At L24, Localogy’s Mike Boland interviewed Chad Richard of Yelp (on the company’s 20th anniversary) about what Yelp’s massive corpus of data is telling the company about the current health of SMBs.

Key Takeaways

Here are a few key messages or insights that we gleaned from this session.

• Noting how much Yelp has changed since its 2004 founding, Richard, who runs business and corporate development at Yelp, says the company has evolved from a sales-driven company into more of an engineer-driven company. He noted that the Yelp sales team is now most likely to be engaged with training SMBs on self-provisioning their ads on the Yelp platform.
• Referring to Yelp’s ongoing monitoring of new small business formation says this is a very active time for new business formation. He echoed Localogy findings shared earlier in the morning that showed new businesses are increasingly being formed by digital natives. He also said new businesses are much more diverse than in the past, with black-, Hispanic-, and LGBTQ+-led businesses growing by 25% over the past year.
• He said last year was the first year in which there were more women-led home services than beauty businesses formed.
• He also said businesses face significant challenges in the current economic environment, including a 25% increase in the cost of essential goods. This creates a much more hard-nosed mindset in which businesses are “leaning into efficiencies” and are becoming “more aggressive with digital marketing.”
• He also says this is leading many SMBs to question spending, including for software, which points to demand for a single software provider, or at least better integration among solutions. “How do we partner better so solutions work together?”
• He said AI is still in its early days for SMBs, “but it is happening.” Yelp as a company is benefitting from its early adoption of machine learning, a necessity, Richard said, to allow Yelp to make sense of its massive corpus of data.
• Chad said the home services category has seen the most dramatic growth in the past year. Some of this is driven by higher interest rates, which favor home repairs over home purchases. He added that this category is the focus of innovation for Yelp, and several new product announcements will be coming soon.

The SMBs: A Health Check

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Chad Richard, Yelp