Like YouTube, PayPal, Yelp Has Illinois Root

Yelp.com is quickly becoming the next sensation on the Internet with Illinois roots.  Founded by ECE alumnus Jeremy Stoppelman and Computer Science alumnus Russel Simmons, who is also a graduate of the Illinois Mathematics and Science Academy®  (IMSA), Yelp is the first online service to combine social networking with personal reviews of restaurants, shopping, night life, hotels, and more. Users rely on reviews from current friends or make new ones based on common interests.

Unique and useful

Yelp provides a forum for users to share insight with friends and others about local businesses that they liked, loved, disliked, or hated. Members post reviews of the locations on their personal Web page. Reviews include the name and address of the businesses, the writer’s personal critique of the business, and writer’s rating of the business using a five-star scale.

In addition to hosting reviews, Yelp allows users to create profiles, add photo albums, send and receive messages, and invite friends to join. Even though the features are similar to social networks like MySpace and Facebook, Stoppelman, the site’s chief executive officer, says that the basis for Yelp is different.

“The point is not to have yourself and your friends and their friends just leaving comments for the fun of it,” he says. “It’s about sharing your opinion online. There are probably just a couple of people on the social networks who you go to for advice. They have strong opinions, know what’s good and hot, and love to tell others about it. Those are the people that should be on Yelp.”

Yelp is unique because it links “the well-written and insightful reviews to the actual human beings who wrote them, what we call ‘Real People, Real Reviews,’” boasts Yelp.

How it all began

“In my opinion, ideas are cheap. Execution is hard,” Stoppelman says. “There are lots of people out there with the same idea. Being flexible and having the right people around you, having smart people around you, and getting things done quickly are key.”

Yelp grew out of an incubator organized by Max Levchin, another Illinois alumnus (computer science ‘97) and former chief technology officer of PayPal. Levchin invited Stoppelman and Simmons, his former PayPal co-workers, to take part in the project and the two moved to SanFrancisco in 2004.

Simmons, who is chief technology officer of Yelp, said that at a lunch for Levchin, members of the incubator discussed the need for local reviews on the Internet. 

"It was Jeremy's idea to create a site motivated by your friends' help" Simmons says. "We all thought, 'Wow, that's an awesome idea!'"

Stoppelman says that the idea for a place where friends could share their reviews had been in the back of his mind before Yelp transpired. He said that the summer before its creation, when he first moved to San Francisco to participate in the incubator, he was in pain and in need of a doctor.

“I searched on the Internet for some way to find a doctor downtown and how other people had liked him,” Stoppelman says. “It bugged me that I couldn’t find something. Things like that had been floating in my head, but the actual idea came out of the conversation.”

Illinois roots

Stoppelman, who grew up in Arlington, Virginia, said he was interested in computers from pretty early on and knew that he wanted to do something related to technology in the future.

“At the time the Internet was just starting to pick up speed,” Stoppelman recalls. “And it sounded like there was a lot of cool stuff going on at Illinois.”

After graduating from Illinois in 1999 with a bachelor’s degree in computer engineering, Stoppelman took a job with @Home Networks. Within five months, he was recruited to X.com, a company that specialized in online banking. The company was directly competing with another company, known as Confinity, which was co-founded by Levchin. The companies eventually merged to form PayPal. Stoppelman became the vice president of engineering in January 2002 and left in the summer of 2003 to attend Harvard Business School.

Stoppelman was at Harvard for a year when he received a call from Levchin, asking him to join the incubator in San Francisco. Stoppelman said he didn’t think he would leave Harvard after a year, but things changed after he and Simmons got the idea for Yelp.

Like Stoppelman, Simmons had been interested in computer programming since he was about seven years old. The Homewood, Illinois, native and class of 1995 IMSA graduate, said that it was a “no brainer” that he went into computer science.

After receiving his bachelor’s in computer science from Illinois in 1998, Simmons stayed at Illinois for graduate school for a semester, until he was invited by Levchin to help start Confinity in California. He remained at the company as the lead software architect, which eventually turned into PayPal, for about four years.

“(The company) started with just six people. By the time I left there were hundreds of employees because we had sold the company to E-Bay,” Simmons said. “The most fun and interesting time is when the company is a small size or medium size like a hundred people. The bigger, the more bureaucratic it is and it’s harder to try out ideas.”

Simmons traveled all over the world for about a year after he left PayPal. During that time, he kept in touch with Levchin, who was talking about starting up a new company through a business incubator. Simmons then traveled to San Francisco to participate in the incubator, and, within a few months, he and Stoppelman created Yelp. 

Stoppelman and Simmons have been featured in a variety of magazines and newspapers, including the Red Herring, Forbes, The Register, the Los Angeles Times, and the San Francisco Chronicle. They were also named “Tech’s Best Young Entrepreneurs” by BusinessWeek in March 2006.

The site has continued to grow in popularity. In its first year, Yelp received $6 million in funding from

• Bessemer Venture Partners and Levchin; it then received an additional $10 million from
• Benchmark Capital in its second round, according to Wikipedia.