Social media is often about scale, NextDoor Bet something different long ago. That means that large businesses can grow from smaller communities.
For years, the plans worked. The 15-year-old company has long been the dominant platform for neighborhood-based conversations, connecting everyone from lost pet alerts to local business recommendations. Then, at some point, growth stopped. Users have found that there are fewer reasons to engage with the app beyond transactional use cases. Also what they turned off: misinformation, racism and small arguments on the platform were perpetuated by contributors who either didn’t know or cared about.
Now, Nirav Tolia is on a mission to turn things around. He has a strong motivation to prove himself capable. Tria founded the company and led it until 2018 when he was there. He was reportedly kicked out by the board of directors over differences of opinion regarding a potential acquisition. In 2021, Nextdoor is valuation of $4.3 billionhowever, in the face of flattening growth and advertisers’ interest, the board last year asked to return to Tria.
Tria has also been in financially at many crises. He says he is the largest individual shareholder on Nextdoor, with a current market capitalization of around $1 billion. One of Nextdoor’s earliest venture backers, the benchmark is the company’s largest institutional shareholder. Tria claims that “neither of us have sold it since the IPO.”
Tria says he has confidence in the company. It is mainly due to the works he has introduced. He’s also progressing. NextDoor reported 45.9 million weekly active users As of the end of September, it will increase by 13% from the same period in 2023. One of these most valuable parts is the unique data that the next door generates from the platform. Unlike RedditFor example, Nextdoor does not intend to sell to Openai or Google.
Still, given the challenges facing the relatively small-sized company at Nextdoor, there are some evidents, including the inability to involve large institutional investors as shareholders. Questions include whether Nextdoor will take time to convert and whether it is better for a private company.
We spoke with Tria about these things and how it relates to longtime board member Bill Gurley’s benchmark. Please listen here. Meanwhile, an excerpt from that chat continues below and edited for length and clarity.
You’ve been on a little media tour recently. why?
In the first few months I’ve returned, the most important priority for me was to talk to people internally, but we’re working internally to put together plans and what So I thought about whether I would start to achieve my potential. It becomes increasingly important to tell that story externally as well. One of our challenges is that Nextdoor is a company that has been around for 14 years and has 100 million verified neighbors. [registered on the platform]. So it’s not small. It is a company that believes it has no relevance and does not achieve the possibilities it should have.
You say you are planning to change the product.
We believe very deeply that there are so many ways our neighbors can help us. We also very deeply believe that maintaining our connection with our community is important to inform us, staying safe and staying smart about our community purchasing decisions. Masu. However, when I saw the product I realized that there was not enough relevant information needed to keep the information supplied. . And when we had that information, we didn’t always deliver it the right way. And creating a new product that we call next, the “next door” and the “next door” makes it even more powerful that users feel connected to the community That’s what it is.
What specific transformations do you make?
Nextdoor has always been where the content created by UGC and Neighbor is 99% of what you find. However, we have noticed that your neighbors don’t always have the broadest information you’re looking for, and that there are many entities in your neighborhood. These could also be local news publishers. They all have content to be shared with their neighbors. And it’s one of the big initiatives [is to bring in] New content from new sources that allow you to broaden your value proposition when reading content on NextDoor.
I was a little worried about what happened so I stopped using the next door [being said by neighbors]. Many of your challenges are certainly [users] They are not left the rails without being accused of restraining freedom of speech.
That’s really one of the big challenges that all social media platforms have. I say two things. One is that you can do better at any time to ensure that the mood and sensibility of the conversation is more constructive and positive. Other works. . With the advent of AI, we believe there is more technology leverage than ever before. And our combination reminds our neighbors that this is to use new and innovative AI tools after coming with the community… I’m very optimistic… can be improved [users’ experiences] In a very important way.
Can AI be used to weaken political conversations?
Our official policy is that we do not allow national political conversations. Of course, people still cultivate things frequently. One is that it turns out that some users actually want those discussions, so they can create dedicated groups for political conversations. This is not a place for political debate. Have it on x [or] On another platform. “So some of it avoids it in areas that are not part of the mainstream experience, but it is still accessible. And part of it is really. . . [applying more AI].
To give a very specific example, we have what we call a kind reminder. Here, before the post goes to the site, we run it using AI technology to look for heated language or expressions that describe it as unstructured. And before you allow them to post on the site, they hit you around with the message “Hey, maybe you want to reconstruct the words you used in these ways.” There’s more to do in this aspect.
