Nirav Tolia: Nextdoor. How neighborhood chatter went global

Transcript from https://podmenti.com/t/c8602c5229de9a06

When we started next door two thousand ten, the Pew report.
on community in America said thirty percent of Americans could not name a single neighbor by name.
So thirty percent of our
potential audience doesn't know any of their neighbors, even if they want to invite them.
We knew from the very beginning.
This was gonna take
More dedication.
More resilience.
more patients, and in many ways we kinda wore that as a badge of honor.
Because we knew that it would scare away.
The vast majority of competitors.

Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.
They built.
Guy Rise and on the show today, how the founders of Nextdoor wanted to turn physical neighbors into virtual ones with a network that's grown to nearly 350,000 neighborhoods.
Around the world.
Uh
If you know most of your neighbors, that's actually pretty rare. As you just heard in that clip, barely one out of three people in America know most of the people who live around them. And that number has gone down significantly over the past 30 years.
So when Nirvia and his co founders decided to start next door back in 2010,
It was with that trend in mind.
They wanted to build real-world communities online that brought neighbors together to share tips and recommendations and local events. But scaling that vision was anything but easy.
It started with a single neighbor.
Sending a physical postcard, then another, and another.
And then came the questions, how do you get people to trust the platform?
How do you get them to keep coming back and eventually
How do you make money off of this?
Before Nextdoor, Nirov had already taken some pretty big swings. He left Yahoo in the late nineties when it was one of the hottest tech companies in the world. He co-launched EPinions, which was kind of an early version of Yelp, and then FanBase, an almanac for sports fans that
completely failed. But that failure?
It set him on the path to next door.
And as you'll hear, Nextdoor was always the company Nirov was most passionate about.
But even passion didn't make the journey easy.
It took years before the business earned any revenue, and internal tensions grew.
So in twenty eighteen, Nirov stepped down as CEO.
Six years later, he's back, convinced that next door had never reached its full potential.
And now he's rebranding the company and trying to restore its relevance. But he faces some pretty big challenges.
Years of financial losses, and a stock price down nearly ninety percent from its peak.
And Nariv will talk about how he plans to turn the business around.
But for now.
Nirve Story starts in Odessa, Texas in the 1970s and 80s.
His parents were both physicians who'd emigrated from India.
And when Nerv got to Stanford, he thought he might become a doctor as well.
But then he got hooked on the early internet. And in the mid nineteen nineties, he left Stanford.
and got his first job.
In tech.
I ultimately stumbled upon this thing called Yahoo.
Which in the early days of the internet.
Was the guide
To all the websites that existed online. And it was started
by a couple of Stanford grad students in a trailer
on campus.
And so yes, ultimately I was able to
Meet them, join there as an early employee. You know, the funny story is
There happens to be a chocolate milk company.

Uhu.
Yeah.
And true story.
I think my parents believed for the first few weeks when I was working at Yahoo.
That I was working for a chocolate milk company. Interestingly.
In a series of months.
after I joined Yahoo.
The dot com boom.
Really ignited.
And at that point people were watching CNBC.
And they were seeing Yahoo as a public company and they were seeing the stock double and triple and quadruple. And I was part of that. It was like I had won the lottery. So it was not something I earned.
Bing at Yahoo, I was not qualified.
I don't think they had their pick of the best candidates back then because it was such an unorthodox job choice.
And it was magical.
And from what I read, I mean your first kind of work at Yahoo, I mean, it was basically a version of like data entry. Like you were physically literally categorizing websites into a database.
It was marketed much better than data entry. And the job was actually pretty cool. It was called being a Yahoo surfer.
So at that time, and I was employee eighty four at Yahoo, so there weren't that many people there. We would go and surf.
the web and we would get submissions into the Yahoo directory, which we were responsible for reading.
And categorizing and then I would say the true
Job was more like being a librarian.
But it was way cooler.
We would joke, can you believe they're paying us to surf the web?
Every single day.
And so again, it was
The break of a lifetime.
And that paved the way for everything that's happened since.
One of the interesting things.
about your time there was I mean clearly you were you are ambitious and
You started this kind of informal like
monthly meetup in the late nineties called Round Zero. And I guess the idea was just to find like minded
young people in working in tech who had dreams of building their own thing, and and you were one of them, even though you were at Yahoo.
And this became like a kind of a a really
hot ticket, right? Like people really wanted to come to these meetups and I think
like Larry Page and Reed Hoffman, people who years later would become known for LinkedIn and obviously Google, like lots of people

