Part 1 Video Starts 00:13: Google makes reviewing easy by adding attributes to restaurant reviews
Part 2 Video- Starts 8:16: Fake reviews are costly to SMBS but Google seems incapable of fixing it
Part 3 Video- Starts 15:17: Square’s new bank is a threat to traditional SMB banking relationships
Transcript: EP 25
Greg: Okay. Welcome everyone to the near memo, episode 25 of our silver anniversary. And, um, as always Mike and David are here with me and we're going to be talking about, uh, the news of the week in the world of local and local social and small business commerce that we always talk. And, um, uh, to everybody that's, um, I was going to say something about fires, but hopefully they'll go away soon.
All right. There, there's my sentiment. Couldn't agree more. Yes. Natural disasters about these days. Yes. And
Mike: it's natural one
Greg: life is a, is a, is a mix of very, very strange juxtapositions, which I won't go into in detail. We're we're, we're doing some remodeling at our. And so I'm looking at, um, uh, kitchen countertops against the backdrop of the apocalypse.
So it's like this weird society is collapsing and should I have course sullen or granite from my countertops? That's my, that's the way my brain is working these days. So, all right. On that note, um, Well, let's
David: see if we can distract you for at least 15 minutes here with, uh, with the near memo. Um, so I'll dive in.
Oh, Mike, you're trying
Mike: to say something. I'm going to say that, given that this is Greg's mood, just start, I'm going to really work hard to be positive on the phone.
David: All right. Well, let me kick things off, uh, with a piece of news that according to Mike is not actually news, but, uh, Google did promote it this week.
Um, and an announcement on their blog.google, uh, called the keyword, um, which is the new review experience within Google maps. That apparently has been out for some people on Androids for quite a while. Uh, and they say is now rolling out to the iOS, uh, devices, which of course I'm, I'm not an Android user, so I haven't seen it.
It was news. It's a very simple, uh, interface. That's essentially more of a selection, uh, type of interface, uh, where they're asking specific questions about specific attributes of a business. And presumably these attributes, uh, tie in pretty well to the ones that have been displayed in Google maps for quite a while.
Um, but the, the, my big takeaway from it is that Google is collected. Much more structured data. Uh, even though they positioned this as a, as a user experience improvement. Um, and I think it flies directly in the face of, of, you know, Yelp's longstanding commitment to, uh, long form reviews and the fact that they think this is what users want to read and write.
And Google here is taking the exact opposite approach, uh, that which they've had on the reading side for quite a while. Now with these little sort of. Uh, attribute things in there now, extending it into the user side of things. The, the box that says share more about your experiences about, I don't know, 8% of the vertical height of the review interface.
The rest of it is devoted to things that you can just tap, uh, at to leave a very quick review about each of these more granular data attributes. So I just think it's kind of Googled doubling down. Yeah. Quick and structured and, uh, to the exact polar opposite of, of Yelp on long and, and unstructured. So, uh, certainly an interesting, interesting change, um, evolution from Google.
Uh, I think it flies, it, it follows a, a trend that they've had, uh, for the last several years in, in Google maps.
Mike: And one thing about it is it gives them a structured sequence of information that works very well with them. Learning because it can be reasoned about, so they know that the restaurant has this specific feature and then they can answer queries with high degree of confidence.
Is this a cheap restaurant? Is it, you know, a kind of question. So in that sense, it gives them much better tools to drive against in terms of search results. But what I noticed in restaurants, which I thought was interesting, there wasn't a lot, there was a lot of non sentiment driven questions. Uh, price, for example.
And I thought that was kind of unusual. I fat dine in delivery. Right. Take out which seem they don't. I mean, I though maybe, I suppose, in terms of evaluating how good is the best time to do at these different functions, maybe that's a way that they could take it so you can see if the restaurant does all good or just part of it.
