Lending Club founder Renaud Laplanche knows full well that some ideas will catch on and others will flop.
Take the red jackets he and other Lending Club staffers wore to this year's LendIt conference in New York in April. Laplanche, Lending Club's chief executive officer, wanted his people wearing eye-catching attire so that they would stand out but the color was all wrong.
"We thought it'd be easier for you to see us and come know who we are which was a great idea until we realized Marriott's hotel staff is also wearing red jackets," Laplanche said in a speech kicking off the conference. "So I had two people asking me for the way to the bathroom."
Laplanche acknowledged that the jacket snafu won't be Lending Club's only misstep. "We're going to try a number of new things," he said. "Not all of them are going to work."
He then went on to unveil one of those new things a point-of-sale terminal that would allow it to make loans on the spot to people shopping for big-ticket items. On stage, LaPlanche removed its cloak to display a prototype a 7" x 7" x 7" red cube that looked like a less threatening cousin of "2001: A Space Odyssey's" Monoliths.
[Coming this November: Marketplace Lending + Investing. Hear how participants in this fast-growth niche are using data and technology to propel lending into the 21st century.]
Potential borrowers could use the cube equipped with a touch screen, a scanner and wifi to apply for loans at the point of sale. Think car dealerships, furniture retailers even airports, where a traveler might want to take out a last-minute loan before heading off on that pricey ski vacation. It's still in development and may stay on the drawing table, but LaPlanche's point was that there's still room for innovation in marketplace lending.
Not everyone was impressed. Aaron Vermut, the CEO at Prosper, viewed the cube as showy, arguing that the functions could easily be performed on a tablet. Vermut and Prosper President Ron Suber expressed frustration during the conference and a post-conference mixer that no one has paid much attention to Prosper's actual foray into point-of-sale lending.
In January Prosper bought alternative medical lender American Healthcare Lending to take advantage of the company's established network of point-of-sale lending at doctor's offices. Patients can apply for loans to cover elective medical procedures on iPads through the newly rebranded Prosper Healthcare Lending. Vermut described healthcare lending as "the tip of the spear," for Prosper's point-of-sale efforts.
The emphasis on point of sale highlighted another major theme of the conference: the desire of marketplace lenders to expand into new areas of lending. A prime example is Social Finance, or SoFi, which started out strictly as a student lender and now offers home loans to superprime customers, as well as other consumer finance loans. Co-founder and CEO Mike Cagney expressed skepticism over point-of-sale loans, though.
"I couldn't underwrite [those loans] the way I would want to write them," he said in an interview at the conference.
Still, nothing at the conference generated as much buzz as the growth of the industry itself. The first LendIt conference held two years ago drew only about 350 people. This year there were nearly 2,500 confirmed attendees.
"It's the end of the beginning," Prosper's Vermut said, paraphrasing Winston Churchill.