Really great post that clearly links the company’s business and operating models together. Lending Club is such an interesting company!
My first question is around their underwriting processes. As you mentioned, in order to make their processes more consumer-friendly and attract more people, the Lending Club is trying to make the data collection process less cumbersome / shorter. It also seems that they are making up for the missing data by including other types of risk assessments – such as social media data. Do you think these external data sources can adequately compensate for the less rigorous data collection from the customer? Cutting costs in the underwriting processes sounds a bit risky to me.
In addition, will they have to charge higher fees? Presumably they will (at least initially) be attracting riskier customers who cannot get loans (or get loans with unattractive conditions) elsewhere due to the more rigorous processes.
Overall, I really enjoyed reading this post!
Really interesting read and I appreciated the very clearly laid out flow.
I’m curious to see how Sephora evolves its operating and business models to address changes in the industry (e.g., personalization trend mentioned in the above comment, move away from brick-and-mortar stores). Based on your post, it seems that their Innovation Lab is hard at work thinking through these issues. Do you think they will be able to navigate challenges and sustain their double-digit growth?
I was reminded of Play! by Sephora – a new subscription box service that was launched to compete with Birchbox and other similar sample-based models. I do think Sephora is better positioned to differentiate in this area and create value (e.g., they can offer better samples based on their brand relationships vs startups like Birchbox), but I am not confident they can actually capture this value through increased online or in-store sales. I’d be curious to hear your thoughts on the subject.