Nirav Tolia talks monetization, Nextdoor's value proposition

Steven Loeb · May 19, 2016 · Short URL:

Nextdoor offers a better experience for local advertisers than Facebook or Twitter, he said

We've been doing a series for the last few years called What's Your Business Model, where we take companies and break down how they make money. One company I have wanted to cover was Nextdoor. The only problem is that, so far, they don't actually have a business model.

That will probably be changing soon, though, as the company continues to grow (it is currently adding 100 neighborhoods a day).

At Vator Splash Spring last Thursday, our founder and CEO, Bambi Francisco sat down with Nirav Tolia. Co-Founder and CEO of Nextdoor to ask him about how the company will eventually start to monetize.

Specifically she mentioned local advertising, and why Nextdoor would be a good platform for that.

"We're a social network, and if we we look at the giants whose shoulders we stand on, whether its Facebook or LinkedIn or Twitter or Instagram, they all monetize through advertising. So that has been something that we have had a fairly strong sense of. We're a free product for consumers, but something that ultimately monetizes because advertisers want access to those consumers," he said. 

"In our case, we think the opportunity is incredible because, by and large, local businesses cannot use existing social platforms to reach their customers. If you're a dentist, if you're an architect, if you're a contractor, or a plumber, a babysitter, etc, Facebook is not really that useful to you, because you're not trying to get scale of leads, and you really need to target those kind of straight, geographic service areas."

The same goes for other online advertising networks as well. Like Facebook, the scale is too big on Twitter. With Google, "you have to wait for people to have intent," and then once that happens the competition will be huge. 

"So, if you go back to some of the more traditional ways that local businesses would get themselves noticed, it was the yellow pages. It was local newspapers, local radio, local television. Most of those, if not all of them, have declined over time because people headed on to the Internet as a way to get information," said Tolia.

"If you think about it. we're still very early in our usage of Internet technology to get information on local. It's sort of ironic because, in many ways, the local information's the most valuable."

Nextdoor can "occupy a place, we believe, that allows local businesses to connect with local communities, in a way that makes sense for them, that they don't really have with the Facebook's of the world."

Of course, there are other networks, like Handy and Taskrabbit, which are going after local businesses. Francisco asked Tolia what Nextdoor's value proposition is against those companies, as opposed to the big social networks that he had mentioned.

"At the end of the day, Nextdoor is actually really simple. It's place you go where to go what your neighbors think is important. And it's that simple. So if you're looking for a neighbor recommendation on a handyman, a plumber, a doctor, a restaurant, etc, Nextdoor is the place you want to go," he said.

"if you believe the best place to get restaurant reviews is a place like Yelp, then by all means you should go to Yelp because we can't provide that same experience. The experience we can provide, however, is a private place, where you can ask your neighbors to recommend a service provider, or a service in general, that you would find valuable. That, to us, is a very dear value proposition."

He even compared Nextdoor to Amazon, which he said "really pioneered the notion of user-generated content around reviews," with the big difference being that you don't actually know the people who are writing the reviews on the site.

"The sole value proposition behind Nextdoor, and we think it's immensely powerful, is that you know all the content is created by your actual neighbors. And we feel that's different."

Thanks to our amazing top-tier Splash Spring 2016 sponsors: KPMGJavelin Venture PartnersSAP Startup Focus ProgramBread and ButterKapor Center for Social ImpactLyftAvison YoungTubemogulWendel Rosen and

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Nextdoor ( is a private social network for the neighborhood. Using Nextdoor’s free online platform, neighbors create private neighborhood websites where members can ask questions, get to know one another and exchange local advice and recommendations. Nextdoor is specifically designed to provide a trusted environment for neighbor-to-neighbor communication. Hundreds of neighborhoods are already using Nextdoor to build happier, safer places to call home.

Based in San Francisco, California, Nextdoor was founded in 2010 by Internet veterans who have spent their careers creating thriving online communities.