Walled Gardens Make Good Neighbors, Argues Nextdoor CEO

Xconomy San Francisco — 

Nirav Tolia has a pretty audacious goal for his young social media company, and he wasn’t afraid to say it out loud when I interviewed him recently.

“Our aspiration is to be approaching the same scale as Facebook,” says Tolia, who co-founded the San Francisco, CA-based neighborhood network Nextdoor in 2010.

Nextdoor connects people who share the unique pleasures and challenges of living within a particular residential zone that might cover less than a square mile—or, in the case of a place like New York, a single apartment tower. If nothing else, Nextdoor’s collection of individual neighborhood networks could be lifelines during a natural disaster, Tolia says. But it’s also a bulletin board for lost pets, virtual garage sales, and community gatherings.

Tolia knows reaching his ambitious membership goal—hundreds of millions of users in and outside the United States—will be an uphill climb. Facebook, Twitter, and LinkedIn are already entrenched as communications hubs for far-flung friends, professional contacts, and businesses.

“Yet we felt that something was missing,” Tolia says. All those millions of wired-up people are often strangers to the nice folks living two doors down the street. “One of the most important communities in our real-world life was not represented.”

Judging by the money Nextdoor has raised, Tolia isn’t the only one who thinks his membership goal is plausible. The 80-employee company has collected about $100 million in venture backing in the past 20 months, he says. The latest fundraising round of $60 million, announced in October, was led by John Doerr and Mary Meeker of Kleiner Perkins Caufield & Byers and Lee Fixel of Tiger Global Management. Other backers include Benchmark, Greylock Partners, and Shasta Ventures.

As it happens, I learned about Nextdoor well before I thought of it as a news story. It was during one of those sudden events that can turn strangers into neighbors. In a freak, violent windstorm one night, the tall trees lining the streets around me started pinwheeling like the Whomping Willow from the Harry Potter books. On a walk the next morning, I saw huge branches blocking side roads, and torn electrical cables draped across cars and sidewalks.

Clusters of residents were out trading information, and it was natural to fall into conversation with a smiling woman, Jessica, who told me that Nextdoor was another conduit for neighborhood intel. I decided to check it out, and signed up for the e-mail feed.

Now as I work at my computer, or call entrepreneurs many miles away, I’m also seeing a trickle of messages about the lives being lived minutes from my doorway. A small black and white dog was found—is it yours? Does anybody have a pair of crutches to lend someone with a sprained ankle? Free books are on the lawn at a certain corner. Watch out for the door-to-door salesman who acts weird.

Immediate problem-solving is a major theme of Nextdoor messages. Homeowners ask around about the best local mechanics and tree pruners. Parents look for other parents who want to share a nanny.

Tolia, a serial tech entrepreneur who also co-founded Epinions.com and Fanbase.com, has been studying these patterns like an anthropologist, starting in late 2010 with Nextdoor’s first test neighborhood, the Lorelei area of Menlo Park, CA. Tolia had been expecting a flood of messages based on consumer needs—classified-type messages and recommendations are still the most common postings. But he says he wasn’t as prepared for Nextdoor’s role in the response to crime.

In the Lorelei neighborhood one day, some thieves robbed a store. The police gave chase, quarantined the neighborhood, and spread the word that the thieves might try to take refuge in someone’s home. Meanwhile, the neighbors were also getting the word out, Tolia says.

“The police used bullhorns; the neighbors used Nextdoor,” Tolia says.

Neighborhoods, as defined by Nextdoor, vary in acreage and are often defined by boundaries such as major streets. As an example, one Nextdoor neighborhood in Oakland, CA, covers about 30 blocks bordered by big thoroughfares, and numbers about 2,000 households.

Residents called “leads” can found a new Nextdoor neighborhood by recruiting at least 10 other members, and they help set the geographic boundaries. The leads then patrol the mini-village’s home page for unacceptable messages, and manage some of its information resources. They can also verify that aspiring members live in the zone.

No one can join a Nextdoor neighborhood unless they live there—even members who have moved away and would like to maintain ties, Tolia says. Applicants must give their real names, and offer proof of residence through one of a number of means, such as a mailing address, a landline phone number, or a credit card billing address.

The intensely local focus is one of the three critical elements Tolia sees as essential to the company’s success. The second pillar is usefulness to members, and the third is privacy, Tolia says. While networks such as Facebook permit a daisy chain of sharing from friends to friends of friends, Nextdoor restricts access to the neighborhood message feeds. The company pledges not to sell user information to advertisers, and the messages are guarded from Web browser searches, Tolia says.

“Nothing anyone posts to Nextdoor can be found on Google,” Tolia says. “Ours is a closed system—it’s a walled garden.”

