How a Small Startup Landed Yelp as a Big-Brand Partner
May 7, 2015
Long before the Socrata team picked up the phone to pitch Yelp, they had already logged an impressive number of hours identifying the leading consumer review brand as a perfect partner. They had taken much care in planning their outreach, now all they had to do was convince Luther Lowe, the Director of Public Policy at one of the biggest consumer brands online, to give a scrappy, government data startup the time of day so they could explain their vision for collaboration.
Working in Socrata’s favor was the fact that the partnership they were about to propose made a lot of sense for everyone involved. For one thing, it would give Yelp the means to provide its users with instant health inspection scores for the local restaurants covered in its crowd-sourced reviews. In turn, it would give forward-thinking local municipalities the ability to make better use of their data (via Socrata’s Open Data Network). Most important of all, it would give consumers a more useful and relevant, data-driven experience.
The last benefit held particular appeal for Socrata. In addition to connecting the Seattle-based startup to a nationally recognized logo, the partnership with Yelp would also give Socrata a great story to tell their government clients. The idea behind the partnership would provide a near perfect illustration of how Socrata helps governments put their data to work so that it can deliver real, everyday value to the citizens they represent.
It was this ultimate outcome — perfectly aligned with Socrata’s vision and values — that gave the team the confidence to make that all-important call. They knew that this partnership could be a game changer for their company and a win-win-win for all parties involved. Now, all they had to do was help Lowe see it the same way.
Where the Best Partnerships Are Born
In any business relationship it’s critical to be clear and consistent about your values and your vision, to know who you are and what you stand for, and to bring that “Big Idea” and conviction into the relationship.
For Socrata, the Big Idea centers on unleashing the power of open data by getting it into the hands of the people who need it most.
In 2007, CEO Kevin Merritt founded Socrata with the goal of creating a cloud platform that gives public sector organizations the ability to easily manage, share, and utilize their data to enable data-driven action. From day one, the emphasis has been on accessibility, with Merritt challenging his team to find creative solutions to break government/public data out of silos so it can put it in front of citizens.
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— Kevin Merritt, Founder and CEO, Socrata |
“The logical solution is to make the data automatically flow to where the people are already looking for the answers to their questions,” Merritt explains. “The ultimate vision is that people will no longer need to seek information out; it will just automatically be pervasively where it’s needed most.”
For Socrata, the most efficient way to realize and scale this vision is to identify and engage partners who can put that data on a big stage in front of a large audience.
Finding the Right Partners / Kick-starting the Partnership Process
Because they keep their guiding philosophy front and center, the Socrata team approaches partnerships from a much broader, more strategic perspective. Instead of working within the narrow focus of a random, ad hoc opportunity, they generate and assess ideas within the larger context of who Socrata is today and who they hope to be tomorrow.
It was with this mindset that the team initially sat down to identify potential partners. They began by reviewing all the possible business sectors and the companies within those sectors that might be a good fit. To narrow down options they developed a grading process based on the following:
- whether data was available
- whether it was being effectively liberated
- whether there were any particular challenges to overcome (such as a presumption of privacy)
Based on a blended scoring against these criteria, the team settled on healthcare as a sector that provided strong opportunities. An analysis of the relevant data helped the team identify where it touched and impacted people in unique ways, and also where Socrata could demonstrate results quickly. Their aim — just like with any startup initiative, even an internal one — was to fail fast, learn from those failures, and figure out a new path to success.
As with the majority of good ideas, the Yelp opportunity wasn’t sparked by an isolated epiphany. But, when they saw it, the team knew they were on to something. Having been down the partnership road before, they knew enough to trust the data and criteria, but they also understood they couldn’t ignore the “it” factor.
The draw of a partnership can (and should) go beyond immediate business and technical considerations and also have to do with whether it has the potential to be a perfect match for the larger purpose. In Socrata’s case, the partnership must have a strong potential to improve or even transform civic services. Socrata is looking for the kinds of innovations that will ultimately create a large ripple effect in the lives of end users.
From Socrata’s perspective, a partnership with Yelp would provide the kind of big stage the startup was looking for, but — perhaps more importantly — it would also allow Socrata to offer smaller cities and towns the opportunity to flow their data into Yelp. “If you’re a large city, you probably have the resources, gumption, and wherewithal to call Yelp directly,” explains Merritt. “But now we can give equal opportunity to smaller cities to come online and share their data.”
Photo by sea turtle
Getting to Yes: Selling the Vision (and the Details)
When the Socrata team pitches a potential partner on a new idea, they don’t just talk about the logistics of that one partnership. They provide greater context and talk about the big idea that the partnership will support. Ian Kalin, former Socrata Director of Open Data, who helped cement the partnership with Yelp before leaving to take a job as Chief Data Officer at the U.S. Department of Commerce, calls this big idea context the vision sale.
“A partnership is not a transactional relationship,” he says. “It’s part of a bigger story and a bigger vision. It’s never just about what we’re doing right now. It’s about what we’ll do together over the next year, three years, and five years.”
In order to tell a bigger story that resonates, you need to treat the partnership like a sale, applying the same process you use to learn about your customers — their mindset, needs, goals, etc. You then need to find the points of alignment between those needs and the solution your partnership will provide.
In the case of Socrata and Yelp, it was a pretty good bet that the global purveyor of local business reviews would be interested in a partnership that helped them deliver a better experience to their end users. Being able to automatically deliver additional data that was relevant to the customer needs — health inspection reports for restaurants related to their search — would enable Yelp to add value for their users in a very real and tactical way.
