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.

Nextdoor

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:

nextdoor

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:

Nextdoor

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.

You can follow any responses to this entry through the comments feed.

8 Responses to “Nextdoor Moves In on Facebook, Yelp, Craiglist with New Local Services Directory”

  1. Street Fight Daily: LivingSocial and ‘Unicorpses,’ Airbnb Raises $100 Million | Street Fight says at

    […] Moves in on Facebook, Yelp, Craiglist with New Local Services Directory (Screenwerk) Greg Sterling: Nextdoor is making its move into local services with “Neighborhood […]

  2. George Tsafonias says at

    Great piece Greg and I read that piece in 2013 and actually was intrigued by Nextdoor app so I downloaded it but I didn’t really look at it deeply for some time after. Well being on local space for quite some time I to saw opportunity as a next local frontier from craigslist especially for local service companies and have actually recommended it to a few local service providers as ways to connect to their local space. I am part of a local Rotary Club and I recently posted a fundraising event that we do annually to raise money for local charities on Nextdoor.com and it almost instantly ranked page # 1 and several people mentioned that they found it there which was all I could hope for with the limited non profit budget available. CHALLENGES: I also see a few challenges, some shady local service providers see it as a place to take advantage of the local community angle and get over on people and play to their trust. I had a situation where I connected to a local service provider (Powerwash) my patio, and lets just say it was not a good experience and learned a $250 lesson which could have been worse, I think look online BBB and found that this same guy had done this several times in much bigger ways a contractor. A vetting process or authorized provider might keep some of those non honest individuals out. Otherwise I see great things for this local focused app.

  3. Rich H. says at

    Greg, hope all is well.

    I’ve been waiting for their next move, glad to see them rolling-out some useful “local search” tools.

    I manage my local neighborhood Nextdoor site, and my biggest take-away has been the lack of engagement. Despite having the majority of households as members, rarely does anyone use it. On the occasions I’ve posted content, I rarely see comments or response.

    I wish this were not the case as I love the platform and hyper-local focus, but I suspect that may actually be one of the reasons engagement is so low. How can it compete with Facebook groups at this point?

    I’d love to see the merger of two concepts; Patch’s local news content and Nextdoor’s hyper-local focus.

    Selling local businesses or sponsorships seems like an obvious opportunity, but you know better than anyone that selling SMB’s local advertising presents a whole range of other challenges.

    To your point, people don’t want another local search option. If someone’s lost a cat, it’s great – but I unfortunately don’t see things going much farther…

  4. Malcolm Lewis says at

    It’s a smart move that you and many saw as an obvious monetization play. As you point out, the big advantage Nextdoor has over Yelp as the go-to site for local recommendations is: 1) Recommendations from real people I know and trust; 2) Decent coverage in local service categories where Yelp often falls short. They also have an advantage over Facebook – who I think is also gearing up to go big in local search on mobile – because for local service providers I’m more likely to get a useful recommendation from the guy next door than my high school buddy in London.

  5. Greg Sterling says at

    Engagement in my area is relatively good. But lots of people are getting the emails. So by adding new use cases presumably engagement will increase.

  6. Greg Sterling says at

    One would assume the community would police the scam artists and they would be weeded out pretty quickly.

  7. Eric Wentworth says at

    The entire ratings and reviews “industry” is going through enormous changes, with new players all the time. It’s definitely not a good time for these player to sit back and just respond to the changes, but be more proactive and strategic in future planning.

  8. Perry says at

    Greg, when you say “I found two names on Nextdoor that were recommended and “validated” by looking them up on Yelp.”, do you mean that you separately did a Yelp search to complete your search/decision path, or is Yelp content embedded in the ND Business Pages? 

    In my experience on ND, most recommendations are for service-based businesses that may not be vetted or well profiled elsewhere. I see a LOT of recos for indie trade service pros [home service pros, pet sitting, photographers, individual salon professionals, etc.]. So, by far most are in the VSB category [under 10 people]. I’m in a rapidly gentrifying urban hood, so perhaps my experience is skewed. 

    If my experience projects broadly, perhaps the real niche here is in bringing leads to the low end of the service trade market that today is closer to the CL VSB than Yelp or even FB. 

  9. Greg Sterling says at

    I found the name and then looked him up on Yelp to confirm he was good.

  10. NextDoor’s ‘Neighborhood Favorites’ Gets Closer to a Business Model | Peter Krasilovsky's Blog on Local Digital Marketing says at

    […] Next Door Networks is soft launching a “Neighborhood Favorites” feature in a number of markets that should be highly attractive to users, and serve as its first attempt to charge businesses for promotion. The launches are in Alameda and Contra Costa counties in California; Collin County, Texas; and King County, Washington. Greg Sterling initially reported on the development here. […]

Leave a Reply