How to Build an App Like Yelp: Business Model, Features, and Technologies

What Is Yelp?

Yelp is a review and social media site. The project is based on crowdsourcing and focuses on surveys of local businesses such as restaurants, schools, hotels, bars, beauty salons, doctors, and other local businesses. Yelp users provide product and service reviews using a five-star rating system.

Yelp was born in late 2004. In those days, future Yelp CEO Jeremy Stoppelman came down with the flu. He had just moved to San Francisco a couple of months ago and needed a doctor’s recommendation, so he tried to find advice online.

However, he found no useful information. But that’s how he came up with the idea for the project: a website that provides an overview of local businesses and helps people find valuable information about local products and services.

At the time, Jeremy Stoppelman and his colleague Russell Simmons were working at MRL Ventures, a business incubator based in San Francisco. They pitched the idea of creating a review site to their boss, Max Levchin. The bid was successful and Levchin invested $1 million and Yelp was born.

Through custom app development services, anyone can now build an application like Yelp. In this article, we’ll explore how to build an app like Yelp, discuss the Yelp business model and the yelp features you should include in your product as well. Let’s explore how profitable this business is and how Yelp makes money before we dive into the development process. 

How does Yelp make money?

Every product needs its own business and monetization model to be competitive. What type of business model does Yelp use? Their business model has three main parts: advertising, branded and verified profiles, and other paid services.

1. Advertisement

• Search ads

Companies can use Yelp as a platform for self-promotion. As a result, their products may be advertised as sponsored search results on their respective listing pages.

• Resale ads

Yelp also earns revenue from the resale of some of its promotional products. In 2018, the company also launched the Yelp Ads Certified Partner Program, through which agencies can now manage and sell ad campaigns for any business client.

2. Transaction Fees 

• Yelp Platform

Regarding the use of Yelp partner integrations, users can make direct purchases on the Yelp website or app.

• Yelp Deals

On the Yelp platform, companies can use the deal feature. This allows you to promote products at a discount.

• Gift certificates

Yelp allows for special gift certificates that businesses can sell to Yelp users. Businesses can choose the price of their certificates ranging from $10 to $500.

3. Branded and Verified Profiles

• Branded profiles

Yelp allows businesses that need to improve their listings to get a branded profile with Yelp premium features like preferred videos and images, or simply by updating their business information.

• Enhanced profiles

The enhanced profile option prevents ads from other companies from appearing on a specific list.

4. Other Services

• Yelp Verified License

Businesses can subscribe to a verified license, which is displayed as an icon on their listing pages. The Yelp license is meant to show that a particular business is trustworthy, so it becomes easier to attract more customers.

• Subscription Services

Other subscription services play a small role in the monetization of Yelp. But they are still part of Yelp’s business model. Yelp subscription services include Yelp reservation, Yelp waiting list, and Yelp knowledge.

• Yelp Reservations

On Yelp, prepaid businesses can use a range of online bookings for various locations, restaurants, and bars.

• Yelp Waitlist

Yelp Waitlist is a business management software. Using this option, businesses can manage their seats efficiently and customers can check waiting times. The Yelp Waiting List Service is also available on a subscription basis.

Yelp app features

• Yelp Knowledge

Yelp Knowledge is a program that offers business owners access to Yelp content and historical data for a fee.

Now that you know how Yelp makes money, let’s find out how to make a rating app of your own.

Tech stack for an app like Yelp

To develop and support the Yelp platform, the company uses the so-called LAMP stack. It is an open-source platform that allows you to create web applications, including:

• Linux Ubuntu
• Apache
• MySQL
• Python or PHP

However, alternative technologies can be used to create applications such as Yelp. All these technologies will help to realize the idea and create a beautiful product. We believe that the choice of technology should depend on the requirements of a particular project.

11 steps to develop an app like Yelp

Here are eleven steps to make your review app idea come to life and simplify the development process.

1. Choose a niche

There is plenty to explore in the review app industry. Keep your options open and don’t focus on an area where other companies are already successful. Find your specialty, but remember that it’s not enough to fill a niche. You need to fill this niche with a product that will appeal to people and make their lives better. Ensure that the end product is reliable, user-friendly, and available at all times.

2. Start locally

It’s always a good idea to research and research before committing to a business idea full-time. It’s wiser to fix shortcomings and take your time to make ends meet when there is little at stake. When you’re working locally, you’re more likely to be in control, whether you’re recruiting new contractors, managing logistics, training, marketing, or making app updates.

3. Idea and concept

Developing a review app should begin with an original idea embodied in a concept. Answering the following questions will help you understand how to make a review app that stands out from the crowd:

• What unique features will make your review app different from competitors?
• What is the main idea behind the app?
• What value can you offer users?

