Neighbourly's work to create a platform where businesses and communities can connect was able to break through the chicken and egg question of which group should use the platform first through a partnership with Marks & Spencer. Since then the team have recieved three rounds of funding and expanded outside of the UK. We spoke to founder Nick Davies about scaling the platform's audience and moving through the "upward tick in the j-curve" of growth.
1. What is your investment status?
Neighbourly recently closed its third funding round, £1m of angel investment, and we are now preparing the business for its next growth phase.
2. Describe your business in one paragraph; what’s its vision and what problem does it solve?
Neighbourly connects local community projects with companies that want to make a difference. It’s an online platform that allows causes of all types and sizes to publicise and gain community support, while businesses can easily find causes that matter to them, manage their contributions, generate and receive authentic content and measure the value of their participation – at both a local and a national level.
By providing evidence that engaging in local activity is good for business, Neighbourly will increase corporate investment into communities.
3. How did you come up with the idea for your business?
Having previously worked in marketing, it became clear to me that the old rules of engagement between company and consumer have changed. Consumers are less reliant on the communications aimed at them by organisations, and as a result are less engaged – leaving companies searching for a new way to make meaningful connections with their customers. This became even more pronounced after the recession: consumers voted with their feet and showed that their trust in big brands is wavering at best.
Alongside this shift, I had frequently worked with clients that wanted to have a positive local impact, but lacked the expertise to do it and struggled with the logistics of managing it at scale. There was no mechanism that made it easy for businesses to make a difference, and for local groups to get things done and make their communities a better place – that’s where Neighbourly comes in.
4. What’s your addressable market?
Until now, we have focused two key groups in the UK: community causes and companies. The proposition is inherently local, so local businesses can use the platform, while bigger companies can use it to scale-up their community involvement and engage their workforce in giving back – the addressable market is huge. And that’s only for the UK. We’ve recently begun expansion further afield, with the Netherlands becoming our second ‘Neighbourly Nation’.
Even more importantly, there is a third group that Neighbourly undeniably serves: the public. The platform exists to facilitate the relationship between companies and communities all over the UK and beyond – and that is a universally relevant purpose.
5. What’s great about your team and do you have a mentor?
We read a lot today about younger generations wanting to work for companies with purpose. Yes, the data’s most pronounced for Millennials, but the simple truth is most of us do. Everyone at Neighbourly believes. We’re all thrilled at getting paid to do a job we love and that will make a difference… it’s the dream ticket. As you might expect, the dedication and commitment our team have shown on our journey has been incredible.
As for me, I haven’t had a mentor specifically, but I’ve been careful to build a strong board and investor group with highly relevant experience.
6. What key challenges have you faced and how have you overcome them?
In building a digital marketplace Neighbourly has had to tackle the ‘who goes first’ conundrum. It’s difficult to ask community groups to invest time in setting up a project on a brand new social platform with no companies or pledges in sight. Likewise, for a company to go first they have to believe not only your vision, but also that it’s the right thing to do to help you get there.
We are on the cusp of rapid growth – what you could call the upward tick in the j-curve. Our next funding round will be key in helping activate that fast-growth stage.
It says a huge amount about Marks & Spencer, and their absolute commitment to being the world’s most responsible retailer, that they were prepared to go first – to back us from nothing more than a presentation – and having them as a founding partner has played a significant role in our growth so far.
7. How have you funded your startup and why did you choose this route?
To date, we’ve been funded through three rounds of angel investment – our most recent round of £1m closed this summer. It has given us the perfect balance of the investment needed to get the idea off the ground and begin building a strong team, the structure of goals and milestones to work towards, and the guidance to get us this far and match those goals.
We are on the cusp of rapid growth – what you could call the upward tick in the j-curve. Our next funding round will be key in helping activate that fast-growth stage, taking the step from ‘the next big thing’ to being a recognised, trusted brand with a presence on an international scale.
8. How do you market your business and how successful has it been so far?
Until now, this has been a relatively organic process. At its core Neighbourly is a social platform, so project sharing – making it easier for people to promote their cause – is built-in. We also came from a communications background, so we’ve been able to get the right channels up and running (we’re on Facebook, Twitter and LinkedIn) to begin expanding the network of people that help tell our story (from local media championing us as an up-and-coming startup to updating the technology and investment communities on our progress).
Most recently I’ve learned that, while you must have a plan, being flexible with that plan is vital. Something will always go wrong – and it’s the way you respond that matters.
But our real opportunity to build awareness lies with the companies that use us. When a company pledges volunteer time or funds on Neighbourly, it’s in their interest to tell customers what they’re doing. Many have significant ‘owned media’ channels – including in-store display, customer communications and social media strategies. The combined media exposure of just a handful of national brands starts to create national awareness of Neighbourly.
Our challenge now – and it is my job to lead this as founder – is to take that awareness and build a bigger, more complete understanding of how everyone can use Neighbourly to make a difference where they live.
9. What are your plans for the future?
We have big plans. The platform is rapidly reaching a critical mass of companies ready to make a difference, so it’s time to make sure every community group in every town and city knows that Neighbourly can help.
As mentioned, we also have to build out Neighbourly in a way that remains accessible to any consumers who want to help improve their community. So as we grow, we’ll have to make sure the site works as an intuitive, easy-to-use platform for anyone to find out what’s going on in their area and how they can be more neighbourly.
10. If you started again, is there anything you would do differently?
I can honestly say that there’s nothing I’d change – we’ve stayed true to the original purpose and we’re on schedule. But it would be different of course and that’s simply because of the network I’ve built. The connections I’ve made since starting this journey have been invaluable. If I started again tomorrow I’m pretty sure we’d be doing it bigger and faster.
11. What advice would you give to entrepreneurs that are starting a business?
Take a risk. Do something different. And do something you believe in; all clichés, but for a good reason.
Most recently I’ve learned that, while you must have a plan, being flexible with that plan is vital. Something will always go wrong – and it’s the way you respond that matters. Likewise, it’s not always possible to plan for great opportunities that appear unexpectedly.
We’ve seen this first-hand, launching Neighbourly in the Netherlands ahead of schedule because the opportunity presented itself to plant a flag in the ground and work with a talented team of people who really understand what we’re working towards. The decision may have slightly slowed our UK growth in the short term, but the medium to longer-term impact will be hugely positive for both markets and further afield.