We're coming to these monthly meetups. Tell me tell me about that.
Well, when I was at Yahoo, I realized something really striking.
As fortunate as I was to be there.
The thing that was gnawing at me.
Wise
I'm not actually
Building.
What's here?
And so then you start thinking, okay, well, what else can I do? Because this is a great job, but you know, I'm a young person and I want to create my own Yahoo.
But that was a really scary thought because who would be stupid enough?
to leave Yahoo to start a new company. And so the way that I decided to de-risk that.
is I started talking to people first one of my colleagues at Yahoo and we would talk together about our dreams.
of being entrepreneurs. And when we got together for dinner.
Ultimately, in about six months, we realized we were onto something because entrepreneurs need community.
They're helping each other, whether it's intellectually helping each other think through
whether or not they should start certain companies or emotionally helping each other or just
Hiring each other.
And
This thing did turn into a pretty big organization, and so.
We pick this name round zero, that's really about entrepreneurs coming together before they go and get round one financing. Yeah.
We then incorporated it as a nonprofit. We got some sponsors, and yes, Reed Hoffman, Larry Page.
Many of the other stars of today.
We're just attendees at round zero.
I would imagine that that experience kind of
being around other people who had dreams and ideas and ambitions start to shape your own or start to kind of
push you in that direction and
In nineteen ninety nine, so roughly two and a half, three years after you join.
you decide to leave Yahoo to start your own
company to co found a a company with some other
smart people, including Naval Ravikant, who's now a pretty well-known investor and podcaster, and and and others who were involved. Tell me a little bit about
It's it's kind of crazy in in one sense because you could have just stayed at Yahoo and just with your stock options alone, you know, you probably could could have been
Worth fifty.
plus million dollars. But you left, um I think you l you forfeited
$10 million in stock options at that point. You know, it uh it always depends on where the stock is, right? So ultimately, depending on when I would have sold, it would have been some number of millions of dollars. But
That
Wasn't ever part of the consideration.
I always wanted to start something, and I was crazy enough to think.
Maybe I can create my own Yahoo.
And I remember at my goodbye party from Yahoo, because I was one of the first people who left. No one was leaving Yahoo. People were towards were banging the doors to come into Yahoo, right? 100%. So Jerry Yang, the founder of Yahoo, is at my going away party. It was so nice of him to stop by. And he came up to me and he said, you know
I'm wondering.
Why are you leaving?
Because you know, you got a great opportunity here, and you're doing good work, and we're doing so many exciting things, and the company's on an amazing track. And I said, Jerry.
When I walk into the office every day
And I look around and I think about what you built.
I would love to do the same thing.
Like I would love to build
A Yahoo myself. And he was dead quiet.
And he kinda looked at me.
And Jerry's got a bit of a sarcastic sense of humor. He's a great guy, but
He will definitely shoot you straight. And he looked at me right in the eyes and he said
You're a lot less intelligent than I thought you were.
Do you have any idea how hard it is?
To build something like Yahoo?
Well you're about to find out.
Okay, so you leave
Yahoo.
to start this new thing called uh e pinions and and tell me how how that came about, how that happened.
Yes, I mean at round zero.
I had met several people who ultimately became
My co-founders of Epinions, and one of them is Naval Ravakant, who's gone on to incredible success, and numerous other co-founders at Epinions have gone on to do amazing things.
And I can't imagine.
how difficult and lonely it is.
to start a company.
By oneself.
I never would have the courage.
to start this thing.
without Naval and Mike and Guha and our other co-founder Dion. And was Naval's idea.
Hm and I wouldn't have jumped.
if it weren't for those other folks. And so
For me.
The journey has always been more about who
And then what?
Alright, so so there's this idea.
That uh Naval has. And basically, if my if I understand it correctly, it was supposed to be like
sort of user generated review site for everything, not like Yelp, which is mainly sort of services, but this is gonna be for products, anything. You could
Get expertise from anybody and it would be gathered at
This site, is that a fair description? Yeah, Naval had this great expression, nobody is smarter than everybody.
And so way back we would make purchasing decisions based on periodicals like consumer reports. Yeah.
We would make our purchasing decisions or our decisions around where we wanted to travel or how we wanted to spend our time. We would make really important decisions based on these so called experts. And Naval had this idea that.
Expertise is distributed.
Can you create a place?
where people can submit their opinions on a wide range of things, products, services, experiences, and then you put in certain mechanisms that will ensure that the best opinions float to the top.
And the worst opinions sink to the bottom, you will get the most valuable database of information that exists. And it's freely available online.
And that idea and that notion, I don't think opinions was the first, but it was one of the first, and it was certainly one of the first mainstream examples of user generated content and online community.
And you launch, you guys raise some money.
Um but I think
Not that long after you launch you get the dot com crash, right? And you guys survived it.
But tell me uh uh before we get into what happened, what was the business model? How I mean, did you have a business model? How were you gonna make money on on
people writing reviews.
We certainly had a business model and that was the same business model that most of the
experts at the time had when they would publish content as well. And that's advertising. And so it was going to be a free service. And if we had enough eyeballs, we were going to monetize. Now this was something
That was very familiar to me because I'd been at Yahoo.
This was not a far fetched thing. And so
Opinions, yes. We launched in I think we started the company in April of nineteen ninety nine. We launched a couple of months later.
And I would say about a year to the day after we launched.
The dot com bust.
started. And so all around us, companies were going out of business. It was incredibly difficult. And we almost ran out of money ourselves. We lost most of the employees. I think we probably were up over a hundred employees. We went down to twenty employees at some point. Many of the co-founders left
And
Without a doubt.
the failure
or imminent failure of something.
Was the fulcrum for really learning about what it might take to survive.
W why did you stay on? I mean as things started to really collapse, you know, there there were other opportunities you could pursue, but
Why did you have a feeling because I think you guys had to
had we had massive layoffs. Um I mean you had you were weeks away from folding. You had to beg investors for money. Um
Uh, and I'm I'm assuming it was around this time that you also become the CEO of the company.
Yeah, all of those things
sound bad laying people off and um begging for money and being weeks away from shutting down the lights.
If they sound bad, imagine how they feel.
Yeah.
And
I became the permanent CEO probably less because I deserved the role, and more because in the middle of the dot com bust.
We had no chance of hiring.
Someone who could be a real CEO.
What did you do? I mean, aside from get some emergency funding, once the you know, the crisis kind of begins to subs.
What were you doing?
To try and salvage it.
Well
You know, around that time
I want another lottery.
Which is one of my investors benchmark capital.
General partner Bill Gurley, who I've worked with for many years, decades, who I think the world of, and he gave me the opportunity to be coached.
Bye.
Someone who'd been the CEO of a real public company into it.
There's a guy named.
And Bill C, coach as we call him.
became my mentor.
And it wasn't just for me, it was for our entire management team because, you know.
I was not the reason.
That opinions ultimately survived і was all of those people.
And so slowly but surely.
We grinded our way to being breakeven.
to being profitable, we merged with another private company, we renamed the entire thing shopping.com, and believe it or not, shopping.com ultimately went public.
had a bit of a mixed track record, but ultimately was bought by eBay for I think about 620, 630 million. So not a terrible outcome.
But when we think about
Our original dreams
We wanted to build something like Yahoo, which at the time was a hundred billion dollar company. But when we think about almost dying,
It's very improbable that we ended where we did.
Yeah.

