become yet more critical now that he’s worked in a nonconsulting environment, “through ups and downs, good quarters and bad quarters, where there are unclear lines of responsibility, multiple geographies and functions, and people have got to make decisions together.”
“It’s hard to succinctly express the value and importance of the BCG apprenticeship, which is really what BCG is all about—even as a partner, you’re constantly learning from your colleagues, from your senior partners, from your clients. You learn so much about analytics, about how to interact, about how to see the big picture. I can’t imagine being able to do what I’m doing at Yelp today without the level of accelerated training I got at BCG.”
And Matt’s take on that ‘big picture’ for companies like Yelp and the world of user-generated content in general? “UGC and crowd-sourced information will definitely extend to more industries,” he said.
A good example of this may develop in the area of higher education and massively open online courses (MOOCs). Imagine, he says, how helpful it will be to apply online user-generated ratings and reviews, course by course, professor by professor, and school by school.
“The UGC genie is out of the bottle,” he concluded. “People want to have a voice to contribute information, and they want to consume information from peers. They don’t believe they need centralized information from a higher source. Platforms like Wikipedia enable the sharing of knowledge provided by individual contributors (instead of a centralized source like [Encyclopaedia] Brittanica), while companies like Yelp allow individuals and small businesses to build reputations and to compete. UCG, crowd-sourcing, and the wisdom of the crowds are here to stay.”
Besides his work at Yelp, Matt sits on the advisory boards of the Wikimedia Foundation and the Stanford University Institute for Research in the Social Sciences (iRiSS), and he is on the board of directors of Management Leadership for Tomorrow.