The CEO of Nextdoor, the social network for local neighborhoods, plans to step down from his role after almost eight years.
Nirav Tolia, one of Nextdoor’s founders, emailed employees today that he is beginning a search for his own replacement, and will move into an “active” chairman role on the company’s board once the new hire is made.
“I think if you’re lucky as a founder, you build your company to a point where it makes sense to find a proven operator to take that company to the next level,” Tolia said in an interview with Recode, which contacted him after hearing about the move. “That’s where we are.”
While CEO changes aren’t uncommon at startups, they are rarely a tranquil transition. The move raises a number of questions for Nextdoor, and it’s possible that a new CEO will threaten the company’s culture and momentum.
The easiest way to think of Nextdoor is a Facebook for your neighborhood. The service, which was founded in 2010, uses people’s addresses to verify where they live and lets them join community groups with their neighbors to talk about everything from local crime to garage sales. In many ways, it offers a more intimate experience than Facebook by connecting people to others who actually live in their community.
That intimacy has also led to some troubling uses of the service, though, specifically around racial profiling.
But that Facebook-like social networking element has made Nextdoor one of the tech industry’s more promising companies, especially at a time when few consumer startups are gaining much traction. The company has raised almost $300 million and is now valued at more than $1 billion. It also recently started to make money, and just hired its first CFO, Tolia said. Nextdoor started selling ads for the first time in early 2017, and has been pushing to expand its product internationally, a unique challenge given the local nature of the product.
That growth is why Tolia said that he believes Nextdoor needs a more “operational” CEO. He dismissed any idea that he was forced by the board to move into a new role.
“I’m a co-founder of this company. I’m the single largest individual shareholder,” he said. “No one wants this company to be great more than me.”
Does this transition mean Nextdoor is thinking about an IPO? Not right now, Tolia said, but he added that the young business is growing. Nextdoor had it best quarter ever this spring, and has already generated more revenue in the first half of 2018 than it did in all of 2017, Tolia said. He declined to share specific revenue numbers.
“We think the valuation today is very small relative to what the opportunity is,” he added.
Tolia doesn’t have a high profile outside of Silicon Valley like some startup CEOs, but he has established himself as a well-known and well-connected Silicon Valley insider. Tolia is known for hosting exclusive dinner parties for entrepreneurs, many of whom have gone on to become some of the tech industry’s most recognizable figures. The gatherings have included guests like former Yahoo CEO Marissa Mayer, Apple’s Jony Ive and Google’s Larry Page.
LinkedIn co-founder and Greylock partner Reid Hoffman is another close friend of Tolia’s. Hoffman says the two have been discussing Tolia’s transition for months. That explains why Tolia specifically mentioned Hoffman’s transition from LinkedIn CEO to LinkedIn chairman as an example of what he’d ultimately like to do at Nextdoor.
Tolia doesn’t have a strict timeline for finding his replacement, but when he does, Hoffman knows what he should expect as part of the transiton.
“You spend the first, I think for me it was like six weeks of Jeff [Weiner] being CEO, being very publicly in support of the company, but not in the building,” Hoffman said in an interview with Recode. “Because what you’re doing is you’re rewiring the neurons. The natural thing is everyone comes to you to say, ‘Hey, can you solve this problem?’” That’s the job of the new CEO, he added.
Tolia says the company plans to look for its next leader externally, and given the small size of Nextdoor’s board, he thinks it’ll be a group effort. The board includes a handful of marquee Silicon Valley investors, including Benchmark’s Bill Gurley and Greylock’s David Sze.
“I think it’s a highly desirable [job],” said Hoffman. “There are relatively few massive-scale networks that really make a big difference in people’s lives. This is one of them.”
Here’s the full email:
Dear Nextdoor Team:
Just over eight years ago, I was blessed to be part of a group of seven friends who conceived of the idea behind Nextdoor. We were a tight-knit, ambitious group of co-founders who believed deeply in the power of community and dedicated ourselves to helping neighbors everywhere create stronger, safer, happier places to call home.
It is amazing to see how this simple but powerful mission has inspired the company that Nextdoor is today. That first year, we worked tirelessly to convince 176 neighborhoods to adopt our platform. Since then, we have grown more than 1000X - we now serve over 200,000 neighborhoods across five countries - including nearly 90% of all neighborhoods in the U.S.
All of this has been made possible by the passion and hard work of each of our employees. Your dedication and commitment energizes me every single day. I’ve never been more excited about our team, including our recent additions of Chief Financial Officer and Chief Legal Counsel. It has been the honor of a lifetime to lead this company as CEO.
Yet as Nextdoor evolves, the role of the CEO needs to evolve as well. The size of our footprint is growing larger and our organization is growing more complex. The time is right to find the next CEO for Nextdoor. With our board of directors, I will be leading the search to recruit a proven operator who can take our company to the next level. We will take our time to find the right person, so this process will likely take several months. During that period, I will continue to lead as CEO. When the next CEO is selected, I will become Chair of the Board where I will continue doing whatever I can to help us succeed.
The future is exceptionally bright for Nextdoor. We’ve never been more well-positioned to achieve our potential, both as a business and force for good in the world. Thank you for the last eight years, this has been one of the best experiences of my life. I will always be inspired by the amazing opportunity - and worthy mission - that makes our company truly special.
This article originally appeared on Recode.net.