Congratulations to the entire Nextdoor team on their public listing debut!

Today’s milestone represents recognition of the growing value hyper-local networks play in creating a stronger global community — particularly during rapidly-changing, uncertain moments in history.

Nextdoor’s public market debut marks a new chapter in a long, dedicated effort to build real-world connections with those nearby – the neighbors, organizations, and businesses who live life side by side.

While other social platforms have “moved fast”, Nextdoor has taken its time. The result is a company that is built to last, says Greylock general partner David Sze.

“Neighborhood networks have a certain level of challenge [with fast growth], but they tend to be much stronger when the connections are made,” says Sze, who has invested multiple rounds in Nextdoor since 2012 and currently sits on the company’s board. “And [these networks] tend to have stronger relevance day in and day out when the connections are made, because our lives are so fundamentally local.”

Sze knew Nextdoor co-founders Nirav Tolia, Sarah Leary, and Prakash Janakiraman before the company was formed in 2008. While he did not invest in their original concept called Fanbase, Sze was among the first investors after the company’s pivot in 2011 into what it is today. Greylock first invested in Nextdoor in March 2012, led a $21.6 million investment round in October 2012, and has been an active partner to the company since.

Now led by CEO Sarah Friar, who joined in 2018, Nextdoor has grown considerably in recent years. As Friar discussed during her time as a guest on Greylock’s Iconversations series, the platform took on an even greater role during the pandemic. Throughout this time, people have turned to Nextdoor to offset isolation, stay informed on oft-changing public health and safety measures, and to offer help (and get help) for local businesses, organizations, and each other.

Sze joined the Greymatter podcast to share his experience working with Nextdoor over the years; how its unique business model and growth strategy has led to durability; and what he envisions for the future of the hyper-local, global neighborhood network.

You can listen to the podcast here:

Episode Transcript

Heather Mack:
David, thank you so much for being with me today.

David Sze:
Oh, thank you for having me.

So today we’re talking about Nextdoor, which has officially gone public through a SPAC and is now trading on the New York Stock Exchange with the ticker symbol $KIND. And you’ve been involved with the company since 2012 when Greylock led their $21.6 million funding round, and you’ve continued to invest since then.

Let’s start with how you first met the team, when you first met the Nextdoor founders. Describe your first initial impressions.

I knew the founders actually all from very different backgrounds in my experiences. One, Sarah Leary, actually was an associate at Greylock when I first joined. And so we overlapped and became friends there. And, since I joined to help build out the consumer side and she went to Epinions, she was very much moving into the consumer side of the world. And so we stayed friends for a long period of time.

Nirav, who founded Epinions, I met through Sarah, but also had met through his time at Yahoo, when he was involved with Yahoo. And then the third founder Prakash actually, I worked with him when I was at Excite@Home. He was one of the engineers there and was one of my favorite engineers to work with, a young, up-and-coming, brilliant, and can-do kind of guy.

And so when they came to me about investing in them, in their first form, they were doing a network that was really about, How do we become sort of ESPN for amateur sports? It was called Fanbase.

You know, I’ve looked at a number of things that had tried to do aggregating up that portion of the market. And it’s just very distributed. It’s very hard to get people to aggregate up. It’s very hard to get people to pay or to be paid as an advertisement. And so I thought it was going to be a long haul – at least from my experience – and a difficult business to build into.

And I love all three of the guys. It was one of those classic kind of dilemmas of, “Do you invest behind the people, in an idea that you aren’t so sure about?” Or do you say, “You know what, I’m going to wait.” In this case, it was just a journey that I was not as I signed up to as they were, and so ended up passing, but staying in touch with the company.

And when they pivoted, they came back and said, “Hey, you know, now we’re doing something different. Would you like to look at this?” And that was Nextdoor.

It’s interesting, because Greylock has famously invested in some of the most durable social networks of our generation – probably the most [durable] – including previous portfolio companies like Facebook, Instagram, LinkedIn,, which is now TikTok, which is larger than life, Discord. And you led many of those investments and have been actively involved in all of them.

Nextdoor is really different, but it’s still managed to be a durable network.

And so you didn’t invest when the company was founded in 2008, but you were one of the first, to invest after their pivot to what Nextdoor is today. What had they done with the pivot that changed your mind?

Well, so the original investors rolled over, and then into the new company when it pivoted, and then we joined in soon thereafter.

