Nextdoor cofounder: To build a billion dollar company, don't be afraid to do things that don't scale

If you want to build a billion dollar company, don’t be afraid to do things that don’t scale well, said Nextdoor cofounder Sarah Leary onstage at the Fortune Most Powerful Women Next Gen Summit.

She cofounded her social network for neighbours five years ago. This March, it achieved the mythical “unicorn” status in Silicon Valley when its valuation reached $1.1 billion, following a $110 million fundraising round.

In Silicon Valley, where building automated online services that can serve hundreds of millions of people is the conventional wisdom, Leary’s advice may sound like heresy. But according to the entrepreneur, companies can often benefit early-on from doing things the old-fashioned way.

In the Nextdoor’s early days, the company did things that wouldn’t be possible when the service’s reach grew to 170,000 neighbourhoods.

For Leary, that meant drawing neighbourhood borders by hand and signing up customers one-by-one. It gave her team time to find the ‘special sauce’ for what makes Nextdoor work and to study how people were using it.

“You can’t skip that first step of doing things that are unscaleable in the beginning if you eventually want to bring it to scale,” she said.

Some investors and employees might shy away from a slower approach in the beginning if they’re expecting explosive growth, so both Leary and Eventbrite co-founder Julia Hartz emphasised having those discussions with investors and employees early on.

“Growing it iteratively is so, so, so important. We haven’t had this crazy hockey stick growth curve. We’ve had steady growth year over year,” Hartz said. “That comes back to not only patience but the people who you choose to have with you.”

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