On the government side of the equation, Socrata helps local municipalities see how they can fulfill their ultimate purpose more easily and completely by working with Socrata to make their data more accessible and useful. “When we lay out the long-term vision, they say, ‘This totally makes sense. This is exactly what we want,’” says Merritt, “This is our shared vision for helping cities connect more with the citizens they serve.”
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— Erika Smith, VP, Ecosystem and Strategic Alliances, Socrata |
“The goal is for information to come back to the governments, as well,” Smith explains, “and for them to benefit from positive outcomes. For example, if this data is liberated and integrated into citizen solutions like Yelp, then perhaps there will be fewer food-born illnesses, leading to lower healthcare incidents and costs.”
Once you have their attention and sell them on the vision, it’s time to provide prospective partners with more information to gain their trust.
In addition to sharing the front-facing story, it’s important to address logistical and risk-mitigation concerns by sharing your company’s back story, explaining in credible detail how you’re building your business, and offering clear examples of how you add value. If you can tie all these pieces together, you can make a strong case for a partnership.
Socrata is growing its customer base two to three times year-over-year, and has a solid track record of designing and implementing successful partnership projects in a variety of sectors with a broad range of partners. In addition, their ability to raise $55 million in venture capital demonstrates investor confidence in the Socrata vision.
“The most remarkable thing about our partners is that they are willing to take a leap of faith with us,” says Merritt. “We might only have seventy to eighty cities today, but our partners are incredibly helpful and patient because they can see how this is all going to play out to broader market penetration.”
Covering All the Bases
Even early negotiations need to cover a lot of territory. After the initial getting-to-know-you and concept validation phases, things will move forward more efficiently and effectively if all the potential roadblocks to success are addressed early in the relationship.
In Socrata’s case, this means having frank conversations about everything from basic interoperability and other engineering concerns to finding out where potential partners stand in relation to key philosophical questions. For instance, Merritt notes that the toughest negotiation point his team often faces is around data exclusivity. “Partners have a natural desire for exclusive access to the data,” he explains. “But, Socrata has a philosophical position that open data is meant to be beneficial to all parties, not trapped in closed systems that exclude groups by limiting access.”
Merritt explains that to move successfully past this point, his team helps partners understand that the data isn’t their core competence or a point of differentiation. “We show them that the real competitive advantage of getting government data into a usable format is that they can then reallocate resources to other projects that will help truly differentiate them in the market.”
From a more tactical perspective, the Socrata team’s partner engagement methodology ensures in-depth collaboration and transparency from start to finish.
Data standards are an often-underappreciated issue in coordinating a technology product between multiple companies. It’s not a sexy topic, but it’s absolutely essential that it be addressed early and comprehensively. Best practices dictate running early pilots to seed a program and generating real data that you can analyze to identify any potential hiccups in the integration.
In Socrata’s case, their team typically drives this process, but, it takes the cooperation and coordination of both parties to successfully clean the data. This is a critical part of the partnership, one of the foundational building blocks of collaborative success. In addition to partner integration, the types of projects Socrata tackles also often involve a lot of political, legal, and process-related issues. In these areas, it’s usually Socrata’s government clients who take point, but – again – everyone needs to work closely to ensure that all the details are expertly handled.
In addition to making sure everything works the way it should, you also need to have a shared understanding of how the success of the partnership will be tracked and measured. In the case of the Socrata/Yelp partnership, Socrata would look primarily at what percentage of their customer base took advantage of the opportunity to flow health inspection data into Yelp. In the bigger picture, this metric is both an indication of partnership success and a tool Socrata can use to influence other governments to engage in the program.
“It’s a kind of virtual growth circle,” explains Merritt. “Socrata can now, because of the Yelp partnership, call governments and encourage them to publish their inspection data, even if they haven’t done so before. We don’t consider ourselves a passive organization. We consider it our job to help these cities see the value in facilitating the flow of their data all the way to the citizens they represent.”
Photo by: Mike Kniec
Bringing Your Partnership to Market, Where It Can Make a Difference
In January, Socrata and Yelp announced their strategic partnership, which will use Socrata’s Open Data Network™ and Yelp’s Local Inspector Value Entry Specification (LIVES) open data standard to get government-generated restaurant inspection ratings into the hands of consumers around the globe. The press release was picked up by a number of key media outlets in the public sector including GCN, govtech.com, and CivSource as well as by mainstream media like GeekWire and Fox News.
In the release, Yelp CEO and Co-Founder Jeremy Stoppelman pointed to the value of the partnership from his company’s perspective. “We’re thrilled to be working with Socrata and its network of partners to make this valuable information more accessible to the millions of people that turn to Yelp every month,” he said. “This was a joint effort as part of Yelp’s Local Inspector Value Entry Specification (LIVES) open data standard, which enables local municipalities to accurately upload restaurant health inspection scores for display on Yelp business pages.”
Starting with a fairly simple idea that just made sense, the Socrata/Yelp partnership was successfully realized in a collaborative partnership that delivers value from one end of the data food chain to the other. Because each of the parties involved — Socrata, Yelp, and local governments — could see and understand the bigger picture, they were willing to do the necessary work to make the vision a reality.
“We are always working to improve our ability to get data across our database in a scalable vs. bespoke way,” says Merritt. “We need to always be thinking more broadly about how the work we’re doing right now (in this case with Yelp) can scale to support other customers and partners. We need to learn how to adapt what we’ve learned gracefully to each kind of data and each partner type.”
At the end of the day, it all comes back to that Big Idea, and to how your relationship with your partners plays into that shared vision. It’s about partnership for a purpose — a purpose that’s bigger than either of you, but will only ever be realized if you work together.
Feature image by: John Lloyd (with color/circles added)