The things they had done that I thought were really interesting was they had found a new space in the social networking fabric that I actually did not believe that I had seen before.

And so, as you can imagine, having been involved with Facebook and LinkedIn and any other number of the social networks, I got to see every social network come across my desk. And this was the first one where I sort of stood up and said, “This is interesting. This is a part of our social fabric that has not been built upon. And the value has not been created for us connecting as neighbors.”

There also is a meme of the internet: really creating separation of people at that time, the idea that people would stay in their homes and be on their computers on the internet and they’d lose external connection.

So I really liked the theme of Nextdoor of bringing together neighbors using the new technologies, but really about connecting with your neighbors and really engaging sort of this online, offline way. That was kind of special.

And then the last piece: I think that we all live our lives locally, that’s the bottom line. And there’s this connection to each other because of that. And then there’s this connection to local businesses and small businesses and the businesses around us. And that’s a really important untapped market as well.

Those all sound like really solid reasons, but I’m sure you got some pushback from some of your co-investors. What was that like?

Yeah, look, I think that every social network has its advantages and its challenges.

I think one of the things that really appealed to me about Nextdoor was at the same time, there was a team that had come out of Twitter that had started something called And they took a very much of a kind of classic Twitter, Facebook approach, which is, “Sign up, we’ll suck in your address book. And then we’ll sort of spam out all your users and we’ll try to build hyper growth that way.”

And initially they did get a bunch of growth, but it was very short lasting.

The things that I think Nextdoor had really done well was they had said, “We need to figure this out. We need to figure out the local model. It’s going to be very different than, say, a Twitter model and a Facebook model. It’s going to be about people that are nearby you that are connected by geography, not necessarily by having gone to high school together or having done other things at work together. “

And so figuring out how to knit that community together, how to bootstrap that community was non-trivial.

And instead of doing the classic, “Let’s go big and suck out address books and spam everyone,” they went very small, they went to special, certain localities and they really tested it out in a hyper-focused, hyper-local kind of way to really figure out how to unlock bringing neighbors together.

That was controversial. I mean, it was very not the way people had done social networks. And so some of the pushback was “Look, is this going to scale?”

“I think neighborhood networks have a certain level of challenge of hyper-growth, but they tend to be much stronger when the connections are made. And they tend to have complete stronger relevance day in and day out when the connections are made, because our lives are so fundamentally local.”

And so I really believed that despite the pushback on it maybe not having the hyper-growth characteristics that some other social networks would allow, I did believe that it could grow and that it would be a solid grower. And that when you had those connections, they’d be very rich and they’d be very powerful, particularly when you match them up against the huge amount of revenue and dollars that are spent in local commerce and small businesses.

And so that seemed like a magic combination, probably a lot more like LinkedIn, in the sense that, Facebook or Twitter, Twitter had hyper-growth. LinkedIn had sort of measured growth because it was really focused on being a business network. So it wasn’t doing things that would violate what you would want in a business network that might have caused it to grow. In an analogous fashion, Nextdoor resisted doing things that could have made it grow faster, but probably would’ve had it end up in a worse place and not survive and thrive like it has.

A few months back, we were really lucky to have Sarah Friar who is now the CEO of the company on for our “Iconversations.” And she described a lot of those kinds of difficult decisions they had to make that maybe didn’t seem logical to growth, but made sense for the long-term strategy.

She joined in 2018 from Square. Describe when you first met her and what struck you about her as a leader and executive.

So I was lucky enough to have met Sarah a number of years before, and she’s someone that a number of us at Greylock have known and really respect. Sarah is just incredibly smart. She’s incredibly thoughtful. She communicates and engages in an incredibly compelling way. And she was someone that we’d been looking for ways to get involved with. We’d been looking to put her on board, looking for her to find an opportunity where might be a good fit as a CEO.

And so, when we started to search for Nextdoor, she was top of my list as someone in our network contact, because I’d always look forward to trying to find a way to work with her. And her background is really very, very unique.

I mean, I already was a huge fan having interacted with her while she was at Salesforce and then at Square, even outside of the context of Nextdoor. But when you think about her back on in the context of Nextdoor, it was even more powerful.

Her strengths stand alone – her success at Salesforce or success at Square speaks for itself. But in the context specifically of Nextdoor, not only were all those things true, but there also is the fact that she really came from a small town in Northern Ireland. She came from Belfast, she’d seen The Troubles, she’d had two parents that were small business owners. And so she really understood the challenges as well as the opportunities, both in neighborhood and community, and also in terms of the power of tapping into small local business owners and helping serve their needs as well.

