Sarah Friar, MBA ’00, On How To Make Strategic Career Risks

Sarah Friar: I totally believe that great ideas come from everywhere. In companies, you don’t want just the product team thinking about the product, the finance team thinks about finance, the marketing team thinks about marketing. You want everyone all the time feeling like they’re an owner and they can have a point of view on any part of the company.

Zack Doherty: Welcome to View From The Top, the podcast. That was Sarah Friar, CEO of Nextdoor. Sarah visited Stanford Graduate School of Business, as part of View From the Top, a speaker series where students, like me, sit down to interview leaders from around the world.

I’m Zack Doherty, an MBA student of the class of 2024. In our conversation, we discussed…. (usually a list of three)

Zack Doherty: Sarah, welcome back to the GSB.

Sarah Friar: It’s always so fun to be at the GSB, although this a much fancier GSB than the one I went to. [I went to the one] down the street. But you moved the bird, so now I’m totally confused.

Zack Doherty: We are so excited to have you as our first speaker, not only as a GSB alum, but you have literally done it all. I think you have a story that can speak to each and every single person in this audience. Just to paint a very small picture of what that looks like, we have a short graphic.

Sarah Friar: Oh my God.

Zack Doherty: You can see. So, born and raised in Northern Ireland. You’ve rode crew at Oxford. You took on Wall Street as the girl facing the bull. You’ve worked alongside Jack Dorsey. You’ve launched two IPOs. You’ve met the Queen.

Sarah Friar: I did.

Zack Doherty: Now you’re here with me.

Sarah Friar: It’s just been a constant rise.

Zack Doherty: And so, I’m hoping your luck of the Irish rubs off on me in this brief time I have with you on stage. But if we take a look back at where it all started, it seems like lucky really had nothing to do with it. And so, can you tell us what it was like growing up in Northern Ireland and how that shaped your perspective and life trajectory?

Sarah Friar: Sure. I would never say luck doesn’t have a play in it; it absolutely does. But it’s definitely — luck is whatever, the preparation meets opportunity, but you got to grab it.

I grew up in Northern Ireland. I realize today I have a very bad American accent. But if we were to go and have probably a LPF or something, you’d start to hear the Northern Irish accent come out. But yeah, I grew up during The Troubles, and it was not a pretty time. I grew up on the border just outside Derry. My local town, it’s called Strabane, had the absolutely — it still is if you go look it up in Wikipedia or whatever — had the dubious honor of being the most bombed town of its size for, I think, three decades, and that includes during the Bosnian-Serbian crisis and so on. So, we still won on that front.

But on the other side, it was an amazing place for community, and we’ll arc back to it, I’m sure, when we come to Nextdoor. But I feel like I got to see Nextdoor in real life before there was a thing of virtual Nextdoor. Because my mom was the local nurse. My dad was the local personnel manager of the local mill. The whole village excited because of this mill; it was founded by the Quakers. And there was rarely a night where someone didn’t knock on our door for some reason, whether they had a medical problem.

My mom was actually the midwife. So, if you were giving birth, and most births happened at home even at that stage, my mom would be there to catch the baby, usually pushing the doctor out of the way. She thought they were useless, which always makes me laugh because my brother’s now a doctor. So, she likes to remind him, he’s not that useful.

My dad would be there if you needed a job, if you needed help with money. And there could be all sorts of societal things, social things going on. And they were always there. And I think that was just a great grounding for me on what it meant to invest back in your community, and in doing that, what that does for you. My parents are now in their 80s. They still live in that same house, and they’re still a formidable part of their community.

Zack Doherty: And now, all those experiences growing up and finding strength in community eventually led you to the GSB where there’s an equally strong community. What were some of the key opportunities that you took advantage of during your time here and lessons that you took away that you continue to apply today?

Sarah Friar: Yeah, so probably the biggest reason I ended up here was a willingness to take a lot of risk, for better or worse. Even as a kid growing up. It was funny. I had a doctor’s appointment this week, and the doctor asked me issues, and I was like, “Not a lot.” He’s like, “Have you ever broken anything?” I was like, “Oh, broken things. Let’s talk about that.” And when I started spewing them all off, ‘he’s like, “What did you do? ” And I was like, “I don’t know. I was a risk taker. I was a tomboy growing up,” and that kept going through career.

When I was at Oxford in my undergrad, someone offered me the opportunity to go off to Ghana. Actually, my degree is called metallurgy economics management, but material science. And my tutor at Oxford was figuring out how to release gold out sulfide ores, and it was moving from a lab process to an industrial process called BIOX. And he said, “Would you like to go over there and actually see it in action?” and I was like, “Count me in.”

I had no idea what I was signing up for, no idea what a mine was like in a place like Ghana at that time. And really showing up and finding both some amazing things that happened, but also really recognizing a place I didn’t feel particularly welcome. There were almost no women on that mine at all. So, that was a really good moment of like I took a risk. Part of it played out, but not all of it.

So, I came home a little bit tail between my legs, actually, frankly, from that experience. I zagged the other way, joined McKinsey. Very different. But because I’d been on that mine, they sent me to South Africa, and that was another moment of taking a risk.

