🎧🍌 How Nextdoor Grew to 100M Neighbors + Why Founding CEO Nirav Tolia Came Back Six Years Later
How Bill Gurley's challenge led to Nextdoor, lessons from the Dot Com Bubble, why local is the last big consumer opportunity, and what its like being a shark on Shark Tank
Nirav started Nextoor with his co-founders in 2011. He stepped down as CEO seven years later, the company went public in 2021, and Nirav re-joined as CEO the summer of 2024. He also founded Epinions which IPO’d in 2004, and before that was an early employee at Yahoo.
We go inside the decision to re-join the company after he thought he’d never come back, and how Nextdoor’s trying to act like a startup as a public company.
He also takes us back to the very early days of Nextdoor, the deliberate product decisions that made growth hard but led to 100M+ neighbors on the platform, the lessons learned operating his first company through the Dot Com Bubble, and what it was like being a guest shark on Shark Tank.
Timestamps to jump in:
2:39 Leaving Nextdoor in 2018
7:30 Coming back in 2024
10:31 The importance of family in career decisions
17:37 Why you have to listen to learn
24:47 The Founders Mentality
26:45 “Develop and Deliver”
32:03 Local, the last remaining consumer opportunity
36:58 Why being a founder is so hard
39:21 Going to the high school from Friday Night Lights
42:07 What Nirav learned at Stanford
46:22 Working at Yahoo from $500m to $100B
49:37 Starting Epinions with Naval in 1999
51:11 Operating through the Dot Com Bubble
56:34 How Bill Gurley’s challenge led to Nextdoor
58:16 Early product experimentation
1:05:19 Why early growth was so hard, and scaling to 100 million neighbors
1:10:10 The opportunity in local news
1:12:14 Being a Shark on Shark Tank
Referenced:
Find Nirav on X / Twitter and LinkedIn
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Transcript - (read on Rev)
Find transcripts of all prior episodes here.
Turner Novak:
Nirav, how's it going? Welcome to the show.
Nirav Tolia:
It's going great. Thanks for having me.
Turner Novak:
I'm excited to have you too. You have a pretty interesting setup right now. Probably the first time in the history of the show, I've had someone on who started a company, left, and then came back to rejoin as CEO.
Nirav Tolia:
Lots of founders, but maybe the first re-founder.
Turner Novak:
Yeah. Can you just tell us the story, what happened?
Nirav Tolia:
It's pretty improbable. I mean, I'd say, on one hand it's been an incredible blessing for me and a privilege to come back, because I love the company and I love the people around the company, and I love the intellectual challenges associated with the company, but I did not after leaving as CEO the first time that I would come back again. One of the reasons why is because I don't think it was exactly my choice to leave the first time. And so, I was definitely starting to hit a wall in regards to my scalability as a leader, I've mostly in my career, been an early-stage founder and CEO. That's primarily what I've done for a couple of decades. So, I've done it for a long time. And after running Nextdoor for almost nine years. So I started the company in the summer of 2010. And then, if we fast-forward to early-2018, it was clear that some of the things that the company required were out of reach for me as a leader.
And whenever that happens, you have an opportunity to grow as a leader, because at every stage of a company, the company needs more from its leadership, or at the very least, it needs different things from its leadership. And, the job of leadership is to rise up and meet that challenge. And for whatever reason, at that point, eight years in, I wasn't ringing the bell like I really should have, or even, I believe I could have. And so, we felt that Nextdoor had a ton of potential, very, very, very smart, very accomplished board of directors who wanted Nextdoor to be as successful as it possibly could be. And, ultimately, the decision was made for there to be a leadership transition. And, I wouldn't say that it was an easy process for me to go through. At the same time, I didn't fight it as much, because I saw it as well. I felt it as well. I was not the best version of myself as a leader, as a executive, even as a person, I was burned out.
And the stress of these jobs is something that maybe people don't always talk about, because it's always the glory of achieving something or the delight of creating something. But, these are hard jobs. They really weigh on you. They grind you down quite a bit. And, I'd lost my mojo a little bit. And so, when the time came for me to move on, I was ready. The company was ready and I was ready. And, I would say, the best thing that I was able to do, and I give my wife a lot of credit for this, I was able to say, "Look, whatever happened in the past, doesn't really matter. I'm proud of Nextdoor. I love the company. I want it to succeed. But now, this is an opportunity for me to do the next thing in my life."
And, that next thing was not going to be to be a founder or a CEO. I moved to Italy with my wife and three young kids. We wanted to live in a foreign country and have a completely different experience. I was lucky to teach a class from my alma mater Stanford. So, I became a visiting professor at Stanford and Florence. Ultimately, I joined a venture capital firm, Hedosophia as executive chairman. Hedosophia had been an investor for Nextdoor. And so, I was very familiar with the firm and its founder. And I was loving learning to be an investor. I was loving advising entrepreneurs, founders, and CEOs that were going on the journey that I'd gone on. So I did not think I would ever come back to being a CEO. Certainly, I didn't believe that I would come back to Nextdoor. At the same time, I'd never really left Nextdoor.
Turner Novak:
Because you stayed on the board, right? Yep.
Nirav Tolia:
Yeah, I was on the board. I was the largest individual shareholder. I love this company, that never stopped. And there were so many people that I had worked with that were still part of the company. But, I changed the way that I was involved with the company and that was from being an operator to being more of a board member. And that's a massive shift in what you see, what you know, and what you can do. I mean, it's like shifting from driving the car to just riding in the backseat and being able to look out the windshield, so you see where you're going, but you have no control really or very limited control, and no one likes a backseat driver.
And so, having been a CEO for a long time with board members, I was not going to be that board member that was trying to micromanage our CEO. I was going to be the patient person in the backseat that was just hoping very optimistically that we were headed in the right direction. And ultimately, when it became clear to everyone that we weren't getting to where we wanted to go, we needed to make another leadership transition. And, either I was the only one who they could get to do the job, or hopefully, I think when the story's told, I will be the best person to come back. But, one way or another, here I am.
Turner Novak:
So, what was the decision like then to come back? Because it sounds like that it was not on your radar to come back. What went into it?
Nirav Tolia:
No, it really wasn't. And, it wasn't as much an intellectual, or I would say, empirically driven decision, as it was an emotional one. But what Nextdoor needed and what we still need is the transformation of our core product. And so, it was very clear to us as board members, and this includes Sarah Fryer, who was CEO at the time, that this was a period of time in the company's history where there needed to be product innovation. And so, as we started to think about who are the leaders that would bring that spirit of product innovation into the company, there is something very special about the way a founder looks at innovating a product. Because I wasn't the only founder. I wasn't the only person who came up with the idea for Nextdoor, but I was one of them.
And so, I understand Nextdoor in a way that very few people in the world understand it. I was building it with a few people at the very beginning. And so, there's an advantage, I believe, in being a founder when you're building innovative product. And ultimately, we thought as a board there was an additional advantage in a founder coming back, because not only did I have that context and that history, I hadn't been running the business for five years, so I had fresh eyes.
Turner Novak:
Yeah, you had that emotional attachment, but you could also come in and say, "What's going on? What needs to be fixed? What should be changed?"
Nirav Tolia:
100%. I think, hopefully, what I have tried to do is to find some balance between keeping what's great about Nextdoor, and that's the DNA of the company, our focus on local community, the absolute devotion we have to neighbors and building an indispensable local application. But thinking about it in an evolved way, because ultimately, what has happened to our product, and I think it happens to a lot of products, we've just gone stale. Nextdoor, the product, has not changed as much as the world has changed. It has not risen up to become contemporary, and modern, and indispensable to today's audience in much the same way that it was maybe in the past.
