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Visit Lending Club, originally added to eHub on Jul 02, 07.

Posted July 2, 2007
eHub Interviews Lending Club

Thanks to Renaud Laplanche of Lending Club for this email interview.

eHub: What is your web application/service about?

Lending Club: Lending Club is an online lending community where people borrow and lend money among each other, bypass the banks, and get better rates. By working together, members can borrow money at a better rate than they would get from a bank, or invest in a pool of loans at higher rates than those served by savings accounts. We launched exclusively on Facebook on May 24, 2007.

eHub: Why did you start this project?

Lending Club: When I started my first company in 1999, I charged the first few expenses on my credit card. Over the next few months, I had put $20,000 on my card, but was surprised that I was paying 18% interest despite my good credit score. I was too busy to shop around for lower rates and read the fine print. Instead, a few friends offered to lend him the money he needed, at a 10% interest rate. This experience set the founding principles of Lending Club:

Most people are paying high interest rates on personal loans and credit cards, because they don’t have the time to shop around for better rates and are being inundated with offers which include hidden fees and confusing terms.

Technology can be used to match lenders with borrowers, and identify connections among people through social networks and online communities. These connections build up trust on the lender side and responsibility on the borrower side.

eHub: How much time do you devote to its growth? Do you have a day job?

Lending Club: I founded Lending Club in the summer of 2006. This is my day (and night!) job.

eHub: How large is your team and what are your backgrounds?

Lending Club: We now have 21 people and will be adding another 20 in the next 6 months. The 3 main team members are myself (Renaud Laplanche), John Donovan and Joaquin Delgado. We have a diverse background of entrepreneurship, financial services and technology: before founding Lending Club, I founded TripleHop Technologies and sold it to Oracle in 2005. John Donovan developed and managed credit and debit products for Mastercard for 17 years, and Joaquin Delgado was my CTO at TripleHop and has a PhD in Computer Science, specializing in matching algorithms and user profiling. We also have team members who joined us from eBay, Oracle, Wells Fargo, Razorfish and Photobucket.

eHub: What is your design philosophy?

Lending Club: We use complex algorithms and highly secure financial processes, yet strive to make it simple for the user. Simplicity and ease of use are really the main design principles.

eHub: What technologies are you currently using?

Lending Club:

* Java/J2EE, Apache Struts and Tiles - base application UI and API development
* AJAX UI libraries and JavaScript - better site interactivity
* J2EE Application Server - mid tier server technologies
* Oracle Business Rules - Business Process Management (BRM)
* Oracle RDBMS and Toplink - Relational Database and ORM Solution
* Web Services and REST API - data communication
* SSL for authentication and encryption - Versign issued certificate

eHub: If your project is live, what are the most requested features from your users/community?

Lending Club: Different features are being requested by lenders and borrowers: many borrowers have asked for the ability to borrow smaller amounts (the current minimum is $1,000) and to “relist” their loan when their listing expires without being fully funded. Lenders are asking for more data and additional search options. All these features will be available in the coming weeks.

eHub: Does your user base reside in a primary geographic location or is it distributed?

Lending Club: Lending Club users must be US residents for regulatory reasons, but they are distributed across all 50 states.

eHub: Where do you see the project heading in the next 6 months? The next 2 years?

Lending Club: We launched exclusively on Facebook on May 24, 2007. In the next 6 months, we will be focusing on making the platform even easier to use and adding a few key features, and will also be expanding beyond Facebook. In the next 2 years, our goal is to make person-to-person lending mainstream: we want to make it so easy, simple and economically efficient that it is the first option borrowers think of, before even thinking of charging their credit cards or walking into a bank. On the lending side, we will continue to promote loan portfolios as a separate asset class that investors should consider when reviewing their asset allocation strategy.

eHub: What is the greatest challenge to your success?

Lending Club: I think the emergence of person-to-person lending as an alternative to banking is inevitable, because it is just a more efficient way of moving money from one person to another. Our main challenge is to get the word out, and make people comfortable with risks, security, privacy, and any other real or perceived hurdle to broadbase adoption. If we do this right, and we convey the value proposition clearly, in 10 years from now the mere idea that people once used to walk into a bank to get a loan or carried credit card balances will seem odd.

eHub: What is the one thing you need to get to the next phase of the project?

Lending Club: More time :)

eHub: Do you have a business model? If so, what is it?

Lending Club: We charge an origination fee of 0.75% to 2% to the borrowers and a servicing fee of 1% to the lenders.

eHub: If you’re able to disclose this information, how much traffic or usage do you see on an average day?

Lending Club: We launched 4 weeks ago and all traffic is gated through Facebook at this point, but we’re already seeing more than 1,000 unique visitors per day.

eHub: What is the one thing you’re most proud of about the project?

Lending Club: We’re helping people. Person-to-person lending is a truly useful service: we help people obtain affordable financing for the projects they care about, or refinance high interest rate debt, or just make more out of their savings. We feel very good about what we do.

eHub: How would you describe the shift that’s occurring with the web right now to future generations?

Lending Club: I think the Web is becoming a more interesting place, with less marketing “sound bites” and more trustworthy content, based on users experiences. We’ve moved away from the “brochureware web” and entered the “experience web”. It’s not only user-generated content; the shift goes beyond that: it is really about letting users experience the service, make it their own and redefine it.

eHub: What site(s) do you visit everyday other than your own?

Lending Club:

Sail-world
Facebook
Bankwatch
NetBanker
VentureBeat
Mashable
Tech Crunch
New York Times
Wall Street Journal

eHub: How many hours of sleep do you get a night?

Lending Club: Not enough, as you can tell :)

Thanks to Renaud Laplanche of Lending Club for this email interview.

Visit Lending Club
Originally added to eHub on Jul 02, 07

» More eHub Interviews

eHub Interviews is a series with the creators of Web 2.0 applications and services by Emily Chang, author of eHub, designer, and co-founder and principal of Ideacodes, a strategic web consultancy in San Francisco that she co-founded with Max Kiesler.

Also see eHub Interviews in Japanese at CNET Japan

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