Recap of CEO Series Fireside Chat with Sarah Friar, CEO of Nextdoor

Sep 03, 2020

The CEO series is honored to have hosted Sarah Friar, CEO of Nextdoor for an online fireside chat with a national audience tuning in from New York, DC and Chicago all the way to Southern California.  Following our very pleasant discussion I found Sarah to be really impressive as a professional and highly relatable as a person.  She has had a diverse and always successful set of experiences, leading to her first role as CEO of Nextdoor, the neighborhood hub.  As always, I got out of the discussion feeling enriched by the many nuggets of wisdom another great leader took the time to share with our community. This article captures some of my personal highlights and takeaways.

Important pivotal points in Sarah’s personal journey.

I started the discussion by asking Sarah, who grew up in Northern Ireland, to reflect on the unique path she took to become the CEO of a major Silicon Valley technology company.  I found the following events to be particularly interesting.

"I grew up in a tiny rural area in Northern Ireland, and one of the first major forks in the road was my decision to attend Oxford.  It was really atypical for people from where I grew up.  My parents desperately wanted me to stay locally, in Belfast, or if I really had to go far, to go to Scotland.  Going to England was considered going really far away.  The second decision was around my degree.  For people who were “good at school”, you would typically study something vocational like becoming a doctor, a lawyer or an accountant, and I chose to study what is now called materials sciences, economics and management.  It was a big deal for my parents, neither of them went to college.  I don’t know why I took those decisions, but I knew that I wanted to experience something different”.

"The second major fork in the road was an opportunity to do an internship in the area of materials sciences.  I went to work on a gold mine in Ghana.  It was an amazing experience culturally, and it was also extraordinary to see what had, up until then, been mostly an academic experience, come alive in a real world setting.  There is a parallel with the process of developing technologies in a lab and eventually seeing them deployed and having an impact on the customer, it was beautiful to see everything come together.  It was also a fork in the road in that it was an incredibly sexist environment and I told myself, frankly, that this was not a place for me, I was not going to be successful as an engineer in that type of environment and I ended up working for McKinsey”.

Fast forward a number of years after coming to the US, studying at Stanford and working at Goldman Sachs, Salesforce.com and Square, on her decision to leave Square where she led the Company as CFO alongside Jack Dorsey for almost 7 years.

"I loved my time at Square, I loved the Company, I am proud to see it growing-up and becoming better and better, but there was this moment when I felt I wanted to work on something that also had deep meaning in the World.  Nextdoor was one of the few sites that could knit communities together again.  Going back to Northern Ireland and the Troubles and the importance of community. But it was also a moment when I felt that there needed to be more female CEOs in the World.  From that experience of a very sexist environment in a mine in Ghana where I looked up and thought that I did not see anyone that looked like me at all, to now where I want to make sure that we are creating role models so that when people look up, they see that there are people that look like me.  It’s a lot of pressure, you feel like you stand for all womankind and you need to be super successful. If more people can see what they can be, hopefully you start creating a new career path that will unfold for many more women and for under-represented minorities in general”.

On transitioning to becoming a CEO.

"In recognizing that transition from CFO to CEO, the number one thing for me, and in any transition, is the people.  I wanted to immediately think about who would be my executive team at Nextdoor.  Nextdoor is a growth stage company, when I joined we were only 200 people and we are 450 today.  We have more than doubled in a year and half, but we are still small relative to the size of the shadow that we are casting.  So it was very clear that I needed to get a team around me and frankly, it’s taken almost 15 months to put all my hiring in place.  You want to go first to the area that is the most mission critical, and in a technology company, that’s your technical area: product, engineering, and in Nextdoor’s case, data and trust. And in building that executive team, you need to figure out how you are going to put diversity in play, and I don’t just mean gender diversity or racial diversity, but beyond that, thinking about what you aspire to build and how the different pieces add up to make the overall team more interesting.”

