Nextdoor Moves In on Facebook, Yelp, Craiglist with New Local Services Directory

Nextdoor homepage

Over the past few years, in several conversations with Nextdoor CEO Nirav Tolia, I’ve discussed with him the site’s various opportunities to make money. Like all good startup CEOs Tolia said that he was focused on building audience engagement and that there were several ways the site could make money over time.

In November 2013 I wrote about one of the obvious, potential ways:

If Nextdoor were to continue to with its current momentum it could eventually become a primary source for local business recommendations as well as a classifieds resource. All this remains to be seen, but the company has made it farther than many would have predicted at the outset — including me.

The company has just started to make its move into local services with the new “Neighborhood Favorites” — essentially a directory of local services providers. This feature has just launched and, for now, has limited geographic availability:

Nextdoor recently launched Neighborhood Favorites–an easier way to find the top local businesses in your neighborhood. Through Neighborhood Favorites, Nextdoor members will be able to search for a business and see all neighbor replies and comments in one, easily searchable list.

Currently, this feature is only available in Alameda and Contra Costa counties in California. On November 17th, it will also be available for members in Collin County, Texas and King County, Washington.


One immediately striking thing about this is that there are already quite a few recommendations in these categories:

  • 61 recommended dentists
  • 42 recommended auto mechanics
  • 34 recommended electricians

The businesses, which are all very local, are ranked by number of recommendations. I can click on any of these links and see the individuals who recommended the business and what they said about that specific business. Only those in immediate and adjacent neighborhoods can make local recommendations or see them.

This is what one of the category pages looks like:


What you get is a kind of Facebook-Yelp-Craigslist hybrid. It’s like Facebook in that I can see which of my neighbors have recommended the business; these are real-identity recommendations. It’s like Yelp in that users can search for businesses and the presentation of rankings is user-friendly and straightforward. It’s un-like Craigslist in that it represents a trusted alternative for classifieds listings, which will undoubtedly come later in the form of some sort of formal marketplace.

Facebook has lots of great reviews and user-generated local business content but the site has taken its sweet time about making that content readily accessible to consumers (still waiting for a “Places” app). Discovery of this development may light a fire under Facebook’s posterior however.

Neighborhood Favorites should also concern Yelp. However Yelp’s user base and heaviest usage categories may be distinct enough that Nextdoor isn’t an existential threat. Other sites such as Angie’s List and HomeAdvisor should also be quite concerned about Nextdoor’s “disruptive” potential in their markets. It goes without saying that internet yellow pages should equally be concerned, from a consumer product standpoint.

Another interesting thing here: Nextdoor doesn’t rely on SEO for discovery and/or usage. Google and maybe Amazon home services ads/listings could in the longer term be negatively impacted should Favorites take off.

People ultimately want fewer — not more — sources of local information. They don’t want to use 10 sites to find a plumber or handyman. If Nextdoor presents enough choices with enough context and credibility it could become the primary local business discovery site for many people.

Nextdoor explains on a FAQs page that it has used a “third party tool” to identify and organize this content. Essentially it has mined its posts and seeded the directory accordingly:

To make it easier for you and your neighbors to find older content, we’ve used a 3rd party tool to help us identify and classify all previous discussions around business recommendations. The 3rd party tool was not privy to any member account information and could only access replies to recommendation posts stripped of member identification.

Now the site is soliciting recommendations directly. Last week I received this email:


I have sold things through Nextdoor and I’m now going to look for a plumber and electrician on the site. Given that Nextdoor users are likely to trust their neighbors (even if they don’t know them well), I would expect that Neighborhood Favorites will quickly become a go-to source for local business referrals. (In my Nextdoor Feed I now notice daily requests for all kinds of service recommendations, especially home service professionals.)

Nextdoor could sell placement, visibility and/or native inclusion. It could also sell presence or functionality to business owners (e.g., enhanced presence, appointments, payments). There are a variety of monetization scenarios.

Nextdoor’s penetration is already nationwide and quite significant at this point, though still under the radar for some. This Favorites launch marks a new phase in the site’s development and a formal move toward a business model. It also means the formal arrival of a new player in the “local search” ecosystem.

