Lending Club

Social Lending... and Push-Ups

Andy Kuo — Fri, 29 Aug 2008 17:24:08 +0000

Venture capitalist Paul Graham has a famous essay on 8 lessons for startups. I’d like to add a ninth lesson to the list: You Will Get Fat. Being stressed supposedly causes weight loss, but the effect is easily offset by an abundant supply of food. Whether it’s the weekly catered lunches, or the semi-monthly birthday cakes, or the endless supply of Costco-sized snacks, we love to eat… a lot. It has led to the rather deplorable fact that a company of about 25 people has collectively gained over 200 pounds in the last year.

In a timely coincidence, we stumbled across the One Hundred Push-up Challenge. The pitch is alluring – give us 6 weeks, we’ll take you to 100 consecutive push-ups. So alluring that it’s been Dugg, Lifehacked, and blogged; spawned Facebook and LiveStrong groups; and – of course – generated the obligatory push-up tracking site (this is the 'net, after all).

Seduced by promises of a “great chest and shoulders” and improvements in “strength, fitness and general health [in] about 30 minutes…per week”, 13 foolhardy Lending Club souls (including the CEO and COO) started the program four weeks ago. As additional incentive, losers – those who ultimately fail to reach 100 push-ups – would have to buy winners dinner.

So that explains why, if you pass by the office on a Monday, Wednesday, or Friday around 6pm, you will hear a curious symphony of groans, grunts, and gasps. To prepare, some participants strip to their undershirts, others stretch arm and back muscles, while still others pray to the deity of their choice – whatever small rituals will see them through the session. Then the count begins: “Ready… Down… one. Down… two. Down… three…” Five sets and an eternity later, red-faced, gasping, and trembling, we roll over and ask those same deities what we did to deserve such punishment.

Nevertheless, the pain has unquestionably produced results. Everyone has shown marked improvement. The average number of consecutive push-ups has risen from the low teens to the mid-forties. Pounds have been shed. Spouses and significant others have been taking note.

The discerning reader might wonder what any of this has to do with building the world’s most innovative social lending company. Well, we are in a quiet period, after all; we’ve got to find something to occupy our time. And once we’re done with the push-up program, the chests and arms we’ve developed will help us improve the service we provide to you, our customer, because, um, well…

Time for another push-up.

Permalink | No comment

Who's linking:

Want more on these topics? Browse the archive: Features.

Smart Shopping for Glasses and Contacts

Mike Smith — Fri, 29 Aug 2008 14:36:37 +0000

One way we often end up overspending is by overvaluing convenience. At times, we don’t even realize we’re doing this. A trip to the eye doctor can fall into this category if we blindly purchase our glasses and contacts from our eye doctor, without considering alternative sources.

You probably chose your eye doctor because of a recommendation from a friend, insurance provider, or similar. Those recommendations were most likely driven by the doctor’s skill or personality. It’s highly unlikely that anyone made the recommendation because of the low cost of glasses and contacts provided at the doctor’s office. In fact, choosing a doctor for that reason would probably be a bad idea.

When it comes to choosing providers, particularly those that care for our health, we want the best ones for that need. Once we’ve made the choice, we assume that if the doctor is good at what he or she does, that the prices charged for secondary services should be good as well. Unfortunately that is rarely the case.

Glasses and contacts should be handled just like any other type of purchase. Comparison-shopping, both in person and online, can save you considerable amounts of money. It may be more convenient to just use your doctor’s office to fill your prescription, but that convenience comes at a price. Some people feel like they might insult their doctor if they take their prescription elsewhere. To me, making a good financial decision is more important than a potential insult. Most doctors realize that you come to them for their care, not the products they sell in the lobby. In many cases, they don’t even see you through that portion of the visit, so you can tell the other office staff that you will be evaluating different options for filling your prescription.

You can still look at the products and prices offered by your eye doctor. In fact, this makes a great baseline for your price comparison. Once you realize that you can get a similar, or exactly the same, product for much less elsewhere, you’ll be glad that you made the effort.

Permalink | No comment

Who's linking:

Want more on these topics? Browse the archive: Financial Education.

Price Versus Cost

Mike Smith — Thu, 28 Aug 2008 17:45:15 +0000

When making purchasing decisions, we typically look at price rather than at cost. Both are important, but paying the lowest price often ends up costing us more.

Rather than looking at the price of an item, consider the cost of the need it hopes to fulfill. By thinking about paper towels in terms of dollars per spill, instead of dollars per towel, we can see the difference clearly illustrated. Low-cost paper towels are simply not as effective as their more expensive counterparts. Even if one brand is half the price, if you use more than twice as many, they actually cost more. Taking this example even further, the well-informed consumer might splurge for a reusable chamois that is not only more cost effective but also considerably more environmentally friendly.

While paper towels are a simple example, cost comparisons can be used for any purchase where price comparisons are normally done. Many times, the recurring cost of an item comes into play. You might not choose a less expensive printer if you found out that its replacement ink was significantly more expensive than for a competing product. Purchasing a less expensive appliance that was also less energy efficient could end up costing more in a similar manner.

Your analysis might not show that a Mercedes costs less than a Kia, but it will probably show that their costs are much closer than their prices. Paying more for a higher quality item is often a wise investment. At the very least, performing cost comparisons instead of price comparisons will leave you in a better position to make an informed purchasing decision.

Permalink | No comment

Who's linking:

Want more on these topics? Browse the archive: Financial Education.