Greg: One of the thoughts I had that I wondered about was how does this, or whether does this, whether this translates into other verticals, I mean, I would imagine there are corresponding data points that you could formulate for a lot of different verticals, hotels, for example. No,
Mike: but they're already doing it.
Greg: Does it, does it, does it, does it get into in other service areas? Does it work equally?
David: Well, I think it does. Right. And many anyway, at least sort of more complex services. Like I can see it working very well in medicine. Right. How long was your wait? How was the doctor's bedside manner? What treatment did you get?
Blah, blah, blah, blah. You know, what insurance did they take? Um, you know, it seems like even in a category like that, Um, you know, hopefully more of a, you know, once a year or once a decade type of experience that there's still this structured information that would be valuable to searchers and
Mike: to Google.
And they did roll it out in April of the pandemic year in almost every other service category lawyers and accountants and, uh, plumbers and roofers. You're saying a comparable, a comparable UI. Yes. An attribute driven faceted interface with three or four attributes that a user could choose. That we started scraping and it's very nice because it's very structured.
It allows you to do some really nice analysis over time and compare yourself to other predators. It's a very useful thing because it's effectively a survey because, uh, so we, we, we brought it right in together up and it's, uh, so it's in all the, when I looked last, it was in 340 service categories.
Greg: So, so quick, a quick point that kind of is a segue T to you, Mike, in a way, even though David, you were going to do this.
Um, the quality to let you take it, correct. Okay. All right. Qualitative information. Okay. Be very useful. In many situations, especially in a more complicated transaction, a higher consideration purchase. So I was talking before we got on about buying solar panels and I looked at all the reviews for the four vendors that we were, uh, choosing from among.
And I read all the Yelp reviews and all the Google reviews and some of them. Comments that were made were very, very interesting and helpful in helping us make a choice. And if I'd only seen stars or if I'd only seen prices, um, it would not have been as useful to me in making a decision.
David: So what were your buying criteria for solar panels?
What were the, what were, can you distill the things that, that helped make your design.
Greg: Um, well, quality of service, uh, the absence of complaints, particular complaints, the, the equipment that was being used, um, uh, w among, among other things, those are the kind of top
David: are those three. It seems like Google could assess via survey equipment
Yes, but in one particular case, there were some problems with a subcontractor that was used. And so the subcontractor had a lien against the job. And so things like that don't come out in surveys and that reflected on the service, uh, or the, or the reliability, the credibility of one of the, one of the providers.
So, so that kind of stuff wouldn't come out in a survey. Yeah. I don't
Mike: think they are currently afterwords timeliness, quality, uh, professionalism in the services right now. So some
Greg: of you could probably handle like 80% of the issues in a, in a structured data survey, probably. Right. That's
David: assuming that you knew the reviewer was legit
Mike: over to you, Mike, and, and assuming you, you did decide to dive in, which is what my story was about, which was the real cost of fake reviews.
Gentlemen, who had spent a lot of money on a forklift, came into the forum, you know, hat in hand because he didn't go beyond this review summary. He sent somebody to. For a lot of money and they never delivered. Um, when you dig into this company, you find a ton of fake reviews. There was 125 reviews, roughly 80 of them were fake and the real reviews were all very negative.
And when you dug further, looked at the better business bureau, even though Yelp like to claim, they should've looked at Yelp, they weren't on Yelp. I hate to tell Yelp that, but they weren't there. But if you looked at a better business period, you would find. Better business bureau complaints and better business reviews, all of which are negative.
Um, and so the Corpus of better business bureau was totally negative. The Corpus that Google gave them 4.2 and this guy not doing due diligence fell for it. And he came into the form to help, to try to see if you can get the faker dudes cleared up, which then got escalated to Google. And they're struggling with whether they're fake or not, which raises this question for me, which Google.
Promoting their incredible artificial intelligence. I can translate between 109 different languages. They can. If you drop a picture of poison Ivy into lens, they can tell you it's poison Ivy. And yet after 13 years they've been incapable, developing a machine learning algorithm that can sex can successfully.