So, I went to South Africa in 1996, right after apartheid had ended. It wasn’t particularly safe, so another kind of — a little bit of taking life risks as well as career risks. But it was such an amazing time to go see a country being born, the Rainbow Nation. Mandela had risen. And the country that at the time — it makes me sad a little to see South Africa of today — but really wanted to bring about this whole new world where the Rainbow Nation, everyone joined hands.

Because I went to McKinsey — this is the moment where I get to the GSB — I’d never heard of an MBA, frankly. I had no idea what this thing was, but I was like, “Two years? You can pay for me to go somewhere for two years? And I can pick where?” And in my complete naivety, and it could’ve seemed like hubris, I really only applied to two schools. And I was so incredibly blessed that I picked to come to this one.

And frankly, again, it was a little bit of a risk. I didn’t really know anything about California. I’d never seen the school till the day I showed up to move in and drove down Palm Drive, right? How people have done that for the first time and you’re literally like, “I’m in a dream. This can’t be real.”

In fact, when I lived in Schwab, and I’d open up my blinds every morning and the sky was always blue. Remember, I grew up in Northern Ireland. This is a big difference. I literally called it The Truman Show, if you’ve ever seen that movie. I’m like, I feel like I’m inside the bubble. Everyone’s chipper: “Good morning, Sarah.” “Good morning.” “Professor Saloner, I’d love to talk about strategy today.” But yeah, it was an amazing outcome.

So, I guess the arc is take risks. You think that you have to keep doing these things to build expertise, and that somehow if you zag, it’s going to be all these risks you’re going to take. It’s all in your head, absolutely all in your head. And I think my big learning in getting to Stanford, and even subsequent, is it is really good to take zigzag risks and to lean into just these moments. It was a cocktail party that took me to South Africa. It was a conversation with a partner at McKinsey who was like, “You worked on a mine?” Again, it was very much community and social interactions that layered on top of a career path.

Zack Doherty: So, not only have you talked the talk, but you have walked the walk with taking phenomenal risks, particularly around your career at Square. So, prior to Square you were working at Goldman. You’d been there for over 10 years. You had reached the level of managing director, had a very successful tenure. And then decided to take the huge risk to join this small, relatively uncertain company called Square. Can you tell us what motivated that decision and what was going through your head at the time?

Sarah Friar: Yeah, so I definitely head a moment, actually, at Goldman during the great financial crisis — so ‘08, ‘09 — where I really felt I lost that moment of purpose. And my parents, as you can hear, were very big on a reason to be in the world. Today I think a lot about this ikigai framework, if you know, a Japanese framework. So, it’s what the world needs, what you’re good at, what you’re passionate about, and then importantly, what you can get paid for, right? Without the bottom, it’s a hobby. And this makes it a job.

When I looked at that moment when Goldman was on the front page of Vanity Fair, I think it was, as the vampire — no, Rolling Stone magazine as the vampire squid or the vampire — yeah, vampire squid, it was a hard moment. My parents were calling me and checking in, like “Is everything okay? Who do you work for?” [There was] a lot of fear. And I’m very proud of my work at Goldman. I’m proud of the firm and what we did. But it made me realize that for me personally, purpose was, in some ways, everything.

Now it still took me three years to extract myself because I had a lot of fear at the time. First of all, the world had almost ended from an economic standpoint, so you did not take having a job lightly at all. Number two, I had two very young kids at the time, and my job kind of worked for me. So, it was hard as a working mom to say I’m going to throw all those balls up in the air and we’ll just see how they land on the other side. And I’m going to go into corporate is how people talk about it.

But in the end, it was a push from a couple of mentors. I actually did a small hope to Salesforce, so I give Marc Benioff a lot of credit for pulling me out of Goldman and saying, “You really would be a better operator.” It was also moments of learning about myself.

These talks, I’ve been to many of them where I’ve listened to just incredible people. So, I’m going to start you low and your View From The Top is going to crescendo from here. But I think of them as it’s almost like you’re creating your own patchwork quilt. You’re going to get pieces of advice and information, something that might inspire you, something that feels really apropos. But then you are going to create the quilt that works for you.

And so, in a moment of being at Goldman, coming home one night. And at the time, my associate had gotten promoted to VP. And it had taken us a couple of years to get her there. It was a lot of fighting for her. It was a lot of learning, me personally, about what it means to be an advocate for someone, not just a mentor. So, you’re really standing up for them in that meeting.

But she made it over that finish line. And I came home and I — I keep pointing down here because my husband’s just sitting here — but it was like cracking open a bottle of wine, a bottle of champagne tonight. And David said something along the lines of, “I’ve just never seen you this excited about a stock pick.” And it kind of just like annoyed. It’s like sitting on a burr. It annoyed me for a long time. I was like maybe I’m actually doing the wrong thing. And then it was a moment of failure, frankly, that made me finally make the decision.

So, I was in the running for partner. I really thought it was my year. I was super excited. I felt like I had checked all the boxes. I know most of you in this audience are complete overachievers, right? So, we all have boxes for like, I got an A, I got an A-plus. Always done the right thing. And in that moment when I got the call, it was an early morning call, that said this is not your year. And in fact, partner years are every two years, so this is not your two years.