Um all right, so around this time, this this happens in two thousand four.
You
Resign. You step down, but in a press release that the company sent out they said
You know, we became aware of of that Mr. Tolia had misrepresented his background. Tell me about that. I mean you were
uh in your early thirties and and what what happened what did you well well look I think there are always
things that we do that we wish we didn't.
Right. Yeah. There are
Times when we have to pay.
for those mistakes and sometimes we don't, right? I mean this was a case of me having to pay for it.
When you are a company that wants to go public.
You wanna be
as unencumbered by controversy.
as possible.
Right. And the best thing for me to do at that point was to step away. Now
Did I have a choice? No, not really. I mean, they they kind of asked me nicely to do it. I understood that it was the right thing to do. But yeah, I mean, it was devastating for me.
On a number of levels, one is you know you don't want to publicly fail.
So that's one piece of it.
The second piece of it is
I loved
My job.
I loved working with those people. I love trying to solve that problem. And so when you lose that opportunity
That's the hardest thing.
Yeah, I think one of the things that they
that they said was that you had you had claimed you had a degree from Stanford, which you didn't because you hadn't graduated, which I don't think is a big deal. You went there. You just dropped out early, which today is a badge of honor. I did I did actually get my degree at Stanford. You did eventually get it, right? Yeah. Yeah.
Yeah.
And then I guess that you had worked at McKinsey and maybe you didn't. And I'm just curious, I don't wanna put you on the spot and and bring this up again, because it's we all make mistakes, we all do things like this, especially when we're younger.
Do you think that
some of that just came from a culture and environment that you were around where people were like sort of
I don't know, fake it till you make it or become it. I don't know I'm just No, I I look I I don't think there's ever any value in justifying
things based on the environment or based on some other thing. I think the best thing to do
Is to acknowledge mistakes.
to learn from them and then to move forward.
And that's something that's not easy to do.
one of the fallouts of the merger was a lawsuit that you're
former co founders who you speak about with
reverence and and and respect Naval and and and uh and the others
And they had left the company, they were not involved, but they felt like the merger
Basically I guess
their their shares uh went down to nothing. They were worthless. And so they felt like
Uh, they were misled with the merger because they had to approve it and all these things. And so they filed a lawsuit against the investors. You were named in this lawsuit.
Tell me about how that I mean I imagine just on a p a personal level that m massively.
Impacted your relationship with those other co-founders. Well you're you're definitely taking me down a trip of memory lane that, you know, I've tried to uh avoid. I'm sure. I because we don't want to get most people don't want to
We we want to avoid pain. I'm the same way. I
But we are talking about your life and it's part of it. And I think it's this was this was twenty years ago and
Okay.
Is
For me, even today.
A huge bummer.
That those relationships that I had.
were affected.
by this outcome.
And so I've tried over the years.
Two
Put myself in their shoes.
It took friendships.
and it fractured them and they've never been repaired.
Never been repaired to this day. Twenty plus years later.
I doubt very much, uh, given the incredible success that they've had, that they're thinking about this ever.
Right. And that's good.
And this is not something I think about.
on a daily basis, right? But when I go back and think about it.
Yeah, those were people that were really important to me.
It was eventually settled.
Again about twenty years ago.
But it's gotta be a low point. I mean, y there's a lawsuit, you're out of a job as CEO. I'm sorry to to bring you back to this place, but I mean I imagine that there were at at moments in your head you might have thought, I'm done, I'm finished, I'm not I don't have what am I gonna do with the rest of my career? I don't know what's gonna happen next.
Without a doubt, all those things go through your mind. And you know
I was definitely in a situation where
You get so cooked.
As a founder.
Like being in the tunnel.
You haven't had the opportunity to take a step back and say, Hey, what does all this stuff mean?
What have I learned?
Like, am I qualified to be a CEO? Am I a good founder? Is that the thing I should be doing? Should I go work for someone else? Right. And so
Leaving
while it was incredibly painful, also gave me the opportunity to do a lot of self reflection.
One of the hardest things about being a founder
in my opinion is
You never have the space.
to really absorb.
The greater lessons.
You're just
In motion.
And so to stop for a second.
And have a little bit of reflection.
It was actually quite valuable for me.
So
You didn't just leave, you moved, you left
San Francisco, the Bay Area, moved to New York City.
after this went down, I think. It was a year later. It was a year later. Yeah, it was a year later. I decided I wanted to take the opportunity to live in a place that I always wanted to live in.
Had visited New York.
And I was so
Enamored.
With the city.
Да, і та мосев, каж.
I mean, maybe I'll just live here for a year. And for me it was always the plan of I'm just gonna go for a year.
And just see what it's like. And I didn't know
what the professional opportunities in New York were.
Now ultimately when I was there
I met entrepreneurs.
And I started doing some consulting and I started doing some investing and I started
Realizing
That I was missing.
being part of the flow.
And I called up Bill Gurley.
who I talked about before from Benchmark, and he said something really interesting. He said, Okay, well, you wanna start a company in New York. All right, well, but let me just ask you a question since you're in New York.
How many billion dollar
Consumer internet companies are there in New York.
And at the time the answer was zero.
And so what he was really saying is look, if you really want to optimize the probability of success.
You should probably move back to San Francisco. And so
When it got to be time.
To get serious about starting a new company, I was lucky enough to have one of my first colleagues from Opinions, a woman named Sarah Leary.
We went and joined Benchmark as entrepreneurs in residents together with the intent of starting a new company. But as part of that, I moved back to Silicon Valley. But and I highly encourage entrepreneurs who are coming off of one journey to take a sabbatical because I learned some of my
greatest lessons in New York. They have nothing to do with business, right? But about life. You had you had had this experience with the pinions and
I guess while you're at an entrepreneur in residence for benchmark, um you guys start to talk about a new idea um that would become basically uh a database of every college and professional athlete. Tell me a a bit about how this idea
came about. Um how did you start to come up with this idea for what would become fan base? So we really felt that
We knew we wanted to do something in the areas of user generated content and online community. Cause you had that experience already. We we were people who had spent more time thinking about how to solve some of those problems.
Than anyone else. And so we had competitive advantage, right? And I had grown up in a place Odessa, Texas, where the idea of sports and team, particularly around football, you know, the book Friday Night Lights, that was written about the football team in my high school when I was a junior.
And then the third piece was
Going and trying an area.
That we could build a successful business and a user generated content and online community version.
of ESPN.
So ESPN was the old guard.
ESPN had
all of the professionals that were writing about these things.
But where was the fans perspective?
So you get together and you manage to convince a pretty top Google engineer to come join you.
Uh Prakash had also been Eddie Opinions. And so we were getting the band back together. And it's Pash Jana Karama. He had gone to Google and was one of the early engineers on Google Maps. And so, but he had been someone that we had known, Sarah and I had known and had worked with for many, many years.
Prior to him leaving Google.
Um
And by the way, let me let me just say one thing.
I don't think
That it's a fatal flaw.
to not have the clearest vision because there is no doubt the vision will change.
What happened to us is that we
had many different visions.
And when none of them worked.
We didn't really fall back on one of them and
Try to force it.
And so sometimes having too much vision.
can be a problem, right? Because you don't stick to the simple things. And we couldn't ultimately find
enough success in the simple things. But you know when
When Fanbase launched
In a matter of months, I think we had 10 million users or something crazy like that. So that there was a lot of usage, but it just never clicked.
You launched in August of two thousand nine.
You've got
rosters and scores on twenty-one thousand teams, so college and professional teams.
Um,'cause you guys had raised a little bit of money.
And as you say, I mean, w within a couple of months you had over ten million users, which is
That sounds great. But th but there was a problem, right? And the problem was what? What was the main problem? Well the users would come in.
And then they wouldn't stick around. So maybe they would come again.
Maybe they would come one more time.
But then they didn't come back. And they didn't contribute. We had some contributors. You know, most of these contributor communities guy.
Of a hundred users who visit.
You only need one to contribute.
Yeah. So think about YouTube.
99.9% of the users of YouTube have never uploaded anything. They've never contributed anything besides their viewing hours, right? So it wasn't so much, I I would say actually interesting learning from that.
Was we probably got the contributer side.
Right.
What they contributed, though, was not resonating strongly enough with people who were looking for information. And part of the reason
Е та поит во стартінь асцен.
And as a result
All of the holders of professional content.
Began to protect their license.
Much more aggressively.
And so what happened very quickly for fan base is if
A Michael Jordan fan.
And said, Here are my three favorite dunks.
of Michael Jordan of all time and I'm gonna upload them because I think it's kinda cool if you're a Jordan fan, you wanna come and see them as well.
We knew at that point if we posted those things, we didn't own the rights. Yeah, you couldn't. And we could get sued out of existence, right? So that then led us to pivot a little bit more towards high school.
And what we realized about high school was it's just not nearly as big a business.
as professional sports. And so when professional sports was off the table
It made it very difficult for us to think about building a thriving business.
So how quickly launch
Did it become clear to you?
that you could not make this work.
It was pretty quick.
after the launch and then
I think for probably the next six months.
We tried
Everything.
to get this thing to ignite again.
And you know, when you try everything as an internet company it means
You change the user interface. You think about developing a mobile app if you have a web app. You think about uh activating a different community. You think I mean you think about every idea that you possibly can.
And none of those worked.
So you come to the conclusion pretty quickly that this is not salvageable, and I guess you you know, you'd raise some money
You went to your investor Bill Gurley again and said, Hey
This isn't working. And and I think your idea was
Return the money to to the investors and fold this thing up.
Yeah, and look, you said you came to a conclusion pretty quickly.
Any founder knows.
that you're talking about dog years. Yeah. For every year of being a founder, right? And when things are going well.
The time flies by.
But when things are tough.
You are forcing yourself to pick yourself up off the ground and go into the office, even though you were kicked.
The day before.
And so when I say for six months, we came into the office every single day.
Knowing
That what we were working on.
had no future.
But we were gonna try to change it.
And so it was a very
very challenging time. And so in in early two thousand ten
We say
We've kind of tried everything here.
Maybe we give the money back'cause most of it's still intact and
We go take the summer off and then we
Think about what's next.
So I have a meeting with Bill Gurley.
And so I start to give him my narrative of gosh, we've tried everything and I really wish this could have worked, and I feel so bad you took a chance on us.
And he
slides over a piece of paper.
It says read this.
And I look at it and it's a poem.
Actually one of my favorite poems. He probably didn't know that, but
It's If by Rudyard Kipling. Yep.
And it was a very powerful way for him to say
I don't think
You can give up.
And
It was surprising because
I didn't have a contingency idea.
Hm.
And so I took the poem back.
to my co founders.
And
I said, here's what Bill said. And Bill
Followed by saying,
I believe in the team.
Come up with a new idea.
See if you can do it.
And if so, we'll back it.
And so
When you finally have the courage to
To say
This didn't work.
I'm shutting it down.

