Nextdoor's unexpected killer use case: Crime and safety

By Sarah Lacy , written on January 22, 2013

From The News Desk

Last Wednesday, Salim Shaikh was standing, absent-mindedly staring out his kitchen window, his daughter playing right behind him. It was an ordinary Wednesday in an ordinary 1950s Menlo Park neighborhood where the houses are close together and everyone knows each other by name.

Just then he saw a car fly down the street. Puzzling, since there's only two inlets into the sleepy neighborhood that doesn't usually serve as a thoroughfare to traffic. He looked up and saw his neighbor also standing at her kitchen window staring in disbelief. The two of them ran out to their lawns. 

"Did you just see that?"

They looked down the street to see huddle of cop cars -- blocking the only way out of the neighborhood.

"What the hell is going on?"

A police officer drove over to them and said in his calm, keeping-the-peace voice, "Go inside, and lock the doors. We have some suspects that may be armed trapped in your neighborhood. We'll keep you posted."

A gang of jewel thieves had been thwarted mid-robbery nearby and had escaped into this sleepy little neighborhood, not knowing there was only one way in and one way out. The Atherton police, the Menlo Park police, the Palo Alto police and the Sheriff's office were all there and they'd cut off the entrance and exit. But the suspects were somewhere hiding, where parents and nannies were home with dozens of kids. And as far as Shaikh knew, exactly two residents knew what was happening.

He went inside and posted the whole account onto the neighborhood's Nextdoor page -- which 80 percent of his neighborhood is on. He sent out an urgent alert that went via text to people's cell phones. Not only did it let people in the neighborhood know to lock their doors, but it let people at work know what was happening too. A man was able to call his nanny and tell her not to take the kids out to play. Another woman panicked that she'd left her door unlocked that morning and asked someone to check it out.

For the next four hours as the neighborhood was on total lockdown those on the inside gave updates and snapped pictures to communicate with those on the outside what was going on. The police, too, were able to feed updates onto the page.

Finally, the suspects were found, and no one was hurt. One was armed and hiding in someone's backyard shed, a nanny spotted another running through a backyard. "It gave us the security blanket we needed," Shaikh says.

While this may sound like a dramatic one-off, stories like these are increasingly becoming to Nextdoor what photos were to Facebook. That is to say, the thing that makes you join and makes sure you don't quit.

When the site launched 18 months ago, cofounder Nirav Tolia expected it to be a more locally relevant replacement to Craigslist or Angie's List or Yelp -- and for many users it's that, sure. But it's arguable how much the world really needs that. What neighborhoods do need is a way to communicate with neighbors on safety matters -- particularly urgent ones, when phone trees and Yahoo groups just don't work. So far, 20 percent of Nextdoor's activity is around this. It's increasingly a big reason for user adoption, and the answers to its eventual business model may lie around crime and safety as well.

Andy Oglesby is the leader of the Nextdoor group in my neighborhood, and has personally invited some 64 people to the group who've accepted. (More than 50 have not, so adoption is hardly a slam dunk.) Our neighborhood already had an active off-line neighborhood watch group, but there was no easy way to communicate with the group and post immediate messages. The bulk of the conversation is about crime and safety -- not surprisingly, given I live in a very urban neighborhood.

It was a big driver for Oglesby to push the neighborhood to use it. It didn't have every feature he wanted, but they needed something that would function like Facebook, without actually being Facebook. "People didn't really want to share community watch-style activities with their existing Facebook networks," he says. It's that slippery trust issue coming back to haunt the company yet again, but it's also relevance. Your broader network of friends doesn't need to know someone was jumped at 19th and Folsom. Nor does your Twitter-sphere. But to your neighbors, that's highly relevant information.

The neighborhood requirements to sign up were also key to Oglesby and other neighborhood leads. Nextdoor takes Facebook's requirement of being a real person and using your real name to a more stringent level: You can only join a neighborhood if they can confirm through public records that you live there. It's hampered the growth of the site, the same way LinkedIn hampered its own growth in the early days by requiring you know someone's email address you wanted to connect with. But without such stringency, the networks would be meaningless in a situation like the one that played out in Menlo Park last week.

The boundaries around neighborhoods also matter greatly. The company has to get these right, which isn't easy. If I toggle from Central Mission to nearby neighborhoods I go from highly relevant minutia I care about to minutia I don't care about at all.