"The other couple of things to think about as a new leader in an organization that is complex, where you can make a change that looks positive, and find out twelve months later that it is having a negative impact on engagement.  The interplay of the system is what I find so intellectually stimulating and also so frustrating at times, but in this context it is important to first experiment and learn quickly.  The second thing is cultural.  When you join a company in a leadership role, it is important to put a stamp on what is the new new that you want to bring, but you don’t want to throw out the old, there is a lot of good there, so how do you melt those things together so people can quickly get behind? I did a lot of work at the beginning to work on our purpose, our mission and our values because when you get that North Star from an organizational standpoint, people can go and march behind it but you don’t have to keep checking in so much.  When you give people the blueprint, that’s when you know that the decisions getting made are made in a sustainable way.”

Key role models and mentors

Sarah is fortunate to have worked with several generational leaders.  Here is how some of them have influenced her.

One of the great things about working with Jack [Dorsey] is that Jack lets you do what you are really capable of doing.  In my seven years at Square, I think that the only part of the organization that at some point did not report to me was front end pure product.  But literally everything else did, including back-end engineering, the risk business, I helped found Square Capital, our lending business, a very successful business today, and right before I left I helped found Square Payroll which I think will become an equally huge business.  Jack did not try to contain me to being a CFO, he expected me to be able to do the basics of that job before I could go on to do the next thing, and that’s all about people first, it’s about hiring great people.  Jack said that my job is to get myself to retirement, so I am going to keep hiring amazing people that can take over the work I am doing, because that frees me to go on to do the next thing.”

"Jack has a great impact on the way I think about building.  I was also very lucky when I made the pivot into my first operating job to work with Marc Benioff.  He is an amazing entrepreneur, he is the consummate sales person but he does it by really getting into the shoes of the customer.  When you see Marc with a customer, he is literally, because he is so big, in their space, but he really wants to understand their business. He does not walk into the room and tells you “let me tell you about Salesforce”, instead he says “tell me about Nextdoor, what are your problems?” and he is immediately brainstorming with you.  That customer intensity is a great thing to learn from him, it’s what makes him in my mind the best salesperson in the world”.

"Fast forward to today, another person that is having a great impact on me is Mary Meeker who sits on the Nextdoor board and was also on the board at Square.  If I go back to 2000 when I was a banker at Goldman, one of the really interesting pieces of advice I got that first year came from Abby Joseph Cohen. If you think about Mary and Abby, they were the two doyennes of Wall Street at the same time, Mary has the queen of the Internet and Abby was the person you went to when you wanted to know how the markets were going to move. What Abby said at that time, in giving advice to young women, was: “get yourself into a place where there is no qualitative assessment on your performance.  Go where the quant is”.  So in the case of being a research analyst, I looked at someone like Mary and I could see that the book was marked every day, you either buy the stock or sell the stock and look at where that stock closed relative to when you made the call.  And it did not really matter who you knew etc. any of the other things that come into play into organizations and can create a lot of bias.  That really helped my career because for the next decade, I had Abby’s advice in my head and I had Mary as an inspiration, someone I would never get to meet.  But after coming to Square, Mary was on the Board!  We have become huge friends and I probably talk to her every other day! It has been such a blessing in my life to find such an amazing woman to become a mentor, but also ultimately a friend”.

Nextdoor’s mission

I asked a typical question about the mission of Nextdoor, and Sarah added a nuance which stuck with me, in fact I have already started using the distinction in my professional environment.

"Nextdoor’s purpose is to cultivate a kinder world where everyone has a neighborhood to rely on.  I want to separate purpose and mission.  Why do I say purpose first?  Purpose should be enduring, in 100 years, when Jack and I will be sitting on those rocking chairs together, that purpose should be enduring as other people will have taken over.  But mission should evolve, you should, at some stage, have a mission accomplished otherwise you may not be doing things right.  So the mission of Nextdoor is what you started with, which is, we are the neighborhood hub that allows for trusted connections, that allows people who don’t inherently know each other to come together to know one another, and also for an exchange of goods, services and information.  For instance, answering a question like “what does shelter in place mean in your neighborhood?”.  If you want to exchange goods: people use our platform all the time for “For Sale & Free”, we see about $2B of goods transacting per month on the platform.  And for services, it is a great place to go when you want a recommendation for a great plumber or a great painter, because something is high trust about it, you can’t Amazon Prime it, you can’t Google Search it, this is about getting trusted recommendations from the people that live around you”.

