FRANCISCO ó 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
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 womenís fashion. "Although theyíve
just launched menís," he said, hunched over his
laptop, "I canít use the product. Iím too
unusually tall." (Gurley is 6 feet, 9 inches.)
then, is one of the few products heís backed that he
can use without wondering whether he might be missing
something. Anyone can join and participate in Nextdoorís
community-centric groups, so long as they verify their
is an active member in the Nextdoor neighborhood of
Atherton, Calif., the Silicon Valley-area community
where he lives. Heís 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.
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
has posted to Nextdoor asking about fishing lures. Heís
given away golf clubs. Heís asked about bicycle
a belief that venture capitalists spend their days
sitting at the end of conference tables determining the
fate of startups desperate for cash. Itís 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
believes that being an investor means going a step
further than that. He spends days staring at websites
and apps ó a little less "Shark Tank," a
little more scrolling, chin rubbing and note-taking when
he sees people use a product in unexpected ways.
figured out they could foster pets out very successfully
(on Nextdoor) ó I wouldnít have thought of
that," he said.
switched back to the Atherton Nextdoor group, where a
post read: "German shepherd to be euthanized
tomorrow if no foster can be found."
he said. "Thatís a tough post."
scrolled through the responses: "Oh, it worked
look at this," he said, scrolling to a post that
read: "Found: Super sweet large orange tabby,
friendly, purple collar."
post had 192 replies, most of which were neighbors
expressing relief that Bert the cat had been found.
point is, look at all this. Engagement like this,"
he said, "those are the best signs something is
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 ó a
page that looks like an online dating site for cats and
dogs ó so neighbors could easily identify and return
missing or stray pets. Itís 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.
he understands that even with his foot in two
neighborhoods, heís seeing only a narrow sliver of
Nextdoor. In Atherton ó the third-most-expensive ZIP
code in the country ó 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 personís skin color.
things can get heated. The same Monday when Gurleyís
neighbor asked about Tim Tam cookies, an Oakland
resident took to Nextdoor to yell: "Youíre (sic)
CAR ALARM on 65th St. is ruining my life!!!" In
neighboring Woodside, residents have lost their temper
on Nextdoor over each otherís 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 didnít get involved, but it went
wonít go away, Gurley bets, is Nextdoor.
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.
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.
a lot of neighbors getting on each otherís 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.