Sometimes the emphasis on crime and safety can make reading Nextdoor downright grizzly. A bit too much for me at times; but there are plenty in the neighborhood who want to know. And given the San Francisco Chronicle doesn't cover local crime in this level of detail and local blogs like Mission Mission can be riddled with anonymous commenters, giving out information that may or may not be accurate, Nextdoor is one of the only reliable places to find out what threats are happening and safety measures are being taken.

It may not be what Nextdoor's founders had in mind when they launched the site, but they are hardly complaining. Crime and safety arguably gives them better reasons for neighborhoods to adopt the site, stay on it, and better options for monetization.

It'll still be a long slow road to get to even tens of millions of users -- paltry in today's consumer Web age. But this is one thing people aren't likely to do over Facebook and there are only so many verticals within social networking you can say that about. In a world glutted with reasons and places we should all connect, the unexpected surge in crime and safety messages has given Nextdoor it's best odds for being truly different.

To wit: The company has done close to 80 partnerships with different City Halls to allow police and fire stations to be able to post alerts and updates to individual feeds of over 300 neighborhoods. It can be as urgent as a murder or just need-to-know information like a street will be shut down for a parade route. The beauty about conversations between residents and cops and policemen is that, unlike city hall, the interests are totally aligned. It's not about stumping for office. It's about making a neighborhood safer. The founders never would have set out to start a company that does biz dev deals with local cities, but the cities have mostly come to them.

When Tolia presented some of this engagement information at last year's Sun Valley conference, Khosla Ventures' Dave Weiden seized on the crime and safety stats as well.

"You have no idea how valuable you are," Tolia says Weiden told him when he got off stage. "ADT does $3 billion in annual revenues and 85 percent of their expenses come from customer acquisition." The hardware, the monitoring? It's all off the shelf or outsourced. Weiden was suggesting that Nextdoor could use its footprint to undercut ADT by 50 percent and potentially become the most valuable security company in the US.

Tolia doesn't know yet if the site will go down that route. He's said no to a lot of monetization ideas -- like highly targeted political ads that would match up voter rolls with addresses for specific targeting. He fears forcibly introducing politics and religion into these networks would divide neighbors, which is counter to what the site is trying to do.

Another idea that merchants brought to Nextdoor was a neighborhood "card" where locals could get discounts by using local vendors. Or a partnership with restaurant reservation engines where a push notice could go out to locals if there's open capacity offering a discount.

"We get thousands of incoming inquiries of people who want to use our local distribution," Tolia says. "Nanny sites, real estate agents, local businesses, politicians. We know there's a short term opportunity here, but there's a responsibility to get it right."

His investors are putting no pressure on him to monetize. Nextdoor investor Bill Gurley of Benchmark Capital has advised Tolia not to spend an ounce of energy right now on monetization. Part of that is because generating widespread user adoption on a neighborhood-by-neighborhood level is such a challenge, but part of it is because he's convinced if they can get the Menlo Park-effect working in more places, monetization will be easy.

Benchmark has seen the challenges of building dozens of local network effects through sites like Yelp and OpenTable. But since Nextdoor's success depends on building hundreds of network effects within one city, the challenge is even greater. And OpenTable and Yelp both took greater than five years to really scale -- an eternity in consumer Internet time.

Indeed, with the Yellow Pages, local radio, and local newspapers all eroding, a Nextdoor at scale could be powerful. The question is whether it can get to scale. 97 percent of the growth is neighbors evangelizing the service to other neighbors. Nextdoor couldn't influence or control something that granular if they wanted to.

And there's something big residents want that they aren't getting right now: An iPhone app. Along with the surprise in how people use Nextdoor has given the company previously unimagined revenue ideas, it's also putting demands on where they need to do more product development.

Both Oglesby and Shaikh are stunned the company doesn't yet have a mobile app and say that's the single biggest thing that could augment their use of it. In the case of Shaikh's brush with jewel thieves, a mobile app could have allowed far easier updating and photo sharing than dealing with a kludgy mobile site. Oglesby would like it for meeting updates and alerts that aren't full-on emergencies but are time-sensitive.

Tolia gets it. "When we started the company we didn't know the immediacy of information would be so important," he says. "We thought we'd be a hyperlocal Yelp or Craigslist and a place for civic change, and those conversations aren't immediate in nature."

It's coming, he says.

[Image from Rear Window]