Nextdoor over the past 6 months.

I asked Sarah to tell us stories from what she and her team saw happening since the Covid crisis started.  I had a hunch that they must have been at the forefront of a lot of inspiring moments and that their impact on communities, if it was not already obvious before, must have been even more accentuated over the past few months.

"During Covid, we have seen this huge lift in usage of the platform.  What has been inspiring is to see the willingness to help.  In the beginning, we saw the first rise being in the “help to give”, because after a disaster, the first thing you do, after you figure out that you are still standing, is asking yourself whether you can help.  In the case of Covid, it’s “can I go to the supermarket for you?” or “can I go to the pharmacy?”.  We actually rose to meet the moment at Nextdoor and created the help map where people could put their hand out and say “I am here and ready to help”.  The next wave was that of people finally getting out and asking for help.  What you find, particularly among the elderly, is that they don’t want that perceived vulnerability or weakness.  Even the couple of folks I help out locally always start the conversation by saying “I am really with it” or “I exercise a lot” but they also say “I really can’t afford to take the risk”.  I think it’s really hard for people to be able to vocalize that need.  The power of proximity plays out, I am just a stranger showing-up at their door.  There are also so many health benefits, psychological and physiological, the endorphins that are released literally help you live longer.  I could see it in a microcosm here on Nextdoor, in my community, but I could also see it across all of the Nextdoor platform, the large number of people who signed-up, and who are still signing-up since those crises are still ongoing, on Help Map. We have seen a 262% increase in members talking about helping, and that’s since February.  And in terms of members joining groups, we saw a 7x increase, and most of those groups were around help.  We saw the number of “thank yous” double.  It’s fun what you can do with data, you can see these themes rising and definitely these themes have shifted through Covid, but back in that February-March timeframe, we could see a lot of goodwill coming out of the crisis and manifesting itself in the platform.”

Nextdoor’s responsibility as a social platform

As Sarah described, Nextdoor is a platform with a broad set of use cases but part of it touches on the social aspect.  An attendee pointed out the fact that each neighborhood can develop its own culture and a culture can become toxic, how can Nextdoor avoid this?  I was really impressed with the thoroughness of the response, which illustrates how seriously the matter has been thought about at Nextdoor.