I went through the full ranges of grief just in that morning. I called my husband; he said, ““I’ll walk over.” He said, “Don’t cry. Don’t cry in the office.” I’m like, “Okay.” It’s okay to cry in the office these days; it was not okay at that point. I walked on stairs. I’m Irish, so I swore the whole way around the building we have a very big lexicon of swear words when you’re Northern Irish. And once I’d walked the building a few times and recomposed myself, he said — My husband’s sounding like he should be up here because I’m about to give him credit for a second moment of insight. And I’ll pull it to something that’s important for all of you. He said, “They’ve kind of set you free,” and I was like, “What are you talking about? They have devastated me.” And he’s like, “They’ve set you free. If you want to say and push to be a partner, full support. But they’ve also allowed you in this moment to really look around.”

And that’s where that moment of recognizing some of the things I was way more passionate about. I had lost my sense of purpose. I knew I loved developing and working with people, which being a research analyst, that wasn’t perfect for that because you are inherently working in a small team. You don’t have a lot of force multiplication out to others. And then the third piece of suddenly being somewhat free, it all worked in that moment.

And so, as you think you’re going to move through your career, you’re going to end up in places, you’re going to have built to a local maxima. But I would push all of you to say when you want to go to the next place, sometimes you have to tick down to go to the next. Because in the end you want to build to a global maxima where you can have maximum impact based on what you’re passionate about, what you’re good at, what you can get paid for. When all of those circles align, then you hit flow, it’s an amazing moment. And also having a great mentor, someone who will just really truth talk to you, is an incredibly important piece of the puzzle as well.

Zack Doherty: That’s amazing. A I really love the metaphor that you use about patching together that quilt. And I’m sure that must have guided you also in your decision to ultimately leave Square after, again, seeing it through its IPO, reaching a $30 billion market cap.

It’s very obvious in your story that this idea of connection is hugely important to you. And in speaking with people that have worked directly for you, the overwhelming feedback that I’ve heard is that you touch every person’s life that you meet and make them feel like they’re the most important person in the room. That’s a direct quote. In terms of your ability to be such a high achiever and high performer, what’s your secret to balancing that with creating positive work cultures that make people excited and passionate to show up every day?

Sarah Friar: Yeah. So, it does have to start with what is important to you. So, if you ask me what is my leadership mantra, it is people first. Because I fundamentally believe that if you get the right people and you really let them fly, and that involves a lot of giving them a lot of autonomy, encouragement, tough love. But if you do that, then the A team with the B idea will always beat the B team with the A idea, in my humble opinion.

We could probably debate that. I’m sure there’s lots of case studies where you prove me wrong. Sorry. But that’s what I’ve seen over the course of my career. Because in those tough times when you have done that investment in people, they will run through walls for you.

And if I go back to Square for a moment, so Square was such a shock to the system when I went there. So, I went from — I can’t remember how big Goldman was at the time — 35,000, 40,000 people. I went to Salesforce which was a 5,000-person company at the time, which also felt so small. And then I went to Square and it was 200. It was so strange to be in a company where you actually could see everyone every single day, not just get to know them, but literally every day you were in their space.

And if you look at the arc of Square, at the time it may probably have looked very straight up and to the right. It’s never like that inside companies. It is absolutely you’re paid to work on the things that aren’t working. So, you have a tendency to always think nothing is working when you’re inside a company. And that’s also a good learning about your own personal resilience and remembering to actually celebrate.

But when Square went public, it was awful. We went public at a time when the market had been closed for kind of like right now, a very elongated moment in time. We had done our last funding round at about a $3-ish billion valuation. To make it easier, it was about $18 a share, because this is going to make it easy when I go to the next point.

We hit the road. The market is absolutely shitty. Our roadshow is not going that great. I know it’s not going that great. The bankers are doing the best they can to be like, “Your book is almost covered,” and I’m like, “That’s not good in IPO. You need to be 20 times covered.” And I had a team with me that had never been in the market, so they were lapping in that. “This is great. The book is getting covered.” And my stomach is just going, arrrgh, this is terrible. But you can’t stop; you’re on it.

And then we get to that night of pricing, which is actually the final moment where you could actually say at that moment, we’re pulling our offering. You could say that. But there’s so much. It’s like a tsunami that’s coming behind you. Everyone’s excited. People have flown into New York to ring the bell and so on.

And so, when the bankers price the deal at 8 bucks a share — so I said 18 — 8 bucks a share, I just remember that night. I literally get goosebumps right now. But on the people front, I really felt like — I was like, “No, we can do this. Because you know what? It doesn’t matter.” What we did to get to the other side is we really shrank the deal overall. We sold 7 percent of our company. Most IPOs sell about 14 percent.

So, we said we hate this price, but we’re going to still push to the other side, raise money when you can. I think we raised $280 million. It’s like such a small amount, actually, in hindsight. But we’re going to push to the other side. And then for the next year, our stock pretty much — it broke offering. I think it got as low as $6. It was brutal. So, your question about people is so important. Because if you have the right team whose mission-driven, who’s there for the right reason, and you have created a personal relationship almost with them and they trust you, they will run through walls behind you. And that was that moment when I saw that happen from a Square perspective.

And it’s crazy, right? We raised $280 million in that IPO. I think a year later we did a billion-dollar debt offering. I think two years later we did a $3.5 billion debt offering at almost zero percent. It was crazy how the market then flipped and the stock really took off. I think the market cap when I left, right before I announced I was leaving, we had a hundred-billion-dollar market cap because we were on the road marketing in Chicago and I remember that day because it was a really big deal to hit that market cap. But it really came down to the people and having spent the time invested in the people.

