Why Nextdoor’s founder moved back into the company C-suite

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Transcript

Diane Brady: Leadership Next is powered by the folks at Deloitte who, like me, are exploring the changing roles of business leadership and how CEOs are navigating this change.

Welcome to Leadership Next, the podcast about the changing rules of business leadership. I’m Diane Brady. 

Nirav Tolia is co-founder and CEO of Nextdoor. This is his second stint at running that online platform where you can sell a couch, report something or someone strange in the neighborhood, and just connect with others on a range of topics. His first stint as CEO ended in 2018. He went on to be an investor, a judge on Shark Tank, and other endeavors. But earlier this year, he came back to the CEO slot with a plan to make some bold changes. Take a listen.

(Interview begins.)

Hi, everybody. I’m here with Nirav Tolia, who is the chairman, co-founder, and CEO of Nextdoor Nirav, great to see you. You’re actually back for the second time. So let’s start there. In May, you decided, you know what? I’m coming back. Why?

Nirav Tolia: Well, it’s great to be back to the company that I started, but I never really left. I just was the CEO for the first nine years, and then I was on the board for the last five and a half, and now I’m back as CEO. But, Diane, thank you for having me. I’m thrilled to be back here. I guess not really back. This is the first time. I am thrilled to be back at Nextdoor.

Brady: So tell me you’re on the board. Were you sitting there just constantly feeling like, well, that’s not a decision I would make? Or was it, there must have been some eureka moment where you thought, You know, what I really need to do is be back in that seat where I can be making the decisions?

Tolia: It was much more serendipitous. And I would say as someone who has been a founder and CEO for over 20 years, the last thing that I would do as a board member is sit and criticize the existing CEO. I didn’t like it when people did that to me. So when I transitioned from being the CEO to a board member, I wanted to be supportive and I was. It’s very lonely to be a CEO. It’s very difficult to be a CEO. And of course you can second guess everything. But unless you’re actually operating the company, unless you’re in the details, unless you have all the information at your disposal, you can’t really second guess what’s going on. And so I was sitting, watching, supporting, trying to be helpful, and we had a wonderful CEO during those four years. And Sarah (Friar, Nextdoor’s last CEO) is an amazing person and amazing executive, but we felt like we needed to get back to building product. And building product is what I’ve done my entire career. It’s what founders typically do at the beginning, and now we’re going to do it again.

Brady: So let’s tell people a little bit about Nextdoor. I think, I certainly know it. I’ve been a member and I think you’re, what, more than 330,000 communities at this point? Give us a sense of the scope. How ubiquitous are you?

Tolia: So Nextdoor is 14 years old. We started the company in the summer of 2010. It’s operating in 11 countries now as a public company. We have over 330,000 neighbourhoods across 11 countries all over the world. In the U.S., 99% of neighborhoods use Nextdoor. One of three households across the country is on Nextdoor as well. So pretty ubiquitous. We think of ourselves, or at least we aspire to be, the essential neighborhood network. We’re a social media platform, but we are social media that’s focused on local, which is different than Facebook, different than Instagram, different than X, or different than TikTok. We are about building local community and we use an online mechanism to do that. But the magic of Nextdoor happens when you use Nextdoor to get into the real world, meet with your neighbors and create a better neighborhood for everyone.

Brady: That’s true. Like some of the questions are things like, Who’s that guy that keeps hanging out by the car on Third Street? That’s some of the questions…

Tolia: It’s more utility-centric. It’s finding a service provider. It’s asking for help finding a lost dog. It’s coming together in a time of crisis, whether that’s weather or crime-centric. It’s the kinds of things that you do when you get together with the people that you live around. And special things happen. When neighbors start talking, good things happen.

Brady: So let’s go to what’s next and get back to that founders mentality we’re talking about. The first thing I always think of with a founder or co-founder in this case is vision. So what is your vision for the next chapter?

