{"id":9683,"date":"2019-10-17T07:40:27","date_gmt":"2019-10-17T11:40:27","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/nextdoor-platform-connecting-neighbors\/"},"modified":"2019-10-17T07:40:27","modified_gmt":"2019-10-17T11:40:27","slug":"nextdoor-platform-connecting-neighbors","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/nextdoor-platform-connecting-neighbors\/","title":{"rendered":"Nextdoor Platform: Connecting Neighbors"},"content":{"rendered":"

What is Nextdoor? <\/strong><\/p>\n

Founded in 2011, Nextdoor is an online platform positioned as the \u201cworld\u2019s largest social network for the neighborhood<\/em>\u201d [1].\u00a0 Specifically, its mission is to facilitate conversations that empower neighbors to create stronger and safer communities.\u00a0 Nextdoor is pursuing this objective by defining the physical boundaries of individual neighborhoods, and building an associated, private online community site for each.\u00a0Users are required to verify that they have a local address before they are allowed to join a neighborhood\u2019s Nextdoor site. \u00a0Once an online neighborhood has a critical mass of members, those members can begin creating discussion forums on a range of topics.\u00a0 For example, users commonly leverage the platform to find babysitters, locate lost pets, sell personal items and review local businesses.<\/p>\n

In eight years, Nextdoor has received over $400M in financing, giving it a valuation of more than $2B.\u00a0 From a usership perspective, the platform has grown quickly, with about 27M active monthly users and 236K neighborhoods defined [2].\u00a0Nextdoor now operates in the US, UK, France, Germany, the Netherlands, Italy, Spain, Australia, Denmark, Sweden and Canada.<\/p>\n

\"\"<\/a><\/p>\n

How does Nextdoor create value?<\/strong><\/p>\n

What sets Nextdoor apart from other leading social platforms is its hyper-localized approach.\u00a0 Importantly, the users who become members of a neighborhood site frequently know of one another already.\u00a0 Even if not, all users are required to sign up with their real names \u2013 aliases and pseudonyms are not allowed.\u00a0 Design features like this one contribute to a sense of accountability, and help build trust and community between members of each digital neighborhood [3]. \u00a0Nextdoor therein becomes a secure online space where people feel safe sharing the things they would otherwise only discuss with their neighbors in person.<\/p>\n

Nextdoor\u2019s emphasis on local community makes the platform an asset for small business owners, too.\u00a0 Businesses with a verifiable local address can join a neighborhood site and create a free page promoting their services.\u00a0 Members of the online neighborhood can then leave reviews for the business.\u00a0Arguably, positive Nextdoor reviews are more valuable to business owners than those collected on platforms like Yelp, Yahoo and Google; readers tend to give reviews more weight when they are provided by known neighbors versus unknown strangers [4].<\/p>\n

How does Nextdoor capture value?<\/strong><\/p>\n

Nextdoor was slow to monetize its platform, allowing the social network to reach a critical scale. However, the strategy has increasingly been to drive revenue by selling online advertising space of various kinds, from native display ads to email ads.\u00a0Since the Nextdoor social platform is so localized, it offers a way to achieve highly targeted and effective marketing. \u00a0Nextdoor has reportedly measured that users engage with ads designed specifically for their neighborhood more often than the industry average for display and search ads (7% engagement versus 2% engagement) [5].<\/p>\n

On the Nextdoor platform, small businesses gain inexpensive tools for promoting local sales, discounts and incentives. \u00a0Nextdoor has already partnered with hundreds of advertisers from industries like home security, retail, dining, financial services, tech, telecom and automotive [6]. \u00a0This aspect of the Nextdoor model \u2013 connecting users with dependable, skilled local service providers and helping those professionals expand their regional businesses \u2013 is a focus area for the company.\u00a0 Recently, Nextdoor announced that it has established integrations with existing platforms like Handy, HomeAdvisor and Thumbtack to increase the volume of local service providers who can advertise to each neighborhood [7].<\/p>\n

Real estate agents have proven to be particularly lucrative customers for Nextdoor, and another focus area for the company.\u00a0 75% of Nextdoor users are homeowners, and 25% of Nextdoor conversations organically relate to real estate.\u00a0 Nextdoor\u2019s online communities have therefore become an invaluable resource for real estate professionals who want to engage in the dialogue with residents and demonstrate their knowledge of the local housing market.\u00a0 To capture this value, Nextdoor allows real estate agents to purchase limited sponsorship spots for each online neighborhood [8].\u00a0 This patronage is made highly visible to users and positions the agent as the expert for the area.<\/p>\n

The road ahead\u2026<\/strong><\/p>\n

Nextdoor is expected to resume its international expansion.\u00a0 From a product perspective, Nextdoor will continue to improve its user interface, invest in personalization engines and release additional advertising formats.<\/p>\n

One major challenge for Nextdoor is the management of its community guidelines and content moderation policies.\u00a0 \u00a0Nextdoor online communities have traditionally been monitored and cleaned up by the users, but in 2015 a scandal broke regarding the pervasiveness of racially insensitive and offensive material on the platform.\u00a0 This is not a problem unique to the Nextdoor social media environment (Facebook, Twitter and Google have all made headlines for similar reasons), but a difficult one from a reputational perspective.\u00a0 Generally, Nextdoor has been praised for its proactive and swift handling of the situation \u2013 several policy and product changes are believed to have reduced racial profiling on the platform by 75% [9]. It remains to be seen if Nextdoor can continue to be so nimble in responding to customer experience issues as it grows.<\/p>\n

[1] \u00a0https:\/\/about.nextdoor.com<\/a><\/p>\n

[2] \u00a0https:\/\/www.wsj.com\/articles\/nextdoor-valued-at-over-2-billion-in-fresh-funding-round-11557833400<\/a><\/p>\n

[3] \u00a0https:\/\/digiday.com\/marketing\/nextdoor-ads-verified-homeowners\/<\/a><\/p>\n

[4] \u00a0https:\/\/about.nextdoor.com\/nextdoor-announces-local-deals-for-businesses-to-reach-local-customers\/<\/a><\/p>\n

[5] \u00a0https:\/\/fortune.com\/2017\/05\/21\/nextdoor-revenue\/<\/a><\/p>\n

[6] \u00a0https:\/\/digiday.com\/marketing\/nextdoor-ads-verified-homeowners\/<\/a><\/p>\n

[7] \u00a0https:\/\/about.nextdoor.com\/nextdoor-launches-local-partnership-network-to-better-connect-neighbors-with-local-service-professionals\/<\/a><\/p>\n

[8] \u00a0https:\/\/about.nextdoor.com\/nextdoor-announces-new-real-estate-feature-your-home\/<\/a><\/p>\n

[9] \u00a0https:\/\/hbr.org\/2018\/05\/how-nextdoor-addressed-racial-profiling-on-its-platform<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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