Uh, limit the impact of fake reviews because these reviews were clearly fake. And, you know, I did an analysis with Curtis points, help Curtis point runs this company. To track fake reviews where it was clear that of at least 50 or 45 of the reviewers had reviewed other businesses in common across the whole world, which the chance of that happening is about zero.
Greg: Uh, which is, which is a pretty easy thing for Google to
Mike: track. It's very easy to check if I can track it and Curtis can track it. Google should be able to track it, but they, so it really raises the question. Why is Google not solve this? It's not a technical question. I don't think
Greg: it's, it's a version of the, it's the, it's the, uh, the user reviews version of the, they can put a man on the moon, but why can't they make a good cup of coffee?
I remember that commercial
Mike: ever now, everybody can make you a cup of coffee.
Greg: So, so, so Google clearly can do more than it's doing with its technology. I mean, the stuff that Curtis Boyd is and his objection.ceo or the transparency company, I think he's rebrand. It's doing Google can do all the same things.
He's doing NLP comparison about IP addresses, looking at review velocity, uh, looking at profiles, comparing them, but they're, but they're not. And, um,
Mike: and what they do do whenever they tighten it. They get a lot of false positives because we see in the forum a tremendous increase in users complaining they posted a review and it's not showing.
So it's not even clear to me why that would be the false positive.
Greg: Yeah. Well, you could, you could, as we discuss sort of before this, um, today you could do some mix of, of machine and human moderation and probably minimize that.
Mike: Right. Well, what I'm guessing is that the human moderation is what's the quick cut and Googles.
There's no motivation for them to do so. And
Greg: so what they rely on right now is, is a, is a crowdsourcing system where individuals are supposed to flag spam reviews. I mean, that's their chief enforcement mechanism.
Mike: I think they have some other backend algorithm cause it periodically as I started.
Greg: Well, certainly, certainly, but I mean, that's one of their main mechanisms.
If, if it's not the, the main, the main one and the, the, the reality is that most of these fake reviews are generated by the businesses themselves. In one form or another, either friends and family or they're paying some service to do it. And so these business owners themselves are not motivated to take down their own reviews or to flag their own reviews.
And I think it's very unlikely that competitors are going to be flagging, uh, false, uh, positive reviews in, in most of these cases. So I think that whole system is, is probably fundamentally flood. Yeah.
Mike: There's something flawed. I mean, to me, it's attention focus. They just don't seem motivated to really fix the problem.
Again, it's been 13 years. It should, shouldn't be Yelp is, does have a lot of false positives, but manages to make, make that impact light reviewers better business bureau seems to have a system in place that captures the essence of this company. I mean, this company has clearly robbed people of somewhere in the order, about three or $400,000 and cents, they rely on,
Greg: they rely on complaints.
I think too, for
Mike: that it's two systems. They have reviews and complaints, but the reviews reflected the complaints pretty closely. Yeah. Yeah.
David: But the BBB does a lot of human review of those complaints is my understanding which Google is, as you said, it's never going to do so. That's true.
Mike: I just don't think it's rocket science other than I'm motivated to do it.
Cause it's very frustrating such thing for this guy. I sent my son up there the other day. Just see if this place was real. It had been there, but they've closed up shop. They'd moved down and they opened a place down the street with her name.
Greg: It's it's trust is a big, is a big issue online. And, um, you know, it's, it's, it's interesting to me that Google doesn't perceive any threat to its brand from this.
Uh, at all, seemingly, and it's interesting that Yelp has not gone after them in the way that apple is going after Facebook, for example, or Android by implication with privacy, right? I mean, Yelp could Mount a campaign and say, we, you know, we are aggressive about cleaning up these reviews. You can trust our reviews.
Other platforms are replete with. I don't, I don't know why they don't, I don't know.