Tolia: Well, let me go back. So the vision for Nextdoor was that technology could play a powerful role in bringing people together locally. And the company was founded on this premise that we’ve started to lose touch with our local communities. There’s this wonderful book written by Robert Putnam called Bowling Alone, which is about the decline of community in America. So we used to bowl together. We used to be in bowling leagues. That was one way that we would come together in our local communities. Now we bowl alone…

Brady: I guess everyone is a winner when you bowl alone. There’s that.

Tolia: Well, they may win at bowling, but they lose at that social cohesion that creates so many great outcomes for society, whether it’s stronger family units, more support in the neighborhood, less loneliness. These are the kinds of things that happen in strong local neighborhoods. So that was the original vision for the company in the summer of 2010. And the truth is, we haven’t executed fully on that vision. We may never execute fully on the vision. So I ran the company for the first nine years. I was gone for five-and-a-half years, and when I came back I realized, along with everyone else around Nextdoor, the potential for Nextdoor has always been amazing. When you tell someone about Nextdoor the first time their eyes light up. They think to themselves, I do want to be connected to my local community. I do want to feel closer to my neighborhood. I can use the utility of knowing and relying on my neighbors. But then you use the product and you realize it’s good, but it’s not great. And so the biggest part of the vision now is to say we have this amazing potential. And it’s the idea behind Nextdoor, which is can you use an app on a smartphone to feel closer to where you live? The vision is to make that app better so that it’s a magical experience. When you open it, you do actually feel closer to your neighbors.

Brady: I know you’ve got AI-enabled sales now, I was reading about that, but let me start with the fact that this is an online experience which by its very nature would seem to reinforce the loneliness you’re talking about. Do you try to facilitate more of an online to offline community gathering? I mean, how do you create the social fabric through a platform?

Tolia: It’s a great question. Everything about Nextdoor is online to offline because the kinds of things that you do on Nextdoor you can only do offline. So you can ask for a babysitter recommendation. You can ask for help because you need a couch and someone’s going to give away a couch. Those are things that don’t actually resolve online. The only way to resolve them is to go into the real world. And so, unlike a lot of social media platforms where you can scroll mindlessly for hours and hours and hours, if Nextdoor is successful, it will get you off of your phone and into your neighborhood, into physical space.

Brady: So when you left, what made you decide after nine years it was time to move on?

Tolia: The company was actually going extremely well and it was clear that we were going to be able to go public, which was an amazing milestone and continue to grow. And in the last few years before I left, that’s when we launched in most of these countries. So the company was global. It was well on its way to being a public company. And I realized that, number one, I needed to spend more time with my young kids. I had a six-year old, a four-year old and a two-year old. And number two, the next stage of the company, which is really about scale, would be better served by a really experienced and skilled operator. And that’s why we hired Sarah Friar. It felt like we’d won the Super Bowl, we’d hired such an amazing executive. And she did, in fact, scale the company, take it public, and put it in this great place for me to come back and try to evolve the product.

Brady: So now that it’s of this bigger platform, essentially, how does it feel to be back in the CEO role, because  it hasn’t been that long?

Tolia: Well, five years has seemed like an eternity because even a year as a CEO, it’s kind of like dog years. So I feel like I took five years off even though I was working. Yeah, it’s kind of a vacation because I became an investor.

Brady: You were a Shark Tank judge, I remember that.

Tolia: I got to be a shark on Shark Tank. I moved to Italy for two years with my family, so we lived abroad. So I got to do a lot of things that you don’t typically get to do when you’re operating a company. But now coming back, it is a privilege but it’s not trivial. And that decision, as you mentioned at the very beginning, it may seem like it was intentional, but it was much more serendipitous. I never thought that I would come back to Nextdoor as an operator. I never thought that I would go back to being a CEO. I was really enjoying being with my kids, who are now 12, 10 and eight, being with my wife, co-parenting, having a somewhat more normal life that you don’t really have when you’re a CEO. But ultimately that thing that you create and we talked a little bit about the founder’s mentality, I want to get into that, that thing you create as a founder, it’s almost like another child. And so when you have a chance to go be part of that child’s life again and be influential again in raising that child, it was something that I couldn’t avoid. I was talking to my wife about it really at the end of the year before we decided that I would come back and I said, You know, this is not going to be great for work-life balance. It’s not going to be great for us co-parenting our kids the way that we have. It’s going to be very demanding. It’s a public company.