And so, that's going to require not just an incremental adjustment or two, that is going to require transformation. We've said internally, if you think about this like a software product, we're not looking for a point release, going from 2.1 to 2.2. We're looking for a version release. We're looking for something that looks, feels, and operates completely different. And so, sometimes, when that's the task, bringing in someone who has the credibility of having been there from the beginning, but the freshness to really make those big changes, that can be an asset. And, we're hoping that's the case here.
Turner Novak:
So, I know family is really important to you, and the decision to come back was a family decision. I think anyone with kids, anyone who's in a relationship, multiple generations, they think about it a lot when they're thinking about their career. How did you decide just with all the stakeholders in the family that it was the right decision to come back?
Nirav Tolia:
It's tough for me to think about even now. I have professionally found coming back to Nextdoor to be, as I mentioned at the beginning, an incredible privilege and a blessing. I am so excited, and invigorated, and I wake up every morning very grateful to have this job, that's professionally. But on the personal side, it has required and will require enormous sacrifice. It did require enormous sacrifice when I was running the company the first time. And one of the reasons why I was ready to step down is because I wanted to spend more time with my family. In fact, post-COVID, my wife and three kids and I decided to move to Texas where I grew up because we wanted to be closer to family. And my mom and dad are in Dallas. My only sibling is in Dallas with his wife and their wonderful children. And, an ability for our three sons, my wife and me, to be closer to family, and to focus on that, that was a priority for us.
If I thought I were going to come back to Nextdoor, or if I thought I was going to come back to Silicon Valley at all, I wouldn't have made that decision. But ultimately, I knew that if I didn't come back to Nextdoor, it would be a regret. I knew that if I were sitting on my deathbed and someone came to me and said, "Hey, you started that Nextdoor thing. And, gosh, it didn't really go as well as you wanted it to. Why didn't you get in there and do something about it?" I knew that I would have a regret. And, my wife is so wonderful in supporting me and knows that we don't want to live with regrets. And so, the discussion was not really, again, about putting a spreadsheet together to understand exactly how are we going to navigate this. And, my wife is a very ambitious, very successful executive herself. She's the president of Shonda Rhimes company, Shondaland. So she has a big job herself.
Our three young sons are 12, 10, and 8, and so they're in the primes of their childhoods. And my parents are in their mid-80s. I was enjoying spending time with them. And my brother for the first time since I left Texas to go to Stanford for college, I had never been around my family in the same way. So, enormous sacrifice. And yet, Nextdoor is something I love. So this season in my life, my wife agreed with me that this season would be about Nextdoor. And, we went in eyes wide open, because I'd been the CEO before. I mean, when you're a CEO, when you're a founder, it's hard to think about other things. It's hard to have that mythical work-life balance that everyone talks about. I think it's much more about harmonizing work and life. And one of the ways that we harmonize in our family is we say, "In this given period of time, what is the priority going to be?"
I feel so blessed that for the last five years, my priority was family. It's why we moved to Texas. It's why I wasn't an operator. It's why we made so many of our decisions over the last five years, the 20 years prior to that, almost every decision I made personally was driven by my professional pursuits. And so, that was a departure, but now coming back, I don't pretend to be wiser in some way so that I can work smarter, not harder, or I don't pretend to have some magic formula through Zoom or virtual meetings where I don't have to show up the way that I did the first time. It's enormously difficult to run these companies, to build these products to be successful in our industry. And for me, that is going to take sacrifice. I'm just really lucky, because my wife and kids are supporting me in that endeavor, but it's not easy.
Turner Novak:
Yeah. And I think, we were talking about this a little bit beforehand and I didn't mention this, so I actually live with my in-laws and also my wife's grandma lives in a little cottage on the property that we have. So we've got four generations all living together.
Nirav Tolia:
You're very lucky. You're very lucky. I always say that hearing the laughter of my parents and my kids when they're together is one of the most beautiful sounds in the world. And it really helps you understand that circle of life and your place in it, right? Because you're looking up to your parents who provided everything for you and you're looking down at your kids who you want to provide everything for, and to bridge that into these sacrifices we make professionally.
My children were all born during the first eight plus years when I was creating and running Nextdoor. So they're familiar with Nextdoor. They were born and raised in San Francisco. But they were young. And so, by the time they started to become aware of me in more of a childhood sense, versus a baby or infant sense, I wasn't working the way that I was when I was CEO of Nextdoor. So, I don't even know to some extent if they even understood what it was like for Daddy to be a CEO. Because being an investor is very different. You have a lot more leverage in your personal life when you're an investor than you do as an operator.
And so now that I've come back, they joke sometimes and say, "Well, daddy, we used to love Nextdoor and now we're not really so sure, because it's taking you away." But I think, for them, they are observing a value that my wife and I believe very strongly in, which is the value of responsibility, the value of commitment, the value of accountability, the value of being able to make sacrifices in the near-term, because in the long-term, something's really important to you. And so, I'm hoping that they will pick that stuff up. But I do. I miss them a lot. And I think the really hard thing about not being in Silicon Valley, which is where our headquarters is, it's not just the long hours. It's not being able to kiss them good night before they go to bed, or take them to school in the morning, right? But, that's why we got to make Nextdoor successful. It's very, very, very important to me personally and professionally.
Turner Novak:
Speaking about making Nextdoor successful, I think you're, at this point, maybe six months. I don't know the date. It'll probably be about seven months when the time this comes out. But, what did the first couple months look like? How do you come back in? What were the priorities? What are you looking for? And then, maybe more recently, I'm assuming now you're like, "All right. We've got a plan." What's the plan for the next phase of the company?
Nirav Tolia:
Whenever you go into a new situation, whether it's starting a company, or restarting or re-founding a company, or just taking a new job, there's that early period where it's almost pure adrenaline. And I felt like the single most important thing to do when I came in was to learn, and you can only learn by listening. So the most important thing for me coming into Nextdoor was to relearn what the company was about, because it wasn't my company. It wasn't a company that I'd been running. The majority of employees had been hired after I had left. The product was completely different. And so, I had to learn and familiarize myself with what was going on. And, it was just great to be back around people in an operating context. So one of the things I realized almost off the bat is how much I missed being part of a team.
And I enjoyed learning to be an investor. And, I don't know that I felt that I was a great investor, or even on the road to being a great investor. I was still relatively early in the journey. It had only been a couple of years. But, coming back to be an operator, immediately that visceral sense of being in the room with other people and coming together to solve problems, it's like community, which is the whole point of Nextdoor. And, the whole point of us moving to Dallas, we were creating a family community. So, it felt very additive to my life to come back into this Nextdoor community. But, at the beginning, it was really learning as fast as possible, drinking from a fire hose, and learning on so many different vectors, learning about the company that I knew some things about, but not everything. Learning what it was like to be a public company CEO, versus a startup CEO. Learning enough about the outside world and our users' needs in that world to craft a product strategy that we believe will serve them better than we are today.
So, there was a ton of learning and reflecting on it, even as we have this conversation, I love learning. I love that feeling that you go to bed at night exhausted, because there's so much more information in your brain than there was when you started. I'm still honestly in that phase, now, six or seven months in. But I have my sea legs. And, most importantly, I've gotten to know my teammates in a way that I didn't when I first came in. And to me, it's always been about who first and then what? And so, from the beginning, I wanted to not just learn about the business, and our challenges, and product strategy, I wanted to learn about the people. I want to learn about my teammates, right? "Who's going to stay? Who's going to go? Who am I going to bring in? How are we going to work together?" Right? "What's the community that we are going to build that's going to enable this larger community of Nextdoor for our almost 100 million verified neighbors?" Those were the things that I was doing.
