NextDoor’s ‘Neighborhood Favorites’ Gets Closer to a Business Model

Next Door Media 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 on his blog.

There is reason, of course, to be skeptical. Hyperlocal concepts from AOL Patch way back to Family Education Network have typically relied on high penetration of local users, frequent newspaper-like visits, and active participation. None of them have come close to succeeding as local media.

Until now, there has been no reason to think that NextDoor, which was founded in 2010, would be different. A neighborhood site with just a few active neighbors doesn’t make it as media. Basically, given the problems in the hyperlocal space, the major reason we’ve continued to pay attention to Next Door is its ability to raise lots of money — $210 million at this point, giving it a $1.1 billion valuation.

The VCs have obviously been told something we don’t know. And what’s that? That a directional model will make more sense.

Like Yellow Pages, this is what NextDoor is going to be adept at providing. Currently, the company’s “recommendations” – unorganized by business category – are getting one million posts a day from its 53,000 microcommunities, with 800,000 specific cites of businesses. Favorites will only be compiled and sent out to people in the immediate and adjacent neighborhoods, limiting their potential exposure to hype and scam artists. The ten initial categories being compiled are electricians, pest control, plumbers, HVAC, general contractors, dentists, auto mechanics, body shops, roofers and vetenarians

I suspect that when it can begin promoting its service, there will be a genuine viral effect on recommendations, and on new signups. And at that point, NextDoor can begin charging for access, analytics etc.

Here’s my personal story: The leaves are off the trees and completely cover my gutters. So I just called a gutter cleaner from someone who lives within a mile of me that was recommended on my Next Door community as “very good” and “inexpensive”.

I didn’t know where else I would have gotten that recommendation. Facebook, the various Facebook groups in my metro area; Angie’s List, Yelp and the local newspapers and Yellow Pages aren’t there yet. Their closest listings or recommendations would probably have come from Medford, a larger market — but that is 15 miles from me, and I suspect, would have at least doubled the cost.