Kleiner Perkins Didn't Invest $60 Million in NextDoor So You Can Share Your Knitting Group Schedule
Think I could borrow a cup of milk? one refrigerator asks another in a kitchen just a few blocks away. I have three quarts, not a problem, replies Fridge 2, which has been set on "generous mode." Fridge 2 continues: Tell your owner to stop by at 8:37 am. My owner is out for a run but he's due back at 8:35 am, according to the chip in his shoes. It's exactly this kind of exchange that Venture Capitalists like Kleiner Perkins' John Doerr dream about when they invest $60 million in a company like NextDoor, a social networking app for neighborhoods. The immediate future involves more prosaic exchanges typed by humans: NextDoor, which is reportedly being used in 20,000+ neighborhoods, promises it can help you get to know your neighbors, find reliable babysitting, sell your superannuated child booster seat, and catch a thief, among other valuable infocentric services. It's Miss Manners, Angie's List, Craigslist, and Alfred Hitchcock all rolled into one, with a dash of hyper-localized Facebook thrown in.
For now it's just that, a social network (or lots of them) circumscribed by real terroir--thousands of virtual gated communities. The immediate attractiveness of even this business model is easy to see, if you discount the lack of defensibility and the obvious reliance on network effect. (Troubles that doomed previous contenders in this space.) But clearly if the lion's share of neighborhood activities shift from the community center, the yard sale and the PTA meeting to their online equivalents, then every tutor, gutter cleaner, ice cream vendor and real estate agent who wants to stay in business had better advertise their wares there. The platform derives its muscle from that still timeless real estate truism: "location, location, location." It doesn't take a visionary to understand that. But to see what happens next--and it may happen very fast--does require uncommon foresight and it's far more exciting for the investors. It goes back to our talking refrigerators. Because in the future when the boiler breaks it's going to call the repairman itself, and the network it uses to decide which one to call is going to be the most important commercial network there is. That network will be, as the saying goes, "the only game in town." It's then that a company like NextDoor--or whoever wins the great battle for local linkage--could be the preeminent arbiter of everyday commerce. Because our online avatars never need a cup of milk and they never get cold. But we do--and we actually live somewhere.
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