David: They don't mention Google by name and just compare in this case. It wouldn't be impossible because they didn't, the business didn't have a Yelp profile, but there's gotta be plenty of, of major disconnects between what a GMB profile looks like and what a Yelp profile looks like.
Um, so I don't know. It seems, yeah, I agree. This is a much, um, you know, it seems like a much surer tactic to get eyeballs away from Google, then hoping that the. Senate antitrust commission will slap Google on the risks
Mike: and, and force Google to rank higher, which is a weak strategy you just start with.
Right. That's that's yellow. Hope. Exactly.
Greg: It's, it's a, it's a brand strategy. Trust us, you know, we're we, we have more integrity, but they're not doing it. Yeah. Um, okay. So, uh, my. Issue item is, uh, I got a lot of problems, a few people I'm, I'm having a tough week anyway. Um, my item is really, uh, uh, from, uh, from an item that was in, uh, in, in Wednesday's newsletter square becoming a bank.
So squares had, um, well, this didn't become a bank, but it has, it owns a bank. Um, uh, it had sort of square finance financing options before. And we talked about, we we've talked about Shopify and Stripe doing similar things. Um, but now square has a bonafide bank where you can have a checking account, a savings account, and they give you other services, uh, access to loans.
So the three pieces are checking savings and loans, and there are no fees at all. No overdraft fees, no account fees. And I think it's a, it's a very, very powerful. Addition to their existing and expanding services lineup. And they may not be in a totally unique position, but they're in a pretty interesting space.
Uh, right now vis-a-vis sort of small businesses and, and providing a whole range of services.
Mike: Yeah. And the loan side, they have such tremendous insight into cash flow and operations that they can loan things more efficiently, more effectively with less risk. So their loan profits.
Greg: Yeah, exactly. And they, and they are, are much closer to the business than a bank because they're right at the center of that operation with their point of sale.
I mean, my, my sense is I, you know, I think if you look at all the surveys that con con C said, surveys of banks, people hate their banks for the most part. And it seems to me that traditional banks, which have been trying to get into mobile payments and trying to upgrade their user experience. I really going to get disrupted by companies like square and Shopify and Stripe to varying degrees.
Um, because the market is right for
Mike: that. What's not to love about Wells Fargo. Well, the bay, they have some sort of disgusting discovery about once every six months. Right? That's some cheating they did in the mortgage or in the credit cards. There's little
Greg: chip or chase or B of a, or any of them, any of them, they're all kind of horrible institutions.
Mike: The other question I have is 10 years from now, we're going to be talking about square in the same way. We're talking about apple in terms of, Hey, aggregated. So many servers. Hmm, uh, that they are now considered anti-competitive or Stripe or square, or one of these, uh, types
Greg: of things. It's it's, it's, it's like you can do it until you get across some threshold of size and market power, and then you can't.
David: um, C squared G I mean, anytime soon, I don't, I don't see them getting there, uh, to the level of antitrust. I think that there's so many point of sales out there. Big banks, own point of sale systems, right? Didn't first data acquire like two or three of them a few years ago. Um, that's attached to one of these huge, huge banks.
So, um, so I don't see it Mike, as, as, as raising any flags anytime soon at the, no, I trust it. I just
Mike: think 10 years from now when Stripe and square and Shopify are that the next big thing, right? Then it becomes a question
David: it's possible. I was going to say, though, this is definitely a way to decrease churn, because it's such a pain in the butt to change banks, uh, with, with, as, as somebody who's done that a couple of times in this past decade, as a result of some of these stories that you guys were mentioning earlier, um, as a consumer, trying to vote with my wallet, uh, it's a really hard thing to do.
So, um, I think it's really smart from S from square standpoint to really lock. Their customers. And I think that they are providing a pretty good experience on as, as a square user, as well as somebody who's helped businesses set up square websites and connect them to points of sale. I think that they're providing a good experience on both sides.