Brady: She’s a senior executive, too.

Tolia: She’s the president of Shondaland, so she has a big, important job as well. And ultimately she said, You know, I feel like if you were on your deathbed and you thought to yourself, I had this opportunity to go back to Nextdoor and take it to the next level but I didn’t do it, that would be a regret. And we don’t want regrets, so just go do it. We’ll figure out the rest.

Brady: But you’re a serial entrepreneur. That’s what’s interesting. I’m thinking about Epinions and all the different … So normally with a serial entrepreneur, I would think you’d move on to the next thing. And so maybe the next thing is within this ecosystem right now and you’ve talked a little bit about that. Let’s talk about the experience of having been on the board and how that may have shifted your mentality as a CEO. I know you just brought Marissa Mayer onto your board and you were, I think, employee number 84 or something, is that right?

Tolia: Yeah, at Yahoo! So long before she was CEO.

Brady: Long before she was CEO. But that experience of being on a board and seeing Nextdoor through that prism, which is a bit different than being chairman, has that changed the way you look at the company?

Tolia: It’s a great question and it’s a great question, particularly as it relates to even this idea of coming back and seeing something with fresh eyes. So most of my career I’d been an entrepreneur, a founder, and a CEO. Nextdoor was the third company that I’d been lucky enough to start and be CEO for. So all I’d really done was start companies and operate them. When I left Nextdoor, not only was I on the board of Nextdoor, I joined this VC firm, Hedosophia, which had been an investor in Nextdoor as executive chairman, I joined over 10 boards in addition to Nextdoor, and I became an investor. I became that person that I as CEO would look up to when I was building my ….

Brady: Or get frustrated by, right? You know what I would do…

Tolia: Look up to. Look up to. What I realized is the role of an investor is different than the role of an operator. An operator has to get really deep. An operator has to get really focused on the details. An operator is not diversified in their thinking. You’re thinking about your problem that you have to solve. An investor has to be much more broad. An investor, if you’re on multiple boards, those can be in different industries, they can be completely different companies, different stages. And so for five years I was looking across the landscape, primarily thinking about fintech companies, consumer companies, AI companies. And it taught me a lot, not just about those industries, but about the different ways to run companies and how different leaders employ different strategies. So when I then came back to Nextdoor six months ago, I thought to myself, Wow, what an incredible blessing to have all of the experience and legacy knowledge to understand the details…

Brady: It’s like an executive MBA.

Tolia: …but at the same time that fresh eyes. And so the combination of being deep because I’m the founder of the company and I’ve been there for almost 10 years, right. And also be broad because I’d been looking across the industry, I’d done Shark Tank, I’d lived in a different country. Yeah, those are experiences that really impact you. And so what I’ve been trying to do is bring that freshness back to Nextdoor while never forgetting the things that made us special in the first place.

Brady: Well, it’s interesting. I agree with you having that 30,000-foot view and that ability to connect the dots, first of all, is really valuable, as somebody who’s in the CEO role. What else did you learn? I mean, can you be a little specific even about a particular lesson or two that you gleaned from that five years that you’ve now applied in your current iteration?

Tolia: The most important lesson that I learned was that sometimes you need to take a step back and stop thinking about all those details you’re trying to get perfect to understand where the company needs to go longer term. And so what I did as an operator, I was always on this, whether it was a quarterly grind or an annual planning grind, and you’re trying to make the numbers and you’re trying to do the things that may not feel short term, but they really are short term, whereas all around you, the world is evolving. And so while you’re evolving your company and that’s all you’re really focused on, the world is evolving as well. And if you don’t harmonize those two things, the evolution of your company with the evolution of what’s going on outside, you’ll be stale.

