This billion-dollar startup helps neighbors and local businesses stay connected and help each other during the COVID-19 lockdown

This billion-dollar startup helps neighbors and local businesses stay connected and help each other during the COVID-19 lockdown
  • During the COVID-19 pandemic, social distancing requirements can make neighbors feel distant despite their living nearby.
  • The networking service Nextdoor, founded in 2011, offers a place to stay connected with your neighbors, whether to ask for recommendations for a plumber for to offer shopping assistance to an elderly resident.
  • The platform's cofounder Prakash Janakiraman says that users have skyrocketed during the pandemic, "Usage is up 80% in most neighborhoods."
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In times of crises, our network is our first port of call: our family, our friends, our colleagues.

Increasingly, as a society, knocking on our neighbor's door has become a last resort.

In Bowling Alone — written in 1995 but what may prove to be seminal theory in the post COVID-19 world — the political scientist Robert Putnam describes how the chaos of modern life: longer working hours, staring into screens, and driving everywhere has made us residents of, rather than active participants in, our communities.

He talks about the damaging decline of "social capital" — deeply rooted civic relationships, rather than pages full of so-called friends we only interact with online — in modern American life.

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Nextdoor's front-to-back-end approach to keep the peace between neighbors

Nextdoor's front-to-back-end approach to keep the peace between neighbors
The network sends out 'kindness reminders.' Shutterstock

"We have invested heavily in artificial intelligence. A kindness reminder pops up when it detects text that has been flagged as inappropriate in the past; this makes people step back and think again before posting. Our content teams are also constantly monitoring activity across the platform," he said.

While being neighborly might be at the center of Nextdoor's mission, as its user base grows, there's opportunity to strengthen its relationship with businesses and to cash in on big advertising dollars.

At the end of 2019, it launched Local Deals, where businesses could target direct marketing only to people living near their premises. Door-to-door mailing is time- and labor-intensive for a small business, and many inboxes are already packed with promotional mail.

The idea is that the members on Nextdoor have already signed up to be a part of the local conversation and are more likely to want to support the shops and restaurants down the street.

As well as teaming with local businesses, contracts with big corporations are very much part of the growth plan. In April, at the height of the global lockdown, it launched 'Neighbors Helping Neighbors' with Walmart — a service that connects elderly or less-able members with other members willing to get groceries for them. "This has obviously been a critical service during the COVID-19 lockdown but we expect it will continue and grow," said Prakash.

Having raised $170 million in its last funding round, Nextdoor is comfortably in unicorn territory with a current valuation of $2.17 billion. It was well capitalized to strengthen communities across the world before COVID-19.

In fact, as citizens get ready to head out into the world beyond our zip code and reflect on the lockdown period, we may ask ourselves why we dodged our neighbors for so long.

In the middle of a pandemic, people are in survival mode

In the middle of a pandemic, people are in survival mode
Volunteers help load cars with food at a San Antonio Food Bank drive-through during the coronavirus pandemic on April 7, 2020. Eric Gay/AP Photo

We need to know that we can still function day to day, individually, and as a household if we have dependents. We also need a bit of reassurance when so much is out of our control.

Nextdoor is "founded on trust and utility. We have a friction-full verification process, so we are sure every resident is who they say they are and lives at the address given," said Prakash. "This makes it a safe environment for people to reach out for and offer help."

There has been a 262% increase in conversations around 'help' on the platform, and in response, Nextdoor added a 'Help Map' feature.

This allows users to mark their location and list what errands they can run or support they can give. This is in addition to Nextdoor Groups, which are formed around a mix of needs and interests, from parent groups to book clubs.

Prakash is proud that local government, police, and fire departments trust the platform as a space to get information out to residents.

To ensure visibility, the company has put public agency information at the top of the feed during the lockdown period. "We have seen a tripling in the number of public agencies posting in recent weeks but we expect them to continue to engage after this is all over," he said.

Although a private social network, Nextdoor is very much a public chat room where agencies, businesses and neighbors share information. This will always carry a certain level of risk; Facebook and Twitter learned the importance of content moderation the hard way.


Nextdoor wants to bring communities together again

Nextdoor wants to bring communities together again
The network is a place for neighbors to ask each other for advice for help. Getty Images/Andrew Burton

Founded in 2011, Nextdoor is the world's largest private network for neighbors, currently in 11 countries and 260,000 neighborhoods and with plans to expand globally.

At its core, it's a place where someone can ask for help finding a local plumber or selling a bike.

Increasingly, it's becoming a hub for local government and trade, where agencies can post area specific information and businesses in the area can advertise discounts.

Over the last few weeks of the global COVID-19 lockdown, more people are at home, confined to exercise, shopping, and interactions in their locality only, and so neighbors have become a lifeline.This should be Nextdoor's moment.

Prakash Janakiraman, the cofounder of Nextdoor, agrees. "Engagement picked up at the end of February and then skyrocketed from March. Usage is up 80% in most neighborhoods," he said.