The Exchanges

Q mention, uh, 2010, 2011. It's still a more, let's say, innocent time in the history of the internet. So, um, some of the things that, that, you know, user-generated companies deal with now, including Nextdoor, um, were not quite as much of a problem back then. But how, for example, were you going to make sure that, um, people really lived in the neighborhoods? That they were who they were?

A So, over and over again, what we heard is, well, I need to make sure that the people on this thing are my actual neighbors, and so that led us to many innovations, including looking at a map, breaking the map down into specific homes, and then we had to verify that they lived there, and so we would do very old school things, like send them a printed postcard via US mail with a code, And you would have to enter the code to verify your address. And so in the early days, I mean, look, we weren't thinking what's going to happen when we have a hundred million users. I mean, that's a pretty expensive postcard bill, but we had a hundred users, 500 users, a thousand users. Right. But we built it with quality from the very beginning, because that's what the neighbors asked for. And we felt like we'll solve the scalability issue. Later.

AI assessment note: “send them a printed postcard via US mail with a code”

Q And people were banging the doors to come into Yahoo, right?

A 100%. And so Jerry Yang, The founder of Yahoo is at my going away party. It was so nice of him to stop by, and he came up to me, and he said, you know, I'm wondering, why are you leaving? Because, you know, you got a great opportunity here, and you're doing good work, and we're doing so many exciting things, and the company's on an amazing track, and, and I said, Jerry, when I walk into the office every day, and I look around, and I think about what you built, I would love to do the same thing. Like, I would love to build A Yahoo myself. And he was dead quiet. And he kind of looked at me, and Jerry's got a bit of a sarcastic sense of humor. He's a great guy, but he will definitely shoot you straight. And he looked at me right in the eyes, and he said, you're a lot less intelligent than I thought you were. Do you have any idea how hard it is to build something like Yahoo? Well, you're about to find out.

AI assessment note: “100%. And so Jerry Yang, The founder of Yahoo is at my going away”

Q So basically, you start to test this out, and, and what gives you confidence that this was going to work? What kind of data did you gather or, or feedback did you get where you thought, okay, let's do this, let's pursue this?

A Well, certainly we had a strong intuition having built products in the past and certainly having failed at building products that this felt different, which is to say, when you do user testing, people are excited. I mean, there was a time when we were changing servers and so we went down for a couple of hours and we got tons of incoming messages from our users saying, what happened? What happened to this thing that I'm using? It's important to me. Did you take it down? Is there a site outage, right? And it wasn't even called anything at that time. It was just called a neighbor site. It wasn't called next door. It wasn't professional, right? But that's a very strong sign. So there was strong user feedback. And then there was another person that came on. We were very lucky to have him on the board as well. Rich Barton, the creator of Expedia, and then more recently Zillow. And I remember pitching him many of the ideas we had and then showing him The idea that became Nextdoor, and he said, that's the right one. And then Sarah and I said to him, okay, well, are you so passionate about this that you would join our board? He said, yeah, I'm passionate about this one. And so we had kind of the investor viewpoint, we had the user viewpoint, and then we had our own intuition.

AI assessment note: “we had kind of the investor viewpoint, we had the user viewpoint”

Q imagine that in 2018, you're in your sort of mid to late forties, and not old by any stretch of the imagination, I'm sure I'm, I'm in my fifties, But, I mean, did you feel like at a crossroads, like, what am I gonna do next? Or maybe I just kind of go in a completely different direction with my life? I mean, what was going on in your mind?

A I have been through enough difficult transitions that I was a hundred percent focused on leaving in the best possible way. Yes, of course, from an ego standpoint, it hurt like crazy. I wanted to be the person who could take it from day one to, you know, day infinity. I wanted to be the person to take the company public, but what was driving me was wanting next door to be successful because it felt like the best thing that I could do professionally ever. So I didn't think, oh, the next thing I do is going to be bigger than next door, right? I thought to myself, I love next door. And so, when it was clear that I wasn't going to be the person to take it to the next stage, yeah, that was a blow, but honestly, at that point, I knew it was the right thing, and I was going to make it the right thing.

