The NY Times Says Yelp has Arrived

It's not often that the venerable New York Times publishes a glowing piece on one of my portfolio companies. This is a welcome bit of good cheer amidst the backdrop of a generally gloomy economy.  When I invested in the young company founded by Jeremy S. and Russ S. back in 2005, Yelp had attracted about 100,000 San Franciscans to its site.  Today, with more than 15,000,000 monthly visitors, it seems to have "come of age" -- at least enough to get serious coverage from the NY Times.  Yelp has more or less been a household name in Silicon Valley for a couple of years already, but I'm especially excited to see it turning heads now in New York as well.  

As the article points out, Yelp is not just about restaurants. It's good for everything from hair salons to insurance brokers. The courageous Megan C. even used Yelp to share thoughts on the doctor that performed her anatomical modification. Now that's what I call broad coverage.

Among the many reasons Yelp is succeeding is that it easily passes the multiple choice test for consumer internet startups that I blogged about 18 months ago.  Later this week, I'm hoping to post a similar multiple choice test for enterprise software companies, though I don't anticipate success with that test will lead to any articles in the NY Times Dining Section.

Humor without the lies, please

I admit that I'm a frequent reader of Valleywag, a low-brow blog full of silicon valley gossip.  It's often pretty funny, and I know many of the people referenced in the stories, which only adds to the entertainment value.

Last week, however, the blog ran an entry containing a fabricated story.  The entry was meant to embarrass Jimmy Wales, an entrepreneur we backed two years ago.  If there is such a thing as an Internet celebrity, Jimmy is surely one of them, so he is accustomed to being attacked by web "journalists" -- particularly those at The Register, where they seem to attack him on a daily basis.  If he read the Valleywag piece, I'm sure he just shrugged it off.  But since the piece referred to me, I would like to set the record straight.   

A few months after we invested in his company, Jimmy transitioned from CEO to full-time executive Chairman, and he and I were fortunate to recruit Gil Penchina, a long-time eBay executive, to assume the CEO role.  Valleywag reported some nonsense about Jimmy getting fired because of a bogus expense report. Nothing could be farther from the truth.

If it weren't enough that Jimmy founded Wikipedia and Wikia, he impressed me even more so a few weeks ago when he volunteered to forgo his Wikia salary to maximize the company's flexibility during this lousy economy. I wonder how many Valleywag staffers would ever consider such a sacrifice.

I hope Valleywag continues to entertain readers with witty observations and curious photos, but I wish its writers would substantiate offensive claims before clicking the "publish" button.  I wonder how many times I have laughed at fabricated Valleywag stories in the past.  Now I know to laugh but not to believe.

Portfolio Company Politics

I got nervous today when I heard one of my consumer internet portfolio companies had posted a political advertisement on YouTube. It seemed obvious to me that any consumer company is likely to alienate half of its customer base by making a political statement. No matter how well-executed the ad, it is guaranteed to hurt business as much as it helps.

It appears that I may have jumped too quickly to a conclusion.  This is the first political ad I have seen that appeals to both Democrats and Republicans.

Money fears

Doesn't this new version of the dollar bill do a perfect job capturing the essence of the Treasury Department's current state of mind?

Oh my Goldman

I got a first-hand sense of how badly Goldman Sachs felt the pressure of the crumbling financial markets this morning.   

At the start of a private company's board meeting I was attending, a director received a call on his cell phone.  One member of the board had not yet arrived, so the director answered the call in case it was the missing attendee.  He dispatched with the caller after about a minute.

The caller turned out to be his broker from Goldman Sachs who was calling to relay a simple message: If Goldman goes under, don't worry, your assets will still be safe.

I almost fell out of my chair.  The senior executives at Goldman decided the perceived threat to the investment bank was so great that they instructed brokers to call clients proactively to address concerns about the company's failure.  Wow.