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What Nextdoor is doing right with hyperlocal and Patch is doing wrong

Mathew Ingram — Tue, 12 Feb 2013 21:06:26 +0000

Serving hyperlocal community-level or neighborhood-level markets with news and information is a tough business — just ask NBC, which recently closed the doors on its EveryBlock unit, or AOL, which is still fighting to keep the losses at its Patch operation from sinking the ship. So why should anyone pay attention to a startup like Nextdoor, which just got $21 million in financing from a group of venture capital funds? Because Nextdoor is doing the exact opposite of what Patch and others have done — instead of making its network wide-open, it is keeping the barriers to entry high, and that could be the key to its future success.

At first glance, it might not look like Nextdoor and Patch are even in the same game: after all, Nextdoor describes itself as “the private social network for your neighborhood,” while AOL has always described Patch as a source of news and information, more like a community newspaper. But when it comes right down to it, these are really just two different ways of looking at the same problem: how to get important information about a community to the residents who care most about that information — whether it’s school closings or local government ineptitude or criminal activity.

Blurring the line between news and social network

That kind of content has always been the core of what small town and community-level newspapers have done, and the best ones have been similar to a social network in many ways as well — in the sense that readers pay more attention to the birth and death notices and the letters to the editor than they do to the actual “news.”

This is the goal that EveryBlock was going after, first as a data-driven startup launched by programmer/journalist Adrian Holovaty with a grant from the Knight Foundation, and then as a subsidiary of NBC after it was acquired in 2009. In 2011, the service added a lot more human-powered and community features — which Holovaty said he had come to believe were crucial for such a network to succeed — but it wasn’t enough to keep the service afloat.

Patch recently did something similar: instead of relying exclusively on journalists, it is opening up the service in an attempt to make it more of a community noticeboard. The main goal seems to be to cut the costs of the network, which AOL has poured more than $150 million into. According to comments made during its latest conference call with analysts, Patch is doing well — but it is still well short of the revenue targets that AOL chief executive Tim Armstrong has repeatedly promised to hit.

Instead of starting with the news and then trying to add social-networking aspects later, Nextdoor started with the social networking side: the idea behind the service is that you and your neighbors need a place to talk about those school closings or crime reports or even where to find a good mechanic or babysitter, and doing it on Facebook or Twitter or another public network isn’t appealing for a variety of reasons, including privacy concerns.

High barriers to entry improve the signal

So what Nextdoor does is make it as difficult as possible to join — the exact opposite of what Facebook and even Patch try to do. Only people who actually live in a specific neighborhood can join the Nextdoor network for that area, and the service doesn’t just accept your word: it verifies it by checking your credit-card information, calling your home phone or sending a postcard directly to your house with a special registration code on it.

Nextdoor CEO Nirav Tolia says the company is sending out about 15,000 of these postcards every day, and admits that the service builds in “a lot of friction to join” the network.

In part because of Facebook, we are used to thinking of social networks as being more powerful the more open they are, but in the case of Nextdoor the private and restricted nature of the network could be its biggest strength — and it’s almost certainly why David Sze of Greylock, an early investor in LinkedIn, was interested in the company. In many ways, Nextdoor is like a LinkedIn for your neighborhood, but even more restrictive: so if you are interacting with someone on the site, you have a high degree of confidence that what they say is going to be relevant to you.

When it comes to monetization, Nextdoor and its backers say there are some fairly obvious advertising or e-commerce tie-ins to such local content — and given the network’s focus on keeping the signal-to-noise ratio high, an argument could be made that it is more likely to succeed at this strategy than either Patch or the existing hyperlocal media players (newspapers, etc.) in those regions. Nextdoor says it has doubled in size in the last six months and now covers over 8,000 neighborhoods in all 50 states.

Images courtesy of Flickr users Jason Parks and Pew Center

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Startups tackle the local neighborhood as the next frontier

Eliza Kern — Wed, 05 Dec 2012 00:16:28 +0000

Geolocation-based startups have been all the rage for a while now in the age of mobile phones, but there’s another element to location that startups are tackling: the neighborhood. More than just a point on a map, neighborhoods provide an interesting intersection between location and community that can be used to a startup’s advantage, both in targeting particular customers and then serving them local ads.

Neighborhood-oriented products can either attempt to provide an entire social network for those communities, or provide information specifically for tourists or shoppers. But the trend toward neighborhoods makes sense, since people searching for information from a particular community are perfect targets for advertising, which relies on clear evidence of someone’s intent to purchase plus location-specific information for success.

