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12 Leadership Lessons from Nextdoor CEO Sarah Friar

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October 26, 2020 7 min read

Opinions expressed by Entrepreneur contributors are their own.

In my ongoing series with Entrepreneur, “If I Knew Then: ,” I host virtual fireside chats with high-profile CEOs of major brands like IndeedBlue ApronWaze and Warby Parker. During these warm and lively sit-downs, I ask these prodigious leaders to share invaluable lessons and practical career advice learned during their career trajectory. These rare, candid insights into the lives of remarkable catalysts for success in the world are accessible as a resource for current and future entrepreneurs and are not to be missed.

For the latest episode, I sat down with Sarah Friar, CEO of Nextdoor — the hyperlocal networking hub for neighborhoods. Hers is the compelling story of a CEO who came from a small town in Northern Ireland to take the world by storm with her unique, remarkable career path, which took her from Wall Street to her executive roles in the tech industry at Salesforce, Square, and now Nextdoor. In fact, she was CFO at Square during its highly publicized IPO, so she knows a thing or two about managing sudden hyper-growth. Friar sits on the boards of Walmart and Slack and is the co-founder of Ladies Who Launch, a nonprofit that celebrates and empowers . Friar discusses everything from starting meetings with meditation in Silicon Valley to how job performance reviews impact men and women differently, and her best practices on how to run one-on-one and executive team meetings.

Related: 14 Leadership Lessons From ZoomInfo Co-Founder and CEO Henry Schuck

Here are 12 essential takeaways from our discussion:

1. Every part of your backstory can help you become an incredible leader

Friar’s own is inspiring. Her father was an HR manager and her mother was a nurse, and she says she “won the lottery” and ended up attending Oxford. Friar says it was the power of the close community she grew up in that forged in her a desire to help others.

2. Have at least three mentors you trust at every point in your career

Friar suggests that one should be a mentor at your current job who can give you advice specific to the role you’re in and the history of the company you’re a part of. Another should be a mentor from a prior work environment who can give honest and tougher feedback they might not have given you when you worked with them. And remember to have at least one close, personal mentor who will still give you that tough feedback but will wrap it in love.

3. Be prepared for one-on-one meetings with Friar’s “three Ps”

Friar has a document for every meeting, prepared every two weeks, that she calls “The Three Ps,” which covers people, performance and product. It includes enough essential information that allows her to “answer things for you before you walk into our one-on-one, so we can shorten the time that we meet.”

4. Team performance is based on nature AND nurture

Although everyone on the team is there because something in their nature makes them the right fit for the job, management must also nurture and amplify individual skills so that team is pushed forward. It’s important for leadership to understand where the intersection of passion and ability is for each member of the team.

Related: Free On-Demand Webinar: How the World’s Largest Network for Neighborhoods Grew Explosively Fast

5. Your hiring philosophies will evolve as your company grows.

The people are the thing that will add the most value to the company over time. During the initial spurt of growth, don’t overthink hires. Some early hires won’t grow at the same rate and might not be around for that later, bigger iteration of the company. When interviewing for new people as you expand, screen applicants for the company’s core values.

6. Diversity leads to better business outcomes

Diversity is one of the smartest ways to affect the bottom line. “Diversity should be a business imperative,” Friar says. “Facts are facts: Boards and executive teams that are more diverse do better. And companies with diversity receive more return on investment.” 

7. Whenever possible, build and use your platform for good

Nextdoor solves for a problem that our society has slowly manifested over the last half-century: We just don’t know our neighbors like we used to. “I think what is really special about Nextdoor is that you really see how much people want to help each other in the bigger picture,” Friar says. “For me, one of the things that really shines about Nextdoor is how positive the platform is versus a lot of other things that we interact with on the internet.”

Related: 10 Visionary Leadership Tips from Warby Parker’s Dave Gilboa

8. Numbers are critical in leadership

Friar says she’s never met a number she didn’t like. People in general still aren’t good enough with numbers. “For example, if we have 10 new neighbors on our platform, is that good? Bad? Numbers without context are dangerous,” Friar says.

9. Don’t be afraid to fail publicly or take risks 

If you don’t get an adrenaline rush every day, maybe it’s time to look for your next role. Friar backpacked through Asia at the age of 18. That curiosity fired up a need in her to keep going, finding ways to take educated risks.

10. It’s okay not to be perfect

Failure and vulnerability are relatable to everyone and can be a major source of learned wisdom. For women and young girls in particular, perfectionism comes to life because you feel like you have to be better than everyone else, and that holds you back from being a taker. When asked what she would tell herself in her early 20s if she could go back in time, Friar shares: “I would tell myself to not feel like I have to fulfill the mold of what people around me wanted me to do.”

Related: 10 Leadership Lessons with Dallas Mavericks CEO Cynt Marshall

11. Don’t get caught up in the money that coincides with high expertise and leaves you with low passion 

Remember that the place where high passion and expertise meet is your zone. It’s easy to stay at a company because you’re good at what you do, but don’t let the fear of leaving a company be the thing you become good at. Having joy and passion for your trade is also important. Although Friar was excellent at her well-paying job on Wall Street, she admits to staying there for five years longer than she should have. “I kept staying; I don’t know if my life would have been different, but I wish I had the confidence to jump sooner.”

12. It’s okay to jump off the treadmill sometimes

CEOs can face job fatigue or regrets that they didn’t take some time off in the midst of their career. After Friar had her children, she says she wishes she had done just that: “It’s okay to pull back to rest, recover and then lean back in again. Your career will be long.”

Get inspired by watching the full webinar to hear more pearls of wisdom. It is no surprise why this incredible leader has received top ratings from her employees on Comparably, a platform at the forefront of building transparent workplace cultures and known for our Best Places to Work Awards.

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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