And, one of the reasons I traveled so much and still travel is because I believe that learning happens best when you're right next to someone. You can do it the way we're doing it right now, but if you're sitting right next to someone, there's an enhanced sense of connection there that's difficult to get when you're not in the same room, occupying the same physical space. And so, those first couple months, I just wanted to drink up as much of Nextdoor and its people as I possibly could.
Turner Novak:
Did it work? Do you feel like you learned anything interesting, or any mindset change that you had from maybe the beginning of May of '24 to today?
Nirav Tolia:
Let me frame it slightly differently, which is, as I mentioned, very improbable that I would come back. And I also mentioned that I was not as effective a leader as I wanted to be when I left. So, in the intervening five years, I think I've done a lot of thinking about what leader I want to be, what leader I wish I had been, never with the intention of coming back to Nextdoor, or never even with the intention of being the same leader as a founder, or a CEO, or being in a startup at all, more just trying to understand myself better, and trying to evolve as a human being, and learn what makes me tick, and how can I lift people up? As I get older, the one thing that's really important to me is, I not only want to make myself feel good, I feel good if I can make other people around me feel good as well.
And so, when I came back, I think there was another vector of learning that continues, and that vector is, "What can I do to be the best version of myself in this role?" You asked, "Is it working?" The output's always a lagging indicator, a trailing indicator, right? We don't know. I mean, we hope. We don't know though, right? We've put up some decent quarters and we feel good about the trajectory, but we're very far from that breakthrough. And I think, in some ways, that breakthrough is a myth. I mean, it's 1000 small steps that ultimately looks like one giant leap. We are trying as hard as we can, and I am trying as hard as I can to make those steps. And those steps need to happen every day, every hour, every minute, every second, and it's draining. And you're not always at your best, and you don't always move forward. Sometimes you move to the side, sometimes you move to the back.
But, the most important thing to me is that we have a team that believes in what we're doing and we feel like we're getting a little bit better every day, and we don't know when that will lead to a breakthrough. We hope it's sooner, not later. But we have a lot of conviction in each other and our ability, as long as we keep making progress, that ultimately that trailing indicator of the output of that progress will be seen. We are way too early. But at the same time, my biggest anxiety around Nextdoor is how long is this going to take? "How long is it going to take for us to turn around the product? How long is it going to take for us to put something out there that our neighbors love in a way that they don't love today?" We have limited time, right? So, balancing these two opposing views, which is, you're not going to be able to flip a switch and change everything immediately, and there's extreme urgency, because the world doesn't wait for anyone or anything. Balancing those two things, that's one of the big challenges.
Turner Novak:
Yeah. It seems like you're in an interesting spot where you're acting like a startup. You're like, "All right. We need to do things. We need to move. We need to think about the product, what changes." I know you want to make changes to the product. But then, you're also a publicly traded company, where quarter to quarter, I think by the time this comes out, Q3 earnings will come out a couple of weeks prior. And it's like, you got to... How do you think about that, like being a public company but also-
Nirav Tolia:
I love that you brought that up, because it takes us to something we were talking about before we officially began, which is this book called The Founder's Mentality, which I love. In fact, I got a copyright here. So, I'm hoping that you read this and that many of the listeners will pick it up as well.
Turner Novak:
... We'll throw a link in the description to the show, so you can talk about it. People want to click, check it out, and buy it, they can order it online.
Nirav Tolia:
Well, and the idea behind The Founder's Mentality, and this is a book that was written in 2015, and as I mentioned to you, I'm shocked that as a three time founder in Silicon Valley, I've never seen the book. I found it when I was researching things to write my first letter to shareholders as a public company CEO. And, I wanted to explore this idea that you just laid out, which is, how do you blend the dueling attributes of a startup and a more mature company? Because both of those have advantages, and both of them have deficiencies. The startup has the advantage of insurgency. The startup thinks that it can change the world, but the startup doesn't have many resources to do that, right? The incumbent has the disadvantage of moving slowly, and of all of these processes, and all the bureaucracy that invariably comes along the way as you're building a large company. But the incumbent has the advantage of scale, has the advantage of resources.
And so, is there a way to blend these two things? And I found this book. And, it's an absolutely brilliant book, because it's not a point of view that is in some way an idea. It's actually an empirically written book based on hundreds of interviews with founders of successful companies. And they are successful because they have scaled from being a startup to being an incumbent. They've not actually tapered off, they've not never been able to get on the ground. I mean, they don't need transformation, or if they need a transformation, they were able to transform themselves.
And there's a concept in the book called develop and deliver, and it's a very important concept. It's this idea that startups are all about developing. Innovation is about developing. Big companies, particularly public ones on this quarterly cadence, they're all about delivering. You hear that old expression, beat and raise, beat and raise, right? So you deliver your results, and you beat whatever the estimates are, and then you raise guidance, and you just rinse and repeat over and over again. That's delivering over a long period of time, which builds credibility, which makes shareholders want to own your stock.
But, startups, they're not delivering anything except for innovation. And innovation needs to be developed. And so, can you build a culture... And this is the real question for us at Nextdoor, can we build a culture that is good at developing? Because we have to be good at developing, that's innovation. We're a technology company. If our product development folks can't innovate, if we can't develop, we will almost certainly lose relevance. And, that's what we feel like has already happened. But on the other hand, we're a public company. We have lots of shareholders, right? We have to do our best to deliver as much value as we can to them on an ongoing basis, and that requires real results that are predictable, and measurable, and consistent, right?
And so, that dual challenge of developing and delivering, I love it, because one of my board members, who's the first investor in Nextdoor and the venture capitalist that I've worked with the most, I've worked with him for over 20 years, Bill Gurley, he has this expression that comes from another great business book, Jim Collin's, Built to Last, and the expression is, "The tyranny of the or." Most people get themselves caught in a dilemma where they say, "We can either innovate or we can scale." "We can either develop or we can deliver." Well, that's the tyranny of the word or. You have to find and. "What is the right way for us to develop and deliver?" It may not be 50/50, it may not be that we can do both those things in the same quarter, but we have to constantly be pushing ourselves to say, "What are the things that need to be developed?" And that's about innovation. That's a little bit more of a long-term perspective. "And what are the things that we need to deliver?" Because execution is absolutely the lifeblood of any successful company at any size.
And so, what I really like about The Founder's Mentality is, you might think with that expression, The Founder's Mentality, it's about founding a company, it's about startups, it's not. And it's not even just for founders. It's about taking a point of view that enables you to use some of those unfair advantages that founders and startups have and apply them at all stages of the company life cycle. And that to me was a huge eye-opener, because I thought the same thing you did. "We need to operate like a startup, but we're a public company. How are we possibly going to reconcile those two things?" Well, you know what? We have to. And not just now, but forever. Forever we want the advantage of the startup with the advantage of the incumbent. And that requires, I think, a very intentional set of things that you do culturally.
Turner Novak:
Are there any companies that you feel have done this right over the past, I don't know, couple decades?
Nirav Tolia:
All successful technology companies have had to do this, right? So, I've been around for many decades in this industry. It's amazing that Apple and Microsoft are the two most highly valued companies in the world, because in our industry, at various points, both of those companies have been left for dead.
Turner Novak:
Yeah, Apple almost went bankrupt in the '90s.
