Don’t fear the Yelper

It shouldn’t be that surprising what side Inc. magazine took in the battle of Yelp vs. Small Business Owners. That’s what they – and any other specialty magazine – are there for, after all. They exist to address the concerns, alleviate the fears, and confirm the prejudices of their niche group of readers. But the recent cover story, ‘You’ve Been Yelped’, is so intent on focusing on the harm the review site can do to a business, and so lax on the owners themselves, it can’t help but do a disservice to their readership.

The feature starts off on the wrong foot by its surprisingly sympathetic portrayal of Diane Goodman, an obviously unhinged dingbat a small business owner who took issue with some negative reviews of her bookstore on the site. Considering the sort of obscene vitriol that populates a lot of the web, user Sean C.’s review seems downright quaint:

“This place is a TOTAL MESS. I think this place needs to close down for a few days and do a thorough cleaning and organization and get rid of all the crap!”

Rather than doing what a normal person might have done – say, taking stock of how your store looks to outsiders and maybe sprucing it up a bit – Goodman began doing this:

She clicked a link on Yelp’s website, opening a tool that allows business owners to send messages to reviewers. “Why don’t you come in here and say it to my face?” she wrote. “Are you too much of a coward?” She told him that she knew who he was — so few people came into the store that it was obvious — and that the store was a mess because sales were slow. Over the next few hours, she sent several more angry messages. She warned of a “world of pain.” “Goodbye pussy boy I will be contacting your employers,” she said. And: “Your mom was a bitch and she didn’t teach you how to behave. That’s why your life is such a mess right now.”

She eventually found his address through Google to go ‘apologize’, and the two got involved in a scuffle. The police were called, and Goodman was charged with battery, though accounts differ on who started it.

More than anything, she blamed Yelp. Out of nowhere, the little company had somehow managed to get between her and her customers. It had hurt her business and caused her to humiliate herself, first online and now, improbably, in the real world. “I’ve never met any store owner who likes Yelp,” Goodman says. “We’re all gritting our teeth. It’s evil.”

No, what caused her to humiliate herself was that she behaved like someone off their meds instead of a successful business owner. Yet Inc. bizarrely chooses to view the story from her eyes, and use it as a jumping-off point for a largely critical profile of Yelp.

The magazine and its subscriber base of entrepreneurs are right to see Yelp as a challenge, and yes, occasionally, a threat to small businesses. But the point that’s not made enough in the article is just how much of a service it provides to small firms. For businesses that are doing most things right, it’s free advertising – better, actually, because it has the credibility of being from real customers. And for businesses that are doing some things wrong, it’s a uncensored survey of your clientele and a road map for improvement. Everyone’s heard of the statistic that, for every customer that complains, 26 say nothing and simply stop patronizing your business. Undoubtedly, some of those 26 are taking their beef to Yelp. Instead of shooting the messenger, the savvy business owner should appreciate the feedback and incorporate it into an overhaul. To Inc.’s credit, they eventually admit Yelp isn’t going away, and give some solid advice for dealing with it at the end of the article.

Small Business as Shield and Sacred Cow

But more importantly than the specific issue of Yelp, the article highlighted a paradox about small businesses in the American popular imagination. On the one hand, the lobbies and interest groups representing them make up one of the most reactionary and anti-progressive political coalitions around. They are on the forefront of fights against discrimination laws, minimum wage hikes, environmental laws, and the estate tax. They – or the people who claim to speak for them – endorse a laissez-faire, pull-yourself-by-your-own-bootstraps, philosophy for the individual. But when it comes to their own survival, they break out the violins, playing a tune of community cohesion and the fuzzy feelings you get when you know the name of your pharmacist. The sudden switch is whiplash-inducing, but it’s an old and familiar refrain in America: cutthroat for thee, coddling for me. To be fair, small businesses are more political shield than autonomous actor here, used by corrupt politicians as an excuse to execute whatever rollback policies their big dollar donors want carried out.

Don’t worry. I’m not about to pen a paean to the joys of shopping at a big box store, or pretend I’ve loved the sight of America turning into an indistinguishable mass of identical strip malls. But the fact-free fetishization of so-called Mom and Pop operations gets a little old after a while. The simple truth is, it’s not necessarily better to be an employee or a customer of a small business than of a big one. As a worker, you often get paid less and receive fewer benefits, and have a much tougher time forming a union. And while much is made of the soulless bureaucracy of mega-corporations, being directly under the owner is often the worst place to be for a peon. Some of the most tyrannical bosses I’ve ever had were small business owners, and a lot of my friends have had the same experience.

And as patrons, Americans clearly vote one way with their voice and another way with their wallet; the consumer inside them in an eternal, schizophrenic war with the citizen. Small businesses rank second only to the military in polls about which institutions Americans have the most confidence in, and, not surprisingly, big business is dead last. But if they really hated big companies that much, they wouldn’t be big companies in the first place. It’s a classic example of what economists call ‘revealed preference’. We’d all like to be the kind of people who shop at O’Grady’s Corner Store instead of Wal-Mart or Costco, but we’re not and haven’t been for a long time. And I’m not even sure we should feel that bad about it. I’m as bleeding heart as they come, but I like to save my sympathy and charity for the poor, not for those who fail to make money through money-making propositions. The market’s not great at everything, but I think it does a pretty good job of trimming the fat of the business community and giving consumers what they want. If you want my business, make your argument through your products and services, not by invoking guilt and nostalgia.

The bygone era of Mom and Pop stores didn’t exist because people cared about their neighbors more, or valued knowing the name of the guy they bought their gasoline from. It thrived because that’s all there was around. As soon as consumers had a different path, they took it. But it’s not all bad news for the little guys. While mega-chains kill a ton of small stores, there are instances where they actually help them, in a weird, unintended symbiosis. Starbucks certainly intends to kills off its competitors, but as often as not it ends up creating a market for upscale coffee where there wasn’t one before – a market big enough for it and a neighbor. And there are plenty of stories of independent bookstores thriving in the wake of chains moving in, especially if they know their way around the used market.

But even where they don’t help, I have a hard time believing chain stores are the last manifestation of commerce in our country. Consumer preferences change, and the pendulum won’t stay on the Big N’Cheap model forever. The smart small fries will be the ones who can capitalize on the swing back to niche, instead of whining about how the free market is actually doing its job by making a popular review site rich.