4. Target audience

When developing a review app, the first thing you need to consider is the target audience. Understanding your users’ needs makes development easier and leads to a better final product. Find out as much as you can about your potential users. You can start by researching the following:

• Demographics. Find out the average age of your users, where they live, what devices they use, etc. 
• Behavioral trends. Find out what decreases a user’s desire to download an app, your users’ security expectations, and so on.

To develop an amazing mobile application, we suggest creating a user persona, or a detailed portrait of your ideal user. 

When you’re researching your product idea and deciding how to build a review app from scratch, you should also determine who your target audience is. It’s not enough to know the target audience’s age, place of residence, financial situation, and hobbies; you need to think about your app users in terms of numbers. Also, analyze your competitors, for example, Yelp’s target market, and determine how different it is from yours.

Once you start thinking about how to create a review app from scratch, you should start by doing some initial research on your target audience. This research can be done online, where you can search for statistics, find communities, and explore other data.

The next step is to test your idea with real people. You can interact with members of interest-based communities online or in real life. The challenge here is to see how your review app idea resonates with your target audience and understand how to create a review app that communicates your idea.

5. Strategy

By now, you probably know a thing or two about how to create a review app of your choice, but there are a few more important points we should mention. It’s time to move on to the next step — building a business strategy for your app.

The wants and needs of the community you’re targeting should determine how you build a review app and what features you offer. What do your users expect from you? How do you want them to use your app like Yelp? Knowing the answers to these questions makes it easy to determine which features to include in your review app.

You can start with an initial scaled-down version of your app and then expand it with new features and innovative technologies. If your resources permit, you can immediately launch a more feature-rich app or a full-fledged product. A less risky strategy is to start small, but how to build your review app is up to you.

6. App development vendor

You can’t decide how to create an app like Yelp from scratch and make it successful without choosing the right app development company. If you are not a developer yourself and are not ready to take on this task alone, you will need someone who can provide professional website development services and who knows how to create a review app with all the necessary features. A good option is to choose IT outsourcing in Eastern Europe due to the excellent value for money.

Approach this task with caution, as you need to find a reliable partner who understands innovative technologies and, ideally, has previous experience with review apps.

7. Discovery phase

Once you’ve decided on a software provider, you can move to the first phase of developing a review app — the discovery phase. During this phase, a business analyst will determine your platform’s functional characteristics. The results of the business analysis are used to create your app’s UI/UX design, which will later be used to build the app from scratch.

8. Development

This stage is the most time-consuming, as it can take months to develop an app like yelp and it can take years of continuous development and iterations to build a complex and non-standard review app. However, a company with experienced professionals will be able to provide you with a plan for building your app.

Software testing services are just as important as development itself. The first thing you should look out for is poor performance, as slow apps tend to scare away users. Testing should be done prior to deploying the project so you don’t have to troubleshoot issues after a review app is launched. Keep this in mind when looking for information on how to create a review app from scratch.

9. Define your pricing strategy

Finding the right pricing strategy is a top priority for any business. For some review apps, the provider sets the price, while in the traditional review app, vendors set their own prices and you only charge for the service. However, when it comes to money, there is always a chance to make a mistake. The most dangerous strategy is to pay too much. This can make it impossible for you to compete and negate all the effort you put into building the app.

10. Marketing and promotion

Marketing is an important part of building a review app, as, without promotion, no one can find out about your new product. You can promote your app in a variety of ways, one of which is by advertising on social networks like Instagram and Facebook. Other methods include email marketing, SEO techniques, blogging, and paid advertising.

As you can clearly see, deciding how to create a review app from scratch is not enough, as you also need to keep in mind post-development activities such as promotion and advertising.

11. Ongoing maintenance and support

It’s not enough to know how to make an app like Yelp. You also need to know how to organize the ongoing maintenance of your project in order for it to function effectively in the future. Typically, a good web development provider can advise you on this and provide related services.

How much does it cost to build an app like Yelp?

The cost of developing a review app depends on these factors:

• Product features
• Product design
• Hourly rate of your development team
• Project size and complexity
• Technology stack
• Number of team members on the project
• Time frame

The biggest factor that influences the cost of developing apps like Yelp is the hourly rate of developers, and that greatly depends on their location. For example, an application that costs $40,000 to build in the US will cost around $9,000 if developed by engineers in Ukraine.

Developing your project with a company based in Eastern Europe is cost-effective and gives you access to top talent.

Final thoughts

People like to share their experiences and also visit new places. For this reason, online directories like Yelp will remain popular in the near future. With multiple monetization models, Yelp generates significant revenue from its users. That’s why you should consider building a Yelp-like app for your startup. And, if you’re looking for a development team to create a review app like Yelp or Tripadvisor, we’re here to help.

Mobile app development

Web development

UI/UX Design Services

Quality Assurance