Nirav Tolia:
Apple almost went bankrupt. And, you remember, with the rise of Google, Microsoft was seen as completely irrelevant. You had the rise of Google and you had the creation of the iPhone, and where's Microsoft's place in the ecosystem? Right? And then, the cloud comes along, and Satya is able to reinvent them again. Now, he's not even the founder, right? But those successful companies, and certainly, Google is one of them, we see what Google's doing now with AI and Gemini. They are literally cannibalizing themselves. They're putting those results above the 10 blue links that make them money, because they know that if they don't disrupt themselves, someone else is going to.
Zuck does this all the time. He sees something that's working externally. It's the Metaverse, okay, huge effort into the Metaverse. Maybe it works, maybe it doesn't. Then he sees AI, huge effort into AI. The best technology companies, they have these cultures. They are constantly delivering results, stunning results at their scale. These are trillion dollar companies that are growing 30% year-over-year. It's just unheard of. But they're also innovating in a way that creates future glory. And so, this is really the story of our industry. And so, if you want to be a great company in our industry, you got to figure out a way to do this.
Turner Novak:
So I think it begs the question then, tying it back to Nextdoor, thinking about all the opportunities that you have in front of you, what are you most excited about right now?
Nirav Tolia:
Oh, I'm most excited about the same thing that was exciting to me the first couple months that we were starting the company, which is, local from a business standpoint, is one of the only remaining massive consumer opportunities. It's not owned by Meta, it's not owned by Alphabet, it's not owned by Amazon, it's not owned by Apple. Local's heart. There are dozens of companies trying to do things in local, none of which have established a scale that would even get close to any of those companies that I just mentioned.
Turner Novak:
Who would maybe be biggest if we were to stack rank them?
Nirav Tolia:
I think, maybe Zillow is one of the biggest at 13 or 15 billion, right? But the majority of them are all sub-10 billion market caps, right? And there are maybe a dozen of them, whether it's Yelp, or Angie's List, or Thumbtack, or Eventbrite, or Nextdoor, or this whole host of players. And, they're all delivering some value, because they're still in business, and they've created decent sized businesses. But, they haven't been able to really follow suit with the rest of the verticals in the internet, which is, you have one or two people that really gain separation and they build massive businesses. So, we knew that even in 2010 when we started the company. So, that has always been this incredible north star from a business standpoint, because one of the things you realize as a founder is, you don't know when you come up with an idea how big it might be. You think it's going to be big. I mean, you think it's going to be big, right?
But if you're the person who invented Google Search, I don't think Larry and Sergey knew that it could serve as the operating system for the internet. I think they were solving a problem for themselves. I don't think Zuck knew that Facebook would ultimately have a billion people. He was creating something for Harvard. And so, you have that first idea and you think, "Oh, this is something that I would find compelling. And I have a small audience that thinks it would be compelling as well." Even Amazon, I mean, Bezos says today, "Oh, my vision was always to have every category." But, what's the biggest business at Amazon right now? It's AWS.
Turner Novak:
Yeah, that was not the plan when he started a bookstore.
Nirav Tolia:
He had no idea that that's where it was going to go, right? And so, the fact that we're sitting here 14 years later and that local has not been dominated by a single company, it's still a massive business opportunity, that is a North Star that really excites me. The other thing that really excites me from a human standpoint, the opportunity to build local community and make people or enable people to feel better about where they live, that's meaningful. Now, we're a business. So, this is not a social justice cause, or this isn't something where the way we make people feel is the most important thing. I mean, we are a for-profit business. But, we're very lucky. And what excites us is, in the service of building a great business, we should also be able to help people feel more connected on a local level. And so, there's no conflict for us.
So, the quality of this idea as someone who started multiple companies, some of which have not been good ideas, that I found out, right? The quality of this idea, its potential size, impact, and scope, that's something that you just cannot take for granted, because the actual business metrics are a lagging indicator. And because we've identified a transformation of the product as the thing that really needs to happen, we are not going to have instant gratification here. Do I feel like things are going well? I'm an optimist. I tend to see the world as glass half full. And so, I think things are going well, because we're executing better than I believe we have in the past. We have a product vision that we believe in that we're starting to test, and we're getting good feedback on that front. Things like attrition levels are lower than they've been. Our ability to recruit great people, those are certainly the way that we want them to be. But, as I told someone recently, we're selling hope right now.
Turner Novak:
I mean, it's a startup.
Nirav Tolia:
We're selling this potential future. We're not selling something that you can put in the bank today, right? And so, yes, I'm optimistic. I'm excited. I believe deeply. I'm also terrified. I'm also paranoid. I'm also anxious. I also feel like I get kicked in the stomach 100 times a day. I mean, it's a little bit like that develop and deliver. I mean, you can be excited and nervous at the same time. You can be optimistic and deeply concerned that what you're optimistic about is not going to work, right? I mean, it's that Andy Grove, only the paranoid survive thing. I mean, this is why being a founder takes such an emotional toll, because you hear this throwaway line, "The highs are higher and the lows are lower." Right? And, "You live and die every day." It's actually true. You don't have a stable emotional sense of life and the world when you're building one of these things.
You learn something one day that gets you really excited. The very next day you learn something that makes you feel like you have no shot, right? You hire an amazing person. The next day, one of your best people decides to leave and work somewhere else. This is actually the life. This is what the job is. I think maybe the one advantage I bring to the table is, I just recently turned 53, so I'm no spring chicken over here. And, I've been through a couple of these wars before. And so, it's not a new experience for me. It's just as visceral as it has always been, just as visceral. I mean, I was telling you before we started, just before the call, I was on with a board member. I mean, the board members, they're so helpful. They are so engaged, but they're always pushing. And it's their job. They're always pushing you to do more, go faster, think further, be more ambitious. That's tiring. I'm doing the best I can, right? It's tiring.
But, I love the game. And, one of the things that I tell the team all the time is, "Look, when we were kids, or when we decided we wanted to be in business, or when we were early in our careers, this is the opportunity we dreamed about, to take a public company that has the potential to have a billion or more users and make it successful, that isn't something that everyone gets to do. So, let's bring it with everything we have. Let's go." And that is probably the thing I feel the best about, which is, folks around here have embraced that challenge. They want it. We don't know exactly how to do it, when it's going to happen, or how we're going to be able to measure the impact. Those are all things we have to find out. We have to figure out. But, the first thing you need is, you need that commitment. You need the conviction. You need the belief and the desire. And, we've got that.
Turner Novak:
So I think, one thing I really want to hit on is going back to before Nextdoor, you talked about the importance of family. You're originally from Texas. You decided to move to Silicon Valley, go to Stanford. What was the decision like to do that?
Nirav Tolia:
Well, it was like getting hit by a pitch or winning a lottery ticket. When I was growing up in Odessa, Texas, which is a small city in West Texas, I didn't really have a lot of exposure to a broad range of different choices. My parents are both physicians. I'm of Indian descent. So, I think in some ways, I can only be an engineer or a doctor, right? That's the stereotype from back then. And, I was fine with that. I really aspired to be a physician. I really wanted to be a surgeon like my dad. He's someone that I've always looked up to and I've admired very deeply. And, I would've loved to just follow in his footsteps. And so, for me, going to Stanford, it was really about trying to go to the best possible college that I could have the opportunity to attend. It wasn't because it was Silicon Valley, because it was technology. I went there as a pre-med having zero intention of being in business or of being in technology. And it was just very serendipitous.
But, in retrospect, especially, it makes sense. So, living in Odessa Texas, one is, I don't want to say, victim, but one is certainly in a circumstance where geography confines you to your worldview. You live in West Texas, it's 300 miles from Dallas, it's 300 miles from El Paso. It's not like you're in the suburb of a big city. You're not in a great college town like Ann Arbor where you are, right?
