How NextDoor Found An Actual Purpose

A year ago, startup NextDoor’s status as a unicorn (a new firm with a valuation over $1 billion) was something of a mystery to outside observers. Founded in 2008, NextDoor has long described itself as “the largest social network for neighborhoods, enabling local conversations in order to build stronger and safer communities.”

As of 2015, the social networking firm had clocked in with a valuation of $1.1 billion despite the fact that it had generated not so much as a single dime of revenue over the course of the seven years it had been in the market, and had been rather slow to add neighborhoods to the platform. Its own internal figures had roughly 100,000 neighborhoods as of 2016. But its then-CEO said the firm expected to have 85 percent of U.S. neighborhoods on its platform by 2017.

That didn’t quite happen, but 2017 NextDoor had a total of 150,000 neighborhoods, globally, as part of its platform — a pretty good jump but likely still a good distance from the 85 percent forecast. “Likely” because it is hard to know exactly what percentage of U.S. neighborhoods were captured in that 100,000 count in 2016, or how much they had to grow to get to 85 percent.

The firm was, however, at this point reporting revenue figures of “tens of millions” in advertising.

As of last year, NextDoor was reporting 236,000 neighborhoods globally, and a new CEO, former Square CFO Sarah Friar.

The problem, Karen Webster noted in a commentary, is that for all the money it had raised, and for all of the top-tier talent it had brought in, there just wasn’t enough there when she tried to actually use the platform. Instead of a healthy listing of useful and relevant local content about businesses openings, useful tips on goings-on in the neighborhood, ways to connect to local service providers and things that might actually make the platform useful and sticky, what she mostly found was generic, somewhat spammy content she didn’t particularly want to engage with. For all its sign-ons, Webster wondered how many “users” were like her — people who signed on to find a useful hyper-local platform, and found not much of anything to hold their interest.

“No great content, no user engagement. No user engagement, no users. No users, no advertisers. No advertisers, no revenue. No revenue, no business,” Webster wrote. “Based on my experience, Nextdoor.com is a platform with a lot of VC funding that — 11 years later — is still searching for a purpose.”

But the universe, as it turns out, can be a funny place at times, and it seems that after over a decade in business, a purpose may have actually found NextDoor — in the form of a global health pandemic that has left consumers with a newfound focus on life in their local communities.

“There’s never been a moment in time when proximity mattered more,” NextDoor CEO Friar told The Wall Street Journal in an interview. “I don’t need to explain to people anymore why their neighbors are important.”

In the last few months, Friar noted, interest and engagement in NextDoor has spiked as people have broadened their use of the platform beyond such classics as sharing bread recipes or making lost pet postings. In the last two months, she said, people have taken to posting to find out if their elderly or otherwise at-risk neighbors need help grocery shopping, share tips for avoiding potential infection or even offer help with home-schooling. There is still the airing of local grievances air that NextDoor has developed a reputation for — going jogging without a mask will likely earn one a negative review from their hyper-local peers — but the bigger shift, Friar said, is toward NextDoor’s next evolution as a community-building tool at a time when consumers have nearly overnight discovered the value of building local communities.

That, Friar said, has meant NextDoor has had to modify and expand its offerings to meet the moment. Recent additions include the  “Help Map” tool that allows users to mark their availability to help as well as search for local available helpers. The platform has also stepped up its content moderation efforts — making sure the health data going out over the platform is accurate and in line with Center for Disease Control and Prevention (CDC) and World Health Organization (WHO) guidelines.

But modifying for today, Friar noted, is only part of the challenge. The real question, she asked, is about tomorrow, and how NextDoor will change itself to conform to a landscape where an awful lot of things look very different than they did even three months ago.

“We will totally change how we interact at a community level. I’m trying to look for those emerging themes: What will people maybe not do for a long time? How will people visit restaurants in the future? How will people go to a sporting event? Those are inherent parts of communities,” she told the news outlet.

As is employment, she noted, and the alarmingly high rates of people who now find themselves without it. One theme that has been important on NextDoor that looks due for even further development, she noted, is the idea of a neighbor for hire — and giving people a better pipeline into the sort of jobs like dog walking or landscaping services that are really best captured hyper-locally.

Will it really be a game changer for NextDoor? As always that question remains a jump ball in a broken economy — and of course it is all in the execution by NextDoor in terms of how attractive it makes itself to consumers. As we’ve seen thus far, that has been an issue in the past, and the simple fact of a global pandemic is not a guarantee those issues will simply resolve themselves.

But in an era when people are social distancing and reconfiguring nearly every aspect of their lives — and thinking a lot more locally than they have in a generation — NextDoor might have something it didn’t in May of 2019 or even before that: a solution to a friction. How it keeps its users and monetizes that engagement is now NextDoor’s next act.