So, um, I think it's really gonna, you know, if anything, it will decrease their churn further. From what I assume is already pretty low.
Mike: Is it, when I was doing the books for local you, I went to our local credit union, which is a very friendly and has always treated me very nice with good cars. Although a lot of paperwork and to get a $5,000 line of credit against the account that carried an account balance of 60,000 every month, except for the week of June, the first January 1st.
Right? Right. But every other month, every other month carry to 50,000 pounds, it took a raft of paperwork and, uh, an amazing amount of cruft to get a $5,000 grab protection against the checking account. It was like, no. Right. And
Greg: the, and the, the PPP loan saga that just played out over the last year. A lot of, a lot of small businesses got screwed in that.
And you know, a lot of the money went to larger enterprises who arguably didn't need the money who were sort of savvier and able to take advantage of it. And a lot of the true small businesses had real trouble. And this, this a friendlier financing entity, as you sort of are alluding to, I think, is going to be something that a lot of business owners recognize is important for them.
Mike: So, I mean, finance has always been something that companies do historically, right. Ford got into it, GE got into it, Apple's getting into it. And the question is, does it, does it, is it because growth has slowed in their core areas and they need this too? Or has the market slowed or, I mean, or is it just a good fit and they're doing it because it makes.
Uh, to do it. I was at where capital is best deployed. I guess
Greg: I would suspect, I suspect that there are a couple of things going on. There has been some slowing of point of sale adoption, and it's a natural extension of their, their, their product evolution. I think also, you know, they started, they started providing financing pretty early because they had access, you know, they had visibility on the cashflow and so this was a product they could offer.
And I think this emerges from. And it also is good for, you know, it's good for their story to the public markets because you know, the number I quoted in the piece was that, uh, you know, some analysts had said that, uh, that payroll, you know, P uh, uh, accounting and invoicing and, you know, sort of this cluster of services, um, is, is, is $500 billion in annual.
Fees paid by small businesses, whether or not that's literally true or sort of directionally doesn't matter. There's a big, huge pot of money there.
David: Well, right. It seems like a positive enough note to end on that.
Greg: There's a huge, I don't think we should fetishize positivity. It's appropriate, but not always. Wow.
David: You've really had a rough week.
Mike: Know me well enough that I don't finish I's positivity. Uh, my,
Greg: my, my wife is, is, uh, is, is up in Mendocino with a friend north of the San Francisco bay area.
And I it's very nice for her. And, um, I'm, I'm, uh, you know, I'm sort of holding down the Fort and doing all this stuff and working and got the pets and the kids and all of that. So, and the roofers, the roofers have not come yet. Oh. But I can tell you, I can people who are watching this, that want to know about roofing and want to know about solar installation.
I can tell you everything you need to know.
Mike: I'm getting a geothermal heat pump put in this next month. We
Greg: can have a conversation. So that's, that's very interesting. Cause I've been looking at heat pumps as well. Right. So does it, you guys can
David: start an alternative energy section of a near media doc.
Greg: Well, yeah, the heat pump doesn't rely on the furnace in the same way that, you know, so it'd be, I have gas.
And so it could shift over to electricity, which I could subsidize with the solar.
Mike: Right? Although electricity in California doesn't seem like a very reliable
Greg: deliverable. This is, this is part of the apocalyptic mindset because the, you know, the power grid is breaking down. Right. Can't rely on a fundamental thing like that.
It shows that the society. Perhaps coming to an end, but
Mike: I worry about the telephone poles falling
Greg: down. So yeah, but society is coming to the end and end, but we're just getting started. This is one of the tech, the tech tech company, cliches, blah, blah, blah, blah, blah. We're just getting started. So anyway,
That's a little grumpy, even for my tastes, but, uh, with that,
Greg: we can take it
David: away. I think we should quit while we're ahead at this
Greg: point. Okay. All right. Anyway, thanks for listening. See you next week as always everyone.