Comments on: In Defense of Prosper.com – Can it Survive? http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/ Saving, Earning, and Investing Money Sat, 21 Nov 2009 00:22:17 -0800 http://wordpress.org/?v=2.8.5 hourly 1 By: Revealing the Keys to Prosper Success http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4949 Revealing the Keys to Prosper Success Fri, 23 Mar 2007 14:00:10 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4949 [...] this week, I defended the Prosper’s business viability. I spent two posts rebutting the idea that it might not be a good investment. Just yesterday, I [...] [...] this week, I defended the Prosper’s business viability. I spent two posts rebutting the idea that it might not be a good investment. Just yesterday, I [...]

]]> By: RateLadder.com http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4837 RateLadder.com Thu, 22 Mar 2007 14:19:56 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4837 [...] Tuesday - In Defense of Prosper.com - Can Prosper Survive? [...] [...] Tuesday – In Defense of Prosper.com – Can Prosper Survive? [...]

]]> By: Amanda http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4691 Amanda Wed, 21 Mar 2007 22:24:07 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4691 I've been lending on Prosper for over a year, with a small amount of money spread over 26 loans - my Prosper account value has just reached $2000. (Yes I know that this is not small to many, in fact it's not a small amount of money for me, but I understand that it is a small sum of money as investing goes). After fees and whatnot, I've made nearly $200, and all of my loans obviously have between two and three years. I'm incapable of doing the math on this, but I'm happy with my rate of return so far. I’ve been lending on Prosper for over a year, with a small amount of money spread over 26 loans – my Prosper account value has just reached $2000. (Yes I know that this is not small to many, in fact it’s not a small amount of money for me, but I understand that it is a small sum of money as investing goes). After fees and whatnot, I’ve made nearly $200, and all of my loans obviously have between two and three years. I’m incapable of doing the math on this, but I’m happy with my rate of return so far.

]]> By: mapgirl http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4625 mapgirl Wed, 21 Mar 2007 15:24:40 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4625 Marcus asked the question I wanted to ask. I am sure their burn rate is much closer to $2M/month for operations including data center fees, credit reporting bureau relationships so they can do hard pulls, etc. They're also located in the Financial District of San Francisco, which is mostly Class A commerical space. (I helped move an office from 101 California to 345 California in 1998. Market rate at that time was like $50/sq ft. Could be up or down after the dotcom crash happened.) It seems that their location is inside the Charles Schwab HQ, and across the street from Crocker Galleria, one of the poshest shopping malls in the city. (Versace is located there, as well as the tasty San Francisco Soup Company. I recommend the butternut squash soup.) Electricity is still pretty expensive in San Francisco, but a lot of places have their data in Arizona instead where the electricity is subsidized by the dams owned by the BLM. I think you are right, they are probably choosing not to be profitable at the moment, and that's probably a good strategy for them since they have an actual revenue generating business model. Unlike Jonathan, I have $100 in fun money there. For me, it's not a serious investment vehicle, nor will it ever be, but I like the concept a lot. Marcus asked the question I wanted to ask. I am sure their burn rate is much closer to $2M/month for operations including data center fees, credit reporting bureau relationships so they can do hard pulls, etc. They’re also located in the Financial District of San Francisco, which is mostly Class A commerical space. (I helped move an office from 101 California to 345 California in 1998. Market rate at that time was like $50/sq ft. Could be up or down after the dotcom crash happened.) It seems that their location is inside the Charles Schwab HQ, and across the street from Crocker Galleria, one of the poshest shopping malls in the city. (Versace is located there, as well as the tasty San Francisco Soup Company. I recommend the butternut squash soup.)

Electricity is still pretty expensive in San Francisco, but a lot of places have their data in Arizona instead where the electricity is subsidized by the dams owned by the BLM.

I think you are right, they are probably choosing not to be profitable at the moment, and that’s probably a good strategy for them since they have an actual revenue generating business model.

Unlike Jonathan, I have $100 in fun money there. For me, it’s not a serious investment vehicle, nor will it ever be, but I like the concept a lot.

