Privacy Focused Social Network Analysis: Facebook vs. Nextdoor

When I wrote about how Facebook could become privacy focused, I got to talk with a product manager at Facebook who told me that this was an internally discussed idea. However, they decided not to pursue the idea of sharing wealth with the good actors, as the gain for each user was too low.

This led to us discussing the alternatives (i.e. giving meaningful wealth to thought leaders that others can aspire to be, making virtual currency of Facebook coin carry more value within the Facebook ecosystem, etc), but I got curious to know if anyone had tried making a privacy focused social networking site before.

Did every social networking service follow the Silicon Valley style of optimizing for virality or did some take a risk by asking for more than just their phone number, as that would increase each users’ accountability at the cost of higher barrier to entry? Verifying the user’s phone number was meant to stop the flow of fake bots, instead of incentivizing users to think twice about the actions they take on social networking sites.

Moreover, did every social network make user actions public by default? Hashtags are used to increase discoverability of each post and by doing so, tech companies get to learn a lot more about the users’ online behavior and make each user their product. Optimizing for virality and discoverability made sense for social networking companies to grow, but they have created unintended incentive models that have deeply affected our society today.

Jack Dorsey at Senate hearing last year (source)

As Twitter’s Jack Dorsey said at the Senate hearing last year, Twitter [and other social media companies] must reconsider what the incentive model is for each user using their product. The products’ design choices are what drives each ‘nudge,’ so if a user behaves in ways that are harmful to the product and themselves, instead of blaming the user, the product teams must reconsider what nudge they have been offering to each user.

Hence, the question which drove my search was, “which product nudges users to intrinsically act well?” This question in essence would help me find the product that eliminated the trolls and gained user trust.

Anonymity of the internet gave many a masquerade, the Pandora’s curse of user generated content.

This would also address one of the questions Mark Zuckerberg asked in his annual Facebook post this year,

“In a world where many physical communities are weakening, what role can the internet play in strengthening our social fabric?”

The product that satisfied my search was Nextdoor, an app that will be unfamiliar to those who don’t own houses or live in Asia, as it is only present at Australia, France, Germany, Italy, Netherlands, Spain, Sweden, United Kingdom and United States. It is the world’s largest private communications platform for neighborhoods, designed to help build stronger and safer places to call home.

Let’s first cover why you may have never heard of it, although it has already amassed 90% of the US neighborhoods, with over 100 million users globally, and 236k followers on its parody Twitter account, @bestofnextdoor. Unlike Facebook, where one can create an account and enter discussions in an instance unless the group is private, members of Nextdoor have to verify their home address to join and start using the services of Nextdoor.

Users can use the address associated with their social security number or financial statements (billing address of credit/debit card) for verification. However, verification can also occur via a postcard sent to your home. Having a postcard sent by a tech company today may sound manual and inefficient in an era where most user-acquiring invites occur digitally, but postcard invites made up 29% of Nextdoor’s purely organic growth in 2018.

Each letter costs Nextdoor around 50 cents and the company has not disclosed the conversion rate of the postcards, but considering how the cost per acquisition via postcards was recouped by Nextdoor in 1 year of revenue, Nextdoor have brought a unique human touch that’s often void in the digital startup world.

The other ways users join are either by email invites, which makes up the other 29%, and direct joins, where users enter their home address to either start a new neighborhood, where they have to find 9 other neighbors to initiate this process, or join an existing neighborhood nearby, which makes up the rest (42%).

Nextdoor’s approach is unique because Nextdoor intentionally hampered their virality and discoverability severely to ensure that each member acts to the best interest of the community when they sign up. As they knew that each neighbor’s home address could be traced by all in their neighborhood, users can no longer hide behind the veil of internet.

However, the greater reason why you may have never heard of Nextdoor is because we are living in a world where 28% of the people in a study couldn’t name a single neighbor by name when Nextdoor was founded in 2010. We are living through a loneliness epidemic, where in a world that has never been more connected, people are feeling lonelier than ever.