Update: I just used Nextdoor Favorites to find a plumber to do a sink faucet install. I found two names on Nextdoor that were recommended and “validated” by looking them up on Yelp. Called both and picked the one with immediate availability. Didn’t use Google at all.


Will Google’s New ‘App Streaming’ Kill App Downloads?

Apple Watch Apps

Complaining that the world of apps was not enough like the web, Google, Facebook and others sought to enable deep linking within apps. Apple has recently joined the party as well.

In one way this makes great sense. Deep linking and app indexing allow users to access and discover content within apps or go directly to relevant “pages” within apps. Previously users were sent to the app homepage or, worse, to a download page.

Before deep linking and app indexing, the shift from the PC to mobile apps threatened Google’s position at the center of the internet user experience. Rather than navigating to desired content via Google, as users generally do on the desktop, they could go directly to their favorite apps. Google was often left out of the equation. For many publishers this was also an opportunity to establish or, for some, reestablish an “unmediated” relationship with users.

To be sure, search is vigorously used in mobile (now more than on the desktop). Still, the mobile user relationship to Google, especially for iPhone users, was different than on the PC. Deep linking and app indexing have started to change that and put mobile search back in the center of the user experience.

In classic Google fashion the just announced “app streaming” is both a great user-experience innovation and a highly self-interested move:

[Y]ou’re also going to start seeing an option to “stream” some apps you don’t have installed, right from Google Search, provided you’re on good Wifi. For example, with one tap on a “Stream” button next to the HotelTonight app result, you’ll get a streamed version of the app, so that you can quickly and easily find what you need, and even complete a booking, just as if you were in the app itself. And if you like what you see, installing it is just a click away. This uses a new cloud-based technology that we’re currently experimenting with.

As Danny Sullivan writes, this is a beta test with a small number of app-developer partners right now. There are 9 partners, including The Weather Channel and Hotel Tonight. Danny has other details, such as the capability will only work over WiFi and on Android devices for now.

I have not yet had a “hands on” experience with app streaming but it promises to deliver the content and functionality of apps via search results without the need to actually have the app on the phone. The benefits for mobile search and Google here are obvious: it will make mobile search more useful and more encompassing as a content discovery tool for mobile users.

From a publisher-developer perspective one argument in favor of app streaming is that it’s like SEO in a way and a new way for users to discover apps and app content. The hope would be that after deeper exposure they’ll download the app directly. And that may well be.

It’s also possible that users may be less inclined to download new apps because they’ll be able to access in-app content via mobile search. Storage space is limited and most installed apps are used only occasionally. Thus users may be disinclined to install new apps because they can access them as needed through Google. (This is an “empirical question” that will be answered over time if the program expands.)

Google, for some of the reasons above, has always been highly ambivalent about mobile apps. In the beginning Google saw apps as a kind of bridge between the desktop internet and the new mobile internet. Google’s Vic Gundotra (no longer there) and others such as Tim O’Reilly argued that the mobile web would, of necessity, inevitably supersede apps.

That didn’t turn out to be the case. In fact things went in the opposite direction; apps became much more popular and much hand wringing ensued. Google and others have now intervened to change things (Steve Jobs may not have been as eager to do app indexing). Some go further to argue that Google has been working “to make apps obsolete.”

Between deep linking, app indexing and now app streaming Google is making more apps more accessible to more users and improving the mobile search experience. But it is also partly undermining the app user proposition and reinserting itself between users and publishers.

Whether you see a benevolent objective (improving the mobile user experience) or a primarily self-interested one depends on how you view Google. I believe that both motivations coexist in app streaming.


Many Digital Marketers Seem Just As Confused, Overwhelmed As SMBs


From behind a two-way mirror this evening I observed a 90 minute focus group. It consisted of representatives of digital agencies — mostly larger agencies. It was interesting to hear them discuss their digital marketing challenges and pain points.

They spoke about the challenges of dealing with clients that were not sufficiently educated or were conflicted about their priorities and objectives. They discussed organizational challenges with different internal groups not coordinating their efforts or working together smoothly. Despite their size they also spoke about not having sufficient resources to do what they needed to do.