So let’s think about what happened in the last couple of years. We had COVID. That was a massive change. We now have this idea of place and geography that’s very different as individuals. We work from home. We live in more remote places. We travel more in spite of the work from home and the working in isolated places. And so the world has really changed. When I came back to Nextdoor, I realized that the product vision for Nextdoor had evolved, but it had not evolved in a contemporary way relative to how the world had evolved. And the only way that I could realize that was by being outside. If I’d been on the inside, I never would have been there. So that’s one very specific thing.

The other specific thing is, as I was sitting down to write my first shareholder letter and I was thinking to myself, Okay, it’s my first shareholder letter. I need to make this authentically me and I want to start to communicate what’s important to me as a leader and what will be important to us as a company. And I came across this great book called Founder’s Mentality, and it resonated almost identically with the way that I was thinking about coming back to the company. And there were three main points, and I want to name all three of them.

Brady: I’ve read the book, actually.

Tolia: The first is, yeah, having, having a founder’s mentality. And by the way, I tell this to people internally, having a founder’s mentality is not just the province of founders. It’s an approach. It’s a way of thinking. It’s a state of mind. And I firmly believe that it can be applied to any business at any stage. And there are three keys. The first is you have to have an insurgent mission. So what does that mean? You need to care about changing the world, making it a better place.

Brady: Insurgent implies a little bit of a revolution.

Tolia: Insurgent implies that you are not satisfied with the status quo, and you believe that change is necessary, right? In our case, we don’t like the fact that the social bonds that once made neighborhoods great have eroded and we want to bring those back. So that mission is very important because when it’s late at night, when we’re tired, we don’t want to put another foot in front of the other, we remember the mission, and that’s the emotional pull that keeps us going.

Brady: So that’s pillar number one.

Tolia: The second pillar is you have to have an obsession with the front line and an obsession with details. Now, what does that mean? As companies get bigger, leadership in particular gets further and further away from the customers, from the users, from the details that make a product great. What do founders do? Exactly the opposite. They’re the ones that are talking with all the customers. They’re talking with all the users. They are the customers and the users in the early days. And so, we with a founder’s mentality need to get back to putting magic into the details and the only way you can do that is to be obsessed with the front line. That means everyone in the company is a user, is a customer, is someone who’s thinking about expectations and keeping those expectations high. And the only way to do that is to know the details. The third and final part of the founder’s mentality, you’ve got to have an owner’s mindset. What does that mean?

Brady: Fly economy class.

Tolia: They spend every penny like it’s their own.

Brady: That’s right.

Tolia: They’re okay working weekends. They care deeply about every part of the company because it’s an extension of themselves. So this idea of being an owner, I mean, it’s funny when you come back to a company and it’s got hundreds of people and locations around the world and you have a process for everything. You have expense reports, you have budgets, and you have planning. And at the end of the day, people feel like it’s not their company and you want to get back to making it feel like it’s their company. They have control, not just control, but responsibility. So, the mission, the details and the owner’s mindset, if you bring that to a company, I think you can do magical things.

(Music starts.)

Brady: We’re entering an era of innovation unlike any we’ve witnessed before. You all see it. The pace of technological change is staggering, and it’s challenging for any leader to keep up. We spoke with Jason Girzadas, the CEO of Deloitte US, which is the long-time sponsor of this podcast. Here is his advice for leaders on how to navigate this new world.

Jason Girzadas: There’s probably nothing more important for CEOs, no matter what organization they’re leading to really be thinking about technology’s impact on our workforce. It’s really a function of how do you think about technology in concert with your workforce? We at Deloitte talk about it as the age of with, the age of technology with your workforce, and really embracing this idea of the co-dependency of technology and the workforce. We’re also an environment of a very tight workforce where there’s a scarcity of top talent and an increased pressure on the diversity of top talent. That’s going to be the challenge for organizations to demonstrate to top talent that they can grow and evolve the work that they do, working with leading technology in a very aligned way. Finally, it’s what top talent really wants in an organization is to learn and grow and to be part of an organization that’s supportive of them actually embedding technology in their work.