Turner Novak:
Yeah. Didn't you go to the high school that Friday Night Lights, the TV show is? And I think I heard or saw that somewhere.
Nirav Tolia:
100%. Odessa Permian High School I attended. And the book Friday Night Lights was written about the class of '89, and I was the class of 90. So, not only did I go to that high school, I went to the high school and lived many of the things in the book. And, look, some of it was not great, which is an over-reliance on football, and its importance, and that sort of thing. But some of it was great, which is, a sense of community that ultimately led many ways to the creation of Nextdoor, and a pride in coming together as a group of people in this town and being part of something much bigger than any of the individuals, which is something I've taken with me. But, no, it was the late-80s when I was in high school, and Stanford was starting to really emerge, and Gorbachev had just visited Stanford.
And, when I was growing up, the Cold War was the thing that was dominating all the headlines, right? So this more of a union, less frosty relationship between the USSR and the USA, that was a big deal. And so, probably partially as a result of that, we used to look at U.S. News and World Report and look at the college rankings. And I looked at that and Stanford was ranked number one that year. And I thought to myself, "Oh gosh, wouldn't it be amazing if I could go to Stanford?" And, I was very lucky and I went there. But, I think, maybe a more interesting part of the story is, I get to Stanford, I realize very quickly almost everyone I meet is smarter than me.
Turner Novak:
It's a good feeling, but also like a, "Oh shit" feeling as well too.
Nirav Tolia:
Oh, it was definitely terrifying. I mean, it was definitely a gut check of the highest magnitude. And, because I'd just gone to a public school in the middle of nowhere, I had not even taken an AP class. And so, I'm there and in the mix with folks who have had college prep educations who are telling me Stanford's easy for them, compared to their high schools. And I'm thinking to myself, "I don't even know how to study." And so, as a pre-med, you need to know how to study. And, I struggled. And, it was not something that came easily to me the way that I wanted things to come easily to me.
And, meanwhile, I had an Ethernet connection in my dorm room. And so, even though I was not thinking about technology or was a technologist, I loved computers. My favorite subject in high school was computer science, strangely. I didn't know how I would use that to build a career, because I wanted to be a doctor, but I was interested in writing code, and the way that I could write code to solve problems. Being a builder, even if I couldn't articulate it at the time, it was something that was more meaningful to me, than even something like studying chemistry, or biology, or physics. And so, I get to Stanford and I have an Ethernet connection, and I can go online. And this is pre-browser, by the way.
Turner Novak:
So how did you access the internet back in... This is early-90s?
Nirav Tolia:
Yeah, I went to Usenet. So Usenet was a collection of communities, which is probably one of the reasons why I've been working on community my entire career. And it's funny, growing up in Texas, huge Dallas Cowboys football fan.
Turner Novak:
Oh no, I'm sorry.
Nirav Tolia:
I was in the Bay Area in the early-90s when the biggest rivalry was the Cowboys and the San Francisco 49ers. And so, I couldn't really go outside my dorm room and tell people I was a Cowboys fan, because they didn't want to hear it. They were 49ers fans. So I went online and I found a community of Dallas Cowboys fans, and I connected to them. And it was an immediate epiphany for me that if I had had that when I was growing up in Odessa, it wouldn't matter that I was growing up in Odessa. I could go online and I could experience any place in the world because of this incredible virtual technology. And so, it's profound on a lot of levels. It's why I ultimately was drawn to technology, that empowerment of not feeling like, "Because I live in Odessa, I'm limited to only the things I see in Odessa." It was an immediate benefit to me, this internet thing that has now empowered the entire world to do whatever they want to do, no matter where they live.
But it's also ironic and profound, because Nextdoor is really about the opposite. It's not about dwelling in the virtual world, it's about using the virtual tools to make the physical world stronger. And so, Reid Hoffman is someone that I consider a great mentor, and I'm lucky to call him a friend. And, he has this expression that entrepreneurs tend to work on the same problem their entire careers. It may be through multiple companies, but it's that one problem that keeps coming back. For me, I would say, primarily because I grew up in Odessa, that problem is around building community, which is what I loved about Odessa, but transcending geography, which is something I didn't like about being in Odessa.
And so, it just so happens that user-generated content, online community, and the internet more broadly is the perfect solution to those things that I just discussed. And so, that's what led me there. I was just so lucky to be at Stanford, because that gave me the opportunity to be around the folks who were starting these companies, including the folks who started Yahoo. And, as a completely unqualified, wannabe pre-med who wasn't getting it done, I was able to join Yahoo as a surfer. That was my title, surfing Yahoo. Imagine explaining that to your Indian physician parents who had paid for you to go to Stanford. That wasn't the easiest conversation. But, back then, Yahoo had engineers, a few executives, and then Yahoo was trying to classify all of the Internet's websites into a directory. So they needed web surfers who would take those submitted sites and put them into categories. And that was the role that I was able to play.
It's an early, early, early version of a product manager, but with an ontology or almost a classification focus, because you're taking these sites in, you have to quickly assess them, and then you have to put them into the categories where they should exist. Now, soon thereafter, Yahoo became a full-fledged media company. And so, it had Yahoo Finance, and Yahoo Sports, and all of these other properties. And, I was lucky to work with marketing teams that were building those brands, and ultimately learn much more than just the classification of websites. But, it was all luck. It was not qualification. I mean, my story is one of just being so lucky, being at the right place at the right time, being inspired by people around me, and then just trying to make the most of those things.
Turner Novak:
And then, you started your first company too back in the late-90s. What was it? And how'd that go?
Nirav Tolia:
I was at Yahoo from '96 to '99. And, that was just a golden era to be at a place like Yahoo. I mean, I was one of the first 100 employees. And I think by the time I left, there were 10,000 employees.
Turner Novak:
Holy cow. Wow.
Nirav Tolia:
I don't know, the market cap went from 500 million to 100 billion. And yet, I knew that if one day I didn't show up to work, or if I were crossing the street and I wasn't looking both ways and I got run over, no one at Yahoo would've even noticed. I mean, I was not driving their success in any way, shape, or fashion. I was just so lucky to be there. And, as the tide was rising, I was rising with it. And so, I wanted to understand, can I build a Yahoo? Can I be part of influencing the world in a positive way, the way Yahoo is? And so, while at Yahoo, I'd started with a couple of friends, this nonprofit for entrepreneurs, where we got together once a month to talk about new business ideas. And, again, right time, right place, no intention of that leading to anything, but that was the monthly gathering where Larry and Sergey would come, where Reid Hoffman came, Elon came. All of these folks that you hear about today, they all came to this thing called Round Zero.
Turner Novak:
It was a dinner series?
Nirav Tolia:
It was a monthly dinner where we picked a topic and we had an hour of networking, and then we sat down at small tables of five or six and there could be 100 people at the dinner. And we'd have 20 different tables, and we would talk about something that was happening in technology. "Is Microsoft going to continue its dominance? What does it mean when the venture capitalists are the ones that are actually funding all of the revenue that's being generated by these ad-driven companies?" All of these things that we talk about today. And, I met this absolutely brilliant person, Naval Ravikant, at one of the Round Zero dinners. And he had, what I felt at the time, was a brilliant idea around user-generated content and online reviews called Epinions. And, I was lucky enough to start a company with him.