Yet I was most struck by their complaints about their inability to clearly distinguish the different vendors and solutions in the market. Their statements reflected pervasive confusion and noise that we all now confront.

They also said they didn’t feel they had sufficient visibility into what was working or most effective. They had challenges demonstrating ROI to clients and connecting the dots between ads and sales.

Amid all the similar-sounding yet competing companies and claims, they convey the impression that they don’t know whom to believe or trust. It was difficult for them to get objective information, notwithstanding the market being awash in data. They also didn’t appear to know as much as they claimed they knew and were relying on vendors for education, which was a source of some frustration.

For the most part this is exactly the position that most small businesses are in:

  • They want and need education
  • They don’t know exactly what’s working and it’s difficult for them to gauge ROI
  • They are bombarded by pitches that all sound similar
  • They don’t know whom to trust and so don’t trust most digital marketing providers they encounter (or even work with)

Clearly there are digital agencies that are doing great work and that are highly sophisticated. But to what extent do you think these things I’ve said above are representative of digital agencies generally?

I was quite surprised to hear some of the things I heard and I’m wondering how much I can extrapolate to the larger agency universe.


For Most SMBs Customer Service Matters More than Ad Performance

Causes of SMB churn

The two main causes of small business (SMB) advertiser churn have to do with poor (perceived) campaign results/performance and customer service frustration. These are captured in the LSA-research chart above. But these same reasons are repeatedly cited in other research.

I’ve had a number of conversations with various sales organizations recently that suggest customer service is the single biggest variable that will affect advertiser retention. Certainly marketing performance is critical and notwithstanding the order of reasons in the chart, there’s ample evidence that customer service is the most important factor.

RearchLocal recently indicated that it has focused more resources on customer service and seen positive results. Loyalty platform Belly has also touted customer service as a key differentiator vs. other SMB marketing platforms and tools.

Net promoter data collected by Alignable not long ago showed that GoDaddy’s customer service was a key factor in its win in the webhosting category. While some providers (Wix, Squarespace) were regarded as more “usable,” from a DIY perspective, GoDaddy triumphed because of customer service:

According to Alignable’s NPS data of over 4,500 ratings submitted across 25 leading small business brands, GoDaddy is the most highly recommended website provider.

Despite the rise of so many new, sleek “DIY” platforms available to small business owners, GoDaddy not only has the highest NPS score, they ran away with it. Elite customer service was the core component of almost every user review that was submitted regarding GoDaddy.

Google has data that show up to a third of SMB customers who churn out of marketing programs would be willing to return if contacted — by apparently they’re not contacted. This is a customer service issue.

Google has also said (as have others) that in situations where there’s an in-person sales relationship advertiser retention is stronger than a telesales relationship. And there’s quite a bit more evidence like this. When outsourcing their marketing, what SMBs want is a reliable and trusted relationship. They don’t want to be “upsold,” they want a place to turn for real help.

Unfortunately a lot of what passes for SMB marketing “education” is thinly veiled sales and many reps (in person or on the phone) are given incentives not to help advertiser but to hit quotas and sell certain packages.

Marketing performance and related metrics are important. I’m not saying they’re not. But today companies are throwing every conceivable piece of data at the SMB: impressions, clicks, calls, form fills, etc. This is usually in the hope that the advertiser will see value or be convinced that the program is “working.”

What might be more effective is taking the time to listen and understand the business owner and going the extra mile to deliver great service. Does anyone disagree?


After $1 Billion Sale to Webhost EIGI, Will Constant Contact Keep Its Soul?

Constant contact pricing

This morning Constant Contact announced that it had agreed to be acquired in a deal valued at roughly $1.1 billion The buyer is webhosting company Endurance International Holdings Group.

Endurance is focused on the SMB market and has a number of brands including Bluehost, Homestead,, Typepad (among others) and now Constant Contact, which immediately becomes the jewel in the company’s portfolio — especially with the new Facebook integration. Beyond that Constant Contact offers a number of other marketing products.

The acquisition makes sense for both companies and positions Endurance to compete directly with GoDaddy and, which offer a full range of of marketing services beyond webhosting.