find the activation energy to say, actually we're not shutting it down.
We're gonna start from scratch because you know.
The energy you have at the beginning of a journey.
When it's brand new.
It's amazing.
It's just possibility.
So the three of us said okay.
We're gonna try to come up with a new idea.
But it's not like you can schedule.
A meeting.
Ten a.
Come up with billion dollar idea.
I mean, that's not the way these things work, at least in my experience.
But we met.
We crowdsourced ideas from each other.
Prakash in particular said
As the person writing the majority of the code, he said.
I'm sitting on my hands.
And not writing a line of code.
Until you can prove to me.
With user feedback.
That whatever idea we have
is something that's worth building.
So tell me about some of the ideas that you started to
To talk about.
It's funny, there was a there was an idea called need feed.
And it was this idea that we're all looking at newsfeeds these days.
Would you create a feed where people say
I need
advice on this particular thing. I need
to be prepped for this particular meeting. I need to find a trusty plumber. That was one of the ideas. We probably had
Dozens of bad ideas.
And ultimately there was this one idea.
And it wasn't called next door at the time. It was called neighborly.
And the idea is can we create
The next generation of a neighborhood message board.
And it'll look like a newsfeed, it'll look like a social network, it'll be more fully featured, and we felt like local.
was an opportunity that had largely been ignored, but coming off of the failure of fan base,
It's not like I thought of myself or my co founders as we're awesome at coming up with ideas. The next idea we're gonna come up with is gonna be a winner. I think if anything.
We
We're scared.
We were anxious. What if this turns out just like fan base?
What if this also doesn't have legs? What if we put everything that we have into this thing and it ends up being a waste of time? And so
In the moment.
It was very scary.
When we come back in just a moment, how do you turn a bunch of neighbors into a new online community?
One postcard.
Time.
Stay with us, I'm Guy Raz and you're listening to how I built this.