Now your question was how do you do that. It’s hard. You have to take the time, because people are literally one person at a time. You can try to do some more scaled up things. So, for example, I always since I started working in corporate, I’ve always done a welcome wagon. So, I try to group people up whether it’s once a month or whatever. Anyone new joining Square, anyone new joining Nextdoor, I meet with them for an hour. And it’s my way of going around the room. There’s no agenda. But it’s kind of a touching moment.

And I always tell them, “I want you to leave this room — there’s only one thing I want to leave this room, I want you to feel like I am super approachable. I want you to see me as a human.” I introduce myself as a human being, not as a CEO or a CFO or strategist or whatever. But I’m like, “I’m Sarah. I have two kids. I have a great husband. I grew up here.” I want them to see me as a human for two reasons. Number one, when people see you as very accessible, they will come and tell you their best ideas.

And I totally believe that great ideas come from everywhere. In companies, you don’t want just the product team thinking about the product, the finance team thinks about finance, the marketing team thinks about marketing. You want everyone all the time feeling like they’re an owner and they can have a point of view on any part of the company.

But the other thing that’s really important, and I probably felt it more keenly even as a CFO, is risk. You also want people to feel that they can speak up no matter what. There’s going to be no consequence. I always tell them, “Come tell me. ” What I hope is I’m going to say, “We know about that. Here’s the mitigation. We’re in good shape.”

But every once in a while, people bring you a risk and you’re like, “Huh. I hadn’t thought about that. Let me go sweat a little and then we’re going to figure out how to go mitigate it.” But to me, that’s part of the why is that you want to keep those doors very open as a leader so people will come talk to you, tell you, tell you. It’s how you’ll build a great company.

Zack Doherty: In terms of opening doors, let’s turn to Nextdoor.

Sarah Friar: Good segue. Well played. Those Irish genes, yeah.

Zack Doherty: So, it’s very clear how mission-driven and value-oriented you are, and again, the focus of bringing people together. Can you tell us a little bit about what it’s like to be at the helm of a company whose sole purpose is to build and strengthen communities and human connectedness?

Sarah Friar: Yeah, so you all can see the arc for me why on the one hand it was very hard to leave Square. Absolutely loved what we had built. It was a family, almost. But getting to Nextdoor, the purpose just made it all seem karmic, almost.

Today Nextdoor — hopefully you know us. If you don’t know Nextdoor, I will be okay if you leave right now and go sign up, no problem. But we serve about 85 million verified neighbors on the platform, 310,000 different communities across 11 countries, and we fundamentally believe everyone’s a neighbor. So, this is a platform for anyone. We can’t let you on till you’re 13 and up, but pretty much everyone is part of a community.

And the decision to go there was, number one, that purpose just really sang to me. I’m sure we’ll talk about some of the themes, whether it’s addressing themes of loneliness, whether it’s addressing themes of things like cost of living. How do you help people make money in their community? Things like crisis response. In a moment of a true big crisis — we all lived it with COVID. But if you think about a hurricane. Hurricane Harvey blowing into Houston was actually a seminal moment in Nextdoor’s history as a company because it was a moment when 911 went down. It got overloaded.

And so, the mayor of Houston actually got on TV and said, “Hey, if you know that Nextdoor app, download it and please start helping your fellow neighbors,” because those were the people that showed up in a boat to take you off the roof of your house whenever everything was flooded. That’s who sticks out the hand and pulls you out of the waters. And they don’t ask, by the way, in that moment like, “How do you vote?” “Do you believe in gun control?” Humans will help humans in times of need, which is something I love about the platform.

So, the purpose was big, but there was also an extra element of feeling like I had to step up in the world and lean into that you can’t be what you can’t see. I felt like I had spent a lot of my life on a stage often talking to rooms of women, non-binary individuals, and saying, “Just do it. Grab that leadership moment. We have to show up for each other.”

And so, there was definitely a moment of saying, “Oh, I need to do that, too.” A little terrifying at times. But I wanted to say, “Hey, women can be CEOs.” I never want my kids to grow up and not just see that as a normal part of life. And women can run public companies. And it’s tough, but I really think it’s important to also lead the way, not just talk about it.

Zack Doherty: In terms of seizing the moment and leading the way, we’re obviously at a very pivotal time in technology with AI. How are you looking at incorporating AI into Nextdoor?

Sarah Friar: Yeah, it is an amazing moment in time. I felt so blessed to show up to The Truman Show that was the GSB in 2000 because there was a platform change happening, right? The Internet. Yes, I am that old. You are all living through something that I think is literally orders of magnitude bigger in terms of a platform change. It’s such a seminal moment.

At its ground level, data is everything if we’re going to build those LLMs. Clearly, we see it in action already. And so, from a Nextdoor perspective, what I get excited is that we own the local knowledge graph. So, we have a really unique graph; no one else has it. That is one of the interesting things about social networks is you have to plant your flag and own your graph. LinkedIn owns your colleagues, your work environment. Facebook is your friends and family. But Nextdoor is your local knowledge graph, and that data is very dynamic.

So, if you think about we just grabbed a coffee over at — turns out there’s multiple Coupa Cafes on Stanford campus, who knew? — but the Coupa café, at the moment, I could easily have tapped in like, here’s the special today. By tomorrow that data is cold; it’s not interesting anymore. But it’s very different from a Google Local Search or even a Yelp search, right? It’s got a lot more color and texture and so on to it.