The question is whether Endurance will leave the Constant Contact culture intact. If it simply treats the acquisition as  “tool” or a “product” in its broader offering it will see an eventual exodus of customers to other email providers.

Even as some enterprises and brands have shifted focus to other channels like social media, email remains one of the top three or four methods most SMBs use as part of their marketing mix.

The impetus behind the sale for Constant Contact may have been the company’s basically flat share price (it’s up today) and a desire to get away from the mania of quarterly reporting. By the same token, it was pointed out to me, that EIGI was trading below its IPO price.

The company needs to be able to tell and demonstrate a larger growth story to the market (i.e., webhosting + marketing services for SMBs). The visibility and strength of the Constant Contact brand now becomes the biggest single part of that story.


YP Hires Former InsiderPages CEO As ‘EVP of Consumer Platforms’

YP logo wide

YP has made a really interesting hire. Stu MacFarlane was hired in July (and announced this morning) as the new “Executive Vice President of Consumer Platforms.” MacFarlane was the CEO of InsiderPages before it was sold to IAC years ago. He was also at IdeaLab (among other places), which launched InsiderPages.

Here’s how the press release describes MacFarlane’s role:

As EVP of Consumer Platforms, MacFarlane is responsible for all aspects of YP’s consumer properties which reach more than 70 million users per month, including community building and innovations that drive additional value to consumers to help make informed decisions about local businesses, further developing YP’s mobile experience, and building out additional opportunities for consumers to connect more directly with businesses.

Screen Shot 2015-10-28 at 8.48.01 AM

I spoke to MacFarlane yesterday and he expressed excitement about the new position and said there would be things to announce in the near term but couldn’t discuss product evolution right now.

I asked about whether YP would be building out new non-flagship experiences or whether his work would focus on the existing YP properties. He confirmed it would be the latter.

He alluded to new content and new “transactional” consumer experiences but wasn’t able to discuss further. He said that he was working to transform the user experience on and its mobile properties into something that’s “very engaging.”

When MacFarlane was at InsiderPages he was up against Judy’s Book and Yelp, among others including Google. In some ways the market hasn’t really changed in the past decade and in other ways it’s radically different. Mobile has dramatically altered the landscape and consumer behavior and Facebook is a major competitor in waiting.

I’ve long argued that it’s important for directory publishers to maintain a consumer brand for multiple reasons. However doing that can be challenging and costly. Among the major US publishers only YP has continued to invest in a serious way in the consumer experience.

I’ll be very interested to see what MacFarlane has up his sleeve.

The company also announced today that it had hired Wendell Hicken as EVP of Technology. He’ll oversee development of YP’s ad, tech and data platforms.


SMB Top 20: Google Rated Highest, Yelp Lowest According to NPS Survey

B2B social network Alignable is doing something very interesting. It has started surveying its small business members and generating NPS rankings for a wide range of companies that serve that market.

This past week it released its second “report” using these data. Below are what the company calls “the three pillars of SMB buying decisions”: ease of use, customer service and business practices. It’s not entirely clear what “business practices” means here.

Alignable NPS buying pillars

The following list shows the 20 “most rated” SMB brands, from highest to lowest rated (NPS). Google is the top-rated brand (although it’s not clear what these SMBs are responding to in “Google”). The lowest rated brand on the list is Yelp. Facebook is #7.

Alignable top 20 brands

I assume the question that generated the list above is, “would you recommend?” I’m not certain what additional questions are being asked by Alignable about SMB experiences with these companies. I do know they have deeper data than this.

This is a presumably a holistic assessment of the SMBs’ experiences with these various brands. So “Google” or “Facebook” would mean a broader experience than simply AdWords, GMB or Facebook ads.

What inferences or conclusions might you draw from this list? Or do you dismiss it? If so, why?


Spotted: New “Native” Ad Unit from Yelp

Screen Shot 2015-10-12 at 2.08.35 PM

I’m in Europe this week for the SIINDA conference and I was using Yelp to find restaurants. After selecting a potential place to eat, I always run through the photos to get a sense of the food and atmosphere.

Tonight I encountered this “native ad” in the midst of flipping through the images associated with another restaurant I was considering. It showed up in the middle of the sequence. I suspect the company is testing this unit.