Hey, welcome back to how I built this. I'm Guy Raz. So it's the summer of 2010, and Nirf and his co-founders decide to ditch fan base in order to work on a totally new concept.
And eventually they land on the idea.
Of a digital version of a neighborhood bulletin board, like the kind you'd see at a local hardware store.
We ended up building this little prototype.
It was drawn initially.
Міни хандraн, shown to neighbors.
And almost from the beginning.
They resonated with this concept that
I do want to know my neighbors. I do want to know what's going on around me. I don't have an easy way to do that today. Yeah. So there's Facebook for our friends.
There's LinkedIn for our colleagues.
There's Twitter for people whom we find interesting.
But there was no network comprised of
What we believed was one of the most important communities of them all, and that was the people who live right
Next door. Now we didn't even have the name next door.
at that point, right? It was more about
I think one of our co founders, Adam Ginsburg is his name.
He lived in an area in San Francisco. I'm trying to remember the name of the neighborhood now, but they had a listserv.
They had a little news group that they were using to communicate. And he would show us the kinds of conversations. And it was about trying to fix potholes, and it was about letting people know if there was construction. And it was about
recommending service providers. And it was actually
Very valuable.
So basically
you start to test this out and and what gives you confidence that
this was gonna work. What kind of data did you gather or or feedback did you get where you thought, Okay
Let's do this. Let's pursue this.
Well, certainly we had a strong intuition.
having built products in the past and certainly having failed at building products.
That this felt different.
Which is to say
When you do user testing.
People are excited.
I mean, there was a time when we were changing servers and so we went down for a couple of hours.
And we got
Tons of
incoming messages from our users saying, What happened?
What happened to this thing that I'm using?
It's important to me. Did you take it down? Is there a side outage? Right? And it wasn't even called anything.
At that time.
It was just called a neighbor site.
Wasn't called next door. It wasn't professional, right? But that's a very strong sign. So there was strong user feedback. And then there was another person that came on. We were very lucky to have him on the board as well, Rich Barton.
the creator of Expedia and then more recently Zillow and
I remember pitching him.
many of the ideas we had and then showing him
The idea that we came next door.
And he said
That's the right one.
And then Sarah and I said to him, Okay, well
Are you so passionate about this that you would join our board? He said, Yeah.
I'm passionate about this one.
And so we had
Kind of the
Investor viewpoint.
We had the user viewpoint and then we had our own intuition.
And you had a little bit of money from the previous venture that was you just kind of carried over from fan base. So fan base essentially becomes next door. I mean, this is still uh we I guess I should mention uh two thousand ten, two thousand eleven.
It's still a a more let's say innocent time in the history of the internet. So
Um some of the things that that you know user generated companies deal with now, including next door, um were not uh quite at as much of a problem back then. But how, for example
Were you going to make sure that um people really lived in the neighborhoods that they were who they were?
So over and over again, what we heard is, well, I need to make sure that the people on this thing are my actual neighbors.
And so that led us to many innovations, including looking at a map.
breaking the map down into specific homes, and then we had to verify.
that they lived there. And so we would do very old school things like send them a printed
Postcard.
via US mail with a code.
And you would have to enter the code to verify your address. And so in the early days, I mean, look, we weren't thinking
What's gonna happen when we have a hundred million users? I mean, that's a pretty expensive postcard bill. Yeah. But
We had
A hundred users.
500 users, a thousand users, right?
But we built it.
With quality.
From the very beginning, because that's what the neighbors asked for. And we felt like we'll solve the scalability issue.
Later.
How
were you thinking about
Making sure that the content was appropriate, you know, even if it's just local
People, neighbors.
With their real names, I mean they can still post a bunch of kooky stuff, right? I mean they can still go on rants, they can I mean all kinds of things could happen. Was there any way for you to prevent that?
I think about it less as prevention, and I think about it more as you build the system and the reference of the system.
with high quality content.
Because if you see high quality content.
You just assume this is a place for high quality content. It's a little bit like if you go outside and you see trash on the ground.
you might actually throw something on the ground too. If you go outside and it's perfectly manicured.
You're gonna feel really bad about throwing a little trash there, right? So that was a very important decision. The other thing we did is every single neighborhood had a founding member.
and had a series of leads.
And it was their responsibility.
Теншу да конверсін
Was
very relevant and
Of the neighborhood.
There are neighborhoods that
that are a little more fractio.
Yeah. And they discuss things in a little bit more of a fractious way. And there are neighborhoods that are much more homogeneous where politeness
is the cultural custom of the neighborhood.
We have three hundred and thirty five
Thousand
distinct neighborhoods that use next door. And we needed to build a system that would be flexible enough.
That all of those neighborhoods could feel authentic.
to themselves.
So in that first kind of year of building it out.
Before you launched.
How did you sort of
Determine what
constituted a neighborhood. I mean a neighborhood in
You know, the middle of Nebraska is
very different. I mean houses can be two, three miles apart.
compared with a neighborhood in, you know, in San Francisco.
every single neighborhood boundary.
Was something that was drawn in consultation.
With someone who lived there.
We asked.
Our members and then we built a tool.
I mean, in the early days, we m Sarah, my co founder and other co founders, maybe Bakash as well, would be looking at maps.
Taking a sharpie.
And drawing a polygon around areas.
to ensure that we were getting the user feedback and then
baking that into the code. It it kind of bears mentioning that
This idea that
It's okay to do unscalable things initially.
And so many young entrepreneurs, particularly technology ones, are always thinking, Well, I can't do that.
That's manual. That'll never scale.
Worry about solving the scalability problem after you have product market fit.
Doing manual things to get product market fit is perfectly fine. And in fact, I would say the number one learning
from user generated content and online communities, the number one learning.
Don't be afraid.
to do things manually at the beginning.
Because it's a people business building community.
And you can't do that at scale.
You have to do that one conversation at a time. So most of these challenges, what do you want to talk about? What's the shape of your neighborhood? What should the interface look like?
Those are all things that we would take.
To the neighbors.
How many people did you have before you launched? How many people did you hire?
It wasn't that many. I mean, I think when you're experienced enough to have laid off people
And to have been part of a company that failed.
I think in general we were very cautious about hiring people about spending money.
I
Love this old expression in Silicon Valley. More companies die of indigestion than starvation. Yeah. I think we probably had 50 people or so when we launched, but
The idea came to us in the summer of two thousand ten. We didn't actually launch until the fall of two thousand eleven.
And that is not because it took us a year to build the thing.
It was more because we wanted to be sure. Before we uncloaked publicly, we wanted to be sure that we were on to something. And when we launched,
Nationally.
We had a hundred and seventy six neighborhoods.
Using next door, and I remember board meeting where
Well, the board members said, Okay, you got a hundred and seventy six neighborhoods. How many neighborhoods do you think there are
Overall.
In the US.
I don't know, it's probably like
Couple hundred thousand, maybe, right? And the board member said, Okay, so if it's taken you a year to do a hundred and seventy six.
It's gonna take us a hundred years.
To get all the neighborhoods, right? And and but that was kind of a very daunting challenge, but you know, 176 then.
As soon as we launch, though.
People were starting their neighborhoods. So my parents started their neighborhood in Odessa, Tex. My brother started his neighborhood in Dallas. My sister in law started her neighborhood in San Diego. My brother in law started his neighborhood in Southern California. So very quickly
Very soon thereafter we had all fifty states. And what were you what were the guidelines you were giving people? What were you encouraging people to post on? Because one of the challenges you had a fan base was the quality of the content wasn't that great, right? That was the challenge. You know, the quality of content was not the real challenge with next door. The challenge was
