Yelp

Buy distressed assets for $0: acquire dying businesses' client lists on rev-share

Codie's playbook for buying distressed assets without spending a dime: find businesses closing on Yelp, offer the owner a rev-share to transition their client roster to your business. They get revenue while closing, you get customers — no liabilities. 60% of temporarily-closed Yelp businesses close permanently.

“Like, I— if I owned any business, I would be out there right now for every business closing on Yelp. 60% of the businesses on Yelp that close temporarily close permanently. So I would be out there right now going after every one of their client lists, even if they were unrelated, and doing discounts and coupon codes, giving a rev share to the owner who probably could use it, and taking their client base. And that's how I would buy distressed assets. I wouldn't spend a dime.”

Steal thisFind businesses closing on Yelp and offer the owner a rev-share to migrate their client list to you — acquire the asset, none of the liabilities.

The Israeli locksmith who owns Yelp rank #1 through #10

Sam describes an Israeli locksmith in Nashville who recruits fellow immigrants and creates 10 differently-named websites (Smith, Expert, ABC, AAA Locksmith) that all rank on Yelp and route to one call center where prices are quoted on the spot, cornering the local market.

“And on the phone I just see like, yeah, you know, like, you know, maybe, uh, $300. Does that sound good to you? You know, they just make up prices and then they deploy their, their coworker out there and they own the whole Nashville Locksmith. They own number 1 through 10.”

Become a destination, get out of Google: how Amazon and Yelp diverged

Daniel Gross recounts that pre-Prime, 60-80% of Amazon's traffic came from Google, an existential risk; Amazon escaped by becoming a destination, while Yelp got killed when Google promoted Maps over it.

“we forget before Prime, before Prime, Amazon had this giant existential threat, which is I think 60 to 80% of its traffic came from Google. And this is what killed Yelp at the end of the day, because at some point Google was like, "Mm, we're gonna integrate into Maps and just promote Maps over Yelp."”

Steal thisDon't build a business that depends on Google traffic; race to become a destination people open directly.

Consolidate boring local businesses found on Yelp

Sam says if he were 21 he'd pick a very specific local niche on Yelp like irrigation, scaffolding rental, or lawn cutting in a city like Nashville or Denver, and start a business engineered to beat everyone else on Yelp. He's 'obsessed' with consolidating local businesses.

“So if I was a 21-year-old kid, what I would do is go on Yelp. Find, pick a very specific niche like irrigation services, scaffolding rental, lawn cutting service. Pick some niche in a town like Nashville, Denver, or something like that, and try to start a business that beats all the other people on Yelp. I'm quite obsessed with the idea of consolidating local businesses.”

Steal thisPick one boring local niche on Yelp in a specific city and build a business engineered to out-rank and out-execute everyone else there.