This is the first time I’ve seen this kind of ad on Yelp. I looked but I couldn’t find another example. Has anyone else encountered this before? And if so where, what cities?


Google: Mobile Searches Eclipse Desktop Volumes Across the Globe

Screen Shot 2015-10-08 at 5.12.34 PM

Earlier today Google’s Amit Singhal told a conference audience that there were now more searches happening on mobile devices than on PCs and laptops around the world. Google made a more limited version of this announcement in May when it said, “more Google searches take place on mobile devices than on computers in 10 countries including the US and Japan.”

At the time, Google declined to name the other countries but soon it added the UK to the list. Now Singhal is saying the phenomenon is global. Individual countries may be exceptions but overall mobile has eclipsed the PC.

In terms of local-mobile query volumes Google has thrown out a range of numbers over the past couple of years: 30%, 40%, 50% and most recently 30% again. It’s not entirely clear where these numbers are coming from (whether internal data or surveys). Bing previously told me that 53% of the queries coming through its mobile app were local in nature.

Notwithstanding this uncertainty, I think it’s safe to now assert that the majority of mobile search queries carry a local intent — and potentially by extension the majority of search queries period. While people do entertainment, news and general research queries, most lookups are going to have a local or offline purchase intent.

In 2010 Google said that 20% of PC search queries were “related to location.” Upon further questioning Google acknowledged that it was difficult to disambiguate many queries and that this 20% figure was a safe and reliable estimate but that it probably didn’t capture all of local-intent search taking place on the PC.

On mobile devices local intent queries are generally easier to determine. I would argue that the relationship between local and non-local queries has now flipped. Or perhaps more accurately I would contend that it’s simply easier for us to see the location intent reflected in the query and subsequent user behavior on mobile devices.

In any event we’ve truly entered a new era.


Thumbtack Defies Conventional Wisdom, Scores $125 Million — More


Local home services marketplace Thumbtack is now a so-called “unicorn.” I hate that term. But it means the company is worth at least $1 billion.

With a new $125 million round of funding, announced yesterday, Thumbtack is valued at $1.25 billion. Last August the company announced a $100 million round. That means within essentially a year the company has raised $225 million.

When I heard about the $100 million last year I was surprised. After all, Thumbtack is essentially Service Magic 2.0 (nothing special in a sense). It also doesn’t have a consumer brand and does no consumer marketing today.

In its blog post announcing yesterday’s massive round, the company said that it was rejected 42 times for its Series A funding. This just shows the lack of confidence, independence and vision that characterize most VC investing. Yet everyone wants a piece of something already proven — hence the big later rounds.

That brings me to what’s “proven” about Thumbtack. I would guess that 9.5 out of 10 people on the street probably wouldn’t be able to tell you what the company was about or did  — although Republican presidential candidate Jeb Bush visited Thumbtack on a recent swing through Silicon Valley and gave it some general media publicity.

But Thumbtack has been steadily executing since 2011. I spoke with Marco Zappacosta, Thumbtack’s co-founder and CEO, yesterday about the company’s funding and its success to date.

He told me that Thumbtack has 200,000 paying small business advertisers but no sales reps — zero. He said that Thumbtack is entirely self service and that its retention numbers are impressive. He wouldn’t share them with me specifically except to say that “We’ve had small businesses working with us for years.”

He added that the retention discussion “is the strongest part of our [VC] pitch.” Currently 95% of the company’s referrals and traffic are organic; only 5% is coming from any paid advertising that Thumbtack does. As an aside Zappacosta added that 75% of SMBs respond to leads via their mobile phones. I thought that was pretty interesting.

The last two paragraphs explain the $225 million in a nutshell:

  • 95% of consumer traffic organic and word of mouth
  • No sales reps
  • Total SMB self-service model
  • 200,000 paying local advertisers
  • High retention rates

This is extremely impressive and defies most of the well established, conventional thinking in the industry. As I said there’s really nothing special or terribly inspired about the model; the company’s success is about execution. But with $225 million in the bank the company is going to start executive on building its brand.

I’ve asked Marco Zappacosta to tell the Thumbtack story at next year’s LSA 16. I promise it will be very interesting.