Sarah Friar - Building the Local Graph

**Patrick O'Shaughnessy** (0:00)
This episode of Invest Like the Best is sponsored by Canalist. Canalist is the leading destination for public company data and analysis. I'd heard of Canalist over the past few years and became more interested after meeting the founder and CEO last year to pick his brain about SaaS businesses. Founded by a former buy side analyst who encountered friction in sourcing, building and updating models, Canalist is now used by over 300 institutions, including the largest money managers in North America and by a number of the guests on this show.
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories, and strategies that will help you better invest both your time and your money.
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**SPEAKER_2** (2:02)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of Oshanose Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:27)
My guest today is Sarah Friar, the CEO of Nextdoor, which connects people in local neighborhoods together. Sarah's CV sparkles with impressive achievements at interesting businesses, and we spent a lot of time in this conversation thinking through what excellence looks like as a CEO, CFO, equity analyst, and board member. The rest of our discussion is focused on Nextdoor and how the soon to be public business is fostering connections between people and businesses in their local areas.
I do this podcast so I get to meet and learn from people like Sarah. I could have talked to her for hours. I hope you enjoy this great conversation with Sarah Friar as much as I did.
So, Sarah, I was trying to think of a fun way to begin our conversation that respects your very unique CV.
You are an equity analyst at Goldman, so you have an investing background. You are a CFO. You are a board member at Walmart. And Slack, you are the CEO of Nextdoor that is going public. You have this wild, smorgasbord of experience. And so I thought it would be fun to open with asking what excellent means in each of those categories to you. And I will start, maybe I will go chronologically and I will go all the way back to your equity analyst days. What do you think makes an excellent equity analyst?

**Sarah Friar** (3:36)
I think the number one thing that makes a great equity analyst is fundamental research where you actually do proprietary research and go talk to all of the stakeholders of a company. And I think too much gets done at a quite superficial level.
And I think the best both sell side and buy side, the best outcomes are where you're deep in the trenches talking to ideally customers first. But I think it's great to talk to everyone surrounding company, their community, their employees and so on. Because I think those are the moments where you have true insight and aha moments.

**Patrick O'Shaughnessy** (4:10)
When you were at Goldman, what cemented that lesson? Was there a company or an episode that drilled that home for you?

**Sarah Friar** (4:17)
So when I started out at Goldman, my patch was security software. And this is 2000, the bubble is bursting all around us.