]]> By: Lazy Man http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4542 Lazy Man Tue, 20 Mar 2007 21:14:40 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4542 For the most part I was taking the analysis that DINKs Finance (see link in story) had done and for the most part tripled it to 1M. I still think that this is pretty conservative as salaries alone are typically $100K in San Francisco and I assume that they have more than 10 people. Thus their burn rate is probably more than the $200K that had in the story. However, if they ever had a money crunch, they COULD scale down the company to two technical guys running a web server in a hosting facility. I'm sure that the 800K revenue (from Jonathan's math) would more than pay for bandwidth, electricity, etc. of those people. I want to make the distinction that Prosper CAN be run at a profit even if they choose not to do so at this moment. Prosper has very few "necessary expenses." Many of the dot-com boom companies couldn't scale down if necessary. For the most part I was taking the analysis that DINKs Finance (see link in story) had done and for the most part tripled it to 1M. I still think that this is pretty conservative as salaries alone are typically $100K in San Francisco and I assume that they have more than 10 people. Thus their burn rate is probably more than the $200K that had in the story. However, if they ever had a money crunch, they COULD scale down the company to two technical guys running a web server in a hosting facility. I’m sure that the 800K revenue (from Jonathan’s math) would more than pay for bandwidth, electricity, etc. of those people.

I want to make the distinction that Prosper CAN be run at a profit even if they choose not to do so at this moment. Prosper has very few “necessary expenses.” Many of the dot-com boom companies couldn’t scale down if necessary.

]]> By: Marcus http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4539 Marcus Tue, 20 Mar 2007 20:52:12 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4539 Very interesting. I am thinking that the burn rate might be higher, could you elaborate on how you came up with 200k annual burn rate? The reason I ask is that during the dot-com boom burn rates of 200k PER MONTH were considered paltry. Now, I know that those companies were spewing money they shouldn't have, but still, the running of the business may require more than salaries - how about legal fees, accountants, health insurance, rent (on top of servers), electricity, bandwidth charges, etc. This operation is bigger than two guys running a web server out of a basement. However, since I'm a Prosper lender I am anxious to see it succeed. Very interesting. I am thinking that the burn rate might be higher, could you elaborate on how you came up with 200k annual burn rate? The reason I ask is that during the dot-com boom burn rates of 200k PER MONTH were considered paltry. Now, I know that those companies were spewing money they shouldn’t have, but still, the running of the business may require more than salaries – how about legal fees, accountants, health insurance, rent (on top of servers), electricity, bandwidth charges, etc. This operation is bigger than two guys running a web server out of a basement.

However, since I’m a Prosper lender I am anxious to see it succeed.

]]> By: Jonathan http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4531 Jonathan Tue, 20 Mar 2007 18:07:45 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4531 I agree that it is very unlikely that they will go under. Even though they aren't profitable I think they would easily get more funding if needed to get them there. They have a pretty lean business model - have you ever had to speak to a human? I just wouldn't be like the "pensioner" person and drop a mil :) I definitely will be looking into Prosper again in the future, it's good that they show their stats openly. I agree that it is very unlikely that they will go under. Even though they aren’t profitable I think they would easily get more funding if needed to get them there. They have a pretty lean business model – have you ever had to speak to a human? I just wouldn’t be like the “pensioner” person and drop a mil :)

I definitely will be looking into Prosper again in the future, it’s good that they show their stats openly.

]]> By: James http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/comment-page-1/#comment-4530 James Tue, 20 Mar 2007 17:56:04 +0000 http://www.lazymanandmoney.com/in-defense-of-prospercom-can-it-survive/#comment-4530 Lazy Man, Here are some additional thoughts... Prosper has doubled their managment fees, so one would have to take that into account as well. Also, I've noticed that prosper is getting more word of mouth buzz. For example, my brother emailed me yesterday and mentioned that he heard about prosper from a friend in Hawaii. This also supports your contention that prospers amount of money under management is increasing. Best, James Lazy Man,

Here are some additional thoughts…

Prosper has doubled their managment fees, so one would have to take that into account as well.

Also, I’ve noticed that prosper is getting more word of mouth buzz. For example, my brother emailed me yesterday and mentioned that he heard about prosper from a friend in Hawaii. This also supports your contention that prospers amount of money under management is increasing.

Best,

James

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