Askablogr Question: Comment on a Comment on TechCrunch re: Yelp

Q: What do you think of the following comment (last paragraph of #12)?
Posted by Ben R

A: Hey Ben, thanks for the question (and for those who don’t have the patience to click through, here’s the paragraph in question):

“Local interest websites are always non-viral, because they operate in the disjoint “internets” of each metropolitan area. So one needs to wait a very long time before they reach decent size. For Craigslist, it took 7-8 years. VCs will not wait that long. To accelerate this, you can throw money at the distribution/marketing. I do not know what the timescale for them will be in NYC, but VCs may get impatient, especially because this business is very recession-prone, and the recession is coming.” – Posted by SutroStyle

 I don’t know that I agree that local content properties are “non-viral”, but the commenter is correct (IMO) that reaching any kind of monteizable critical mass is orders of magnitude more difficult in local, and the momentum that you achieve in any one local market doesn’t necessarily translate into success in the next one. I’m on record with the view that Yelp might make the founders money, but is unlikely every to be a profitable business, so it’s not a stretch for me to agree with the general point here. I think they have a great product and I wish them well, but I’m happy not to be in that business any more (and I’m very happy not to be a limited participating in the current round of funding).