It’s also data that’s already pre-labeled thanks to the 85 million people on our platform. What I mean by that is you’ll hear many companies talking about needing to go label data. It’s often kind of Mechanical Turk is how they do it. But in our case, if you post a recommendation, it’s clearly a recommendation. If you post lost, it’s clearly lost. If you flag something for moderation, then that gives us another piece of labeling to that data, that here’s content that a neighbor feels could or should be moderated. So, it’s a very interesting moment as a platform.

Now we’re definitely trying to — You’ve got the very big guys in the room, guys and gals in the room, but the Googles, the Metas, the Microsofts, and then the OpenAI’s Anthropics. And I clearly just only talked about U.S. companies. Let’s look to what’s going on in Asia as well. But then I think there’s what a practitioner like a Nextdoor can do sitting on top of some of those models. We use an API to OpenAI.

And a couple of the places we’re moving into right now. Number one is we’re helping neighbors just make more engaging posts. So, as you begin to make a post, particularly in areas like recommendations, which is about 20 percent, 25 percent of the content that happens on Nextdoor, it’ll actually recreate the post for you to make it more engaging.

So, if you haven’t — You all have experienced ChatGPT, but often I’m talking to a room of folks from all walks of life, all ages, who maybe haven’t even heard of something like ChatGPT. And I’m like, this is a way to experience it in a very nonfrightening way, something that’s actually going to help you. So, that’s one place we’ve deployed it. And we are seeing better engagement, which is great.

A second way has actually been in areas of moderation. We’ve done some amazing work with folks. Dr. Eberhardt sitting right here in the audience. And Spark, if you don’t know the [do] lab they have — yes, oh, hey — it’s wonderful what they’ve done.

So, we deployed something actually way back in 2017 called Kindness Reminder, and it was premised on the social science of slowing people down. So, we’re using ML all the time. Long before generative AI came along, AI/ML has been in place to score every post. And when a post looks like it’s getting to a headed moment, we’ll slow you down by popping up a little contextual moment that says, “Hey Neighbors, remember great communities are created with kindness.”

What we write there is important, but actually, the more important thing is that we’ve made you read something. So, now you’re back in this part of your brain where you have learned, to some degree — sometimes big, sometimes small — to overcome bias. Today that’s actually been very successful for us, about 35 percent to 37 percent of all people who see the Kindness Reminder actually decide to edit their post because that’s what we prompt you to do.

But now with generative AI, we’re actually now offering you a constructive way to do it. Because I do think about the other 70-ish percent or 65 percent that don’t edit. I’m like, where are you all at? You just want to not be that constructive in your community, or are you a bit stuck? You don’t actually know how to word it in a way that’s constructive? So, even we can nudge up another now — maybe it’s another 30 percent we can grab through an Ai, that’s a great outcome.

When I talk to folks about this, if I go back to Northern Ireland, we had to get people around a table where they did not want to talk to each other in any sort of constructive way. And remember, it was brutal. You might be sitting at a table with someone who maybe murdered a member of your family, right? These are not like, you didn’t take your bins out or who was it that parked their car where you didn’t like them. This was awful conversations. Or what went on in South Africa, when people had to talk about what had happened, like real trauma. But just getting people around that table to be constructive, look what can happen, right? We created peace almost exactly 25 years ago.

So, on a very much smaller context, if we could just help people be more constructive, can we actually therefore start to create better, healthier communities? Because I actually think the worst thing you can do is close down the conversation. So, in a lot of platforms they move to moderation, removing content. I’m really trying to nudge people to say here’s how we can have those tough conversations, but have them in a way where maybe we’re more open to listening.

Zack Doherty: So, based on what you describe, Nextdoor is tackling some of the biggest issues in society and that we see rife throughout social media. There also seems to be this very interesting confluence or overlap between what Nextdoor offers as a private company, and then facilitating some traditionally public sector interests.

So, you mentioned the hurricane response. I know you were also personally involved in Governor Newsom’s rollout of the COVID-19 response. So, can you speak to, A, how you see Nextdoor as having this intersection with government, and then B, where you see that those two things should be delineated and those responsibilities being kept separate?

Sarah Friar: Yeah, so if you go back to the definition of a neighborhood, it’s not just the residents, right? A healthy, thriving neighborhood is the neighbors, but it’s the businesses, it’s the public agencies, it’s the school, it’s the church, and, and, and, right? Here’s many, many organizations at play. And so, we view Nextdoor as important to bring all those organizations to the platform.

So, today we have about almost 6,000 now, I think, public agencies that can range from the local library to FEMA to 10 Downing Street to the London Mayor’s Office. So, it can go very broad, nationally, down to the super, super micro. Last year — I think it’s last year’s data — there were 18 billion-dollar disasters, climate-related disasters, in the United States alone. I think the total cost to the economy was about $175 billion. Those are moments where, as I talked about with Hurricane Harvey, it is vital, frankly, that residents are involved. Because those are the moments where you all are going to save each other.

Think about your own experience in COVID. I’m sure even in the GSB community people stepped up, right? You maybe went to the pharmacy for someone that couldn’t, that was immunocompromised. Maybe you thought about an elderly person that might not be able to get out of their home. And so, this is the power of really energizing community. But there still needs to be a link often to the public agency to know what to do, how to do it, where are supplies, if there’s sandbags or whatever. We want to make sure that that messaging ins coming through the platform as well.