So which are some of the startups tackling neighborhood data as a way to stand out? Here are a few that have caught my eye:

The neighborhood platform for travelers: Airbnb

When I first moved to San Francisco I stayed in an Airbnb apartment while conducting my apartment search, which was a perfect way to get to know the city before signing a lease. However, being totally new to both San Francisco and Airbnb, my selection of short-term neighborhood was pretty random. Now that Airbnb has become a de facto travel option for tech-savvy travelers, the company has smartly decided to release neighborhood guides for its major cities, giving travelers a sense of what they’re getting into with each neighborhood before they book, and perhaps encouraging travelers to look outside the most trafficked haunts. The guides are heavy on beautiful photos and light on text (they could benefit from a few more suggestions for popular destinations), but they do give you a sense of what you’ll see on the streets (just check out the guide to the Tenderloin for evidence). It’s easy to see how the company could introduce ads for local businesses or popular hangouts within those guides — in fact, the company has already partnered with local coffee shops to provide Wi-Fi and more city info.

The neighborhood platform for the civic-minded: Neighborland

Neighborland (see disclosure) at first glance seems very much like Quora, one of the more popular question and answer sites on the web, but a version of Quora used by your action-oriented neighbors who want to get things done. Want to rally local support around an issue? In San Francisco alone, Neighborland lets people come together on everything from getting more bike cars on BART, finding a more creative use for the old Bay Bridge, or getting more public fruit trees in town. It’s unclear if Neighborland can get things done, or if it’ll just turn into a platform for the naive and complainers among us. But CEO and co-founder Dan Parham said the next phase is “one hundred percent focused on turning intent into action,” and as it expands nationwide this week, the company is an interesting example of rallying digital support for local issues.

The neighborhood platform for families: Nextdoor

Providing any kind of personal information in a social network for neighborhoods immediately raises privacy concerns, which is why Nextdoor is so attuned to that issue and highlights its privacy features and civic-mindedness on the social network for neighbors. Having just raised $18.6 million in funding in June, it’s one of the most visible neighborhood-specific startups in San Francisco, and has been growing despite the fairly laborious sign-up process that’s intended to protect user privacy. The site allows users to create profiles for their families, filling out information on everything from children to pets, and then connecting with neighbors to find babysitters, coordinate yard sales, or note local crime. Because of its recommendation element, allowing users to look for local businesses to serve their needs, Nextdoor seems especially primed to eventually target local commerce.

Disclosure: Neighborland is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

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NextDoor, the social network for neighborhoods, raises $18.6M

Ryan Kim — Tue, 24 Jul 2012 11:30:12 +0000

While Facebook, LinkedIn and Twitter have helped us connect to social networks online, there’s still a big opportunity in helping people connect to the real-world social community — our local neighborhoods — right outside our doors. While our links to our neighbors are getting more and more tenuous, in most cases, people still see a lot of benefit in knowing who they live next to and connecting to this larger network.

That’s the opportunity that San Francisco startup NextDoor went after when it launched in nine months ago with its Facebook for neighborhoods idea. And now the startup is getting a big endorsement in the form of $18.6 million in new funding to pursue this market, which is turning out to be a promising. The new funding comes from existing investors Benchmark Capital and Shasta Ventures and new investors DAG Ventures, Greylock Partners, Allen & Company and Pinnacle Ventures.

NextDoor said it now has about 3,700 neighborhoods on board in 48 states with a median of 600 to 700 members in each network. The service is adding 22 neighborhoods every day now. My first worry about a program like this was that in the same way that many of us don’t invest in learning who our neighbors are, many NextDoor users wouldn’t be involved.

But Nirav Tolia, CEO and Co-founder of NextDoor told me that 40 percent of users have contributed to NextDoor through comments or posts and 33 percent invite a neighbor. He said the most popular category for NextDoor posts is getting and sharing recommendations (26 percent of users), followed by civic issues (22 percent), crime and safety (20 percent), classifieds (14 percent) and events (11 percent).

Tolia said NextDoor has managed to grow by emphasizing privacy so users must confirm their address to be accepted into their local NextDoor website, which is shielded from search engines and other NextDoor neighborhoods. Users can also hide their actual address, phone number and email address if they want to. That trust and privacy encourages people to share and open up to each other for recommendations, tips and more.