And that was my first one in 1999. It was called Epinions, which I admit is a very.com era name. E anything, I probably wouldn't go there again, but Electronic Opinions. And, that was my moment where I got to become an entrepreneur, and I was a founder, which to me is the most important title. It's a more important title than CEO, or board member, or chairman, or any of those other things, because it means you were there at the very beginning. And building, creating, starting from scratch, those are things that really matter to me. And so, we started the company in 1999, and we went through a lot of highs, and we went through a fair number of lows, some real true near-death experiences, and that was my arena. That was really where I started to learn what is it like to build one of these things, and how hard is it really? Because, Yahoo didn't feel hard, because I wasn't doing any of the lifting.
But once I got to Epinions, I was one of few people who were doing most of the lifting. And it was not easy. It was not easy. But gosh, what an incredible experience. And, meanwhile, that was the micro, trying to build opinions, but the macro was, you have the .com boom, you have the .com bust, you have the slight return. I mean, you're living through these cycles and understanding that, again, you as a company cannot be tone deaf to what's happening outside the four walls. You can't control what's going on outside the four walls. You can control what's going on inside, but you can't be tone deaf. And so, needing to harmonize in an environment where capital is plentiful, versus an environment where capital is not available, those require different strategies, right? In one, you're hiring like crazy and you're trying to take advantage of the fact that you can take on a lot of money for limited dilution, and you can hopefully take some real steps forward in the business. But, when capital's not plentiful, you have to do more with less. You have to deal with the resources you have.
And so, at one point, I think, we had hundreds of people at Epinions, then we went down to dozens of people. I mean, it's not fun to do the accordion, once again, as I talked about, of going up and down. It's actually one of the more jarring things, but it is sometimes necessary, because you're a little bit of a rubber band, you're shooting out there, and then you're coming back, and you're shooting out again. And, I learned so much at Epinions. Naval was the original CEO, I took over a CEO about a year in, and didn't know what I was doing, and had no background or qualifications really to be a CEO. I was the one that they chose.
And, I was really lucky, very, very lucky, because soon after I became CEO, Benchmark Capital, where Bill was at the time, brought me this CEO coach, Bill Campbell, maybe the most famous CEO coach in Silicon Valley history. He had been a CEO before, and when he was coaching me, he was also coaching Eric Schmidt, Jeff Bezos, Steve Jobs. I used to joke with him and say, "Hey, what's it like to come to the Farm League team after being in the major leagues?"
But, Bill became more than a coach to me. He became like a second father. And, I used to tell him, and I still believe this, anything good I've accomplished in my career as a CEO, he would get full credit for. Anything that I have done wrong, I have to take responsibility for, because none of that came from him. But, just imagine, again, as I look back on these memories in my life, how lucky can a person be? I mean, the fact that I went to Stanford, I never would've been in technology. The fact that Dave and Jerry were at Stanford starting Yahoo, I never would've gotten that job. Meeting Naval at Round Zero, I never would've started Epinions. Being at Epinions and having Bill Campbell, I never would've had any success without Bill Campbell. I met Bill Gurley in 1997 and have worked with him ever since. Right? So, my story is one of lots of different people at various points in my lives and lots of serendipitous blessings.
Turner Novak:
Yeah. I know you mentioned that, I think, Bill is on the board of Nextdoor. Correct?
Nirav Tolia:
Yeah, Bill is a founding board member. In many ways, he's one of the founders of the company, because he was there at the beginning. Nextdoor too. So many of these experiences have come out of adversity, and I don't like to say it, but failure. I mean, Bill had funded a previous company of mine called Fanbase, which was a community centric effort to build a next generation ESPN. And it hadn't gone anywhere.
Turner Novak:
Yeah, going back to the college dorm room, the Dallas Cowboys. Yeah.
Nirav Tolia:
Going back to the college dorm room, and back to community, and the whole thing. And, it didn't work. We got to 15 million users in the first year. So we got a lot of false positives, but-
Turner Novak:
Wait, you had a 15 million users. What does that mean in 2011, 2010-ish?
Nirav Tolia:
... It was 2007. And it meant that we were very good at search engine optimization, which is where all those users came from. But they didn't stick, which is a problem, right? I mean, you can get them to come in at the top of the funnel, but if they're all ejected out of the bottom of the funnel, you're not going to build a successful business. And so, I went to Bill and I said, "Look, this is not working. You and I have had one success together." Epinions ultimately became a company called shopping.com, which went public in 2004. And then, in 2005, eBay bought it for a little over 600 million. So, not a massive success by our industry's scale. But, definitely a success, right? And so, Bill and I had experienced that together. And, I wanted to go on and do greater things. I'm sure he wanted to as well. And he's gone on to do much bigger things with Uber and other companies that he's funded.
But, I went to Bill and said, "This isn't going to be the one. Fanbase is not going to work. You know that. I know that. Why are we wasting our time on this? And, we've only spent a few million dollars of the 11 million that we've raised. Take the money back." And Bill said, "Nope. I believe in the team. I think you should take one summer and come up with a new idea and pursue it." And I remember telling him, "Bill, you know the serendipity that has to occur to come up with a great idea, it's not as if you just put something in your Google calendar that says 10 A.M. come up with a billion dollar idea, right? That's just not the way these things work." And Bill said, "Yeah, yeah. I know, I know. But, I trust the team. And so, give it a shot."
And so, we went back, that was the summer of 2010, and somehow we were lucky enough to come up with the idea for Nextdoor. I mean, I'll mention one other thing, I mean, Bill did challenge me. He looked at me and said, "Hey, it seems like you're giving up. What's going on here?" Right? And he slid across a piece of paper, and it was the poem If from Rudyard Kipling, which many people may recognize, because several verses from the poem are in the locker rooms at Wimbledon. And so, it's about trying to rise up in the arena and be a champion. And so much of it, and this is what the poem's about, so much of it is the inner battle. It's not the outer battle against other people, other companies, other rivals, other opponents. It's about being the best version of yourself.
And so, that tweaked me when he gave me that poem, because I loved the poem anyway, and I felt challenged, and I thought, "Okay, we're going to give it one more run." And was very, very lucky that my co-founders came up with the idea for Nextdoor. And then, we worked on it. But, again, the point I'll make, and it's for all the founders that are listening out there, be open to serendipity. I don't know about everyone's journey. I'm sure there are folks out there that have earned every single penny of whatever they've gained. But, my experience has been that there's a whole lot of serendipity and luck. And if you put yourself in the right situations. And typically, that's about being where the action is, that's about being around people that inspire you, that's about growing, and stretching, and challenging yourself. If you have the courage to be in the arena, good things can happen.
Turner Novak:
Yeah. So when you mentioned the serendipity, the calendar event, the timeline, do you remember how the idea came up initially?
Nirav Tolia:
Oh, I remember it very, very viscerally. I remember it, because it was not the only idea we came up with. So we went back to the drawing board and we read several books. Steve Blank's book about Lean Startup. We read a book called The Product Market Fit Epiphany. We were trying to get smart because we were coming off of failure. And, at the time, the conventional wisdom is, you come up with as many ideas as possible and then you run them to ground one by one, and then that creates a small set that you may do some prototyping around. And then, you test the prototypes. And ultimately, where you see the signal is where you go.
That period of time was, we'd already moved past this Silicon Valley mythology, which is, you wake up in the morning and you have this idea, and the idea ends up being Apple Computer, right? It was much more, I think, in reality, you either start with a small problem that you want to solve for yourself, which is, Larry and Sergey said, "Look, we're not getting the results we want from any of the existing search engines. Let's a better one." Or, it's just serendipity and luck. You just stumble upon an idea and you start to realize, "Oh my gosh, this is one with big potential and opportunity." And then, you follow it.