I happened to know, though, of one member who had managed to sign up by giving a false address. She did this without any sneaky intentions—she actually lives in the neighborhood. But she has particular reasons to guard her exact street address. To protect her identity, I’ll say that her problem is a stalker who might be violent. Nevertheless, she was approved for Nextdoor membership by a neighborhood lead who didn’t know her. As a precaution, she reads but doesn’t post to the site, to avoid calling attention to her location.

When I told Tolia about this, he said it was the first example of a successful “lurker” he’d heard of.

“There are still loopholes, and this is one we’ve got to close,” Tolia says. Eventually, any improperly verified members will be bumped out, because every six months Nextdoor runs all member names through data providers such as Acxiom to confirm addresses, Tolia says.

Quite a few people may have legitimate reasons to want to participate in Nextdoor without identifying themselves or their locations fully. But the company has no plans to allow members to post anonymously, or under pseudonyms, or to withhold their addresses when they sign up, Tolia says. Members may, however, list only their street’s name without a house number on the profile that can be viewed by their neighbors.

“We believe what makes Nextdoor work so well is three things: verification, true identity, and privacy,” Tolia told me in an e-mail. “These three things requires a detailed sign up process.”

Tolia recognizes that Nextdoor’s restrictive membership policy and verification procedures will lengthen the timeline for the huge expansion it plans. His ambitions regarding the company’s scale don’t include reaching that goal with great speed.

“The friction in the signup process at Nextdoor may seem counter intuitive to what other Internet companies have done to achieve scale, but it is by design,” Tolia says. The company has resisted Silicon Valley pressures to amass “100 million users overnight” by means such as search engine optimization of Nextdoor’s message content, he says.

“We are the tortoise, not the hare,” Tolia says.

About two years ago, Nextdoor had 176 active neighborhoods scattered across the country as it ramped out of its test phase. A year later the figure was 5,694; and at the latest count early this year, 26,733 neighborhoods were participating across all 50 states. The company estimates that there are 150,000 neighborhoods in the United States.

Kate Bedbury, a Realtor who lives in the Palomar Park neighborhood west of Redwood City, CA, discovered how far she could take Nextdoor as an organizing tool. Users have the option to share their messages solely within their own neighborhoods, or to extend their reach to surrounding “Nearby Neighborhoods.” Bedbury told me she tried this because she had set a goal: every resident of the San Mateo assisted living center where her mother lives would get a Christmas present in 2013.

Earlier in the year, Bedbury had brought her mother a velvety blanket, and saw another resident looking over at them sadly. Only about four of the 96 residents received any visitors, she learned. Bedbury put out a message asking Nextdoor members if they’d help her buy more of the soft blankets.

“Within four days of me posting that, I had all 96 blankets,” Bedbury says. She also had dozens of handwritten cards, 96 Santa hats, a restaurant to host a wrapping party for the gifts, and six sheet cakes for the party where the residents of the home opened their presents.

“Some of them just cried and cried and cried,” Bedbury says.

Tolia says members are now posting about 1.5 million messages a day. However, Nextdoor doesn’t release the total number of individual members—an important benchmark of a network’s growth.

Nextdoor is one of a series of startups that have tried to create active user communities rooted in local neighborhoods, with varying success. Among them are the microlocal news sites Patch.com and EveryBlock, and sites that rely mainly on user generated content, such as Burlington, VT-based Front Porch Forum. EveryBlock suspended operations last year, but recently re-launched in Chicago. Nextdoor is now trying to fuel its expansion by hiring field organizers across the country to encourage neighborhoods and new members to join up.

Nextdoor rolled out dedicated apps for Android and Apple mobile devices last year, and the platform was updated to allow members to issue urgent alerts. Neighbors can warn each other about traffic snarls, muggers, and even missing children. Nextdoor is also developing partnerships with city agencies and police departments in San Francisco, Oakland, San Jose, New York, Houston, and Dallas. Police on the neighborhood beats are posting crime-prevention tips and surveillance photos of suspects in local bank robberies and other crimes.

Each neighborhood website features a calendar page for city council meetings and other local events that might be too small to make the newspapers, such as an annual parade of grade school kids in their Halloween costumes.

What you won’t see yet on a Nextdoor page is advertising. Tolia says the company is focusing on building the network right now, rather than monetizing it too early. The platform offers a natural communications venue for local businesses that want to connect with local residents, he says. First, though, the company plans to develop a business model that reinforces the benefits to members, rather than making the platform distracting, Tolia says.

Tolia is grappling with some interesting questions right now as his network expands. Can people be part of two neighborhoods if they have a second home? Can parents be part of the neighborhood where their child’s school is located? Is a workplace full of office staffers clustered in nearby cubes a “neighborhood?” He doesn’t rule out these broader views.

For now, though, Nextdoor is sticking to its original definitions of geographic neighborhoods, and who belongs to them.

“In today’s world, people have lost touch with the neighborhood,” Tolia says. “Ironically, technology has played a role in fraying those ties. But now we can bring that back.”

Photo 2008 by Chris Dlugosz; “Grant Ferry, Buffalo, NY.”