AI assessment note: “I was a hundred percent focused on leaving in the best possible way.”

Q What did you do? I mean, aside from get some emergency funding, once the, you know, the crisis kind of begins to subside, what were you doing to try and salvage it?

A Well, you know, around that time, I won another lottery, which is one of my investors, Benchmark Capital, general partner, Bill Gurley, who I've worked with for many years, decades, who I think the world of, and he gave me the opportunity to be coached by Someone who'd been the CEO of a real public company into it. There was a guy named Bill Campbell and Bill C coach as we call him became my mentor. And it wasn't just for me. It was for our entire management team because, you know, I was not the reason that opinions ultimately survived. It was all of those people. And so slowly, but surely we grinded our way to being break even, To being profitable. We merged with another private company. We renamed the entire thing shopping.com. And believe it or not, shopping.com ultimately went public. Had a bit of a mixed track record, but ultimately was bought by eBay for, I think, about 626 hundred thirty million. So not a terrible outcome. But when we think about our original dreams, we wanted to build something like Yahoo, which at the time was a hundred billion dollar company. But when we think about almost dying, It's very improbable that we ended where we did.

AI assessment note: “we grinded our way to being break even, To being profitable. We merged”

Q You, um, return in spring of twenty-twenty-four, and you've now been there a little over a year. Tell me about the circumstances that, that brought you back. First of all, what was going on, and then why did you agree to do it?

A So, The company had, had fallen into a place where there was a lot of adversity being a small cap stock. There was a lot of adversity dealing with the bump of COVID that had then returned to normal. There was a lot of adversity in managing a remote organization. We definitely felt as a board, this includes Sarah, that the company needed to go in a new direction. And in particular, we felt that that direction Needed to be deeply steeped in a new product, and we could have found someone external, but that would have been very risky, or you can bring the founder back, and no, I never thought about it. I wouldn't have joined 11 boards. I wouldn't have put my kids in school here in Dallas. I wouldn't have done any of those things, but when the opportunity arose, I love next door. And I went to talk to my wife about it, and she said, I do feel that if you don't take this opportunity, and next door fails, at some point in the future, you can ask yourself, why didn't I do whatever I could to help it succeed? And so from there, with her blessing, I jumped in. And so I ultimately brought back my co-founder, Sarah Leary, who we've talked about a little bit, and was blessed that She came back to join me, and so we're both re-founding or re-founders of the company, and Sarah used to say, let's go back and finish the job.

AI assessment note: “when the opportunity arose, I love next door... with her blessing, I jumped in.”

Q How were you thinking about making sure that the content was appropriate? You know, even if it's just local people, neighbors with their real names, I mean, they can still post a bunch of kooky stuff, right? I mean, they can still go on rants. They can, I mean, all kinds of things could happen. Was there any way for you to prevent that?

A I think about it less as prevention, and I think about it more as you build the system and the reference of the system with high quality content. Because if you see high quality content, you just assume this is a place for high quality content. It's a little bit like if you go outside and you see trash on the ground, You might actually throw something on the ground too. If you go outside and it's perfectly manicured, you're going to feel really bad about throwing a little trash there, right? So that was a very important decision. The other thing we did is every single neighborhood had a founding member and had a series of leads, and it was their responsibility to ensure that the conversation was very relevant and of the neighborhood. There are neighborhoods that are a little more fractious. And they discuss things in a little bit more of a fractious way. And there are neighborhoods that are much more homogenous, where politeness is the cultural custom of the neighborhood. We have 335,000 distinct neighborhoods that use Nextdoor, and we needed to build a system that would be flexible enough that all of those neighborhoods could feel authentic to themselves.

AI assessment note: “The other thing we did is every single neighborhood had a founding member and had a series of leads”

Q gotta be a low point. I mean, there's a lawsuit. You're out of a job as CEO. I'm sorry to, to bring you back to this place. But I mean, I imagine that there, at moments in your head, you might have thought, I'm done. I'm finished. I'm not, I don't have, what am I gonna do with the rest of my career? I don't know what's gonna happen next.