So, we had come up with many ideas. We were doing lots of brainstorming. We were doing testing. We would build a website that would say, "Coming soon." And then, we would describe the idea, and then we would buy AdWords against that idea to see what is the potential demand. And, we would first see what's the click-through rate on the ad, and the ad would be the value proposition of the idea. And then, once they get to that page, we would have a little box that would say, "Enter your email if you want to be notified when we build this thing." And that would be another indicator how badly do people want this thing?
In the meantime, one of our team members shared with the group an op-ed that had been written in the New York Times by David Brooks about the decline of community in America. And, one of my other co-founders, Sarah Leary, who I've been lucky enough, again, as I think about the people who've changed the arc of my life. And, in this case, she's changed it both professionally and personally, she's like a sister, I've worked with her since the early days of Epinions. I was lucky enough to hire her in 1999. And so, we've worked together for 25 years.
Turner Novak:
And she came back too recently also to Nextdoor. I think I saw that. Yeah.
Nirav Tolia:
Really lucky to have her back. And, our head of comms is a wonderful woman, Kelsey Grady, who was working on comms for us in the first seven or eight years of Nextdoor. And so, there have been a couple of boomerangs, as we call them. But, Sarah had taken sociology at Harvard as an undergrad under a professor named Robert Putnam. And Robert Putnam had written this book, this seminal book called, Bowling Alone. And that book was about the decline of community in America. And, it wasn't about Nextdoor, it was about this idea that social cohesion at a local level has been one of the most important factors in the American dream, in making people feel connected, making people feel like their communities matter, and making people feel supported. And, one example of that is the sport of bowling, which in his book, it was a construct, because the popularity of the sport bowling has stayed the same, but people no longer bowl in bowling leagues, which was a social activity. They now bowl alone.
So why have they gone from bowling in leagues to bowling alone? And the bowling leagues were such a big part of those communities back in the '60s and '70s and '80s. And there are a number of factors which are obvious to us now. Technology is a big one. Technology has played a big role in keeping us inside, versus going outside and keeping us within ourselves as singular beings, versus within a community of people. And whether that's television or now the internet, it's undeniable what this has done. And so, those things came together and we thought to ourselves, "Okay, social networks are starting to really emerge." At that point, Facebook was clearly taking off. Twitter was taking off. LinkedIn was taking off. There wasn't a social network that was devoted to what we believed was the most important community of them all. And that is the community in which you live.
There was a social network for friends. There was a social network for colleagues. There was a social network for people that you find interesting, that was Twitter. There was no social network for your neighbors. And so, I wish I could say that it was this incredible epiphany moment where we said, "We know how to build a billion dollar company. It's the social network for neighborhoods." It was much more, "Oh, this could be interesting. But wow, local's incredibly hard to scale. And how are we going to do this?" And so, from that summer of 2010 until we launched Nextdoor publicly was over a year of slowly testing, of finding product market fit, of listening to user feedback. And ultimately, when we launched Nextdoor in October of 2011, we had about 200 neighborhoods using it across 26 states of the country.
And I remember going to one of our first board meetings and saying, "Hey, we've been able to get 175 neighborhoods to use Nextdoor. That's amazing." And Bill, or maybe it was Rich Barton, one of our other founding board members said, "Hey, how many neighborhoods are there in America?" And one of the management team members said, "Oh, we think there are about 300,000." And I said, "Stop. Before you even do the calculation, I know that we're on 100 year run rate. But we'll figure out a way to scale this thing faster than we did in the first year." And, lo and behold, here we are today, over 300,000 neighborhoods using Nextdoor 14 years later. But, I remember viscerally all of those things. I wish I could say that we were ultimately super confident and we knew what would happen. We didn't. However, we had a very strong feeling.
And then, we worked really hard to vet that feeling, to inform that feeling, to confirm the feeling, and then to expand it. And that's what we're still doing. That to me is the magic behind building one of these things. Yes, you do have an intuition, you do have an insight, you do have a feeling and that's qualitative. But then, you take all the quantitative stuff, the hard work, the measurement, the A/B testing, the user feedback, and you apply all of that to the intuition. And that's what ultimately creates something that can succeed. And if you're really lucky, you have people around the table who have different strengths in that process. So I would consider myself to be more intuitive. I would consider Sarah Leary, my co-founder, to be much more empirical. So when the two of us get together, I'm dreaming, and she's thinking about how do we test the dream to ensure that it's real? And that ends up being a very powerful combination.
Turner Novak:
So then, when you talk, okay, you have 175 neighborhoods, you're sitting in the boardroom, obviously today, 300,000, there's a time period in between that. How did you really start to scale it up? Because I've heard you mentioned before that growth was actually really hard.
Nirav Tolia:
Yeah, we did a lot of things that felt to people counterintuitive, relative to the way growth hacking was being done.
Turner Novak:
Oh, yeah, fair. Yeah, you're right in the heyday of it.
Nirav Tolia:
Yeah, I'll give you a couple of examples. I mean, I mentioned that failed company, Fanbase, that had gotten to 15 million users on SEO. The first company, shopping.com, what was formerly known as Epinions. The reason we had to sell the company is we had such a large SEO dependency that when Google changed its index and we fell out of the index as a public company, because that company had gone public, we couldn't get back in the index fast enough. We lost a lot of our free cash flow. And the company was really punished from a stock price perspective. And, if you can't control your own destiny, it's hard to be a public company.
And so, one of the early decisions we made was the contents going, because neighbors don't want the things they're discussing to be accessible by people outside the neighborhood. But that decision means we're not going to have any SEO. So we're going to have no discovery, no traffic, no distribution that's driven by people going to Google and typing in, "Great Plumber Ann Arbor." Which would be a perfect search for Nextdoor, because in all the Ann Arbor neighborhoods, they talk about the best plumbers all the time, as it relates to Nextdoor.
And so, that was a decision we made early on. The other decision was, by virtue of taking on a challenge through a social network, which typically social networks are fueled by virality, but understanding that in our system, the whole purpose for Nextdoor was that we don't know our neighbors. There was this interesting... It's a counterfactual, because the factual is, okay, you're starting a social network, you're going to be fueled by virality. You invite someone and they invite all their neighbors, and then the whole neighborhood lights up. But in our sense, the whole reason you need to come to Nextdoor is you don't know your neighbors.
So in that sense, you can't have the same level of virality. So, we were constrained there. And then, the third and final thing we did is, growth hackers always talk about reducing friction. "Don't require name. Don't require anything that would get in the way, a password. Don't require anything that would get in the way of the person just joining the service." We said, "Actually, trust is really important to us. We need a first name, a last name, we need a physical address. And then, we're not going to activate your account until we verify that you live where you say you live." And so, we used to send through snail mail, postcards with a verification code to ensure that people on Nextdoor were actually who they said they were.
So, those three things are just three examples. Not having SEO, picking a problem where virality would be an obvious solution, but having antivirality. And then, the third thing is creating as much friction as possible to ensure great fidelity at the end. Those were three examples of things that, over the years, we've hired so many people from Facebook, or LinkedIn, or Twitter, or places where they really understand virality and they've come in and said, "Well, this would be easy to grow, because you just got to do this thing that we've done at the other company." And then, they realize, "Actually, that's not in the DNA of Nextdoor." And so, how did we grow? We grew through providing a great experience, so that neighbors would tell their neighbors in the real world, "You should join Nextdoor." And it has taken us a long time to grow. I mean, we are now finally approaching 100 million verified neighbors. And, to do that over 14 years is much longer than someone like Facebook, or Instagram, or X, or any of the other social networks.