Loneliness is now becoming recognized as a health epidemic (source)

Communities have also become more divided, as big data algorithms have been “used to manipulate people in unprecedented ways.” Social media introduced us to other users that we may never see offline, which pushed us further apart as there was no incentive for people to try to understand each other and emotional outrages filled our feeds, as they accumulated most likes.

Technology companies have also lost significant user trust over the past few years. Tech conglomerates previously devoted their efforts towards pushing people towards spending more time and money towards online activities that detached us from offline activities around us.

As Center for Humane Technology claims, “today’s tech platforms are caught in a race to the bottom of the brain stem to extract human attention.”

Hence, having Nextdoor suddenly ask for a user’s home address to start using their service may have been a tough ask. But as we can see from Nextdoor’s growth in number of neighborhoods, creation of authentic, real world communities are high in demand.

source: Kleiner Perkins Caufield & Byers Internet Trend Report 2018

With Nextdoor, you are creating a conduit for people to meet offline, as you know that you are interacting with those of close vicinity. By creating opportunities for people to leave their phones behind and leave their homes to gather in person, Nextdoor offers a unique value proposition.

Yuval Noah Harari, the author of several best sellers, also emphasizes the importance of developing a genuine, local community, claiming that,

“Most humans find it impossible to really know more than 150 individuals, irrespective of how many Facebook “friends” they boast. No nation, corporation or global network can replace communities of people who actually know each other intimately. Without these groups, humans feel lonely and alienated. Hence a global community can succeed only if it gives support to local communities.”

Nextdoor gives us an opportunity to do just that, as they have made a community based product. No product is going to be perfect and Nextdoor had its own share of problems, with racial profiling and unfair moderations causing anxiety amongst some users.

However, by nudging users to provide additional information, such as hair, clothing and shoes, they were able to reduce racial profiling by 75% and even likely help police in tracking down possible suspects. The best part of this app is that it connects people to meet in an offline world, so that users will no longer have to rely on their biases and interpretations when making decisions.

Racial profiling is a problem in the offline world, but Nextdoor can help fix that too (source)

For example, when certain users say offensive things, there is a community available to explain to them in person why what they said could be hurting to others. The risk of being traceable will certainly be a concern, especially if the neighborhood has people that you would prefer to avoid. However, even this could potentially be solved as the neighborhood community comes together and works to resolve the problems in person.

Survey studies also support that growth of neighborhoods are indeed having a positive impact on the society. 93% of Americans say it is important for neighbors to look out for one another, while 67% of homeowners feel safer in their home/neighborhood because they know their neighbors according to Harris Interactive Survey. Nextdoor is clearly delivering value, which is why they were able to recently raise $123 million at $2 billion valuation.

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.

source: Market Share Graph from 2016

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.

Brand loyalty can be built off all the words we see here, but in a more authentic way (source)

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.

Do we really want people to be replaced in stores?

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.

If Nextdoor succeeds in strengthening local communities, it could fulfill Yuval’s vision of having a stronger global community. We have to remember that our success as homo sapiens over neanderthals came not from our individual excellence, but from our ability to communicate and work together.

It’s time that we return to what made us be our best and build communities of trust. I am personally excited about what’s to come once neighbors of all countries become connected and start working towards the benefit of the community over themselves.

Perhaps then, we can feel more comfortable with our kids using social networking sites and be thankful that technology has empowered us all to become a global community that we can trust. People will make mistakes, but it will be made within a safe, encrypted place, so that any emotional outbursts could be resolved in person before it burns any bridges.

The ones that fulfill this dream may not necessarily be Nextdoor, but they have set a good precedence that many can draw inspirations from.

My hope is that technology for social good will no longer be a category, but be a necessity in how tech startups are evaluated. Internet has been with us for over 20 years and taught us a lot of valuable lessons. Mistakes are bound to be made when any technology matures and now that we’ve had our experiment stage, I hope that we apply the lessons we have learned and build our next decade for the good of all.

Privacy Focused Social Network Analysis: Facebook vs. Nextdoor was originally published in Hacker Noon on Medium, where people are continuing the conversation by highlighting and responding to this story.

Publication date: 
05/22/2019 - 20:16

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