Hi Trevor and Jared, we have been building financial predictions on data from marketplace lending platforms. Curious to talk to you about where you see the business models of prediction going, examples other YC companies who are selling prediction and ML as a service, pricing strategies etc.
We have some experience with companies like this. We worked with Framed Data (http://framed.io), which predicts churn, among others.
I don't know that it's particularly useful to think about business models and pricing strategies disembodied from a specific business. What is it that you predict exactly? Who is the customer and what is the value you bring them?
"LendingClub doesn't loan out its own capital and collects fees of loans that are originated on its platform from both individuals and more sophisticated investors alike."
Lending Club owns a subsidiary fund that invests in the platform as well.
Investors should be aware that LC is both a platform, and an investor in it's own platform which, if not monitored closely, can be potentially dangerous.
I don't think it is. The subsidiary you are talking about LC Advisers isn't using LC's own capital. It is a vehicle that manages investments from institutional investors.
As LendingClub has grown it has transitioned from a purely P2P model where individuals made the majority of the loans to a whole loan model where banks and other accredited institutional investors make up the majority of the loaned capital. They still have the original platform but their growth isn't coming from Joe off the street it's coming from big banks etc... who see this as a cheaper way to do underwriting.
LC no longer invests any significant amount of own money in loans. See https://www.peercube.com/blog/post/11 for the analysis. IMO, it is negative that LC no longer has their own skin in the game as their interests are no longer aligned with lenders on their platform. Most of the recent policy changes, for example loosening the credit quality and charging lenders to pay for collection and charging lenders for first few days of interest to LC's loan originator, seem to reflect this dissociation.
My friend has been working on a TV series for years which finally was picked up last season by Esquire Network featuring craft breweries across the country. Awesome to watch it go from custom videos for the Craft Brewer's Association, to pilot, to first and second seasons. Super proud of them.
At first I thought "well that's an unforfunate name collision with the Brewdog brewery". But it turns out the show's headlined by brewdog's founders. Nice. They make fun beer (though I'm still sad they retired the tac' and the bismarck, those two were interesting experiences).
In 2007 I was in the midst of uncovering a pump and dump scheme while communicating with the SEC (who were incredibly non-responsive and incompetent).
While trying to learn more about white collar crime, I uncovered a website, sharesleuth.com. The owner was writing stories on stock fraud/white collar crime, and we exchanged a few emails.
A few weeks later I found out Mark Cuban was backing him, and short selling the companies he found to be fraudulent. Cuban was doing this for two reasons: #1 To bring attention to white collar crime and #2 If the SEC wasn't going to shut down the companies, he might as well make money while doing it...inevitably bringing it back to #1. It looks like he was successful in drawing their attention.
I've worked with several hundred regional banks and credit unions.
One thing people forget is that there are over 14,000 banks and credit unions across the country, not including the top 10. The challenges of regional FIs is dramatically different than that of large organizations. (Note, most comments on HN are from large banking backgrounds, very few from the other 14,000).
FWIW, the two themes I have seen emerge are:
1) Regional banks outsource a lot of their technology, often times leaving them with the inability to quickly adapt.
2) The regulatory environment drives technology and has created a gun shy approach to tech.
3) Most CEOs of banks and credit unions tend to have some type of finance background as opposed to technology.
So on the one hand we schools that cost too much and complain about that, and on the other we complain when the money from the government that enables those high costs gets more expensive - this is crazy. The only way to lower the cost of universities is to dry up the credit available to students.
Like the health care debate... lessons learned from the rest of the world is not a topic up for debate.
That is not a particularly American phenomenon, we do it all the time in Australia... however there are often calls to stop the "Americanisation" of health care/education/workplace.
Thats just because credit is so cheap that the costs can go so high. If it was much harder to borrow money, I tell you the universities would never get away with such fees.
Which again goes back to one of the article's points of cross-economy borrowing on crack that was started a few decades back and will eventually get someone to pay for it.
Yes, the current education system in America is due to a willful desire to increase the cost of college, because every American politician is a terrible person.
(One could educate oneself on the history of public college funding and the underpinning philosophies of the student loan to get a better idea of the massively complex economic situation, but I know that's not the American way...)
I spend quite a bit of time analyzing lending data and personal finances.
I've also observed that when comparing a group of loans, those with homes were almost as likely to default on a loan as those without homes and it had minimal impact despite most people assuming that having a home makes a person "more stable." I have definitely seen many situations where a home becomes the priority over life, family and personal finances as well.
On the flip side, this argument also assumes that if consumers get better jobs, make more money, etc. that they'll actually save and/or invest more and the unfortunate reality is that most people just tend to increase their rate of consumption proportionately to their income/bonus increase.
So the nature of having a forced savings plan through a mortgage payment requires them to put money away yet still limiting their ability to move or take better positions.
Here is an interesting article talking about the $2 Trillion underground economy of people using cash to avoid paying taxes as part of the economic recovery.
Is anyone else bothered by the fact that if the [Insert Kickstarter project here] doesn't materialize there are few things holding the founder/creator accountable?
In this case, if they don't obtain the video they are simply going to donate $200k to a charity that they will "figure out what that is later if it comes to it."