But, we feel like we've always focused on quality, not quantity, and the quantity has come. Our issue today is not that we aren't growing. The issue today is we want deeper engagement. We want to become indispensable. We want folks to feel like if they don't check Nextdoor every single day, they'll miss out on something critical that's happening in their local community. And there are moments where they feel that way today, if there's a hurricane that's coming through, if there's a tornado, if there's a wildfire, folks are on Nextdoor every single minute, because that's where they're getting the information. But we don't want to wait for natural disasters and crises until people will rely on Nextdoor. We want to tell you the best thing to do this weekend in your local community. We want to tell you the stories of the high school athletes that you want to rally behind who live around you. We want to tell you about the best place to buy tacos and the new restaurant that's come in the neighborhood. We want to educate you on the mayoral race or the ballots that are up for discussion.
And so, this is where Nextdoor needs to go, because even in the time that Nextdoor was created and has evolved, access to local news, whether it's through a newspaper, or through a newscast, or through any other publisher or publication, those things have all declined. Where do we go to get local information? The answer should be Nextdoor.
Turner Novak:
Yeah. And it's interesting because we're recording this on U.S. election day, and you could argue that local elections are actually more important than federal. The more local you get.
Nirav Tolia:
They're at least equally important. And I remember when I learned when I was living in San Francisco and someone said, "Oh, less than 60% of the country votes in the presidential election." And I was floored. And then, they proceeded to say, "Less than 20% of the people in San Francisco vote in the local election." And I was devastated, because the interesting thing is, a lot more than 20% of the people complain about what's going on in San Francisco, and a lot more than 20% of the people, I hope 100%, care deeply about San Francisco being great. What can they do about it? Well, you got to vote. You got to start there, right? And yet, we don't even know the issues.
I mean, if you think misinformation's bad at a national level and you think it's hard to keep up with everything that's going on with the national election, imagine local. Where do I go? In the old days, it was the newspaper, or it was the town hall, or it was me sitting on my porch having a discussion with the person next door, "Who are you going to vote for? Are you going to vote yes on that initiative? What do you think of this thing that they're trying to do?" Right? And those things have all dried up. And so, we don't want to punch above our weight. It's not like Nextdoor is this magical panacea or some antidote to the fact that we've lost touch with our communities, but we can certainly be part of the solution. And I think a very big part of the solution. And that's a high bar, and that's the bar we have to set for ourselves.
Turner Novak:
You were a shark on Shark Tank for a little bit during the step away from Nextdoor. I got to ask, what was that like?
Nirav Tolia:
It was incredible. I mean, it was, again, just such an incredible opportunity and a blessing. And, Shark Tank to me is about the American Dream. It's about entrepreneurship. It's about having an idea, going into the arena, trying to convince titans of the industry that your idea has legs, and then everything that comes along with that. So, when I was given the opportunity, my gosh, I mean, it's like a dream for me. In fact, interestingly, I got to be one of the sharks. But, my whole professional career, I've been on the other side. I've been the entrepreneur who's talking to the Sharks. Some things that people might be surprised to know about Shark Tank. The first thing is, it's not scripted.
Turner Novak:
Do you get the pitches ahead of time? Do you know?
Nirav Tolia:
We do not get the pitches. We are seeing the pitches and learning about the companies in real-time. And, that's a little demanding, right? Because, you might see a pitch edited down to, I don't know, 15 minutes or so in a show. It's more like 50 minutes when we are seeing it. So, there's more time, but there's not that much time. And I can only imagine how nerve-wracking it is to come in to that music. And you walk into that room. And there's Mark Cuban, and there's Barbara Corcoran, and there's all the sharks that you've seen. There's Mr. Wonderful. And yet, it's a really, really nurturing environment. It's called Shark Tank. But, the Sharks are there, because they love entrepreneurship, and they want to lift these people up. And, even the folks who come in and you're thinking to yourself, "This thing is never going to work. That is one of the most terrible ideas I've ever heard."
Turner Novak:
You can't say that.
Nirav Tolia:
Well, some people do say that, right? But they say it in a nice way, because look, on some level, if there's a great entrepreneur out there and the entrepreneur is pursuing something and you have an insight as to why it's not going to work, you don't want to not share that. In fact, you want to share it. You may be wrong. The entrepreneur may disagree. Right? I mean, people have told me thousands of reasons why Nextdoor shouldn't exist and why it should fail. And, some of the reasons have actually been good reasons. And so, we've gone in different directions, and some of the reasons we've overcome. But that give and take hardens your idea, and it puts you in a position where you have to, again, really strengthen your assumptions and ensure that the reasons you're doing something and the ideas you have for how it would succeed, you have to make sure that that's really crisp, and clean, and will be successful.
And, that part of Shark Tank is something that I think any person who goes on Shark Tank, whether they get a deal or not... And by the way, the deals are real. I invested in multiple companies. That was my own money, that wasn't given to me by Shark Tank, as I used to joke with my wife. Shark Tank was a loss-leader for us in our family, until one of these investments works out, right? We paid to be on Shark Tank, literally, right? But, the whole thing is real. And, everyone who goes on Shark Tank, whether they get a deal or not, I know they benefit from the experience of having to, in some ways, justify your business in front of these people who are very good at quickly assessing whether a business has legs or not. A couple of other things I'll say, the sharks are extremely collegial. They're very close with each other. They're friends. Mr. wonderful, Kevin O'Leary, he's got a persona on the show, but he's a sweetheart.
Turner Novak:
Really?
Nirav Tolia:
He's a great guy.
Turner Novak:
Would not have expected that.
Nirav Tolia:
The other thing I'll say is, I mean, the sharks, they're really smart. And so, I loved the banter, both during the pitches, but also in between the pitches, because I was learning. I was learning a lot. And, again, these folks see hundreds. I mean, you're an early-stage investor, so this resonates with you, right? I mean, the more pitches you see, the more you start to develop a hypothesis for, "Well, here are the things I need when I invest in a company. And, here are the things I really matter." You actually lay them out on your website. I went there and I saw you said, "Here are some of the things that really mattered to me." I remember the last one. "Would I want to work with this founder 10 years from now?" I love that one. Right?But, all of those sharks have their own collection of those things. And to see them apply those criteria to the deals, it's fascinating. That was a huge privilege to be on that show.
And it's funny, because to this day, the number of people who recognize me from being on Shark Tank, that show has a very large footprint. I mean, many people care about that show. And, I was not as familiar with it, but it ends up being a really great way for kids to learn about business. And so, I would encourage anyone with kids who have any curiosity or interest about business... Because you watch the show, it's entertaining, but you're learning about revenue, and you're learning about cost, and you're learning about unit economics, you're learning about competitive advantage, and you're learning about marketing, and you're learning it in a fun way. So, from my standpoint, we need more Shark Tank. We need more things like Shark Tank. And, I've always taken it for granted in Silicon Valley. And in Silicon Valley, you see that stuff all the time. But for the rest of the world, Shark Tank is an amazing resource.
Turner Novak:
Yeah, it's helpful when people ask. So, "Turner, what do you do?" And, they're a mom in Ann Arbor, I'm like, "Ah, venture capital. And it comes with... It's like Shark Tank." And like, "Oh yeah, I know that." So, I think it's good for the world. People trying to build things, solve problems for people. I think we need more people like that.
Nirav Tolia:
I definitely feel now as a public company CEO, that I have my own swimming in the shark pool. Not quite at the level as the early-stage Shark Tank thing. But look, in life, we are always trying to move things forward and take ideas that we have and make them bigger and better. And, the moments when you go into the tank, whether it's the metaphorical tank or the actual Shark Tank show, those are the moments when you feel most alive.
Turner Novak:
Yeah, I think, it's a good place to end it. This has been a lot of fun. Thanks for coming on the show.
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