The first unicorn company I'll be talking about is Nextdoor. I actually have a personal connection to this company, because I interned there Summer 2014 as a software engineer. To give a brief background of the company, Nextdoor was founded in October 2011, and is a private social network application for neighborhoods. It competes with other community-based social networks such as Facebook, Yahoo Groups, Yelp, etc. However, it differentiates itself via a strict privacy policy -- you must verify you live in the neighborhood to join its network.
Nextdoor's IP portfolio is extremely small. Based off a Google Patents search, the company only has 2 patents: "Providing content to a geographically constrained set of recipients", and "Methods and Systems for a location-based online social network".
The first competitor is the social network giant Facebook, which owns over 1,000 patents (mostly through acquisitions). Compared to Nextdoor's, Facebook's IP portfolio is much larger. However, Facebook's product is more generalized in the sense that it is a general social network, whereas Nextdoor is very specific. However, if Facebook continues to grow its IP portfolio rapidly, Nextdoor could find itself infringing on their patents unwittingly in the future.
The second competitor is Yahoo Groups. Yahoo has been one of the first players in the game for online communities. However, with the rise of Facebook, Yahoo Groups' usage saw a decline. Yahoo! Inc. owns thousands of patents (couldn't get an actual number, but the number is definitely in the thousands). Considering they have way more patents than Nextdoor, Nextdoor faces a similar situation with Facebook in that they could unwittingly infringe on Yahoo's patents. In fact, Yahoo actually sued Facebook in 2012 over 10 patents. If Nextdoor gets much larger, which I think it will, then Yahoo could play a similar game with them.
The third competitor is Yelp. Even though Nextdoor is primarily a social network, its eventual goal to monetize seems to be through integrating local businesses and classifieds. The local businesses model is a direct competitor to Yelp, which it focuses its entire business model around. However, Yelp only has one patent (via Google Patents), while Nextdoor holds two. So numbers-wise, Nextdoor is in a better position than Yelp. However, neither of the two patents that Nextdoor holds are about local businesses, so Nextdoor could be seeing some issues down the road in that area.
To bolster its IP portfolio, I think Nextdoor needs to diversify its patent-holdings. Since they don't seem to have the need to acquire other companies, boosting its IP portfolio through acquisitions doesn't make sense. So the only other way to increase its portfolio is by filing the patents themselves. Currently, their holdings are all very technical -- on the engineering side. Diversifying to have patents about the product itself could be beneficial down the road.
Hi Shauray,
ReplyDeleteThanks for the read! I enjoyed how you broke down the IP holdings of Nextdoor in comparison to its competitors. Having worked for Nextdoor yourself, do you feel that the patenting process takes away from the ability to iterate your product to better suit the needs of your users?
Hi Shauray, good job on your post about Nextdoor. I had never heard of the company prior to your post, so good job providing some background on the company and where it sits relative to other well-known companies. It is interesting to view Nextdoor with relation to Yahoo Groups (which, as you mentioned, very few people seem to use) and Facebook groups (which serve almost the same purpose as Nextdoor's product). I definitely agree that Nextdoor should aggressive patent or pursue existing intellectual property with regard to products that can help the company compete with Facebook groups and Yelp. Thanks!
ReplyDeleteHi Shauray,
ReplyDeleteI found it helpful that you included the specific patents that Nextdoor has and then elaborated on mechanisms to make the company more competitive by utilizing more patents. As Yahoo struggles with downsizing its business and stopping non critical units, it will be interesting to see if Nextdoor acquires any patents existing in the marketplace or files patents internally. Thanks for a great post!
Hi Shauray,
ReplyDeleteVery interesting post! I was surprised to learn about Nextdoor and its patent portfolio of 2 patents. I actually never knew about Nextdoor before seeing your patent and certainly didn't know it was a unicorn! I definitely do think to bolster its IP portfolio, Nextdoor needs to diversity its patent holdings by acquiring other companies and engineering their own.