Venture capitalist spends time browsing Nextdoor
The lauded Silicon Valley venture capitalist Bill Gurley who, along with his partners at Benchmark, was an early investor in companies such as Instagram, Uber, Stitch Fix and Snap Inc., spent a recent afternoon scrolling through the neighborhood social network, Nextdoor, studying the ways people use the service.
As a 51-year-old man, Gurley is not often the target demographic of the companies in which his firm invests. Snapchat is for teens. Instagram is for millennials. Stitch Fix is women's fashion. "Although they've just launched men's," he said, hunched over his laptop, "I can't use the product. I'm too unusually tall." (Gurley is 6 feet, 9 inches.)
Nextdoor, then, is one of the few products he's backed that he can use without wondering whether he might be missing something. Anyone can join and participate in Nextdoor's community-centric groups, so long as they verify their address.
Gurley is an active member in the Nextdoor neighborhood of Atherton, Calif., the Silicon Valley-area community where he lives. He's also a Nextdoor lead in Truckee, Calif., a Lake Tahoe community where he owns a vacation home. Being a lead means he had to help launch the local Nextdoor group by inviting people to join. In the town of Truckee, 576 people are on Nextdoor. Gurley invited 227 of them.
On a Monday afternoon, someone in Atherton posted to Nextdoor asking where they could buy Tim Tams, a chocolate-covered Australian cookie. Another neighbor wanted to know where to buy tomato plants. Someone was giving away baby bottles. Someone needed a nanny. In Truckee, where Nextdoor usage is more seasonal, a neighbor wanted recommendations for a compost system. Another person needed a boat fixed. And under the crime and safety category, a warning was issued for bears and coyotes.
Gurley has posted to Nextdoor asking about fishing lures. He's given away golf clubs. He's asked about bicycle repairmen.
There's a belief that venture capitalists spend their days sitting at the end of conference tables determining the fate of startups desperate for cash. It's not untrue. Good venture capitalists go a step further to provide guidance to entrepreneurs, helping them navigate big-picture problems, say figuring out when to go public.
Gurley believes that being an investor means going a step further than that. He spends days staring at websites and apps - a little less "Shark Tank," a little more scrolling, chin rubbing and note-taking when he sees people use a product in unexpected ways.
"Someone figured out they could foster pets out very successfully (on Nextdoor) - I wouldn't have thought of that," he said.
Gurley switched back to the Atherton Nextdoor group, where a post read: "German shepherd to be euthanized tomorrow if no foster can be found."
"Wow," he said. "That's a tough post."
He scrolled through the responses: "Oh, it worked out!"
"Or look at this," he said, scrolling to a post that read: "Found: Super sweet large orange tabby, friendly, purple collar."
The post had 192 replies, most of which were neighbors expressing relief that Bert the cat had been found.
"My point is, look at all this. Engagement like this," he said, "those are the best signs something is working."
He likens the evolution of Nextdoor, in which Benchmark led an $18.6 million investment in 2012, to eBay, in which Benchmark invested $6.7 million in 1997. EBay added new categories based on what people were selling and buying. Nextdoor is adding new features based on ways people are using it. It recently launched a pet directory - a page that looks like an online dating site for cats and dogs - so neighbors could easily identify and return missing or stray pets. It's also rolling out a property listing feature so people can see which homes are for sale in their neighborhood. Gurley is watching these features closely to see if people use them.
But he understands that even with his foot in two neighborhoods, he's seeing only a narrow sliver of Nextdoor. In Atherton - the third-most-expensive ZIP code in the country - residents primarily give away things they no longer need and ask for recommendations. Fifteen miles away, in a Sunnyvale neighborhood, residents are using Nextdoor to organize a political push for rent control. In Oakland, Nextdoor faced a backlash when residents used the platform to racially profile their neighbors. Nextdoor responded by making it harder for people to post crime alerts that simply describe a person as suspect, and adding descriptors that go beyond a person's skin color.
Still, things can get heated. The same Monday when Gurley's neighbor asked about Tim Tam cookies, an Oakland resident took to Nextdoor to yell: "You're (sic) CAR ALARM on 65th St. is ruining my life!!!" In neighboring Woodside, residents have lost their temper on Nextdoor over each other's use of drones. There was a heated fight in Atherton not too long ago in which neighbors were recording each other and posting the footage to Nextdoor to prove who was right or wrong. "I think it related to a drone, actually," Gurley said. "I didn't get involved, but it went away."
What won't go away, Gurley bets, is Nextdoor.
The majority of companies that get venture capital funding turn out to be duds, with success stories such as eBay and Instagram being the exception rather than the norm. Benchmark has already made clear its confidence in Nextdoor, investing in multiple funding rounds. Gurley also sits on its board of directors.
The social network is now used by more than 137,000 neighborhoods across the U.S. and has partnered with 2,200 city agencies, including police departments in Los Angeles, San Diego, Oakland, Phoenix and Denver. Around a hundred new neighborhoods are added each day.
That's a lot of neighbors getting on each other's nerves. But also a lot of pets that might be found, recommendations to be made and, for Gurley, a lot of potential for Nextdoor to be one of those rare Silicon Valley investments that actually pays off.
©2017 Los Angeles Times
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