What smart choices has the company made along the way that have put them in the position that they are today?

Yeah, the biggest choice they made was not to run after hypergrowth. The pressure is always on from investors, from employees, from everyone to emotionally feel like, “Oh, we’ve got this hyper-growth and it’s all just like dragging us forward, and there is a certain euphoria that goes with that.

But they were very structured about deciding that they needed to have quality growth and that the neighborhood connection needs to be a quality connection – not a hyper connection – because if you think about it, pulling in your address book, we can quickly probably find, friends that you grew up with, friends who went to high school with you, college friends. But we would probably only find a handful of your actual neighbors in there. And so this is about bringing people together that live in proximity and share commonness because of that, not because they already knew each other through some connection.

And so taking that and understanding the importance of how you make that connection, the understanding of the importance of privacy and control of privacy – because these are people that you know by geography, but you don’t know personally yet, in some cases. How important is it, if you’re going to expose yourself into that community of your neighbors, that you have control over how that’s being seen and where that goes.

So there was a very special type of network that needed to be built for Nextdoor, and it required a lot of discipline not to get sort of drawn into the siren song of a lot of the things that other networks were doing.

We now see that paying off, but there were definitely years where that was challenging and where that was unpopular as a choice. But I think in the long run, that’s created much more richness and density. That’s created much more opportunity, and going forward, the power of that community unlocking, their power for small businesses and all the dollars that are in small businesses, I think, is a massive opportunity that they’re barely scratching the surface of.

One of the magic things that people didn’t understand about Facebook in the early days was right after you graduate from college, you go into a city that you don’t know anyone in. So what are you going to do? You’re going to bring your connections from your high school Facebook connections, your college Facebook connections. And you’re going to find the ones that are in your local new city.

I think the same thing is true for Nextdoor. Yes, people may change. But when they come to the new place, they need to get connected into that neighborhood. They need to find community. And so, there’s just so many wonderful and heartwarming stories about people that move into a neighborhood, don’t know anyone, someone could be elderly.

And so they aren’t that active outside or engaged socially, and they can reach out to Nextdoor and people will throw a backyard party for them or we’ll have a weekly dinner with them. And there’s just this great connection that happens.

And so, whether someone’s moving into the neighborhood or whether they’ve been there 30 years or their whole lives. Surfacing up the richness of connection between that neighborhood, surfacing up the richness of all, the great and wonderful small businesses and restaurants and stores and what the great things to do in the area are, there’s just a power that will always exist. Even if you move from one place to another. And, then I think that’s something that doesn’t go away and it’s very different from a lot of the other networks.

2020 was obviously a really interesting year for the company. Many people became much more active in their local communities on Nextdoor, during shelter in place, and the neighborhood connectivity became essential also for businesses.

It was also an interesting time for Nextdoor to make a lot of decisions with some of the fallout of the events of 2020. And they did some things that might have seemed counterintuitive, like putting in product changes that introduce friction that actually make people slow down and moderate what they’re going to say – anything that would have to do with any racist language or hate speech. Especially during all the social upheaval that we had last summer, what do you think about that strategy?

I think that the complexity and the speed of change that happened over that last year took a lot of people by surprise. And I think for Nextdoor, there were challenges that appeared inside our network that we hadn’t expected. The great news is – and the thing that gives me so much confidence – is just how fast the organization responded; how quickly they reacted and the way they reacted.

And so in the case of Black Lives Matter, we instituted a whole bunch of actions to, as you said, slow people down, make them think about what they were saying. If we were picking up that they were potentially about to post something that might be racially loaded or, involve racial profiling. We quickly put together a – they already had a board – but an augmented advisory board of experts on things like racial profiling, and instituted a whole bunch of changes in the product in order to help combat some of those challenges.

And again, it’s one of the things that is both a blessing and a curse, right? The blessing is that we’ve grown big enough; that we were covering 98% of the neighborhoods in this country. The curse was that [covering] 98% of the neighbors of the country meant we had all the diversity and all the complexity and all the surfacing of challenges that happened in that very powerful summer. But I think that’s part of our goal. Like if we want to be a great place for neighbors and neighborhoods, we have to go and figure out how to solve these problems. And we won’t always get it right immediately. Because we’ll get surprised by changes like, Who could predict the pandemic? Who could predict the social upheaval (somewhat related) to that?

