An important question to ask once a product grows and reaches a unicorn status is how this product will sustainably monetize. After all, Google and Facebook will continue to own the advertisement market and with all the conversations private to each neighborhood (unless it’s about the business), getting the viral reach the advertisers want may be difficult.
However, what Nextdoor could offer is a different value to small medium businesses (SMBs), who can communicate with their local neighbors to understand what their needs are. The SMBs cannot see the private discussions within each neighborhood (unless they are neighbors themselves), but can reach out to them and interact with the neighbors.
This allows the SMBs can personalize their services by developing a relationship with their local neighbors and acting according to their votes, rather than inferring what they see from your data that you yourself may not even be aware of. For example, a café can suggest which interior people would like to see and offer a 2 dollar coupon when a neighbor casts their vote.
This works for small medium businesses, who have limited cash to spend and need each dollar of their advertisement to lead to a return on investment that is tangible in the short term. What they need is not aerial advertisements, but rather microphones that reaches out to a local community who will walk to their stores and discover why they need the product through a personal experience that the store visit gives them.
Users can also better understand what they need by talking with experts of the product, instead of relying on their guts after seeing suggestions that may offer you things you may want, but not necessarily need. SMBs can also build their brands, which has been losing its significance rapidly as Amazon reproduced third party items at a cheaper price (Amazon Basics).
This will make reviews a lot more meaningful as well. Instead of having to read through reviews by unknown users, who may not always have the best incentives and likely had no offline interactions with the sellers, the local reviews will likely be more authentic, as they are written by those in your neighborhood for the good of the community.
In essence, what this means is that people will seek SMBs because they offer a premium and consistent experience of purchasing the product that the online stores may not be able to match. Moreover, the diverse number of ways that businesses can interact with neighbors means that there are opportunities for Nextdoor to create multiple subscription plans with varying benefits for the businesses.
This ecosystem creates a cycle where neighborhoods can better serve businesses as they frequently visit and share their needs, businesses can better serve neighbors as they cater their services to what they see/hear and in turn, neighborhoods become stronger as everyone in the ecosystem works for each other’s interest, strengthening their trust of each other.