(Music ends.)

Brady: Well, let me ask a little bit about some of the unintended consequences of hyper local and I know that actually Nextdoor has addressed a lot of this. For example, privacy. Not all of us (want everyone to) know, Hey, I’m going on vacation. You know, that could be a signal to for people to rob your house. I know you’ve addressed issues of sometimes bullying because there are mean girls and guys within some of these neighborhoods. What do you see as some of the pain points or friction that we have to address both in our communities and by extension then, in your online communities, whether it’s polarization or just creating that social fabric that maybe has not been as strong as it used to be.

Tolia: What a great question. And it is the case that we live in an increasingly divided world and we hope that Nextdoor can be one of the forces that goes against that. Social media in general acts as a mirror to the world. So all of these social media platforms, whether it’s Nextdoor or Facebook or Instagram or even X, where you probably see some of the most divisive …

Brady: An amplified mirror, perhaps.

Tolia: Right, and amplified things. I think there are two things going on. The first is people want to state their beliefs on these social platforms, and that’s not about the platform, that’s about their beliefs. But the second piece is we tend to be a little bit more aggressive or antagonistic behind a keyboard versus in real life. Now, let’s…

Brady: It’s the cloak of anonymity, isn’t it?

Tolia: I don’t believe at all in anonymity. It’s a very good point. I think anonymity gives us an excuse to be the worst versions of ourselves. Whereas if you reveal someone’s identity, I think there’s an additional kind of accountability. It’s a little bit like if you’re walking around in a room and you don’t know anyone, but you have a name tag on and everyone else has a name tag on, you act differently than if you’re walking around a room and no one knows who you are. So at Nextdoor, we did a couple of things from the very beginning to make it different. The first is there’s absolutely no anonymity. We actually verified when you joined Nextdoor that you lived at the address that you said that you lived at and you had to use your real name.

The second thing is things like where you live and whether you’re on vacation and who your kids are, that is always private on Nextdoor. And so we have done a number of things at the systems level to ensure that maybe the worst thing that can happen on Nextdoor is that people disagree. I think one of the really challenging things in today’s world is we haven’t found a way or we’ve lost the ability to debate different points of view in a civil way. It’s an old expression, and I grew up in Texas, so maybe it was a little bit more old fashioned, but we used to say you can disagree without being disagreeable. Unfortunately, most social media platforms, when you disagree, you become very disagreeable. We feel like with Nextdoor, though, the opportunity is if you disagree with someone and you end up being disagreeable, you may see that person in physical space later that day. If you disagree with someone on X, you may not know where that person lives. You may never encounter that person in the real world, but it’s different in a hyper local city. So we try to use things, like we have an AI thing called the Kindness Reminder, where if you’re posting something on Nextdoor and our artificial intelligence figures out that it’s not a positive sentiment, we just kind of say, Hey, maybe you want to rephrase that.

Brady: Nobody sucks. Come on, change your word.

Tolia: We don’t want to use that word. And it’s funny because when I think about the creation of Nextdoor and essentially building a user generated content system where the content is created by all of our users, we’re not creating the content. So you have to build the checks and balances in the system in such a way that people do want to do the right thing. I think it really benefits me to be a parent because in many ways we’re doing the same things with our children, right? When I see my three boys fight with each other, right, it’s not just stop fighting. It’s hey, if you have a different point of view, learn how to express it in a way that’s constructive. Be a little more empathetic. Listen to the other point of view. And those are some of the things that we try to do on Nextdoor as well.

Brady: Walk in another man’s shoes or woman. We do live in in our local communities. You’ve got people that are organizing protests, for example, about the Israel-Hamas war. You’ve got people putting up Trump signs on one lawn and in Harris signs across the street. Do you find that that plays out in Nextdoor with regard to just the polarization of our communities? Are you seeing that?