But it’s more, to me, about, We’ve earned the right to be there and we have the leadership team that’s reacting and making the product in a way that really helps build a great community.

I think for example, we hope we’re a place where those conversations can happen in a civil manner. You know, elections are another example. We have obviously had some very contentious elections, both at the local, state, and federal level. We made a conscious decision not to take advertising from candidates, political advertising, and we’ve made a conscious decision during that cycle, not to encourage or allow huge conflict or debate around those topics. I think that’s unfortunate, but I think it’s the right decision for right now because I don’t think we were ready for that. And I don’t think it would’ve been a positive influence in the system if we had allowed it.

But I think in the future, I think our vision is that we should be a place where those kinds of dialogues can happen. The local level, there can be such richness of dialogue and decision-making.

One of the things that’s happened as we know over the last couple decades is – certainly at the hyperlocal level – that the newspaper news and information sources have just gotten eviscerated. And so, how do [react] when you get that ballot? Yeah, sure, you know the presidential candidates, you probably know some of your Congresspeople, and you probably know, at the top, the mayor. Aut after that, down the school board, down the education board down, all the different areas, people have no information about these candidates. And in truth in our daily lives, those people affect us in major ways too, at the local level.

And so I think in future, I just view that we can be part of that discussion and we can help encourage that discussion and we can help, while there will be disagreement, have it be civil and be part of a neighbor discussion that gets us to better answers and brings us together as a civil union.

Mm-hmm (affirmative).
The company’s grown tremendously. And I know you’ve known them for a long time, but what are some of the key features that have always been there – the core attributes of the company, core company values that you see today?

They’re really focused on the neighbor. They’re really focused on the small business and what are the jobs to be done? What is this concept of jobs to be done? What are the jobs to be done for a neighbor in their neighborhood? What do they want to experience? How do they want to interact? What do they want to do? What are the jobs to be done for a small business? What are their needs? How can we connect them with customers? How can we make them more successful and thrive? How can we make their presence more known?

There’s just the same fundamental values about staying close to the neighbors, staying close to the small businesses, treating them with respect, giving them a sense of privacy and control, so that they feel safe in their neighborhoods, the virtual neighborhood that’s Nextdoor, just the way they should still feel safe in their physical neighborhoods.

And then I think, encouraging and engaging the different constituencies in how to make their neighborhoods better, how to make it better for their lives, how to help each other, how to support each other. That’s the things that I think have always been the core tenants.
This idea of creating community and civil at the local level is just incredibly inspiring. And I think that’s always been the case and will continue to always be the case at a fundamental part of the company.

Very cool. Why is now the right time for the company to go public?

You talked about the challenges of the last few years. They also created great opportunities for the company. The company grew, the world became incredibly local. Our worlds all shrunk down during the pandemic to where information was happening at a local level, where our activities were at a local level where, what was safe or not safe to do was really a function of what you were doing at a local level.

And so we saw great growth and an explosive jump in usage and an understanding of why Nextdoor existed and what service it provided.

Same thing for small businesses. Small businesses were struggling, they needed support. And you had all kinds of support, whether it was Nextdoor, providing a way for encouraging locals to take out from a local restaurant or whether it was locals finding out that a restaurant was really struggling and actually just giving straight up donations to that restaurant to keep them in business and showing the love and saying “ This is my favorite place, and I want it to survive,” and rallying the other neighbors in the neighborhood to help support their fellow neighbors. Those are inspiring things.

And I think it was really a step function in the understanding of the business. That’s continued on, when things have opened up or when they’ve closed down, we’ve still continued to see that growth. Our international presence has exploded.

And so I think it’s a wonderful time for us to then sort of tap the public markets – not only tap the financial wherewithal to continue that growth – but also to have the presence at scale, because it really was sort of, a real step function opportunity. And we’re just growing from there. And I think we want to take advantage of that. There’s just so much ahead of us in terms of what we can do for our local communities, whether that be the neighbors or whether that be the small businesses and beyond.

Great. Awesome.

Well, thank you so much for joining us today on Greymatter, David. I really appreciate your time.

Thanks for having me. It was great to chat.


David Sze

Advisory Partner

David invests in consumer media, gaming and social platforms that have the potential to connect millions of people.

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