And in fact, we just added in — in a kind of trifecta, we just added in weather alerts for exactly this reason. So, now working with Weather Company to say, okay, in the moment of, say, a natural disaster, you can both get the commercial side weather alert plus what’s going on with the local public sector. Plus, then how can neighbors, the private sector, rise to help? So, I think that’s where you get the beauty of it.

I do absolutely believe that there is a dividing line, though. It’s usually where, ultimately, the private sector starts to fail is the moment when the public sector has to step in. Do we do that incredibly well? No. It was eye opening to work on Governor Newsom’s COVID response, in good ways because I could see the diversity around the table. There were groups of people I would never normally sit at a table with. Unions, for example. Very important and powerful groups in California.

But it was also, as someone who works int the private sector, sometimes frustrating the speed with which you could get anything or maybe nothing done because there were so many competing elements and people rather than working on the thing here. I was working particularly on small businesses. Small businesses were devastated.

If you had an in real life business, if you were a hair salon, if you were ever the local pizza shop or whatever, I guess you could still deliver, but you were being devastated. And we couldn’t pass something simple as how to just get you money to pay your employees because people, the many constituents around the table who all had their own thing they wanted, wanted that to get tacked on. And then the whole thing couldn’t move forward because everyone disagreed with all the tack-ons.

It was a place to see both when you can almost pull something off to the side, just go work on it and make it happen, and ask a little bit less for permission and just do. You could see the power. Because then when you do get something moved, when you have the state of California coming behind you, you’re no longer talking about like, can we hit 10,000 businesses. You’re hitting millions of businesses.

So, it’s both the power of the state, but also the slowness. And I’m sure many of you are probably doing joint degrees here and thinking about how do we inject some of that speed, some of the competitive elements that I think the private sector does so well into the public sector, but also recognize that a healthy, thriving public sector is needed to catch the people that fall through the safety net.

Zack Doherty: That’s such an incredible impact, and it is everything that I nerd out about at the GSB. I could ask you 30 more questions. In the interest of time, because I do want to leave some room for the audience to ask questions, we do have one final question that we’re asking each member of our series this year. So, as you know, our theme is redefining tomorrow. And so, Sarah Friar, as the CEO of Nextdoor, if you can make one change to redefine tomorrow, what would it be?

Sarah Friar: Simply, it’s that everyone in the world would know six neighbors or more, and that might sound very facile. We have done a bunch of research on loneliness in particular, done with an incredible academic, Dr. Julianne Holt-Lunstad out of BYU. And she used the platform and used or data to try to find a statistically significant moment when feelings of social isolation would abate, and that magic number is six, six neighbors.

So, if I think about a vision for the future, I mean, of course, I’m talking my book a little bit, but I really would love to see that re-knitting of community. That way I experienced my parents in action in our little village in Sion Mills, 2,000 people, but the way I saw them in action. Because when that social fabric comes back together again, when you have high social capital.

If you’ve read any of the work of Dr. Putnam out of Harvard, for example, or Mark Granovetter, actually, here at Stanford, you’ll know that when that social capital starts to build back up, the outcomes, broadly, are just incredible. You get better health outcomes. People literally live longer. An older person, for example, that never gets to talk to someone else in real life, that’s, in Julianne’s words, worse than smoking a pack of cigarettes a day in terms of its impact on your health.

House prices go up. Home equity, usually the largest way that people save for their future, go up, right? Broken window effect comes into play. People care about their community. Suddenly everyone starts to care a little bit more.

Child outcomes go up, because a neighbor might be looking out for a. kid coming home from school. Maybe they’re getting bullied on the way home. Maybe they don’t have anywhere to go do their homework that’s a little quieter. So, suddenly a neighbor pulling them in and saying, “You can work here for an hour till your parents get home from work,” that can make all the difference.

So, I go back to — I started simple. For all of you, the magic number is six neighbors. Do you know six neighbors? Have you taken the time to just go out and maybe knock on a door, say hello to people? But then the meta effect, the vision for the future, is this reconnected society at a grassroots level, because I really don’t believe it’s going to happen top down.

Zack Doherty: That’s amazing. I’d like to now turn it over to the audience.

Audience Member: I’m very intrigued about your six-neighbor goal for the future. How do you view the housing shortage that we have in the U.S.? Do you think it’ll be more of a shift to multi-family housing, tighter communities and proximity, or do you think it’ll be a mix of what we currently have? Do you guys have a view on that at Nextdoor or your personal view?

Sarah Friar: Yeah, we don’t have a view, per se. What we see happen on Nextdoor, if I were to relate it back, is that where Nextdoor tends to fly first is if you think about the kind of CBD, the central business district, very urban. When you get out into sprawl, Nextdoor tends to really take off. So, people are in tight enough proximity, but they tend to have maybe started to move to that moment where they’re renting for a longer period of time, maybe they’re starting to own a house, then suburban works very well.

Where we tend to break down is actually in that middle of the doughnut, and then also in hyper-rural. Rural is not great because local can be miles and miles apart. It’s hard to get enough content. Doesn’t mean it couldn’t happen, but it’s just much harder. And then in the middle, we spent a lot of time head scratching on it. Is it problem of the product, or is there no product market fit yet?