Tolia: Well, communities themselves tend to be more homogenous than heterogeneous. So you tend to have more in common with your neighbors than less in common. So I don’t think that it’s frequently the case that you would see the lawn sign for a Democrat right across the street from the lawn sign of a Republican. But I would be okay with that. I think one of the things that we’ve got to think deeply about, this is not just Nextdoor, but this is this is our society as a whole, we’ve lost the ability to debate different points of view in constructive ways. And I worry for my children that they will only be embedded in the way they see the world because they’re not being exposed to other points of view.

Brady: That’s like the echo chamber effect as well of social media.

Tolia: There are two pieces. One is the echo chamber, which is when I say something, I’m reinforced by people just like me. The other part is the cost of silence. And that’s this idea, Why would I ever even expose myself? Why would I take the risk of stating something when I’m going to be attacked? And so you have both the echo chamber and you have the fear of participation. And instead we need to find a way to say, look, we’re not going to agree on everything, but can’t we create a stronger community if we’re able to debate those things in a way that isn’t vitriolic or antagonistic? And we don’t have the answer at Nextdoor. Don’t get me wrong. But I think it’s something that increasingly, from a policy standpoint, we have historically said you cannot debate national politics on Nextdoor because we’re a hyper local system. And if you want to talk about local politics, okay, maybe we have an open mind there. But the national presidential race, what does that have to do with your neighborhood? I think increasingly we need to rethink that. We need to think, are we tapping out when in fact, we need to teach people how to have these ideas?

Brady: I teach debating, impromptu debating to middle school kids, and that’s called ad hominem, where you basically assault the person and not the argument. And I think if we were to reintroduce debating in the schools where you have to argue opposite points of view and you get judged on your ability to criticize an argument, not the person, that would be a start.

Tolia: I love that idea.

Brady: It could be a start. It could be something Nextdoor supports. There you go.

Tolia: We certainly shall.

Brady: Anything else that that’s on your radar that you want to put on ours right now with regard to what’s next for Nextdoor or even just how you’re viewing the landscape in general? I think you’re addressing some pain points that we all think about, which is the kind of state of civics did the civic discourse, but also our communities. But what else are you thinking about or excited about in terms of what’s around the corner?

Tolia: Well, I love the word next because it’s in Nextdoor, obviously, But we are calling the next version of Nextdoor “next,” internally, that’s our code word internally. And what we’ve realized is after 14 years, it’s time for Nextdoor to not just do what we might think of as a point release in the software world that’s going from 2.1 to 2.2. We need a version release. We need 2.0 to go to 3.0 or 3.0 to go to 4.0. And so as we think about what’s next for us, that is the next and hopefully the best version of Nextdoor. And it has to be different. It can be the sorts of things that we talked about. Helping you find a plumber or a babysitter, helping you find a lost dog, helping you give away the pieces of furniture you don’t need any more, helping you connect with a pickleball player in your neighborhood. All those wonderful things about Nextdoor. But we think that there is an opportunity to do even more, particularly around local information. If you think about the erosion of local newspapers and other, the 5 o’clock news that we used to watch every day. There’s an opportunity for us to bring some of that back. There’s an opportunity for us to build deeper community. And so what’s next for us is we hope our biggest chapter and best chapter yet.

Brady: Sounds like a village green. I look forward to it. Thanks for joining us.

Tolia: Thank you for having me.

Brady: Leadership Next is edited by Nicole Vergalla. Our audio engineer is Natasha Ortiz. Our executive producer is Hallie Steiner. Our producer is Mason Cohn. Our theme is by Jason Snell. Leadership Next is a production of Fortune Media.

Leadership Next episodes are produced by Fortune‘s editorial team. The views and opinions expressed by podcast speakers and guests are solely their own and do not reflect the opinions of Deloitte or its personnel. Nor does Deloitte advocate or endorse any individuals or entities featured on the episodes.