"It’s a great question and if there is something that keeps us up at night, it’s this question.  I am really grateful for the fact that the starting point of Nextdoor was really founded on trust.  Unlike other social networks, we verify you when you join.  We hope that everybody has a seamless experience getting verified but if it does not happen, we will end up sending you a postcard in the mail with a code to get you verified.  In Silicon Valley, that process seems nuts, they ask “why would you slow down people who want to join your service?” and it’s because at the core, we feel that it has to be founded on trust.  When you really know who’s in there, that’s one piece of how you maintain a culture.  The second thing is that we are a community guideline driven platform.  We do not say “we’re all about free speech”, instead there is a very clear expectation set for how you are going to behave once you are on Nextdoor, and in fact we just launched something called the “neighborhood pledge” to re-remind people, because we know that we are living in a moment of heightened stress, particularly in the US, and as we are heading into an election, it is even more heightened at the moment so we put a pledge in that reminds everyone of the guidelines, like “be helpful not hurtful”, “there is no place for racism or discrimination on Nextdoor”.  Everyone needs to sign-up to those guidelines.  The next thing we do on the moderation front, which I think is the hardest thing to do today on a consumer technology platform, is that we chose to have local moderators or “leads”.  We have hundreds of thousands of “leads” today.  We thought that local moderation by people in the community was the right way to moderate because those people actually have context, and what I did not want to see was a West Coast company, reviewing content for my Dad’s neighborhood in Northern Ireland because people would not have context for what is culturally appropriate: we love our sarcasm in Northern Ireland, so what some people write to one another and laugh at, in a California context you might have people shouting at one another.  From there, we have also used a technology layer to help and I don’t want to be one of those people who say that the answer to everything is machine learning or AI, but where we have gone very deep, particularly with academics, is how we slow people down.  It’s very antithetical to a typical Silicon Valley company, where the number one goal is usually engagement, and engagement is also our goal but engagement is something that may come with heated discussions.  In our case, we work with people like Doctor Jennifer Eberhardt from Stanford, author of the book Biased, and what she and her team brought to us was this concept of slowing people down, so we instigated something called the Kindness Reminder, as an example, which is a little interstitial that pops up when a user is composing something that is likely to get moderated.  Easy things to spot are clearly profane language, but we can also start to tell by things like the speed at which you are replying, are you using punctuation, are your words getting shorter? These are strong signals that conversations are probably downturning.  By pushing that interstitial, what you are doing is pulling people from their dinosaur brain, where their biases lie, into their frontal lobe where a lot of their learning and subsequent education in life brings about the recognition of bias and allows them to overcome it.  The other thing that the interstitial suggests is that, at a future state, your content will be reviewed, and when people believe that their content is going to be reviewed, they usually act better.  So there is a lot of deep academic research behind something that looks almost frivolous sometimes, and yet has an amazing impact on reducing toxic conversations.  The last thing I would say on the topic of good cultures becoming toxic is the need to recognize people’s preferences.  We are not a thought bubble, you are not in there just with your friends or with your colleagues, you are there with your neighbors who are more diverse than either of the first two groups, but we also recognize that there are certain people who don’t want to talk about national politics in their newsfeed, so there are certain topics where we push people to take it over to a group, so the conversation can continue, and we want it to continue, because I think that one of the things that the US needs the most right now is a place for tough conversations to happen, but in a more agreeable way.  We don’t want to stifle the conversation, but also recognize that other users would not enjoy it as part of the main newsfeed, so we make sometimes decisions as to where certain content has the best opportunity to flourish”.

The questions from the business audience that is the HBS community also brought us to discuss Nextdoor as a business.  We were treated to as good and detailed insight into a private company’s business as anyone outside the company will ever be at this particular stage.  Needless to say, I personally believe that Nextdoor is in extremely capable hands and I have high hopes for the future for the Company. We finished the event with the quickfire session, which is always fun and insightful with regards to getting to know the speaker a little more. 

I strongly encourage members to watch the full video on hbsanc.org.

What a great discussion that was! Sarah is an amazing business leader and seems like a great and fun person to boot.  She joins a long line of exceptional CEOs who have taken time to share part of their wisdom with our community. We are extremely grateful to her and to her team and will keep rooting for Sarah and Nextdoor going forward.

If you have enjoyed the event and/or this article, we really hope that you will join us for our next CEO Series Fireside Chat on 9/30 from 5-6:30pm with Ed Catmull, Founder and Retired President of Pixar and Walt Disney Animation Studios. 

Regards,
JP Emelie Marcos (MBA 2001), HBSANC Chair of CEO Series

REGISTER HERE FOR 9/30 ED CATMULL EVENT

About the CEO Series
The CEO Series is a long-standing HBSANC event tradition.  This series exists to foster continuous growth and education among the HBS alumni community by providing a platform for business leaders to share their experience, lessons learned, and advice and opinions in an interactive format.  CEOs of prominent companies such as DocuSign, Mulesoft, or Zoom took the stage recently in San Francisco to speak to our members.  From now until the foreseeable future, we will conduct monthly online events as part of this series to the Bay Area and other HBS alumni clubs nationally.

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This event is sponsored by Perkins Coie, a leading international law firm that is known for providing high value, strategic solutions and extraordinatry client service on matters vital to clients' success.  With more than 1,100 lawyers in offices across the United States and Asia, Perkins Coie provides a full array of corporate, commercial litigation, intellectual property, and regulatory legal advice to a broad range of clients, including many of the world's most innovative companies and industry leaders as well as public and not-for-profit organizations.


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