People don't know their neighbors.
And so, how do we get people to join?
Next door, how do you hear about it? You don't
bump up against the content, your neighbors can't invite you because they don't know who you are. And so that led to a lot of different innovations, including
We would pay.
For them to send postcard invitations.
to their neighbour.
That would say, Hey.
I'm Guy. I'm your neighbor in this neighborhood, and I really want you to join this thing that we started called Next Door So and So. And
Please join, here's a code.
All right, so you have this idea, right, and you're ready to launch it in October of two thousand eleven.
But you know from fan base that getting enough users isn't enough.
And in this case, you needed not just the users, but you needed them to stay there and to really participate in the site in some ways.
But I'm assuming back then.
There wasn't a whole lot of pressure to generate
uh revenue. It was more about getting users and gathering them.
into this site.
You know, there's always pressure.
To have a business model.
Yeah. However, when you choose an indirect business model, and an indirect business model is when you're not asking your primary users to pay you directly.
You are making money indirectly through advertising or through some other means.
When you're building that kind of business.
It's not a simultaneous
You attract the user and you attract the advertiser at the same time. It's a sequential build.
So I don't want anyone listening to think that we started next door thinking, oh, it doesn't matter how we're going to make money or when we're going to make money or you know, why we're going to make money.
No no.
We wanted to build a successful business on day one, but we had articulated a vision.
Where the reason advertisers would care
about advertising on next door is because there were vibrant communities and community audiences.
And so
On fan base, a bunch of people showed up on day one.
And by day two, it was slightly less people. By day three, it was less. And then that just kept happening. On next door, it was exactly the inverse. On day one, hardly anyone showed up.
Mm.
We just had to find the neighborhood.
the the founding member and the lead, but then
Those people would invite two or three people.
And those people would invite two or three people. And two weeks later there would be a couple dozen.
But
When we started next door two thousand ten, the Pew report.
On
community in America said thirty percent of Americans could not name a single neighbor by name.
So thirty percent of our
potential audience doesn't know any of their neighbors, even if they want to invite them.
And so this was we knew from the very beginning.
This was gonna take more dedication.
More resilience.
More patients, and in many ways, we kind of wore that as a badge of honor because we knew that it would scare away.
The vast majority of competitors.
One of the things that could have
created problems and from time to time did, but i if had it been sort of the dominant feature of the site
would be
If somebody really just some neighbors decided to really kind of just use it as a platform for their political views, right? If it just devolved into let's say misinformation, people were were
Uh saying things about neighbors that weren't true, for example, like how did you think about trying to control for that possibility? Because that could have had an impact on the credibility and then the business. Yeah, it's a great question. So
Ultimately, we created neighborhood guidelines. You can't discuss national politics. If you do, you can get reprimanded, right? You can get disciplined, right? Yeah.
A much harder one is when someone wants to discuss
Something that the local government's doing?
And it's relevant to the community, but other people are like, you know what, I don't care. I don't want to hear this, right? And so the real antidote in today's world is personalization.
It's this idea that over time
We are smart enough using technology and it's primarily machine learning.
To learn here are the people.
And the topics that guy.
Wants to hear from
And if he one doesn't want to hear about what's happening at City Hall.
That's okay. We don't have to silence the entire neighborhood because there are people in the neighborhood who do want to have that conversation.
So it's much more sophisticated today at our scale and with the technologies that we have in place, but in those early days.
Our only real arbiter
Was the people we had chosen.
And now it's algorithmic, basically.
Now it's algorithmic, but it's not algorithmic.
in a bad way. It's algorithmic in that
Based on your behaviours.
We show you more of the things you like.
and less of the things that you don't like. It just so happens though that we all have different
We we have different taste. I'll give you an example.
I get a lot of feedback these days on next door.
That there are too many posts about lost dogs.
lot of post and lost talks. I'm I'm actually looking at at mine here in Marin County.
And there are a lot of lost dogs and cats.
Which tugs at my heart'cause I have dogs and cats.
So you said exactly the thing that I was gonna say, right? Which is before I had a dog.
I didn't want to see any lost dog postings.
Yeah. Two years ago we got a dog.
If I lost my dog, it would be like losing a family member, right? Yeah. And so that has changed my perspective completely. You know, another example that is maybe a little bit more nuanced, but still makes sense is
If you're in a neighborhood and they're having a conversation about some place to take the kids for ice cream.
That's a great conversation if you have children.
If you don't have children, you don't care. You wouldn't have the conversation about where to get an after dinner drink.
Right.
So being able to facilitate those things in the same neighborhoods
That's gotta be part of what makes next door special because we're not
robots and we gotta figure out a way to unite
Around common things
And then let all those people express themselves in different ways and still feel like next door is for them.
Tell me about so I from what I gather, from what I've read.
It seems like the first four, maybe five years.
You didn't have any
revenue coming in. I mean it was
There was no paid advertising, there was no and and it really was only in like twenty fifteen
when you start to experiment with um having like local businesses
set of pages and start to advertise. Tell me about
Why you waited so long before you started to experiment with ads.
It's a really hard thing to generate revenue, but in our case it's much harder to think about
Establishing ubiquity.
of all neighborhoods and having all of those neighborhoods be vibrant. And as a startup
I think it's very difficult
To work on multiple hard problems at the same time.
And so it's not that we didn't feel.
working on the advertising product.
was important.
It's that we were so consumed.
Certainly in the first five years, and even today.
To be honest.
With trying to create the most vibrant
atmosphere for people who want to be part of their local community.
That we didn't invest.
enough time on the advertising side.
And as I listen to your question
I think we probably made a mistake.
Not
Thinking about how to bring small businesses.
Into the conversation.
From the beginning.
Now
Because I'm pretty frugal.
And because the company was
successful, we could raise money. We were spending zero on marketing.
We were not hiring
hundreds and thousands of people. I think we were sub two hundred employees.
We had one office.
We were kinda slow and steady.
But
I've been reading this book since coming back to Nextdoor called The Founders Mentality. And one of the principles in the Founders Mentality is.
You have to innovate and execute.
At the same time, you know, some people will say this is my innovation phase.
And then some people will say, Well, this is our execution phase. We're not innovating right now.
The books made me think, gosh, you know, you gotta figure out the muscle.
So that you can do both. You may be sixty, forty, seventy, thirty, something like that, but you can't be a hundred zero. And I do believe now.
That from the beginning if we'd involved small businesses
it would have created a more vibrant community.
Well we come back in just a moment.
Mirov has the conversation with his board of directors that every founder CEO
is afraid of.
Stay with us, I'm Guy Raj, and you're listening to How I Built This.
Hey, welcome back to How I Built This. I'm Guy Raz.
So by 2018, Nextdoor is in about 200,000 neighborhoods, including internationally.
And after a few rounds of fundraising,
The company has reached a valuation of over a billion dollars.
But even though the future for Nextdoor looks limitless...
Nirv realizes that his ability as a leader
is not.
I was getting burned out.
I was tired.
I was
not operating at maximum intellectual capability or emotional capability. So an intellectual capability is
All right, I know how to start companies. Now this company's got 200 people. We still haven't really figured out revenue.
What's going on?
Was that making you feel stressed that
You weren't making a whole lot of money, you weren't bringing a lot of revenue.
Look.
Everything.
was making me feel stressed.
We're not growing fast enough. We're not generating revenue. We, you know, our product isn't moving fast enough. The quality of the experience isn't where we need it to be. Like everything.
Was making me stressed, right, and it was the stress.
In my world.

