Yelp, I’m drowning in the medium

A story about the founding of Yelp led us to wonder why Zagat didn’t create Yelp. The core idea (reviews by consumers) is exactly identical, and the Zagats had their brainstorm in 1979. Why couldn’t they translate the phenomenal success of their printed reviews and their formidable brand into an online presence with a moat that would deter everyone else?

Of course, Zagat does have a website, and you can even get and write reviews on it. But to use it, you have to sign up for a subscription. That is the relentlessly logical solution from their perspective. After all, why would Zagat cannibalize the valuable revenue stream they drive from selling their slim brown books by making the reviews and ratings available online for free? Yet, this perfectly reasonable decision made them an also-ran on the Internet, ultimately fit for a purchase by Google to bootstrap their location review content. If Google hadn’t bought Zagat, the end would have been even more ignominious.  As most reviewers would have migrated to online sites, Zagat would have died a long, comfortable death as it’s core subscriber base aged into a comfortable retirement.

There is a lot that can be said about this, one of the more obvious things is that most companies are reflections of their founders.  The broader truth though is what Marshall McLuhan outlined in Understanding Media, or in the soundbite, The Medium is the Message. The new medium of the Internet has transformed not only message delivery and message representation, but the message itself, and us as well. Any entity that fails to adapt to the new medium is relegated to the archives. It has even changed human and societal behavior and will continue to do so, inexorably. This is as true for restaurant reviews as it is for books. And thanks to ipads, as true for your parents as it is for toddlers.

The medium of the Internet has its own relentless logic, content has to be speedily delivered, ideally at no cost, look fresh, be current, as comprehensive as the world, and appeal to very exacting, specific tastes. Oh, and you have to make the audience feel they have a voice, either through forums or direct interaction. Absent these features, you’re paddling against a powerful tide. Zagat misunderstood one feature of the Internet and that left enough of a crack open for Yelp to eat their lunch, and dinner.