Narratives Don't Build Great Companies. Execution Does.
While scrolling social media, I came across a Reel from entrepreneur and investor Michael Girdley discussing the rise and collapse of FTX and its founder, Sam Bankman-Fried.
Girdley has built, acquired, and operated businesses for years. His perspective comes from evaluating companies through the lens of operations, leadership, financial performance, and execution—not hype.
The Reel made me stop and think.
https://www.facebook.com/reel/2186793178830723
Not because I believe Nextdoor is FTX.
I don't.
But I noticed patterns that every investor should pay attention to.
Both companies were built around compelling stories.
Both attracted significant outside investment.
Both had leaders who became the public face of the company, regularly appearing on podcasts and interviews to explain the vision.
A compelling narrative can attract users.
A compelling narrative can attract investors.
But eventually, every public company is judged by something much simpler:
Execution.
At FTX, the narrative eventually collided with reality. When investors, regulators, and journalists dug into the financials and governance, the story changed dramatically.
That is why transparency matters.
As a Nextdoor shareholder, I'm continuing to ask questions that any investor should ask.
Why has my request for a published study gone unanswered for more than a month?
Why are moderation decisions that appear similar producing very different outcomes?
Why are executive bonuses awarded while shareholders continue waiting for sustained profitability?
Why does leadership spend so much time discussing AI and future monetization while investors are still waiting for consistent financial results after more than 15 years?
None of those questions accuses anyone of wrongdoing.
They are governance questions.
They are shareholder questions.
And they deserve answers.
Nextdoor's stock has recently risen.
Markets can be optimistic.
Markets can also be wrong.
History has shown that stock price alone is not evidence of a healthy company.
The real test is whether the business fundamentals eventually justify the valuation.
As shareholders, our responsibility isn't to cheer every interview or podcast appearance.
It's to evaluate leadership based on measurable results, transparency, capital allocation, communication, and long-term value creation.
The lesson I took from Michael Girdley's discussion wasn't about FTX.
It was about remembering that every company eventually reaches the point where execution speaks louder than the story.
Join the discussion on NielFlamm.com.
Day 28: Four Full Weeks Without a Response
Today marks Day 28.
Yes, Days 27 and 28 happened to fall on a Saturday and Sunday, but the bigger picture remains the same.
It has now been four full weeks since I requested the methodology and report for a study published by the Nextdoor Communications team that listed Jacob Chavis as the contact.
No report.
No methodology.
No acknowledgment.
Realistically, this should have taken a few business days at most. Even if the report couldn’t be shared, a one-line response explaining why would have demonstrated professionalism and respect.
Instead, silence has become the response.
I also remember keeping track of CEO Nirav Tolia’s public engagement. There was a stretch of more than a month—from around Thanksgiving until New Year’s Day—with little public communication. Today, much of the messaging centers around AI, transformation, and the future.
AI is important.
But AI isn’t a substitute for accountability.
As a shareholder, I’m more interested in hearing why leadership believes the company’s performance justifies executive compensation.
After reviewing the SEC filings, I found myself asking:
What is the rationale for awarding executive bonuses while the company continues to report losses?
Executive compensation should align with the creation of long-term shareholder value.
One metric often highlighted is Adjusted EBITDA.
Adjusted EBITDA can be a useful operational measure because it removes items such as interest expense, income taxes, depreciation, amortization, stock-based compensation, restructuring charges, and certain one-time or non-recurring expenses.
However, it is not the same as profitability or cash generation.
It does not fully reflect:
Interest expense on debt.
Income taxes.
Capital expenditures needed to operate and grow the business.
Depreciation and amortization of assets.
Stock-based compensation that dilutes shareholders.
Changes in working capital.
Free cash flow available to the business.
That’s why I prefer looking at the complete financial picture rather than one adjusted metric.
As investors, we should ask:
Are executives being rewarded for building lasting shareholder value?