Seeing clearly, thinking clearly, and then on the emotional side.
The stress is where you're short with people.
So by
Two thousand eighteen I think I would have been
Totally happy selling the company.
Did you try? Did you look around? No, no. I mean, you know, Bill Campbell used to say this great expression, you know, companies are not.
sold their bot.

Like putting a shingle out saying I'm selling my company. You build something so great that someone wants to buy it. But
I definitely
Was not
Feeling fulfilled.
And as a result, I was probably not fulfilling other people. And it started to show up.
In the progress of the company. And so I think the board felt.
At some point
Gosh, has he plateaued because they didn't think.
That the opportunity
had plateaued.
And so, you know, they have a conversation and
In Silicon Valley's conversations are kind of interesting. They start with, Hey, have you ever thought of bringing on a CEO and you can be the chairman and you're the founder and you know, you have the great ideas, but you need someone who's got the operational rigor and discipline and understands what scalability is like, right?
But you know what that conversation really means. I mean, what that conversation really means is it's time for a new leader.
And
I knew in that moment.
that what they were saying was true.
And
We hired a wonderful woman, Sarah Fryer, who's now the CFO of Open AI. And you know, I felt like she would be a great leader and
By the end of twenty eighteen, I was out.
Yeah.
You know, I'm curious about that time because it's I I have to imagine that in twenty eighteen
You're in your sort of
mid to late forties and not old by any stretch of the imagination. I'm sure I'm I'm in my fifties. But I mean, did you feel like
at a crossroads, like what am I gonna do next? Or maybe I just kind of
go in a completely different direction with my life. I mean, what was going on in your mind?
I have been through
enough difficult transitions.
That
I was a hundred percent focused.
I'm leaving
In the best possible way.
Yes, of course, from an ego standpoint.
It hurt like crazy.
I wanted to be the person who could take it from day one to, you know, day infinity.
I wanted to be the person to take the company public, but
What was driving me was wanting next door to be successful.
Because it felt like the best thing that I could do professionally ever.
So I didn't think, oh, the next thing I do is gonna be bigger than next door, right? I thought to myself
I love next door.
And so when it was clear that I wasn't gonna be the person to take it to the next stage.
Yeah, that was a blow.
But honestly, at that point
I knew it was the right thing, and I was gonna make it.
the right thing.
Alright, so you step down as CEO, but you stay on the board, um
But over the next several years a lot happened, right? I mean the company
Did end up going public.
Um

Uh, but in in your in your personal life, you actually took your family and moved to Italy for a few years. Tell me what you did there.
I experienced my own personal renaissance.
I mean I was in the cradle of the Renaissance, and I think for me and my wife and three kids, we were undergoing our own
We were in Italy for seven months and then Covet hit.
So within a number of days we left everything in Italy.
And we rushed back to San Francisco.
Within a series of weeks, San Francisco was shut down.
Yeah. And so then within a series of months
Covid had
run through Europe enough that there was some herd
Immunity.
And so
We left San Francisco that summer and went back to Italy.
And did a second year there.
And during that year the border was shut down.
Yeah.
But it was a magical time because
It wasn't the tourist season that you experience in Florence and Rome and Milan and Venice.
It was real Italy.
Meanwhile at next door, Sarah's taken over.
She's building the company, she's taking it public, the company goes through a transition. Yes, I'm paying attention, I'm on the board, I'm the chief cheerleader, and at that time.
My wife and I decided that we weren't gonna move the family back to San Francisco.
We were gonna move to Dallas because
I didn't have a job.
to get back to and she didn't have a job to get back to either.
We really wanted
To be close to family.
And so yeah, there was no
Anticipation
expectation or even wildest dream.
that I would go back to next door because that was November of twenty one.
Starting in January of twenty two.
the whole market went down.
Yeah. And next door went down as well. And that ultimately led us
You know, to where I'm sitting today.
You um return in the spring of twenty twenty four.
And you've now been there.