“It’s not about becoming friends with your neighbors, it’s about working with your neighbors on useful things like crime and safety,” said Tolia.

The new money will help the company add employees as it tries to serve more neighborhoods. Tolia said with 200,000 neighborhoods in the U.S., NextDoor has a huge opportunity to grow and become a real social tool in the lives of millions of people. NextDoor also needs to figure out its revenue plans. With 40 percent of the posts currently about recommendations and classified ads, Tolia believes NextDoor could easily make money by connecting local businesses with users. It could also partner with home security companies to help them acquire customers.

I think there’s definitely a place for new niche social networks like NextDoor. I personally don’t know my neighbors by name but I’d like to. I’m still a little skeptical about how much time I’d spend each day on NextDoor. But I think for many people, it’s easy to justify signing up, just to stay on top of local issues and get warnings about neighborhood problems. The key will be keeping the users involved on a regular basis. That’s a still a challenge online, just like it is in real life.

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Nextdoor launches to bring your real neighborhood online

Colleen Taylor — Wed, 26 Oct 2011 11:30:32 +0000

How well do you know your neighbors? If you’re like most people these days, probably not very well. A recent study from Pew Research indicates that more than half of all Americans today know only some of their neighbors by name — and 28 percent say they know none of their neighbors’ names.

As great as the virtual world can be, it’s still important to know the people who surround you in the physical world – whether you need to find a good babysitter, borrow a cup of sugar, or plan what to do in the event of a major natural disaster.

That’s where Menlo Park, Calif.-based startup Nextdoor comes in. Founded by tech industry veteran Nirav Tolia (of Epinions and Shopping.com fame), Nextdoor lets neighbors within certain regions create private websites where they can exchange local information and events while getting to know each other better. Nextdoor was founded in the fall of 2010 and is officially launching to the public Wednesday.

Inspired by Facebook’s early days

Nextdoor's main page (click to enlarge)

To be a member of Nextdoor, you must register with your real name and real physical address. Nextdoor verifies members addresses in one of four ways: Sending a postcard to the address with a unique code, making a phone call to a listed number at that address, linking the person to a billing address from a credit card they provide, or by providing an invitation from a previously verified neighbor.

“We were inspired by the early days of Facebook; when they launched, they required university-specific email addresses to allow people to access university-specific networks within Facebook. That creates a little friction up front but ultimately it allows people to feel more comfortable,” Tolia said.

Each Nextdoor network’s size is established by the first person to add the region to the site — Nextdoor provides a drawing tool that allows users to define the boundaries of their neighborhoods on top of a Google map. Boundaries can be changed later as the group evolves. The typical Nextdoor network would comprise between 50 to 2,000 households, depending on the geographic region and its density.

Social network meets public utility

Nextdoor region map (click to enlarge)

Why the need for Nextdoor, in a world where it seems like so many different social networks already exist? The company says it’s because neighbors fill a distinct role in our lives: We don’t necessarily want to be Facebook friends with them or add them to a Google+ Circle; we probably don’t know their email addresses, or even their names, to initiate such a relationship.

That’s why in addition to letting people join the site via email, Nextdoor lets users print semi-custom flyers inviting neighbors to join the site, and it will also send personalized postcards to their neighbors for them.

Over the past year, Nextdoor has been testing its site in a pilot program in over 175 neighborhoods across 26 states — from the suburbs of Memphis, Tennessee to tech-savvy bedroom communities in the heart of Silicon Valley. Tolia says Nextdoor has generally been enthusiastically adopted in all different types of places. “It’s the same kind of pattern we’re seeing in almost every neighborhood. In a very short period of time, it becomes a public utility for the neighborhood.”

But will it really take off?

Nextdoor is backed with an undisclosed amount of funding from Benchmark Capital and Shasta Ventures; its board of directors includes Rich Barton, the chairman and co-founder of real estate website Zillow. The company currently has 22 employees. Nextdoor currently does not make money; it plans to eventually generate revenue by allowing local merchants to advertise their goods and services on the site.

When I was given a demo of Nextdoor, I immediately recognized its potential value — it’s that very rare website that I could envision my extended family in the Midwest using, just as well as I could imagine using it myself. It’s a mix of a crazy idea (another social network?) with one of the oldest, most practical ideas around (love thy neighbor, of course.) And like any social network, it’s only as good as the people who are on it. Only time can tell if Nextdoor will take off, but it certainly seems worth a try — and what better time than now.

Here’s a video intro to Nextdoor:

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