I think it’s a little bit of both. I think in those very urban areas, to your point about the housing where maybe people are much tighter, maybe you’re going more vertical and so on, You tend to find that there’s so much noise and not a lot of signal. So, you have to be really carefully what distances. In fact, we’re rethinking the product at the moment to get away from the idea of hardwired neighborhood boundaries. We changed it a couple years ago to just let the algorithm decide what content was interesting because everyone’s concept of local is different, right?

I live in Marin. Actually, I think of Miranda as kind of home. So, I’m quite happy to hear from a pretty wide area. Some people get so irate if it’s going beyond their street. They’re like, “Why are you sending this content to me? It’s not interesting.” But then it also changes based on the job that you’re trying to get done, right? If I’ve lost my dog, there’s probably a radius that makes sense. If it’s like, what’s that noise, it’s probably a very small radius. If I want a plumber, I’m probably fine going to 20 miles because she’s probably got a van and she’s going to drive to me. So, we realized that we would let the content do the talking rather than trying to do this artificial neighborhood boundary.

We’re shifting it again. It’s called Project Sun — you can understand why — where the person becomes the center of their own universe, and we let that interplay with the content. So, in that CBD, I think part of it is the product. Doesn’t have good product market fit. But I also think there’s something in that area which goes back to your question of where housing happens that often people are much more transient. They’re not invested in their community because they don’t have a reason to care about it.

Homeowners very much care about their communities because it impacts their house price. They’re often very young, maybe just out of college sort of young, and they don’t really have a thing about community yet. Their friends are the people — They’re happy to go across the whole city to go hang out with their friends, but they’re probably never going to knock on the door next door unless it’s a complete emergency. So, how do we change that psyche?

And I actually worry a little bit about generationally, right? We’re more connected than ever and yest so disconnected from people who are just around us in real life. So, I think that there’s a whole — we could probably now call on Dr. Eberhardt to talk about that — but there’s something going on psychologically with humanity that worries me.

In terms of fixing where you began, fixing the unhoused population, I mean, wow, that is a problem that just feels, when I go to work in San Francisco every day, has an element of feeling like an intractable problem, and yet it can’t be. It’s like anything. Like if you have a business problem, you just need to break it down and I think go after it in pieces. And right now, I don’t see our public sector as particularly well put together to do that, but we have to do something, right?

When we chose our headquarters at Nextdoor, we’re actually in the Tenderloin. And people come to visit and they’re often a little taken aback. They’re like, “Did you actually choose this?” We’re like, “Yes.” We did not want to live in a tech bubble. I want me, but I want my employees to, as they look outside the office, understand a community that’s under duress and think about the why we do it rather than coming to work on your bus, and you’ve got your Mac, and you got your snacks in the kitchen, and you’re wondering if you’re going to make it home for your yoga class. Sorry, I’m being a little facetious on purpose. That is not real life community.

And I think it’s really important. You’re all the business leaders of the future. I really want you to think about not putting people into bubbles and not putting people into these very synthetic situations. But how do you lean back into the communities that you’re going to serve as amazing business leaders, but make sure that you don’t create an air gap between you and them, like actually get down and be proximate?

Matt: Hi, I’m Matt. I’m also an MBA1. Giving you had so many different senior leadership roles before becoming CEO, what have you found to be uniquely challenging about the CEO role and being at the helm versus your other roles, and how do you address those challenges?

Sarah Friar: Yeah. So, on this, I have now become the cliché. I totally denied it for my first couple of years of being a CEO, but I think the CEO’s job is very lonely. And what I’m realizing, it’s because you sit between — a little bit you have a mask on for everyone who works with you, for you at the company, and then you have to outbound to a board. And so, you’re kind of in this stuck in the middle moment. And often you don’t really have someone to talk to about it because you can’t really talk to your leadership team endlessly about your board. You have to create a little space.

And then for your board, you need to be mindful of what do you want to really message to them to be consistent, because they only get to talk to you every 90 days. You call them a lot in the middle. And so, you can be leaning one way at one period, and then you come back 90 days later, and you’ve done 90 days of work, so your opinion has evolved. But to them it can almost feel like you’re flip-flopping. So, I’m very mindful of that when I sit on boards to try to really be empathetic to the fact that we feel like we’re getting whiplash, but actually the company’s, “No, no, no. We did all this work for 90 days. We’ve just evolved our thinking.”

So, I do think it’s lonely, and I think that’s the moment where it’s really good to then have a fabric of connection with other CEOs, and not always in a super formal context. Because when you meet people more formally, everyone’s got their mask on and we’re all very like, “We’re working on these business problems.” And then sometimes it’s good to just go have a drink with someone when the walls come down a little and you’re like, “Oh, that’s happening for you? That’s happening for me, too.” And so, I think that is the hardest thing of sitting in that air gap.

Zack Doherty: Time for one more question.

Eddie: Hi, my name is Eddie. I’m actually a freshman at the university. But my question was, in your different senior leadership roles, what was your process for getting up to speed on different industries from enterprise SaaS to fintech to consumer Internet?

Sarah Friar: Thank you. And thank you for coming over, crossing the road. Yay. Some of my best moments at the GSB were actually when I crossed back the other side. I did a Spanish class. I did an engineering class. I think I did an art class at one stage. I loved it. So, take advantage, people. Come both ways.

