When Nextdoor, a social networking platform for local neighborhoods, launched its advertising business in 2017, CEO and Co-Founder Nirav Tolia declared it would be a $1 billion business by 2020.
“I’m going to have to ask for all the articles where I said that to be revoked,” Tolia jokes on this week’s episode of AdExchanger Talks.
Nextdoor, which went public in 2021, doesn’t break out numbers for its advertising business, but it shared with investors earlier this month that it generated $66 million overall in Q3, a 17% YOY increase spurred by its ad offerings.
That’s a far cry from $1 billion. But Tolia is confident about the advertising opportunity.
“That was a classic example of trying to set a really high, ambitious target,” he says. “We’re not there yet, [so] what do we need to do?”
Continue delivering value to users. Do that, Tolia says, and the advertisers will follow.
“Our revenue number, which is not small … is a reflection of the value we’re creating for advertisers,” he says. “[But] it’s clear we need to build a much better product if we really want to deliver on our potential.”
Over the past year, Nextdoor has been getting ready to embark on a “complete transformation” of its product through an initiative it’s calling “NEXT.”
“What we mean by transformation is not necessarily different but better,” Tolia says. “The thing we need to transform is the experience so it delivers more value to our user base, full stop.”
For example, Nextdoor provides value to people with strong intent in the moment, like when someone needs a local plumber recommendation or to freecycle their couch or recruit their neighbors to search for a lost dog. But the usage is sporadic and driven by a specific need.
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People typically check a handful of services on a daily basis: email, SMS, WhatsApp, Instagram, maybe the front page of The New York Times or another news site.
Nextdoor’s aspiration is to become part of a user’s everyday life as the go-to source for hyperlocal traffic and weather information, for instance, or to hear about that new taqueria in the neighborhood.
Taco info “isn’t a burning need, but the burning need is that you want to be informed,” Tolia says. “You want to feel like you know what’s going on, and we need to bring you that information.”
Also in this episode: The power of location data for targeting, Nextdoor’s AI investment plan and keeping the conversation kind and civil on its platform. Plus: Tolia’s time in an a cappella group in college, as a “surfer” at Yahoo in the nineties and, more recently, as a guest shark on Shark Tank.
