I know what you’re thinking. Postcards? Sounds like the opposite of growth hacking and more suited for a small business than a social networking giant.
But this is a true story, and our offline marketing master is Nextdoor, the leading social networking platform for neighborhoods. It’s a simple and easy way for people in a neighborhood to relay information about anything from lost pets to garage sales. The company is currently valued at $1.1B and has raised $200M in funding from KPCB, Benchmark, Greylock, Tiger Capital and other top VCs.
As the CEO of Applico, I speak to to platform operators daily. I recently spoke with Nextdoor CEO Nirav Tolia to learn about the company’s offline marketing strategy and how it’s used technology to scale this offline neighbor-invitation program.
It all started with a simple problem: most people don’t know their neighbors.
“We spent an entire year in private beta testing Nextdoor in our own neighborhoods and our friends’ and families’ neighborhoods. What we realized very quickly was that many people didn’t know a single neighbor by name,” says Tolia. “If you don’t know your neighbor’s name, you definitely don’t have their email-so we knew early on that we would have to help our members grow their Nextdoor communities in other ways.”
The solution? Postcards. It’s a strategy the company likes to call “neighbor-to-neighbor mailed invitations.”
The way it works is simple: Nextdoor members browse their neighborhoods, see who isn’t on Nextdoor that they’d like to invite, and Nextdoor sends them a postcard invitation.
At first, it was a tedious process through which the postcards were printed in-house and physically dropped off at the post office at the end of each day.
How, then, did Nextdoor scale such a linear process?
“We built technology around this process to make it scalable,” Tolia says. “We send hundreds of thousands of postcards a week in a self-service way through the product and fulfillment center.”
The company also decided to limit the number of postcards being sent out. It started off with an fixed limit based on neighborhood size. Now, it allows select members to get more postcards depending on the size of their Nextdoor community.
Nextdoor describes their approach to scaling offline invitations, "This system allows us to scale our direct mail strategy as our member base grows without having to tweak complex parameters.”
The company also scaled with a mobile app. It launched on the web and then released its mobile app (iTunes & Google Play links) two years later when it knew the conditions were right. It can be difficult to know when to scale with mobile, but with the right platform advisory, this will become clearer.
So despite the limitations of offline marketing, the company was able to scale with the help of technology.
The whole process has proved incredibly effective. Each postcard serves more as a letter from a neighbor than an advertisement from a company, which improves signup rates.
“A meaningful percentage of our new members came through postcards,” says Tolia. “Our continuing efforts have enabled postcards to become a cost-effective way for neighborhoods to grow.”
Despite its success, Nextdoor is still finding ways to improve. “We are focused on improving the experience of receiving and giving a recommendation on Nextdoor as well as helping our members better discover events in their community,” says Tolia.
So what’s next for Nextdoor? Expansion. “90% of neighborhoods in the top 40 US cities by household count rely on Nextdoor,” Tolia says. “We are now focused on achieving a similar level of neighborhood adoption in the top 100 cities.”
Nextdoor didn’t follow the conventional path to startup success, but its unique strategies helped it become a billion-dollar company. Here are a few lessons from this unicorn’s journey.
Tipping the Scales recommendations:
1. Learn by any means necessary.
Nextdoor beta tested with friends and family. They made daily trips to the post office to test their referral system. It was tedious, but they learned from it. Baby steps are okay in the beginning as long as you’re learning and improving network effects along the way.
2. Use technology to scale linear processes.
Nextdoor knew its offline efforts had scalability limitations. But technology mitigated the limitations. “Before we launched on October 26, 2011, we’d already built the ability to send postcards to neighbors,” says Tolia. The company then improved the parameters governing the allotment of postcards to permit the process to scale as more members joined.
3. Don’t be afraid to take the road less traveled.
There’s a ton of growth hacking content. None will suggest offline marketing to solve the chicken and egg problem. But it turned out to be the perfect solution for Nextdoor. Every startup is unique.