A Without a doubt, all those things go through your mind, and you know, I was definitely in a situation where you get so cooked as a founder, like being in the tunnel. You haven't had the opportunity to take a step back and say, hey, what does all this stuff mean? What have I learned? Like, am I qualified to be a CEO? Am I a good founder? Is that the thing I should be doing? Should I go work for someone else, right? And so, leaving the While it was incredibly painful, also gave me the opportunity to do a lot of self-reflection. One of the hardest things about being a founder, in my opinion, is you never have the space To really absorb the greater lessons. You're just in motion. And so to stop for a second and have a little bit of reflection, it was actually quite valuable for me.

AI assessment note: “Without a doubt, all those things go through your mind”

Q So in that first kind of year of building it out, Before you launched, how did you sort of determine what constituted a neighborhood? I mean, a neighborhood in, you know, the middle of Nebraska is very different. I mean, houses can be two, three miles apart compared with a neighborhood in, you know, in San Francisco.

A Every single neighborhood boundary. Was something that was drawn in consultation with someone who lived there. We asked our members, and then we built a tool. I mean, in the early days, we, Sarah, my co-founder and other co-founders, maybe Prakash as well, would be looking at maps. Taking a Sharpie and drawing a polygon around areas to ensure that we were getting the user feedback and then baking that into the code. It kind of bears mentioning that this idea that it's okay to do unscalable things initially, and so many young entrepreneurs, particularly technology ones, are always thinking, well, I can't do that. That's manual. That'll never scale. Worry about solving the scalability problem after you have product market fit. Doing manual things to get product market fit is perfectly fine. And in fact, I would say the number one learning from user generated content and online communities, the number one learning, don't be afraid to do things manually at the beginning, because it's a people business building community. And you can't do that at scale. You have to do that one conversation at a time. So most of these challenges, what do you want to talk about? What's the shape of your neighborhood? What should the interface look like? Those are all things that we would take to the neighbors.

AI assessment note: “Every single neighborhood boundary. Was something that was drawn in consultation with someone who lived there.”

Q right? And that's, The best way to find people to, to do work around your house or contracts, whatever. What babysitter do you use, right? And so I understand the impulse that you didn't want it to be like a marketplace. You don't want it to be like just people constantly selling, but at the same time, if done right, it can actually be really valuable and useful for people.

A I think you're exactly right. I mean, the question of recommendations, right? That neighbors make for how you would spend your money and how you would spend your time. That's been 30%, roughly, of all the content on Nextdoor since inception. And we just launched the new Nextdoor, which, for the first time, brought in third-party content. All of our content, historically, has been from neighbors. But now with the new Nextdoor, we have 3500 local publishers that are publishing 50,000 articles a week, and they're real journalists. And that's really important. In the same way, What we haven't built and what we should have built, which is Angie's List and Yelp and Thumbtack and many others have done exceptionally well, we haven't built the button after the conversation happens that says, okay, book this for me.

AI assessment note: “That's been 30%, roughly, of all the content on Nextdoor since inception.”

Q Um, all right, so around this time, this, this happens in 2004, you resigned. You stepped down, but in the press release that the company sent out, they said, you know, we became aware of, of that Mr. Tolia had misrepresented his background. Tell me about that. I mean, you were, uh, in your early thirties, and, and what, what happened? What did you-

A Well, well, look, I think there are always Things that we do that we wish we didn't, right? There are times when we have to pay for those mistakes, and sometimes we don't, right? I mean, this was a case of me having to pay for it. When you are a company that wants to go public, you want to be as unencumbered by controversy as possible, right? And the best thing for me to do at that point was to step away. Now, did I have a choice? No, not really. I mean, they, they kind of Asked me nicely to do it. I understood that it was the right thing to do. But yeah, I mean, it was devastating for me on a number of levels. One is, you know, you don't want to publicly fail. So that's one piece of it. The second piece of it is I loved my job. I loved working with those people. I love trying to solve that problem. And so when you lose that opportunity, that's the hardest thing.

AI assessment note: “there are always Things that we do that we wish we didn't”