Or are they being rewarded for meeting adjusted targets that don’t tell the entire financial story?
Four weeks without a response, and executive incentives tied to adjusted performance metrics leave me asking more questions than I receive answers.
Leadership is measured by results.
Communication is part of those results.
Join the discussion on NielFlamm.com
Day 27: When Silence Becomes the Message
Today marks Day 27 since I requested the full methodology and report for a study published by the Nextdoor Communications team, with Jacob Chavis listed as the contact.
Twenty-seven days.
No report.
No methodology.
No acknowledgment.
Ironically, I recently received a “Thank you for sharing your thoughts” response to one of my comments from NextDoor Service. My reply was simple: Will someone finally address why Jacob Chavis has not provided the report? (See attached image.)
At this point, the larger question isn’t about the report.
It’s about leadership.
How does any manager—regardless of where they sit in the organization—allow a straightforward request to go unanswered for nearly a month?
While thinking about this, I reflected on CEO Nirav Tolia’s executive compensation disclosed in the SEC filings.
One of the performance metrics still indicated the company was operating at a loss, yet an annual bonus was awarded.
That reminded me of my years living in Las Vegas.
I’m not much of a gambler. I mostly played slot machines because they’re easy. But I understand enough Blackjack to appreciate how winning and losing work.
Imagine sitting at a Blackjack table with a $50 bet.
The dealer finishes with 20.
I finished with 18.
I lost.
Now imagine the casino sliding me $60 and saying:
“You didn’t win, but you came close. Here’s your $50 back, plus a $10 bonus.”
No casino on the Las Vegas Strip would operate that way.
Why?
Because bonuses are generally associated with achieving the positive desired outcome rather than falling short of it.
That’s why executive compensation receives so much scrutiny. Investors, employees, and customers want to understand whether incentive plans truly reward the outcomes that create long-term value.
As a shareholder, I believe communication, accountability, and executive incentives all point back to the same principle:
Results matter.
So does transparency.
I’d love to hear your perspective. Should executive bonuses primarily reward positive business outcomes, or is there a place for rewarding progress even when key financial goals haven’t yet been fully achieved?
Join the discussion at NielFlamm.com.
Following the Money: A Look at Nextdoor CEO Compensation
After not receiving the SEC disclosure information directly from Nextdoor Investor Relations despite my request, I decided to obtain the publicly available filings myself.
I reviewed the SEC disclosures and created the attached spreadsheet to better understand CEO Nirav Tolia's compensation in 2024 and 2025.
Here are a few observations:
Base Salary
2024: $334,615 (prorated due to his May 8, 2024, start date as CEO; annualized salary of $500,000)
2025: $500,000
Earned Bonus
2024: $500,000
2025: $543,367
According to the SEC disclosures, the 2024 annual incentive was weighted 50% toward achieving $235 million in revenue and 50% toward an adjusted EBITDA loss target of less than $57 million. The filings describe how these performance measures factored into the annual incentive award.
Stock & Option Awards
2024: $20,183,196 (new-hire equity grants)
2025: $2,216,555
Other Compensation
2024: $59,008
2025: $2,300
This resulted in reported total compensation of approximately:
2024: $21.08 million
2025: $3.26 million
As a shareholder, I'm not criticizing executive compensation simply because it's executive compensation.
It's about understanding how compensation aligns with company performance and shareholder outcomes.
Executive incentive plans are designed to reward specific objectives. The important questions are:
Were the performance metrics the right ones?
Did they drive long-term shareholder value?
How should investors evaluate bonuses when some company performance indicators remain challenged?
Do the incentives encourage sustainable growth, profitability, and accountability?
These are governance questions every public company investor should ask—not just about Nextdoor, but about any company they own.
That's why I continue reading the SEC filings myself. They're often one of the best ways to understand how a board evaluates leadership performance.
I'd be interested to hear how other investors evaluate executive compensation packages. What metrics do you believe matter most?
Join the discussion on NielFlamm.com.