Is AI developed in-house?
Definitely in-house. This is something I really feel strongly about. When it comes to AI, there are actually three ingredients needed as a technology company to do something really great. The first thing is, we need engineers, so to your point, we developed it all at home. The second is that you need your own content. You can purchase the content. Licensed content is something many companies do today, but creating your own content is far better. This is happening on Nextdoor. And the third thing is that you need an audience that can test LLMS. Because that’s how they get smarter. And with 100 million users, there is clearly a very large bowl of fish.
Is there a license for that AI?
That’s what we’re always asked by investors. I have a very strong perspective on this, [which is]: If you can find NextDoor content, whether it’s Google, Openai, or Microsoft Passport, why do you come to NextDoor? So, my personal opinion is that if you have a platform that has its own database of content that is the reason why users visit, then frankly, consumers give it rather than that. is very, very dangerous. I’ll go first. I’ll never say it. But the strong point of view I have is if you want the value of the next door, then I would like you to come to NextDoor.
You know [famed VC] Bill Gurley has been around for years. He is on the Nextdoor board. According to the information, he designed your exile and called you back after growth was flattened. Is that an accurate narration?
No, it’s not accurate. But look, there was no one around the company that was excited by its trajectory. So we’re public and stock has dropped by 90%. It wasn’t just a single individual, whether it was Bill Gurley or Nirav Tria. It was clear that we needed to do something. Bill is someone I know since 1996. I’ve been working with him since 1999 since he funded my first company. I don’t know that anyone has more impact on my professional career than Bill. I think I value him very much. We don’t always agree, but we have amazing work relationships through three different companies, he is invaluable to me, and when I left Nextdoor, he said we were together He was incredibly valuable when he was on the board. We were happy. It wasn’t just me and Bill. It included Sarah Frier, who was CEO at the time. We are all trying to make this company great. I’m trying to find a way to do that.
Do you want to work as a public company? I wonder if there’s a benefit to making NextDoor Private private again with everything you want to do? Have you talked about anything? [private equity] Buyers about that?
We have not commented on such things. but [it’s] In theory, it’s a very interesting question we consider becoming private. I had a lot of conversations with Bill about this just when I was back in Bill. Clearly Bill is primarily a private company investor and I was primarily a private company CEO, so it’s a comfortable place. For decades.
If you are a public company, quarterly results are very important. When you are a public company, your score, which is your stock price, is what you see in real time every day, but as long as you have a good relationship between your investor and your investor You are looking at as a private company, you can manage, make long-term bets, and do things that can affect short-term metrics without feeling the pain of external reactions at the same time. can.
What Bill and I talked about is that if you really want to make this company great, you need to do it as a public company. It’s kind of thing, do you want to play in major leagues or minor leagues? In other words, private companies are still minor leagues. When it is finally published, there is more responsibility. You will be tracked more closely. You have more skepticism around you. And while there are people who are deeply interested in short-term and long-term performance, they are all muscles that need to be built anyway. I [also] Be private, slowly but surely build things up, and ultimately think about the costs of publishing in the future.
Who owns the next door at this point? I know you have a pretty good position, just like the benchmark. It has been discovered that Cathie Woods’ ARK Investment Management recently raised something like 4% of Class A.
Yes, absolutely. It’s all public information. So I am the biggest individual investor. Bills and benchmarks are the largest institutional investors. Neither of us have sold since IPO, so know that NextDoor’s potential is greater than what is seen today and is very, very, very, very, very, very confident You need to do so. For all of our shareholders, but that includes us as two major shareholders.
Kathy is someone who feels very fortunate to have achieved a big spot on Nextdoor, but there are things that are interesting in our industry. We are a subscale company with a market capitalization of $1 billion now. Everyone understands the challenge of being a subscale. One of them is the largest institutional investor. They are not even allowed to buy positions at companies with a market capitalization of $3 billion or $4 billion. And we’re looking for more investors, long term investors, marquee investors, but we have to do it slowly, but at this point it’s a subscale and a little more self-service Until we prove it, we don’t have that opportunity.
That goes back to the same thing I was talking about a few minutes ago. It’s something we have to prove our value, and it starts with a better product that proves more value to our users, and it allows us to make it possible Make sure you have a better experience. But now we are in a place where everything we do has to be better.