That is a great question because it’s a skill. As a consultant, it’s actually a skill you have to learn because pretty much you go to meet your client, and it might be the first time you’ve ever seen their industry. But you’re being paid to show up and actually consult them, and so you cannot be ignorant for too long a period.

So, I’m an avid reader to begin with, and I really tried to not narrow my reading. I actually still get the paper Wall Street Journal, don’t laugh at me. But I do that because I find when I read online, I naturally curate myself. They ask you to, right? It’s like, “What are you interested in?” Technology. And suddenly everything you’re reading seems so like, oh, they picked it for me, because they did; it’s an algorithm. Versus when I open up the Wall Street Journal, I find myself reading almost — they feel random at the time.

But why I think that’s important is if you think about the span of your career or your life — you read enough interesting, different things — there are moments in time where suddenly it becomes very apropos of the moment. Beyond the paper, I am an avid, avid reader. I try to read 52 books a year. That’s my personal goal every year. I usually get into the 40s. This year’s a good year, actually, because there’s a lot going on with things like AI. And so, I tend to, again, read because I can usually find then ways that it’s going to matter in the situation I’m in.

The book that I really like a lot on this is called Range, and it’s this idea of you actually do become a better leader when you have all of these different skills feeding in. I think one of their archetypes is Leonardo da Vinci. And I read Range at the same time as I read Walter Isaacson’s biography of da Vinci, and it was fascinating.

Because here you had this incredibly curious individual that was a sculptor. But to understand how metal would flow to sculpt, he was actually leaning on work he’d done around the water system in Italy, which then was tied back to how blood pumped in the human body when he was doing dissections and so on. And so, I think about that a lot when people are like, “You’ve done so many different things.” I’m like, “Hell no.” We’re very narrow, actually, relative to I think how humans used to be. So, reading is a big part of it.

And then, particularly, I think in your 30, 60, 90. So, when you join something new, 30 is just listen. I often try to have 3 questions that I ask every single person I meet with. I am going to compare and contrast, ultimately. You’re listening, but you’ve got some framework. Once you get to 30, people want you to do stuff. And that’s kind of the dangerous moment because you still actually don’t know enough. So, in 30 to 60, I normally try to start to find maybe smaller things where I can put some points on the board. At 90, I think you have to start acting, and that’s when you have to come with a first push of what’s my strategy top-down, and then from there my tactics.

I think a lot of people in life are very much ready, fire, aim. So, their need for speed to get going. It’s worth taking that moment to write down strategically what you’re trying to do, and then the tactics build from there. A good strategy should be multi — it’ll last multi-years. You don’t have to roll it all out in 90 days — that would be a lot — but you need to have a frame that at least can stay somewhat true over a longer arc. That’s a good question, thank you. Lovely to meet you.

Zack Doherty: Thank you so much, Sarah. Like any good GSBer, I know you have the rest of your day planned out by five-minute increments.

Sarah Friar: I do.

Zack Doherty: And so, I want to keep you on time. What we’re going to finish with is a quick lightning round. So, I’m going to ask you — it’s a View From The Top tradition — I’m going to ask you five questions in rapid fire. We’re going to finish in two minutes to be perfectly on time.

Sarah Friar: Okay. Let’s do this.

Zack Doherty: And it’ll be a fill-in-the-blank. So, I’ll say the beginning of the sentence, and you finish it was a short phrase or word that first pops into your head.

Sarah Friar: Okay.

Zack Doherty: The one thing city folk don’t understand about growing up in the country is?

Sarah Friar: Animals. Like they’re messy.

Zack Doherty: The biggest culture shock I faced moving from Ireland and the UK to America was?

Sarah Friar: Just sense of humor. Yeah, I’m sorry. Is that bad? I’m not going to tell you which way. You’re all guessing.

Zack Doherty: The most applicable lesson I learned from a Masters of Engineering and the study of metals is?

Sarah Friar: How to release gold out of sulfide ores. No. Yeah, that I actually love seeing something in a lab come alive in the real world.

Zack Doherty: My favorite memory of the GSB is?

Sarah Friar: Meeting my husband. Second only to being cold called in Garth Saloner’s class the first time I walked into it.

Zack Doherty: And last but not least, if I could put up a billboard in town square with one tagline of advice for everyone here in the audience, it would say?

Sarah Friar: So, I’m stealing from my favorite Irish poet, Seamus Heaney, his epitaph. He was buried very close to where I grew up. It’s very Irish to start talking about a burial right at the end of everything. But I love this. “Walk on air despite your better judgment.” If you think about it. It’s good. Take risks. Your intuition, let it guide you. Don’t always be logic-driven, but walk on air despite your better judgment.

Zack Doherty: That is the most beautifully poetic note I think any View From The Top has ever ended on. Sarah, it has been such an honor and a pleasure interviewing you, and we wish you the most success in your career and everything moving forward. Thank you so much.

Sarah Friar: Zack, you’re amazing. Amazing.

Zack Doherty: You’ve been listening to View From The Top, the podcast, a production of Stanford Graduate School of Business. This interview was conducted by me, Zack Doherty, of the MBA Class of 2024. Lily Sloane composed our theme music. Michael Reilly and Jenny Luna produced this episode. You can find more episodes of this podcast at our website gsb.stanford.edu/. Follow us on social media @stanfordgsb.