Tell me about the circumstances that
That's
brought you back? First of all, what was going on and then why did you agree to do it?
So
The company had
Had fallen into a place where there was a lot of adversity being a small cap stock. There was a lot of adversity dealing with the bump.
of COVID that had then returned to normal. There was a lot of adversity
In
managing a remote organization.
We definitely felt
As a board, this includes Sarah.
that the company needed to go in a new direction. And in particular
We felt that that direction
Needed to be deeply steeped.
in a new product.
And
We could have found someone external.
But that would have been very risky.
Or
You can bring the founder back.
And
No, I never
Thought about it.
I wouldn't have joined eleven boards, I wouldn't have put my kids in school.
Here in Dallas, I wouldn't have done any of those things.
But
When the opportunity arose
I love next door.
And I went to talk to my wife about it.
And she said
I do feel that if you don't take this opportunity
And next door fails.
At some point in the future you can ask yourself.
Why didn't I do whatever I could?
To help it succeed.
And so from there, with her blessing.
I jumped in.
And so
I
ultimately brought back my co-founder Sarah Leary, who we've talked about a little bit and was bless that she came back to join me. And so we're both refounding or refounders of the company.
And Sarah used to say.
Let's go back and finish the job.
It's

Well known brand. It's a brand that lots of people like and and even love.
But I mean you're looking at the same number that I'm looking at, which is the only metric, but the stock price is one metric and
It's at like you know, as we speak today, it's like a little over two bucks a share down from its high of you know
thirteen dollars in twenty twenty one.
Um
I know that you're focused on revamping, re launching.
Creating a new
kind of a new face of of what next door will be.
Tell me a little bit about your plan.


Well the goal is to make it the essential
Local.
Application.
And and that's very ambitious. Essential means people are using it every day, several times a day. And today of our hundred million verified neighbors, twenty five million use next door every week.
Not even every day.
Right. So just
Based on the measurable numbers.
There's a lot that we can do, and we don't think a hundred million.
Is the ceiling.
And so
Yes, I think it is a big challenge.
It was almost easier
To not be
the active CEO because
When you're the former CEO.
People say, Oh, I love the concept of next door.
I believe in it.
But when you're the day to day CEO
People say, Hey, you know that idea that you pitched me on?
That's not what I see when I open up my app.
Mm.
That isn't what it feels like.
It's few people complaining and it's some irrelevant
Postings about this and that, right? And so there was a gap.
There is a gap.
between the potential of next door
and the reality of the product today.
I also think
No one
Has one local.
Google hasn't.
Meta hasn't.
Apple hasn't, Amazon hasn't, right? Why is that?
It's really hard.
Yeah.
And it's because it's incredibly difficult to get the same outcome.
from one locality to another. But I think we can do it. I think we can do it.
With a community centric approach, but the product's gotta be
way better. And that's what we're trying to do.
Yeah, I mean, in a sense, right, and we'll talk about the evolution of w what you're trying to do now and the sort of the relaunch, um, but you the you could have sort of gone head to head earlier with like Angie's list or even what Yelp did, you know, with because at the end of the day
neighbors trust neighbors, right? And if a neighbor's like, Oh your s your lawn looks great. Who did that? Oh my landscaping guy's amazing. I'll give you his number, right? That's
the best way to find people to to do work around your house or contractors, w whatever.
I understand the impulse that you didn't want it to be like
a marketplace. You don't want it to be like just p people constantly selling.
But at the same time.
If done right, it can actually be really valuable and useful for people.
I think you're exactly right. I mean the question of recommendations.
that neighbors make for how you would spend your money and how you would spend your time.
That's been thirty percent roughly of all the content on next door since inception.
And we just launched the new next door, which for the first time.
brought in third party content. All of our content historically has been from neighbors, but now with the new next door,
We have thirty five hundred local publishers that are publishing fifty thousand articles a week.
And they're real journalists.
And that's really important in the same way.
What we haven't built and what we should have built, which is Angie's List and Yelp and Thumbtack and many others have done exceptionally well.
We haven't built the button after the conversation happens.
That says okay, book this for me.
Yeah. Okay, make this appointment. Okay.
Put me in touch with this babysitter.
Because you know, what we're realizing now
Particularly in a world of AI.
Where most consumers are gonna get a
Go to one place.
Ask a question.
And everything's gonna be taken care of behind the scenes. It's not gonna be you go to Google, you get 15 links, you click on all of them, you hit back, you keep searching, you keep ultimately going from one place to another to another. That's the old world. The new world is you go one place.
You ask a question, you get an answer, and you act on it.
And so I think this is gonna be a critical part.
of next door's evolution.
So in I I know that one of the things that you're focused on also is like real time alerts and public safety and emergency, like I mean you know f
flooding or if there's a power outage and things. So so next door could be sort of a uh a repository for all that stuff. If in if you could sort of look out in five years from now
And it was the perfect sort of
expression of what you want it to be.
What does it look like? What is my experience like?
When I log into next door.
You open the app several times every single day because you want to know the most important things that are going on around you.
And there is no easy way.
to know what's going on around you today. Do you know what's happening this weekend in your San Francisco neighborhood?
Do you know all the power outages as they occur?
Do you know the next new restaurant that's coming in?
After that other restaurant closed, it's it's the person who wants to bake fresh empanadas in my neighborhood, and you can walk right over and buy one.
Those things

Neighborhoods.
Feel like home.
Yeah.
Why can't next door be the place?
Where you continually
Discovery
Those things over and over again.
Yeah.
the journey you took and where you where you are now. I mean you know
sort of this kind of second chance to really
do something cool and interesting with this thing that you co founded.
How much of where you are now do you attribute to
The work you put in and the the grind and how much do you think has to do with
Just being
Lucky at the right place at the right time.
Yeah.
It's all luck. Амін'я.
All emerged because of luck and timing and other people.
Someone hired me at Yahoo.
Someone let me into Stanford.
My parents
Paved the way for all of this stuff. Bill Gurley supported me, even when the chips were down. Sarah Leary has been my partner for 25 years.
These are people that
They've made it all possible.
But when I've been given that opportunity.
I've done everything I can to ring the bell.
And most of the
Most successful people I've met.
It hasn't been just because of skill or just because of luck.
It's been some conflation of the two.
And
That's kind of what makes it magical.
That's near Tolia, co founder and CEO.
Up next door.
Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show.
And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, please sign up for my newsletter at gyros.com or on Substack. This episode was produced by Casey Herman with music composed by Ramtina Rablui. It was edited by Neva Grant with research help from Catherine Cypher.
Our engineers were Quasey Lee and Jimmy Keeley. Our production staff also includes Alex Chung, Sam Paulson, Carrie Thompson, Chris Massini, Ramel Wood, Andrea Bruce, and Elaine Coates.
I'm Guy Raz and you've been listening to how I built this.