Tuesday, June 09, 2009
Its best to know nothing ...
When you are setting out to change completely the way in which an industry works, sometimes its best not be an expert in that field.
Experts sometimes know too much about how things work, how things are done, how its been done for years.
When Errol Damelin first set out to change the way in which unsecured lending was done - he started with a blank sheet of paper.
It was case of "what if customers could apply for a loan, be verified and risk assessed in real time and the money transferred to their account instantly?" And of course, the service operates 24X7 from anywhere. If that could be done, wouldn't this meet a need and be an awesome service?
This is not easy - even now, no-one else does it.
Jonty Hurwitz joined him and they set about building this. Still not a banker in sight.
Since the funding round for Wonga was announced a couple of days ago, people have been asking - 'how does a company that's been trading for just less than a year raise $22m from some of the world's leading VCs - in this market.
The answer clearly is that Wonga have built some impressive technology, is serving its customers exceptionally well (they get a net promioter score in the 80's!) and is addressing an enormous market.
Errol and Jonty have built a great team too - dedicated to ensuring that their product remains cutting edge and obsessed with great cusomter experience and service. Congratulations.
Of course the APR debate will rage but its clear that this is an entirely inappropriate measure for the very short term loans which they make.
For my part, if the customer needs and loves the service then Wonga are doing a great job.
Some press coverage of the funding round:
Wall Street Journal